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

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 26 27 28

MICHAEL B. BERNAYS State Bar No. #007057 3839 N. 3rd Street, Suite 400 Phoenix, Arizona 85012 Phone: 602-254-5544 Fax: 602-254-9263 E-mail: [email protected] Attorney for Defendant Margaret Molter UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA UNITED STATES OF AMERICA, Plaintiff, vs. MARGARET MOLTER, Defendant. ) ) ) ) ) ) ) ) ) ) No. CR 04-00539-PHX-MHM

SUPPLEMENTAL SUBMISSION RE: LOSS CALCULATION

The Defendant, Margaret Molter, through counsel Michael B. Bernays, and pursuant to the Court's Order of December 18, 2007, hereby submits these additional matters in support of her position that certain matters included by the government in its calculation of loss attributable to Ms. Molter should not be included. Counsel would urge the Court, based upon the matters presented herein , to find that the calculation of loss, as counsel stated in oral argument, should be reduced by $68,364.74 to $99, 854.83 as explained in greater detail in the attached Memorandum of Points and Authorities. RESPECTFULLY SUBMITTED this 21st day of December, 2007.

/s Michael B. Bernays Attorney for Defendant Margaret Molter

Case 2:04-cr-00539-MHM

Document 260

Filed 12/21/2007

Page 1 of 6

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 26 27 28 II. I.

MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION On December 18, 2007, the parties gathered in court to litigate the issue of loss attributable to Ms. Molter pursuant to the United States Sentencing Guidelines and to certain stipulations in Ms. Molter's plea agreement. At the end of the day, the Court granted leave of counsel for Ms. Molter to submit additional documents to the government and to the court in support of Ms. Molter's position that certain attributions to her loss calculations were inappropriate. These submissions concern three separate areas: 1. 2. Depler; and 3. Payments made to a company founded by Ms. Molter's sister, Susan Starks, Payments made to Ms. Molter's parents Richard and Eileen Molter; Payments made to Ms. Molter's sister and brother-in-law, Annette and John

called "Brite Baby". Counsel will discuss each of these matters separately.

PAYMENTS MADE TO RICHARD AND EILEEN MOLTER Evidence before the Court is that there are two payments made to Margaret Molter's

parents, Richard and Eileen. Exhibit 3, tab 2 of the government's submission shows a $1,100.00 check to Eileen Molter. The government had conceded that this check should not be attributable to Ms. Molter's loss calculation. Exhibit 3, tab 4 shows a check for $7,807.69 to Richard Molter. The government has not made a similar concession as to this payment. Submitted with this memorandum are two documents in support of Ms. Molter's position that the payments to Mr. and Mrs. Molter were a loan to Mr. Molter to help him cover living expenses while he recovered from an auto accident which occurred in March of 1997. Exhibit A is a letter from Mr. Molter's attorneys, Kleinman, Lesselyong, Novak & Russell, indicating that they had settled the accident law suit and that there is an outstanding lien in favor of Business Equipment Leasing and Financial Corporation (BELFC) in the amount of $8,450.00. The letter also indicated that a check in that amount

Case 2:04-cr-00539-MHM

Document 260

Filed 12/21/2007

Page 2 of 6

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 26 27 28

had been executed to the law firm of Kimerer & Lavelle on behalf of Angelo Tullo and that it represented full satisfaction of BELFC's lien against Mr. Molter's law suit settlement. Page 2 of exhibit A is a copy of the check from einman, Lesselyong, Novak and Russell to Kimerer & Lavelle. Counsel believes that the reason the money was placed in trust to Kimerer & Lavelle is because the bankruptcy litigation was on-going at the time of this repayment of loan to BELFC. Exhibit B is the lien release executed by Mr. Tullo on behalf of BELFC acknowledging receipt of the funds from Mr. Molter and acknowledging that it is a complete satisfaction of the loans which had earlier been made to him. Counsel would urge the Court to find that these two documents establish that the $7,807.69 payment to Mr. Molter was a legitimate arms length business transaction which was repaid and should not therefore be counted as an amount personally received by Margaret Molter so as to be included in the loss calculation.

III.

