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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Criminal Action No. 04-cr-103-REB UNITED STATES OF AMERICA, Plaintiff,

NORMAN SCHMIDT, GEORGE ALAN WEED, CHARLES LEWIS, MICHAEL D. SMITH, Defendants. _______________________________________________________________ REPORTER'S TRANSCRIPT TRIAL TO JURY - VOLUME XXVII _______________________________________________________________ Proceedings before the HONORABLE ROBERT E. BLACKBURN, Judge, United States District Court for the District of Colorado, commencing at 8:35 a.m., on the 15th day of May, 2007, in Courtroom A701, Alfred A. Arraj United States Courthouse, 901 19th Street, Denver, Colorado. APPEARANCES WYATT B. ANGELO, MATTHEW KIRSCH, Assistant United States Attorneys, 1225 Seventeenth Street, #700, Denver, Colorado, appearing for the Government. Suzanne M. Claar, Official Reporter 901 19th St. Denver, Colorado, 80294-3589 (303)825-8874 PROCEEDINGS REPORTED BY MECHANICAL STENOGRAPHY TRANSCRIPTION PRODUCED BY COMPUTER

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APPEARANCES (Continued) PETER R. BORNSTEIN, 1600 Broadway, #2350, Denver, Colorado, THOMAS J. HAMMOND, 1544 Race Street, Denver, Colorado, appearing with Defendant Schmidt. THOMAS E. GOODREID, 1801 Broadway, #1100, Denver, Colorado, appearing with Defendant Weed. RONALD GAINOR, 6414 Fairways Drive, Longmont, Colorado, appearing with Defendant Lewis. DECLAN J. O'DONNELL, 777 Fifth Street, Castle Rock, Colorado, RICHARD N. STUCKEY, 2150 West 29th Avenue, #500, Denver, Colorado, appearing with Defendant Smith.

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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 morning.

P R O C E E D I N G S (Proceedings resumed at 8:35 a.m.) THE COURT: Very well. Mr. Schmidt, good morning.

MR. SCHMIDT: THE COURT: MR. WEED: THE COURT: MR. LEWIS: THE COURT: MR. SMITH: THE COURT:

Good morning, sir.

Mr. Weed, good morning. Good morning, your Honor. Mr. Lewis, good morning. Good morning, your Honor. Mr. Smith, good morning. Good morning. Counsel in attendance, good morning. Good morning, your Honor.

MR. BORNSTEIN: MR. ANGELO: THE COURT:

Good morning, your Honor. Ladies and gentlemen generally, good

And ladies and gentlemen of the jury specifically,

good morning. THE JURY: THE COURT: Good morning. Presumably we are prepared to proceed.

Let's do precisely that. Very well. Mr. Goodreid, if prepared, you may make

closing argument on behalf of Mr. Weed. MR. GOODREID: THE COURT: Thank you, your Honor.

You are welcome. And your Honor, as a preliminary matter,

MR. GOODREID:

I request if I may borrow from the court's lexicon to

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peregrinate periodically at will. THE COURT: peripatetically. MR. GOODREID: THE COURT: May it please the court. You may just peregrinate at will, just not

Thank you. CLOSING ARGUMENT

MR. GOODREID: jury.

Counsel, ladies and gentlemen of the

Ladies and gentlemen, six weeks ago I stood in front of you and told you that this case with respect to George Alan Weed is a case of misplaced trust. It was about Mr. Weed who

placed -- misplaced his trust in what Norman Schmidt told him and in what other people told him. I also told you, ladies and gentlemen, Mr. Weed had made mistakes in this case, and the evidence, as I will discuss now, has shown all three of those things. Now, let's begin and talk about the charges in this case. There are four categories of charges as against Mr. Weed. There are money -- excuse me.

There is a conspiracy count.

There is a conspiracy count, mail fraud charges, wire fraud charges, and securities fraud charges. Alone among these

defendants, there are no money laundering charges facing Mr. Weed in this case. Let's talk about how those hang together with the use of my chart here. What we have at the top, ladies and

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gentlemen, we have a box. All right?

In this box we call it a conspiracy.

And as you have heard from many people, a conspiracy

is an agreement among people to do something illegal. Now, the government contends that some of the objectives of that conspiracy were as follows: these tree branches, if you will. And we will call We

Pardon the poor drawing.

will call one stem here mail fraud, we call one stem securities fraud, and we call one wire fraud. And along this tree we have various notches here. These notches each represent a count in the indictment. Now,

the government contends, and the court has instructed you already, that a defendant who is in the conspiracy, is in the box, and jury instructions I believe 28 and 36A, even if a defendant is not involved in a particular count down here, he can still be held criminally liable if he is in this conspiracy and involved in the objectives of the conspiracy. if you think about it. However, ladies and gentlemen, the other side of that is, there are two sides of that coin. If you look at all the Makes sense

counts along here and the defendant is not involved in any of these counts, that tends to show he is not involved in the conspiracy, all right? So let's take a look here at the substantive counts, and you will see when we do that why the only thing that matters against Mr. Weed is whether or not he is in this conspiracy.

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Let's look at the counts. fraud, right?

We start off with mail

There are eight counts of mail fraud pending With the exception of one of those counts,

against Mr. Weed.

Mr. Weed has no connection to any one of those counts. Let's go through them very quickly here. Count 2 is a

mailing from -- that Norman Schmidt sent to Gordon Hulbert on February 1st, 2000. Mr. Weed didn't send that letter. Didn't

have anything to do with that letter. Count 3, an investment packet sent on January 2nd from Smitty's Investment to Warren Peterson. do with that. Count 4, a Federal Express letter from Norman Schmidt to Thomas Sindelar on 23 February, 2002. to do with that. Count 6, a letter from Norman Schmidt to Wendy Delaney, Mr. Weed never had any contact with Wendy Delaney. Count 7, Mr. Weed had nothing Mr. Weed had nothing to

money orders from Jannice McLain Schmidt to Cliff Seigneur in April of 2004. That was after Mr. Weed was arrested. Mr. Weed

testified he had nothing to do with Seigneur, he had nothing to do with any of those entities. There is just no evidence,

ladies and gentlemen, of him being involved in that. Count 8, May of '04, a monthly statement from Jannice McLain to Carol Hall dealing with one of those prior entities. Now, again, there is testimony about Mr. Weed being involved with Carol Hall with respect to the Smitty's business, and we

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will get to that later.

