12-2297 karron coa appendix v07

7/28/2019 12-2297 Karron CoA Appendix v07

1/406

12-2297prTo be argued by:D. B. KARRON

FOR THE SECOND CIRCUIT

Docket No. 12-2297

DANIEL B. KARRON,

Petitioner - Appellant,

v.

UNITED STATES OF AMERICA,

Respondent - Appellee.

ON APPEAL FROM THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF NEW YORK

APPENDIX Volume 7 FOR THE PETITIONER - APPELLANT7

D.B.KARRON

pro se

348 East Fulton StreetLong Beach, New York 11561

(516) 515- [email protected]


2/406


3/406

Contents

Table of Contents ............................................................................................. 2APPENDIX VOLUME COVERS .................................................................. 6APPENDIX Volume 1 FOR THE PETITIONER APPELLANT ................ 7APPENDIX Volume 2 FOR THE PETITIONER APPELLANT ................ 9APPENDIX Volume 3 FOR THE PETITIONER APPELLANT ..............11APPENDIX Volume 4 FOR THE PETITIONER APPELLANT ..............13APPENDIX Volume 5 FOR THE PETITIONER APPELLANT ..............15APPENDIX Volume 6 FOR THE PETITIONER APPELLANT ..............17APPENDIX Volume 7 FOR THE PETITIONER APPELLANT ..............19APPENDIX Volume 8 FOR THE PETITIONER APPELLANT ..............21APPENDIX Volume 9 FOR THE PETITIONER APPELLANT ..............23APPENDIX Volume 10 FOR THE PETITIONERAPPELLANT ............25APPENDIX Volume 11 FOR THE PETITIONERAPPELLANT ............27APPENDIX TABS ........................................................................................29Case Docket ..................................................................................................... 1District Court Amended Opinion and Order ................................................... 2Docketed Briefs ............................................................................................... 3Originating 2255 Form Motion ....................................................................... 4Originating Brief Memorandum of Facts and Law ......................................... 5Reply Brief Corrected Sur Reply Memo of Facts and Law ............................ 6Audit and Accounting Forensics (short) .......................................................... 7GX114 .............................................................................................................. 8GX114 in Focus ............................................................................................... 9GX110 Year 1 ................................................................................................10KARRON PERSONAL ACCOUNTS ..........................................................11GX112 Year 1 ................................................................................................12Year 1 SF269A ..............................................................................................13Year 1 Source of Funds .................................................................................14

Karron Co-Funding Year 1 Schedule.....................................................15Karron Co-Funding Check 1166 .........................................................16Karron Co-Funding Check 5339 .........................................................17


4/406

Karron Co-Funding Check 5341 .........................................................18Karron Co-Funding Check 1222 .........................................................19Karron Co-Funding Check 1228 .........................................................20Karron Co-Funding Check 1142 .........................................................21Karron Co-Funding Check 1243 .........................................................22Karron Co-Funding Check 1152 .........................................................23Karron Co-Funding Check 1153 .........................................................24Karron Co-Funding Check 1154 .........................................................25

Karron 75K Payroll Advance and Repayment......................................26Salary Advance and Repayment Schedule .........................................27

Year 2 Source of Funds .................................................................................28GX113 Year 2 Source of Funds ....................................................................29Year 2 Karron Checks Source of Funds ........................................................30

Karron Co-Funding Year 2 Schedule.....................................................31Karron Check 1142 for $5000 ..............................................................32Karron Check 1152 for $2,500 .............................................................33Karron Check 1153 for $2,500 .............................................................34Karron Check 1154 for $2,500 .............................................................35Karron Check 1166 for $2,000 .............................................................36Karron Check 5339 for $2,000 .............................................................37Karron Check 5341 for $1,000 .............................................................38Karron check 1222 for $1000. ..............................................................39Karron check 1228 for $20,000 ............................................................40Karron Check 1243 for $25,000 ...........................................................41Program Purchases during Program on Karron Personal ...............42

KARRON PERSONAL MASTERCARD ....................................................43STATUTES ...................................................................................................4415 USC 278n(2001) .....................................................................................45Rules and Regulations ...................................................................................4615 CFR 24.30 Changes ................................................................................47


