Documente Academic
Documente Profesional
Documente Cultură
.
.'
/ ---
2*
By: I f
Speclal Agent
b7C::
EXHIBITS TO BRIEF PAGE 5
u.s. Department of Justice
Federal Bureau of Investigation
In Reply, Please ReIer t.o
FIle No
Mr. william T. Mc Givern
united states Attorney
Northern District of California
450 Golden Gate Avenue
P.O. Box 36055
San Francisco, California 94102
450 Golden Gate Avenue
San Francisco, CA 94102
February B, 1991
yt ,( ''''''! liI.'6enhtJ/
II nYlDIIIYt{J '1
th11
/1'!uM/ ')7l'N/U
Vi,,1 /til II/If} flo,) '1 htloJ tJ .
Attn: Mr. Michael Yamaguchi
Assistant u.s. Attorney
r'
Re: Chip Armstrong, dba
Hamilton Taft and
company
#1 Market
Spear Tower
San Ca 94105
Fraud by Wirer
Tax raud
00: San Francisco
Dear Mr. Me Givern:
Our office is SUbmitting the following information to
you for a prosecutive opinion as to 'whether a violation of
Federal Law has taken place.
\
\
D
9(;ff-
/q/ .L1 - rJ':: - q '?:J c-<-:- I 11
b7C
Enclosures
The San Francisco Division first became cognizant of
the existence of Hamilton Taft and Company in August of 1988 when
I interviewed at our office. I I was
the co-founder of Hamilton Taft and the other founder was one, -
I I who founded the company in ,1979. For your
information
r
Hamilton Taft is a service company which provides. a
tax paying service on behalf of their clients. Hamilton Taft and
Company collects money from their clients and in turn
pays their clients various and local income
1 - Addressee 'nn,O '""\ I fJt, 1
1 - 196A-2868 I \ , 1/ 'V
PKM/sgc
(2)
b7C
r'
b7C
In Reply, Please ReIer to
FIle No
Mr. william T. Mc Givern
united states Attorney
Northern District of California
450 Golden Gate Avenue
P.O .. Box 36055
San Francisco, California 94102
Attn: Mr. Michael Yamaguchi
Assistant u.s. Attorney
Dear Mr. Me Givern:
u.s. Department of Justice
Federal Bureau of Investigation
450 Golden Gate Avenue
San Francisco, CA 94102
February B, 1991
Re:
Y1'i
P
P'lt1'''/'"v ,r '"''''I JIIJt,sen,l18l
II nYlDIllYiJ '1
th114
'!U
M
/ m""t)
Vi,,1 /til 11I1f} flo,) '1 h,1oJ tJ .
Chip Armstrong, dba
Hamilton Taft and
company
#1 Market
Spear Tower
San Ca 94105
Fraud by Wirer
Tax raud
00: San Francisco
Our office is submitting the following information to
you for a prosecutive opinion as to 'whether a violation of
Federal Law has taken place.
The San Francisco Division first became cognizant of
the existence of Hamilton Taft and Company in August of 1988 when
I Mas interviewed at our office. I I was
the co-founder of Hamilton Taft and the other founder was one, -
I I who founded the company in ,1979. For your
information
r
Hamilton Taft is a service company which provides. a
tax paying service on behalf of their clients. Hamilton Taft and
Company collects money from their clients and in turn
pays their clients various and local income
1 - Addressee nn,O "'\ I '{It, I
1 - 196A-2868 I \ '1/
PKM/sgc
(2)
Enclosures
b7C
\
\
D
9 C; fJ - d 15 t.:
/q/ .LJ - rJ':: - q '?.:J C"( -:- I 11
EXHIBITS TO BRIEF PAGE 6
taxes. Unemployment taxes and other various tax liabilities are
also paid by Hamilton Taft. When a company becomes a client of
Hamilton Taft, it notifies Hamilton of the companies payroll
dates, pertinent payroll information, the state in which the
company is required to pay taxes and the type of taxes which need
to be paid and on what dates. Hamilton collects monies from
these various clients and in turn pays the clients tax obligation
whether they be local, county, state and/or federal income taxes,
unemployment taxes and/or other tax liabilities.
b7C I I advised that when a client company enrolls
with Hamilton Taft, the company notifies Hamilton of its payroll
dates, pertinent payroll information the state in which the
company is required to pay taxes and the type of taxes which need
to be paid. The company then remits to Hamilton Taft on a timely
basis its payroll tax liability. The client company will also
remit funds to Hamilton Taft which would be used to pay the
aforernentionedtax liabilities. Historically the funds were
either wired to a Hamilton Taft Impound Account each time a
payroll is paid by the company or Hamilton Taft gains access to
the companies account by a depository transfer check.
Hamilton Taft was also responsible for filing all
applicable federal, state, county and local tax filing
information on behalf of its client and pay their various taxes
as they become due for the service Hamilton Taft charges its
clients a fee based on the number of times a client renders a
payroll and the number of areas taxing agencies which have to be
ultimately paid. Hamilton Taft also receives the interest in
which it can generate on the funds its clients deposit with it.
All this information is revealed to the client prior to a
contract being entered into by the client and Hamilton Taft.
This is also done orally by Hamilton Taft's sales
representatives.
As Hamilton Taft grew, the company became concerned
with what its liability may be with the funds they were
collecting on behalf of their clients. Because of this internal
concern in 1981, the firm contacted Baker and McKenzie Attorney's
at Law, 555 California street, San Francisco, California, 94104
and requested that this firm provide Hamilton with an opinion of
the characterization of the funds it was holding on behalf of its
clients for tax payments.
On October 29, 1981, Baker and McKenzie issued an
opinion that basically stated that at the time a payroll is
rendered, that is paid by the employer, the funds representing
the withheld taxes belong to the federal government. The
employer becomes a trustee for those funds and as such the duties
and responsibilities of a trustee are mandated under common law.
2
taxes. Unemployment taxes and other various tax liabilities are
also paid by Hamilton Taft. When a company becomes a client of
Hamilton Taft, it notifies Hamilton of the companies payroll
dates, pertinent payroll information, the state in which the
company is required to pay taxes and the type of taxes which need
to be paid and on what dates. Hamilton collects monies from
these various clients and in turn pays the clients tax obligation
whether they be local, county, state and/or federal income taxes,
unemployment taxes and/or other tax liabilities.
b7C I advised that when a client company enrolls
with Hamilton Taft, the company notifies Hamilton of its payroll
dates, pertinent payroll information the state in which the
company is required to pay taxes and the type of taxes which need
to be paid. The company then remits to Hamilton Taft on a timely
basis its payroll tax liability. The client company will also
remit funds to Hamilton Taft which would be used to pay the
aforernentionedtax liabilities. Historically the funds were
either wired to a Hamilton Taft Impound Account each time a
payroll is paid by the company or Hamilton Taft gains access to
the companies account by a depository transfer check.
Hamilton Taft was also responsible for filing all
applicable federal, state, county and local tax filing
information on behalf of its client and pay their various taxes
as they become due for the service Hamilton Taft charges its
clients a fee based on the number of times a client renders a
payroll and the number of areas taxing agencies which have to be
ultimately paid. Hamilton Taft also receives the interest in
which it can generate on the funds its clients deposit with it.
All this information is revealed to the client prior to a
contract being entered into by the client and Hamilton Taft.
This is also done orally by Hamilton Taft's sales
representatives.
As Hamilton Taft grew, the company became concerned
with what its liability may be with the funds they were
collecting on behalf of their clients. Because of this internal
concern in 1981, the firm contacted Baker and McKenzie Attorney's
at Law, 555 California street, San Francisco, California, 94104
and requested that this firm provide Hamilton with an opinion of
the characterization of the funds it was holding on behalf of its
clients for tax payments.
On October 29, 1981, Baker and McKenzie issued an
opinion that basically stated that at the time a payroll is
rendered, that is paid by the employer, the funds representing
the withheld taxes belong to the federal government. The
employer becomes a trustee for those funds and as such the duties
and responsibilities of a trustee are mandated under common law.
2
taxes. Unemployment taxes and other various tax liabilities are
also paid by Hamilton Taft. When a company becomes a client of
Hamilton Taft, it notifies Hamilton of the companies payroll
dates, pertinent payroll information, the state in which the
company is required to pay taxes and the type of taxes which need
to be paid and on what dates. Hamilton collects monies from
these various clients and in turn pays the clients tax obligation
whether they be local, county, state and/or federal income taxes,
unemployment taxes and/or other tax liabilities.
b7C I advised that when a client company enrolls
with Hamilton Taft, the company notifies Hamilton of its payroll
dates, pertinent payroll information the state in which the
company is required to pay taxes and the type of taxes which need
to be paid. The company then remits to Hamilton Taft on a timely
basis its payroll tax liability. The client company will also
remit funds to Hamilton Taft which would be used to pay the
aforernentionedtax liabilities. Historically the funds were
either wired to a Hamilton Taft Impound Account each time a
payroll is paid by the company or Hamilton Taft gains access to
the companies account by a depository transfer check.
Hamilton Taft was also responsible for filing all
applicable federal, state, county and local tax filing
information on behalf of its client and pay their various taxes
as they become due for the service Hamilton Taft charges its
clients a fee based on the number of times a client renders a
payroll and the number of areas taxing agencies which have to be
ultimately paid. Hamilton Taft also receives the interest in
which it can generate on the funds its clients deposit with it.
All this information is revealed to the client prior to a
contract being entered into by the client and Hamilton Taft.
This is also done orally by Hamilton Taft's sales
representatives.
As Hamilton Taft grew, the company became concerned
with what its liability may be with the funds they were
collecting on behalf of their clients. Because of this internal
concern in 1981, the firm contacted Baker and McKenzie Attorney's
at Law, 555 California street, San Francisco, California, 94104
and requested that this firm provide Hamilton with an opinion of
the characterization of the funds it was holding on behalf of its
clients for tax payments.
On October 29, 1981, Baker and McKenzie issued an
opinion that basically stated that at the time a payroll is
rendered, that is paid by the employer, the funds representing
the withheld taxes belong to the federal government. The
employer becomes a trustee for those funds and as such the duties
and responsibilities of a trustee are mandated under common law.
2
EXHIBITS TO BRIEF PAGE 7
In addition various state and federal law mandates how a trustee
needs to act in his capacity as a trustee.
Although Hamilton Taft is not the employer but an
independent agent, it was the opinion of Baker and McKenzie that
the funds are still trust funds and the holder of these funds
(Hamilton Taft) still bears the responsibility of a trustee.
...::
::l
r
()
-
When interviewed by the Federal Bureau of Investigation
(FBI) in August of 1988, I I went so far as to stat,e that some <:i::i:::-
individuals representing clients have stated that the collected
funds need to be put in a bank account separate from other funds
of that particular entity. In during his tenure at lJ
Hamil ton Taft, Hamil ton ,Taft considered themselves to be trustees "'-t..it
, for those funds on behalf of the various taxing agencies. :L:"t>:;;
. i.'
By way of background information, I I stated that in
August of 1984, Hamilton Taft was sold to the Cigna.Corporation
the large insurance conglomerate out of Philadelphia,
Pennsylvania and Hartford, Connecticut. At that time, Hamilton
Taft had approximately 900 corporate clients and was -handling on
'"a daily basis, approximately $100,000,000 in client deposits.
"'.
According to a personality conflict developed
b7C between himself and one formally Executive Vice
President of cigna W 0 was placed by that corporation
as the person in charge of Hamilton Taft's operation. Because of
I
tbe persynality differences landl lonel I
Jwas appointed as President of Hamilton Taft.
Shortly after leaving ,Hamilton Taft in the latter
of ,1stated he became aware th.at Hamilton Taft stc;rted 1
to lose approx1mately $100,000 per month. He noted that whlle he (.
was President of Hamilton Taft, that the company although not
highly profitable, was able to stay in a slight profit position.
He understands that Hamilton Taft hired another President but'the
company continued to lose, money in C.igna and soon thereafter
began to look for a buyer for Hamilton "Taft. In December of
1987, Maxphrama Incorporated of Dallas, Texas paid $500,000 to
Cigna Corporation as a down payment for the purchase of Hamilton
Taft. On February 29, 1988, Maxphrama Incorporated completed 'its
purchase of Hamilton Taft from Cigna Corporation. / .
____ stated to onel I former Executive
Vice President in charge of operations for Hamilton Taft provided
him with the foregoing information. r--1allegedly toldl Ion
February 27,1988 I ! transfer
$5,000,000 by wire transfer to a brokerage house in New
Louisiana called the Howard Wiel Labluisse Friedricke Investment
Security Incorporated. I that this wire
transfer was td'"purchase a Treasury B111 at 5 1/2% interest. rI
allegedly asked I Iwhy she was purchasing a Treasury" Birr--
3
"'.
In addition various state and federal law mandates how a trustee
needs to act in his capacity as a trustee.
Although Hamilton Taft is not the employer but an
independent agent, it was the opinion of Baker and McKenzie that
the funds are still trust funds and the holder of these funds
(Hamilton Taft) still bears the responsibility of a trustee.
...::
:3
r
()
-
i!.
When interviewed by the Federal Bureau of Investigation
(FBI) in August of 1988, I I went so far as to stat,e that some
individuals representing clients have stated that the collected
funds need to be put in a bank separate from other funds -
of that particular entity. In during his tenure at lJ
Hamil ton Taft, Hamil ton ,Taft considered themselves to be trustees "-.t..it
, for those funds on behalf of the various taxing agencies. tL:"t>:;;
. i.'
Byway of background information, I I stated that in
August of 1984, Hamilton Taft was sold to the Cigna.Corporation
the large insurance conglomerate out of Philadelphia,
Pennsylvania and Hartford, Connecticut. At that time, Hamilton
Taft had approximately 900 corporate clients and was handling on
'"a daily basis, approximately $100,000,000 in client deposits.
According to a personality conflict developed
b7C between himself and one formally Executive Vice
President of cigna W 0 was placed by that corporation
as the person in charge of Hamilton Taft's operation. Because of
tbe persynality differences between! landl lonel I
I Jwas appointed as President of Hamilton
Shortly after leaving ,Hamilton Taft in the latter half
of 1985, I Istated he became aware that Hamilton Taft started \
to lose approximately $100,000 per month. He noted that while he (I
was President of Hamilton Taft, that the company although not
highly profitable, was able to stay in a slight profit position.
He understands that Hamilton Taft hired another President but'the
company continued to lose, money in C.igna and soon thereafter
began to look for a buyer for Hamilton "Taft. In December of
1987, Maxphrama Incorporated of Dallas, Texas paid $500,000 to
Cigna Corporation as a down payment for the purchase of Hamilton
Taft. On February 29, 1988, Maxphrama Incorporated completed 'its
purchase of Hamilton Taft from Cigna Corporation. / .
...... __ 'stated to onel I former Executive
Vice President in charge of operations for Hamilton Taft provided
him with the foregoing information. r--1allegedly toldl Ion
February 27,1988 thatI I ! transfer
$5,000,000 by wire transfer to a brokerage house in New
Lou'isiana called the Howard Wiel Labluisse Friedricke Investment
Security Incorporated. I that this wire
transfer was to"purchase a Treasury B111 at 5 1/2% interest. rI
allegedly asked I Iwhy she was purChasing a Treasury" Birr--
3
-.:..
.....,,, t:; ......
"'-.,.
EXHIBITS TO BRIEF PAGE 8
with such a short yield period, I I would not respond to
Mayl s question and just told him to do it. c::::::J told! I that
the $5,000,000 was funds which were put on
deposit with Hamilton Taft. at the time the
transfer was made, Hamilton Taft did not have any funds of its
own.
hJ--l
:--\"'"
In order to assist you in preventing your opinion from 7 fs
a historical point of Yle are enclosing a copy of the actual r
FD-302 noting interview Of, Iwith appropriate copies of -J '1\
documents provided byl to our agent. --/-t
G
__I noted that the form 8-K report which,. was filed in -'-'.
the Securities Exchange Commission (SEC) by Maxphrama for the
purchase of Hamilton Taft, Maxphrama states it has used a
$5,000,000 Treasury Bill to secure a promissory note which funds
were used to conclude the of Hamilton Taft from Cigna
Corporation. According tal Itold him that these funds
had been transferred to brokerage firm from customer funds
in the custody of Hamilton Taft. According toL' . also
advised thatl
J
; - Ihad directed him to wire transfer $50,000
in an unrelated transaction.
b7C
b7C
I was also interviewed in December of
1988. by Hamilton Taft as Treasurer-
Manager of the firm. I I is a Certified Public Accountant
(CPA) having become a CPA in the state of :': t986.
I Ibasically stated that shortly after became
President of Hamilton Taft, she told him t a sewall e making
the day to day investment decisions regarding the funds of
Hamilton Taft. She instructed him not to make any investment
unless she okayed them. He explained to her that any monies
collected from the clients only had a two or three day "window"
during which they could be invested prior to having to be paid to
taxing entities. Thereafter, all investments he made, other than
into commercial paper, were done at the direction L
I I In connection with his responsibilitiesC:
assist in the preparation of the monthly financial statements for
Hamilton Taft. Each month a meeting would be held to discuss a
just completed financial statement for the previous month. At
the close of such a meeting in April, 1988, after the close of
the April financial statements,l lstated that he had a
conversation with in her office. During this
conversation was bragging on the financial strength of
Maxphrama an ow axphrama was in the process of purchasing C &
H Nationwide Incorporated, a specialized trucking company.
Apparently, in order to herr statements and the
strength of Maxphrama, she showedL _ the Hamilton financial
statement which listed Hamilton Taft's assets in excess of
30,000,000. r Ifinancial picture was quite different than
the financial statements which he had prepared for Hamilton from
the month of April, 1988. x -,
i,"'" t"'"'' ''''U' k'" '.' I
b7C
with such a short yield period,! I would not respond to
May/s question and just told him to do it. I Itold! I that
the $5,000,000 was funds which were put on
deposit with Hamilton Taft. lthat at the time the
transfer was made, Hamilton Taft did not have any funds of its
own.
..... ' noted that the form 8-K report which., was filed in -'-'.
the Securities Exchange Commission (SEC) by Maxphrama for the
purchase of Hamilton Taft, Maxphrama states it has used a
$5,000,000 Treasury Bill to secure a promissory note which funds
were used to conclude the of Hamilton Taft from Cigna
Corporation. According tOl Itold him that these funds
had been transferred to brokerage firm from customer funds
in the custOdy of Hamilton Taft. According tol' , I also
advised thatl
J
; - Ihad directed him to wire transfer $50,000
in an unrelated transaction.
trJ--l
:--\"'"
In order to assist you in preventing your opinion from 7
a historical point of View, are enclosing a copy of the actual r
FD-302 noting interview of.. I with appropriate copies of 'il
documents provided byl I to our agent. -,--./f!
I was also interviewed in December of
1988. by Hamilton Taft as Treasurer-
Manager of the firm. I I is a Certified Public Accountant
(CPA) having become a CPA in the state of :': t986.
I Ibasically stated that shortly after became
President of Hamilton Taft, she told him t a s e wou e making
the day to day investment decisions regarding the funds of
Hamilton Taft. She instructed him not to make any investment
unless she okayed them. He explained to her that any monies
collected from the clients only had a two or three day "window"
during which they could be invested prior to having to be paid to
taxing entities. Thereafter, all investments he made, other than
into commercial paper, were done at the direction ofl I
I I In connection with his responsibilities I Iwould
assist in the preparation of the monthly financial statements for
Hamilton Taft. Each month a meeting would be held to discuss a
just completed financial statement for the previous month. At
the close of such a meeting in April, 1988, after the close of
the April financial statements, I Istated that he had a
conversation with in her office. During this
conversation was bragging on the financial strength of
Maxphrama an ow axphrama was in the process of purchasing C &
H Nationwide Incorporated, a specialized trucking company.
Apparently, in order to her statements and the
strength of Maxphrama, she showedt J the Hamilton financial
statement which listed Hamilton Taft's assets in excess of
30,000,000. r I financial picture was quite different than
the financial statements which he had prepared for Hamilton from
the month of April, 1988. x -,
t"'K" ,,,U, .,'"
b7C
EXHIBITS TO BRIEF PAGE 9
ftL P -iitpf1-s
4/3/91
CONNIE/C. JR.,
AKA
DBAvHAMILTON TAFT AND COMPANY;
32ND FLOOR, SPEAR STREET TOWER,
SAN FRANCISCO, CALIFORNIA;
FRAUD BY WIRE; MAIL FRAUD; TAX FRAUD i
00: SAN FRANCISCO
San Francisco has initiated a Fraud By Wire
investigation based on information received from the former
Comptroller of Hamilton Taft and Company (HTC) that the sUbject,
Armstrong, has'embezzled over $100 million from the firm's
clients over the last three years. ,These allegations continue to
be front-page news in San Francisco and on 3/15/91, the Wall
street Journal ran a front7page article detailing the allegations
(copy attached).
HTC contracts ,with companies who owe taxes to numerous
state and local taxing authorities. Client companies make a lump
sum wire transfer of funds to the HTC account, and thereafter,
HTC issues checks to whatever taxing authority is owed money.
The former Comptroller, I I, has alleged that
Armstrong diverted lump sum payments to his own use and
thereafter, incurred penalties associated with late payments and
7(: passed these costs along to the client companies who were not
notified of the late charges. In essence the allegation is that
Armstrong is running a "Ponzi scheme
ll
of considerable magnitude
Which requires increasing amounts of cash to keep the operat'on
going -3:1,:;"& -"
left HTC in Februar of 1991 and on 3
You will be kept apprised of pertinent developments.
NOT APPROPRIATE FOR DISSEMINATION TO THE PUBLIC
Enclosure
1 - Mr. Jones
1 - Mr. Baker
1 - Mr. Potts
1 - Mr. Bryant
GDM:gdm/sw (9)
1 - Mr. OIHara
1 - Mr. Esposito
1 - Special Assistants, CIn
- ;-.
.
Mr Baker:\f7
RE:
ftL p -iift>f1-S
CONNIE/C. JR.,
4/3/91
AKA
DBAvHAMILTON TAFT AND COMPANY;
32ND FLOOR
1
SPEAR STREET TOWER,
SAN FRANCISCO, CALIFORNIA;
FRAUD BY WIRE; MAIL FRAUD; TAX FRAUD i
00: SAN FRANCISCO
San Francisco has initiated a Fraud By Wire
investigation based on information received from the former
Comptroller of Hamilton Taft and Company (HTC) that the subject,
Armstrong, has'embezzled over $100 million from the firm's
clients over the last three years. ,These allegations continue to
be front-page news in San Francisco and on 3/15/91, the Wall
street Journal ran a front7page article detailing the allegations
(copy attached).
HTC contracts ,with companies who owe taxes to numerous
state and local taxing authorities. Client companies make a lump
sum wire transfer of funds to the HTC account, and thereafter,
HTC issues checks to whatever taxing authority is owed money.
The former Comptroller, I I, has alleged that
Armstrong diverted lump sum payments to his own use and
thereafter, incurred penalties associated with late payments and
7C passed these costs along to the client companies who were not
notified of the late charges. In essence the allegation is that
Armstrong is running a "Ponzi scheme
ll
of considerable magnitude
which requires increasing amounts of cash to keep the operat'on
going -3:1.:;"& -"
left HTC in Februar of 1991 and on 3
You will be kept apprised of pertinent developments.
NOT APPROPRIATE FOR DISSEMINATION TO THE PUBLIC
Enclosure
1 - Mr. Jones
1 - Mr. Baker
1 - Mr. Potts
1 - Mr. Bryant
GDM:gdm/sw (9)
1 - Mr. O'Hara
1 - Mr. Esposito
1 - Special Assistants, CID
EXHIBITS TO BRIEF PAGE 41
COURT
NORTHERN CT FORNIA
BEFORE THE HONORABLE CHARLES A. LEGGE, JUDGE
UNITED STATES OF AMERICA,
)
)
)
)
)
)
)
)
)
)
PLAINTIFF,
VS. NO, CR 94-0276 CAL
CONNIE C. ARMSTRONG, JR./
AND RICHARD A. FOWLES,
FOR FF:
I CALIFORNIA
MONDAY JANUARY I 1997
VOLUME PAGES 868 - 3048
BY: GEORGE D.
SANTA
RONALD D
ASSISTANT
SOLOMON
94102
90404
388 MARKET STREET, SUITE 1080
SAN 94111
(APPEARANCES CONTINUED ON NEXT : )
REPORTED BY: YEOMANS J CSR
COURT REPORTER!
COMPUTERIZED BY XSCRIBE
JAMES YEOMANS, REPORTER, USDC, 415 863-5179
DISTRICT FORNIA
BEFORE
UNITED OF AMERICA,
PLAINTIFF,
VS.
CONNIE C. AJU4STRONG, JR.,
AND RICHARD A. POWLES,
DEFENDANTS.
FOR PLAINTIFF:
A. LEGGE I JUDGE
450
SAN
)
)
)
)
)
)
)
)
)
)
, CR 94-0276 CAL
CALIFORNIA
t 1997
PAGES 286B - 3048
AVENUE
, CALIFORNIA 94102
BY: GEORGE D, HARDY I ESQ.
lBB
SAN
RONALD D. SMETANA, ESQ.
ASSISTANT UNITED STATES
90404
10S0
94111
CONTINUED
REPORTED BY: YEOMANS I CSR
COURT REPORTER I
COMPUTERIZED
JAMES YEOMANS, REPORTER, 1 415-863-5179
DISTRICT FORNIA
BEFORE
UNITED OF AMERICA,
PLAINTIFF,
VS.
CONNIE C. AJU4STRONG, JR.,
AND RICHARD A. POWLES,
DEFENDANTS.
FOR PLAINTIFF:
A. LEGGE I JUDGE
450
SAN
)
)
)
)
)
)
)
)
)
)
, CR 94-0276 CAL
CALIFORNIA
t 1997
PAGES 286B - 3048
AVENUE
, CALIFORNIA 94102
BY: GEORGE D, HARDY I ESQ.
lBB
SAN
RONALD D. SMETANA, ESQ.
ASSISTANT UNITED STATES
90404
10S0
94111
CONTINUED
REPORTED BY: YEOMANS I CSR
COURT REPORTER I
COMPUTERIZED
JAMES YEOMANS, REPORTER, 1 415-863-5179
EXHIBITS TO BRIEF PAGE 42
2885
GOVERNMENT COUNSEL COME IN, PLEASE, I NEED TO SEE THEM ABOUT A
MATTER HERE.
(PAUSE IN THE PROCEEDINGS)
THE COURT: I RECEIVED FROM THE GOVERNMENT THIS
MORNING A DOCUMENT ENTITLED, IIEX PARTE SUBMISSIONS" REGARDING
WITNESS TERRI ROBINS.
NOW, IS SHE GOING TO BE COMING IN THIS MORNING?
MR. SMETANA: IT WAS OUR INTENT TO DO SO IF MR. HARDY
WAS IN THE PROCESS OF PRE-TRYING YESTERDAY WHEN HE DISCOVERED
THIS.
MR. HARDY: ONE CORRECTION TO THE SUBMISSION. THE
DATES ARE WRONG. APPARENTLY, IT WAS TWO YEARS AFTER THE FACT.
IT WAS 1993 AND 1994.
THE COURT: BUT NOW WHAT BOTHERS ME IS THAT SHE DOES
HAVE AND DOES KNOW OF STATEMENTS BY ARMSTRONG. YOU NOW KNOW OF
STATEMENTS BY ARMSTRONG.
MR. HARDY: WE KNOW SHE APPARENTLY DID RECORD SOME
STATEMENTS.
THE COURT: YOU HAVEN'T SEEN THE STATEMENTS?
MR. SMETANA: AGAIN, WE FOUND OUT YESTERDAY AND SINCE
THIS MORNING TALKED WITH THE FBI SPECIAL AGENT INVOLVED WHO
CONFIRMED FIRST, THAT IT WAS AN INVESTIGATION OF AN ENTIRELY
DIFFERENT COMPANY.