But this mailing, this monthly

statement has to do with Ms. Hall's earnings in one of those later entities with which Mr. Weed had nothing to do. Count 9 is a monthly statement from Jannice McLain Schmidt to Darren McGee. Again, it was after Mr. Weed was

arrested, and he had nothing to do with Mr. McGee. Now, there was one count of these eight counts that at least Mr. Weed factually has something to do with, and that is Count 5, August 24th letter from George Alan Weed to Greg Hector. Now, ladies and gentlemen, Mr. Weed sent that letter. Although, again, as you are

There is no dispute about that.

familiar, he sent that letter as he did so others based upon instructions from Norm Schmidt, and he accurately described, as he understood it, the insurance coverage on the account in that case. So mail fraud, we have eight counts, seven of which even in the government's best argument Mr. Weed has nothing to do with. It's a similar circumstance with respect to wire fraud. There is seven counts of wire fraud against Mr. Weed, none of which he is factually connected to. All right?

Count 10, November 18th, 1999, teleconference among Norman Schmidt, Leon Harte, Boyd Brown, Kelly Schnorenberg. Mr. Weed is not even on the telephone conversation. Count 12, February 17th, 2000, wire transfer from Gary

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Bell to Commercial Federal Bank to Reserve Foundation Trust. Now, Mr. Weed did have something to do with Mr. Bell later. We will talk about that in a little bit. But you recall He had He

it is undisputed that Mr. Weed did not recruit Mr. Bell.

nothing to do with that and was not involved in that at all. was one of the people to whom Mr. Weed did not send, did not represent, one of the insurance certificates. list. Similarly, Count 14 from Gary Bell from his Developp

He wasn't on his

Aldear account at Commercial Federal Bank to Reserve Foundation, LLC. Again, Mr. Weed not involved with Mr. Bell at that point. April 7, 2000, Count 13, wire transfer from Gold Coast Enterprises at Bank of Nevis to Reserve Foundation, LLC. Gold

Coast Enterprises, you may recall, that was Mary Anne Gough's company. There was no testimony that Mr. Weed ever had any

contact with Mary Anne Gough. Count 15, $50,000 wire transfer, August 1st, 2000, from the Cynthia Lange account to the Reserve Foundation Trust, LLC, account. Again, no connection, ladies and gentlemen, between

Mr. Weed and Cynthia Lange. Count 16, transfer from Gregory Hector account at Wells Fargo to FastTrack, LLC. Now, as I said a moment ago, Mr. Weed

had sent a letter to Mr. Hector in the summer of 2002, but this, ladies and gentlemen, is a wire transfer in February of 2003, six to nine months later, and it is going to FastTrack, LLC, an

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entity with which there is no evidence that Mr. Weed had any involvement, and in fact he testified specifically he never even heard of that entity. And finally, with respect to wire fraud, Count 17, April 30th, 2003, $45,000 wire transfer from Carol Hall account at Wells Fargo to Rocky Mountain Sports Promotions. Again, no

involvement between Mr. Weed and Ms. Hall with respect to Rocky Mountain Sports Promotions. So look at the math again, ladies and gentlemen. We

have got mail fraud, eight counts, only one of which Mr. Weed is actually connected to. We have got wire fraud where we have

seven counts, no connection whatsoever between Mr. Weed and these counts. All right?

It's a similar situation with respect to securities frauds. There are 12 counts there, and I will go through them Count 18 has to do with Mary Anne Gough. No

very quickly.

connection to Mr. Weed. Count 19, the Rademachers, no connection between Weed and the Rademachers. Mr. Weed. Count 20, Shirley Lehr, no connection with

Count 22, there is a deposit from Gregory Hector

account, May 9th, 2002, but that's before Mr. Weed sent that letter in August. No connection there.

Count 23, deposit from the Dellapennas to the Capital Holdings account in Wells Fargo. Dellapennas and Mr. Weed. No connection between

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Count 24, a deposit from Main Street Mortgage to First Bank of Capital Holdings account. No connection. Count 25, deposit from Lambros Gianos at Bellco Credit Union, Capital Holdings, LLC, account. with Lambros Gianos. Count 26, October 2002 deposit from the Hendriksons to Capital Holdings account Wells Fargo. Mr. Weed. Count 28, November 2002 deposit from the Hendriksons to a Capital Holding account. Again, no connection. And this is No connection to Mr. Weed had no contact That's in October of 2002.

one of my favorite counts here, Count 28, this is the travel, ladies and gentlemen. to Chicago. Air travel by Mr. Schmidt and Mr. Lewis He did

Mr. Weed did not travel to that meeting.

not attend the meeting.

And as you recall, he testified it was

undisputed, he didn't even know that meeting was taking place. No connection with that count. Count 24, this is another deposit to Rocky Mountain Sports Promotion. Again, no connection. All right. There is

one count here of the 12, that's Count 21 where there is a deposit from Lindy D. Markham into Smitty's account. Now, you recall Lindy Markham testified, and she exemplified the doctrine, ladies and gentlemen, what I call -and that happens a lot to people in testimony where the case comes to trial well after the events take place. And what that

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doctrine is is what I call, we think we knew then what we know now. Let me give you the best example of that in this trial. Remember when FBI Special Agent Bratcher testified in this case, you remember he and I went back and forth about whether or not he had given a warning to Mr. Weed that the RFT was a scam when he interviewed Mr. Weed in February of 2000. that he had done that. Well, you recall when I cross-examined him and looked at his 302, he was certain that was in his 302, and it turns out in fact it wasn't in his 302. Now, it was in his 302 from three years later. And And he was certain

what that is an example of is that he is testifying, he is not coming to this courtroom to actively lie to you. He is simply

confused because he knows now in 2007 that he gave Mr. Weed a warning in 2003, which he has extrapolated in his mind back to 2000. But in fact his written record shows he didn't give

Mr. Weed a warning at that point. Similar situation with respect to Lindy Markham. You

may recall that when she testified in this court she said she contacted Mr. Weed in the summer of 2002 and had a discussion with him about Lloyd's of London and insurance certificate policies. But you may recall it came out on cross-examination that when she interviewed with the FBI the first time, all

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right, she said that she had contacted Mr. Weed and he never returned her phone calls. All right.

You may recall also that when she was interviewed by the FBI a second time, a year or so later, she didn't mention contact with Mr. Weed at all. Now, as time went on inevitably she, as an investor like everybody else in this case, learned more information. when she met with Mr. Angelo and Special Agent Hahn in the summer of 2005, suddenly she has a recollection that she contacted Mr. Weed and he promised her various things. There is a point Mr. Gainor raised yesterday, when is the witness's most reliable? Of course, ladies and gentlemen, So

it's most reliable closest to the point in time the events happened. All right.