5/406

15 CFR 14 DoC Uniform Administrative Rules ........................................48OMB Cost Principles 2001 ............................................................................4948 CFR Ch. 99 9903.2015 Waiver (2001) ................................................50Government Exhibits .....................................................................................51Government Exhibit Contracts ......................................................................52GX1 Proposal Preparation Kit .......................................................................53GX2 ATP General Terms and Conditions 2001............................................54GX3 DoC Financial Assistance Standard Terms and Conditions .................55GX4 Grants and Agreements Management Division GAMA ......................56GX12 Co Operative Agreement ....................................................................58GX13 Special Conditions ..............................................................................59GX14 Special Conditions ..............................................................................60POPA Newsletter 1 ........................................................................................61POPA Newsletter 2 ........................................................................................62Case Law........................................................................................................63Institute for Technology Development v. Brown, 63 F.3d 445 (C.A.5

(Miss.), 1995) ...........................................................................................................64Scholarly Writing ...........................................................................................65Legal Scholarly Writing ................................................................................66Say What You Mean J Levine .......................................................................67Financial Assistance And The Bona Fide Need Rule ...................................68The Use of Sentencing Findings ............................................................69THESE PAGES INTENTIONALLY BLANK .............................................70TRIAL and Sentencing TRASCRIPT (Long) ...............................................77DUNLEVY FORENSIC RECONSTRUCTION (Long) ..............................77


6/406

APPENDIX VOLUME PAGES

Volume V1 KA-1 KA-300Volume V2 KA-300 KA-599

Volume V3 KA-600 KA-899




Volume V7 KA-1800 KA-2200a (oversize)




Volume V11 KA-3100 KA-3332 END

Table 1 Appendix Volume Pages


7/406


8/406

Total 6067 Oxford HealthTotal 6060 . Employee Benefits

TOTAL

Class Debit11,2')9.7457,373.5757,373.57

Memo

CASI ENTITIESTransaction Deta"1October 2001 throu h I By Account9 September 2002Nameumateype

2:58 PM07/20/10Accrual Basis

A-1801 KA-1801


9/406


10/406

2:56 PM ? ~ - r CASI ENTITIES07/20/10 Transaction Detail By AccountAccrual Basis October 2001 through September 2002

Type Date Num Name Memo Class Debit..General Journal 8/1812002 pr081802 19 NISTATP 38.28General Journal 9/6/2002 pr090602 20 NISTATP 61.07General Journal 9/13/2002 pr091302 21 NISTATP 132.90General Journal 9/30/2002 pr093002 23 NISTATP 299.66General Journal 9/3012002 dbk pr 1.45 % 61918. NISTATP 897.81General Journal 911012002 dbk pr NISTATP 0.00Total 6352 . Medicare 5,132.196353' FUTAGeneral Journal 12/3012001 FUTA INC 10,870 ... NISTATP 86.96General Journal 3/3012002 FUTA NISTATP 114.10General Journal 6/29/2002 FUTA NISTATP 117.10General Journal 8/3012002 FUTA INC 34,270 ... NISTATP 42.96General Journal 9/29/2002 FUTA NISTATP 255.99Total 6353 . FUTA 617.116354 NYSUIGeneral Journal 12130/2001 NYSUI NISTATP 150.93General Journal 12/3012001 NYSUI NISTATP 2.90General Journal 3/30/2002 NYSUI NISTATP 290.50General Journal 3/3012002 NYSUI NISTATP 5.45General Journal 6/2912002 NYSUI NISTATP 705.50General Joumal 6/2912002 NYSUI NISTATP 13.23General Journal 813012002 NYSUI NISTATP 214.80General Journal 8/3012002 NYSUI NISTATP 4.03General Journal 9/2912002 NYSUI NISTATP 544.70General Journal 912912002 NYSUI NISTATP 10.21Total 6354 . NYSUI 1,942.256356 . NJ DisabilityCheck 4/30/2002 10158 NewJerseyDivisio... 6356 6357 NISTATP 117.50Check 7/29/2002 10346 State of New Jersey 6356 6357 NISTATP 103.34Check 7/29/2002 10347 State of New Jersey 6356 6357 NISTATP 183.86Total 6356 . NJ Disability 404.706357 NJ UICheck 4/3012002 10158 NewJerseyDivisio... 6356 6357 NIST ATP 99.88Check 7/29'2002 10346 State of New Jersey 6356 6357 NISTATP 333.28Check 7/2912002 10347 State of New Jersey 6356 6357 NISTATP 591.64Total 6357 . NJ UI 1,024.806359 Penalties and Late FeesCheck 9'30'2002 10418 State of New Jersey 6359 NISTATP 29.01Total 6359 . Penalties and Late Fees 29.01