THE COURT: HE STILL MADE STATEMENTS.
MR. SMETANA: AND, SECONDLY, SHE WAS INSTRUCTED NOT TO
JAMES YEOMANS, OFFICIAL REPORTER, USDe, 415-863-5179
2885
GOVERNMENT COUNSEL COME IN, PLEASE, I NEED TO SEE THEM ABOUT A
MATTER HERE.
(PAUSE IN THE PROCEEDINGS)
THE COURT: I RECEIVED FROM THE GOVERNMENT THIS
MORNING A DOCUMENT ENTITLED, "EX PARTE SUBMISSIONSII REGARDING
WITNESS TERRI ROBINS.
NOW, IS SHE GOING TO BE COMING IN THIS MORNING?
MR. SMETANA: IT WAS OUR INTENT TO DO SO IF MR. HARDY
WAS IN THE PROCESS OF PRE-TRYING YESTERDAY WHEN HE DISCOVERED
THIS.
MR. HARDY: ONE CORRECTION TO THE SUBMISSION. THE
DATES ARE WRONG. APPARENTLY I IT WAS TWO YEARS AFTER THE FACT.
IT WAS 1993 AND 1994.
THE COURT: BUT NOW WHAT BOTHERS ME IS THAT SHE DOES
HAVE AND DOES KNOW OF STATEMENTS BY ARMSTRONG. YOU NOW KNOW OF
STATEMENTS BY ARMSTRONG.
MR. HARDY: WE KNOW SHE APPARENTLY DID RECORD SOME
STATEMENTS.
THE COURT: YOU HAVEN'T SEEN THE STATEMENTS?
MR. SMETANA: AGAIN, WE FOUND OUT YESTERDAY AND SINCE
THIS MORNING TALKED WITH THE FBI SPECIAL AGENT INVOLVED WHO
CONFIRMED FIRST, THAT IT WAS AN INVESTIGATION OF AN ENTIRELY
DIFFERENT COMPANY.
THE COURT: HE STILL MADE STATEMENTS.
MR. SMETANA: AND, SECONDLY, SHE WAS INSTRUCTED NOT TO
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
2885
GOVERNMENT COUNSEL COME IN, PLEASE, I NEED TO SEE THEM ABOUT A
MATTER HERE.
(PAUSE IN THE PROCEEDINGS)
THE COURT: I RECEIVED FROM THE GOVERNMENT THIS
MORNING A DOCUMENT ENTITLED, "EX PARTE SUBMISSIONS" REGARDING
WITNESS TERRI ROBINS.
NOW, IS SHE GOING TO BE COMING IN THIS MORNING?
MR. SMETANA: IT WAS OUR INTENT TO DO SO IF MR. HARDY
WAS IN THE PROCESS OF PRE-TRYING YESTERDAY WHEN HE DISCOVERED
THIS.
MR. HARDY: ONE CORRECTION TO THE SUBMISSION. THE
DATES ARE WRONG. APPARENTLY, IT WAS TWO YEARS AFTER THE FACT.
IT WAS 1993 AND 1994.
THE COURT: BUT NOW WHAT BOTHERS ME IS THAT SHE DOES
HAVE AND DOES KNOW OF STATEMENTS BY ARMSTRONG. YOU NOW KNOW OF
STATEMENTS BY ARMSTRONG.
MR. HARDY: WE KNOW SHE APPARENTLY DID RECORD SOME
STATEMENTS.
THE COURT: YOU HAVEN'T SEEN THE STATEMENTS?
MR. SMETANA: AGAIN, WE FOUND OUT YESTERDAY AND SINCE
THIS MORNING TALKED WITH THE FBI SPECIAL AGENT INVOLVED WHO
CONFIRMED FIRST, THAT IT WAS AN INVESTIGATION OF AN ENTIRELY
DIFFERENT COMPANY.
THE COURT: HE STILL MADE STATEMENTS.
MR. SMETANA: AND, SECONDLY, SHE WAS INSTRUCTED NOT TO
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
EXHIBITS TO BRIEF PAGE 43
ASK OR DISCUSS HAMILTON TAFT.
THE COURT: BUT SAY -- IT'S NOT JUST
THE WITNESS ITSELF I'M CONCERNED ABOUT, IT'S ALSO POSSIBLY
EXCULPATORY THINGS THAT WERE SAID. I THINK THE DEFENSE HAS A
RIGHT TO THOSE STATEMENTS BOTH BECAUSE THEY ARE, AI
STATEMENTS OF THE WITNESS AND, B, BECAUSE THEY'RE POTENTIAL
BRADY MATERIAL. I DON1T KNOW WHETHER THEY ARE OR NOT.
MR. HARDY: WE I VE NEVER SEEN THEM. WE I RE NOT
THAT CONCLUSION AT ALL, THAT'S WHY WE BROUGHT
YOUR ATTENTION.
THE HOW CAN WE GO AHEAD ROB INS?
MR. HARDY: CAN WE DO THIS? WE REVEAL THE FACT
THAT THE PAYMENT OF MONIES BY THE FBI TO TERRI ROBINS DURING
THE PER
DEFENSE
HERE,
CROSS SHE
1993 TO 1994?
THE COURT: DIRECT?
MR, HARDY: IN OUR DIRECT I OR WOULD BE LEFT TO THE
NOW, THEN ORDER UP ALL OF THAT/ GET IT FAXED
FEDEXED OUT HERE.
SHE'S RELEASED FROM TESTIFYING AFTER DIRECT AND
BE RELEASED SUBJECT TO RECALL FOR THE
CROSS-EXAMINATION ON THOSE POINTS. IS THAT IBLE?
TO THE SO THAT WE CAN TURNOVER THE
THEY CAN REVIEW THEM, THEY CAN DECIDE WHETHER OR NOT THEYJRE
ISSUES WANT TO BRING UP.
THE COURT: YOU DON'T THINK IT MIGHT BE BETTER TO
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
6
ASK OR DISCUSS
THE COURT: BUT
TAFT.
SAY -- IT'S NOT JUST
THE WITNESS ITSELF I'M CONCERNED ABOUT, IT'S ALSO POSSIBLY
EXCULPATORY THINGS THAT WERE SAID. I THINK THE DEFENSE HAS A
RIGHT TO THOSE STATEMENTS BOTH BECAUSE THEY ARE, AI
STATEMENTS OF THE WITNESS AND, B, BECAUSE THEY'RE POTENTIAL
BRADY MATERIAL. I DON1T KNOW WHETHER THEY ARE OR NOT.
MR. HARDY: WE I VE NEVER SEEN THEM. WE I RE NOT
THAT CONCLUSION AT ALL, THAT'S WHY WE BROUGHT
YOUR ATTENTION.
THE HOW CAN WE GO AHEAD ROB INS?
MR. HARDY: CAN WE DO THIS? WE REVEAL THE FACT
THAT THE PAYMENT OF MONIES BY THE FBI TO TERRI ROBINS DURING
THE PER
DEFENSE
HERE,
CROSS SHE
1993 TO 1994?
THE COURT: DIRECT?
MR, HARDY: IN OUR DIRECT I OR WOULD BE LEFT TO THE
NOW, THEN ORDER UP ALL OF THAT/ GET IT FAXED
FEDEXED OUT HERE.
SHE'S RELEASED FROM TESTIFYING AFTER DIRECT AND
BE RELEASED SUBJECT TO RECALL FOR THE
CROSS-EXAMINATION ON THOSE POINTS. IS THAT IBLE?
TO THE SO THAT WE CAN TURNOVER THE
THEY CAN REVIEW THEM, THEY CAN DECIDE WHETHER OR NOT THEYJRE
ISSUES WANT TO BRING UP.
THE COURT: YOU DON'T THINK IT MIGHT BE BETTER TO
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
6
ASK OR DISCUSS
THE COURT: BUT
TAFT.
SAY -- IT'S NOT JUST
THE WITNESS ITSELF I'M CONCERNED ABOUT, IT'S ALSO POSSIBLY
EXCULPATORY THINGS THAT WERE SAID. I THINK THE DEFENSE HAS A
RIGHT TO THOSE STATEMENTS BOTH BECAUSE THEY ARE, AI
STATEMENTS OF THE WITNESS AND, B, BECAUSE THEY'RE POTENTIAL
BRADY MATERIAL. I DON1T KNOW WHETHER THEY ARE OR NOT.
MR. HARDY: WE I VE NEVER SEEN THEM. WE I RE NOT
THAT CONCLUSION AT ALL, THAT'S WHY WE BROUGHT
YOUR ATTENTION.
THE HOW CAN WE GO AHEAD ROB INS?
MR. HARDY: CAN WE DO THIS? WE REVEAL THE FACT
THAT THE PAYMENT OF MONIES BY THE FBI TO TERRI ROBINS DURING
THE PER
DEFENSE
HERE,
CROSS SHE
1993 TO 1994?
THE COURT: DIRECT?
MR, HARDY: IN OUR DIRECT I OR WOULD BE LEFT TO THE
NOW, THEN ORDER UP ALL OF THAT/ GET IT FAXED
FEDEXED OUT HERE.
SHE'S RELEASED FROM TESTIFYING AFTER DIRECT AND
BE RELEASED SUBJECT TO RECALL FOR THE
CROSS-EXAMINATION ON THOSE POINTS. IS THAT IBLE?
TO THE SO THAT WE CAN TURNOVER THE
THEY CAN REVIEW THEM, THEY CAN DECIDE WHETHER OR NOT THEYJRE
ISSUES WANT TO BRING UP.
THE COURT: YOU DON'T THINK IT MIGHT BE BETTER TO
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
6
EXHIBITS TO BRIEF PAGE 44
2887
ROBINS?
MR. SMETANA: WE PROPOSE TO REST
WE'RE ABOUT DONE.
OR WEDNESDAY.
THE COURT: I THINK WE'RE NOW AT A POINT WE HAVE TO
TELL THE DEFENSE ABOUT THE PROBLEM. NOW, SO YOUR SUGGESTION IS
WE GO .. '.u ...... n ~ WITH WHAT WE'VE GOT AND THAT THE ONLY QUESTION THEN
WHAT TO DO ABOUT THE STATEMENTS THEMSELVES? WOULD
THEM
MR HARDY: CORRECT THEY MAY NOT WANT TO GO INTO
THEY LOOK AT THEM.
THE COURT! THEY MAY BE JUST TOTALLY IRRELEVANT. BUT
IT'S A PIECE OF MEAT FOR TO JUMP ALL OVER AND I
HAVE TO BE CONCERNED THAT IF SHE HAS RECORDED IT AND THEY ARE
PRODUCED AS WITNESS STATEMENTS AND WHETHER THERE'S POSSIBLY ANY
BRADY MATERIAL IN THERE, YET NONE OF US KNOW THAT.
(PROCEEDINGS HELD IN OPEN NOT PRESENT:)
THE COURT: LET THE RECORD I'VE RECEIVED THIS
A STATEMENT FROM THE GOVERNMENT WITNESS TERRI
ROBINS, AND THIS RAISES SOME ABOUT MS. ROBINS AS A
WITNESS AND'S, I GUESS, ANTICIPATED TO BE YOUR NEXT
WITNESS?
MR. HARDY: THAT'S
THE COURT: APPARENTLY, IT CAME TO LIGHT OVER THE
WEEKEND IN THE PRE-TESTIMONY BETWEEN THE
GOVERNMENT COUNSEL HERE AND MS. ROBINS, WHICH SHE WAS ASSISTING
YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
ROBINS?
MR. SMETANA: WE PROPOSE TO REST
WE'RE ABOUT DONE.
2887
OR WEDNESDAY.
THE COURT: I THINK WE'RE NOW AT A POINT WE HAVE TO
TELL THE DEFENSE ABOUT THE PROBLEM. NOW, SO YOUR SUGGESTION IS
WE GO ~ ~ ~ = ~ WITH WHAT WE'VE GOT AND THAT THE ONLY QUESTION THEN
WOULD WHAT TO DO ABOUT THE STATEMENTS THEMSELVES?
MR HARDY: CORRECT THEY MAY NOT WANT TO GO INTO
THEM THEY LOOK AT THEM.
THE COURT! THEY MAY BE JUST TOTALLY IRRELEVANT. BUT
IT'S A PIECE OF MEAT FOR TO JUMP ALL OVER AND I
HAVE TO BE CONCERNED THAT IF SHE HAS RECORDED IT AND THEY ARE
PRODUCED AS WITNESS STATEMENTS AND WHETHER THERE'S POSSIBLY ANY
BRADY MATERIAL IN THERE, YET NONE OF US KNOW THAT.
(PROCEEDINGS HELD IN OPEN NOT PRESENT:)
THE COURT: LET THE RECORD I'VE RECEIVED THIS
A STATEMENT FROM THE GOVERNMENT WITNESS TERRI
ROBINS, AND THIS RAISES SOME ABOUT MS. ROBINS AS A
WITNESS AND'S, I GUESS, ANTICIPATED TO BE YOUR NEXT
WITNESS?
MR. HARDY: THAT'S
THE COURT: APPARENTLY, IT CAME TO LIGHT OVER THE
WEEKEND IN THE PRE-TESTIMONY BETWEEN THE
GOVERNMENT COUNSEL HERE AND MS. ROBINS, WHICH SHE WAS ASSISTING
YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
ROBINS?
MR. SMETANA: WE PROPOSE TO REST
WE'RE ABOUT DONE.
2887
OR WEDNESDAY.
THE COURT: I THINK WE'RE NOW AT A POINT WE HAVE TO
TELL THE DEFENSE ABOUT THE PROBLEM. NOW, SO YOUR SUGGESTION IS
WE GO ~ ~ ~ = ~ WITH WHAT WE'VE GOT AND THAT THE ONLY QUESTION THEN
WOULD WHAT TO DO ABOUT THE STATEMENTS THEMSELVES?
MR HARDY: CORRECT THEY MAY NOT WANT TO GO INTO
THEM THEY LOOK AT THEM.
THE COURT! THEY MAY BE JUST TOTALLY IRRELEVANT. BUT
IT'S A PIECE OF MEAT FOR TO JUMP ALL OVER AND I
HAVE TO BE CONCERNED THAT IF SHE HAS RECORDED IT AND THEY ARE
PRODUCED AS WITNESS STATEMENTS AND WHETHER THERE'S POSSIBLY ANY
BRADY MATERIAL IN THERE, YET NONE OF US KNOW THAT.
(PROCEEDINGS HELD IN OPEN NOT PRESENT:)
THE COURT: LET THE RECORD I'VE RECEIVED THIS
A STATEMENT FROM THE GOVERNMENT WITNESS TERRI
ROBINS, AND THIS RAISES SOME ABOUT MS. ROBINS AS A
WITNESS AND'S, I GUESS, ANTICIPATED TO BE YOUR NEXT
WITNESS?
MR. HARDY: THAT'S
THE COURT: APPARENTLY, IT CAME TO LIGHT OVER THE
WEEKEND IN THE PRE-TESTIMONY BETWEEN THE
GOVERNMENT COUNSEL HERE AND MS. ROBINS, WHICH SHE WAS ASSISTING
YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
EXHIBITS TO BRIEF PAGE 45
2888
THE FBI AND ANOTHER INVESTIGATION OF HAMILTON TAFT INVOLVING
COMPUTECH AND THAT SHE WAS PAID BY THE FBI FOR WHAT, I DON'T
KNOW, TIME, EXPENSES, I'M NOT SURE WHAT. SHE DID RECORD
CONVERSATIONS WITH MR. ARMSTRONG.
NOW, AS I TOLD GOVERNMENT COUNSEL, I THINK THOSE
STATEMENTS THAT SHE RECORDED HAVE TO BE PRODUCED TO THE DEFENSE
BOTH AS STATEMENTS OF THE DEFENDANT AND FOR POTENTIAL BRADY
MATERIAL. NOBODY HAS YET REVIEWED THESE. IT'S MY
UNDERSTANDING GOVERNMENT COUNSEL DOESN'T KNOW WHAT'S IN THOSE
STATEMENTS, JUST FOUND OUT ABOUT IT THIS WEEKEND.
MR. HARDY! THAT 1 S CORRECT.
THE COURT: SO THE STATEMENTS HAVE TO BE PRODUCED. SO
THE QUESTION IS WHAT WE CAN DO WITH MS. ROBINS WHO'S COMING IN
TO TESTIFY TODAY. THE GOVERNMENT SUGGESTS - - WELL, MAYBE YOU
BETTER STATE THE SUGGESTION.
MR. HARDY: GOVERNMENT SUGGESTS THAT WE PROCEED TODAY
AND WHEN WE'VE FINISHED WITH THE TESTIMONY THAT THE PLAINTIFF
CROSS-EXAMINATION, WHATEVER CROSS-EXAMINATION THAT YOU GO INTO,
THAT SHE BE RELEASED SUBJECT TO RECALL FOLLOWING THE REVIEW OF
THOSE STATEMENTS, SHE BE CALLED ON CROSS ON THOSE POINTS.
WE DON'T KNOW IF YOU'RE GOING TO WANT TO GO INTO THOSE
POINTS OR NOT. WE DON'T KNOW WHAT'S THERE, BUT WE'RE RUNNING
LOW ON WITNESSES.
THE COURT: HOW SOON CAN YOU HAVE THE STATEMENTS?
MR. SMETANA: I DON'T EVEN KNOW AT THIS POINT WHAT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
2888
THE FBI AND ANOTHER INVESTIGATION OF HAMILTON TAFT INVOLVING
COMPUTECH AND THAT SHE WAS PAID BY THE FBI FOR WHAT, I DON'T
KNOW, TIME, EXPENSES, I'M NOT SURE WHAT. SHE DID RECORD
CONVERSATIONS WITH MR. ARMSTRONG.
NOW, AS I TOLD GOVERNMENT COUNSEL, I THINK THOSE
STATEMENTS THAT SHE RECORDED HAVE TO BE PRODUCED TO THE DEFENSE
BOTH AS STATEMENTS OF THE DEFENDANT AND FOR POTENTIAL BRADY
MATERIAL. NOBODY HAS YET REVIEWED THESE. IT'S MY
UNDERSTANDING GOVERNMENT COUNSEL DOESN'T KNOW WHAT'S IN THOSE
STATEMENTS, JUST FOUND OUT ABOUT IT THIS WEEKEND.
MR. HARDY! THAT'S CORRECT.
THE COURT: SO THE STATEMENTS HAVE TO BE PRODUCED. SO
THE QUESTION IS WHAT WE CAN DO WITH MS. ROBINS WHO'S COMING IN
TO TESTIFY TODAY. THE GOVERNMENT SUGGESTS - - WELL, MAYBE YOU
BETTER STATE THE SUGGESTION.
MR. HARDY: GOVERNMENT SUGGESTS THAT WE PROCEED TODAY
AND WHEN WE'VE FINISHED WITH THE TESTIMONY THAT THE PLAINTIFF
CROSS-EXAMINATION, WHATEVER CROSS-EXAMINATION THAT YOU GO INTO,
THAT SHE BE RELEASED SUBJECT TO RECALL FOLLOWING THE REVIEW OF
THOSE STATEMENTS, SHE BE CALLED ON CROSS ON THOSE POINTS.
WE DON'T KNOW IF YOU'RE GOING TO WANT TO GO INTO THOSE
POINTS OR NOT. WE DON'T KNOW WHAT'S THERE, BUT WE'RE RUNNING
LOW ON WITNESSES.
THE COURT: HOW SOON CAN YOU HAVE THE STATEMENTS?
MR. SMETANA: I DON'T EVEN KNOW AT THIS POINT WHAT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
2888
THE FBI AND ANOTHER INVESTIGATION OF HAMILTON TAFT INVOLVING
COMPUTECH AND THAT SHE WAS PAID BY THE FBI FOR WHAT, I DON'T
KNOW, TIME, EXPENSES, I'M NOT SURE WHAT. SHE DID RECORD
CONVERSATIONS WITH MR. ARMSTRONG.
NOW, AS I TOLD GOVERNMENT COUNSEL, I THINK THOSE
STATEMENTS THAT SHE RECORDED HAVE TO BE PRODUCED TO THE DEFENSE
BOTH AS STATEMENTS OF THE DEFENDANT AND FOR POTENTIAL BRADY
MATERIAL. NOBODY HAS YET REVIEWED THESE. IT'S MY
UNDERSTANDING GOVERNMENT COUNSEL DOESN'T KNOW WHAT'S IN THOSE
STATEMENTS, JUST FOUND OUT ABOUT IT THIS WEEKEND.
MR. HARDY! THAT'S CORRECT.
THE COURT: SO THE STATEMENTS HAVE TO BE PRODUCED. SO
THE QUESTION IS WHAT WE CAN DO WITH MS. ROBINS WHO'S COMING IN
TO TESTIFY TODAY. THE GOVERNMENT SUGGESTS - - WELL, MAYBE YOU
BETTER STATE THE SUGGESTION.
MR. HARDY: GOVERNMENT SUGGESTS THAT WE PROCEED TODAY
AND WHEN WE'VE FINISHED WITH THE TESTIMONY THAT THE PLAINTIFF
CROSS-EXAMINATION, WHATEVER CROSS-EXAMINATION THAT YOU GO INTO,
THAT SHE BE RELEASED SUBJECT TO RECALL FOLLOWING THE REVIEW OF
THOSE STATEMENTS, SHE BE CALLED ON CROSS ON THOSE POINTS.
WE DON'T KNOW IF YOU'RE GOING TO WANT TO GO INTO THOSE
POINTS OR NOT. WE DON'T KNOW WHAT'S THERE, BUT WE'RE RUNNING
LOW ON WITNESSES.
THE COURT: HOW SOON CAN YOU HAVE THE STATEMENTS?
MR. SMETANA: I DON'T EVEN KNOW AT THIS POINT WHAT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
EXHIBITS TO BRIEF PAGE 46
2889
THEY'RE IN, WHETHER HAVE BEEN TRANSCR WHETHER
THOSE ARE JUST TAPED, WHETHER THERE'S TAPES THEY HAVE BE
THE COURT: DO YOU KNOW THE VOLUME?
MR. SMETANA: I KNOW WHAT WE
ONE OF THE AGENTS WHO IS HERE IN COURT IN TOUCH
FBI AGENTS IN DALLAS AND ARRANGE TO HAVE THOSE
ALONG THE WAY FIND OUT.
IS HAVE
THE
AND
ONE OF THE PROBLEMS WE APPARENTLY ENCOUNTERED IS THERE
IS APPARENTLY ICE AND SLEET IN DALLAS AND THE FBI OFFICE IS
OFFICIALLY CLOSED. AS IT HAPPENS, THE AGENT WENT IN, BUT I
GUESS THEY WERE GIVEN AN ADMINISTRATIVE DAY OFF
WEATHER, SO WE HAVE A PAGER NUMBER FOR THE FBI
HAVE HIM PULL THAT
TO THE
WE CAN
THE COURT: HOW SOON DO YOU THINK YOU CAN GET THE
STATEMENTS HERE, EITHER -- IN WHATEVER FORM THEY'RE IN, TAPES
OR TYPEWRITTEN FORM?
MR. SMETANA: AT A MINIMUM 1 EVEN I F THEY WERE TO
LOCATE THEM IMMEDIATELY AND SEND THEM I IT WOULD
BE TOMORROW UNTIL WE HAVE SOME - - SOME TIME BY FEDEX. THAT'S
THE FASTEST WE CAN POSSIBLY DO IT, AND I DON'T KNOW WHETHER
THAT'S POSSIBLE.
THE COURT: THEN, OF COURSE, THE DEFENSE WOULD NEED A
REASONABLE TIME TO GO OVER THEM TO DECIDE WHAT THEY WANTED TO
WITH THEM OR DO WITH MS, ROBINS.
JAMES YEOMANS I REPORTER, USOC! 415-863-5179
2889
THEY'RE IN, WHETHER HAVE BEEN TRANSCR WHETHER
THOSE ARE JUST TAPED, WHETHER THERE'S TAPES THEY HAVE BE
THE COURT: DO YOU KNOW THE VOLUME?
MR. SMETANA: I KNOW WHAT WE
ONE OF THE AGENTS WHO IS HERE IN COURT IN TOUCH
FBI AGENTS IN DALLAS AND ARRANGE TO HAVE THOSE
ALONG THE WAY FIND OUT.
IS HAVE
THE
AND
ONE OF THE PROBLEMS WE APPARENTLY ENCOUNTERED IS THERE
IS APPARENTLY ICE AND SLEET IN DALLAS AND THE FBI OFFICE IS
OFFICIALLY CLOSED. AS IT HAPPENS, THE AGENT WENT IN, BUT I
GUESS THEY WERE GIVEN AN ADMINISTRATIVE DAY OFF
WEATHER, SO WE HAVE A PAGER NUMBER FOR THE FBI
HAVE HIM PULL THAT
TO THE
WE CAN
THE COURT: HOW SOON DO YOU THINK YOU CAN GET THE
STATEMENTS HERE, EITHER -- IN WHATEVER FORM THEY'RE IN, TAPES
OR TYPEWRITTEN FORM?
MR. SMETANA: AT A MINIMUM 1 EVEN I F THEY WERE TO
LOCATE THEM IMMEDIATELY AND SEND THEM I IT WOULD
BE TOMORROW UNTIL WE HAVE SOME - - SOME TIME BY FEDEX. THAT'S
THE FASTEST WE CAN POSSIBLY DO IT, AND I DON'T KNOW WHETHER
THAT'S POSSIBLE.
THE COURT: THEN, OF COURSE, THE DEFENSE WOULD NEED A
REASONABLE TIME TO GO OVER THEM TO DECIDE WHAT THEY WANTED TO
WITH THEM OR DO WITH MS, ROBINS.
JAMES YEOMANS I REPORTER, USOC! 415-863-5179
2889
THEY'RE IN, WHETHER HAVE BEEN TRANSCR WHETHER
THOSE ARE JUST TAPED, WHETHER THERE'S TAPES THEY HAVE BE
THE COURT: DO YOU KNOW THE VOLUME?
MR. SMETANA: I KNOW WHAT WE
ONE OF THE AGENTS WHO IS HERE IN COURT IN TOUCH
FBI AGENTS IN DALLAS AND ARRANGE TO HAVE THOSE
ALONG THE WAY FIND OUT.
IS HAVE
THE
AND
ONE OF THE PROBLEMS WE APPARENTLY ENCOUNTERED IS THERE
IS APPARENTLY ICE AND SLEET IN DALLAS AND THE FBI OFFICE IS
OFFICIALLY CLOSED. AS IT HAPPENS, THE AGENT WENT IN, BUT I
GUESS THEY WERE GIVEN AN ADMINISTRATIVE DAY OFF
WEATHER, SO WE HAVE A PAGER NUMBER FOR THE FBI
HAVE HIM PULL THAT
TO THE
WE CAN
THE COURT: HOW SOON DO YOU THINK YOU CAN GET THE
STATEMENTS HERE, EITHER -- IN WHATEVER FORM THEY'RE IN, TAPES
OR TYPEWRITTEN FORM?
MR. SMETANA: AT A MINIMUM 1 EVEN I F THEY WERE TO
LOCATE THEM IMMEDIATELY AND SEND THEM I IT WOULD
BE TOMORROW UNTIL WE HAVE SOME - - SOME TIME BY FEDEX. THAT'S
THE FASTEST WE CAN POSSIBLY DO IT, AND I DON'T KNOW WHETHER
THAT'S POSSIBLE.
THE COURT: THEN, OF COURSE, THE DEFENSE WOULD NEED A
REASONABLE TIME TO GO OVER THEM TO DECIDE WHAT THEY WANTED TO
WITH THEM OR DO WITH MS, ROBINS.