Now, so on that basis, ladies and gentlemen, and you also heard that Mr. Weed himself testified he never had any contact with Lindy Markham. And I suggest to you a combination

of those two things shows he never had any conversation with her, and thus no connection to Count 41, the securities fraud count in the indictment. So I have now gone through with you in rapid fashion, aside from the conspiracy count, 27 counts in the indictment, so-called substantive counts. Mr. Weed has no connection to

those 27 counts which, ladies and gentlemen, ought to make you ask yourselves, how can he be in the conspiracy if he has no

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connection to these 27 counts that are the object, the objects, according to the government, of the conspiracy. Well, let's talk about conspiracy, all right. as I said a moment ago, that's the key issue. Because

The one issue

that you have to decide in this case with respect to Mr. Weed is, did he ever make an agreement, did he ever make an agreement with Norman Schmidt or anybody else to participate in this massive fraud scheme to take all this money from these investors? And as we go through this, ladies and gentlemen, I

want you to think about not only what the evidence shows, but what it doesn't show. There is another way of saying that. In other words, What

it's just not what evidence did the government produce. evidence did they not produce. the points of that.

And we will go through some of

Well, let's start with the big one here, all right? Insurance. Insurance. You have heard the government jump up

and down, and you heard Mr. Angelo cross-examine Mr. Weed and say, you are the insurance man, aren't you. insurance man. You are the

As if Mr. Weed were responsible for every single Well, the record shows that's not

insurance issue in this case. the case.

But let's talk about one thing that the government just will not get off its horse on, all right. indictment. It's in the

It's in the jury instructions, this whole issue

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about Alan Weed is not an authorized agent of St. Paul. Ladies and gentlemen, how can the government of the United States stand by that allegation after what you have seen in this case, all right? here are, all right? Well, let's talk about where this scheme began, all right. Remember Roy Christian when he testified? He said that And we will go through that in detail

he met with Leon Harte in Kansas City in April of 1999, and that is before Mr. Harte has ever made any contact with Mr. Weed. And you recall Mr. Christian testified that at that point Lloyd's of London, you know, this company we keep hearing about and hearing about was already in the air. In fact, let's And

pull up Government's Exhibit 70, and take a look at page 5. this is an early Cooperative Private Placement Agreement. at page 5. security.

Look

And look at that -- we will enlarge the paragraph, And do you see that? This is early on before

Mr. Weed is involved in this thing at all. It's a hundred percent bonded by St. Paul, RLI or other acceptable surety. So in other words, Mr. Harte, or whoever is

working with him, has already, already before Mr. Weed is ever involved in this, a scheme going back to 1999, has already got the idea that they are going to tell the investors that this is insured. Now, unfortunately for Mr. Weed, who plays the dupe in the case, when he contacts him in the summer, it's a happy

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coincidence of circumstances between Mr. Harte, who is a conspirator, who already has got this plan going, and he comes up with Alan Weed. We don't know how he got Mr. Weed's name. A

fair inference is that he came up with Mr. Weed's name because he found out somehow Mr. Weed had already sold one of these policies in the DWD-1, remember that? across Mr. Weed. All right. So he comes

He has already got a connection with St. Paul.

Mr. Harte has to be thinking, wow, isn't this happy, and he talks to Mr. Weed over the telephone, and here is a guy who, unfortunately for Mr. Weed, is willing to help him. Mr. Weed. Now, there is that issue that Mr. Angelo raised the other day and he said, ladies and gentlemen, that Mr. Weed testified on cross-examination that he, Mr. Weed, had come up with this term "non-depleting trust account". Well, I was in My Contacts

this courtroom, ladies and gentlemen, and you were, too. recollection is different from that.

My recollection is that

Mr. Weed specifically denied that he had ever said that, and in fact, he pointed to language in the DWD-1 trust document that showed that was similar to that language, but he denied that he had ever come up with that language. And think about all the

people who have testified in this case about non-depleting trust account. term. There is no evidence that Mr. Weed came up with that

That's the term that these people were selling to the They said, your money is never going to be touched.

investors.

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Mr. Weed didn't come up with that. So we get to St. Paul Insurance Company now. The

government is all over Mr. Weed because of his representations that he makes that supposedly are false. What do you think It's an insurance They want

happens to St. Paul, ladies and gentlemen. company. to sell.

What does an insurance company want to do. They want to sell premiums, all right. They want to sell.

What do they

want to do. do.

And that's exactly what they

Mr. Weed comes in and says, can you insure depository bond for the bank that's in St. Vincent in the Grenadines? Sure, no problem, we can get premium. We can do that. They

issue a two million-dollar bond, and Mr. Weed comes back several months later and says, can you make it ten million dollars. they say, sure, we can do that. They go to the entity St. Paul in Chicago and deal with Sandy Woodbury. Can we sell a commercial crime policy on this Well, sure we can. We can sell that And

guy Clifford Pitt? premium.

We can collect that.

Do you remember what Sandy

Woodbury said about that? is selling.

This is a $2 million policy St. Paul

Cross-examination was elicited, what sort of Nothing, nothing.

investigation did you do on Clifford Pitt?

$2 million policy, and the St. Paul Insurance Company doesn't care who Clifford Pitt is. All right. They just want to sell the premium.

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Same thing happens with respect to the bank. of investigation did they do in that bank? They want to sell a policy. happens in January of 2000? companies like to do.

What kind

Nothing, nothing. What

So what happens to them?

Now, we know what insurance We also know

They like to sell policies.

what they don't like to do which is to pay claims, all right. Something comes to the attention of St. Paul, and remember the timing of this, all right. The timing of this is

in November of 1999 Mr. Weed has sent out, and pull this up, Weed Exhibit 68. All right? Remember that he sent them a

notice and said, here is what I am sending out, gentlemen. Sends this on November 29th, 1999. page 1, page 2, and page 3. the certificates to. Let's look at page 3. All right. He sends the certificate to Where is Let's take a look quickly at

There is a list of people he sends

Where is the call from St. Paul?

the call from Mr. Kesselring or from his boss Mr. Bailey to say, Mr. Weed, you can't represent yourself as an authorized agent. You can't do that. You can't put up the St. Paul Reserve They don't do that. Do you know why And to say that That's

Foundation Trust, too. they don't do that?

