1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK 2 - - - - - - - - - - - - - - X 3 UNITED STATES OF AMERICA, : CR 96 1016(S-1) 4 v. : U.S. Courthouse 5 Uniondale, New York BRUCE W. GORDON, WHO'S WHO 6 WORLD WIDE REGISTRY, INC., : STERLING WHO'S WHO, INC., 7 TARA GARBOSKI, ORAL FRANK : OSMAN, LAURA WEITZ, ANNETTE 8 HALEY, SCOTT MICHAELSON, : and MARTIN 9 REFFSIN, : TRANSCRIPT OF TRIAL 10 Defendants. :February 24, 1998 11 - - - - - - - - - - - - - - X 9:45 o'clock a.m.
12 BEFORE:
13 HONORABLE ARTHUR D. SPATT, U.S.D.J. and a jury 14 APPEARANCES: 15 For the Government: ZACHARY W. CARTER 16 United States Attorney One Pierrepont Plaza 17 Brooklyn, New York 11201 By: RONALD G. WHITE, ESQ. 18 CECIL SCOTT, ESQ. Assistant U.S. Attorneys 19 For the Defendants: NORMAN TRABULUS, ESQ. 20 For Bruce W. Gordon 170 Old Country Road, Suite 600 21 Mineola, New York 11501
22 EDWARD P. JENKS, ESQ. For Who's Who Worldwide 23 Registry, Inc. and Sterling Who's, Who, Inc. 24 332 Willis Avenue Mineola, New York 11501 25 (cont'd)
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5414
1 APPEARANCES (cont'd):
2 GARY SCHOER, ESQ. For Tara Garboski 3 6800 Jericho Turnpike Syosset, New York 11791 4 ALAN M. NELSON, ESQ. 5 For Oral Frank Osman 3000 Marcus Avenue 6 Lake Success, New York 11042
7 WINSTON LEE, ESQ. For Laura Weitz 8 319 Broadway New York, New York 10007 9 MARTIN GEDULDIG, ESQ. 10 For Annette Haley 400 South Oyster Bay Road 11 Hicksville, New York 11801
12 JAMES C. NEVILLE, ESQ. For Scott Michaelson 13 225 Broadway New York, New York 10007 14 THOMAS F.X. DUNN, ESQ. 15 For MrShortcut, 150 Nassau Street 16 New York, New York 10038
17 JOHN S. WALLENSTEIN, ESQ. For Martin Reffsin 18 215 Hilton Avenue Hempstead, New York 11551 19
20 Court Reporter: HARRY RAPAPORT, CSR United States District Court 21 Two Uniondale Avenue Uniondale, New York 11553 22 (516) 485-6558
23 Proceedings recorded by mechanical stenography, transcript 24 produced by Computer-Assisted Transcription 25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5415
1 M O R N I N G S E S S I O N
2
3 (Whereupon, the following takes place in the
4 absence of the jury.)
5 THE COURT: Where is your witness?
6 MS. SCOTT: Right next door.
7 THE COURT: Bring him in.
8 MR. LEE: I have a preliminary application.
9 THE COURT: Why did you wait for now?
10 MR. LEE: Only thing I wanted to do is to let
11 Mr. Rapaport know I needed one minute with the Court, and
12 I thought that was done. I assume you were notified. I
13 apologize.
14 THE COURT: A miscommunication. It is all
15 right.
16 MR. LEE: I am asking permission to bring into
17 the courtroom my personal cassette player. The reason
18 being is when I review the tapes, I had queued portions of
19 it to my own counter, which is different from the counter
20 in court.
21 THE COURT: What is a cassette player? The thing
22 that plays these tapes?
23 MR. LEE: Yes. Mine has a counter, which I don't 24 believe queues out to exactly what the government has. 25 THE COURT: Bring it in.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5416
1 MR. LEE: Thank you.
2 The second application, with respect to the
3 testimony of Mr. Safer, I am requesting a direction to
4 your Honor for the government to instruct Mr. Safer not to
5 mention the prior employment of my client, Ms. Weitz, as
6 Steven Watstein's Who's Who's organization. He was also a
7 prior employee.
8 We discussed it in the context of an in limine
9 motion. And I believe the government did say that they
10 will not bring it up in their direct. But, of course, I
11 wanted to make sure to remind everyone so it doesn't get
12 blurted out.
13 THE COURT: Is Mr. Safer the next witness?
14 MR. WHITE: No. We have Mr. West --
15 THE COURT: Please advise him not to say anything
16 about that other employment.
17 MR. SCHOER: I join in that application with
18 respect to my client. I originally made the motion.