Total 6350 . Payroll Taxes 28,638.34TOTAL 28,638.34

H A ~

A-1803 KA-1803


11/406

11:39 PM07/26110Accrual Basis

CASI ENTITIESProfit&Loss by ClassOctober 2001 through September 2002

N LLC N NISTATP NN CO FUNDOrdinary Income/ExpenseIncome4000 . Income

4010 Reimbursed Expense Income 0.00 207.51 0.04013 . Co-Funding via Out of Pocket 94.10 0.00 1,371.74014 . Co-Funding via Mastercard 0.00 0.00 25,735.94015 . In-Kind Equipment Contribution 0.00 0.00 30,000.04020 NISTATP Income 0.00 800,000.00 0.04712 FROM DBKTO NISTAlC 1010 0.00 3,000.00 0.04912 DBK For NISTATP 0.00 0.00 17,795.0

Total 4000 Income NwN 94.10 NJ5r 803,207.51 NN 74Total Income 94.10 ------mr 803,207.51 ~ I t ~ 74Expense5000 . AE-Accounting

5001 . AE.JIII Feldman CPA 0.00 1,000.00 0.0Total 5000 AE-Accounting 0.00 1,000.005002 . AE-Airfare5004 . AE-American West 0.00 316.00 0.05005 . AE-Expedia 0.00 956.50 0.05006 . AE.Jetblue 0.00 280.00 0.0

Total 5002 . AE-Alrfare 0.00 1,552.505007 . AE-Auto5009 . AE-Central Parking 0.00 25.00 0.0

5010 AE-Edison Parking 0.00 68.00 0.005011 . AE-Gas 0.00 182.49 0.00

Total S007 . AE-Auto 0.00 275.495123 AE-Books

5125' AE-Bames & Noble 0.00 18.40 0.005126 . AE-Borders Books 0.00 48.66 0.005128 . AE-IEEE Books 0.00 193.48 0.00Total 5123 . AEBooks 0.00 260.545138' AE-Duesand SUbscriptions 0.00 1,026.485139 . AE-Finance Charge 0.00 4.375140' AE-Hardware

5141 AE-3D.FX Cool 0.00 86.30 0.005143 . AE-ADOBE.Com 0.00 767.39 0.005145' AEBlkBox 0.00 1,014.43 0.005157 . AEDatavision 0.00 4,316.84 0.005158' AE-Digital River 0.00 180.82 0.005161 . AE-Electrlcal Supply 0.00 571.70 0.005165 AE-GL Video 0.00 335.00 0.00

N1Sf' ~ I ct1lfr"

A-1804 KA-1804


12/406

11:39 PM CASI ENTITIES07125110 Profit & Loss by ClassAccrual Basis October 2001 through September 2002

N LLC N NISTATP NN CO FUND5168 AE-IBM Direct 0.00 1,111.73 0.05169' AE-J&R Sound 0.00 243.53 0.05171 AE-Lumberland 0.00 9.90 0.05173 AEProjector People 0.00 199.00 0.05174 AE-Racklt Technology 0.00 1,366.00 0.05176 AE-8ub Zero Technology 0.00 89.35 0.05178 AE-Wacom Technology 0.00 171.29 0.05180' AE-Winzip 0.00 29.00 0.05140' AE-Hardware - Other 0.00 310.57 0.0

Total 5140 AE-Hardware 0.00 10,802.855189 AE-Hotel 0.00 2,282.805190 AE-Installatlon5192 AE-Homefront Hardware 0.00 2,672.03 0.05193' AE-Jensen Tools 0.00 1,161.01 0.05190' AE-Installation - Other 0.00 111.87 0.0

Total 5190 AE-Installation 0.00 3,944.915200 . AE-Intemet5203 AE-Expedla 0.00 331.25 0.00