JAMES YEOMANS I REPORTER, USOC! 415-863-5179
EXHIBITS TO BRIEF PAGE 47
2890
MR. HARDY:" IT'S MY UNDERSTANDING WE'LL BE BREAKING,
AFTER THE GOVERNMENT FINISHES ITS WITNESSES THIS WEEK, UNTIL
THE DEFENSE BEGINS. THERE WILL BE A GOOD BIT OF TIME FOR
REVIEW AND IF NEED BE WE COULD BRING HER BACK BEFORE YOU START
YOUR CASE.
IN OTHER WORDS, I THINK THERE WILL BE A BLOCK OF TIME
FOR YOU TO REVIEW IT AND FIGURE OUT WHAT YOU WANT TO DO.
MR. SABELLI: WE MAY HAVE RELEVANCE OBJECTION TO ANY
OF THIS AREA. THERE MAY BE 403 CONCERNS AS WELL, 404(B)
CONCERNS. IT MAY BE A BASIS FOR A MOTION TO SEVER ON THE PART
OF MR. FOWLES. I'M NOT SURE IT'S FAIR FOR US TO HAVE TO BEGIN
OUR CROSS-EXAMINATION WITHOUT KNOWING THE NATURE OF THIS
MATERIAL. MAYBE SOMETHING THAT WE CAN USE TO
MR. HARDY: YOUR COMMENTS SUGGEST WE HAVE SOME
INTEREST IN PUTTING SOME OF THAT MATERIAL IN AND USE IT IN SOME
WAY, WE DO NOT. WE HAVE NOT SEEN IT. WE DON'T KNOW WHAT'S IN
IT AND HAVE NO INTENT USING ANY OF THAT MATERIAL.
MR. BROWN: AT THE VERY LEAST, THIS WITNESS -- WE
THINK THIS WITNESS ALREADY HAS A TREMENDOUS BIAS AND SHE
INDICATED IN HER GRAND JURY TESTIMONY III'M UPSET, I'M ANGRY,
I'M VINDICTIVE. II NOW WE FIND OUT SHE BECAME A GOVERNMENT
INFORMANT. CERTAINLY THAT'S SOMETHING WE WOULD WANT TO BRING
UP ON CROSS-EXAMINATION.
THE COURT: I WOULD IMAGINE THAT COULD BE DONE EVEN
BEFORE YOU SEE THE STATEMENTS. WHAT I'M DEBATING HERE, SHOULD
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
2890
MR. HARDY:" IT'S MY UNDERSTANDING WE'LL BE BREAKING,
AFTER THE GOVERNMENT FINISHES ITS WITNESSES THIS WEEK, UNTIL
THE DEFENSE BEGINS. THERE WILL BE A GOOD BIT OF TIME FOR
REVIEW AND IF NEED BE WE COULD BRING HER BACK BEFORE YOU START
YOUR CASE.
IN OTHER WORDS, I THINK THERE WILL BE A BLOCK OF TIME
FOR YOU TO REVIEW IT AND FIGURE OUT WHAT YOU WANT TO DO.
MR. SABELLI: WE MAY HAVE RELEVANCE OBJECTION TO ANY
OF THIS AREA. THERE MAY BE 403 CONCERNS AS WELL, 404(8)
CONCERNS. IT MAY BE A BASIS FOR A MOTION TO SEVER ON THE PART
OF MR. FOWLES. I'M NOT SURE IT'S FAIR FOR US TO HAVE TO BEGIN
OUR CROSS-EXAMINATION WITHOUT KNOWING THE NATURE OF THIS
MATERIAL. MAYBE SOMETHING THAT WE CAN USE TO
MR. HARDY: YOUR COMMENTS SUGGEST WE HAVE SOME
INTEREST IN PUTTING SOME OF THAT MATERIAL IN AND USE IT IN SOME
WAY, WE DO NOT. WE HAVE NOT SEEN IT. WE DON'T KNOW WHAT'S IN
IT AND HAVE NO INTENT USING ANY OF THAT MATERIAL.
MR. BROWN: AT THE VERY LEAST, THIS WITNESS - - WE
THINK THIS WITNESS ALREADY HAS A TREMENDOUS BIAS AND SHE
INDICATED IN HER GRAND JURY TESTIMONY III'M UPSET, I'M ANGRY,
I'M VINDICTIVE. II NOW WE FIND OUT SHE BECAME A GOVERNMENT
INFORMANT. CERTAINLY THAT'S SOMETHING WE WOULD WANT TO BRING
UP ON CROSS-EXAMINATION.
THE COURT: I WOULD IMAGINE THAT COULD BE DONE EVEN
BEFORE YOU SEE THE STATEMENTS. WHAT I'M DEBATING HERE, SHOULD
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
2890
MR. HARDY:" IT'S MY UNDERSTANDING WE'LL BE BREAKING,
AFTER THE GOVERNMENT FINISHES ITS WITNESSES THIS WEEK, UNTIL
THE DEFENSE BEGINS. THERE WILL BE A GOOD BIT OF TIME FOR
REVIEW AND IF NEED BE WE COULD BRING HER BACK BEFORE YOU START
YOUR CASE.
IN OTHER WORDS, I THINK THERE WILL BE A BLOCK OF TIME
FOR YOU TO REVIEW IT AND FIGURE OUT WHAT YOU WANT TO DO.
MR. SABELLI: WE MAY HAVE RELEVANCE OBJECTION TO ANY
OF THIS AREA. THERE MAY BE 403 CONCERNS AS WELL, 404(8)
CONCERNS. IT MAY BE A BASIS FOR A MOTION TO SEVER ON THE PART
OF MR. FOWLES. I'M NOT SURE IT'S FAIR FOR US TO HAVE TO BEGIN
OUR CROSS-EXAMINATION WITHOUT KNOWING THE NATURE OF THIS
MATERIAL. MAYBE SOMETHING THAT WE CAN USE TO
MR. HARDY: YOUR COMMENTS SUGGEST WE HAVE SOME
INTEREST IN PUTTING SOME OF THAT MATERIAL IN AND USE IT IN SOME
WAY, WE DO NOT. WE HAVE NOT SEEN IT. WE DON'T KNOW WHAT'S IN
IT AND HAVE NO INTENT USING ANY OF THAT MATERIAL.
MR. BROWN: AT THE VERY LEAST, THIS WITNESS - - WE
THINK THIS WITNESS ALREADY HAS A TREMENDOUS BIAS AND SHE
INDICATED IN HER GRAND JURY TESTIMONY III'M UPSET, I'M ANGRY,
I'M VINDICTIVE. II NOW WE FIND OUT SHE BECAME A GOVERNMENT
INFORMANT. CERTAINLY THAT'S SOMETHING WE WOULD WANT TO BRING
UP ON CROSS-EXAMINATION.
THE COURT: I WOULD IMAGINE THAT COULD BE DONE EVEN
BEFORE YOU SEE THE STATEMENTS. WHAT I'M DEBATING HERE, SHOULD
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
EXHIBITS TO BRIEF PAGE 48
2891
WE START ROBINS AT ALL, DIVIDE HER UP AS THE GOVERNMENT
SUGGESTS, OR THE BETTER THING TO DO IS POSTPONE HER UNTIL THE
DEFENSE HAS THE MEANS EVEN MAXIMUM SPEED IT
GETS HERE OVERNIGHT, YOU GET IT TOMORROW, IT'S GOING TO BE
WEDNESDAY BEFORE WE CAN WI MS. ROBINS.
MR. BROWN: I DON'T WE'RE ING TO HAVE, FIRST
OF ALL, A GREAT OF FFI THE GOVERNMENT'S
WE'D BE ABLE TO
IT SEEMED THAT WAY. I
WITNESSES THIS WEEK. THINK THROUGH
COMPLETE WHATEVER, WOULDN'T YOU
WOULD LIKE JUST A MOMENT OR TWO TO CONFER WITH COUNSEL.
YET.
THE COURT: APPARENTLY, THE U"-\.JI\..;;) MEN' T ALL HERE
MR. BROWN: I F WE COULD HAVE A FEW MOMENTS.
THE COURT: GO AHEAD AND CONSULT.
(PAUSE IN THE PROCEEDINGS)
MR. BROWN: YOUR WEtRE STILL IN THE PROCESS OF
DISCUSSING IT AND IF WE DID A LITTLE FOR A FEW
MOMENTS, WHAT -- THE THING I'M TO SAY, I THINK,
THERE ARE SOME CASES TO SUPPORT WHAT I'M ABOUT TO SAY.
THE FIRST MOTION WE WOULD MAKE WOULD BE THAT THE
WITNESS BE EXCLUDED ENTIRELY. THIS COMPUCHECK WE'RE TRYING TO
SET UP THE TIME FRAME. I'M EVEN WONDERING IF IT WAS COMPUCHECK
AND I DON'T EVEN KNOW IF MR. SMETANA OR MR. HARDY KNOWS AT THIS
POINT, BUT I'M WONDERING IF SHE WAS REALLY
COMPUCHECK OR THERE WAS A SPILLOVER HER
GATING
WERE FOR THIS
J k ~ E S YEOr4ANS, OFFICIAL REPORTER, USDC, 415-863-5179
2891
WE START ROBINS AT ALL, DIVIDE HER UP AS THE GOVERNMENT
SUGGESTS, OR THE BETTER THING TO DO IS POSTPONE HER UNTIL THE
DEFENSE HAS THE MEANS EVEN MAXIMUM SPEED IT
GETS HERE OVERNIGHT, YOU GET IT TOMORROW, IT'S GOING TO BE
WEDNESDAY BEFORE WE CAN WI MS. ROBINS.
MR. BROWN: I DON'T
OF ALL, A GREAT OF FFI
ING TO HAVE, FIRST
THE GOVERNMENT'S
WE'D BE ABLE TO
IT SEEMED THAT WAY. I
WITNESSES THIS WEEK. THINK THROUGH
COMPLETE WHATEVER, WOULDN'T YOU
WOULD LIKE JUST A MOMENT OR TWO TO CONFER WITH COUNSEL.
YET.
THE COURT: APPARENTLY, THE 1..I'"'",.,n..... MEN' T ALL HERE
MR. BROWN: I F WE COULD HAVE A FEW MOMENTS.
THE COURT: GO AHEAD AND CONSULT.
(PAUSE IN THE PROCEEDINGS)
MR. BROWN: YOUR WEtRE STILL IN THE PROCESS OF
DISCUSSING IT AND IF WE DID A LITTLE FOR A FEW
MOMENTS, WHAT -- THE THING I'M GOING TO SAY, I THINK,
THERE ARE SOME CASES TO SUPPORT WHAT I'M ABOUT TO SAY.
THE FIRST MOTION WE WOULD MAKE WOULD BE THAT THE
WITNESS BE EXCLUDED ENTIRELY. THIS COMPUCHECK WE'RE TRYING TO
SET UP THE TIME FRAME. riM EVEN WONDERING IF IT WAS COMPUCHECK
AND I DON'T EVEN KNOW IF MR. SMETANA OR MR. HARDY KNOWS AT THIS
POINT, BUT I'M WONDERING IF SHE WAS REALLY
COMPUCHECK OR THERE WAS A SPILLOVER HER
GATING
WERE FOR THIS
J k ~ E S YEOr4ANS, OFFICIAL REPORTER, USDC, 415-863-5179
2891
WE START ROBINS AT ALL, DIVIDE HER UP AS THE GOVERNMENT
SUGGESTS, OR THE BETTER THING TO DO IS POSTPONE HER UNTIL THE
DEFENSE HAS THE MEANS EVEN MAXIMUM SPEED IT
GETS HERE OVERNIGHT, YOU GET IT TOMORROW, IT'S GOING TO BE
WEDNESDAY BEFORE WE CAN WI MS. ROBINS.
MR. BROWN: I DON'T
OF ALL, A GREAT OF FFI
ING TO HAVE, FIRST
THE GOVERNMENT'S
WE'D BE ABLE TO
IT SEEMED THAT WAY. I
WITNESSES THIS WEEK. THINK THROUGH
COMPLETE WHATEVER, WOULDN'T YOU
WOULD LIKE JUST A MOMENT OR TWO TO CONFER WITH COUNSEL.
YET.
THE COURT: APPARENTLY, THE 1..I'"'",.,n..... MEN' T ALL HERE
MR. BROWN: I F WE COULD HAVE A FEW MOMENTS.
THE COURT: GO AHEAD AND CONSULT.
(PAUSE IN THE PROCEEDINGS)
MR. BROWN: YOUR WEtRE STILL IN THE PROCESS OF
DISCUSSING IT AND IF WE DID A LITTLE FOR A FEW
MOMENTS, WHAT -- THE THING I'M GOING TO SAY, I THINK,
THERE ARE SOME CASES TO SUPPORT WHAT I'M ABOUT TO SAY.
THE FIRST MOTION WE WOULD MAKE WOULD BE THAT THE
WITNESS BE EXCLUDED ENTIRELY. THIS COMPUCHECK WE'RE TRYING TO
SET UP THE TIME FRAME. riM EVEN WONDERING IF IT WAS COMPUCHECK
AND I DON'T EVEN KNOW IF MR. SMETANA OR MR. HARDY KNOWS AT THIS
POINT, BUT I'M WONDERING IF SHE WAS REALLY
COMPUCHECK OR THERE WAS A SPILLOVER HER
GATING
WERE FOR THIS
J k ~ E S YEOr4ANS, OFFICIAL REPORTER, USDC, 415-863-5179
EXHIBITS TO BRIEF PAGE 49
2892
MATTER.
THE COURT: THAT'S THE ISSUE, THAT'S PART OF THE
QUESTION. NOW, MY FEELING, JUST AS I'M THINKING ABOUT IT, IT'S
NOT FAIR TO THE DEFENSE TO HAVE THEM HAVE TO TAKE MS. ROBINS ON
CROSS AND TIPTOE AROUND THE QUESTION WITHOUT KNOWING THE WHOLE
STORY, THAT YOU GOT THE -- KNOW THE WHOLE STORY. AND BY THE
WHOLE STORY, I MEAN, CERTAINLY THE RECORDED STATEMENTS BEFORE
YOU CROSS-EXAMINE.
MR. BROWN: I AGREE WITH YOU.
THE COURT: I THINK
MR. BROWN: BUT I'M GOING ONE STEP BEYOND THAT FOR MY
FIRST INITIAL DISCUSSION WITH THE COURT. IN THE PREPARATION
OUR DEFENSE, IN AND ANALYZING ALL THESE CASES AND RECEIVING ALL
THE WORK THE GOVERNMENT DID SO NICELY IN ALL THESE BINDERS AND
BOOKS AND LOOKING AT ALL THE 302'S, WE HAD TWO 302'S FROM THIS
WITNESS. SHE GAVE A COUPLE OF DEPOSITIONS AT OR ABOUT THIS
TIME AND SHE HAD GRAND JURY TESTIMONY. IT'S NOT MENTIONED
ANYWHERE. THEY DIDN'T KNOW IT EITHER. SHE'S MISLED THE
GOVERNMENT. SHE J S MI SLED EVERYBODY. AND WE WERE NOT ABLE TO
TAKE THIS INTO ACCOUNT IN PREPARATION OF OUR DEFENSE.
I REALLY THINK SHE NOT BE ALLOWED TO TESTIFY.
THE COURT: I'M NOT GOING TO GO THAT FAR UNTIL I SEE
WHAT IT IS. IT MAY BE HAS ABSOLUTELY NOTHING TO DO WITH THIS
CASE AT ALL, BUT I'M NOT PREPARED TO STRIKE HER, BUT CERTAINLY
NOT GOING TO FORCE YOU FOLKS TO DO YOUR CROSS BEFORE YOU HAVE A
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-B63-5179
2892
MATTER.
THE COURT: THAT'S THE ISSUE, THAT'S PART OF THE
QUESTION. NOW, MY FEELING, JUST AS I'M THINKING ABOUT IT, IT'S
NOT FAIR TO THE DEFENSE TO HAVE THEM HAVE TO TAKE MS. ROBINS ON
CROSS AND TIPTOE AROUND THE QUESTION WITHOUT KNOWING THE WHOLE
STORY, THAT YOU GOT THE -- KNOW THE WHOLE STORY. AND BY THE
WHOLE STORY, I MEAN, CERTAINLY THE RECORDED STATEMENTS BEFORE
YOU CROSS-EXAMINE.
MR. BROWN: I AGREE WITH YOU.
THE COURT: I THINK
MR. BROWN: BUT I'M GOING ONE STEP BEYOND THAT FOR MY
FIRST INITIAL DISCUSSION WITH THE COURT. IN THE PREPARATION
OUR DEFENSE, IN AND ANALYZING ALL THESE CASES AND RECEIVING ALL
THE WORK THE GOVERNMENT DID SO NICELY IN ALL THESE BINDERS AND
BOOKS AND LOOKING AT ALL THE 302'S, WE HAD TWO 302'S FROM THIS
WITNESS. SHE GAVE A COUPLE OF DEPOSITIONS AT OR ABOUT THIS
TIME AND SHE HAD GRAND JURY TESTIMONY. IT'S NOT MENTIONED
ANYWHERE. THEY DIDN'T KNOW IT EITHER. SHE'S MISLED THE
GOVERNMENT. SHE J S MI SLED EVERYBODY. AND WE WERE NOT ABLE TO
TAKE THIS INTO ACCOUNT IN PREPARATION OF OUR DEFENSE.
I REALLY THINK SHE NOT BE ALLOWED TO TESTIFY.
THE COURT: I'M NOT GOING TO GO THAT FAR UNTIL I SEE
WHAT IT IS. IT MAY BE HAS ABSOLUTELY NOTHING TO DO WITH THIS
CASE AT ALL, BUT I'M NOT PREPARED TO STRIKE HER, BUT CERTAINLY
NOT GOING TO FORCE YOU FOLKS TO DO YOUR CROSS BEFORE YOU HAVE A
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-B63-5179
2892
MATTER.
THE COURT: THAT'S THE ISSUE, THAT'S PART OF THE
QUESTION. NOW, MY FEELING, JUST AS I'M THINKING ABOUT IT, IT'S
NOT FAIR TO THE DEFENSE TO HAVE THEM HAVE TO TAKE MS. ROBINS ON
CROSS AND TIPTOE AROUND THE QUESTION WITHOUT KNOWING THE WHOLE
STORY, THAT YOU GOT THE -- KNOW THE WHOLE STORY. AND BY THE
WHOLE STORY, I MEAN, CERTAINLY THE RECORDED STATEMENTS BEFORE
YOU CROSS-EXAMINE.
MR. BROWN: I AGREE WITH YOU.
THE COURT: I THINK
MR. BROWN: BUT I'M GOING ONE STEP BEYOND THAT FOR MY
FIRST INITIAL DISCUSSION WITH THE COURT. IN THE PREPARATION
OUR DEFENSE, IN AND ANALYZING ALL THESE CASES AND RECEIVING ALL
THE WORK THE GOVERNMENT DID SO NICELY IN ALL THESE BINDERS AND
BOOKS AND LOOKING AT ALL THE 302'S, WE HAD TWO 302'S FROM THIS
WITNESS. SHE GAVE A COUPLE OF DEPOSITIONS AT OR ABOUT THIS
TIME AND SHE HAD GRAND JURY TESTIMONY. IT'S NOT MENTIONED
ANYWHERE. THEY DIDN'T KNOW IT EITHER. SHE'S MISLED THE
GOVERNMENT. SHE J S MI SLED EVERYBODY. AND WE WERE NOT ABLE TO
TAKE THIS INTO ACCOUNT IN PREPARATION OF OUR DEFENSE.
I REALLY THINK SHE NOT BE ALLOWED TO TESTIFY.
THE COURT: I'M NOT GOING TO GO THAT FAR UNTIL I SEE
WHAT IT IS. IT MAY BE HAS ABSOLUTELY NOTHING TO DO WITH THIS
CASE AT ALL, BUT I'M NOT PREPARED TO STRIKE HER, BUT CERTAINLY
NOT GOING TO FORCE YOU FOLKS TO DO YOUR CROSS BEFORE YOU HAVE A
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-B63-5179
EXHIBITS TO BRIEF PAGE 50
2893
LITTLE , AND THAT RAISES THE ABOUT I
SHOULD LET HER ON BEFORE THAT OCCURS, TOO.
MS. LEARY: WE JOIN IN MR. BROWN'S MOTION.
THE COURT: IS THERE A MOTION? WHAT'S THE MOTION?
MS. LEARY: THE MOTION IS EXCLUDE HER AS WITNESS
ON DUE PROCESS GROUNDS, SPECIFICALLY ON BRADY GROUNDS.
THE COURT: WE DON'T KNOW WE HAVE ANY BRADY.
MS. LEARY: WE KNOW THIS WOMEN PARTICIPATED IN AN
INVESTIGATION OF MR. I POSSIBLY MR. FOWLES I
WE HOPE NOT. THE FACT THAT INVESTIGATION DIDN'T RESULT IN
ANYTHING, MAYBE ON ITS FACE BRADY, CERTAINLY IT'S IMPEACHMENT
MATERIAL AND THAT IS A TYPE OF BRADY MATERIAL, THIS RAISES SOME
GRAVE DUE PROCESS CONCERNS.
THIS PERSON HAS HAD CONSTANT CONTACT WITH THE FBI AND
WITH THE GOVERNMENT. 'S TESTIFIED BEFORE THE JURY, AT
NO INDICATING
THE COURT: GRAND JURY WHERE, IN TEXAS?
THAT
MS. LEARY: MR. SMETANA AND MR. YAMAGUCHI DIRECTED
JURY TESTIMONY. SHE AT NO POINT INDICATED --
THE COURT: YOU HAVE THAT
MS. LEARY: WE DO. THIS
CONCERNS. THIS IS SOMETHING THAT
GRAVE DUE
EXTREMELY
MUST HAVE MET WITH MR. YAMAGUCHI, AND MR. SMETANA AT
DIVULGES THIS TYPE INFORMATION.
SHE
POINT
IN FACT, I HAVE A LIST OF IN LIMINE MOTIONS I'D LIKE
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863 5179
2893
LITTLE , AND THAT RAISES THE ABOUT I
SHOULD LET HER ON BEFORE THAT OCCURS, TOO.
MS. LEARY: WE JOIN IN MR. BROWN'S MOTION.
THE COURT: IS THERE A MOTION? WHAT'S THE MOTION?
MS. LEARY: THE MOTION IS EXCLUDE HER AS WITNESS
ON DUE PROCESS GROUNDS, SPECIFICALLY ON BRADY GROUNDS.
THE COURT: WE DON'T KNOW WE HAVE ANY BRADY.
MS. LEARY: WE KNOW THIS WOMEN PARTICIPATED IN AN
INVESTIGATION OF MR. I POSSIBLY MR. FOWLES I
WE HOPE NOT. THE FACT THAT INVESTIGATION DIDN'T RESULT IN
ANYTHING, MAYBE ON ITS FACE BRADY, CERTAINLY IT'S IMPEACHMENT
MATERIAL AND THAT IS A TYPE OF BRADY MATERIAL, THIS RAISES SOME
GRAVE DUE PROCESS CONCERNS.
THIS PERSON HAS HAD CONSTANT CONTACT WITH THE FBI AND
WITH THE GOVERNMENT. 'S TESTIFIED BEFORE THE JURY, AT
NO INDICATING
THE COURT: GRAND JURY WHERE, IN TEXAS?
MS. LEARY: MR. SMETANA AND MR. YAMAGUCHI DIRECTED
THAT JURY TESTIMONY. SHE AT NO POINT INDICATED --
THE COURT: YOU HAVE THAT
MS. LEARY: WE DO. THIS
CONCERNS. THIS IS SOMETHING THAT
GRAVE DUE
EXTREMELY
MUST HAVE MET WITH MR. YAMAGUCHI, AND MR. SMETANA AT
DIVULGES THIS TYPE INFORMATION.
SHE
POINT
IN FACT, I HAVE A LIST OF IN LIMINE MOTIONS I'D LIKE
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863 5179
2893
LITTLE , AND THAT RAISES THE ABOUT I
SHOULD LET HER ON BEFORE THAT OCCURS, TOO.
MS. LEARY: WE JOIN IN MR. BROWN'S MOTION.
THE COURT: IS THERE A MOTION? WHAT'S THE MOTION?
MS. LEARY: THE MOTION IS EXCLUDE HER AS WITNESS
ON DUE PROCESS GROUNDS, SPECIFICALLY ON BRADY GROUNDS.
THE COURT: WE DON'T KNOW WE HAVE ANY BRADY.
MS. LEARY: WE KNOW THIS WOMEN PARTICIPATED IN AN
INVESTIGATION OF MR. I POSSIBLY MR. FOWLES I
WE HOPE NOT. THE FACT THAT INVESTIGATION DIDN'T RESULT IN
ANYTHING, MAYBE ON ITS FACE BRADY, CERTAINLY IT'S IMPEACHMENT
MATERIAL AND THAT IS A TYPE OF BRADY MATERIAL, THIS RAISES SOME
GRAVE DUE PROCESS CONCERNS.
THIS PERSON HAS HAD CONSTANT CONTACT WITH THE FBI AND
WITH THE GOVERNMENT. 'S TESTIFIED BEFORE THE JURY, AT
NO INDICATING
THE COURT: GRAND JURY WHERE, IN TEXAS?
MS. LEARY: MR. SMETANA AND MR. YAMAGUCHI DIRECTED
THAT JURY TESTIMONY. SHE AT NO POINT INDICATED --
THE COURT: YOU HAVE THAT
MS. LEARY: WE DO. THIS
CONCERNS. THIS IS SOMETHING THAT
GRAVE DUE
EXTREMELY
MUST HAVE MET WITH MR. YAMAGUCHI, AND MR. SMETANA AT
DIVULGES THIS TYPE INFORMATION.
SHE
POINT
IN FACT, I HAVE A LIST OF IN LIMINE MOTIONS I'D LIKE
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863 5179
EXHIBITS TO BRIEF PAGE 51
2894
TO MAKE ABOUT HER TESTIMONY TODAY THAT'S THIS,
WHO IS MORE THAN WILLING TO BEND THE TRUTH IN AN
AGGRESSIVE WAY.
AND I THINK THIS IS AN EXTREMELY UPSETTING EXAMPLE OF
THE EXTENT TO WHICH SHE IS IN MR. ARMSTRONG
AND BY IMPLICATION OF MR. FOWLES. AND I WOULD MOVE TO STRIKE
THE TESTIMONY OF SOMEBODY WHO WITHHELD THIS
FOR THIS PERIOD OF TIME.
THE COURT: I'M NOT PREPARED TO
SHE MAY HAVE, QUOTE, "WITHHELD, II AS YOU
OF INFORMATION
FAR. BECAUSE
IT, MAY BE
SOMETHING THAT IS TOTALLY NOT TANGENTIAL BUT TOTALLY IRRELEVANT
TO AN ENTIRE DIFFERENT MATTER.
I'M NOT PREPARED TO SAY IT IS OR ISN'T, BUT I DO THINK
THAT I SHOULD NOT LET MS. ROBINS TESTIFY HERE TODAY UNTIL
RE READY TO CROSS.
THE WHOLE STORY. AND ONCE YOU
I YOU CAN RENEW YOUR MOTION
TO BE A WITNESS AT ALL.
MS. LEARY: THERE'S TWO
THE
STAND NOW AND VOIR DIRE HER OUTSIDE
WE
L YOU HAVE
AND THEN,
THINK
HER
THE PRESENCE THE
JURy WHAT SHE DID, WHAT THE STATEMENTS WERE, AND TRY F
WHAT THE RELEVANCE ON THAT BASIS.
WE CAN ASK THE GOVERNMENT I ALSO, I WHAT
KNOW ABOUT THE COMPUCHECK, INVESTIGATION; WHO INITIATED, WAS IT
JAMES YEOMANS, OFFICIAL REPORTER, USDe, 415-863-5179
2894
TO MAKE ABOUT HER TESTIMONY TODAY THAT'S THIS,
WHO IS MORE THAN WILLING TO BEND THE TRUTH IN AN
AGGRESSIVE WAY.
