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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 XI _______________________________________________________________ Proceedings before the HONORABLE ROBERT E. BLACKBURN, Judge, United States District Court for the District of Colorado, commencing at 8:40 a.m., on the 17th day of April, 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. are.

P R O C E E D I N G S (Proceedings resumed at 8:35 a.m.) THE COURT: Thank you, and please be seated. Indeed we

To the parties and their counsel, lady, gentlemen, good And ladies and gentlemen of the jury, good morning. THE JURY: THE COURT: Good morning. Ladies and gentlemen, I want to start this On

morning with an additional word of caution and limitation.

several occasions during the trial I overruled the objections of one or more of the defendants on the grounds of hearsay as defined by Rule 801(c), or on the grounds that the foundational predicate was lacking for admission as non-hearsay as a form of the admission of a party opponent, either as an agent under 801(d)(2)(D) or as a coconspirator under 801(d)(2)(E). On those occasions, I admitted the evidence as non-hearsay. That is evidence that was not offered for the

truth of any matter asserted in the statement, writing, or evidence. On those occasions I admitted the evidence as what the witness had been told, for example, about an alleged or purported offer, contract, investment program, trust, or proof of insurance, or as proof of the effect, if any, the utterance or writing, had on the witness as the hearer or reader of that statement.

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Now, I have admitted the evidence as verbal acts or conduct or as utterances and writings offered to show effect on hearer or reader under the much quoted Section 249 of McCormick on Evidence, fifth edition. And please be instructed that on all such occasions, past, present, and prospective, you must consider all such evidence for the limited purpose for which I admitted it. That

is, and stated differently, you may not consider such evidence for the truth of any matter asserted in any such statement, writing, or evidence, and you are so instructed. Very well. Thank you.

If prepared to proceed, the government may

call its next witness. MR. KIRSCH: calls Paetra Donegan. THE COURT: Very well. Good morning. Thank you, your Honor. The government

MR. BORNSTEIN: THE COURT: by the court.

Good morning, your Honor.

Ma'am, if you will come forward to be sworn

And to accomplish that, if you will make your way Right

forward to stand in this open area in front of my bench. there is fine. I am going to administer the oath.

If you will face me

and raise your right hand to be sworn, and thank you. May have I have your attention in the courtroom. (Paetra Donegan was sworn.) THE WITNESS: I do.

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THE COURT: witness stand.

Thank you.

Please be seated in that

And ma'am again, good morning. THE WITNESS: THE COURT: Good morning.

As you testify, please use the microphone

in front of you, and by its peculiar design, it works best with a speaking distance of about six to eight inches. you. Mr. Kirsch. MR. KIRSCH: THE COURT: Thank you, your Honor. You are welcome. DIRECT EXAMINATION BY MR. KIRSCH: Q A Q A Q A Could you please state and also spell your full name for us? Paetra Parnell Donegan. Okay. P-A-E-T-R-A, D-O-N-E-G-A-N. And thank

And where do you work, Ms. Donegan?

I work for HQ Global Workplaces. What sort of business is that? It's an executive suite, short-term office space type of We provide office space for short-term clients, you

business.

know, regional salespeople, all sorts of flexible type of space. Q A Q A Q What's your position with HQ Global? Currently I am operations manager. Were you also employed with HQ Global in 2002? I was. What was your position then?

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A Q A Q A Q

Paetra Donegan - Direct At the time I was the general manager. And where did you work at that time? I worked at our 1400 16th Street location. Is that here in downtown Denver? It is. During that time, do you recall being involved in leasing

space to a companies known as Summit Ventures or Capital Holdings? A Q I do. Was there a particular person that you primarily dealt with

during the course of that business arrangement? A Q A Q Mr. Chuck Lewis. Do you recall approximately when that arrangement began? March of 2002. And at the beginning of the arrangement, was there actually

space being rented at the 1400 16th Street location? A Q A I believe so, yes. Can you describe the space that was initially rented? Um, well, they had -- originally I believe they had an Our floor is

interior office, maybe a hundred square feet.

broken up into many, many offices, and they rented one suite of those on our floor. Q All right. At any point during your dealings with

Mr. Lewis, did he ask you personally to undertake any projects for him?

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A

Yeah.

Paetra Donegan - Direct When he first moved in -- I don't -- he may have been

there a couple of weeks, he asked me to put together, not a program, but kind of a spreadsheet that would track, from what I understood, credits and debits in like investments, and basically just in Xcel but I really didn't know how. Q A Did you make an attempt to do that? I did. I made about three cells, and that was it. I had

very limited experience. Q All right. At some point did -- was there a larger office

rented by Mr. Lewis or people associated with him? A Yes. At one point they moved into -- basically across the

hall into a larger office that sat -- I think they had three people in there, three desks in there, and then I think they had a smaller suite right next door. frame, though. Q Okay. I am going to ask you to take a look at a document I don't remember the time

that's been marked for identification as Government's Exhibit No. 270. The clerk is going to hand you a notebook that will have it in there. It's No. 270. And can I ask you, please, to

remove that document from the plastic sleeve once you find it, so that you can look at all of the pages. Do you have it in front of you now? A Q I do. Do you recognize that document?

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Paetra Donegan - Direct 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 A Q A I do. What is it? It was our lease agreement at the time. When you leased

office space with us, this is what you signed, both parties signed. Q A Q Who prepared this document? I did. Is that something that you prepared in the ordinary course

of HQ Global's business? A Q It is. Is this a document that was then maintained in the ordinary

course of HQ Global's business? A Q It was. On the second page of the document, is that your signature

on behalf of HQ Global Workplaces? A Q It is. Do you recognize the name of the person who signed as the

client? A Q The name looks familiar. Okay. I don't remember the person.

Do you recall receiving an executed copy of this

lease in connection with HQ Global's business at that time? A I did. MR. KIRSCH: The government would offer at this time,

your Honor, Government's Exhibit No. 270. THE COURT: Objection by any one or more of the

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defendant?

Paetra Donegan - Direct Mr. Gainor. Brief voir dire, your Honor, if possible. You may. Thank you.