Because they don't care.

Mr. Weed is not an authorized agent? absolutely ridiculous.

That's ridiculous.

Remember the document they sent him?

The document that The

they send him that says, Dear St. Paul agents and brokers.

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company sends it to him. problem, all right. to pay a claim.

But now in January of 2000 there is a My God, we might have

There is a problem.

So let's start sending stuff out here and All right.

saying Mr. Weed was never an authorized agent.

If we look at -- let's pull up Weed Exhibit 18 again here. There it is again. Documents just talking about. Dear

St. Paul agents and brokers. and gentlemen, from that?

Where is the retraction, ladies

That says Mr. Weed, you are not But you know what the They said, well,

really a St. Paul agent or broker.

government argued yesterday in their closing?

you know, Mr. Weed was never an authorized agent, he was a broker. Well, that's an interesting theory from the government because none of the witnesses testified to that. Not one of

those three people, not one of those three people, Sandy Woodbury, Scott Bailey or Jerry Landsman could tell you, ladies and gentlemen, how this man could sell their insurance policy not being an agent or a broker. Now, still trying to fit that square peg into a round hole, well, you know, Mr. Weed was a broker. look at Government's Exhibit 87, all right. Now, according to their theory, not the witnesses, but he was an authorized broker. 2. Let's look at what's in paragraph Well, let's take a

And this is the letter, ladies and gentlemen, that Sandy Do you see what it says

Woodbury sent out to various investors.

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here?

It says, as indicated in prior correspondence, neither

the trust, Alan Weed, nor the Weed Agency are now or ever were authorized agents or representatives. How does the government stand in front of you and say, oh, well, he was a broker when St. Paul at the time is saying he was never even a representative of St. Paul. Do you remember

what Sandy Woodbury said when I asked her, well, why do you say that? And she says, I don't remember that and I don't remember I just signed whatever the lawyers put in It's nonsense. St. Paul ran

the certificates. front of me.

That is nonsense.

away because they were afraid they were going to have to pay a claim. All right. And you know what they did? all right. And why? They canceled the policy,

Because they said, oh, there was fraud. Well, I ask

There was fraud involved in these representations.

you ladies and gentlemen to think about one thing that happened in this case that increased St. Paul's risk, all right? know the first act of the so-called conspiracy involving Mr. Weed, according to the government, is he sent an application in to apply for the insurance policy. All right. That's against the law? You

Mr. Weed was doing what he believed was correct.

Like with any other client, he is trying to buy an insurance policy for his client. All right.

What is the misrepresentation that caused St. Paul any problems, all right? They think there is something hinky going

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on between the Reserve Foundation Trust and its investors? right. How does that increase their risk?

All

Their risk is they

are so adamant to point out they only have an obligation to the trust, all right? And they only have to pay the trust under one

or two circumstances; the bank fails, which didn't happen in this case, or Mr. Pitt stole the money. Well, before anybody could investigate whether Mr. Pitt stole the money, they canceled the policy. St. Paul isn't stupid. problem, all right. Let's take a look at Weed Exhibit 228. So But you know what?

They knew that was going to be a

Mr. Landsman, what he does, ladies and gentlemen, he starts sending out all these letters. Sends out all these letters in

January of 2000, and says, you know, all these misrepresentations have been made to you. any insurance. Don't think you have But then

Don't think there is a problem here.

what St. Paul does is Mr. Landsman denied any knowledge of this. Let's take a look at page 3 of this document. St. Paul

Insurance Company goes into Federal Court in the Northern District of Illinois, and they file a lawsuit to have the policy canceled. And how many of those investors do you think they gave notice to that this lawsuit was pending. Remember they send all

the letters that say, well, hey, you know, there is no coverage. There was misrepresentations. But at a point when the investors

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might have been able to assert their legal rights, they give them no notice of this lawsuit. Who the defendants are, Reserve Foundation and Clifford Pitt. No notice to the investors that St. Paul was so anxious And then go back to page 1 of

to communicate with, all right. this document.

As if that's not enough, Mr. Landsman in

August -- that happens in the spring -- in August of that year sends a letter to Orvalee Farris that's essentially a na, na, na, na, na, na letter. It says here at the bottom that in fact

we have already -- he tells her after the lawsuit is done and over with, we have a judgment, we don't have to pay. to call the Illinois Department of Securities. That's the entity with which Mr. Weed was associated with the government says, oh, well, he is misrepresenting himself. Now, another issue, ladies and gentlemen, that's the St. Paul business. All right? Let's talk about Mr. Weed's next You need

set of dealings, all right.

With an insurance entity, and that Another thing that the

was the Marsh USA company, all right.

government has been very upset about is Mr. Weed sent out a number of these letters that said, you will be receiving personal certificates of insurance, as if somehow that was a scam in and of itself. of 5013. All right. This is the e-mail remember from Nancy Bell Let's take a look at the language though

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back to Mr. Weed.

And what it says in paragraph No. 2 is -- if

you can enlarge that a little bit -- it says, your request for Marsh to issue individual certificates to those members on three-page list must at this point deny -- be denied. It doesn't say in that language, ladies and gentlemen, that, you know, we never issue certificates of insurance to anybody. It doesn't say it's illegal. It doesn't say it's

fraudulent.

It says, we are not going to do it at this time.

If you look at the bottom paragraph of this document what happens is Marsh goes on to say, however, however, if you want to come back at some point after Wells Fargo requests this, we will do it. We will do it. All right. That's not a flag.

That's not a signal to Mr. Weed to say, hey, we are not going to do insurance certificates. Mr. Weed knew from his dealings with

St. Paul that in fact insurance certificates often were issued. All right. Let's go to the next insurance-related matter. Mr. Weed's dealing with Richard Gray. That is

Now, the government

pounds the table yesterday and says, you know, this is outrageous. There really never was any insurance on those

accounts, and the only entity that was insured was Wells Fargo. Well, remember what Mr. Gray testified to, all right? I asked

him about this, and he said the way the chain works is Lloyd's of London at the top. They have an obligation to the Security Security Guaranty Insurance Company

Guaranty Insurance Company.

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has an obligation to Wells Fargo. to Capital Holdings.

Wells Fargo has an obligation

Capital Holdings has whatever obligations, Remember

which he didn't know, for its account holders, right? that?