PAYMENTS TO ANNETTE AND JOHN DEPLER At the hearing on this matter, counsel disputed the inclusion in Ms. Molter's loss

calculations of payments made to John and Annette Depler, who are Ms. Molter's sister and brother-in-law. Counsel cross-examined Agent Wong with regard to whether or not she was aware of a transaction for a house trailer and it's attendant lot between the Deplers and any of the ABF group of businesses, but Ms. Wong was not aware of any such transactions. The documents submitted hereto as Exhibits C, D, E, and F show the transaction to which counsel was referring. As with the payments to Richard and Eileen Molter, the government has conceded a portion of the payments to the Deplers as being inappropriately included in the loss calculations. The government has conceded that the $4,400.00 check to Annette Depler found in Exhibit 3, tab 6, should not be included in the loss calculation. They have not made a similar concession to the Wells Fargo cashier's check for $10, 355.68 which is found in Exhibit 3, tab 4. Exhibit C to this memorandum is a copy of the Quit Claim Deed from John Depler

Case 2:04-cr-00539-MHM

Document 260

Filed 12/21/2007

Page 3 of 6

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 26 27 28

to John and Annette Depler vesting interest in the trailer and lot in their marital community as joints tenants with rights of survivorship. Exhibit D is the Deed of Trust which was undertaken by John and Annette Depler in order to purchase the trailer and it's lot. Exhibit E is a Warranty Deed from the Deplers to MMCB Holdings Incorporated, one of the ABF group of businesses, and Exhibit F is a Warranty Deed from MMCB Holdings to one Betty Betschman indicating the subsequent sale by MMCB of the same lot and trailer. The Court should note that the deed from the Deplers to MMCB Holdings Inc., is dated may 10, 1999, while the disputed check to the Deplers in Exhibit 3, tab 4 is dated May 20, 1999. The Court should find that these documents make apparent the reasons for the checks to the Deplers and demonstrate that this payment should not be counted as monies personally received by Margaret Molter in reachING her loss calculation.

IV.

THE INVESTMENT IN "BRITE BABY" There were a number of items discussed at THE HEARING of this matter which

concerned payments made to or on behalf of a company called "Brite Baby". These payments totaled $41,111.81. Counsel was unable to locate the original contracts between "Brite Baby" and the ABF group of companies. Counsel did however speak with Susan Starks, who is Margaret Molter's other sister and who provided an affidavit, attached hereto as Exhibit G, concerning the "Brite Baby" enterprise for the Court's consideration. Ms. Starks indicates that "Brite Baby" was an independent project of her and her husband's, which developed a fabric covering for grocery carts that would protect one's baby from potential germs or other contaminants on those grocery carts. Ms. Starks approached Ms. Molter about potential investment in the product, and, ultimately, the ABF group of companies did in fact make such an investment. As is evident from Ms. Starks affidavit, both the paperwork concerning these investments and the 2,500 completed cart covers which had been produced were retained by the ABF companies under Mr. Monteleone's control after Mr. Tullo and Ms. Molter were excluded from the company offices toward the end of 1999. Ms. Starks is still

Case 2:04-cr-00539-MHM

Document 260

Filed 12/21/2007

Page 4 of 6

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 26 27 28

optimistic that at some point, this project can and will be brought to market; in any event, it should be clear to the Court that the investment in "Brite Baby" was not in anyway monies personally received by Margaret Molter but were in fact one of many arm's length investments made by the ABF group of companies.

CONCLUSION For all the foregoing reasons, counsel would urge the Court to find that the government has failed to prove $68,364.74 worth of loss and that that amount should be deducted from the loss calculations presented in Exhibit 3 of the government's submission to the Court. RESPECTFULLY SUBMITTED this 21st day of December, 2007. /s Michael B. Bernays Attorney for Defendant Margaret Molter

Copy of the foregoing e-mailed via ECF this 21st day of December, 2006 to: Howard Sukenic Assistant United States Attorney Two Renaissance Square 40 North Central, Ste. 1200 Phoenix, AZ 85003 David C. Derickson 3636 North Central, Ste. 1150 Phoenix, AZ 85012 Attorney for Defendant John R. Wolfe Michael D. Kimerer 221 East Indianola Phoenix, AZ 85012 Attorney for Defendant Angelo Tullo Dave Appleton 8711 East Pinnacle Peak Rd., #109 Scottsdale, AZ 85255-3517 Attorney for Defendant Gene Monteleone 5

Case 2:04-cr-00539-MHM

Document 260

Filed 12/21/2007

Page 5 of 6

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 26 27 28

Martin Lieberman 111 West Monroe, Ste. 1650 Phoenix, AZ 85003 Attorney for Defendant Allan Guttentag Jess A. Lorona 40 North Central, Ste. 2800 Phoenix, AZ 85004 Attorney for Defendant James Nova /s Michael B. Bernays

6

Case 2:04-cr-00539-MHM

Document 260

Filed 12/21/2007

Page 6 of 6