MR. GAINOR: THE COURT:

EXAMINATION BY MR. GAINOR: Q Excuse me. Can you refer to page 2 of that exhibit, please. Did you see who signed

And that's the lower right-hand side.

this lease, the second party other than yourself? A Q John. No, that's not the question. Did you see the person who

signed the lease? A Q A Q A Q Did I see? Yeah. I don't recall. But it wasn't Chuck Lewis who signed the lease, correct? Correct. Do you know anything about the second party who signed the

lease? A Q A Q A I don't remember. Did you meet him personally? I don't remember. Did you talk to him on the phone? I don't remember. MR. GAINOR: objection. No further questions, your Honor. No

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Paetra Donegan - Direct THE COURT: Objections by any of the other defendants? MR. STUCKEY: We object based on Mr. Gainor's voir

THE COURT:

The basis for your objection. Authenticity and inability to identify

MR. STUCKEY: the document. THE COURT: MR. KIRSCH:

Response. Your Honor, the party identified in the

document, and there has been a good deal of testimony about that party during the course of this trial. There has also been a

good deal of testimony about that party's association with the defendants in this case. That, in combination with Ms. Donegan's testimony about the manner in which this document was made and created, the government believes has satisfied the authenticity rules of 901. THE COURT: Based upon the totality of the evidence

adduced at trial, including the relevant evidence now presented by this witness while testifying, I conclude that the foundational predicate for authentication under Rule 901(a) has been established. Therefore the objection or objections are overruled, and Government's Exhibit 270 for identification is admitted in evidence, with leave to publish. MR. KIRSCH: Thank you, your Honor. If I could begin

by publishing page 1, please.

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Paetra Donegan - Direct 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 BY MR. KIRSCH: Q Ms. Donegan, looking at page 1 of Government's Exhibit 270

on the top left side, does that summarize the information about the client that rented this space? A Q It is. And the information on the right, does that describe the

space, where the space was located? A Q It does. Under program, it says full office program. Can you explain

what the full office program was? A My company provided two different services; a full office

program where you actually occupied space within the center, and a virtual office, that's just simply recognized that you were a physical occupant. Q All right. And if we could look at the bottom of page 2 of That's your signature on the top?

the document now. A Q It is.

Now, I believe you mentioned a few moments ago, Ms. Donegan,

that at some point this entity moved to a larger office space? A Q They did. Do you recall receiving an e-mail in connection with that

movement? A Q I believe I did, yes. Let me ask you to look, please, at what's marked, please, Do you see

for identification as Government's Exhibit No. 271.

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Paetra Donegan - Direct 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 that document? A Q A Q A I do. Do you recognize it? I do. What is it? It is an e-mail from a woman that worked with the company to

myself stating they are -MR. GAINOR: Object to the content of the e-mail. It's

not admitted in evidence yet. THE COURT: BY MR. KIRSCH: Q A Q A Q Let me ask you a couple of other questions, Ms. Donegan. Sorry. What is the date? The date is September 6th, 2002. And what is the subject matter of the e-mail without talking For now the objection is sustained.

about its contents, please? A Q Lease term notification. And is this an e-mail that you received while you were

working at HQ Global? A Q I did. Does it concern the move to a larger office that you

previously -- about which you previously testified? MR. GAINOR: Objection, your Honor. Testifies to the

content which is not yet in evidence.

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Paetra Donegan - Direct THE COURT: Response. No response necessary. the objection is sustained. MR. KIRSCH:

For now

I would offer Government's Exhibit 271

into evidence, your Honor. THE COURT: defendants? MR. GAINOR: THE COURT: MR. KIRSCH: Objection. Response. Your Honor, if that is -- based on that Hearsay. Any objection by any one or more of the

objection, I would ask for leave to ask some additional questions and then re-offer the exhibit. THE COURT: For now the objection is sustained, and

leave is granted as requested. MR. KIRSCH: THE COURT: BY MR. KIRSCH: Q Ms. Donegan, is this an e-mail that you received during the Thank you, your Honor. You are welcome.

course of your business at HQ Global? A Q It is. Is this a document that would have been kept in the ordinary

course of HQ Global's business? A Q It is. And do you recognize this as a copy of such a document that

would have been kept in the ordinary course of HQ Global's business?

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Paetra Donegan - Direct 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 A Q I do. Was it -- are you familiar with the person who sent this

e-mail? A Q I am. And based on your knowledge, was the person who sent this

e-mail a person who would have had knowledge about what Mr. Lewis's -- about what companies associated with Mr. Lewis were doing with respect to the HQ Global space? MR. GAINOR: THE COURT: MR. KIRSCH: Objection. Response. I believe the question was prefaced based Calls for speculation.

on the witness's knowledge. THE COURT: It is. That preface is all that is

required to satisfy, at least initially, the requirements of Rule 602 requiring personal knowledge of the witness. objection for now is overruled. BY MR. KIRSCH: Q Are you able to answer that question, Ms. Donegan? Do you That

recall it? A Q Can you repeat it, please? Based on what you know about the person who sent the e-mail,

is that a person who would have been familiar with what entities associated with Mr. Lewis were doing with respect to the office space being rented from HQ Global? A I believe so.

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Paetra Donegan - Direct MR. KIRSCH: Your Honor, I would reoffer Government's Exhibit 271. THE COURT: defendants? Any objection by any one or more of the

Mr. Gainor. Brief voir dire, your Honor, if possible. Well, we are beyond voir dire. Is there an

MR. GAINOR: THE COURT: objection? MR. GAINOR: THE COURT: MR. GAINOR:

Yes, there is, your Honor. And your objection. Objection as to hearsay. This document

was not prepared by this witness, and she said she believed that the sender, who she didn't even see write the e-mail, had the knowledge. So I don't believe we have a foundation. We join in Mr. Gainor's objection.

MR. STUCKEY: THE COURT: MR. KIRSCH:

Response. I believe the foundation as a non-hearsay

person under 803(6) has been established by this witness's testimony. THE COURT: That wouldn't make it non-hearsay. It

would make it an exception to the hearsay rule.

But I don't

find that 803(6), which is the exception to the hearsay rule, for the records of a regularly-conducted activity are implicated here. And therefore for now the objection is sustained. If there is a basis for admission, it would lie in 801(d)(2) somewhere.

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Paetra Donegan - Direct 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 BY MR. KIRSCH: Q Ms. Donegan, were you familiar with the person named Susan

Veik? A Q A I was. How did you know Ms. Veik? She was what I understood to be the office manager of

whichever company they were. Q Whichever company they were. Who is the "they" that you are

referring to here? A Well, the company she worked for went by a different couple That's what I meant by "they."

of names while I was there. Q A What names were they?