5200 AE-Intemet - Other 0.00 0.00 0.00Total 5200 AE-Internet 0.00 331.255210 AE-Meals 0.00 1,433.235220 . AE..()ffjce

5222 AE-Coffee Distributing 0.00 407.93 0.005226 . AE.Qfflce Depot 0.00 2,939.06 0.05227 AE.Qffice Max 0.00 28.20 0.005229 . AE-Radlo Shack 0.00 185.60 0.005231 . AE-8taples 0.00 1,029.35 0.005220 . AE.Qff ice Other 0.00 201.25 0.00

Total 5220 AE.Qffice 0.00 4,791.395260 AE-Phone5265 . AE-8print 0.00 -310.00 0.005266 . AE-Telephone 0.00 234.30 0.00

5260 AE-Phone - Other 0.00 127.00 0.00Total 6260 AE-Phone 0.00 51.305270 AE-Postage5275 . AE-USPS 0.00 279.43 0.00Total 5270 AE-Postage 0.00 279.435280 AE-Repalrs 0.00 46.165290 AE-8emlnar5292 . AE-8IAM Math Society 0.00 500.00 0.00

fJJ5r ~ 2-

A-1805 KA-1805


13/406

11:39 PM CASI ENTITIES07/25/10 Profit & Loss by ClassAccrual Basis October 2001 through September 2002

N LLC N NISTATP NN CO FUNDTotal 5290 AE-Semlnar 0.00 500.005299 . AE-5oftware5300 . AEBuy Up Time 0.00 799.49 0.05303 . AE-Eacceleratlon 0.00 36.00 0.05306 . AE-Getlnfo.Com 0.00 15.63 0.05307 . AElrls Inc. 0.00 68.94 0.0

530B . AE-Jasc Software 0.00 19.00 0.05310, AE-McAfee 0.00 72.69 0.05312 AE-Quickbooks 0.00 1.227.90 0.05314' AERegsoft 0.00 97.89 0.05316' AERoxio 0.00 105.90 0.005317' AE-Runtlme 0.00 159.00 0.005319' AE-Tehalchemy 0.00 34.95 0.005320 . AE-Visioneer 0.00 44.94 0.005321 . AE-WNT.Reg.Net 0.00 57.90 0.005299 . AE-5oftware Other 0.00 554.31 0.00

Total 5299 AE-5oftware 0.00 3,294.545350 AETech5351 AE-Time Motion Tools 0.00 104.55 0.005352 . Microsoft 0.00 245.00 0.00Total 5350 AE-Tech 0.00 349.555360 AETools

5361 . AE-Mlcro Mark 0.00 139.95 0.005362 AE-Tecra Tools 0.00 247.30 0.00Total 5360 AE-Tools 0.00 387.255369 AETravel

5371 . AE-Luggage Carts 0.00 4.00 0.005372 . AE-Metrocard 0.00 90.00 0.005373 . AETaxi and Limousine 0.00 50.00 0.005374' AE-Train 0.00 1.589.00 0.00Total 5369 . AETravel 0.00 1,733.006000 . Accounting6003 . Jill Feldman CPA 0.00 3,000.00 500.006004 . Joan Hayes CPA 0.00 2,090.00 0.006005 . Ken Jackson 0.00 3.280.00 0.00----_.Total 6000 . Accounting 0.00 8,370.006010 Auto

6011 . Auto Rental 0.00 1.552.65 0.006012 Exxon 0.00 49.30 0.006013' Gas 0.00 56.64 0.006015 . Parking 2.00 993.50 0.00

/V/SI O h J ~ 3 ~

A-1806 KA-1806


14/406

11:39PM CASI ENTITIES07125110 Profit & Loss by ClassAccrual Basis October 2001 through September 2002

N LLC N NIST ATP NN CO FUND8016 Sunoco 0.00 43.40 0.006017' Tolls 0.00 507.15 0.00