AND I THINK THIS IS AN EXTREMELY UPSETTING EXAMPLE OF
THE EXTENT TO WHICH SHE IS IN MR. ARMSTRONG
AND BY IMPLICATION OF MR. FOWLES. AND I WOULD MOVE TO STRIKE
THE TESTIMONY OF SOMEBODY WHO WITHHELD THIS
FOR THIS PERIOD OF TIME.
THE COURT: I'M NOT PREPARED TO
SHE MAY HAVE, QUOTE, "WITHHELD, II AS YOU
OF INFORMATION
FAR. BECAUSE
IT, MAY BE
SOMETHING THAT IS TOTALLY NOT TANGENTIAL BUT TOTALLY IRRELEVANT
TO AN ENTIRE DIFFERENT MATTER.
I'M NOT PREPARED TO SAY IT IS OR ISN'T, BUT I DO THINK
THAT I SHOULD NOT LET MS. ROBINS TESTIFY HERE TODAY UNTIL
RE READY TO CROSS.
AND I DON/T THINK YOU/RE READY TO
THE WHOLE STORY. AND ONCE YOU HAVE THE
I YOU CAN RENEW YOUR MOTION
TO BE A WITNESS AT ALL.
MS. LEARY: THERE'S TWO
STAND NOW AND VOIR DIRE HER OUTSIDE
WE
L YOU HAVE
AND THEN,
THINK
HER
THE PRESENCE THE
JURy WHAT SHE DID, WHAT THE STATEMENTS WERE, AND TRY F
WHAT THE RELEVANCE ON THAT BASIS.
WE CAN ASK THE GOVERNMENT I ALSO I I WHAT
KNOW ABOUT THE COMPUCHECK, INVESTIGATION; WHO INITIATED, WAS IT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
2894
TO MAKE ABOUT HER TESTIMONY TODAY THAT'S THIS,
WHO IS MORE THAN WILLING TO BEND THE TRUTH IN AN
AGGRESSIVE WAY.
AND I THINK THIS IS AN EXTREMELY UPSETTING EXAMPLE OF
THE EXTENT TO WHICH SHE IS IN MR. ARMSTRONG
AND BY IMPLICATION OF MR. FOWLES. AND I WOULD MOVE TO STRIKE
THE TESTIMONY OF SOMEBODY WHO WITHHELD THIS
FOR THIS PERIOD OF TIME.
THE COURT: I'M NOT PREPARED TO
SHE MAY HAVE, QUOTE, "WITHHELD, II AS YOU
OF INFORMATION
FAR. BECAUSE
IT, MAY BE
SOMETHING THAT IS TOTALLY NOT TANGENTIAL BUT TOTALLY IRRELEVANT
TO AN ENTIRE DIFFERENT MATTER.
I'M NOT PREPARED TO SAY IT IS OR ISN'T, BUT I DO THINK
THAT I SHOULD NOT LET MS. ROBINS TESTIFY HERE TODAY UNTIL
RE READY TO CROSS.
AND I DON/T THINK YOU/RE READY TO
THE WHOLE STORY. AND ONCE YOU HAVE THE
I YOU CAN RENEW YOUR MOTION
TO BE A WITNESS AT ALL.
MS. LEARY: THERE'S TWO
STAND NOW AND VOIR DIRE HER OUTSIDE
WE
L YOU HAVE
AND THEN,
THINK
HER
THE PRESENCE THE
JURy WHAT SHE DID, WHAT THE STATEMENTS WERE, AND TRY F
WHAT THE RELEVANCE ON THAT BASIS.
WE CAN ASK THE GOVERNMENT I ALSO I I WHAT
KNOW ABOUT THE COMPUCHECK, INVESTIGATION; WHO INITIATED, WAS IT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
EXHIBITS TO BRIEF PAGE 52
2895
} OUT OF TO WHAT EXTENT THESE GENTLEMEN WERE
WERE INVOLVED, IF THE TWO INVESTIGATIONS WERE
COMBINED IN SOME WAY AND SHE KEPT THAT INFORMATION FROM THEM.
THE COURT: AREN'T YOU GOING TO KNOW BETTER WHEN
SEE THE ?
MS. WE MAY, BUT WE CAN CERTAINLY GET A PIECE
OF IT NOW HAVING HER ON THE STAND, VOIR DIRE HER ON THE
MR. I THINK I JUST TO MAKE RECORD I MY
COMPUCHECK WAS A SEPARATE INVESTIGATION IN
DALLAS.
HAD ANY
'S SOMETHING THAT WE HAVE PLAYED A ROLE IN OR
WITH. I NEED TO SPEAK ONLY BECAUSE I I M THE ONE
WHO'S BEEN WITH
RECENT ADDITION.
CASE THE LONGEST. MR. HARDY A FAIRLY
WE'VE NOT BEEN INVOLVED IN COMPUCHECK INVESTIGATION.
I DON'T KNOW IT'S CURRENT STATUS, IF IT'S STILL AN OPEN
INVESTIGATION, I BELIEVE IT IS. JUST FROM MY
MORNING, TO MY KNOWLEDGE THEY'RE TWO TOTALLY SEPARATE
HAD JUST
THE
THIS MORNING I REVIEWED A COPY OF THE 10K OR
FROM SEPTEMBER OF 1993, AND THAT POINT MR.
MS. LEARY:
INTEREST, SO IT IS SOME TWO YEARS
TAFT.
THE GOVERNMENT KNOW WHETHER
MR. MURPHY WAS INVOLVED IN THAT INVESTIGATION?
JAMES YEOMANS, OFFICIAL REPORTER, usnc, 415-863-5179
THIS
NOT
2895
OF TO WHAT EXTENT THESE GENTLEMEN WERE
WERE INVOLVED, IF THE TWO INVESTIGATIONS WERE
COMBINED IN SOME WAY AND SHE KEPT THAT INFORMATION FROM THEM.
THE COURT: AREN'T YOU GOING TO KNOW BETTER WHEN
SEE THE ?
MS. WE MAY, BUT WE CAN CERTAINLY GET A PIECE
OF IT NOW HAVING HER ON THE STAND, VOIR DIRE HER ON THE
MR. I THINK I JUST TO MAKE RECORD I MY
COMPUCHECK WAS A SEPARATE INVESTIGATION IN
DALLAS.
HAD ANY
'S SOMETHING THAT WE HAVE PLAYED A ROLE IN OR
WITH. I NEED TO SPEAK ONLY BECAUSE I I M THE ONE
WHO'S BEEN WITH
RECENT ADDITION.
CASE THE LONGEST. MR. HARDY A FAIRLY
WE'VE NOT BEEN INVOLVED IN COMPUCHECK INVESTIGATION.
I DON'T KNOW IT'S CURRENT STATUS, IF IT'S STILL AN OPEN
INVESTIGATION, I BELIEVE IT IS. JUST FROM MY
MORNING, TO MY KNOWLEDGE THEY'RE TWO TOTALLY SEPARATE
HAD JUST
THE
THIS MORNING I REVIEWED A COPY OF THE 10K OR
FROM SEPTEMBER OF 1993, AND THAT POINT MR.
MS. LEARY:
INTEREST, SO IT IS SOME TWO YEARS
TAFT.
THE GOVERNMENT KNOW WHETHER
MR. MURPHY WAS INVOLVED IN THAT INVESTIGATION?
JAMES YEOMANS, OFFICIAL REPORTER, usnc, 415-863-5179
THIS
NOT
2895
OF TO WHAT EXTENT THESE GENTLEMEN WERE
WERE INVOLVED, IF THE TWO INVESTIGATIONS WERE
COMBINED IN SOME WAY AND SHE KEPT THAT INFORMATION FROM THEM.
THE COURT: AREN'T YOU GOING TO KNOW BETTER WHEN
SEE THE ?
MS. WE MAY, BUT WE CAN CERTAINLY GET A PIECE
OF IT NOW HAVING HER ON THE STAND, VOIR DIRE HER ON THE
MR. I THINK I JUST TO MAKE RECORD I MY
COMPUCHECK WAS A SEPARATE INVESTIGATION IN
DALLAS.
HAD ANY
'S SOMETHING THAT WE HAVE PLAYED A ROLE IN OR
WITH. I NEED TO SPEAK ONLY BECAUSE I I M THE ONE
WHO'S BEEN WITH
RECENT ADDITION.
CASE THE LONGEST. MR. HARDY A FAIRLY
WE'VE NOT BEEN INVOLVED IN COMPUCHECK INVESTIGATION.
I DON'T KNOW IT'S CURRENT STATUS, IF IT'S STILL AN OPEN
INVESTIGATION, I BELIEVE IT IS. JUST FROM MY
MORNING, TO MY KNOWLEDGE THEY'RE TWO TOTALLY SEPARATE
HAD JUST
THE
THIS MORNING I REVIEWED A COPY OF THE 10K OR
FROM SEPTEMBER OF 1993, AND THAT POINT MR.
MS. LEARY:
INTEREST, SO IT IS SOME TWO YEARS
TAFT.
THE GOVERNMENT KNOW WHETHER
MR. MURPHY WAS INVOLVED IN THAT INVESTIGATION?
JAMES YEOMANS, OFFICIAL REPORTER, usnc, 415-863-5179
THIS
NOT
EXHIBITS TO BRIEF PAGE 53
1 MICHAEL J. YAMAGUCHI
United states Attorney
2
JOEL R. LEVIN
3 C ~ i e f , Criminal Division
41 RONALD D. SMETANA
Special Assistant U.S. Attorney
5 GEORGE D. HARDY
Assistant U.S. Attorney
6
450 Golden Gate Avenue
7 San Francisco, CA 94102
Telephone: (415) 436-6851
II
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
UNITED STATES OF AKBRlCA,
CONNIE C. ARHSTRONG, JR., Iilnd
RICHARD A.FOlllrLES,
No. OR 94-0276 CAL
All!'lI!'IDAVIT Oll!' WILLARD L.
HATCHER, JR. Illi SUPPORT
OF GQVBRmU!JIIT'S EX-PARTE
SUBHXSSION
Plaintiff,
Dllfondanta.
v.
)
)
)
)
)
)
)
)
)
)
---------------)
11
10
15
16
12
14
17 I, Willard L. Hatcher, Jr., state that:
18 I have been a Special Agent with the Federal Bureau of
19 Investigation ("FBI") for 6 years, and am currently the case
20 agent for the prosecution in United States v. Connie C.
21 Armstrong. Jr .. et al, I have been involved with the
22 investigation of Hamilton Taft and Company since March of 1991.
23 Prior to his retirement on January 1, 1997, FBI special Agent
24 Patrick K. Murphy was the case agent.
25 2. I first learned of the government's possession of
26 recorded conversations of Connie C. Armstrong, Jr., on the night
AFFIDAVITOP WILLARD L HATCHIJIl, lR
IN SUPPORT OF GOYllRNMENT'S EX-PARTE
SUBMISSION
1 MICHAEL J. YAMAGUCHI
United states Attorney
2
JOEL R. LEVIN
3 Criminal Division
4 RONALD D. SMETANA
Special Assistant U.S. Attorney
5 GEORGE D. HARDY
Assistant U.S. Attorney
6
450 Golden Gate Avenue
7 San Francisco, CA 94102
Telephone: (415) 436-6851
II
UNITED STATES DISTRICT COURT
10
11
12
14
15
16
17
18
NORTHERN DISTRICT OF CALIFORNIA
UNITED STATES OF AKBRICA,
Plaintiff,
v.
CONNIE C. ARHSTRONG, JR., IiInd
RICHARD A.FOWLES,
Dllfondanta.
)
)
)
)
1
)
)
)
1
)
______________________________ 1
APFIDAVXT OF WILLARD L.
HATCHER, JR. Illi SUPPORT
OF EX-PARTE
SUBHXSSION
I, Willard L. Hatcher, Jr., state that:
I have been a Special Agent with the Federal Bureau of
19 Investigation ("FBI") for 6 years, and am currently the case
20 agent for the prosecution in United States v. Connie C.
21 Armstrong. Jr .. et al. I have been inVOlved with the
22 investigation of Hamilton Taft and Company since March of 1991.
23 Prior to his retirement on January 1, 1997, FBI special Agent
24 Patrick K. Murphy was the case agent.
25 2. I first learned of the government's possession of
26 recorded conversations of Connie C. Armstrong, Jr., on the night
AFFIDAVITOP WILLARD L HATCHIlIl, lR
IN SUPPORT OF GOYllRNMENT'S EX-PARTE
SUBMISSION
EXHIBITS TO BRIEF PAGE 54
1 of January 12, 1997, after witness Terri Robins informed
2 Assistant United states Attorney George Hardy of their existence.
3 3. I telephoned Patrick K. Murphy on January 13, 1997, and
4 asked his knowledge of such recordings. Mr. Murphy stated that
5 he understood that Ms. Robins had made some recordings for the
6 government on an unrelated investigation. Mr. Murphy stated he
7 did not know that Ms. Robins had ever recorded conversations with
8 Armstrong.
4. Mr. Murphy and I knew of the existence of the Dallas
10 FBI's investigation of Armstrong's activity at Comp-U-Check. We
11 understood that this investigation related to conduct that
12 occurred well after the bankruptcy of Hamilton Taft. To our
13 knowledge this investigation was unrelated to Hamilton Taft
14 except for the common involvement of Armstrong.
15 5. Since January 12, 1997, I have contacted Special Agent
16 Peter A. Galbraith, the Dallas FBI case agent for the Comp-U-
17 Check investigation, and requested all taped conversations with
18 Armstrong. I have received thirty-six (36) audio tapes and
19 special Agent Galbraith has assured me that these constitute all
20 of the tape recordings of Armstrong in the possession of the
21 Dallas FBI.
22 6. In addition, Special Agent Galbraith provided to me
23 copies of 302 reports prepared relating to the tapes and
24 documents provided to the Dallas FBI by Terri Robins. He assured
25 me that all of the reports and documents have also been forwarded
26 to San Francisco.
AFFIDAVIT OF WILLAIlD L HATCIlEll, JR
IN SUPPORT OF GOVERNMENT'S E X ~ P A R . T E
SUBMISSION 2
1 of January 12, 1997, after witness Terri Robins informed
2 Assistant United states Attorney George Hardy of their existence.
3 3. I telephoned Patrick K. Murphy on January 13, 1997, and
4 asked his knowledge of such recordings. Mr. Murphy stated that
5 he understood that Ms. Robins had made some recordings for the
6 government on an unrelated investigation. Mr. Murphy stated he
7 did not know that Ms. Robins had ever recorded conversations with
8 Armstrong.
4. Mr. Murphy and I knew of the existence of the Dallas
10 FBI's investigation of Armstrong's activity at Comp-U-Check. We
11 understood that this investigation related to conduct that
12 occurred well after the bankruptcy of Hamilton Taft. To our
13 knowledge this investigation was unrelated to Hamilton Taft
14 except for the common involvement of Armstrong.
15 5. Since January 12, 1997, I have contacted Special Agent
16 Peter A. Galbraith, the Dallas FBI case agent for the Comp-U-
17 Check investigation, and requested all taped conversations with
18 Armstrong. I have received thirty-six (36) audio tapes and
19 special Agent Galbraith has assured me that these constitute all
20 of the tape recordings of Armstrong in the possession of the
21 Dallas FBI.
22 6. In addition, Special Agent Galbraith provided to me
23 copies of 302 reports prepared relating to the tapes and
24 documents provided to the Dallas FBI by Terri Robins. He assured
25 me that all of the reports and documents have also been forwarded
26 to San Francisco.
AFFIDAVIT OF WILI..AIID L HATCIIIlR, JR
IN SUPPORT OF GOvmtNMl!NT'S
SUBMISSION 2
EXHIBITS TO BRIEF PAGE 55
1 7. Agent Galbraith expressed concern about the disclosure
2 the tapes, reports and documents to Armstrong because the Comp-U-
3 Check investigation and other related investigations are on-going
4 and he is concerned that disclosure of the materials may
5 jeopardize these investigations. He understood that certain of
6 the tapes, written materials and reports may have to be turned
7 over to Armstrong, but requested that the materials be
a scrutinized carefully and that those ultimately turned over be
9 limited to those necessary to protect Armstrong's rights without
10 harming the investigations.
11 8. Agent Galbraith said that all of the conversations were
12 recorded and documents were received in late 1993 and early 1994,
13 SUbsequent to the Hamilton Taft bankruptcy and before the
14 indictment of Armstrong.
15 9. After review of the tapes and documents by myself,
16 Special Agent Laura Nielson, Assistant United States Attorney
17 George Hardy and special Assistant United states Attorney Ronald
18 Smetana, we determined that Hamilton Taft is mentioned in five
19 (5) tapes; copies of the relevant portions of those tapes have
20 been reproduced for review by the Court for a determination of
21 whether they should be turned Over to Armstrong. In addition,
22 there is one document, a "novella" about Hamilton Taft, that has
23 statements attributed to Armstrong; since I do not know its
24 authorship, that document has been copied for the Court's review.
25 10. All of the reports, tapes and documents received from
26 the Dallas FBI are being made available for the Court's in camera
AFFIDAvrrOF wn.LARD L HATCHER, JR
IN SUPPORT OF GOVEIlNMIlNl"S !lX-FARTE
SUBMISSION 3
1 7. Agent Galbraith expressed concern about the disclosure
2 the tapes, reports and documents to Armstrong because the Comp-U-
3 Check investigation and other related investigations are on-going
4 and he is concerned that disclosure of the materials may
5 jeopardize these investigations. He understood that certain of
6 the tapes, written materials and reports may have to be turned
7 over to Armstrong, but requested that the materials be
8 scrutinized carefully and that those ultimately turned over be
9 limited to those necessary to protect Armstrong's rights without
10 harming the investigations.
11 8. Agent Galbraith said that all of the conversations were
12 recorded and documents were received in late 1993 and early 1994,
13 subsequent to the Hamilton Taft bankruptcy and before the
14 indictment of Armstrong.
15 9. After review of the tapes and documents by myself,
16 Special Agent Laura Nielson, Assistant United States Attorney
17 George Hardy and special Assistant United states Attorney Ronald
18 Smetana, we determined that Hamilton Taft is mentioned in five
19 (5) tapes; copies of the relevant portions of those tapes have
20 been reproduced for review by the Court for a determination of
21 whether they should be turned Over to Armstrong. In addition,
22 there is one document, a "novella" about Hamilton Taft, that has
23 statements attributed to Armstrong; since I do not know its
24 authorship, that document has been copied for the Court's review.
25 10. All of the reports, tapes and documents received from
26 the Dallas FBI are being made available for the Court's in camera
AFFIDAvrrOF wn.LARD L HATCHER, JR
IN SUPPORT OF GOVERNMIlNl"S !lX-PARTE
SUBMISSION 3
EXHIBITS TO BRIEF PAGE 56
1 review.
2
3 I declare under penalty of perjury that the foregoing is
4 true and correct. Executed
5 Francisco, California.
Ii
7
8
COUNTY OF SAN FRANCISCO )
9 ) SS.
STATE OF CALIFORNIA )
10
11 Sworn to and subscribed in my presence on January 24, 1997,
12
13
15
in San Francisco, California.
e.eeeeceee.eeeJ
@, . .. '
z Notory N:>IIc - Co1IlomlrJ !
' , Son FrancIDCO CounIV 1
d" 0 0
16 My Commission Expires on ,OJ; :: i.\" ""'\ ie,' . cl
i
.' [CYll
\
17
18
20
21
22
23
24
2S
26
AFFIDAVIT OF WILLAIID L HATCHER, JR
IN SUPPORT OF GOVERNMENT'S EX-PART!!
SUBMLSSION 4
1 review.
2
3 I declare under penalty of perjury that the foregoing is
4 true and correct. Executed
5 Francisco, California.
Ii
7
8
COUNTY OF SAN FRANCISCO )
9 ) SS.
STATE OF CALIFORNIA )
10
11 Sworn to and subscribed in my presence on January 24, 1997,
12 in San Francisco, California.
13
15
16 My commission Expires on ,-> :: i.\'- ""'\ Ie,' -c!'.' lei'll
\
17
18
20
21
22
23
24
2S
26
AFFIDAVIT OF WILLAIID L HATCHBR.IR
IN SUPPORT OF GOVERNMENT'S EX-PART!!
SUBMLSSION 4
EXHIBITS TO BRIEF PAGE 57
TRANSMIT VIA:
o Teletype
o Facsimile
!KJ AIRTEL
TO
PRECEDENCE:
o Immediate
D Inority
D Routine
DALLAS, SAC
FBI
CLASSIFICATION:
o TOP SECRET
o SECRET
o CONFIDENTIAL
o UNCLAS EFT 0
o UNCLAS
Date 8/4/93
FROM
SUBJECT
SAC, SAN FRANCISCO (196A-SF-93255) (P)
CONNIE CHIP ARMSTRONG, JRj
ET ALi
WIRE FRAUD (A)i
MAIL FRAUDj
00: SAN FRANCISCO
Reference airtel dated February 22,
SA HATCHER has obtained from
united states Attorney, MICHAEL YAMAGUCHT, forL _ I
I Iconfidential source to record conversa lons with b2
subiects of this case. I I
2 - DALLAS
(1) - SAN FRANCISCO
WLH/wlh
1.
" '
Approved:
Transmitted
(Nmnber) (Tune)
PCI' _
TRANSMIT VIA:
o Teletype
o Facsimile
!KJ AIRTEL
TO
FROM
SUBJECT
PRECEDENCE:
o Immediate
D Inority
D Routine
DALLAS, SAC
FBI
CLASSIFICATION:
o TOP SECRET
o SECRET
o CONFIDENTIAL
o UNCLAS EFT 0
o UNCLAS
Date 8/4/93
SAC, SAN FRANCISCO (196A-SF-93255) (P)
CONNIE CHIP ARMSTRONG, JRj
ET ALi
WIRE FRAUD (A)i
MAIL FRAUDj
00: SAN FRANCISCO
Reference airtel dated February 22,
SA HATCHER has obtained from
united states Attorney, MICHAEL YAMAGUCHT, for _ _ I
I Iconfidential source to record conversa lons with b2
sublects of this case. I I
2 - DALLAS
(1) - SAN FRANCISCO
WLH/wlh
1.
Approved:
Transmitted
" '
fix -"
PCI' ________ _
(Nmnber) (Tune)
EXHIBITS TO BRIEF PAGE 58
VB.
CONNIE
STATES
THE A.
C.
OF AMERICA,
PLAHITIFF,
ARMSTRONG, ,. ,
A. FOWLES,
DEFENDANTS.
)
)
)
}
) CR 94-0276
)
)
)
)
)
SAN FORNIA
27, 1997
PAGES 3441 - 3639
ATTORNEY
AVENUE
,CALIFORNIA 102
BY: G E ( ) R G ~ E D,.
n.' . /L'''.M..I..IJ.J D.
ASSISTANT
CHESTER L. BROWN, ESQ.
2450 BROADWAY, SUITE SSD
SANTA MONICAl CALIFORNIA 90404
SOLOMON WOLLACK,
388 MARKET STREET,
SAN
CONTINUED ON NEXT PAGE:)
1080
111
BY: JAMES J. t CSR
OFFICIAL COURT REPORTER, UBDC
COMPUTERIZED BY XSCRIBE
JAMES YEOMANS, OFFICIAL -863-5179
CAL
NORTHERN
BEFORE THE HO:N01WlLE
UNITED OF
PLAINTIFF,
VS.
I
DEFENDANTS.
OF
. LEGGE, JtJDGE
)
)
)
}
\
CR 94-0276 CAL J
)
}
)
)
)
SAJ.V FORNIA
27, 1997
PAGES 3441 - 3639
AVENUE
I CALIFORNIA 102
BY; GEORGE D. I ESQ.
RONALD D. SMETANA,
ASSISTANT UNITED STATES
2450 550
SANTA MONICAl CALIFORNIA 90404
SOLOMON WOLLACK, ESQ.
388 STREET I SUITE 1080
SAN I CALIFORNIA 111
ON NEXT PAGE:)
REPORTED BY: JAMES ~ 1 . YEOMANS t CSR
OFFICIAL COuKT REPORTER
COMPUTERIZED BY
JAMES -863-5179
NORTHERN
BEFORE THE HO:N01WlLE
UNITED OF
PLAINTIFF,
VS.
I
DEFENDANTS.
OF
. LEGGE, JtJDGE
)
)
)
}
\
CR 94-0276 CAL J
)
}
)
)
)
SAJ.V FORNIA
27, 1997
PAGES 3441 - 3639
AVENUE
I CALIFORNIA 102
BY; GEORGE D. I ESQ.
RONALD D. SMETANA,
ASSISTANT UNITED STATES
2450 550
SANTA MONICAl CALIFORNIA 90404
SOLOMON WOLLACK, ESQ.
388 STREET I SUITE 1080
SAN I CALIFORNIA 111
ON NEXT PAGE:)
REPORTED BY: JAMES ~ 1 . YEOMANS t CSR
OFFICIAL COuKT REPORTER
COMPUTERIZED BY
JAMES -863-5179
NORTHERN
BEFORE THE HO:N01WlLE
UNITED OF
PLAINTIFF,
VS.
I
DEFENDANTS.
OF
. LEGGE, JtJDGE
)
)
)
}
\
CR 94-0276 CAL J
)
}
)
)
)
SAJ.V FORNIA
27, 1997
PAGES 3441 - 3639
AVENUE
I CALIFORNIA 102
BY; GEORGE D. I ESQ.
RONALD D. SMETANA,
ASSISTANT UNITED STATES
2450 550
SANTA MONICAl CALIFORNIA 90404
SOLOMON WOLLACK, ESQ.
388 STREET I SUITE 1080
SAN I CALIFORNIA 111
ON NEXT PAGE:)
REPORTED BY: JAMES ~ 1 . YEOMANS t CSR
OFFICIAL COuKT REPORTER
COMPUTERIZED BY
JAMES -863-5179
EXHIBITS TO BRIEF PAGE 59
1
2
3
4
5
6
7
8
9
10
11
12
13
.... .1'
14
15
16
17
18
19
20
21
22
23
24
25
3446
THE COURT: YES. COMPUCHECK INVESTIGATION? IS THAT
WHAT YOU'RE TALKING ABOUT? YES. THEY FILED SOME STUFF AND, I
GUESS, THEY GAVE IT JUST TO COUNSEL FOR MR. ARMSTRONG BECAUSE I
DON'T THINK MR. FOWLES IS INVOLVED IN IT, AT LEAST, FROM WHAT I
SAW.
MR. SMETANA: THE QUOTE STATEMENTS OF THE DEFENDANT
THAT WE HAVE AND ANY POTENTIAL BRADY THAT WE HAVE RELATE ONLY
TO MR. ARMSTRONG AND NOT TO MR. FOWLES. THOSE HAVE BEEN
PROVIDED TO COUNSEL FOR MR. ARMSTRONG.
THE COURT: AS I SAID, I GOT A GREAT BIG BOX FRIDAY
AFTERNOON FULL OF MATERIAL ON THAT, SO WHAT DO YOU FOLKS WANT
TO DO?
MR. BROWN: LET'S TALK ABOUT THESE TAPES. I KNOW --
FIRST, I KNOW THE COURT IS PROBABLY VERY CONCERNED, I KNOW WE
ARE. FROM OUR PERSPECTIVE, YOUR HONOR, IT'S A MAJOR PROBLEM.
WE'VE JUST RECEIVED -- WE HEARD ON FRIDAY, I BELIEVE,
AFTERNOON THAT THEY HAD FINALLY AND I DON'T, I DON'T BELIEVE
IT'S MR. SMETANA OR MR. HATCHER OR MR. HARDY'S FAULT, BUT IT'S
ONE GOVERNMENT AND WE ALL KNOW HOW THOSE THEORIES WORK, IT'S
THE ABOUT FBI IN DALLAS.