And then they tried to say, well, there is really only There is no insurance for -- there

insurance for Wells Fargo.

is no insurance for in this case Capital Holdings. Well, let's take a look at Government's Exhibit 463. All right. This is the letter, remember, that Richard Gray

finally wrote, and if we can enlarge the bottom paragraph, please. The last paragraph. See what it says, ladies and gentlemen. to back off this but this is what he wrote. Mr. Gray tried

Your agent Alan

Weed of the Weed Agency provided certificates of insurance evidencing this coverage for Monarch Capital Holdings, LLC. Now I ask you, ladies and gentlemen, how could you look at that and not think -- and this is not Alan Weed saying this, this is the vice president of Wells Fargo after many drafts have gone back and forth, says there is coverage for Monarch Capital Holdings, LLC. That's what the bank itself says. There is the

insurance coverage for Monarch Capital Holdings. All right. I mentioned when I started here this

morning, ladies and gentlemen, and I mentioned again in my opening, Mr. Weed made some mistakes. about that. All right. Let's talk He

Biggest mistake was believing in people. He believed in the concept of a

believed in the RFT.

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non-depleting account. he believe that.

But from his perspective why shouldn't

He had just been dealing with Darrell Dunham,

a law professor, a lawyer in Carbondale, Illinois, who set up the same kind of entity. Why shouldn't Mr. Weed believe this

was a legitimate business? He also, it appears, all right, it appears that he was mistaken about the SIPC coverage. We will come back to that in We will come back

a minute because that's very important point. to that in a little bit.

He also made the mistake of trusting Gary Herbert, all right. A mistake that a lot of people made in this case. Now

you have heard some people try to build up Mr. Herbert and say he was a member of the bar. Let's talk about Mr. Herbert for a second. He trusted

Mr. Herbert to take out the language that he was an authorized agent of Lloyd's of London. He testified that Gary Herbert's

letter got disseminated to all sorts of people, all right. Called him after the letter was published and asked him to take it out. Mr. Herbert didn't take it out. He also trusted Mr. Herbert had gotten it right when he talked about the independent insurance policy, all right? Now

remember the government was very excited about Government's Exhibit 5005. All right? Remember that document? That was the

famous red ink documents.

Let's pull it up, please.

That was the document that Mr. Angelo asked Mr. Weed,

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initially after drafting this document, he said, is this your handwriting, Mr. Weed, on this document. mistaken, and thought it was not. Mr. Weed initially was

It was not his handwriting.

He then testified when Mr. Angelo pressed him on it that in fact it was his handwriting. Well, the government is jumping up and

down and saying, we got him. Let's look at this letter. page of the letter. Let's look at the first

We have essentially typographical

corrections on the page. Let's go to the second page. Let's look at the

corrections that Mr. Weed actually made to this letter, all right. One thing Mr. Angelo said yesterday, well, is Mr. Weed

writing in the penultimate paragraph here, let's go to paragraph No. 6, all right. We will enlarge paragraph 6 there. Mr. Weed

made some changes to that. Well, a couple of things, ladies and gentlemen. of all, Mr. Weed did not deny he had any dealings with Mr. Herbert. right? He specifically said he had corrected the letter, First

The changes he makes here is based upon his

understanding about this policy, not that he has independently researched but that Mr. Herbert has told him about. He makes the corrections there. He was involved in it. London. So what? So what? All right.

He didn't correct Lloyd's of He called Mr. Herbert at

He didn't need to correct.

that point.

He called him again later and asked him to correct

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it.

All right.

We will take that down.

So, he trusted Mr. Herbert to take out of the draft authorized agent. He trusted Mr. Herbert, and got it right All right? He also trusted that

about the insurance policy.

the language about non-depleting custodial trust account was correct. Now, Mr. Herbert testified, and I remind you, ladies and gentlemen, who called Mr. Herbert as a witness in this case, the deposition. The government's witness. The government put

him on the witness stand. explain.

Government had him get up there and

Now, Mr. Herbert said in his testimony Mr. Weed had given the information -- all the information about insurance. When weighing the credibility of Mr. Herbert, there are several things you ought to think about. immunity. immunity? Remember that? He was testifying under

Why is Mr. Herbert testifying under

Why does he need immunity?

Let's look at how Mr. Herbert does business, all right? Do you remember his fee arrangement. retainer. Oh, I was paid a monthly No.

Mr. Herbert, do you have any billing records?

He testified approximately ten months he made over a hundred thousand dollars but you know what, he has no billing records, he has no time records. He can't show what that money is for.

If you look at it, ladies and gentlemen, when you are back deliberating this, if you look at Government's Exhibit 9401,

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that's a series of checks, all right, checks to Mr. Herbert and to his wife. right? To his wife. He paid legal fees to his wife. All

This is not a guy that any of you should want to be your He has got all this money. He has got no He

lawyer, all right?

record of what it was for.

He has got no time records.

can't explain what the money is for. He says at some point -- initially he says as of February of 2002 he had a question, a question, mind you, about whether the Reserve Foundation Trust was legitimate, and he said he raised it in general terms with Harte and Schmidt, but magically all of his concerns were resolved. concerns were resolved. Well, why were the concerns resolved? Maybe it had to He All of his

do with all the money that kept pouring into his account.

also testified, and this is critical, we caught him on this. Remember the FBI interviewed him and the other side put on Special Agent Hahn testified and everything? But he said in

deposition, well, he never stated that the Reserve Foundation trust was a scam. That's what he said. Special Agent Hahn, FBI

agent for twenty years took the witness stand and said, he did say that. He did say that. Gary Herbert, ladies and gentlemen,

is not a man on whose testimony you ought to rely. Mr. Herbert also said a number of other things. is really interesting. This

He talked about that June 17th letter. He

He talked about a guy who is fumbling with that letter.

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said -- remember there was an exhibit -- when you saw what happened. You saw it happen with the letter. The letter get

formed in its original form.

It's a letter that says, this

letter, Ms. Jannice McLain Schmidt, is intended for your sole use. That's the final letter Mr. Weed saw. This is intended

solely for your use.

It has not been submitted to the

underwriters for their approval, but of course what do these guys do? Mr. Herbert can't send that letter out to enough He sends a copy to Mr. Smith, he sends a The letter, like all the letters, say that Now, on

people fast enough. copy to Mr. Vallone.