19 THE COURT: She also worked for Mr. West?
20 MR. SCHOER: Yes.
21 MR. WHITE: We didn't intend to elicit that.
22 THE COURT: Just mention it to him.
23 MR.
WHITE: I will. 24 THE COURT: By the way, don't bring up that he 25 talked to the lawyer about the case. In other words, in
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5417
1 cross-examination, don't say, well, did you discuss this
2 case -- you can say it. But if you do, he might come out
3 with something, he told me not to say something. So just
4 watch it.
5 Did I make myself clear? I don't think so.
6 MR. SCHOER: Yes, you did.
7 THE COURT: All right, let's go.
8 (Whereupon, the jury at this time entered the
9 courtroom.)
10 THE COURT: Good morning, members of the jury.
11 Please be seated.
12 I have to say that you made a valiant effort to
13 be here. It didn't really come off too well, but you made
14 a valiant effort. So I am thankful for that.
15 However, we delayed you a little while even after
16 you delayed a little bit. So it is even.
17 We will call it a draw.
18 You may proceed.
19 Where are we, Mr. White?
20 MR. WHITE: I began my redirect on Friday to
21 Mr. Watstein -- of Mr. Watstein.
22 THE COURT: Mr. Watstein you are still -- you
23 better readminister the oath again. I don't know how long 24 it was. When did you start testifying? 25 THE WITNESS: Tuesday, Monday?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5418
1 THE COURT: Administer the oath again then.
2
3 S T E V E N W A T S T E I N ,
4 called as a witness, having been previously
5 duly sworn, was examined and testified as
6 follows:
7
8 THE CLERK: Please be seated.
9 State your full name for the record.
10 THE WITNESS: Steven Watstein, W A T S T E I N.
11 THE COURT: You mayor proceed, Mr. White.
12
13 REDIRECT EXAMINATION (cont'd)
14 BY MR. WHITE:
15 Q Mr. Watstein, let me give you Exhibit 1379, the
16 transcript of your January 1993 meeting with Mr. Martin at
17 the Garden City Hotel.
18 Now, do you recall you were asked questions by
19 Mr. Nelson about various portions of this tape recording?
20 A In a general sense, yes.
21 Q Now, is it correct that ads were placed in
22 newspapers, and that's what Mr. Martin was responding to
23 for this job interview? 24 A Yes, sir. 25 Q Now, you recall Mr. Nelson asked you at that time as
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5419 Watstein-redirect/White
1 to whether your arrest was public knowledge?
2 A Yes, sir.
3 Q And was it at that time?
4 A Yes, sir.
5 Q And since it was last week, I wanted to be accurate
6 and go over one or two questions Mr. Nelson asked you.
7 Mr. Nelson asked you: Would I be correct that a
8 lot of people in the industry knew that you were arrested
9 and were in trouble for running your business
10 fraudulently?
11 Answer: That is correct.
12 MR. WHITE: I am reading from 4717 of the trial
13 transcript:
14 Question by Mr. Nelson. Certainly it appears
15 that Frank Martin was aware of this; is that right?
16 And the answer was: Yes, sir.
17 Q So, notwithstanding that Mr. Martin was aware that
18 you had been arrested, he wanted to work for you; is that
19 right?
20 A Yes, sir.
21 Q Now, if you can turn to page 6 of the transcript.
22 Now, if you look at the second portion that is
23 attributed to Mr. Martin on that tape -- 24 A Yes, sir. 25 Q And if you look where he says, and I will read it,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5420 Watstein-redirect/White
1 even though, umm, I, I make it a point that, you know, you
2 can't say anything, that you can't deviate from the
3 presentation. Because, number one, the presentation
4 basically does work. Umm, and, number two, the postal
5 authorities, and all those other bad guys out there, might
6 be listening. So it behooves you to just stay within the
7 framework of the presentation.
8 Do you see that, Mr. West?
9 A Yes, sir.
10 Q And what was your understanding as to Mr. Martin was
11 referring to as the postal authorities and all those other
12 bad guys out there?
13 MR. NELSON: Objection.
14 THE COURT: Sustained.
15 Q Now, do you recall in connection with that passage
16 Mr. Nelson asked you, isn't it true that Mr. Martin
17 wouldn't say stick to the script, if the script was
18 inaccurate, do you recall he asked you that question?
19 A Yes, sir.
20 Q Do you later in the conversation ask Mr. Martin if
21 the script was inaccurate?
22 A Yes, sir.
23 Q And tell us where you do that. 24 A You will have to refresh my memory as to which page, 25 sir?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5421 Watstein-redirect/White
1 Q Well, if you take a look at page -- look at page 9.
2 A Yes, sir.
3 Q What do you ask him about the accuracy of the script?
4 A At a certain point I ask, what -- the, the
5 presentations that I have seen had a lot of puffing in it,
6 a lot of exaggerations in it. What was the typical,
7 where, where, where, where did his presentation --
8 withdraw it inconsistent with reality?