On that previous lease agreement I believe it was Northwest

Group. Q A Q Were you aware of any other names? Summit Ventures. Did you ever hear the name Capital Holdings in connection

with this firm? A Q I did. Was that an entity that you understood was associated with

Summit Ventures and/or the Northwest Group? A Q Yes. Did you have an understanding about what Ms. Veik's role was

with respect to those three entities? A I just believed she was the office manager.

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Q

Paetra Donegan - Direct Did you correspond with Ms. Veik concerning business that HQ

Global was conducting with any of those three entities? A Q A I did. And what types of correspondence did you have with Ms. Veik? We discussed lease terms. We discussed daily operations.

If someone needed a key, or a parking pass, or how their telephones needed to be answered, things of that nature. Q During those conversations, was it your understanding that

Ms. Veik was conveying information from her superiors? MR. GAINOR: Objection. Calls for speculation. A

third party is going to be thinking about what another party says. THE COURT: The objection implicates Rule 602, again

personal knowledge, which for now is sustained. BY MR. KIRSCH: Q Did you ever speak to Mr. Lewis about Ms. Veik's role in the

office? A Q I don't recall. Was Ms. Veik working for Mr. Lewis at the time that you

first rented the space? MR. GAINOR: THE COURT: Objection. Calls for speculation.

Unless we establish that the witness has

personal knowledge, again Rule 602 is implicated, and for now offended. For now the objection is sustained.

BY MR. KIRSCH:

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Q

Paetra Donegan - Direct When you first had contact with Mr. Lewis, Ms. Donegan, did

you ever see Ms. Veik? A Q A Q I don't believe so. Did you ever hear her name? I don't believe so. Did Mr. Lewis tell you -- speak at all about an employee

named Susan Veik at the beginning of your association with him? MR. GAINOR: THE COURT: therefore overruled. You may answer the question if you recall it and can answer it. Thus, do you recall counsel's last question? I don't believe I heard her name. Objection. Asked and answered. The objection is

I don't recall it.

THE WITNESS: BY MR. KIRSCH: Q

At some point after you first made the arrangements with

Mr. Lewis, did you meet Susan Veik? A Q A Q A I did. Approximately how long after that? I don't recall. Once -- in what context did you meet Ms. Veik? When she joined their team or company, what have you, I am

sure I had to give her keys and things of that nature. Q And did you deal with Ms. Veik -- after she joined the

entity, did you deal with Ms. Veik on matters about which you -concerning which you had previously dealt with Mr. Lewis?

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A

Paetra Donegan - Direct Quite possibly, yes. I believe so, yes. MR. KIRSCH: Your Honor, I would offer Government's

Exhibit 271. THE COURT: defendants. MR. GAINOR: If I may have a moment, your Honor. Same Objections by any one or more of the

objection in terms of hearsay. THE COURT: Foundational predicate for admission of

this evidence now as non-hearsay under 801(d)(2)(D) has been established. Therefore, the objection is respectfully overruled, and the exhibit shall be admitted. Therefore, Government's Exhibit

271 for identification is admitted in evidence, with leave to publish. MR. KIRSCH: THE COURT: BY MR. KIRSCH: Q A Q Ms. Donegan, are you able to see this on your screen now? I am. There is two suite numbers that are referred to there, 4087 Can you explain which one of those is the smaller one Thank you, your Honor. You are welcome.

and 4015.

and which one is the larger one? A 4087 was the smaller original suite, and 4015 was the larger

one that I believe had three desks in it. Q And that -- 4087, the -- that was the -- which one of these

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Paetra Donegan - Direct is the one that was referred to in the lease that we just looked at, Government's Exhibit 270? A Q I believe 4087. All right. Did you have the opportunity while you worked at

HQ Global, Ms. Donegan, to interact with various employees at Capital Holdings/Summit Ventures? A Q A I did. With whom did you interact? Sue, Chuck, um, there were a couple of other people that I

don't remember their names. Q Were you able to observe the mannerisms of those employees

as they worked there? MR. GAINOR: THE COURT: question? THE WITNESS: THE COURT: I believe so. Objection as to the form. Mannerisms?

Ma'am, do you understand counsel's

The objection is overruled. Um, a little.

THE WITNESS: BY MR. KIRSCH: Q

What did you observe about the mannerisms of the employees

that worked there? A They -- the interaction that myself and my team had with We talked

them was very -- we didn't talk about business.

about -- it was very just kind of surface because they were very private with their business.

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Q

Paetra Donegan - Direct Do you recall any discussion with the employees of these

companies about HQ Global employees signing confidentiality agreements? A I believe one of my team members was asked to sign a

confidentiality agreement. Q Let me ask you to look now, please, at what is marked for That's a more

identification as Government's Exhibit No. 272. lengthy document.

So I am going to ask you to remove it from

the sleeve again so you can turn to each of the pages, please. And if you let me know when you have had a chance to do that, please. A Q I am. I want to ask you some questions about, to begin with, about Are you finished with that?

this document with the exception of page 11. A Q Okay. All right. With the exception of page 11, do you recognize

the documents that are contained in this exhibit? A Q A I do. And what are they? They are our monthly invoices that we give to clients every

month with their charges on them. Q When you say "our", you are referring to HQ Global

Workplaces? A Q I am. And were these invoices that pertained to the rental of the

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Paetra Donegan - Direct space that we have been talking about this morning? A Q It does. Were these documents that were made in the ordinary course

of HQ Global Workplaces' business? A Q They are. And who was it who would have responsibility for generating

these invoices? A Q A Q Myself or my assistant manager. Were you familiar with this account at that time period? I was. Was your assistant manager familiar with this account in

this time period? A Q She was. Are these documents that would also have been kept in the

ordinary course of HQ Global Workplaces' business? A Q They are. Now, there is some handwriting on a number of the pages of For instance, on the first page, on

these documents as well. page 12, on page 13. document? A Q I do not. All right.

Do you recognize the handwriting on that

Now, let me ask you a little bit about page 11.

Do you recognize that document? A Q Other than it's a check. All right. It's a check.

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A Q A

Paetra Donegan - Direct It's a check made out to HQ. HQ Global? HQ Global. MR. KIRSCH: Could I have just a moment, please, your

Honor? THE COURT: MR. KIRSCH: You may. Thank you.