Total 6010 . AutofttI#

2.00 3,202.646019 Books 0.00 464.806020 . Communications

6021' ATT 0.00 122.33 0.006022 Cable 0.00 798.06 0.006025' MCI 0.00 410.75 0.006026' RCN 0.00 524.01 0.006027 . Reimbursed Telephone 0.00 344.00 0.006028 . Skytel 0.00 486.60 0.008030 Thorn 0.00 854.55 0.006032 . Verizon 0.00 836.12 0.008034 . Volcestream Wireless 0.00 229.43 0.008035 . Vz Wireless 0.00 272.93 0.006036 . Webworqs 0.00 4,000.00 0.00

Total 6020 Communications 0.00 8,878.786040 . Computer Installation

6041 . Columbia 0.00 589.96 0.008043 . Flglia & Sons 0.00 1,995.00 0.006044 . Homefront Hardware 0.00 29.00 0.006045 . Kips Bay Hardware 0.00 70.27 0.006046 . Metro Solar 0.00 1,000.00 0.00Total 6040 . Computer Installation 0.00 3,684.236050 . Conference 0.00 600.006053 . Dues and Subscriptions 0.00 141.066060 Employee Benefits

6061 . Arlsta 0.00 3,104.35 0.006062 . Childcare Services - Rosalie Me 0.00 1,835.00 0.006063' Drugs 0.00 3,236.88 0.006064' Gym Membership 0.00 1,143.46 0.006065 . Horizon 0.00 888.54 0.006066 . Medical Reimbursed 0.00 19,245.60 17,295.006067 . Oxford Health 0,00 11,209.74 0.00

Total 6060 . Employee Benefits 0.00 40,663.57 17,6090 . Equipment Repairs 0.00 107.176092 . Honorarium 0.00 569.806093 . Insurance 0.00 925.376100 Legal6102 . Frederica Miller ESQ 0.00 6,000.00 0.00Total 6100 . Legal 0.00 6,000.006120 . Miscellaneous 0.00 147,01

N J ~ OnJ'1 1J 7 ~if

A-1807 KA-1807


15/406

11:39 PM07/25/10Accrual Basis

CASI ENTITIESProfit & Loss by ClassOctober 2001 through September 2002N LLC N NISTATP NN CO FUN

6122' NG Check 0.00 0.006130 . Office 0.00 433.276150' Outside Service

6151' Abe Karron 0.00 1,000.00 0.06152' Advanced TechnologyGroup 0.00 1,000.00 0.06155' D. Ferrand 0.00 1,300.00 0.06157' GeorgeWolberg PhD 0.00 38,898.99 0.06158 James Co x oIs 0.00 33,930.00 0.06161 Radio Logic 0.00 100.00 0.06162' Scott Albin 0.00 2,000.00 0.0

Total 6150 .Outside Service 0.00 78,228.996170 Paypal Payments 0.00 329.756175 . Postage & Delivery 0.00 641.106178 . Repairs6180 . General 0.00 173.10 0.06178 . Repairs Other 0.00 75.00 0.0Total 6178 . Repairs 0.00 248.106189 Rent

6192 Rentfor 2002 0.00 2,000.00 0.0Total 6189 Rent 0.00 2,000.006300 . Payroll Expenses

6301 . Scott Albin emp 0.00 4,950.00 0.06304 . James L. Cox emp 0.00 5,200.00 0.06305 . Elisha Gurfeln 0.00 100,000.95 0.06306 . D.B. Karron 0.00 184,252.72 0.06307 . Charles La Salla 0.00 19,800.00 0.06308 . RegnerM. Peralta 0.00 1,312.50 0.06310' Matthew Rothman 0.00 3,405.00 0.06311 . Robert G. Wine 0.00 3,520.00 0.06314' Nlcholee A. Wynter 0.00 9,348.75 0.0

Total 6300 . Payroll Expenses 0.00 331,789.926330 Research and Development

6331 . American Advanced Power 0.00 215.00 0.06332 . American Media Systems 0.00 1,180.09 0.06334 EMAG 0.00 2,850.00 0.06335 . frozencpu.com 0.00 845.83 0.06337 . General Computer 0.00 97,997.14 0.06338 . Pacific Data Storage 0.00 1,429.00 0.06339 Ricoh 0.00 8,019.57 0.06341 . SGI Developers 0.00 295.00 0.06342 . Silicon City 0.00 93,064.55 0.06343 . Silicon Graphics 0.00 45,265.35 0.06344 . Vision Shape 0.00 6,643.25 0.0