WHAT APPARENTLY HAS HAPPENED HERE, WHILE MR. ARMSTRONG
WAS CLEARLY REPRESENTED BY COUNSEL AND WHILE THERE WAS, I
BELIEVE, GRAND JURY GOING ON IN THIS CASE, MS. ROBINS WAS
ACTING AS AN INFORMANT FOR THE FBI DOWN IN DALLAS. IT REALLY
IS HARD TO IMAGINE, WITH THE FACT THAT SHE WAS A GRAND JURY
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
1
2
3
4
5
6
7
8
9
10
11
12
13
,",
14
15
16
17
18
19
20
21
22
23
24
2S
3446
THE COURT; YES. COMPUCHECK INVESTIGATION? IS THAT
WHAT YOU'RE TALKING ABOUT? YES. THEY FILED SOME STUFF AND, I
GUESS, THEY GAVE IT JUST TO COUNSEL FOR MR. ARMSTRONG BECAUSE I
DON'T THINK MR. FOWLES IS INVOLVED IN IT, AT LEAST, FROM WHAT I
SAW.
MR. SMETANA: THE QUOTE STATEMENTS OF TIrE DEFENDANT
THAT WE HAVE AND ANY POTENTIAL BRADY THAT WE HAVE RELATE ONLY
TO MR. ARMSTRONG AND NOT TO MR. FOWLES. THOSE HA.VE BEEN
PROVIDED TO COUNSEL FOR MR. ARMSTRONG.
THE COURT: AS I SAID, I GOT A GREAT BIG BOX FRIDAY
AFTERNOON FULL OF MATERIAL ON THAT, SO WHAT DO YOU FOLKS WANT
TO DO?
MR. BROWN: LET'S TALK ABOUT THESE TAPES. I KNOW
FIRST, I KNOW THE COURT IS PROBABLY VERY CONCERNED, I KNOW WE
ARE. FROM OUR PERSPECTIVE, YOUR HONOR, IT'S A MAJOR PROBLEM.
WE'VE JUST RECEIVED -- WE HEARD ON FRIDAY, I BELIEVE,
AFTERNOON THAT THEY HAD FINALLY AND I DON'T, I DON'T BELIEVE
IT'S MR. SMETANA OR MR. HATCHER OR MR. HARDY'S FAULT, BUT IT'S
ONE GOVERNMENT AND WE ALL KNOW HOW THOSE THEORIES WORK, IT'S
THE ABOUT FBI IN DALLAS.
WHAT APPARENTLY HAS HAPPENED HERE, WHILE MR. ARMSTRONG
WAS CLEARLY REPRESENTED BY COUNSEL AND WHILE THERE WAS, I
BELIEVE, GRAND JURY GOING ON IN THIS CASE, MS. ROBINS WAS
ACTING AS AN INFORMANT FOR THE FBI DOWN IN DALLAS. IT REALLY
IS HARD TO IMAGINE, WITH THE FACT THAT SHE WAS A GRAND JURY
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
1
2
3
4
5
6
7
8
9
10
11
12
13
,",
14
15
16
17
18
19
20
21
22
23
24
2S
3446
THE COURT; YES. COMPUCHECK INVESTIGATION? IS THAT
WHAT YOU'RE TALKING ABOUT? YES. THEY FILED SOME STUFF AND, I
GUESS, THEY GAVE IT JUST TO COUNSEL FOR MR. ARMSTRONG BECAUSE I
DON'T THINK MR. FOWLES IS INVOLVED IN IT, AT LEAST, FROM WHAT I
SAW.
MR. SMETANA: THE QUOTE STATEMENTS OF TIrE DEFENDANT
THAT WE HAVE AND ANY POTENTIAL BRADY THAT WE HAVE RELATE ONLY
TO MR. ARMSTRONG AND NOT TO MR. FOWLES. THOSE HA.VE BEEN
PROVIDED TO COUNSEL FOR MR. ARMSTRONG.
THE COURT: AS I SAID, I GOT A GREAT BIG BOX FRIDAY
AFTERNOON FULL OF MATERIAL ON THAT, SO WHAT DO YOU FOLKS WANT
TO DO?
MR. BROWN: LET'S TALK ABOUT THESE TAPES. I KNOW
FIRST, I KNOW THE COURT IS PROBABLY VERY CONCERNED, I KNOW WE
ARE. FROM OUR PERSPECTIVE, YOUR HONOR, IT'S A MAJOR PROBLEM.
WE'VE JUST RECEIVED -- WE HEARD ON FRIDAY, I BELIEVE,
AFTERNOON THAT THEY HAD FINALLY AND I DON'T, I DON'T BELIEVE
IT'S MR. SMETANA OR MR. HATCHER OR MR. HARDY'S FAULT, BUT IT'S
ONE GOVERNMENT AND WE ALL KNOW HOW THOSE THEORIES WORK, IT'S
THE ABOUT FBI IN DALLAS.
WHAT APPARENTLY HAS HAPPENED HERE, WHILE MR. ARMSTRONG
WAS CLEARLY REPRESENTED BY COUNSEL AND WHILE THERE WAS, I
BELIEVE, GRAND JURY GOING ON IN THIS CASE, MS. ROBINS WAS
ACTING AS AN INFORMANT FOR THE FBI DOWN IN DALLAS. IT REALLY
IS HARD TO IMAGINE, WITH THE FACT THAT SHE WAS A GRAND JURY
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
1
2
3
4
5
6
7
8
9
10
11
12
13
,",
14
15
16
17
18
19
20
21
22
23
24
2S
3446
THE COURT; YES. COMPUCHECK INVESTIGATION? IS THAT
WHAT YOU'RE TALKING ABOUT? YES. THEY FILED SOME STUFF AND, I
GUESS, THEY GAVE IT JUST TO COUNSEL FOR MR. ARMSTRONG BECAUSE I
DON'T THINK MR. FOWLES IS INVOLVED IN IT, AT LEAST, FROM WHAT I
SAW.
MR. SMETANA: THE QUOTE STATEMENTS OF TIrE DEFENDANT
THAT WE HAVE AND ANY POTENTIAL BRADY THAT WE HAVE RELATE ONLY
TO MR. ARMSTRONG AND NOT TO MR. FOWLES. THOSE HA.VE BEEN
PROVIDED TO COUNSEL FOR MR. ARMSTRONG.
THE COURT: AS I SAID, I GOT A GREAT BIG BOX FRIDAY
AFTERNOON FULL OF MATERIAL ON THAT, SO WHAT DO YOU FOLKS WANT
TO DO?
MR. BROWN: LET'S TALK ABOUT THESE TAPES. I KNOW
FIRST, I KNOW THE COURT IS PROBABLY VERY CONCERNED, I KNOW WE
ARE. FROM OUR PERSPECTIVE, YOUR HONOR, IT'S A MAJOR PROBLEM.
WE'VE JUST RECEIVED -- WE HEARD ON FRIDAY, I BELIEVE,
AFTERNOON THAT THEY HAD FINALLY AND I DON'T, I DON'T BELIEVE
IT'S MR. SMETANA OR MR. HATCHER OR MR. HARDY'S FAULT, BUT IT'S
ONE GOVERNMENT AND WE ALL KNOW HOW THOSE THEORIES WORK, IT'S
THE ABOUT FBI IN DALLAS.
WHAT APPARENTLY HAS HAPPENED HERE, WHILE MR. ARMSTRONG
WAS CLEARLY REPRESENTED BY COUNSEL AND WHILE THERE WAS, I
BELIEVE, GRAND JURY GOING ON IN THIS CASE, MS. ROBINS WAS
ACTING AS AN INFORMANT FOR THE FBI DOWN IN DALLAS. IT REALLY
IS HARD TO IMAGINE, WITH THE FACT THAT SHE WAS A GRAND JURY
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
EXHIBITS TO BRIEF PAGE 60
1
2
3
4
5
6
7
8
9
10
11
12
13
-II'
14
15
16
17
18
19
20
21
22
23
24
25
3447
WITNESS OF THE GOVERNMENT HERE, THE FBI HERE IN LOS ANGELES DID
A NUMBER OF INTERVIEWS DOWN IN THE DALLAs AREA.
MR. MURPHY WENT DOWN THERE ON OCCAS ION WE KNOW FROM
MR. EVERETT WHO WAS FORMALLY WORKING WITH THE GOVERNMENT
THAT - - ON ONE OCCASION, AT LEAST, THAT WERE SOME DALLAS AGENTS
THAT WORKED WITH MR. MURPHY WHEN THEY WERE IN DALLAS, THAT THIS
INFORMATION WASN'T KNOWN, ALTHOUGH, IT'S NOT REALLY OUR PROBLEM
WHETHER IT WAS COMMUNICATED TO THE SAN FRANCISCO --
THE COURT: IT IS YOUR PROBLEM. WHAT DO YOU WANT TO
DO ABOUT IT? WHAT DO YOU WANT TO DO?
MR. BROWN: YOUR HONOR, WE'VE JUST RECEIVED - - LET ME
TELL YOU WHAT'S HAPPENED. THE GOVERNMENT - - APPARENTLY,
THERE'S SOME -- 35 SOME TAPES WITH 70 SOME HOURS OF INFORMATION
ON IT.
THE COURT: I'VE GOT A GREAT BIG BOX, LITERALLY A BIG
BOX, OF MATERIAL THEY BROUGHT IN MY OFFICE FRIDAY AFTERNOON.
MR. BROWN: ALL WITH SOUND RECORDINGS ON THEM.
THE COURT: NOT ALL, SUBSTANTIAL QUANTITY OF PAPER IN
THERE. I'M NOT SURE QUITE WHAT IT IS. WHAT I ATTEMPTED TO DO
IS START WITH WHAT WAS OBVIOUSLY GREATEST INTEREST TO YOU, THAT
IS THE TAPES AND, I GUESS I THE OTHER STATEMENTS WHICH HAD MR.
ARMSTRONG ON THEM, SO --
MR. BROWN: I'LL TELL YOU, YOUR HONOR, WE WERE TOLD
THAT THERE WERE THREE HOURS WORTH OF SOUND RECORDINGS THAT
SPECIFICALLY MENTIONED HAMILTON TAFT. THE GOVERNMENT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
1
2
3
4
5
6
7
8
9
10
11
12
13
-"
14
15
16
17
18
19
20
21
22
23
24
25
3447
WITNESS OF THE GOVERNMENT HERE, THE FBI HERE IN LOS ANGELES DID
A NUMBER OF INTERVIEWS DOWN IN THE DALLAs AREA.
MR. MURPHY WENT DOWN THERE ON OCCAS ION WE KNOW FROM
MR. EVERETT WHO WAS FORMALLY WORKING WITH THE GOVERNMENT
THAT - - ON ONE OCCASION, AT LEAST, THAT WERE SOME DALLAS AGENTS
THAT WORKED WITH MR. MURPHY WHEN THEY WERE IN DALLAS, THAT THIS
INFORMATION WASN'T KNOWN, ALTHOUGH, IT'S NOT REALLY OUR PROBLEM
WHETHER IT WAS COMMUNICATED TO THE SAN FRANCISCO --
THE COURT: IT IS YOUR PROBLEM. WHAT DO YOU WANT TO
DO ABOUT IT? WHAT DO YOU WANT TO DO?
MR. BROWN: YOUR HONOR, WE'VE JUST RECEIVED - - LET ME
TELL YOU WHAT'S HAPPENED. THE GOVERNMENT - - APPARENTLY,
THERE'S SOME -- 35 SOME TAPES WITH 70 SOME HOURS OF INFORMATION
ON IT.
THE COURT: I'VE GOT A GREAT BIG BOX, LITERALLY A BIG
BOX, OF MATERIAL THEY BROUGHT IN MY OFFICE FRIDAY AFTERNOON.
MR. BROWN: ALL WITH SOUND RECORDINGS ON THEM.
THE COURT: NOT ALL, SUBSTANTIAL QUANTITY OF PAPER IN
THERE. I'M NOT SURE QUITE WHAT IT IS. WHAT I ATTEMPTED TO DO
IS START WITH WHAT WAS OBVIOUSLY GREATEST INTEREST TO YOU, THAT
IS THE TAPES AND, I GUESS I THE OTHER STATEMENTS WHICH HAD MR.
ARMSTRONG ON THEM, SO --
MR. BROWN: I'LL TELL YOU, YOUR HONOR, WE WERE TOLD
THAT THERE WERE THREE HOURS WORTH OF SOUND RECORDINGS THAT
SPECIFICALLY MENTIONED HAMILTON TAFT. THE GOVERNMENT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
1
2
3
4
5
6
7
8
9
10
11
12
13
-"
14
15
16
17
18
19
20
21
22
23
24
25
3447
WITNESS OF THE GOVERNMENT HERE, THE FBI HERE IN LOS ANGELES DID
A NUMBER OF INTERVIEWS DOWN IN THE DALLAs AREA.
MR. MURPHY WENT DOWN THERE ON OCCAS ION WE KNOW FROM
MR. EVERETT WHO WAS FORMALLY WORKING WITH THE GOVERNMENT
THAT - - ON ONE OCCASION, AT LEAST, THAT WERE SOME DALLAS AGENTS
THAT WORKED WITH MR. MURPHY WHEN THEY WERE IN DALLAS, THAT THIS
INFORMATION WASN'T KNOWN, ALTHOUGH, IT'S NOT REALLY OUR PROBLEM
WHETHER IT WAS COMMUNICATED TO THE SAN FRANCISCO --
THE COURT: IT IS YOUR PROBLEM. WHAT DO YOU WANT TO
DO ABOUT IT? WHAT DO YOU WANT TO DO?
MR. BROWN: YOUR HONOR, WE'VE JUST RECEIVED - - LET ME
TELL YOU WHAT'S HAPPENED. THE GOVERNMENT - - APPARENTLY,
THERE'S SOME -- 35 SOME TAPES WITH 70 SOME HOURS OF INFORMATION
ON IT.
THE COURT: I'VE GOT A GREAT BIG BOX, LITERALLY A BIG
BOX, OF MATERIAL THEY BROUGHT IN MY OFFICE FRIDAY AFTERNOON.
MR. BROWN: ALL WITH SOUND RECORDINGS ON THEM.
THE COURT: NOT ALL, SUBSTANTIAL QUANTITY OF PAPER IN
THERE. I'M NOT SURE QUITE WHAT IT IS. WHAT I ATTEMPTED TO DO
IS START WITH WHAT WAS OBVIOUSLY GREATEST INTEREST TO YOU, THAT
IS THE TAPES AND, I GUESS I THE OTHER STATEMENTS WHICH HAD MR.
ARMSTRONG ON THEM, SO --
MR. BROWN: I'LL TELL YOU, YOUR HONOR, WE WERE TOLD
THAT THERE WERE THREE HOURS WORTH OF SOUND RECORDINGS THAT
SPECIFICALLY MENTIONED HAMILTON TAFT. THE GOVERNMENT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
1
2
3
4
5
6
7
8
9
10
11
12
13
-"
14
15
16
17
18
19
20
21
22
23
24
25
3447
WITNESS OF THE GOVERNMENT HERE, THE FBI HERE IN LOS ANGELES DID
A NUMBER OF INTERVIEWS DOWN IN THE DALLAs AREA.
MR. MURPHY WENT DOWN THERE ON OCCAS ION WE KNOW FROM
MR. EVERETT WHO WAS FORMALLY WORKING WITH THE GOVERNMENT
THAT - - ON ONE OCCASION, AT LEAST, THAT WERE SOME DALLAS AGENTS
THAT WORKED WITH MR. MURPHY WHEN THEY WERE IN DALLAS, THAT THIS
INFORMATION WASN'T KNOWN, ALTHOUGH, IT'S NOT REALLY OUR PROBLEM
WHETHER IT WAS COMMUNICATED TO THE SAN FRANCISCO --
THE COURT: IT IS YOUR PROBLEM. WHAT DO YOU WANT TO
DO ABOUT IT? WHAT DO YOU WANT TO DO?
MR. BROWN: YOUR HONOR, WE'VE JUST RECEIVED - - LET ME
TELL YOU WHAT'S HAPPENED. THE GOVERNMENT - - APPARENTLY,
THERE'S SOME -- 35 SOME TAPES WITH 70 SOME HOURS OF INFORMATION
ON IT.
THE COURT: I'VE GOT A GREAT BIG BOX, LITERALLY A BIG
BOX, OF MATERIAL THEY BROUGHT IN MY OFFICE FRIDAY AFTERNOON.
MR. BROWN: ALL WITH SOUND RECORDINGS ON THEM.
THE COURT: NOT ALL, SUBSTANTIAL QUANTITY OF PAPER IN
THERE. I'M NOT SURE QUITE WHAT IT IS. WHAT I ATTEMPTED TO DO
IS START WITH WHAT WAS OBVIOUSLY GREATEST INTEREST TO YOU, THAT
IS THE TAPES AND, I GUESS I THE OTHER STATEMENTS WHICH HAD MR.
ARMSTRONG ON THEM, SO --
MR. BROWN: I'LL TELL YOU, YOUR HONOR, WE WERE TOLD
THAT THERE WERE THREE HOURS WORTH OF SOUND RECORDINGS THAT
SPECIFICALLY MENTIONED HAMILTON TAFT. THE GOVERNMENT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
EXHIBITS TO BRIEF PAGE 61
1
2
ION THAT THE
THIS
3448
THEIR'
, INVOLVED MR.
3 ARMSTRONG BUT
4
5
'6
7
8
9
lAM
I
THE COURT: I GUESS THAT'S A FAIR
MR BROWN: THAT I S WE WERE AnVI SED. THESE
HONOR, AT LEAST SOME BRADY MATERIAL.
SAYING I THINK THE GOVERNMENT WOULD
IN ONE OF THEIR MOTIONS THAT THEY FILED THIS MOTION ON
OF MIND. ASKING THAT WHATEVER INFORMATION FROM
10 THESE TAPES INDICATES MR. ARMSTRONG'S DENIAL OF ANY WRONGDOING
11 AT HAMILTON TAFT NOT BE PERMITTED TO BE ADDUCED DURING THE
12 COURSE OF THIS TRIAL.
13 THE COURT: PARDON ME A SECOND. I THINK I SEE MR.
14 SOLODOFF IN THE HALLWAY THERE.
MR. HATCHER, WOULD YOU TELL HIM THAT
TELEPHONE STANDBY AND IF WE NEED HIM WE WILL
JUST TO BE ON
HIM A
17 TELEPHONE CALL. HE SHOULD BE AVAILABLE BY TELEPHONE THIS WEEK.
18
19
GO AHEAD.
MR. BROWN: HONOR, FOR US TO
20 ASSESS THIS, AND I HATE TO SAY THIS, IT'S THREE HOURS, WE WERE
21
22
23
24
25
TOLD ABOUT ON FRIDAY. WE WERE IN THE MIDDLE OF --
WERE ARRIVING.
THE COURT: DOUBT YOU HAVE NOT HAD TIME TO LI STEN
TO THE TAPES. WHAT DO YOU WANT TO DO?
MR. BROWN: I REALLY HATE TO SAY THIS. I THINK WE
JAMES YEOMANS, OFFICIAL REPORTER, USDC/ 415-863-5179
1
2
ION THAT THE
THIS
3448
THEIR'
, INVOLVED MR.
3 ARMSTRONG BUT
4
5
'6
7
8
9
lAM
I
THE COURT: I GUESS THAT'S A FAIR
MR BROWN: THAT I S WE WERE AnVI SED. THESE
HONOR, AT LEAST SOME BRADY MATERIAL.
SAYING I THINK THE GOVERNMENT WOULD
IN ONE OF THEIR MOTIONS THAT THEY FILED THIS MOTION ON
OF MIND. ASKING THAT WHATEVER INFORMATION FROM
10 THESE TAPES INDICATES MR. ARMSTRONG'S DENIAL OF ANY WRONGDOING
11 AT HAMILTON TAFT NOT BE PERMITTED TO BE ADDUCED DURING THE
12 COURSE OF THIS TRIAL.
13 THE COURT: PARDON ME A SECOND. I THINK I SEE MR.
14 SOLODOFF IN THE HALLWAY THERE.
MR. HATCHER, WOULD YOU TELL HIM THAT
TELEPHONE STANDBY AND IF WE NEED HIM WE WILL
JUST TO BE ON
HIM A
17 TELEPHONE CALL. HE SHOULD BE AVAILABLE BY TELEPHONE THIS WEEK.
18
19
GO AHEAD.
MR. BROWN: HONOR, FOR US TO
20 ASSESS THIS, AND I HATE TO SAY THIS, IT'S THREE HOURS, WE WERE
21
22
23
24
25
TOLD ABOUT ON FRIDAY. WE WERE IN THE MIDDLE OF --
WERE ARRIVING.
THE COURT: DOUBT YOU HAVE NOT HAD TIME TO LI STEN
TO THE TAPES. WHAT DO YOU WANT TO DO?
MR. BROWN: I REALLY HATE TO SAY THIS. I THINK WE
JAMES YEOMANS, OFFICIAL REPORTER, USDC/ 415-863-5179
1
2
ION THAT THE
THIS
3448
THEIR'
, INVOLVED MR.
3 ARMSTRONG BUT
4
5
'6
7
8
9
lAM
I
THE COURT: I GUESS THAT'S A FAIR
MR BROWN: THAT I S WE WERE AnVI SED. THESE
HONOR, AT LEAST SOME BRADY MATERIAL.
SAYING I THINK THE GOVERNMENT WOULD
IN ONE OF THEIR MOTIONS THAT THEY FILED THIS MOTION ON
OF MIND. ASKING THAT WHATEVER INFORMATION FROM
10 THESE TAPES INDICATES MR. ARMSTRONG'S DENIAL OF ANY WRONGDOING
11 AT HAMILTON TAFT NOT BE PERMITTED TO BE ADDUCED DURING THE
12 COURSE OF THIS TRIAL.
13 THE COURT: PARDON ME A SECOND. I THINK I SEE MR.
14 SOLODOFF IN THE HALLWAY THERE.
MR. HATCHER, WOULD YOU TELL HIM THAT
TELEPHONE STANDBY AND IF WE NEED HIM WE WILL
JUST TO BE ON
HIM A
17 TELEPHONE CALL. HE SHOULD BE AVAILABLE BY TELEPHONE THIS WEEK.
18
19
GO AHEAD.
MR. BROWN: HONOR, FOR US TO
20 ASSESS THIS, AND I HATE TO SAY THIS, IT'S THREE HOURS, WE WERE
21
22
23
24
25
TOLD ABOUT ON FRIDAY. WE WERE IN THE MIDDLE OF --
WERE ARRIVING.
THE COURT: DOUBT YOU HAVE NOT HAD TIME TO LI STEN
TO THE TAPES. WHAT DO YOU WANT TO DO?
MR. BROWN: I REALLY HATE TO SAY THIS. I THINK WE
JAMES YEOMANS, OFFICIAL REPORTER, USDC/ 415-863-5179
1
2
ION THAT THE
THIS
3448
THEIR'
, INVOLVED MR.
3 ARMSTRONG BUT
4
5
'6
7
8
9
lAM
I
THE COURT: I GUESS THAT'S A FAIR
MR BROWN: THAT I S WE WERE AnVI SED. THESE
HONOR, AT LEAST SOME BRADY MATERIAL.
SAYING I THINK THE GOVERNMENT WOULD
IN ONE OF THEIR MOTIONS THAT THEY FILED THIS MOTION ON
OF MIND. ASKING THAT WHATEVER INFORMATION FROM
10 THESE TAPES INDICATES MR. ARMSTRONG'S DENIAL OF ANY WRONGDOING
11 AT HAMILTON TAFT NOT BE PERMITTED TO BE ADDUCED DURING THE
12 COURSE OF THIS TRIAL.
13 THE COURT: PARDON ME A SECOND. I THINK I SEE MR.
14 SOLODOFF IN THE HALLWAY THERE.
MR. HATCHER, WOULD YOU TELL HIM THAT
TELEPHONE STANDBY AND IF WE NEED HIM WE WILL
JUST TO BE ON
HIM A
17 TELEPHONE CALL. HE SHOULD BE AVAILABLE BY TELEPHONE THIS WEEK.
18
19
GO AHEAD.
MR. BROWN: HONOR, FOR US TO
20 ASSESS THIS, AND I HATE TO SAY THIS, IT'S THREE HOURS, WE WERE
21
22
23
24
25
TOLD ABOUT ON FRIDAY. WE WERE IN THE MIDDLE OF --
WERE ARRIVING.
THE COURT: DOUBT YOU HAVE NOT HAD TIME TO LI STEN
TO THE TAPES. WHAT DO YOU WANT TO DO?