That's all my questions, your Honor.

Thank you, Ms. Donegan. THE COURT: Mr. Stuckey. MR. STUCKEY: THE COURT: Thank you, your Honor. Cross-examination on behalf of Mr. Smith by

You are welcome. CROSS-EXAMINATION

BY MR. STUCKEY: Q A Q Good morning, ma'am. Good morning. My name is Richard Stuckey, attorney for one of the Mr. Kirsch asked you who "they" were when you said

defendants.

"they" were occupying the suites, and you began by saying Northwest Group, then Summit, and then I think he had to ask you and you remembered Capital Holdings? A Q I do. It's a fact, is it not, that Capital Holdings and Summit

were there for a long period of time before the Northwest Group name ever got attached onto those suites, right?

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A Q

Paetra Donegan - Cross I believe Northwest -- I don't recall.

I don't for sure.

The lease, Exhibit 270, is dated July 26th of '02 with a

start date of August 1st '02, right? A Q Right. And you didn't recognize the signature of the person signing

as the lessee, the person renting the space, but hadn't Summit and Capital Holdings been there for a long period of time before that? A They had been there since at least March. I do not recall

what the company name was at the time. Q A Q March of '02? March of '02. Maybe a long period of time is not right, but it's several

months. And you said -- let me ask you this first. Where was

your office space in that building compared to the suites at 4015 and 4087, which I assume are on the 40th floor? A Q Fourth floor. Fourth floor, all right. I am sorry. How many floors in

that building? A Q Six. Where were you located in terms of the fourth floor suites

we are talking about? A I was sort of centrally located. As a general manager you

need to be accessible.

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Q

Paetra Donegan - Cross You said you were around a lot, and you said you had an idea And you described that

of the certain mannerisms of the folks. for us.

What discussions did you have with Ms. Veik, whatever her position was there with them, regarding this new lease for space -- what was it -- 4087, and later on the move to 4015? MR. GAINOR: THE COURT: Objection. Response. My friend Mr. Gainor wants to object, It does call for Calls for hearsay.

MR. STUCKEY:

maybe I want to withdraw the question. hearsay.

The question was what -- I guess I should ask, did you have discussions. THE COURT: Let me complete the record. So I withdraw the first question.

MR. STUCKEY: THE COURT:

The first question to which the objection That moots the objection, Therefore,

was interposed is withdrawn.

obviating a need for the ruling by the court. Mr. Stuckey, your next question. MR. STUCKEY:

And it will be a different question in

deference to Mr. Gainor. BY MR. STUCKEY: Q And the question is, ma'am, did you gain any knowledge of

who this Mr. John Schlabach was? A I don't recall.

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Q

Paetra Donegan - Cross Do you recall plans that he was to move there and join this

group and then he decided against that? A Q I don't recall. Go ahead. Let me just reference you. You saw this Spokane,

Washington addresses on the lease and whatnot, right, Northwest Group? A Q A Q A Q Remember that?

On the invoices it's the local address 1400 16th Street. On the lease? Oh, on the lease. On the lease, 270? There is a Spokane address. So you don't know anything about a plan by Mr. Schlabach I am sorry.

moving from Spokane, Washington, moving to Denver, and then deciding against it? A Q I don't recall anything of that nature. Or that that was reason for them to switch the office You

spaces, and then have the Northwest Group vacate the lease. don't know anything about that? A I don't. MR. STUCKEY: THE COURT: Mr. Gainor. MR. GAINOR: THE COURT: Thank you, your Honor. You are welcome. CROSS-EXAMINATION Thank you.

Cross-examination on behalf of Mr. Lewis by

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Paetra Donegan - Cross 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 BY MR. GAINOR: Q A Q A Q It's Ms. Donegan? It is. Good morning. Good morning. You told us that you had heard of essentially three entities

connected with these leases, the Northwest Group, Summit Ventures, and Capital Holdings? A Q Correct. Okay. You had mentioned that these entities were private

with their business? A Q Yes. Okay. So you don't know how exactly they were interrelated

because you weren't a party to them, correct? A Q No. I know that names changed often. Well, you weren't familiar with their business

Okay.

because you weren't a party of these three entities, correct? You were an outsider. A Q Correct. And you had made a comment that they were very private in

terms of the prosecutor's questioning as to their mannerisms. Remember that answer? A Q I do. But it was Mr. Lewis who came up to you at one point and

asked you to prepare -- let me see if I can get this right, a

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Paetra Donegan - Cross spreadsheet program developed to track returns on investments? A Q Something of that nature, yes. So he went to you, an outsider, to come up with an Xcel

program to track investments? A Q Yes. At the very beginning.

Now, you told us, and if I got it wrong, please correct me,

that 4015 was the larger office and 4087 was the smaller office? A Q Correct. And based on your understanding of the e-mail, the occupant

of 4087, which was the Northwest Group, wanted to go into 4015, which was the larger office. A Q That is. Now, this Mr. Schlabach from the Northwest Group who signed Is that your understanding?

the lease for 4087, did he eventually also sign a lease for 4015? A Q A Q I don't recall. Did you talk to him by phone? I don't recall. Can we have Exhibit, with the court's permission, of course,

270 up? THE COURT: BY MR. GAINOR: Q And if we can go to the second page, please. Bottom half. You may. Thank you, counsel.

Now, that is your signature, Ms. Donegan, at the base of the lease for -- I think it's 4087?

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Paetra Donegan - Cross 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 A Q A Q It is. And that was signed on July 26th, '02? Correct. Now, the other signature of Mr. Schlabach, this is already

in evidence, where it's signed as manager is dated the 25th of July. Do you remember receiving this document signed by him

prior to you signing it? A Q A I would have to. Okay. Was it mailed or faxed to you? I don't recall. I am sorry.

I don't recall. MR. GAINOR: THE COURT: MR. GAINOR: THE COURT:

If I may have a moment, your Honor. Counsel, you may. Thank you.

Thank you, Ms. Donegan. Cross-examination on behalf of Mr. Weed, by

Mr. Goodreid. MR. GOODREID: THE COURT: by Mr. Bornstein. MR. BORNSTEIN: THE COURT: No questions. Redirect examination by the I have no questions, your Honor.

Cross-examination on behalf of Mr. Schmidt

Thank you.

government, Mr. Kirsch. MR. KIRSCH: THE COURT: No. Thank you, your Honor.