Mr. Vallone, you asked me to review this.

cross-examination Mr. Herbert admitted he lied about that. Mr. Vallone never asked him to review anything. Same thing with respect to William Thomas. says, you asked me to review. asked him to review it. Mr. Thomas. Mr. Herbert also said this was not an opinion letter. It's not an opinion letter, even though it's a letter from the lawyer that tells the person who gets it what the law is all about. Say it again, ladies and gentlemen. Gary Herbert is not He never reviewed it. It also He never

He never had a conversation with

a person on whose testimony you want to rely. All right. Finally, a list of Mr. Weed's mistakes.

The biggest mistake of all, as I said in my opening, Mr. Weed trusted Norman Schmidt. All right? Trusted him from the moment

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he started.

When he said, I want to form a new entity to try to Remember that? We heard a

help these people get their money back.

And then you know what happened from there.

very touching personal story about Mr. Weed became friends with Mr. Schmidt. Mr. Schmidt had all the trappings -- had all the All right? He talked

trappings of a legitimate businessman.

about their lives, their careers, their family, their friends, and most importantly, trusted him with a painful personal matter, all right? Remember his story about the funeral, the funeral, and the huge flower arrangement that Smitty's Motor Sports sent? Now, try to imagine, ladies and gentlemen, if you are in Mr. Weed's circumstance, all right? This is a guy that's trying Of course not. This

to commit fraud on you and other people? is a person that becomes your friend.

This is a person that

called you grandson, who is seriously wounded in the hospital, and for all the races, and you know what Mr. Weed said? He said

Daniel, his grandson, after talking to Mr. Schmidt and his son would be wheeling himself down the hospital corridors with a hat so excited about what happened here, right? Trusted Mr. Schmidt about that. introduction to Mr. Herbert. Trusted the

Trusted him with respect to the Trusted

description of non-custodial trust account, all right?

the money that he loaned to Compliance Holding Company was clean, that it was for legitimate business enterprises.

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Ultimately he trusted him as an honest businessman, not a convicted felon who is running some sort of scam who did not reveal to Mr. Weed his good friend had been convicted of a scam. Seven points, ladies and gentlemen. Seven points here. All

Why George Alan Weed was not a conspirator in this case. right? No. 1, follow the money, right?

We have heard a lot of

about Capital Holdings and the loans related to Compliance Holding Company. Talk about that for a second, all right?

The government -- in fact, Mr. Angelo said specifically well, you know, he got that extra money supposedly, Mr. Weed denied this, and the government didn't have any evidence that he got any more wire transfers than the expenses he was submitting for Compliance Holding Company. that as a payoff. Well, think about that for a second. It sounds like a And Mr. Angelo characterized

lot of money 500,000, 400 thousand some odd dollars, that was a lot of money. But remember what Mr. Weed said about that deal.

The upside of that was potentially millions and millions of dollar deals. So 400,000, 500,000 pales in comparison to the

ultimate product. Certainly this is an excellent business opportunity, but this isn't the end-all and be-all business that if he doesn't make this deal he will never be in the coal business. He testified on cross-examination he is still in the coal business today.

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Remember talking about a company named Black Fire Coal being involved in coal leases? Follow the money. He is still doing that today. If

Reserve Foundation Trust, right?

Mr. Weed is in this conspiracy as the government contends from 1999, what was he doing it for? Where was the money from the

Reserve Foundation Trust as a payoff for his so-called illegal efforts? It's not there. The only money that Mr. Weed received in connection with this case under the RFT days was money for insurance policies that actually issued by the St. Paul Insurance Company. Sure, he got a commission from that. You think he risks his

life, his livelihood, his license and his liberty for insurance premiums? Why would he do that? He has an insurance business.

It makes no sense whatsoever. Point No. 2.

Follow the money, all right?

The research by Mr. Weed, all right? Mr. Weed is a

Think about this, ladies and gentlemen.

conspirator in this case and is making up all these false representations. Why did he do the research he did? All right?

After the St. Paul Insurance Company canceled the policy in the spring of 2000, Mr. Weed went to some length to try to get a new policy from Lloyd's of London. Remember the

whole business about Cooper Gay and Peter Moss not showing up for the meetings? Why would Mr. Weed need to do that if he is a conspirator? He can just write out policies or make up

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certificates and say, well, this entity is insured by Lloyd's of London, as many other people did. He didn't need to do that. Why did he Why

When it came to SIPC coverage, all right? need to research that?

Why didn't he just put that down?

didn't he just put it down that there was SIPC coverage, all right? If I can find the exhibit, let's look at what happened with respect to SIPC, all right? I can't remember the exhibit. There was an

It was an e-mail, remember, from Byrd Heaton.

e-mail that said, Mr. Heaton, here is an attachment for it. Here is an attachment that tells you all about SIPC coverage. And this is the point when Mr. Weed is trying to figure out what the insurance coverage is on the Smitty's account, all right? We do have it in front of us, right? through this. it. This is a document he got. Let's scroll

He went to research

Again, ask yourselves why did he need to do the research if Let's keep going.

he is just a conspirator and made it all up? Next page, please. All right. Next page.

There is the fax cover sheet. Let's keep going. Keep going, please. How SIPC All

Here is the document. Let's keep going.

protects you. right.

And let's go one more.

All right. What does it say?

Let's enlarge paragraph 4, please. What are protected securities.

In addition to notes, stocks,

bonds, debentures, and certificates of deposit, the term "securities" includes some investment contracts, and skipped a

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few more words, and talks about debentures that came up in this case. here? Now, Mr. Weed testified that he was told that Mr. Heaton, and he was consistent with this, that SIPC coverage applied on the private side of the bank. Now, the government is trying to twist that a little bit because some other people thought it was the securities side of the bank. He said, on the private side of the bank. Why wouldn't Mr. Weed believe that SIPC coverage applied

Mr. Weed's understanding was these investment -- or these accounts were on the private side of the bank. Now, this language goes on to say that SIPC coverage applies -- all right -- SIPC coverage applies if these are SEC registered securities. Well, how does Mr. Weed know if they are registered with the SEC or not? account. All right? He is trying to find out insurance on the He is told here SIPC coverage is gone.

Now, you can argue, well, perhaps he should have done additional research, perhaps he should have gone back later and made that determination. But why isn't Mr. Weed entitled to a You recall the

rely upon what the person in the bank tells him? insurance certificate.

The insurance certificate also says at That's what it says, and that's a

the bottom, SIPC coverage. legitimate certificate. got, remember?