MR. BROWN: I REALLY HATE TO SAY THIS. I THINK WE
JAMES YEOMANS, OFFICIAL REPORTER, USDC/ 415-863-5179
EXHIBITS TO BRIEF PAGE 62
3449
1 NEED AN OPPORTUNITY TO REVIEW THESE AND/ IF WE NEED TO TAKE A
2 DAY JUST TO REVIEW TAPES, I THINK WE NEED TO DO IT. WE
3 CAN 'T - - THE COURT - - I THINK THE COURT NEEDS TO REVIEW WHAT
4 MATERIAL IT HAS. THIS DEFINITELY HAS BRADY MATERIAL IN IT.
5 THERE'S ALL KINDS OF MOTIONS, AS THE COURT KNOWS,
6 INCLUDING MOTIONS FOR DISMISSAL THAT WE OUGHT TO PERHAPS BE
7 REGARDING THIS SITUATION.
8 THERE/S MACIA PROBLEMS BECAUSE MR. ARMSTRONG IS
9 REPRESENTED BUT COUNSEL AT A TIME WHEN THE INVEST ON
10 CLEARLY HAD FOCUSED ON HIM AND HE WAS A TARGET.
11 THERE'S A NUMBER OF OTHER REMEDIES, THE LEAST OF WHICH
12 WOULD BE TERRI ROBINS SHOULD NOT BE PERMITTED TO TESTIFY.
THE GOVERNMENT HAS ALREADY INDI THAT 13
14
15
16
THE
STEP POSSIBLY
MEAN, I JUST
YOU? MAYBE
AGAIN, WHAT DO YOU WANT TO DO? I
WHAT'S COULD COME OUT FOR
FOR A MOTION TO DISMISS. I DON'T KNOW
17 WHETHER THEY HAVE MERIT OR NOT.
18 MR. BROWN: THAT WOULD OBVIOUSLY BE WHAT WE'RE LOOKING
19 FOR.
20 THE COURT: NOT GOING TO BE WANTING TO PUT MR.
21 ARMSTRONG'S OWN STATEMENTS IN THIS CASE. BECAUSE YOU'D BE
22 DISCLOSING TO THE JURY THE FACT HE'S - OTHER INVESTIGATION IN
23 ANOTHER I WOULDN'T THINK YOU'D WANT TO DO THAT. YOUR
24 CALL, BUT THAT'S A TACTICAL
25 MR. BROWN: WE WERE TOLD AND COURT WOULD HAVE TO
I USDC, 415-863-5179
3449
1 NEED AN OPPORTUNITY TO REVIEW THESE AND/ IF WE NEED TO TAKE A
2 DAY JUST TO REVIEW TAPES, I THINK WE NEED TO DO IT. WE
3 CAN 'T - - THE COURT - - I THINK THE COURT NEEDS TO REVIEW WHAT
4 MATERIAL IT HAS. THIS DEFINITELY HAS BRADY MATERIAL IN IT.
5 THERB'S ALL KINDS OF MOTIONS, AS THE COURT KNOWS,
6 INCLUDING MOTIONS FOR DISMISSAL THAT WE OUGHT TO PERHAPS BE
7 FILED REGARDING THIS SITUATION.
8 THERE/S MACIA PROBLEMS BECAUSE MR. ARMSTRONG IS
9 REPRESENTED BUT COUNSEL AT A TIME WHEN THE INVESTI ON
10 CLEARLY HAD FOCUSED ON HIM AND HE WAS A TARGET.
11 THERE'S A NUMBER OF OTHER REMEDIES, THE LEAST OF WHICH
12 WOULD BE TERRI ROBINS SHOULD NOT BE PERMITTED TO TESTIFY.
13
14
15
16
THE
STEP POSSIBLY
MEAN, I JUST
YOU? MAYBE
THE GOVERNMENT HAS ALREADY INDI THAT
AGAIN, WHAT DO YOU WANT TO DO? I
WHAT'S COULD COME OUT FOR
FOR A MOTION TO DISMISS. I DON'T KNOW
17 WHETHER THEY HAVE MERIT OR NOT.
18 MR. BROWN: THAT WOULD OBVIOUSLY BE WHAT WE'RE LOOKING
19 FOR.
20 THE COURT: NOT GOING TO BE WANTING TO PUT MR.
21 ARMSTRONG'S OWN STATEMENTS IN THIS CASE. BECAUSE YOU'D BE
22 DISCLOSING TO THE JURY THE FACT HE'S - OTHER INVESTIGATION IN
23 ANOTHER I WOOLDN'T THINK YOU'D WANT TO DO THAT. YOUR
24 CALL, BUT THAT'S A TACTICAL
25 MR. BROWN: WE WERE TOLD AND COURT WOULD HAVE TO
, USDC, 415-863-5179
3449
1 NEED AN OPPORTUNITY TO REVIEW THESE AND/ IF WE NEED TO TAKE A
2 DAY JUST TO REVIEW TAPES, I THINK WE NEED TO DO IT. WE
3 CAN 'T - - THE COURT - - I THINK THE COURT NEEDS TO REVIEW WHAT
4 MATERIAL IT HAS. THIS DEFINITELY HAS BRADY MATERIAL IN IT.
5 THERB'S ALL KINDS OF MOTIONS, AS THE COURT KNOWS,
6 INCLUDING MOTIONS FOR DISMISSAL THAT WE OUGHT TO PERHAPS BE
7 FILED REGARDING THIS SITUATION.
8 THERE/S MACIA PROBLEMS BECAUSE MR. ARMSTRONG IS
9 REPRESENTED BUT COUNSEL AT A TIME WHEN THE INVESTI ON
10 CLEARLY HAD FOCUSED ON HIM AND HE WAS A TARGET.
11 THERE'S A NUMBER OF OTHER REMEDIES, THE LEAST OF WHICH
12 WOULD BE TERRI ROBINS SHOULD NOT BE PERMITTED TO TESTIFY.
13
14
15
16
THE
STEP POSSIBLY
MEAN, I JUST
YOU? MAYBE
THE GOVERNMENT HAS ALREADY INDI THAT
AGAIN, WHAT DO YOU WANT TO DO? I
WHAT'S COULD COME OUT FOR
FOR A MOTION TO DISMISS. I DON'T KNOW
17 WHETHER THEY HAVE MERIT OR NOT.
18 MR. BROWN: THAT WOULD OBVIOUSLY BE WHAT WE'RE LOOKING
19 FOR.
20 THE COURT: NOT GOING TO BE WANTING TO PUT MR.
21 ARMSTRONG'S OWN STATEMENTS IN THIS CASE. BECAUSE YOU'D BE
22 DISCLOSING TO THE JURY THE FACT HE'S - OTHER INVESTIGATION IN
23 ANOTHER I WOOLDN'T THINK YOU'D WANT TO DO THAT. YOUR
24 CALL, BUT THAT'S A TACTICAL
25 MR. BROWN: WE WERE TOLD AND COURT WOULD HAVE TO
, USDC, 415-863-5179
3449
1 NEED AN OPPORTUNITY TO REVIEW THESE AND/ IF WE NEED TO TAKE A
2 DAY JUST TO REVIEW TAPES, I THINK WE NEED TO DO IT. WE
3 CAN 'T - - THE COURT - - I THINK THE COURT NEEDS TO REVIEW WHAT
4 MATERIAL IT HAS. THIS DEFINITELY HAS BRADY MATERIAL IN IT.
5 THERB'S ALL KINDS OF MOTIONS, AS THE COURT KNOWS,
6 INCLUDING MOTIONS FOR DISMISSAL THAT WE OUGHT TO PERHAPS BE
7 FILED REGARDING THIS SITUATION.
8 THERE/S MACIA PROBLEMS BECAUSE MR. ARMSTRONG IS
9 REPRESENTED BUT COUNSEL AT A TIME WHEN THE INVESTI ON
10 CLEARLY HAD FOCUSED ON HIM AND HE WAS A TARGET.
11 THERE'S A NUMBER OF OTHER REMEDIES, THE LEAST OF WHICH
12 WOULD BE TERRI ROBINS SHOULD NOT BE PERMITTED TO TESTIFY.
13
14
15
16
THE
STEP POSSIBLY
MEAN, I JUST
YOU? MAYBE
THE GOVERNMENT HAS ALREADY INDI THAT
AGAIN, WHAT DO YOU WANT TO DO? I
WHAT'S COULD COME OUT FOR
FOR A MOTION TO DISMISS. I DON'T KNOW
17 WHETHER THEY HAVE MERIT OR NOT.
18 MR. BROWN: THAT WOULD OBVIOUSLY BE WHAT WE'RE LOOKING
19 FOR.
20 THE COURT: NOT GOING TO BE WANTING TO PUT MR.
21 ARMSTRONG'S OWN STATEMENTS IN THIS CASE. BECAUSE YOU'D BE
22 DISCLOSING TO THE JURY THE FACT HE'S - OTHER INVESTIGATION IN
23 ANOTHER I WOOLDN'T THINK YOU'D WANT TO DO THAT. YOUR
24 CALL, BUT THAT'S A TACTICAL
25 MR. BROWN: WE WERE TOLD AND COURT WOULD HAVE TO
, USDC, 415-863-5179
EXHIBITS TO BRIEF PAGE 63
1
2
3
4
5
6
7
8
9
10
11
12
13
. pI
14
15
16
17
18
19
20
21
22
23
24
25
3450
LOOK AT THE IN CAMERA MATERIAL.
THE COURT: DO I? I REALLY AM CHOKING ON THAT. IT'S
HOURS AND HOURS OF SITTING AND LISTENING.
MR. BROWN: I KNOW.
THE COURT: I'VE NEVER HAD ANY REASON TO QUESTION THE
GOVERNMENT'S GOOD FAITH WHEN THEY SAY HERE'S A TAPE THAT
SOMEBODY'S CONVERSATION IS ON AND THESE TAPES DON'T HAVE THAT
PERSON ON THE TAPE AT ALL. YOU KNOW, I GENERALLY TAKE THE
GOVERNMENT'S WORD ON THOSE THINGS. I'VE NEVER BEEN MISLED BY
THE GOVERNMENT.
MR. BROWN: WE, YOUR HONOR, WITH ALL -- IN ALL CANDOR,
WERE OFFERED THESE TAPES SOMETIME LATE FRIDAY AFTERNOON,
MID-AFTERNOON, AND I SIMPLY ADVISED MR. SMETANA TO FAX OVER
THESE VARIOUS MOTIONS THAT THE COURT HAS ..
IN LOOKING AT THOSE MOTIONS AND COORDINATING OUR
WITNESSES AND GETTING READY FOR TODAY AND THE COMPLETION OF
THAT, WE DID NOT HAVE TIME TO BE LISTENING AND EVALUATING THREE
HOURS.
I HAVE WITNESSES HERE FROM OUT OF TOWN TODAY. TO DO
JUSTICE TO THIS INFORMATION, QUITE FRANKLY, WE WOULD NEED TO
TAKE TODAY TO REVIEW THESE TAPES AND DETERMINE WHAT THE
APPROPRIATE RESPONSE THAT WE WOULD HAVE WI-TH REGARD TO THIS
BRADY MATERIAL AND WHATEVER OTHER INFORMATION PERTAINS TO THIS
CASE. THESE TAPES HAVE THREE HOURS OF COMMENTS BY - - AND
STATEMENTS BY THE DEFENDANT.
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
3450
1 LOOK AT THE IN CAMERA MATERIAL.
2 THE COURT: DO I? I REALLY AM CHOKING ON THAT. IT'S
3 HOURS AND HOURS OF SITTING AND LISTENING.
MR. BROWN: I KNOW. 4
5 THE COURT: I'VE NEVER HAD ANY REASON TO QUESTION THE
6 GOVERNMENT'S GOOD FAITH WHEN THEY SAY HERE'S A TAPE THAT
7 SOMEBODY'S CONVERSATION IS ON AND THESE TAPES DON'T HAVE THAT
8 PERSON ON THE TAPE AT ALL. YOU KNOW, I GENERALLY TAKE THE
9 GOVERNMENT'S WORD ON THOSE THINGS. I'VE NEVER BEEN MISLED BY
10 THE GOVERNMENT.
11 MR. BROWN: WE, YOUR HONOR, WITH ALL -- IN ALL CANDOR,
12 WERE OFFERED THESE TAPES SOMETIME LATE FRIDAY AFTERNOON,
13 MID-AFTERNOON, AND I SIMPLY ADVISED MR. SMETANA TO FAX OVER
14 THESE VARIOUS MOTIONS THAT THE COURT HAS ..
15 IN LOOKING AT THOSE MOTIONS AND COORDINATING OUR
16 WITNESSES AND GETTING READY FOR TODAY AND THE COMPLETION OF
17 THAT, WE DID NOT HAVE TIME TO BE LISTENING AND EVALUATING THREE
18 HOURS.
19 I HAVE WITNESSES HERE FROM OUT OF TOWN TODAY. TO DO
20 JUSTICE TO THIS INFORMATION, QUITE FRANKLY, WE WOULD NEED TO
21 TAKE TODAY TO REVIEW THESE TAPES AND DETERMINE WHAT THE
22 APPROPRIATE RESPONSE THAT WE WOULD HAVE WI-TH REGARD TO THIS
23 BRADY MATERIAL AND WHATEVER OTHER INFORMATION PERTAINS TO THIS
24 CASE. THESE TAPES HAVE THREE HOURS OF COMMENTS BY - - AND
25 STATEMENTS BY THE DEFENDANT.
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
3450
1 LOOK AT THE IN CAMERA MATERIAL.
2 THE COURT: DO I? I REALLY AM CHOKING ON THAT. IT'S
3 HOURS AND HOURS OF SITTING AND LISTENING.
MR. BROWN: I KNOW. 4
5 THE COURT: I'VE NEVER HAD ANY REASON TO QUESTION THE
6 GOVERNMENT'S GOOD FAITH WHEN THEY SAY HERE'S A TAPE THAT
7 SOMEBODY'S CONVERSATION IS ON AND THESE TAPES DON'T HAVE THAT
8 PERSON ON THE TAPE AT ALL. YOU KNOW, I GENERALLY TAKE THE
9 GOVERNMENT'S WORD ON THOSE THINGS. I'VE NEVER BEEN MISLED BY
10 THE GOVERNMENT.
11 MR. BROWN: WE, YOUR HONOR, WITH ALL -- IN ALL CANDOR,
12 WERE OFFERED THESE TAPES SOMETIME LATE FRIDAY AFTERNOON,
13 MID-AFTERNOON, AND I SIMPLY ADVISED MR. SMETANA TO FAX OVER
14 THESE VARIOUS MOTIONS THAT THE COURT HAS ..
15 IN LOOKING AT THOSE MOTIONS AND COORDINATING OUR
16 WITNESSES AND GETTING READY FOR TODAY AND THE COMPLETION OF
17 THAT, WE DID NOT HAVE TIME TO BE LISTENING AND EVALUATING THREE
18 HOURS.
19 I HAVE WITNESSES HERE FROM OUT OF TOWN TODAY. TO DO
20 JUSTICE TO THIS INFORMATION, QUITE FRANKLY, WE WOULD NEED TO
21 TAKE TODAY TO REVIEW THESE TAPES AND DETERMINE WHAT THE
22 APPROPRIATE RESPONSE THAT WE WOULD HAVE WI-TH REGARD TO THIS
23 BRADY MATERIAL AND WHATEVER OTHER INFORMATION PERTAINS TO THIS
24 CASE. THESE TAPES HAVE THREE HOURS OF COMMENTS BY - - AND
25 STATEMENTS BY THE DEFENDANT.
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
3450
1 LOOK AT THE IN CAMERA MATERIAL.
2 THE COURT: DO I? I REALLY AM CHOKING ON THAT. IT'S
3 HOURS AND HOURS OF SITTING AND LISTENING.
MR. BROWN: I KNOW. 4
5 THE COURT: I'VE NEVER HAD ANY REASON TO QUESTION THE
6 GOVERNMENT'S GOOD FAITH WHEN THEY SAY HERE'S A TAPE THAT
7 SOMEBODY'S CONVERSATION IS ON AND THESE TAPES DON'T HAVE THAT
8 PERSON ON THE TAPE AT ALL. YOU KNOW, I GENERALLY TAKE THE
9 GOVERNMENT'S WORD ON THOSE THINGS. I'VE NEVER BEEN MISLED BY
10 THE GOVERNMENT.
11 MR. BROWN: WE, YOUR HONOR, WITH ALL -- IN ALL CANDOR,
12 WERE OFFERED THESE TAPES SOMETIME LATE FRIDAY AFTERNOON,
13 MID-AFTERNOON, AND I SIMPLY ADVISED MR. SMETANA TO FAX OVER
14 THESE VARIOUS MOTIONS THAT THE COURT HAS ..
15 IN LOOKING AT THOSE MOTIONS AND COORDINATING OUR
16 WITNESSES AND GETTING READY FOR TODAY AND THE COMPLETION OF
17 THAT, WE DID NOT HAVE TIME TO BE LISTENING AND EVALUATING THREE
18 HOURS.
19 I HAVE WITNESSES HERE FROM OUT OF TOWN TODAY. TO DO
20 JUSTICE TO THIS INFORMATION, QUITE FRANKLY, WE WOULD NEED TO
21 TAKE TODAY TO REVIEW THESE TAPES AND DETERMINE WHAT THE
22 APPROPRIATE RESPONSE THAT WE WOULD HAVE W ~ T H REGARD TO THIS
23 BRADY MATERIAL AND WHATEVER OTHER INFORMATION PERTAINS TO THIS
24 CASE. THESE TAPES HAVE THREE HOURS OF COMMENTS BY -- AND
25 STATEMENTS BY THE DEFENDANT.
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179 EXHIBITS TO BRIEF PAGE 64
3451
1 THE COURT: SO YOU'RE SUGGESTING YOU NEED A DAY OFF
2 TODAY TO REVIEW TAPE?
3
4
MR. BROWN: YES, SIR.
THE THE PROBLEM WITH THAT, OF COURSE, WE
5 BROUGHT THE JURY IN.
6
7
8
9
10
11
12
14
15
16
17
18
19
POSS
TO THEM
MR. I THE NOW. IS IT
WELL, I'D RATHER GIVE THEM A DAY OFF TOMORROW AND I
THEY'
SIMPLY SEND THEM HOME.
, SO BE
I RATHER, IF YOU NEED A DAY OFF, TO TAKE IT OFF
RUDE
TOMORROW OR THE NEXT DAY, BUT INTO
WHAT YOU'RE TO DO
I AND YOU'RE WITH
MR. BROWN: WE CAN DO IT TOMORROW. I UNDERSTAND WHAT
THE COURT IS SAYING. I THINK WE
AS BECAUSE NOW WE'RE
IT AND IT
LOOK THESE AS SOON
DEFENSE,
EVERYTHING.
COURT: I DONIT SEE HOW. I CAN'T
20 DENY YOU THE RIGHT TO DO IT.
21 MR. SMETANA: I HATE TO SUGGEST THIS AS A TEMPEST IN A
22 TEAPOT. IF COUNSEL WILL LISTEN TO THE TAPES HE'LL FIND THERE'S
23 VERY LITTLE OF SUBSTANCE, IF ANYTHING AT ALL, NOTHING THAT
24 HASN'T BEEN SAID OR HEARD
25 MS. LEARY: AS TO MR. FOWLES I WOULD MOVE FOR THE
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863 5179
3451
1 THE COURT: SO YOU'RE SUGGESTING YOU NEED A DAY OFF
2 TODAY TO REVIEW TAPE?
3
4
MR. BROWN: YES, SIR.
THE THE PROBLEM WITH THAT, OF COURSE, WE
5 BROUGHT THE JURY IN.
6
7
8
9
10
11
12
14
15
16
17
18
19
POSS
TO THEM
MR. I THE NOW. IS IT
WELL, I'D RATHER GIVE THEM A DAY OFF TOMORROW AND I
THEY'
SIMPLY SEND THEM HOME.
, SO BE
I RATHER, IF NEED A DAY OFF, TO TAKE IT OFF
RUDE
TOMORROW OR THE NEXT DAY, BUT INTO
WHAT YOU'RE TO DO
I AND YOU'RE WITH
MR. BROWN: WE CAN DO IT TOMORROW. I UNDERSTAND WHAT
THE COURT IS SAYING. I THINK WE
AS BECAUSE NOW WE'RE
IT AND IT
LOOK THESE AS SOON
DEFENSE,
EVERYTHING.
COURT: I DON'T SEE HOW. I CAN'T
20 DENY YOU THE RIGHT TO DO IT.
21 MR. SMETANA: I HATE TO SUGGEST THIS AS A TEMPEST IN A
22 TEAPOT. IF COUNSEL WILL LISTEN TO THE TAPES HE'LL FIND THERE'S
23
24
25
VERY LITTLE OF SUBSTANCE, IF ANYTHING AT , NOTHING THAT
HASN'T BEEN SAID OR HEARD
MS. LEARY: AS TO MR. FOWLES I WOULD MOVE FOR THE
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863 5179
3451
1 THE COURT: SO YOU'RE SUGGESTING YOU NEED A DAY OFF
2 TODAY TO REVIEW TAPE?
3
4
MR. BROWN: YES, SIR.
THE THE PROBLEM WITH THAT, OF COURSE, WE
5 BROUGHT THE JURY IN.
6
7
8
9
10
11
12
14
15
16
17
18
19
POSS
TO THEM
MR. I THE NOW. IS IT
WELL, I'D RATHER GIVE THEM A DAY OFF TOMORROW AND I
THEY'
SIMPLY SEND THEM HOME.
, SO BE
I RATHER, IF NEED A DAY OFF, TO TAKE IT OFF
RUDE
TOMORROW OR THE NEXT DAY, BUT INTO
WHAT YOU'RE TO DO
I AND YOU'RE WITH
MR. BROWN: WE CAN DO IT TOMORROW. I UNDERSTAND WHAT
THE COURT IS SAYING. I THINK WE
AS BECAUSE NOW WE'RE
IT AND IT
LOOK THESE AS SOON
DEFENSE,
EVERYTHING.
COURT: I DON'T SEE HOW. I CAN'T
20 DENY YOU THE RIGHT TO DO IT.
21 MR. SMETANA: I HATE TO SUGGEST THIS AS A TEMPEST IN A
22 TEAPOT. IF COUNSEL WILL LISTEN TO THE TAPES HE'LL FIND THERE'S
23
24
25
VERY LITTLE OF SUBSTANCE, IF ANYTHING AT , NOTHING THAT
HASN'T BEEN SAID OR HEARD
MS. LEARY: AS TO MR. FOWLES I WOULD MOVE FOR THE
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863 5179
3451
1 THE COURT: SO YOU'RE SUGGESTING YOU NEED A DAY OFF
2 TODAY TO REVIEW TAPE?
3
4
MR. BROWN: YES, SIR.
THE THE PROBLEM WITH THAT, OF COURSE, WE
5 BROUGHT THE JURY IN.
6
7
8
9
10
11
12
14
15
16
17
18
19
POSS
TO THEM
MR. I THE NOW. IS IT
WELL, I'D RATHER GIVE THEM A DAY OFF TOMORROW AND I
THEY'
SIMPLY SEND THEM HOME.
, SO BE
I RATHER, IF NEED A DAY OFF, TO TAKE IT OFF
RUDE
TOMORROW OR THE NEXT DAY, BUT INTO
WHAT YOU'RE TO DO
I AND YOU'RE WITH
MR. BROWN: WE CAN DO IT TOMORROW. I UNDERSTAND WHAT
THE COURT IS SAYING. I THINK WE
AS BECAUSE NOW WE'RE
IT AND IT
LOOK THESE AS SOON
DEFENSE,
EVERYTHING.
COURT: I DON'T SEE HOW. I CAN'T
20 DENY YOU THE RIGHT TO DO IT.
21 MR. SMETANA: I HATE TO SUGGEST THIS AS A TEMPEST IN A
22 TEAPOT. IF COUNSEL WILL LISTEN TO THE TAPES HE'LL FIND THERE'S
23
24
25
VERY LITTLE OF SUBSTANCE, IF ANYTHING AT , NOTHING THAT
HASN'T BEEN SAID OR HEARD
MS. LEARY: AS TO MR. FOWLES I WOULD MOVE FOR THE
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863 5179
EXHIBITS TO BRIEF PAGE 65
3452
1 TAPES AND THE WRITTEN INFORMATION.
..
2 THE 'S NOTHING ON TO MR.
3
4 MS. LEARY: IF INVOLVED TAFT MR.
5 FOWLES/ THERE'S ABOUT HIM IT, THEN IT'S BRADY AS TO
6 MR.
7 THE THEN IF THAT'S TRUE THEN YOU'VE GOT THE
8 GOVERNMENT/S REPRESENTATION TO YOU MR. FOWLES NOT MENT IONED J
9 AND YOUR LISTENING TO TAPES CANJT DO ANY BETTER THAN THAT.
10 MS. LEARY: I UNDERSTAND I YOUR HONOR, BUT I ASK
II THE TAPES AND FOR THE - WHATEVER WRITTEN DOCUMENTATION EXISTS
12 SO THAT WE CAN INVESTIGATE.
13 MR. SABELLI: DOES DEPEND ON WHAT'S ON THE TAPES. THE
,.
14 STATEMENTS MADE ON THE TAPES HAVE TO DO WITH THE STRUCTURE AND
15 OVERFLOW WITHIN HAMILTON TAFT, DECISION MAKING, NOTHING
16 ABOUT MR. FOWLES. THEY MAY VERY WELL BE BRADY STATEMENTS. WE
17 DON'T KNOW WHAT STATEMENTS ARE. SIMPLY KNOWING MR. FOWLES
l8 ISN'T ON THERE ISN'T ENOUGH FOR
19 MR. SMETANA: AGAIN! MY EARLIER COMMENT REALLY MADE IN
20 GOOD , THERE REALLY IS NO DETAILED DESTRUCTION OF
21 THERE'S A PASSING MENTION HERE AND THERE OF
22 HAMILTON I SORT OFI I DIDN'T DO ANYTHING WRONG HAMILTON
23 TAFT, BUT THERE'S NO IN DEPTH PLANNING MEETING THEY DID A
24 DISCUSSION OF HAPPENED TWO EARLIER.
25 THE COURT: WHAT IS FORM OF THE MATERIAL THAT YOU
YEOMANS, CIAL REPORTER, I 415-863-5179
3452
1 TAPES AND THE WRITTEN INFORMATION.
..
2 THE 'S NOTHING ON TO MR.
3
4 MS. LEARY: IF INVOLVED TAFT MR.
5 FOWLES/ THERE'S ABOUT HIM IT, THEN IT'S BRADY AS TO
6 MR.
7 THE THEN IF THAT'S TRUE THEN YOU'VE GOT THE
8 GOVERNMENT/S REPRESENTATION TO YOU MR. FOWLES NOT MENT IONED J
9 AND YOUR LISTENING TO TAPES CANJT DO ANY BETTER THAN THAT.
10 MS. LEARY: I UNDERSTAND I YOUR HONOR, BUT I ASK
II THE TAPES AND FOR THE - WHATEVER WRITTEN DOCUMENTATION EXISTS
12 SO THAT WE CAN INVESTIGATE.
13 MR. SABELLI: DOES DEPEND ON WHAT'S ON THE TAPES. THE
,.
14 STATEMENTS MADE ON THE TAPES HAVE TO DO WITH THE STRUCTURE AND
15 OVERFLOW WITHIN HAMILTON TAFT, DECISION MAKING, NOTHING
16 ABOUT MR. FOWLES. THEY MAY VERY WELL BE BRADY STATEMENTS. WE
17 DON'T KNOW WHAT STATEMENTS ARE. SIMPLY KNOWING MR. FOWLES
l8 ISN'T ON THERE ISN'T ENOUGH FOR
19 MR. SMETANA: AGAIN! MY EARLIER COMMENT REALLY MADE IN
20 GOOD , THERE REALLY IS NO DETAILED DESTRUCTION OF
21 THERE'S A PASSING MENTION HERE AND THERE OF
22 HAMILTON I SORT OFI I DIDN'T DO ANYTHING WRONG HAMILTON
23 TAFT, BUT THERE'S NO IN DEPTH PLANNING MEETING THEY DID A
24 DISCUSSION OF HAPPENED TWO EARLIER.
25 THE COURT: WHAT IS FORM OF THE MATERIAL THAT YOU
YEOMANS, CIAL REPORTER, I 415-863-5179
3452
1 TAPES AND THE WRITTEN INFORMATION.
..
2 THE 'S NOTHING ON TO MR.
3
4 MS. LEARY: IF INVOLVED TAFT MR.
5 FOWLES/ THERE'S ABOUT HIM IT, THEN IT'S BRADY AS TO
6 MR.
7 THE THEN IF THAT'S TRUE THEN YOU'VE GOT THE
8 GOVERNMENT/S REPRESENTATION TO YOU MR. FOWLES NOT MENT IONED J
9 AND YOUR LISTENING TO TAPES CANJT DO ANY BETTER THAN THAT.
10 MS. LEARY: I UNDERSTAND I YOUR HONOR, BUT I ASK
II THE TAPES AND FOR THE - WHATEVER WRITTEN DOCUMENTATION EXISTS
12 SO THAT WE CAN INVESTIGATE.
13 MR. SABELLI: DOES DEPEND ON WHAT'S ON THE TAPES. THE
,.
14 STATEMENTS MADE ON THE TAPES HAVE TO DO WITH THE STRUCTURE AND
15 OVERFLOW WITHIN HAMILTON TAFT, DECISION MAKING, NOTHING
16 ABOUT MR. FOWLES. THEY MAY VERY WELL BE BRADY STATEMENTS. WE
17 DON'T KNOW WHAT STATEMENTS ARE. SIMPLY KNOWING MR. FOWLES
l8 ISN'T ON THERE ISN'T ENOUGH FOR
19 MR. SMETANA: AGAIN! MY EARLIER COMMENT REALLY MADE IN
20 GOOD , THERE REALLY IS NO DETAILED DESTRUCTION OF
21 THERE'S A PASSING MENTION HERE AND THERE OF
22 HAMILTON I SORT OFI I DIDN'T DO ANYTHING WRONG HAMILTON
23 TAFT, BUT THERE'S NO IN DEPTH PLANNING MEETING THEY DID A
24 DISCUSSION OF HAPPENED TWO EARLIER.
25 THE COURT: WHAT IS FORM OF THE MATERIAL THAT YOU
YEOMANS, CIAL REPORTER, I 415-863-5179
3452
1 TAPES AND THE WRITTEN INFORMATION.
..
2 THE 'S NOTHING ON TO MR.
3
4 MS. LEARY: IF INVOLVED TAFT MR.
5 FOWLES/ THERE'S ABOUT HIM IT, THEN IT'S BRADY AS TO
6 MR.
7 THE THEN IF THAT'S TRUE THEN YOU'VE GOT THE
8 GOVERNMENT/S REPRESENTATION TO YOU MR. FOWLES NOT MENT IONED J
9 AND YOUR LISTENING TO TAPES CANJT DO ANY BETTER THAN THAT.
10 MS. LEARY: I UNDERSTAND I YOUR HONOR, BUT I ASK
II THE TAPES AND FOR THE - WHATEVER WRITTEN DOCUMENTATION EXISTS
12 SO THAT WE CAN INVESTIGATE.
13 MR. SABELLI: DOES DEPEND ON WHAT'S ON THE TAPES. THE
,.