May this witness, Ms. Donegan, be excused

and released from subpoena, if any, by the government? MR. KIRSCH: Yes, your Honor.

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Paetra Donegan - Cross THE COURT: Any objection by any one or more of the defendants? Hearing none, Ms. Donegan, you are both excused and released from subpoena with our thanks. THE WITNESS: THE COURT: Thank you.

You are welcome.

(The witness was excused.) THE COURT: its next witness. MR. KIRSCH: Thank you, your Honor. The government And when prepared, the government may call

calls Benjamin Ortize. THE COURT: Thank you. If you will make your way forward.

Sir, good morning.

To accomplish that, if you will come forward to this area. Right there is fine. I will administer the oath. right hand to be sworn. And if you will raise your

And thank you.

May I have your attention in the courtroom. (Ben Ortize was sworn.) THE WITNESS: THE COURT: witness stand. I do. Please be seated in that

Thank you.

And Mr. Ortize, good morning. As you testify, please use the And by its peculiar design, it

Good morning.

microphone in front of you.

works best with a speaking distance of about six to eight inches

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Paetra Donegan - Cross 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 BY MR. KIRSCH: Q A Q A Q A Could you please state your name and also spell your name? My name is Ben Ortize, and it's spelled B-E-N, O-R-T-I-Z-E. And where do you live, Mr. Ortize? In Spokane, Washington. What do you do for a living there? I am currently the associate pastor of Calvary Chapel of please. THE WITNESS: THE COURT: MR. KIRSCH: THE COURT: All right. Is that good? Mr. Kirsch.

That's good.

Thank you, your Honor. You are welcome. DIRECT EXAMINATION

Spokane. Q A Q A Q Back in 2002, did you work at the church as well? Yes. What was your position then? I was over the young adult ministry. And during that time period in 2002, did you know a person

named John Schlabach? A Q A Q Yes. How did you know Mr. John Schlabach? He was a member of the church. Around this time period, in the first half of 2002, can you

explain to the jury what Mr. Schlabach's role was in terms of

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Ben Ortize - Direct church activities? A John Schlabach was very active, indeed very friendly towards He was very up front in gifts and these types of

many of us. things.

He worked at the espresso bar in the church, and just a

real active member, you could say. Q All right. At some point during that first part of 2002,

did you come into a little bit of money? A Q A Yeah. How did that happen? We had an automobile. I think it was a 1977 Chevy Blazer.

We sold that.

And we had owned it so we got about $12,000 or

$10,000 out of it. Q And after you got that money, did you have a conversation

with Mr. Schlabach about what you might be able to do with that money? A Q Yes. What was the reason that you talked to Mr. Schlabach about

that? A John was involved in the -- with church finances as well. And he was helping us set up I

forgot to mention that. accounting.

He had talked about understanding accounting,

knowing how to do all of this, and had actually just donated a computer to the church so we could do accounting on this, and he had done any number of things. So John was typically around the church. I heard him

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Ben Ortize - Direct talking about financial stuff on a regular basis with different members of the church, and particularly because he was behind the expresso bar, which was a public type of setting. a lot of people and conversation. regular basis. Q There was

I would overhear him on a

So I assumed he would know.

Did Mr. Schlabach have any suggestions for you when you

asked him that question? A Q A Q A He invited me to come to his office. Did you do that? Yes. Do you recall where that was? It was up north of the church there. I think my wife was

recalling yesterday she thought it was up in the Colbert area. Q A Can you describe this office that you went to? Yes. I was a bit surprised. It was actually a housing

complex.

It looked like an area that was being developed, and As I went inside of there, there

it was a very large nice home.

was a lot of professional-looking people with headsets on talking on phones on all floors, and John's office was in the very basement of that home. Q Now, during this meeting with Mr. Schlabach, did he give you

a specific suggestion about what you could do with that money? MR. STUCKEY: Objection, your Honor. Assuming he did

do means to tell you objection hearsay. 801(d)(2)(D) or (E).

There is no basis under

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Ben Ortize - Direct THE COURT: Your objection is one question premature. The question is, did he tell you, not what he told you, which would implicate hearsay ostensibly under Rule 801(c). MR. STUCKEY: THE COURT: without prejudice. Sir, that means you may answer counsel's last specific question on two conditions, the first of which is do you recall the question? THE WITNESS: THE COURT: question, please. MR. KIRSCH: BY MR. KIRSCH: Q Did Mr. Schlabach during this meeting have a suggestion for Yes, your Honor. No. Thank you.

The objection is premature and is overruled

Mr. Kirsch, would you reiterate your last

you about what you should do with the money you got from selling your car? A Q Yes. Did that suggestion pertain to something called Smitty's

Investments? A Q Yes. What did Mr. Schlabach tell you about Smitty's Investments. MR. STUCKEY: MR. HAMMOND: THE COURT: Now my objection, your Honor. Mr. Schmidt joins the objection.

The objection, as I understand it, is

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Ben Ortize - Direct hearsay, not including non-hearsay under any of the subdivisions of 801(d)(2). The government's response. MR. KIRSCH: Your Honor, the statements of

Mr. Schlabach about Smitty's Investments will not be offered for their truth. THE COURT: On any number of occasions, ladies and

gentlemen, the government has offered evidence not for the truth of the matter asserted as non-hearsay under Rule 801(d)(2)(D), that of an agent, or (E), that of an alleged coconspirator, but instead as non-hearsay to show verbal conduct as defined again under the now famous Section 249 of McCormick on Evidence, fifth edition. Once again, on that limited basis, and for that limited purpose, I overrule the objections and admit the evidence or allow the examination. Now, sir, you may respond to counsel's last question again on my two conditions, the first of which again is, do you recall his last question? THE WITNESS: THE COURT: out. Mr. Kirsch. MR. KIRSCH: BY MR. KIRSCH: Q Mr. Ortize, what did Mr. Schlabach tell you about how Thank you, your Honor. I prefer if he would repeat it. Let's find

And I presume that he will.

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Ben Ortize - Direct Smitty's Investments worked? A Basically from what I understood in the conversation was

that it's basically selling money. Q Did you have -- did Mr. Schlabach give you information about

the return that you would be able to earn through Smitty's Investments? A Q On paper, yeah. He wrote down there.