o"J9 5 1 7N/5 /

A-1808 KA-1808


16/406


CASI ENTITIESProfit&Loss by ClassOctober 2001 through September 2002

0.00 128,118.29_ _ _0:..-.0_0 -137,377.910.00 -9,259.62

0.00 -20,600.000.00 94,376.000.00 -60,000.00----- 0.00 13,776.00-------

0.00

0.00.0

0.00.00.0- - - - -

-----

{ , 6

NISTATP NN CO FUN210.00 0.0

0.00 30,000.02,128.51 0.0

260,143.29 3195.7719,488.28 0.05,132.19 0.0617.11 0.0

1,942.25 0.0404.70 0.0

1,024.80 0.029.01 0.028,638.34

100.00 0.0160.21 0.0

2,923.31 0.0224.93 0.0627.25 0.014.75 0.0

599.60 0.0431.40 0.0

5,081.451,330.351,568.00

18,729.80 47-15,522.29 27

0.000.00

0.00

92.100.000.00

94.10

0.000.000.00

0.000.000.000.000.000.000.00

0.000.00

29.600.0062.500.000.00/ f ~ - - ~

N LLC N6345 . YC Cable6346 . In Kind ComputerEquipment6330 . Research and Development - Other

Total 6330 ' Research and Development6349 . Stationery6350 . Payroll Taxes6351 FICA6352 .Medicare6353 FUTA6354 NYSUI6356 . NJ Disability6357 NJ UI6359 . Penalties and Late Fees

Total 6350 . Payroll Taxes6370 . Travel

6371 . Airfare6372 Hotel6373 Meals6374 MlscTravel6375 Taxi6376 Train6377 . Transit Check6370 . Travel Other

Total 6370 . Travel6379 . Tuition Reimbursement6380 . Utilities

Total ExpenseNet Ordinary IncomeOther Income/ExpenseOther Expense6500 . Payroll Clearing Account

6504 . Debits Net Payroll Clearing Acc6516 Credits Net Payroll Clearing AcTotal 6500 . Payroll Clearing Account7000 . Bank Transfer

7001 . CAS I Co-funding Rec'd by NIST7006 . From 8735 TO INC OUT7009 FROM INC TO 8735 INTotal 7000 . Bank Transfer

A-1809 KA-1809


17/406


18/406

11:40 PM CASI ENTITIES07/25/10 Profit&Loss by ClassAccrual Basis October 2001 through September 2002

AJE INC RENTOrdinary Income/ExpenseExpense

5220 . AE.QffIce 0.00 165.256000 . Accounting

6003 . Jill Feldman CPA 0.00 2,000.00 0.00Total 6000 . Accounting 0.00 2,000.006010 Auto8011 . Auto Rental 0.00 295.57 0.00

6014' Mobil 0.00 63.91 0.008015 Parking 0.00 100.00 0.00

Total 6010 . Auto 0.00 459.486018 . Bank Charges 0.00 45.546020 . Communications

6021 ATT 0.00 139.61 0.006022' Cable 0.00 87.60 0.006025 MCI 0.00 135.99 0.006028 . Skytel 0.00 369.32 0.006030 Thorn 0.00 522.22 0.006032 . Verizon 0.00 1,299.23 0.00

Total 6020 . Communications 0.00 2,553.976050 . Conference 0.00 970.006051 . Depreciation 0.00 10,489.006052 . Domain Name 0.00 70.006053 . Dues and Subscriptions 0.00 50.006060 . Employee Benefits

6063 Drugs 0.00 477.92 0.006066 . Medical Reimbursed 0.00 774.00 0.006067 . Oxford Health 0.00 1,996.96 0.00

Total 6060 . Employee Benefits 0.00 3,248.886090 . Equipment Repairs 0.00 317.176091 . Finance Charge 0.00 8.756092 . Honorarium 0.00 472.256100 Legal6102 Frederica Miller ESQ 10,000.00 0.00 0.006106 . Pennie & Edmonds 0.00 9,404.13 0.00

6109 . Solomon & Bernstein 10,000.00 1,800.00 0.00Total 6100 . Legal 20,000.00 11,204.136120 Miscellaneous 0.00 20.286150 Outside Service