14 STATEMENTS MADE ON THE TAPES HAVE TO DO WITH THE STRUCTURE AND
15 OVERFLOW WITHIN HAMILTON TAFT, DECISION MAKING, NOTHING
16 ABOUT MR. FOWLES. THEY MAY VERY WELL BE BRADY STATEMENTS. WE
17 DON'T KNOW WHAT STATEMENTS ARE. SIMPLY KNOWING MR. FOWLES
l8 ISN'T ON THERE ISN'T ENOUGH FOR
19 MR. SMETANA: AGAIN! MY EARLIER COMMENT REALLY MADE IN
20 GOOD , THERE REALLY IS NO DETAILED DESTRUCTION OF
21 THERE'S A PASSING MENTION HERE AND THERE OF
22 HAMILTON I SORT OFI I DIDN'T DO ANYTHING WRONG HAMILTON
23 TAFT, BUT THERE'S NO IN DEPTH PLANNING MEETING THEY DID A
24 DISCUSSION OF HAPPENED TWO EARLIER.
25 THE COURT: WHAT IS FORM OF THE MATERIAL THAT YOU
YEOMANS, CIAL REPORTER, I 415-863-5179 EXHIBITS TO BRIEF PAGE 66
1 MICHAEL J. YAMAGUCHI
United states Attorney
2
JOEL R. LEVIN
3 Chief, Criminal Division
4
5
6
7
8
RONALD D. SMETANA
Special Assistant U.S. Attorney
GEORGE D. HARDY
Assistant U.S. Attorney
450 Golden Gate Avenue
San Francisco, CA 94102
Telephone: (415) 436-6851
r ",
'. ~ t ., .":t':
. ~ ' ' ' '
''''"''
9
10
11
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
12 UNITED STATES OF AMERICA, )
)
13 Plaintiff,)
)
14 v. )
)
15 CONNIE C. ARMSTRONG, JR., and )
RICHARD A.FOWLES, )
16 )
Defendants. )
17 )
18
Criminal No. 94-0276-CAL
GOVERNMENT'S OPPOSITION
TO ARMSTRONG'S MOTION TO
DISMISS AND/OR REQUEST
FOR PRETRIAL INSTRUCTION
Date: Nov. 8, 1996
Time: 1:30 p.m.
Courtroom: 10
(Han. Charles A. Legge)
19 .L..
20
Introduction
\
Defendant Connie C. Armstrong, Jr., seeks (again) to
21 dismiss counts seven through twenty-one of the Indictment. In the
22 alternative, he seeks an instruction on the "law of the case." For
23 the reasons set forth below, the government opposes this motion.
24 II. Argument
25 ~ Statement of facts.
26 As set forth in the grand jury's Indictment, the charges
000156
1 MICHAEL J. YAMAGUCHI
United states Attorney
2
JOEL R. LEVIN
3 Chief, Criminal Division
4
5
6
7
8
RONALD D. SMETANA
Special Assistant U.S. Attorney
GEORGE D. HARDY
Assistant U.S. Attorney
450 Golden Gate Avenue
San Francisco, CA 94102
Telephone: (415) 436-6851
f '.
" ~ l ., .":t';
. ~ " . -
'" ... ,
,,,,,,-,:,, .. ;
9 UNITED STATES DISTRICT COURT
10
11
NORTHERN DISTRICT OF CALIFORNIA
12 UNITED STATES OF AMERICA, )
)
13 Plaintiff,)
)
14 v. )
)
15 CONNIE C. ARMSTRONG, JR., and )
RICHARD A.FOWLES, )
16 )
Defendants. )
17 )
18
Introduction
Criminal No. 94-0276-CAL
GOVERNMENT'S OPPOSITION
TO ARMSTRONG'S MOTION TO
DISMISS AND/OR REQUEST
FOR PRETRIAL INSTRUCTION
Date: Nov. 8, 1996
Time: 1:30 p.m.
Courtroom: 10
(Han. Charles A. Legge)
''', .. -;
19 .L..
20 Defendant Connie C. Armstrong, Jr., seeks (again) to
21 dismiss counts seven through twenty-one of the Indictment. In the
22 alternative, he seeks an instruction on the "law of the case." For
23 the reasons set forth below, the government opposes this motion.
24 II. Argument
25 ~ Statement of facts.
26 As set forth in the grand jury's Indictment, the charges
000156
EXHIBITS TO BRIEF PAGE 67
1 arise from defendant's operation of Hamilton Taft, a San Francisco
2 based company that provided payroll tax services to large
3 companies. Client companies transferred their payroll taxes to
4 Hamilton Taft and Hamilton Taft was obligated to pay the taxes to
5 the Internal Revenue Service and other taxing authorities on time.
6 At the time the defendant acquired Hamilton Taft the
7 company had a working capital deficit of more than $14 million.
8 Over a period of two years, as money was siphoned out and Hamilton
9 Taft accrued interest and penalties on money it did not have, the
10 withholding of tax payments grew from $19.4 million to $68.2
11 million per quarter. When Hamilton Taft ultimately collapsed,
12 approximately $85 million in taxes were unpaid.
13 Despite the fact that the defendant was aware that he
14 could not pay the taxes of his clients when due, he induced a
15 number of companies to contract with Hamilton Taft with
16 representations that Hamilton Taft had the ability to pay taxes
17 when due, was paying taxes when due and would continue to pay
18 taxes when due.
19 As a further part of the scheme, the defendant concealed
20 the non-payment of taxes to induce the victims to continue sending
21 (on a weekly, biweekly or monthly basis) their tax payments and to
22 avoid the wholesale cancellation of contracts. Finally, when the
23 defendant's scheme was exposed, he sent out lulling letters denying
24 the existence of the scheme and encouraging to continue
25 sending payments.
26 II
J
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 2
0001.57
J
1 arise from defendant's operation of Hamilton Taft, a San Francisco
2 based company that provided payroll tax services to large
3 companies. Client companies transferred their payroll taxes to
4 Hamilton Taft and Hamilton Taft was obligated to pay the taxes to
5 the Internal Revenue Service and other taxing authorities on time.
6 At the time the defendant acquired Hamilton Taft the
7 company had a working capital deficit of more than $14 million.
8 Over a period of two years, as money was siphoned out and Hamilton
9 Taft accrued interest and penalties on money it did not have, the
10 withholding of tax payments grew from $19.4 million to $68.2
11 million per quarter. When Hamilton Taft ultimately collapsed,
12 approximately $85 million in taxes were unpaid.
13 Despite the fact that the defendant was aware that he
14 could not pay the taxes of his clients when due, he induced a
15 number of companies to contract with Hamilton Taft with
16 representations that Hamilton Taft had the ability to pay taxes
17 when due, was paying taxes when due and would continue to pay
18 taxes when due.
19 As a further part of the scheme, the defendant concealed
20 the non-payment of taxes to induce the victims to continue sending
21 (on a weekly, biweekly or monthly basis) their tax payments and to
22 avoid the wholesale cancellation of contracts. Finally, when the
23 defendant's scheme was exposed, he sent out lulling letters denying
24 the existence of the scheme and encouraging to continue
25 sending payments.
26 II
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 2
0001.57
EXHIBITS TO BRIEF PAGE 68
1 .a....
2
Defendant's Reliance on In re Hamilton Taft & Co. is
misplaced.
3 The litigation underlying In re Hamilton Taft & Co., 53
4 F.3d 285 (9th Cir. 1995), was between two parties over a fixed sum
5 of money whether the trustee in bankruptcy would be able to
6 reclaim for the larger group of victims funds paid to the IRS on
7 behalf of S & S Credit. The Ninth Circuit initially ruled that a
8 preferential payment had been made on behalf of S & S and that the
9 funds paid to the IRS on its behalf would have to be repaid by S &
10 S to the trustee. S & S petitioned for rehearing, and before the
11 matter could be heard, the case was settled, the appeal was
12 dismissed as moot, and the decision was vacated. In re Hamilton
13 Taft & Co., 68 F.3d 337 (9th Cir. 1995). The Ninth Circuit s
14 vacation of the opinion nullifies and renders the judgment
15 inoperative. United States v. Munsingwear, 340 U.S. 36, 40-41
16 (1950). Arguably, the parties could now relitigate the issues.
17 340 U.S. at 40.
18 Hamilton Taft & Co.
In short, this Court is not bound by In re
19 This conclusion is made more compelling by the fact that
\
20 the government was not a party to the litigation at the time the
21 opinion was rendered by the Ninth Circuit. When the petition for
22 rehearing was filed the Court obviously recognized that its opinion
23 could well interfere with the governments right and ability to
24 collect employee taxes and thus invited the government to
25 participate in the case as an amicus curiae. The government did
26 file a brief advocating the theory that the funds were held by
J
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 3
000158
J
1 .a....
2
Defendant's Reliance on In re Hamilton Taft & Co. is
misplaced.
3 The litigation underlying In re Hamilton Taft & Co., 53
4 F.3d 285 (9th Cir. 1995), was between two parties over a fixed sum
5 of money whether the trustee in bankruptcy would be able to
6 reclaim for the larger group of victims funds paid to the IRS on
7 behalf of S & S Credit. The Ninth Circuit initially ruled that a
8 preferential payment had been made on behalf of S & S and that the
9 funds paid to the IRS on its behalf would have to be repaid by S &
10 S to the trustee. S & S petitioned for rehearing, and before the
11 matter could be heard, the case was settled, the appeal was
12 dismissed as moot, and the decision was vacated. In re Hamilton
13 Taft & Co., 68 F.3d 337 (9th Cir. 1995). The Ninth Circuit's
14 vacation of the opinion nullifies and renders the judgment
15 inoperative. United States v. Munsingwear, 340 U.S. 36, 40-41
16 (1950). Arguably, the parties could now relitigate the issues.
17 340 U.S. at 40. In short, this Court is not bound by In re
18 Hamilton Taft & Co.
19 This conclusion is made more compelling by the fact that
20 the government was not a party to the litigation at the time the
21 opinion was rendered by the Ninth Circuit. When the petition for
22 rehearing was filed the Court obviously recognized that its opinion
23 could well interfere with the government's right and ability to
24 collect employee taxes and thus invited the government to
25 participate in the case as an amicus curiae. The government did
26 file a brief advocating the theory that the funds were held by
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 3
000158
EXHIBITS TO BRIEF PAGE 69
1 Hamilton Taft in trust for the government. The case was settled
2 and the opinion vacated before the government's position could be
3 considered. To resolve the i;sue t;,o
4 which had tQ b_t;.. heq.rcLi,"",fundsIDWt:lllY
5 )}is) ro
6 The inescapable conclusion from this discussion is:
7 there is no "l,,!w Rather, there remains a dispute of
8 fact that can be resolved only by the scheduled jury trial.
11
9
10
has again pummeled a straw man.
The trial evidence will show that, at a minimum, all of
defendant's argument is his premise that he complied with the
conditions of his contracts and thus did nothing wrong. Defendant
However, fundamental to
Contrary To Defendant's Contention, Hamilton Taft Did Not
Comply with Its Contractual Duties.
The government will subsequently demonstrate why counts
Hamilton Taft's contracts required timely payment of taxes on or
before the statutory deadlines.
1
Some of the contracts also
specifically limited the short-term investments that could be made.
Thus, Scott Paper's contract stated that:
7 through 21 should not be dismissed.
20
19
14
15
16
17
18
12
13
In order to satisfy Hamilton Taft's investment criteria
21 (Security of Principal, High Degree of Liquidity), Hamilton
Taft's investments are limited to investments collateralized
22 by United States Government securities and United States
Government sponsored obligations.
23
24
25
26
lContrary to defendant's assertion that he "occasionally" paid
the taxes late (Defendant's Memorandum 10:16), he intentionally
failed to make more than 300 payments aggregating more than $255
million, and the frequency of missed payments as well as .their
dollar amounts were increasing almost logarithmically.
GOVERNMENT'S OPPOSITION TO ARMSrRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 4
J
000159
J
1 Hamilton Taft in trust for the government. The case was settled
2 and the opinion vacated before the government's position could be
3 considered. To resolve the
4 which had to b_t;..
5 );illisi ro.
6 The inescapable conclusion from this discussion is:
7 there is no "l,,!w Rather, there remains a dispute of
8 fact that can be resolved only by the scheduled jury trial.
9
10
Contrary To Defendant's Contention, Hamilton Taft Did Not
Comply with Its Contractual Duties.
11
12
13
14
15
16
17
18
19
20
The government will subsequently demonstrate why counts
7 through 21 should not be dismissed. However, fundamental to
defendant's argument is his premise that he complied with the
conditions of his contracts and thus did nothing wrong. Defendant
has again pummeled a straw man.
The trial evidence will show that, at a minimum, all of
Hamilton Taft's contracts required timely payment of taxes on or
before the statutory deadlines.
1
Some of the contracts also
specifically limited the short-term investments that could be made.
Thus, Scott Paper's contract stated that:
In order to satisfy Hamilton Taft's investment criteria
21 (Security of Principal, High Degree of Liquidity), Hamilton
Taft's investments are limited to investments collateralized
22 by United States Government securities and United States
Government sponsored obligations.
23
24
25
26
lContrary to defendant's assertion that he "occasionally" paid
the taxes late (Defendant's Memorandum 10:16), he intentionally
failed to make more than 300 payments aggregating more than $255
million, and the frequency of missed payments as well as ,their
dollar amounts were increasing almost logarithmically.
GOVERNMENT'S OPPOSITION TO ARMSrRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 4
000159
EXHIBITS TO BRIEF PAGE 70
....
payments is to assure an adequate supply of current payments.
continued payment. The only way to pay past due taxes with current
contracts were executed, but on an ongoing basis in order to assure
the money was paid over to Hamilton Taft that he could use it for
any purpose he wanted. He induced his clients to do business with
Hamilton Taft on the representation that he could and would pay the
will amply demonstrate.
Defendant did not just commit fraud at the time the
taxes on a timely basis. His knowing and intentional use of the
funds otherwise clearly constitutes fraud, as the trial evidence
1 Others limited Hamilton Taft to benefits accruing from temporary
2 use of client funds or benefits accruing from proper use of client
3 funds. Given the intentional failures to pay taxes on time, the
long-term use of client funds and the other than proper use,
defendant's assertion that he complied with the contracts is
nothing less than revisionist history.
Similarly erroneous is defendant's assertion that once
Defendant and his employees concealed the tax withholds as much as
possible. When discovered, they lied about the basis for missed
payments. Thus, each payment from each of the victims was directly
attributable to the fraud and a direct and intended consequence of
22 the ongoing fraud.
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
."
21
23 Defendant's argument that this was not a Ponzi scheme
24 (Defendant's Memorandum, 10:8-10) is similarly without merit. The
25 defendant is not before this court because he paid "Client A's
26 taxes with Client B's and Client C's money;" the government would
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 5
000160
....
."
1 Others limited Hamilton Taft to benefits accruing from temporary
2 use of client funds or benefits accruing from proper use of client
3 funds. Given the intentional failures to pay taxes on time, the
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
long-term use of client funds and the other than proper use,
defendant's assertion that he complied with the contracts is
nothing less than revisionist history.
Similarly erroneous is defendant's assertion that once
the money was paid over to Hamilton Taft that he could use it for
any purpose he wanted. He induced his clients to do business with
Hamilton Taft on the representation that he could and would pay the
taxes on a timely basis. His knowing and intentional use of the
funds otherwise clearly constitutes fraud, as the trial evidence
will amply demonstrate.
Defendant did not just commit fraud at the time the
contracts were executed, but on an ongoing basis in order to assure
continued payment. The only way to pay past due taxes with current
payments is to assure an adequate supply of current payments.
Defendant and his employees concealed the tax withholds as much as
possible. When discovered, they lied about the basis for missed
payments. Thus, each payment from each of the victims was directly
attributable to the fraud and a direct and intended consequence of
22 the ongoing fraud.
23 Defendant's argument that this was not a Ponzi scheme
24 (Defendant's Memorandum, 10:8-10) is similarly without merit. The
25 defendant is not before this court because he paid "Client A's
26 taxes with Client B's and Client C's money;" the government would
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 5
000160
EXHIBITS TO BRIEF PAGE 71
1 expect that all of A, Band C's payments would be made from the
2 collective contributions from A, Band C. Rather, defendant is
3 before the court, in part, because he bought a ranch with A's money
4 paid to Hamilton Taft for a January tax payment (while
5 intentionally failing to make A's tax payment), and then used Band
6 C's funds paid to Hamilton Taft in April for their April tax
7 payment to make A's January payment while failing to make Band C's
8 April tax payment.
9 Indeed, the description of a Ponzi scheme in In re United
10 Energy Corp., 944 F.2d 589, 590 at fn.l (9th Cir. 1991)2 describes
11 precisely what defendant was doing. Defendant made tax payments
12 for clients with monies obtained from later tax payments from other
13 clients. By funnelling later payments to earlier taxes defendant
14 created the illusion that taxes were being timely paid and that
15 (bankrupt) Hamilton Taft had the financial wherewithal to pay the
16 taxes, inducing continued use of Hamilton Taft's services, all the
17 while siphoning out funds for defendant's personal benefit. The
18 only sorcery involved was the defendant's sleight of hand;
19 unfortunately for him, the audience caught on to the trick!
,
20 IL..
21
22
There is no basis for the dismissal of Counts Seven through
Twenty-One.
Regardless of how the relationship between Hamilton Taft
23
24
25
26
2"A Ponzi scheme is a fraudulent arrangement in which an
entity makes payments to investors from monies obtained from later
investors The fraud consists of funnelling proceeds
received from new investors in guise of profits from the alleged
business venture, thereby cultivating an illusion that a legitimate
profit-making business opportunity exists and inducing further
investment.
J
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 6
000161
J
1 expect that all of A, Band C's payments would be made from the
2 collective contributions from A, Band C. Rather, defendant is
3 before the court, in part, because he bought a ranch with A's money
4 paid to Hamilton Taft for a January tax payment (while
5 intentionally failing to make A's tax payment), and then used Band
6 C's funds paid to Hamilton Taft in April for their April tax
7 payment to make A's January payment while failing to make Band C's
8 April tax payment.
9 Indeed, the description of a Ponzi scheme in In re United
10 Energy Corp., 944 F.2d 589, 590 at fn.l (9th Cir. 1991)2 describes
11 precisely what defendant was doing. Defendant made tax payments
12 for clients with monies obtained from later tax payments from other
13 clients. By funnelling later payments to earlier taxes defendant
14 created the illusion that taxes were being timely paid and that
15 (bankrupt) Hamilton Taft had the financial wherewithal to pay the
16 taxes, inducing continued use of Hamilton Taft's services, all the
17 while siphoning out funds for defendant's personal benefit. The
18 only sorcery involved was the defendant's sleight of hand;
19 unfortunately for him, the audience caught on to the trick!
20 IL..
21
There is no basis for the dismissal of Counts Seven through
Twenty-One.
22
23
24
25
26
Regardless of how the relationship between Hamilton Taft
2"A Ponzi scheme is a fraudulent arrangement in which an
entity makes payments to investors from monies obtained from later
investors The fraud consists of funnelling proceeds
received from new investors in guise of profits from the alleged
business venture, thereby cultivating an illusion that a legitimate
profit-making business opportunity exists and inducing further
investment.
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 6
000161
EXHIBITS TO BRIEF PAGE 72
1 and its clients is categorized, Counts Seven through Twenty-One
2 withstand attack.
3 Defendant appears to argue that the government can
4 proceed on counts One through Six, the fraud in the inducement, but
5 that proceeding on the other counts is "illogical, excessive and
6 totally prejudicial " (Defendant's Memorandum 14:15-16) As he
7 has done throughout these proceedings, defendant has made a lengthy
8 and colorful argument all the while ignoring the one document
9 relevant to the inquiry -- the Indictment. It does not depend on
10 the existence of any particular relationship between defendant and
11 the victim companies. Rather it alleges a fraudulent course of
12 conduct in addition to and beyond the inducement to keep the money
13 flowing into Hamilton Taft. The Indictment alleges fraud on an
14 ongoing basis to keep money flowing into Hamilton Taft by a cover-
15 up3, false tax returns
4
, a change in cover-up methodology5, the
16 selection of specific clients for withholding and Armstrong's
17 attempt to disseminate a false account of what was happening to
18 client funds. All of these allegations are incorporated by
19 reference in each of the counts. (Indictment, paragraph 24.)
20
21
22
23
24
25
26
3"This concealment enabled Hamilton Taft to continue to
receive funds from its clients, to avoid massive cancellation of
its contracts, and to preserve the opportunity for new business."
4"The clients who received these returns were thereby falsely
led to believe that all their taxes had been paid."
5"By choosing to pay past due taxes instead of currently due
taxes, Armstrong was able to delay, for a much longer time,
discovery by the clients that their taxes had been paid late. At
the same time, he was able to create the false impression that
Hamilton Taft's business was running smoothly."
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUESr FOR
PRETRIAL INSTRUCTION 7
000162
1 and its clients is categorized, Counts Seven through Twenty-One
2 withstand attack.
3 Defendant appears to argue that the government can
4 proceed on counts One through Six, the fraud in the inducement, but
5 that proceeding on the other counts is "illogical, excessive and
6 totally prejudicial " (Defendant's Memorandum 14:15-16) As he
7 has done throughout these proceedings, defendant has made a lengthy
8 and colorful argument all the while ignoring the one document
9 relevant to the inquiry -- the Indictment. It does not depend on
10 the existence of any particular relationship between defendant and
11 the victim companies. Rather it alleges a fraudulent course of
12 conduct in addition to and beyond the inducement to keep the money
13 flowing into Hamilton Taft. The Indictment alleges fraud on an
14 ongoing basis to keep money flowing into Hamilton Taft by a cover-
15 up3, false tax returns
4
, a change in cover-up methodologyS, the
16 selection of specific clients for withholding and Armstrong's
17 attempt to disseminate a false account of what was happening to
18 client funds. All of these allegations are incorporated by
19 reference in each of the counts. (Indictment, paragraph 24.)
20
21
22
23
24
25
26
3"This concealment enabled Hamilton Taft to continue to
receive funds from its clients, to avoid massive cancellation of
its contracts, and to preserve the opportunity for new business."
4"The clients who received these returns were thereby falsely
led to believe that all their taxes had been paid."
S"By choosing to pay past due taxes instead of currently due
taxes, Armstrong was able to delay, for a much longer time,
discovery by the clients that their taxes had been paid late. At
the same time, he was able to create the false impression that
Hamilton Taft's business was running smoothly."
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUESr FOR
PRETRIAL INSTRUCTION 7
000162
EXHIBITS TO BRIEF PAGE 73
1 Defendant argues, however, that all allegations of the
2 Indictment, other than the fraud in the inducement allegations, are
3 legally insufficient to charge criminal activity because of the
4 Ninth Circuit opinion of In re Hamilton Taft & Co. which
5 establishes (or so defendant claims) the "law of the case" contrary
6 to the government's charging theory. The "law of the case" that
J
7 defendant sees in that opinion and on which defendant focuses his
8 argument is the conclusion that the relationship between Hamilton
9 Taft and its clients was one of "debtor-creditor", and not a trust
10 relationship. From that "law of the case", the defendant seeks to
11 extrapolate to the further conclusion that the defendant was free
12 to do with the clients' tax money whatever he wanted, because it
13 was Hamilton Taft's "property". Hence, he argues that any criminal
14 fraud allegations in the Indictment which describe what the
15 defendant did with client's tax money after the contracts were
16 signed must be legally insufficient, and therefore dismissed. His
17 argument is further based on the factual predicate that Hamilton
18 Taft complied w-ith the terms of the contracts with its clients.
19 Defendant's argument is factually and legally flawed
1 III. Conclusion
2 For the foregoing reasons, the government respectfully
3 submits that the motion to dismiss be denied and that the Court
4 deny the request to make In re Hamilton Taft & Co. the law of the
5 case.
6 DATED:
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
November 5, 1996 Respectfully submitted,
YAMAGUCHI
.. __
RONALD D. SMETANA
Special Assistant U.S. Attorney
J
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION 12
HOnlG1
-
J
1 III. Conclusion
2 For the foregoing reasons, the government respectfully
3 submits that the motion to dismiss be denied and that the Court
4 deny the request to make In re Hamilton Taft & Co. the law of the
5 case.
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
DATED: November 5, 1996
GOVERNMENT'S OPPOSITION TO ARMSTRONG'S
MOTION TO DISMISS AND/OR REQUEST FOR
PRETRIAL INSTRUCTION
Respectfully submitted,
YAMAGUCHI
.. __
RONALD D. SMETANA
Special Assistant U.S. Attorney
12
DOnlG1
EXHIBITS TO BRIEF PAGE 78
fD-302a 11-15-83)
196A-SF-93255
b7C
of FD-302 of On 2/ B/ 9 3 J Page 2 ---- ......1...- _-----=.-----.;____ _ _
She said that it was apparent to her within the first
twenty-four hours while reviewing Hamilton Taft financial records
that Hamilton Taft was in a cash flow crisis. She said it was
then her job to look at investments and/or loans to determine the
likelihood of these assets generating any She was to
insure that any future capital outflow was ureal investments".
She found out that almost immediately after Maxpharma
purchased Hamilton Taft from cigna corporation that Hamilton Taft
client funds were wire transferred out of Hamilton Taft. These
funds were in the form of notes and were booked at Hamilton Taft
as investments. But she saw no evidence of an attempt to collect
on these notes by Hamilton Taft. She said that some of the
transactions were incredibly complicated.
She said that she had frequent meetings concerning
these notes with Hamilton Taft officers. She discovered that
I I (PHD), Chief Financial Officer,l I
PHO), Director of Operations, I 1President
Comptroller, were the only Hamilton Taft
a knew about the loans by Hamilton Taft which Were
outstanding and uncollected.
She further explained that she recalls ten to fourteen
million dollars in loans had left Hamilton Taft with no payments
returning to Hamilton Taft. She discussed these loans with
I Ibut not with I , All of these loans were
"brokered
ll
through the Maxpharma office in Dallas, Texas. She
discovered that Maxpharma officers would telephoner 1at
Hamilton Taft and instruct her to wire money to
Dallas a9d then the fact.Maxpharma would then send the
b7C notes toL Jln San FranC1SCO.
She felt that the officers at Hamilton Taft were
protective I oftenl accuse
I IOf raiding the funds of Hamilton Taft.1 )was not
very helpful in her audit. She felt that this was because he was
the person who actually wire transferred the funds from Hamilton
alIas. She understood the process being that (FNU)
of Maxpharma in Dallas would
o transfer un s an c::: Iwould then instruct
r---...... the monies. I a director, often
got irate at her inquiries regarding Hamilton Taft loans. A day
or two after she started working at Hamilton Taft she discovered
fD-302a (RI!V 11-15-83)
196A-SF-93255
b7C
of FD-302 of
_...10..-___________ ..&-_______ ' On __ 2.....:./_8......,;1_9_3 ___ Page __ 2 __
She said that it was apparent to her within the first
twenty-four hours while reviewing Hamilton Taft financial records
that Hamilton Taft was in a cash flow crisis. She said it was
then her job to look at investments and/or loans to determine the
likelihood of these assets generating any She was to
insure that any future capital outflow was "real investments".
She found out that almost immediately after Maxpharma
purchased Hamilton Taft from cigna corporation that Hamilton Taft
client funds were wire transferred out of Hamilton Taft. These
funds were in the form of notes and were booked at Hamilton Taft
as investments. But she saw no evidence of an attempt to collect
on these notes by Hamilton Taft. She said that some of the
transactions were incredibly complicated.
