Free Motion for Miscellaneous Relief - District Court of Colorado - Colorado

Case 1:04-cr-00103-REB

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Filed 03/29/2006

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IN THE UNITED STATES DISTRICT FOR THE DISTRICT OF COLORADO CASE NO. 04-cr-00103-REB UNITED STATES OF AMERICA, Plaintiff, v. 1. NORMAN SCHMIDT,

Defendant. _____________________________________________________________________ DEFENDANT NORMAN SCHMIDT'S RESPONSE TO GOVERNMENT'S SECOND SUPPLEMENT TO JAMES PROFFER ____________________________________________________________________ COMES NOW Counsel for the Defendant Norman Schmidt, Peter R. Bornstein and Thomas J. Hammond, and responds the Government's Second Supplement to James Proffer. The government has proffered twenty-seven statements for potential admission under FRE 801(d)(2)(E). Mr. Schmidt objects to the proffer and states the objections to each proffered statement as it appears in chronological form in the government's proffer. Mr. Schmidt objects to the government's attempt to have the Court reconsider its previous ruling in which the Court rejected Statements 321 and 322 for admissibility pursuant to FRE 801 (d)(2)(E). 1. The government's first proffered statement is one in which Mr. Schmidt

allegedly suggested that Michael Huffman set up a promotional company (Rocky Mountain Sports Promotions, LLC). The date of the alleged statement cannot possibly be correct. The statement is not a statement in furtherance of a conspiracy as charged in the original indictment or the second superseding indictment. The conspiracy that is 1

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alleged to have occurred pertains to the creation of a Ponzi scheme in which investors provided large amounts of money as investments in medium term bank notes. Rocky Mountain Sports Promotions, LLC, was not a company designed to obtain investments in any bank notes. Therefore, this is not a statement, that is in any way designed to promote the objective of the charged conspiracy. It is never been suggested that Mr. Huffman was a member of any conspiracy, or that he was to be recruited as a potential co-conspirator. Because the statement does not qualify as a statement by a coconspirator during the course and in furtherance of a conspiracy, it cannot therefore be used to identify an alleged co-conspirator or the role of a co-conspirator. Likewise, it cannot be used as a statement designed to give directions to facilitate objectives of the conspiracy, nor can it be said that the statement is one which would prompt the listener to respond in a way that facilitates carrying out the activities of the charged conspiracy. Because the statement appears to be outside the time frame of the charged conspiracy, it cannot be used to support the claim that it is a statement that was used to set in motion acts that are an integral part of the conspiracy. 2. Statement 324, that Norman Schmidt would have attorney Gary Herbert

draft articles of incorporation for Rocky Mountain Sports Promotion, is inadmissible for the same reasons that the first statement, referred to in paragraph 1 of this Response, is not admissible. Because the statement appears to have been made outside the time of the charged conspiracy, it cannot be used for any of the reasons submitted by the government. 3. Statement 325, that Leon Harte told Gary Herbert that Norman Schmidt

was a co-owner and participant in Reserve Foundation, does not in any way promote 2

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the objective of the charged conspiracy. Further, the statement is at best neutral. While the statement may identify Mr. Schmidt's role in relation to Reserve Foundation, the statement itself cannot possibly be said to be intended to control damage to the conspiracy as alleged by the government in its proffer. 4. Statement 326, is another statement alleged to have been made by Leon

Harte to Gary Herbert. The statement is similar to statement number 325. It does nothing to promote any objective of the charged conspiracy, nor can it be said to be a statement that is intended to control damage to the charged conspiracy. To suggest that the statement is one which prompts the listener to respond in a way that facilitates carrying out the activities of the conspiracy is a purely speculative claim by the government. Such speculation is prohibited by the Federal Rules of Evidence. 5. Statement 327, regarding Mr. Herbert's suggestion pertaining to the role

of Leon Harte, as outlined in the government's proffer, is purely speculative. The statement itself, that Mr. Herbert believed that Mr. Hart solicited clients and secured clients, does not in any way promote the objectives of any conspiracy. The government fails to describe what statement it is that the government wishes to admit. If the statement sought to be admitted is a statement by Mr. Harte, the government has failed to describe the statement with any particularity whatsoever. If the statement sought to be admitted is the statement by Mr. Herbert, in which Mr. Herbert believes that Mr. Harte had a role to solicit clients, then Mr. Herbert's statement does nothing to advance the objectives of the charged conspiracy, and is in fact a conclusion, not a statement that can be attributed to Leon Harte. There is no indication that Mr. Herbert responded in anyway to facilitate carrying out the activities of any conspiracy based on whatever 3