That's a certificate that Lindy Markham

And it says in the bottom lower left-hand corner

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there, it says SIPC coverage on a real insurance certificate. All right. with investors. Point No. 3, all right? Communications

If Mr. Weed is involved as a conspirator in

this case, why does he take calls from the RFT people, all right? Why doesn't he just blow them off and say, I am not You know, why did he do a Leon Harte

going to talk to you? thing?

Leon Harte you will recall over a period of time stopped He stopped taking calls.

taking phone calls from these people. Mr. Weed didn't do that.

He took calls repeatedly from the All

likes of the Jack Hathaways of the world, the Gary Bell. right?

Now, Gary Bell when he testified in this case seemed to be a little unhappy with Mr. Weed. But on cross-examination, he

admitted that the statements he made to Mr. Weed at the time in 2002 were accurate. Government's Exhibit 105 says that Mr. Bell appreciates Weed's candor. He states that Weed -- he, Gary Bell, felt that He told Mr. Weed he He said, in no

Weed had been misled by RFT people.

appreciated his forthrightness and assistance.

way has any of the above been aimed or targeted at you or your organization. Doesn't sound like a man who is pointing his finger at Alan Weed. And he wasn't. The point here is Mr. Weed took

these calls from the investors because he was an honest businessman and not because he is in a deal. The dishonest man

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Leon Harte won't take the calls. All right. Point No. 4. Mr. Weed's behavior at Think about this,

critical points in this case.

All right.

January of 2000 Jerry Landsman issues a cease-and-desist order from St. Paul's. Mr. Weed stops. He doesn't issue any more

certificates after that. It was either 2000 or 2001, Ken Podeschi, Illinois Department of Securities, issues a cease-and-desist order, all right? Mr. Weed stops. In fact, he stops to such a point when

Mr. Schmidt comes along in 2002 and says, will you do the business on my insurance, Mr. Weed says, no, I don't do it. have too many issues in the past. Mr. Podeschi testified that there was no evidence whatsoever that cease-and-desist order had ever been violated. All right. Mid-September of 2001, Nancy Balfe of Marsh USA tells Weed they are not going to be personal certificates of insurance. There is not any evidence to indicate that on I

September 12th of 2002 that Mr. Weed sent even one more letter that said, you will get the personal certificates of insurance. It's a warning. He stopped. March 2003 the FBI raids

Mr. Weed's office.

Weed does no more business with Mr. Schmidt

from this time, all right? In connection with that, point No. 5. He never refused He

to meet with any government regulator or government person.

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met with the FBI on two occasions, met with the SEC, never said, I have to have a lawyer, never refused to answer their questions, all right? And point No. 6, and this may be the most critical point, ladies and gentlemen. Representations about insurance

that were false that were not made by Mr. Weed. Now, hang onto your hats, ladies and gentlemen, because this is a long list. And the point of these representations is,

well, you say, Mr. Goodreid, so what if the other people are making false representations. The reason it matters is because

if Mr. Weed is in a conspiracy, why don't they have him say these things? Surely it would be a lot more compelling to have

an insurance agent making statements about insurance as opposed to Norman Schmidt or anybody else in this case who are not insurance people. Look at this list. Early on, Kelly Schnorenberg tells

Roy Christian about some unnamed major insurance company, all right? Kelly Schnorenberg tells Boyd Brown his money was

insured by St. Paul, and if he lost it, he could go to St. Paul and get his money. Norman Schmidt tells Mr. Hulbert, oh, yeah, these things are 100 percent insured, you don't have to worry about it. Mary Anne Gough said twice on her direct testimony that she was told Lloyd's of London was the insurance company. She

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did not say that George Alan Weed told her that.

All right?

In approximately August of 2000 Mr. Harte tells Cynthia Lange that her investment was insured by Lloyd's of London. We

looked at that in that Cooperative Private Placement Agreement a little bit earlier, a document that was not provided to Mr. Weed, all right? Government's Exhibit 225, all right? September 2002. It's now

Norman Schmidt tells investors that the master Now, that's absolute nonsense. There is no

policy is issued. master policy. representation?

But again, why isn't Alan Weed making that Why doesn't Norm Schmidt call up Alan Weed and Because he is All right.

say, Mr. Weed, I need you to write this letter. not in. He is not in on the deal, that's why.

The Herbert letter itself, why didn't Jannice Schmidt or the other people have Mr. Weed write the letter, all right? Could have been just as compelling, if not more than so, coming from an insurance man as opposed to some lawyer, all right? Tammie Goulet testified that Mr. Schmidt and Mr. Schlabach asked them to change the lawyer's one certificate, it was going to go into solicitation package for investors, right? Why didn't they ask Mr. Weed to do that? Summer of 2002 Mr. Lewis told Gregory Hector they are working on a source of insurance to cover the investment. right? Government's Exhibit 410. Sue Veik testified about All

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this.

Remember the language on the document, it said, don't Don't contact the insurance man. She testified that she was told

contact the insurance man.

Why are you telling him that?

the investors were specifically advised, and it's in writing on Government's Exhibit 410, don't contact the insurance man, meaning Mr. Weed. Because he is not in the deal, that's why. Government's Exhibit 1003, a letter from

All right.

Norman Schmidt to Shirley Lehr, says the office staff at Capital Holdings, I have some great news to share with you about the new insurance protection plan. 259. It's a lie.

Norman Schmidt says -- excuse me -- 260 says -- I 1003 talks about the new

beg your pardon, ladies and gentlemen. insurance plan, all right?

259 says Norman Schmidt writes a On

letter to Byrd that talks about new insurance, all right? and on and on it goes. Why didn't they have Mr. Weed do that? he is in the deal. compelling, right? All right. Finally, point No. 7.

All right?

If

The insurance man would be a lot more

Okay, point No. 7. Let's take a These Do

No forgeries, no falsified documents, all right. look at the certificates.

It was Government 302, right?

are the fake insurance certificates. you remember this number at the top?

Now, think about this. Right.

The number you can This is

see it at the top there, the upper right-hand corner.

the insurance certificates that were falsified by somebody, all

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right?

And that the government contends was ultimately sent to

Carol Hall by Mr. Weed. Now, if there is one thing that Mr. Weed knows, that the other people in this case do not know, is what that certificate number means. all right? Now, do you honestly believe that Mr. Weed was so stupid, so stupid, that he is going to send out false insurance certificates for Smitty's that start with the letters CH? Mr. Weed, if he had wanted to be involved in that process, would have changed it to SM or something. He knows what that means. The CH stands for Capital Holdings,

He didn't send that to Carol Hall, all right? Let's take a look at 573. calculated about five minutes. THE COURT: Six minutes. This is the famous letter. Let's take a And, your Honor, I have

MR. GOODREID:

look at page 1, the signature on page 1 as opposed to the signature on page 2. Now, one of the things that was missing until yesterday, and I have to hand this to the government, is who else might have sent that letter? yesterday. All right. It was introduced

The exhibit that the government referenced, which It showed a Jannice Schmidt had Jannice Schmidt is the All right? She is the

was Government's Exhibit 3009.