Did you talk to Mr. Schlabach about any risk associated with

an investment in Smitty's? A Q A Yes. What did Mr. Schlabach tell you about that? He told me -MR. HAMMOND: MR. STUCKEY: THE COURT: MR. KIRSCH: Your Honor, the objection is for hearsay. Same, your Honor.

Response. Same response, your Honor. It's not

offered for the truth. THE COURT: With the same ruling, ladies and gentlemen.

And again on that limited basis and for that limited non-hearsay purpose, I overrule the objections and permit the examination. Sir, you may respond to counsel's last question if, first, you recall his last question. THE WITNESS: sorry. THE COURT: Mr. Kirsch, would you please. And do you? I am

I would like him to repeat again.

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Ben Ortize - Direct MR. KIRSCH: Yes, your Honor. BY MR. KIRSCH: Q

Thank you.

What did Mr. Schlabach tell you about any risks associated

with Smitty's Investments? A Yeah. He told me that there is risk with any investment,

but this is about as safe as it gets. Q All right. Did you have a conversation with Mr. Schlabach

about any insurance protection applicable to the investment? A Q A Yes. What did he tell you about that? He told me about -MR. HAMMOND: MR. STUCKEY: THE COURT: government? MR. KIRSCH: THE COURT: Yes, your Honor. And to be consistent, ladies and gentlemen, Again, this is Objection. Hearsay.

Note the same, your Honor.

I presume the same response by the

you may have the same ruling by the court.

offered as non-hearsay to show verbal conduct, that is the explanation of alleged terms relating to an alleged investment program. And on that limited basis and for that limited purpose, I again overrule the objections and permit the examination. Again, sir, you may answer counsel's last question if, first, you recall his last question. And do you?

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Ben Ortize - Direct THE WITNESS: I do this time. THE COURT: Can you answer it of your knowledge? Yes, I can.

THE WITNESS: THE COURT:

Please. He talked about it being insured from

THE WITNESS:

Lloyd's of London, and I would be receiving a certificate for that. BY MR. KIRSCH: Q Did Mr. Schlabach tell you anything about his own personal

investment with the program? A Q Yes. What did he tell you about that? MR. HAMMOND: MR. STUCKEY: THE COURT: Objection, your Honor. Same. Hearsay.

I presume a related response reflecting the

effect of the utterance on the hearer. MR. KIRSCH: THE COURT: That's correct, your Honor. Again, that is a non-hearsay purpose. This

is being offered to demonstrate the effect of this utterance, this statement, on the hearer. That is non-hearsay. Again, as

defined by McCormick on Evidence, fifth edition, at Section 249. And once again, on that limited basis and for that limited purpose, I permit the examination and overrule the objections. Sir, you may answer counsel's last question if you

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recall it.

Ben Ortize - Direct Do you? I did and then I forgot. Go ahead.

THE WITNESS: THE COURT: MR. KIRSCH: BY MR. KIRSCH: Q

Mr. Kirsch. Thank you, your Honor.

Did Mr. Schlabach tell you anything about his personal

investment with Smitty's? A Yes, he did. He had said that he had invested two years

prior, and that he had in a year's time received the full investment back. Q Did you actually receive a written contract concerning an

investment that big? A Q Yes. All right. I am going to ask you now to take a look at

what's marked for identification as Government's Exhibit No. 360. MR. KIRSCH: Your Honor, for the purposes of the

examination of Mr. Ortize, may I ask that be connected with the ELMO as opposed to the computer? THE COURT: MR. KIRSCH: BY MR. KIRSCH: Q A Q Do you have that exhibit in front of you, Mr. Ortize? What -360. You may, and leave is granted as requested. Thank you, your Honor.

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Ben Ortize - Direct 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 A Q 360? Yes, sir. When you get it, I will ask you, sir, to take it

out of the sleeve so you can look at each of the pages. A Q A Q A All right. I will ask you to go ahead and remove the document. You didn't want me to take it out of the three-ring binder? It's fine if you do. Let me see if I can. No, it's not going to happen. Okay.

It's taken out. Q Okay. Can you please look through each of those pages and

let me know if you recognize them after you have had a chance to do that. A Q A Q A Q I recognize all of them. How do you recognize them? This is the contract that John had given to us at that time. During the meeting that you previously described? In the house, yes. There are a series of initials first five pages for party A.

Do you recognize those? A Q Yes. Those are my initials, yes.

On page 5 there is also a signature for party A and some Do you recognize that?

writing. A Q A

Yes, I do. Whose writing is that? That's my signature.

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Q

Ben Ortize - Direct There is also a signature on the last page of the document, Do you recognize it?

page 8. A Q 3? A Q A Q A

That is also my signature. Do you recognize the writing at the top of pages 1, 2, and I am referring to the printing there. The writing? Yes, I recognize that writing.

Whose is that? That's John Schlabach's writing. What about the printing on pages 6 and 7? That is also John Schlabach's writing on page 6 and on page

7, yes. Q And did you sign this document during the meeting that you

had with Mr. Schlabach? A Q Yes. What did you do with the document, if anything, after you

signed it? A I believe I got a copy of it, and I believe he took the Yeah.

original. Q A Q A Q

On that day, there is an additional signature on page 5. Correct. On behalf of Smitty's Investments? Right. On that day did you receive a copy of the document with that

signature there? A No.

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Q

Ben Ortize - Direct Did you later receive a copy of the document containing that

signature? A Q A Yes. From whom? John. MR. KIRSCH: 360. THE COURT: defendants? Hearing none, Government's Exhibit 360 for identification admitted in evidence, with leave to publish. MR. KIRSCH: that, please. THE COURT: BY MR. KIRSCH: Q You are not the only one, Mr. Ortize. All right. Are you looking at the top of the first You are welcome. Thank you, your Honor. We would ask to do Any objection by any one or more of the I move to admit Government's Exhibit No.

page of that contract now, Mr. Ortize? A Q Yes. It appears that there is something scratched out next to the Do you have an explanation for that? That when John had written it up, it said

eight there. A

Yes, I do.

.8 percent per month, and I was quite attracted to that. Q A To .8 percent per month? Yes.