6152' Advanced Technology Group 0.00 68,000.00 0.006155 D. Ferrand 0.00 3,319.00 0.00

N b f - ' ; J ~ r 11;.3 H

A-1811 KA-1811


19/406


Total 6150 . Outside Service6175 . Postage & Delivery6189 Rent6191 . Rent for 20016192 . Rent for 2002Total 6189 . Rent6330 . Research and Development6342 . Silicon CityTotal 6330 . Research and Development6349 . Stationery6350 . Payroll Taxes6351 FICA6352 . MedicareTotal 6350 . Payroll Taxes6360 Taxes6361 . NY Corporation TaxTotal 6360 . Taxes6370 . Travel6375 TaxiTotal 6370 . Travel6380 . Utilities

Total ExpenseNet Ordinary IncomeOther Income/ExpenseOther Expense6500 . Payroll Clearing Account6504 . Debits Net Payroll Clearing Ace

Total 6500 . Payroll Clearing Account7000 . Bank Transfer7002 . CASI Co-Funding to NIST ATP7005 . From 8735 to INC IN7010 FROM INC TO 8735 OUTTotal 7000 . Bank Transfer

Total Other ExpenseNet Other Income

CASI ENTITIESProfit & Loss by ClassOctober 2001 through September 2002

AJE INC RENT0.00 71,319.000.00 189.35

0.00 0.00 33,000.000.00 0.00 16,000.00

0.00 0.00 49,0

0.00 1,000.00 0.000.00 1,000.000.00 320.47

-1,229.23 0.00 0.00-330.24 0.00 0.00-1,559.47 0.00

0.00 800.00 0.000.00 800.00

0.00 100.00 0.000.00 100.000.00 7,639.04

18,440.53 113,442.56 49,00-18,440.53 -113,442.56 -49,00

0.00 9,259.62 0.000.00 9,259.62

0.00 20,600.00 0.000.00 -94,376.00 0.000.00 60,000.00 0.00

0.00 -13,776.000.00 -4,516.380.00 4,516.38

!'Jot ,JJSt' 'Q ~ y

A-1812 KA-1812


20/406


CASI ENTITIESProfit & Loss by ClassOctober 2001 through September 2002

Net IncomeAJE

18,440.53INC-108,926.18

RENT49,00

A-1813 KA-1813


21/406

Case 1:08-cv-10223-NRB Document 32-18 Filed 08/23/10 Page 26 of 40N. Y. S DEPARTMENT OF STATEDIVISION OF CORPORATIONS AND STATE RECORDS ALBANY. NY 12231-0001.............. .._ _. : ~ ~ ~ ~ ~ . ~ : ~ : ~ = : =.__ . = c = = = = = = = = ~ 1ENTITY NAME l CASI LLC f ' ". . ~DOCUMENT TYPE: MERGER (DOM LLC) COUNTY: NEWY PROCESSSERVICE COMPANY: DELANEY CORPORATE SERVICES LTD. SERVICE CODE: 30

CONSTITUENT NAME: COMPUTER AIDED SURGERY, INCORPORATED ; i L E D ; O ; i j o i ; o o ; - ~ i i O N ; : : : : : : : : : - - ~ ; 7 o ; o ; 3 0 o o o 6 6 ; - ; i L M - ; ; O ; o ; j 0 0 0 0 6 ; O - -

ADDRESS FO R PR OC ESS EFFECT DATE___________________ _ - - _ - - - -THE.LLC 08/30/2002C/O SOLOMON ~ BERNSTBIN 1178 BROADWAY 5TH FLNEW YORK, NY 10001-5404REGISTERED AGENT----------------

=za = ~ ~ = = = = = = = = . s = = s . = = = = = = = = = = = = = = = = = c = = = ; = = = ~ = _=======FILER FEES 95.00 PAYMENTS 95.00--------FILING 60.00 CASH 0.00JOEL BERNSTEIN ESQ TAX 0 .00 CHECK 0.00C/O SOLOMON & BERNSTEIN CERT 0.00 CHARGE 0.001178 BROADWAY STH FL COPIES 10.00 DRAWDOWN 95.00NEW YORK. NY 10001 HANDLING 25.00 BILLED 0.00REFUND 0.00------ooS -1025 (11/8 9)