9 Q If you look at the rest of 9 and page 10 and 11, does
10 Mr. Martin tell you where he feels it is inconsistent with
11 reality?
12 A Yes, sir.
13 Q Now, do you recall Mr. Nelson asked you with respect
14 to this tape whether it was true that if the managers at
15 Who's Who Worldwide didn't get a commission, they,
16 therefore, had no incentive to let everyone in; do you
17 remember he asked you that?
18 A Yes, sir.
19 Q Do you ask Mr. Martin in this conversation about the
20 percentage of people who get in?
21 A Yes. I believe that I do.
22 Q Okay.
23 If you can take a look at page 17, what do you 24 ask him? 25 MR. NELSON: Objection to the form of the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5422 Watstein-redirect/White
1 question, to the form. It is by way of a statement and
2 not a question.
3 THE COURT: Overruled.
4 A I say if -- was everybody accepted there if, if, a
5 person breathing would buy a membership. I mean, would --
6 and then Martin responds, umm, only if it was, you know,
7 like if it was something like, umm, umm, a porno shop or
8 something, really.
9 Q And further on down, do you ask him about a specific
10 percentage being accepted?
11 A Yes, sir.
12 Q What do you ask him?
13 A I say, but 99 percent were accepted is what you're
14 saying?
15 And he says, yeah, I would say so. If they got
16 the money. As long as they weren't totally outright, umm,
17 just, you know, sure, yeah, laughs, yeah, laughs, really.
18 Q Okay, now, if you can go back to page 9, and the part
19 you read before, where you ask him, where was the
20 presentation inconsistent with reality, right?
21 A Yes, sir.
22 Q Do you see that?
23 A Yes, sir. 24 Q All right. 25 And a few lines down Mr. Martin says, I suspect
HA
RRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5423 Watstein-redirect/White
1 the major flaw was telling people that they were
2 recommended by other, other, other members.
3 Do you see that?
4 A Yes, sir.
5 Q Now, did you make Mr. Martin give you that answer?
6 A No, sir.
7 MR. NELSON: Objection.
8 THE COURT: Overruled.
9 Q In that meeting, was there anything preventing
10 Mr. Martin from saying that, no, there was nothing
11 inconsistent with reality?
12 MR. JENKS: Objection.
13 THE COURT: First of all you are interrupting the
14 question again. I thought we were past that stage.
15 MR. NELSON: I apologize. It was one of those
16 types of questions.
17 THE COURT: I know you are a vigorous advocate.
18 You all are. But just wait until the question is over,
19 will you?
20 MR. NELSON: Yes, Judge.
21 THE COURT: Can I hear that?
22 (Whereupon, the court reporter reads the
23 requested material.) 24 THE COURT: What is your objection, it is a 25 simplistic type of question.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5424 Watstein-redirect/White
1 MR. NELSON: Objection to the form of the
2 question. It is a leading question being asked on
3 redirect examination.
4 THE COURT: It is not exactly leading. And so
5 you understand what leading is, and I will say it again.
6 I said it before.
7 There was nothing that prevented you from saying
8 anything other than that, was there?
9 That's a leading question.
10 He says, was there anything that prevented -- let
11 me hear what he said, maybe you are right.
12 MR. WHITE: I think you are right, your Honor.
13 THE COURT: It is reassuring to have your help.
14 Let
me hear the question.
15 (Whereupon, the court reporter reads the
16 requested material.)
17 THE COURT: That is not a leading question in my
18 view. Was there anything. That's the difference,
19 overruled.
20 THE WITNESS: No, sir, there was nothing that
21 prevented him.
22 THE COURT: As I said, it is a very simple type
23 of obvious question. But if the government wants to ask 24 obvious questions like that, let them ask it. I would 25 hope the government wouldn't do that. It is not
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5425 Watstein-redirect/White
1 necessary.
2 MR. WHITE: I am trying to avoid it, your Honor.
3 Q Now following down on page 9, Mr. Martin, the next
4 thing Mr. Martin says is: Now, there is, there is a way
5 to combat that. And he never really went out of his way
6 by, umm, umm actually asking the members to, and you said
7 really recommend people?
8 THE COURT: No. It is just the reverse -- I beg
9 your pardon. I am sorry.
10 Q And on the top of page 10, and Mr. Martin says, not
11 only that, I think if you, umm, make some kind of effort
12 to do so, think of the leads that you get. I mean these
13 are highly qualified leads.
14 Let me stop there for a minute.
15 MR. NELSON: Judge, I am objecting to him
16 stopping in the middle of sentences, the rule of
17 completeness would require at least the completeness of a
18 sentence.
19 THE COURT: Not necessarily. Depending on what
20 the question is. You might be right. But what is the
21 question?
To continue ingesting this paradigm of pusillanimous promotion of poor prosecution,