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statement it was that Mr. Harte supposedly made. Further, it cannot possibly be said that either statement - by Mr. Harte or Mr. Herbert - was in any way calculated to control damage to any conspiracy. If the statement sought to be admitted is the statement made by Mr. Harte, it was made outside the charged conspiracy. 6. Statement 328 cannot be analyzed in the form that the government has

provided to the Court. The context has not been provided. The answer, that Mr. Schmidt was "reorganizing and revivifying the activity of those entities" is not a statement that promotes the objectives of the conspiracy. This is not a statement of a co-conspirator, as contemplated by Rule 801(d)(2)(E), and was made outside the time of the charged conspiracy. Further, statement 328 is incorrectly attributed to Leon Harte as the declarant in the government's Second Supplement to James Log. 7. Statement 329 is not a co-conspirator statement. The statement is made

outside the alleged period of the conspiracy because it is a statement of Mr. Herbert and his understanding regarding certain funds. The statement was made during Mr. Herbert's deposition. It is a conclusion, not a statement of a co-conspirator as contemplated by FRE 801 (d)(2)(E). It is not a statement that was made in order to further the goals of the charged conspiracy. The claim that this statement is similar to Statement 55 from the original Proffer does not to enhance its admissibility. 8. It appears that Statement 330, attributed to defendant Jannice Schmidt, it

is not one that could be accurately described as being intended to assure the listener of a conspirator's ability to consummate a particular transaction. If the statement is accurate, then it is difficult to imagine how it could be a statement of "puffing" or "boasting." Mr. Schmidt believes that this statement that has no relevance to the 4

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Second Superseding Indictment. Rather, the alleged statement pertains to activities that occurred during the course of the original indictment. Mr. Schmidt therefore objects to the admissibility of this statement as being untimely filed with the court. 9. Mr. Schmidt objects to the admissibility of Statement 331 as being

admissible for the purpose of showing that a co-conspirator has the ability to consummate a particular transaction. Mr. Schmidt further objects that the statement regarding Mrs. Schmidt's churchgoing activities constitute "puffing" or "boasting." Mr. Schmidt also objects on the basis that this statement was not timely filed with the Court, because it should have been filed in the government's original James Proffer. There is no indication that Statement 331 is in any way related to the Second Superceding Indictment. 10. Statement 332, is not a statement that could be admissible on the ground,

submitted by the government, that it is one which is designed to give directions to facilitate objectives of the conspiracy. Troy Hall has not been identified as a coconspirator in this case. 11. Statement 333, without more, does not constitute a statement that reveals

the existence of a conspiracy, nor does it in any way promote the objectives of the conspiracy. It is not a statement that could be construed as one which is designed to control damage to the conspiracy. The statement was part of the original discovery and does not pertain to the Second Superceding Indictment, and therefore it is not appropriate for consideration at this late date as co-conspirator statement pursuant to FRE 801(d)(2)(E). 12. Statement 334 is similar to Statement 333 in that it was contained in 5

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the original discovery and is not sufficiently tied to the Second Superceding Indictment. 13. Statement 335 likewise should not be considered for admissibility as a co-

conspirator statement because it should have been submitted in the government's original James Proffer. 14. Mr. Schmidt objects to the admission of Statement 336 on the same

grounds as stated earlier regarding Statements 334 and 335. 15. Mr. Schmidt objects to the admission of Statement 337 pursuant to FRE

