Free Motion For Issuance of Subpoeanas - District Court of Colorado - Colorado

Case 1:04-cr-00103-REB-MEH

Document 1370-2

Filed 09/08/2007

Page 1 of 1

Appendix A to Motion for Subpoenas for Consolidated Loss Hearing 10/19/07: Witness Gary Pangus Address 653 West 23rd No. 232 Panama City, FL 32405 Expected Testimony Investigator with Denver DA's office in 2002-2003; will testify that he found Capital Holdings to be large Ponzi scheme and assisted in beginning a state grand jury investigation with Deputy DA Joseph Morales; that the U.S. Attorney's Office, Colorado, and FBI caused them to cease their investigation in December 2002; and later in 2003 again caused them to end a second attempt to start a grand jury.

Joseph M. Morales Chief Deputy District Attorney, Denver DA's Office, Economic Crimes Unit 201 West Colfax Ave. Dept. 801 Denver, CO 80202 720-913-9015

Will testify as to same as Mr. Pangus, and will testify as to meetings held with U.S. Attorney's Office officials in December 2002 and later in which he was instructed to cease any investigation into Capital Holdings. Must obtain approval of Denver District Attorney before he can testify.

The testimony of both these witnesses is sought by defendants to show that the federal government, through the FBI and U.S. Attorney's office, allowed the Capital Holdings fraud scheme to extend into 2003 when it could have been stopped, and therefore allowed many more investments to be made that could have been avoided, and that therefore much of the "loss" figure alleged by the government should not be allowed in calculating the advisory amount of the "loss" specific offense characteristic under Advisory Guideline 2B1.1 (b) (1).