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Q

Ben Ortize - Direct How is it you learned it was going to be eight percent per

month? A Later on at the church during work hours he was helping with

our accounting, he went in looking at these things, he says, oh, I made a mistake on this, and he scratched it out. Q Looking at the second page of this document, paragraphs B

and C, 1B and C, do those match up with your understanding of the program as Mr. Schlabach had described it to you? A Q Do you want me to read this again? Just read it to yourself and let me know if that's

consistent with the description that you received. A Q Yeah. And then looking at page 5, those are the signatures from

the document; is that right? A Q Correct. Can I ask you now to take a look at what's marked for

identification as Government's Exhibit No. 361? A Q A Q A I have got it out. Okay.

You recognize that document? Yes. What is it? It's a personal check signed by my wife and given to

Smitty's Investments. Q A And how was this -- was this check delivered to someone? To John Schlabach.

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Ben Ortize - Direct 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 361. THE COURT: defendants? Hearing none, Government's Exhibit 361 for identification admitted in evidence, with leave to publish. MR. KIRSCH: THE COURT: BY MR. KIRSCH: Q Mr. Ortize, is this a copy of the check that you just Thank you, your Honor. You are welcome. Any objection by any one or more of the Q A Q A When? While we were in the office with him at that personal home. And did this check clear your account? Yes. MR. KIRSCH: I move to admit Government's Exhibit No.

described on the screen now? A Q Yes. At some point did you learn that Mr. Schlabach -- let me Were you familiar while you were there with the --

back up.

generally familiar with the management of the church? A Q A Q Was I familiar with the management of the church? Yes. Absolutely. Did you learn at some point that Mr. Schlabach approached

the church itself about making an investment? A Yes.

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Ben Ortize - Direct MR. HAMMOND: Your Honor, that sounds like it would call for an answer based on double hearsay, so I object. THE COURT: The objection is duly noted but Neither hearsay nor double hearsay, a

respectfully overruled.

fortiori, are yet implicated in the question or its answer. You may answer counsel's last question, again, if you recall it and can answer it. THE WITNESS: BY MR. KIRSCH: Q Did you also receive at some point a copy of a contract that Yes. Yes.

had been presented to the church in connection with this investment? A Q Yes, I was. Let me ask you now, please, to take a look at what's marked You may

for identification as Government's Exhibit No. 362.

need to take that one out of the sleeve again, because it has several pages. A Q A Q A Q Yes. What is it? It is what was given to me from Pastor Ken Ortize. Does he have some relationship to you? I call him dad, personally. Okay. And what was your understanding about what this Do you recognize that document?

document was? A This was the document that John Schlabach had presented to

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Ben Ortize - Direct 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 362. THE COURT: defendants? Hearing none, Government's Exhibit 362 for identification admitted in evidence, with leave to publish. MR. KIRSCH: THE COURT: BY MR. KIRSCH: Q Mr. Kirkham -- I am sorry. Mr. Ortize, is this the first Thank you, your Honor. You are welcome. Objection by any one or more of the him. Q In connection with a possible investment by the church

itself? A Yes. MR. KIRSCH: I move to admit Government's Exhibit No.

page of the contract that was presented to the church? A This was the first page of what was given to me for what was

presented to the church, yes. Q This document refers to Capital Holdings as opposed to

Smitty's? A Q Um-hm. Did you have any discussion with Mr. Schlabach about any

relationship between Capital Holdings and Smitty's? A I was told that they had -MR. HAMMOND: Objection. That would be non-responsive

first, and if the court were to allow the answer, then it would

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Ben Ortize - Direct be hearsay second. THE COURT: Non-responsiveness in this court is That basis for objection is

reserved to the examiner. overruled.

The government's response as to the hearsay objection. MR. KIRSCH: Can I have one moment, please, your Honor?

Your Honor, I will just withdraw the question and move on. THE COURT: withdrawn. Very well. The question has been

That moots the question, obviating the necessity for

a ruling by the court. Counsel, your next question. MR. KIRSCH: THE COURT: BY MR. KIRSCH: Q Mr. Ortize, do you know when the church was presented with Thank you, your Honor. You are welcome.

this investment opportunity in relation to the time that you had made your investment? A I believe fairly confident, as I said, Cory Kirkham knows I know from a personal

the time frame much better than I do. basis. Q

But I believe it was shortly after that.

Are you aware of investigative efforts made by the church in

connection with its potential investment? A Q Yes, I do. And are you aware of the results of those investigative

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Ben Ortize - Direct 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 Honor. efforts? A Q Yes, I was. Based on the results of those investigative efforts, did you

develop a concern about your own investment? MR. STUCKEY: Objection, your Honor. That calls for

just a roundabout way to call for the actual verbiage of the results. Hearsay. THE COURT: There it is, hearsay is the objection, Hearsay is not yet implicated

which is respectfully overruled. as defined by Rule 801(c).

Now, where were we in the exchange? MR. KIRSCH: I believe I had asked the question, your

I am prepared to repeat it if necessary. THE COURT: You must. If for no other reason than the

benefit of the court. BY MR. KIRSCH: Q

Thank you.

Mr. Ortize, based on the results of the church's

investigation, did you develop a concern about your personal investment? A Q A A rather large concern, yes. And did you take any action based upon your own concern? Yes. I had not only -- mostly it was Cory Kirkham that was I had politely asked

playing the middleman between me and John.

him about getting the money back, and if that was a possibility. Having called him a number of times, and either he or

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Ben Ortize - Direct Mike were always together. And so I would get ahold of them one way or another, but in an attempt to get ahold of John repeatedly. Q A Q You were attempting to get ahold of Mr. Schlabach? Yes. And did you say that on various occasions when you attempted

to do that, he was in the presence of a person named Mike? A Q A Q A Q Yes. Did you know Mike's last name at that time? Um, I don't recall, to tell you the truth. All right. Yes. During the course of the time that your money was placed Did you ask Mr. Schlabach to return your money?

there, did you receive documents that were monthly statements or monthly disbursement and placement forms? A I received one of the normal monthly forms that they gave

out. Q Let me ask you to look at what's marked for identification

as Government's Exhibit No. 364. A Q Okay. And I will ask you to take that one out of the sleeve as Starting with the first page, do you recognize that

well.

document? A Q Yes, I do. What is it?

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A

Ben Ortize - Direct That is the earnings that I was told that I had earned in

the one month or 45 days, or -- you can check the dates there -time frame. Q Is the first page of the document a document you previously

received? A Q Excuse me? The first page, is that a document that you had previously

received? A Q A Q Yes. How did you receive that document? Through John Schlabach. Let me ask you to look at the second page of the document Do you recognize your signature on that document?

now. A Q

Yes. Do you recognize your handwriting anywhere else on that

document? A The scribbled out 13929.90, I did not scribble that out.