She said that she had frequent meetings concerning
these notes with Hamilton Taft officers. She discovered that
I I (PHD), Chief Financial Officer,l I
PHO), Director of Operations,' iPresident
Comptroller, were the only Hamilton Taft
a knew about the loans by Hamilton Taft which Were
outstanding and uncollected.
She further explained that she recalls ten to fourteen
million dollars in loans had left Hamilton Taft with no payments
returning to Hamilton Taft. She discussed these loans with
I Ibut not with I I All of these loans were
"brokered
ll
through the Maxpharma office in Dallas, Texas. She
discovered that Maxpharma officers would telephOne! J at
Hamilton Taft and instruct her to wire money to Ma pnarman
Dallas afd then the fact.Maxpharma would then send the
b7C notes to_ _In San FranC1SCO.
She felt that the officers at Hamilton Taft were
protective ofl I oftenl accuse
______ raiding the funds of Hamilton Taft.1 Jwas not
very helpful in her audit. She felt that this was because he was
the person who actually wire transferred the funds from Hamilton
alIas. She understood the process being that (FNU)
I of Maxpharma in Dallas would
Iwould then instruct
the monies. I I(PHO), a director, often
got irate inquiries regarding Hamilton Taft loans. A day
or two after she started working at Hamilton Taft she discovered
EXHIBITS TO BRIEF PAGE 79
FD-302u (Re.v 11-15-83)
196A-SP-93255
ContinuatIOn of FD-302 of
On __2-:,./_
8
....:;/_
9
_
3
PAgo __3__
J7C
a "funny" transaction where two to three million dollars of
Hamilton Taft funds was wired to Dallas, Texas. She understood
thatl working on some deal to raise funds.
She was told that these funds were supposedly to be used to
"recapitalize" Hamil ton Taft. I linstructed her that the
details of the transaction was none of her business
l
but she
believes that the funds went to either Amerimac Company in
California or to Gulftex, a real estate business in Texas.
I that from her examination of Hamilton
Taft financ1ai records she discovered that all the funds sent out
for these loans had to be dedicated Hamilton Taft client funds.
She said that' lhad to know that
Hamilton Taft client funds were being used to finance these
investments. She understood thatl lactually assisted in
the creation of the notes to Hamilton Taft. One of these loans
in 1988 in the amount of approximately $200,000.00 was to a
CONNIE CHIP ARMSTRONG, JR. business in Dallas, Texas by the name
of Dresdner Corporation (PHD).
She said thatl 1 (PHO) I Sales Manager, and
Vice Presldent of dperations, at Hamilton
Taft were both concerned and upset at the news of the loans.
These loans violated Hamilton Taft's written cash management
policy which stated that Hamilton Taft can onJY invest client
funds in safe overnight type of investments. I I said that
she recalls that most of the notes for the 1988 loans were for a
90 or 180 day period. She stated that in or around March 1989
I Iwas fired byl I resigned.
She said that Arthur Anderson C.P.A. firm withdrew from
the Hamilton Taft audit a couple of days after they gave Hamilton
Taft their appointment letter. At that point she said that
management at Hamilton Taft felt that Hamilton Taft did not have
enough interest money to pay Arthur Anderson. Therefore,
Hamilton Taft did not receive any audited financial statements to
give the increasingly concerned Hamilton Taft clients. EDS one
of Hamilton Taft's largest clients was requesting audited
financial statements.
I 'said that she started taking legal action on
the debtors at the notes to Hamilton Taft. She was taking
aggressive collection felt that she could have
collected on the Amerimac'L----Jandl rates if not for
FD-302u (Re.v 11-15-83)
196A-SF-93255
ContinuatIOn of FD-302 of __ ________ _____________ .On 2/8/93 ,PAge __ 3 __
J7C
b
"-lr
- I
a "funny" transaction where two to three million dollars of
Hamilton Taft funds was wired to Dallas, Texas. She understood
thatl I were working on some deal to raise funds.
She was told that these funds were supposedly to be used to
"recapi talize" Hamil ton Taft. I linstructed her that the
details of the transaction was none of her business/ but she
believes that the funds went to either Amerimac Company in
California or to Gulftex, a real estate business in Texas.
I I said that from her examination of Hamilton
Taft financ1ai records she discovered that all the funds sent out
for these loans had to be dedicated Hamilton Taft client funds.
She said that I ]had to know that
Hamilton Taft client funds were being used to finance these
investments. She understood thatl lactually assisted in
the creation of the notes to Hamilton Taft. One of these loans
in 1988 in the amount of approximately $200,000.00 was to a
CONNIE CHIP ARMSTRONG, JR. business in Dallas, Texas by the name
of Dresdner Corporation (PHO).
She said thatl l(PHO)/ Sales Manager, and
Vice presldent of operations, at Hamilton
Taft were both concerned and upset at the news of the loans.
These loans violated Hamilton Taft's written cash management
policy which stated that Hamilton Taft can only invest client
funds in safe overnight type of investments. I I said that
she recalls that most of the notes for the 1988 loans were for a
90 or 180 day period. She stated that in or around March 1989
I Iwas fired byl I resigned.
She said that Arthur Anderson C.P.A. firm withdrew from
the Hamilton Taft audit a couple of days after they gave Hamilton
Taft their appointment letter. At that point she said that
management at Hamilton Taft felt that Hamilton Taft did not have
enough interest money to pay Arthur Anderson. Therefore,
Hamilton Taft did not receive any audited financial statements to
give the increasingly concerned Hamilton Taft clients. EDS one
of Hamilton Taft's largest clients was requesting audited
financial statements.
I Isaid that she started taking legal action on
the debtors at the notes to Hamilton Taft. She was taking
aggressive collection felt that she could have
collected on the andl potes if not for
EXHIBITS TO BRIEF PAGE 80
FD-30la (Rev 11-15-83)
196A-SF-93255
Conunuullon of FD-302 of
_ ~ ~ ~ ! ! ! ! ! ! ! ! ! ! ! ~ ,---- , On __2-.;.1_
8
.....;1_9_ 3 Pngc: _4_
the ARMSTRONG takeover of Hamilton Taft in March of 1989. She
said that the I ~ and Amerimac notes totaled approximately $6
million dollars. She personally told ARMSTRONG at the Petit and
Martin law offices about the notes outstanding and her collection
efforts at Hamilton Taft. She told him that he should be able to
collect on some of these loans. She said that he did not seem
interested.
She said that in March of 19891 I concluded that
he was not able to recapitalize Hamilton Taft and that Hamilton
Taft would have to file for Chapter Seven bankruptcy protection
b7C so he conceded Hamilton Taft to ARMSTRONG 4 She recalls a $20
million dollar figure being used at Hamilton Taft around the time
ARMSTRONG took control of Hamilton Taft. She said that the $20
million dollars represented the negative capital and the negative
cash flow at Hamilton Taft. She said that she felt at that time
that this much capital would be necessary to keep Hamilton Taft a
viable company. The financial condition of Hamilton Taft was
constantly being communicated to ARMSTRONG and his attorneys
during the legal actions. I 'said that she sat through
all of the depositions during ARMSTRONG's legal action to gain
control of Hamilton Taft.
She said that she understood that ARMSTRONG's plan for
Hamilton Taft was to recapitalize Hamilton Taft by investing $20
million dollars, rehirel Ito satisfy Wells Fargo Bank and
expand Hamilton Taft's customer base to infuse more revenue into
Hamilton Taft.
FD-30la (Rev 11-15-83)
196A-SF-93255
Conunuuhon of FD-302 of
_ ~ ~ ~ ! ! ! ! ! ! ! ! ! ! ! ~ _______ .l....-_______ , On __ 2....;,.1_8....;,1_9_3 ___ Pngc: _4_
the ARMSTRONG takeover of Hamilton Taft in March of 1989. She
said that the I 1 and Amerimac notes totaled approximately $6
million dollars. She personally told ARMSTRONG at the Petit and
Martin law offices about the notes outstanding and her collection
efforts at Hamilton Taft. She told him that he should be able to
collect on some of these loans. She said that he did not seem
interested.
She said that in March of 19891 I concluded that
he was not able to recapitalize Hamilton Taft and that Hamilton
Taft would have to file for Chapter Seven bankruptcy protection
b7C so he conceded Hamilton Taft to ARMSTRONG 4 She recalls a $20
million dollar figure being used at Hamilton Taft around the time
ARMSTRONG took control of Hamilton Taft. She said that the $20
million dollars represented the negative capital and the negative
cash flow at Hamilton Taft. She said that she felt at that time
that this much capital would be necessary to keep Hamilton Taft a
viable company. The financial condition of Hamilton Taft was
constantly being communicated to ARMSTRONG and his attorneys
during the legal actions. I Isaid that she sat through
all of the depositions during ARMSTRONG's legal action to gain
control of Hamilton Taft.
She said that she understood that ARMSTRONG's plan for
Hamilton Taft was to recapitalize Hamilton Taft by investing $20
million dollars, rehirel Ito satisfy Wells Fargo Bank and
expand Hamilton Taft's customer base to infuse more revenue into
Hamilton Taft.
EXHIBITS TO BRIEF PAGE 81
FD-302 (REV. 3-10-82)
- 1 -
FEDERAL BUREAU OF INVESTIGATION
Date of transcription 2/18'/92
On the afternoon of January 13, 1992, a conference was
held at thelPffices gf Feldman. Waldman and Kline, bankruptcy
counsel for. 1trustee in the bankruptcy of
Hamilton Taft Corporation (HTC). The law firm's offices are
located at 235 Montgomery street, suite 2700, San Francisco,
California, 94104. Present at this meeting werel I
I
Esw1;re, representing Feldman, Waldman and Kline, at cetera. Mr .
. CPA, accQuntant fOr the bankruptcy trustee, and
the trustee These individuals thereafter
provided the following information:
I 'stated that he has recently received certain
accounting reports from representatives of CHIP ARMSTRONG in
Dallas, which begin reporting on the period from
November 1, 1990 through June 15, -1991. This accounting work was
generated using the Quicken Software and chronicles CHIP
ARMSTRONG's personal finances.
I stated that in July, three reports became
available to him. Wated that only copies Of!Som: CberkS
were duplicated by per a restriction put on_ _ . and
apparently agreed 0 y the for the frus ee y
Mr. ARMSTRONG's representatives. L advised that the
Quicken summary was in fact a pub11C record and that, in
addition, the law firm had filed a motion for conternptagainst
CHIP ARMSTRONG for his having allegedly violated a temporary
restraining order issued by the bankruptcy court.
I I stated that his preliminary report indicates
that approximately four million dollars of Hamilton Taft funds
have been traced directly to CHIP ARMSTRONG, that is, four
million dollars of HTC funds have been traced to going directly
to Mr. ARMSTRONG. I Istated that ARMSTRONG had or has five
bank accounts. Any payment that was made to CHIP from either
Hamilton Taft or one of the subsidiaries controlled by ARMSTRONG
are accounted for, that is, they are covered by explanations.
These explanations are usually in the form of a note receivable
or an account receivable notation. These entries to the books
and records of Hamilton Taft or anyone of these subsidiaries
b7C
- ..
-.]ID
Invesligationon at Sa);} Caloi.;fornil
ile
11 J96A-SF-93255 Sub C
I b7C
by SA f,YNN HATCHER PKM la an Dale dictated 2 11 0 192
I ; I
IfThis document neither recommendations nor conclusions of the FBI. It Is the property of the FBr and is loaned to your agtncy;
1\ and ils contents are not to be c1blrlbuted outside your aaency.
----------------'------'--_._- ..._-- ..._---
FD-102 (REV. 3-10-82)
- 1 -
FEDERAL BUREAU OF INVESTIGATION
Date of transcription 2/18'/92
On the afternoon of January 13, 1992, a conference was
held at the pffices gf Feldman, Waldman and Kline, bankruptcy
counsel fori I trustee in the bankruptcy of
Hamilton Taft Corporation (HTC). The law firm's offices are
located at 235 Montgomery street, suite 2700, San Francisco,
California, 94104. Present at this meeting were! I
Eswljre. regresenting Feldman, Waldman and Kline, at cetera. Mr.
I . CPA, the accQuntant fQF the bankruptcy trustee, and
the trustee These individuals thereafter
provided the following information:
I I stated that he has recently received certain
accounting reports from representatives of CHIP ARMSTRONG in
Dallas, which begin reporting on the period from
November 1, 1990 through June 15, -1991. This accounting work was
generated using the Quicken Software and chronicles CHIP
ARMSTRONG's personal finances.
I I stated that in July I three reports became
available to him. Wated that only copies of sam: CherkS
were duplicated by per a restriction put on! _ . and
apparently agreed 0 y the for the frus ee y
Mr. ARMSTRONG's representatives. I advised that the
Quicken summary was in fact a pub11C record and that, in
addition, the law firm had filed a motion for contempt'against
CHIP ARMSTRONG for his having allegedly violated a temporary
restraining order issued by the bankruptcy court.
I , stated that his preliminary report indicates
that approximately four million dollars of Hamilton Taft funds
have been traced'directly to CHIP ARMSTRONG, that is, four
million dollars of HTC funds have been traced to going directly
to Mr. ARMSTRONG.' ,stated that ARMSTRONG had or has five
bank accounts. Any payment that was made to CHIP from either
Hamilton Taft or one of the subsidiaries controlled by ARMSTRONG
are accounted for, that is, they are covered by explanations.
These explanations are usually in the farm of a note receivable
or an account receivable notation. These entries to the books
and records of Hamilton Taft or anyone of these subsidiaries
b7C
-JID
Investigationon _______ at Sa);} Cali;fornil
l1e
11 J96A-SF-93255 Sub C
I'J4..A b7C
'JrsA_I __________________
by SA f,YNN HATCHER PlCM la an Dale dictated 2 11 0 192
I ; I
If This document neither recommendations nor conclusions of the FBI. It 15 the property of the FB[ and is loaned to your agtncy;
It and its contents are not to be c1btrlbuted outside your aaency.
----------------'------'--_._- ,.,--- ... _---
- ..
EXHIBITS TO BRIEF PAGE 82
FD-302a (B:ev. 1l-lS-83)
f:>A-SF-93255 Sub C
Con tlnua tion of FD-302 01 -J I ' On 2/10/92
, Page __
controlled by ARMSTRONG were to pay for clothing for
Mr. ARMSTRONG or for a truck for his personal use. Succinctly
stated, these documents provided a paper trail for a trloan" or
"advance
ll
to ARMSTRONG to account for the payments to him.
I that an enormous portion of
ARMSTRONG's standard of living was booked by the various
comptrollers as advances to CHIP ARMSTRONG.
I Istated that during the period March 20th
through April 4th, 1991, CHIP ARMSTRONG liquidated three assets
which were not in Hamilton Taft's name. The first asset to be
liquidated was a helicopter, apparently owned and/or leased by
Winthrup Corporation for 1.1 million dollars. The second asset
and/or payment was a $700,000 payment to CHIP ARMSTRONG's
criminal. lawyer in Dallas. Finally,1 lindicated that
$300,000 went to was possibly in turn
repaid to a law firm of Long and Leavitt in San Francisco.
. With to the helicopter transaction and
liquidation indicated million dollars was
transferred to on the same day and on the same day, CHIP
ARMSTRONG wired transferred $700,000 to his Dallas based criminal
IWith respect to this $700,000 'wire
transfer, Istated that $400,000 of the lawyers' fees were
returned toJthe Again, with respect to the helicopter
transaction indicated that three million dollars had
originally been wire transferred to another one Bridge
companies and then in turn to winthrup Realty. I I stated
that ARMSTRONG has few sources of income other than the sale of.
assets purchased with Hamilton Taft funds. Among the assets that
ARMSTRONG purchased, apparently with Hamilton Taft funds, are two
stadium boxes for the Dallas Cowboys football team and these
apparently were purchased for $140,000 and $125,000,
respectively. A third box is still owned by ARMSTRONG.
Approximately 1.1 million to 1.3 million went to various lawyers.
Seven hundred and thirty-five thousand dollars went to criminal
lawyers and one hundred seventy-five thousand, two hundred
thousand and eighty thousand dollars, respectively, went to civil
attorneys.
---_... _-- ----
b7C
FD-302a (B:ev. ll-lS-83)
j:>A-SF-93255 Sub C
Continuation ofFD-302 01 --1-_____ -1--------------' On 2/10/92
, Page _----2"---
controlled by ARMSTRONG were to pay for clothing for
Mr. ARMSTRONG or for a truck for his personal use. Succinctly
stated, these documents provided a paper trail for a "loan" or
"advance
ll
to ARMSTRONG to account for the payments to him.
I [ndicated that an enormous portion of
ARMSTRONG's standard of living was booked by the various
comptrollers as advances to CHIP ARMSTRONG.
I Istated that during the period March 20th
through April 4th, 1991, CHIP ARMSTRONG liquidated three assets
which were not in Hamilton Taft's name. The first asset to be
liquidated was a helicopter, apparently owned and/or leased by
Winthrup Corporation for 1.1 million dollars. The second asset
and/or payment was a $700,000 payment to CHIP ARMSTRONG's
criminal. lawyer in Dallas. Finally,l lindicated that
$300,000 went to was possibly in turn
repaid to a law firm of Long and Leavitt in San Francisco.
. With to the helicopter transaction and
liquidation indicated million dollars was
transferred to on the same day and on the same day, CHIP
ARMSTRONG wired transferred $700,000 to his Dallas based criminal
lawyer ,1 IWith respect to this $700,000 'wire
transfer,1 Istated that $400,000 of the lawyers' fees were
returned to the Again, with respect to the helicopter
transactionJ _indicated that three million dollars had
originally been wire transferred to another one Bridge
companies and then in turn to winthrup Realty. I 'stated
that ARMSTRONG has few sources of income other than the sale of.
assets purchased with Hamilton Taft funds. Among the assets that
ARMSTRONG purchased, apparently with Hamilton Taft funds, are two
stadium boxes for the Dallas Cowboys football team and these
apparently were purchased for $140,000 and $125,000,
respectively. A third box is still owned by ARMSTRONG.
Approximately 1.1 million to 1.3 million went to various lawyers.
Seven hundred and thirty-five thousand dollars went to criminal
lawyers and one hundred seventy-five thousand, two hundred
thousand and eighty thousand dollars, respectively, went to civil
attorneys.
b7C
.'----,
EXHIBITS TO BRIEF PAGE 83
FD-301a 11-15-83)
Sub C
b7C
Continuation of FD-302 of -J I On 2/10/92 Pagc_..lI
3
"'----
All records for Hamilton Taft and any of trmstrOnq/S
companies are currently domiciled in San Francisco.
indicated that some records are missing and those records are for
the company known as Winthrup Realty and CHIP ARMSTRONG's
personal financial records.
Additionally,l that her law firm is in b7C
possession of winthrup's ledgers through May of 1991. b7D
------ .' -------------"'---- ---_.-_.--"-----
FD-101a 11-15-83)
Sub C
b7C
All records for Hamilton Taft and any of trmstronq/s
companies are currently domiciled in San Francisco. _ I
indicated that some records are missing and those records are for
the company known as Winthrup Realty and CHIP ARMSTRONG's
personal financial records.
Additionally,l that her law firm is in
b7C
possession of winthrup's ledgers through May of 1991. b7D
---- -- ----------'---
EXHIBITS TO BRIEF PAGE 84
"1-3028 (Rev. 11-15-83)
196A-SF-93255
,On 4/15/91
--------
,
Pa
llC __2__
cash account for that day. If an overage, the money would go to
Hamilton Management for investing. If short, he would ask
Hamilton Management to money into the account to cover
checks written that day. _ lassumed all the trouble was
started when ARMSTRONG instructed one of these guys to send money
to somewhere else or he had the money from Kansas go to one of
his companies in Dallas for investment. "No, I don't consider
his ranch a real investment".
After the interviewing agents gavel la copy of
the sUbpoena for HT records, I 'said "I have been down a
similar shopping list as yours.
lI
He thought a chunk of client
money was taken out and used for investments. Probably a verbal
order by ARMSTRONG. This money replaced later. HT replaced
Federal Express money with Federal Express payments. HT did not
use "Joe Blow's" money to pay Federal Express's taxes and
penalties. Every tax that is owed in last quarter has been paid.
b
""1n
I Istated that HT is about 90 million short this quarter .! ....
because the clients are not putting money into the company. 4
I lexpressed that everything the trustee is
doing will help your investigation. IIHe's doing your work. I am
concerned that you guys will come in here and take all the
records away.. We will not see them for years." He had that
happen before in another case dealing with meat inspectors
getting kickbacks.
I Idiscussed he had worked for his family/s
company which had filed bankruptcy. He had successfully
reorganized the company. He had went on to work for other
companies in trouble. He decided to start consulting on his own.
That is when he answered the HT ad.
When questioned again about his contact with ARMSTRONG
he explained most of his contact was in bUdget meetings. He said
ARMSTRONG was planning to double the volume of business. There
was a summary of the meeting minutes kept by a secretary but he
was not sure which secretary.
When asked what was ARMSTRONG's long term plans
he did not know much about ARMSTRONG/s goals.
"I've been trying to do what you guys are doing. If I I
stated "I know a lot of peripheral facts, but not any detail".
I Idid say that ARMSTRONG went overseas to establish
'1-3028 (Rev. 11-15-83)
196A-SF-93255
Continuation ofFD-302 of _ ...... I ... ..... ";;;;'_;;.,'__ ...1---------' On 4/15/91
paae __ 2 __
cash account for that day_ If an overage, the money would go to
Hamilton Management for investing. If short I he would ask
Hamilton Management to wtre money into the account to cover
checks written that day._ lassumed all the trouble was
started when ARMSTRONG instructed one of these guys to send money
to somewhere else or he had the money from Kansas go to one of
his companies in Dallas for investment. "No , I don't consider
his ranch a real investment".
After the interviewing agents gavel la copy of
the subpoena for HT records, I 'said "I have been down a
similar shopping list as yours.
lI
He thought a chunk of client
money was taken out and used for investments. Probably a verbal
order by ARMSTRONG. This money replaced later. HT replaced
Federal Express money with Federal Express payments. HT did not
use "Joe Blow/s" money to pay Federal Express's taxes and
penalties. Every tax that is owed in last quarter has been paid.
b
"1n
I I stated that HT is about 90 million short this quarter ,! ,,'
because the clients are not putting money into the company. 4
I lexpressed that everything the trustee is
doing will help your investigation. IIHe's doing your work. I am
concerned that you guys will come in here and take all the
records away.. We will not see them for years." He had that
happen before in another case dealing with meat inspectors
getting kickbacks.
________ he had worked for his family/s
company which had filed bankruptcy. He had successfully
reorganized the company. He had went on to work for other
companies in trouble. He decided to start consulting on his own.
That is when he answered the HT ad.
When questioned again about his contact with ARMSTRONG
he explained most of his contact was in budget meetings. He said
ARMSTRONG was planning to double the volume of business. There
was a summary of the meeting minutes kept by a secretary but he
was not sure which secretary.
When asked what was ARMSTRONG's long term plans
he did not know much about ARMSTRONG/s goals.
"l've been trying to do what you guys are doing. If I I
stated "I know a lot of peripheral facts, but not any detail".
I Idid say that ARMSTRONG went overseas to establish
EXHIBITS TO BRIEF PAGE 85
r::D-301a (Rev. 11-15-83)
196A-SF-93255
Continuation ofFD-302 of ~ l . . . ...J----------' On 4/15/91
. Page _3_
Hamilton gaft International aed make SOme sorf of deal.
I Jsaw the bUdget that_ . prepared for
ARMSTRONG. The bUdget indicated that some $50 million dollars of
capital was to be introduced back into HT this month and
eventually catch up all the delinquent taxes due by October of
this year.
b7C
I Ibelieves what' Istated in his written
statement about the actions of the client response unit is a lie.
He was managin; t n ~ ! unit. The intent was not to mislead ~
clients. r _ ~ h O was the supervisor in that ~
department weu d verIfy the unit's intent.
I Ilast contact with ARMSTRONG was last friday
at the HT office in San Francisco. l Istated,IIWe all met
here. It; The trustee with three others and ARMSTRONG with his
attorneys. He explained that he was trying to salvage the
business. He had another meeting later with employees. A sort
of pep talk asking them not to believe the newspapers.
I Iproduced a list of all current employees to
the interviewing agents upon the agents request. Since the
produced copy was missing the last digit of the employee's
telephone numbers another copy was sent vis facsimile to Federal
Bureau of Investigation office later the same day.
r:D-301a (Rev. 11-1S-83)
196A-SF-93255
Continuation ofFD-302 of ---1
L
_________ ...J----------. On 4/15/91
. Page _3_
Hamilton ,aft International apd make SOme sorf of deal.
I _saw the budget that_ _prepared for
ARMSTRONG. The budget indicated that some $50 million dollars of
capital was to be introduced back into HT this month and
eventually catch up all the delinquent taxes due by October of
this year.
I Ibelieves what I Istated in his written
statement about the actions of the client response unit is a lie.
He was managin; unit. The intent was not to mislead
clients. k _ kho was the supervisor in that
departmen weu d verIfy the unit's intent a
__ contact with ARMSTRONG was last friday
at the HT office in San Francisco. I Istated,"We all met
here."; The trustee with three others and ARMSTRONG with his
attorneys. He explained that he was trying to salvage the
business. He had another meeting later with employees. A sort
of pep talk asking them not to believe the newspapers.
I Iproduced a list of all current employees to
the interviewing agents upon the agents request. Since the
produced copy was missing the last digit of the employee's
telephone numbers another copy was sent vis facsimile to Federal
Bureau of Investigation office later the same day_
b7C
EXHIBITS TO BRIEF PAGE 86
Memorandum
To
From
SAC, San Francisco ((Q(,J}-SF-Cf1}S"5)(P) 3/8/92
I b7C
Subject Connie Chip Armstrong, et al
dba, Hamilton Taft and Company, et al
San Francisco, Ca.
FBW (B); Mail Fraud, Bankruptcy Fraud, (A);
OO:SF
712
On the afternoon of March 5, 1992 a meeting was held at
the office of AUSA Michael Yamaguchi to discuss __
strategy in the above referenced matter. Present
ESQ. representing the bankruptcy trustee. Also present was Mr.
Ronald Smetana, Deputy Attorney General, Major Fraud unit of the
california state Attorney General's office. SA's will Hatcher and
re resented the FBI.
i u.
J
-, .
iJ{'! i.e. J
;oA-
(I) It-SF-cr)aS,
(
I
Oa I - J
b7C I
/C) lL1l (.! t:-::: ?h
712
Memorandum
To
SAC, San Francisco ((QC,I}-SF-Q1}S"5)(P) Dale! 3/8/92
From
sAl .... __ --______ 1 b7C
Subject Connie Chip Armstrong, et al
dba, Hamilton Taft and Company, et al
San Francisco, Ca.
FBW (B); Mail Fraud, Bankruptcy Fraud, (A);
OO:SF
On the afternoon of March 5, 1992 a meeting was held at
the office of AUSA Michael Yamaguchi to discuss ____
strategy in the above referenced matter. Present
ESQ. representing the bankruptcy trustee. Also present was Mr.
Ronald Smetana, Deputy Attorney General, Major Fraud unit of the
california state Attorney General's office. SA's will Hatcher and
resented the FBI.
-, .
iJ{'! i.e. J
;oA-
(I) It-SF-cr)aS,
(
I
Oa I - J
b7C I
/C) lL1l (.! ,:-::; ?h
EXHIBITS TO BRIEF PAGE 87
2
On February 27, 1992 the accountant for the trustee
finished his second interim report for the bankruptcy which
includes among other thing a tracing of over $4,000,000 directly
into the pockets of Armstrong himself. The report cites payments
by Armstrong using Hamilton Taft funds to a stripper' and the use
of over $225,000 to purchase Dallas Cowboy "skyboxes
lt