801 (d)(2)(E) on the same grounds as stated earlier in paragraphs 9 and 11-14 of this Response. 16. Statement 338 describe's Gary Herbert's understanding of something that

apparently occurred in June, 2002. This statement is not admissible as a co-conspirator statement. It is not a statement that was made during the course of the charged conspiracy, nor is it a statement that was made to further the objectives of the charged conspiracy. It is simply Mr. Herbert's understanding, which may be based upon numerous conversations. It is not a statement. 17. Mr. Schmidt objects to Statement 339 as being admissible to show the

existence of a conspiracy, or for the purpose of showing the identity or role of a conspirator. 18. Mr. Schmidt objects to Statement 340 on the same ground as the

preceding paragraph. Admissibility of the statements (339 and 340) must be conditioned on the statements as being made in furtherance of the conspiracy, which cannot be said of either Statement 339 or Statement 340. 19. Statement 341, made sometime in July, 2002, does not appear to be 6

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related to the Second Superceding Indictment. It is therefore untimely filed as a coconspirator statement. Further, the statement is not admissible pursuant to FRE 801 (d)(2)(E), because it is not a statement that was made to further the objectives of the charged conspiracy. 20. Statement 342 was made sometime in July, 2002. As with the preceding

statement, Statement 342 does not appear to be related to the Second Superceding Indictment and is therefore untimely filed as a co-conspirator statement pursuant to FRE 801 (d)(2)(E). 21. Statement 343 is untimely filed as a co-conspirator statement. It is not a

statement (See paragraphs 16 and 19). It is also not a statement that is designed to further the objectives of a conspiracy. 22. Statement 344 is untimely filed as a co-conspirator statement. The

statement is alleged to have been made in September, 2002. It is a statement which the government has had since the inception of the case. There is no reason why the statement should not have been submitted in the government's original proffer. 23. Mr. Schmidt objects to the consideration of Statement 345 on the same

grounds as mentioned in the earlier paragraphs (e.g., 9, 11-15, 20, 22). 24. Mr. Schmidt objects to the consideration of Statements 346 through 349

on the same grounds as mentioned in the earlier paragraphs (e.g., 9, 11-15, 20, 22). 25. Statement 350 is untimely filed as a statement to be admitted by the

government pursuant to FRE 801 (d)(2)(E) as discussed earlier in this Response (e.g., paragraphs 9, 11-15, 20, 22).. 26. Mr. Schmidt objects to consideration of Statements 348 and 349 for the 7

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dual purposes of concealing an objective of the charged conspiracy and to promote the objective(s) of the charged conspiracy. 27. Mr. Schmidt objects to the admission of Statement 350 on the grounds

submitted earlier in this Response (e.g. paragraphs 20, 22). 28. Statement 351 is not a statement that it is designed to give directions to

facilitate the objectives of a conspiracy. 29. Mr. Schmidt objects to the admission of Statement 352 on the grounds

submitted earlier in this Response (e.g. paragraphs 20, 22). 30. Statement number 353 fails to identify with particularity the declarant and

therefore should not be considered for admission. 31. Mr. Schmidt objects to the admission of Statement 354 and 355 on the

grounds submitted earlier in this Response (e.g. paragraphs 9, 11-14, 20, 22).

Respectfully submitted,

s/ Peter R. Bornstein Peter R. Bornstein 1600 Broadway, Suite 2300 Denver, Colorado 80202 (303)861-2500 fax: (303)861-0420 email: [email protected]

s/ Thomas J. Hammond Thomas J. Hammond Thomas J. Hammond, PC 1544 Race Street Denver, Colorado 80206 (303)321-7902 fax (303)329-5871 email: [email protected]

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CERTIFICATE OF SERVICE I hereby certify that on January 24, 2006, I electronically filed the foregoing DEFENDANT NORMAN SCHMIDT'S RESPONSE TO GOVERNMENT'S SECOND SUPPLEMENT TO JAMES PROFFER with the Clerk of the Court using the CM/ECF filing system which will send notification of such filing to the following e-mail addresses: Wyatt Burwell Angelo [email protected], [email protected] ; [email protected]; [email protected] Peter R. Bornstein [email protected], [email protected] Paul B. Daiker [email protected], [email protected] Ronald Gainor [email protected] Thomas Edward Goodreid [email protected] Matthew T. Kirsch [email protected] [email protected], [email protected] Declan Joseph O'Donnell [email protected] Daniel T. Smith [email protected], [email protected]

s/ Thomas J. Hammond Thomas J. Hammond

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