Mr. Weed's letterhead in her office.

person who had dealings with Carol Hall.

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person who is trying to get the money from Carol Hall. take a look at the signature very quickly here. those two signatures, ladies and gentlemen.

Just

If you look at

You don't have to

be a handwriting expert to see that those signatures are different. Now, we pull up Weed 30 very quickly. Mr. Weed Now,

testified he didn't sign either one of those, all right?

the government jumped and up and down and says, well, you know, the fax cover sheet there says, return this document to area code 618, which is Mr. Weed's fax number. Why would somebody

else do that knowing the document was going to go back to him? Well, the government did -- this is back to my point earlier as to where is the evidence, all right? did a raid on Mr. Weed's office. offices around the country. The government

They did a raid on six other

They pulled up files, they pulled If

up computers, they pulled up records all over his offices.

that document was sent by Carol Hall to Mr. Weed, where is it? Why isn't it in Mr. Weed's office? The reason it's not in Mr. He

Weed's office is because he didn't send it, all right? didn't send it.

All right, ladies and gentlemen, in the very few moments I have left, let's talk about what Mr. Weed didn't do, all right? Mr. Smith in a meeting at -- you can take a look at Smith Exhibit 10, all right? There was a suggestion by

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Mr. Smith that the letters be sent out similar to what Mr. Weed sent out with respect to First Union. said, no, I won't do it. fax after fax. All right. Mr. Weed

Charles Lewis sent Mr. Weed fax after And the Where

Mr. Weed said, no, I won't respond.

government says, why was it faxed if you didn't respond. is the response? Where is the response, all right?

Finally, the meeting in Chicago, where is Mr. Weed? It's the same state he lives in. Mr. Weed? deal. The final point, ladies and gentlemen, that should nag at you is, why does a man in his mid-sixties with two insurance agencies involved in the coal business, no prior criminal record, suddenly decide to turn to a life of crime at that point in his life. Why? And the answer is, he didn't. He didn't. Why don't they invite He is not in the

Because he is not in the deal.

And therefore on behalf of Mr. Weed I ask you to return the appropriate verdict on all of the counts pending against Mr. Weed in this case. THE COURT: Very well. Thank you.

Counsel, thank you. If prepared to proceed, Mr. Bornstein, you

may make closing argument on behalf of Mr. Schmidt. MR. BORNSTEIN: MR. GOODREID: Thank you, your Honor. Your Honor, I would volunteer to put the

chart back if that would assist Mr. Bornstein. THE COURT: Your offer is accepted. Thank you.

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MR. BORNSTEIN:

I was going to ask him to help me. CLOSING ARGUMENT

MR. BORNSTEIN: THE COURT:

May it please the court.

Thank you. Government counsel, fellow lawyers for Good morning.

MR. BORNSTEIN:

the defense, members of our jury. THE JURY: Good morning.

MR. BORNSTEIN:

Um, on behalf of Mr. Schmidt and It goes

Mr. Hammond, we too thank you for your jury service.

without saying that none of us could participate in this process of justice without you, and regardless of the outcome of this case, you are to be thanked for your service. You have listened to a lot of talk, a lot of talk. a lot of talk. or two to go. And

And hours of summation, and another hour or so And that's a lot. And the mind can only absorb

what the butt can sit and handle. But on behalf of Mr. Norman Schmidt I need you to hang in there, please, just a little while longer. And I don't have

time in an hour to cover every aspect of the case, and I don't have time to cover all the law or the facts, or even maybe even a tenth of the kinds of witnesses and exhibits that you have had. So what I have to do in my time, in my allotted time, is to take those pieces that are important from Norman Schmidt's perspective and ask you to focus on them.

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The government gets their turn to focus on what they think is important. Mr. Schmidt's turn. And then please remember that when I sit down, the government gets up again and they get the last word. And I can We have heard other lawyers argue. This is

try to give you some ideas, and when you go back into the jury room and you debate, well, the government said this about Mr. Schmidt, say, well, if Mr. Bornstein or Mr. Hammond could respond, maybe they would say, this part or they would respond in this way or that way or some other way. Because I can't be

there to respond to every point, point by point. I want to begin this summation by talking about conspiracy also. Conspiracy is at the heart of the government's But there

case, and I will go back later and talk to you why.

are two very famous judges in American history, and one of them was got the wonderful name of Judge Learned Hand, and Judge Learned Hand in 1925 said that conspiracies are the darling of the modern prosecutor's nursery. And a second famous judge, Judge Robert Jackson, who was the prosecutor in Germany of the primary conspirators with Adolf Hitler, said, and I will quote, the modern crime of conspiracy is so vague that it almost defies definitions. Despite certain elementary and essential elements, it also chameleon-like takes on a special coloration from each of the many independent offenses on which it may be overlaid.

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It is always predominantly mental in composition because it consists primarily of a meeting of minds and an intent. The crime comes down to us wrapped in vague but unpleasant connotations. It sounds historical undertones of

treachery, secret plotting, and violence on a scale that menaces social stability and the security of the state itself. Privy conspiracy breaks with sedition and rebellion in the litany's prayer for deliverance. Conspiratorial movements

do indeed lie back at the political assassination, the coup d'etat, the pooch, the revolution of seizures and power in modern times as they have in all history, but the conspiracy concept also is superimposed upon many concerted crimes having no political motivation. It is not intended to question that the basic conspiracy principle has someplace in modern criminal law because to unite the back of a criminal purpose the strength, opportunities, and resources of many is obviously more dangerous and more difficult to police than the efforts of a lone wrongdoer. It also may be trivialized when prosecution would vindicate the majesty of federal law. However, even when

appropriately invoked, the looseness and pliability of the doctrine present inherent dangers which should be in the background of judicial thought wherever it is sought to extend

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the doctrine to meet the exigencies of a particular case. And how does that apply here? Well, let's think for a We

moment of what Judge Jackson, Justice Jackson, might say.

have lived -- we have now lived in a world where there was a real dangerou