That was mine there, and then the date below. Q A Q A Q And is this a document that you also received? Yes. How did you receive this document? Through John Schlabach. And did this second page of the document have some

relationship to your request for your money back? A Yes. Upon asking the money back, he had given me this form,

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Ben Ortize - Direct reluctantly I would add, and I filled it out as he told me to and submitted it to him, and he said he would get it over to the guys. Q A How did you submit it to Mr. Schlabach? Just handed it to him. MR. KIRSCH: Your Honor, at this time I would offer

into evidence Government's Exhibit No. 364. THE COURT: defendants? Any objection by any one or more of the

Mr. Gainor. Your Honor, with the court's permission, a

MR. GAINOR:

brief voir dire of the witness. THE COURT: Granted as requested. EXAMINATION BY MR. GAINOR: Q A Q Sir, with regard to page 2. Yes. You testified as to the number amounts and you had scribbled There is some handwriting down there. Now,

out an amount.

without discussing the contents of the handwriting, is that your handwriting? A Q No. Was that handwriting put on the document at a time when you

were observing it? A Q No. So you don't know when, where, how, and why it got on there?

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Ben Ortize - Direct 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 A No. MR. GAINOR: I would object, your Honor, to the

admission of page 2, or at least the extraneous handwritten aspect of it. MR. STUCKEY: THE COURT: MR. KIRSCH: Join in the objection, your Honor.

Response. Your Honor, Ms. Goulet, during her

testimony, identified that additional handwriting that's the subject of Mr. Gainor's questioning, and she identified it as Mr. Smith's handwriting. On that basis, the government believes the document has been sufficiently authenticated. THE COURT: overruled. The court agrees. The objections are

The court's finding that the condition precedent to

the admission requiring authentication under Rule 901(a) has been established. Therefore, Government's Exhibit 364 for identification is admitted in evidence, with leave to publish. MR. KIRSCH: THE COURT: BY MR. KIRSCH: Q Mr. Ortize, is this the first statement that you received Thank you, your Honor. You are welcome.

now on the screen? A Q Yes. And is this the second statement that you received now on

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Ben Ortize - Direct 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 the screen? A Q Yes. And this handwriting at the bottom, is that the handwriting

that you did not recognize? A Q A Q A Q A Q A That handwriting wasn't on the form when I had submitted it. This handwriting that appears to begin, please refund? Yes. Did you in fact receive your money back, Mr. Ortize? Yes, I did. In what format? In a folded-up handwritten check. How was that check delivered to you? John Schlabach had shown up at the church on a Saturday, I happened to be there and saw him

which is normally closed. drive up. church. Q

He had come in through the front entrance of the

I had come out and taken it from him.

Let me ask you to take a look now at what's marked for You should be Do you

identification as Government's Exhibit No. 365. able to leave that one in there. recognize that? A Q A Yes. What is that?

It's just one page.

That is the copy of the check that I was handed by John

Schlabach. MR. KIRSCH: I move to admit Government's Exhibit No.

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Ben Ortize - Direct 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 365. THE COURT: defendants? Hearing none, Government's Exhibit 365 for identification admitted in evidence, with leave to publish. MR. KIRSCH: THE COURT: BY MR. KIRSCH: Q Did you have an understanding about the amount of money that Thank you, your Honor. You are welcome. Any objection by any one or more of the

this check represented, Mr. Ortize? A Q I don't understand your question. It wasn't a very good question. I am sorry.

Did this check include the

return of your principal investment? A Q A Q A Yes. Did it include anything else? It was the 12,000 that I had invested, and then $1,929.20. And what was that? That was -THE JUROR: THE COURT: THE JUROR: THE COURT: THE JUROR: THE COURT: the step. Excuse me, your Honor. Technical assistance requested. Yes. Mrs. Kramer is en route. There we go. We got it.

Too bad, Mrs. Kramer, you don't get paid by It could be the real thing

This was only a drill.

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Ben Ortize - Direct 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 please. BY MR. KIRSCH: Q Mr. Ortize, what was your understanding about the balance of next time. Excuse the interruption, Mr. Kirsch. Your question,

the check in addition to the $12,000? A Yeah. It was what I had supposedly earned during the time

that it was invested. Q All right. Around the time that you received your money

back, did you receive any telephone calls -- let me back up. Were there any -- are you aware of any attempts to contact you by anyone else? A Q A Yes. What attempt are you aware of? Well, the attempts were return calls because I was calling

down there, and I had one in particular from a Charles Lewis. MR. GAINOR: Objection, your Honor. Calls for hearsay

unless he was the person who actually talked to Mr. Lewis. THE COURT: Well, we are in the business of laying a And this is a foundational question

foundation, if possible.

which does not involve hearsay. The objection is respectfully noted but overruled. believe the question had been asked and the answer had been given prior to the objection and the court's ruling. Thus, Mr. Kirsch, your next question. I

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Ben Ortize - Direct MR. KIRSCH: Thank you, your Honor. BY MR. KIRSCH: Q Mr. Ortize, let me ask you to take a look, please, at what's

been marked for identification as Government's Exhibit No. 363. A Q A Q A Okay. Do you recognize that document? Yes. How do you recognize that document? It's the standard receipt that we have at the church for

messages that come in to any of the staff. Q A Q A Q Do you recognize the handwriting on that document? Yes. Who is that? That's our receptionist, Joyce Perry. Is that the person who fields telephone calls on behalf of

the church? A Q Yes. Is it part of the church's regular practice for her to

record memorandums of telephone calls that she receives? A Yes. She records them, and then we have carbon copies as

well. Q Is it part of the church's regular practice then to maintain

copies of those telephone messages that she creates? A Q Yes. We maintain them. I don't know for how long, but --

Do you recognize Government's Exhibit No. 363 as a

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Ben Ortize - Direct message -- that was created in accordance with those conditions you just described? A Yes. MR. KIRSCH: 363. THE COURT: defendants? Hearing none, Government's Exhibit 363 for identification admitted in evidence, with leave to publish. MR. KIRSCH: THE COURT: BY MR. KIRSCH: Q Mr. Ortize, is this