---------------------- - - --

A-1814 KA-1814 KA-1


22/406

Case 1:08-cv-10223-NRB Document 32-18 Filed 08/23/10 Page 27 of 40

State ofNew York } .\'S:Department ofState JI Iv"", c ~ n i J J tItat 'M tullWud copy IttuWOI " " " f ' t U ~ t I wi,,, 'I v "";';11II1__ II I{.uti " , ,Itt' DqxImrtmr fI{

S l a l ~ IWI ,11m ,Iv ItIIftI is II Irw 1:Df'Y ojmid ori,ilUll.

~ t : r P l o . r y of S,a,,.

--\R~- - - - - ~- " ~ I

A-1815 KA-1815 KA-1


23/406

Case 1:08-cv-10223-NRB Document 32-18 Filed 08/23/10 Page 28 of 40- --_.- ...

FJkST: 'I1w name aDdjgriadietian of fomwioD 01"orgmization of each domwtlc; limitedliabilitycompany or other domestic bIIIiDeIs adity that is to merge are:

FOtJR..TJf: n . asreememo'-S- ha tN.u app.covecl and uocuted by CKh o f ~domatic limiteclliabilitycompauiesor cbDestic otherbuiDcISeatitia thai is a puty thereto.

r"

~ 2 0 8 3 0 0 0 0 ~ { ) ~~ I~ ~ I~ i%\CAS! u.c

CASI u.ciJUo

C2R.TJFICATEOP MERGERof

1.ComputerAided S\IfICrY. IDeCertificate of Incorporation: December 12, 199'2.CASI u.cArticles ofara",ization:1uly31. 20021lDRD: Thenameoftbe iUMving domestic limited lilbiHty company iI : CASI LLC.

2.CASI u.c1. ComputtzAided Surpry, l D C O " ~ e w yarlt State

SIXTH: lbc SecrlUryofStale i . dosipated -cent ol1hc aurrivina Iimi.tcd liabilityampanyllpOD wham PfOC*I apiut it may be Icrved. The po&t ofBce address withiD orwithout

FIFTH: 1he mtlft declive date oEth. ID_. Wto be \IpoD tho date orlbe fi.lin& o r ~CertificateofMCI'ICI'.

SECOND: For each d.omcstic limited liabilityCODlPlDY aM domestic odH:r businessentity. die date when i1s initialArticles ofOrpniZltioD 01" foJmaIion clocumeDt was filed withDeparunmt ofStare is: .

Under Section 1003 of the Limited LiabilityCompmyLaw

.'

f

A-1816 KA-1816 KA-1


24/406


IIIIIIIIIIIIIII

.

..

tbia SlalC10which the SecretlryofState shaJJ.mail a copyof I I I ) 'JJIO"U against the hmitedliability company stn'ed upon himor1= is: CASl u.c c/o Solomon ~ Bematein. 1178Broadway. S floor, New York. New YOIIe 10001-5404.

SEVENTH; The agreement ormerpr is OIl fi le. the followiDa place ofbusineuofthcnrvivirta domeac limil8d liabilityCOJDINIIly: 300 a t 33- StI'CCt, Suite 4N, New YOlk, NewYork 10016.

ElGH1H: A copyo,theasre-n-ofmeracr win be uwiahcd. by tho AUYiviDa QomCllticlimitedHability complY OIl requestmdwithoutCOld to lIlY JIlCIDberor lin)' dDmcstic limitedliability oompaDy O f to anyperson boldine an imerest inmy ocbIlr buIiDeu eatity that ia tom.panuaDl Ie such ~

NIN11t: There are DO cbaaps to the Arbc1el ofOrpaizatioD neeesmyby reuon of themc:rzer.

. . = ;........ ~ . . : ..: .

A-1817 KA-1817 KA-1


25/406

Case 1:08-cv-10223-NRB Document 32-18 Filed 08/23/10 Page 30 of 40. ..( (020830000 1olf6 ~

CERTIfICATEOF MERGER \1\of

Uncla- Scdion 1003 oCtbc 1.im;bIdLiabilityCompanyLaw

DRAWDOWN.')ELANEY- 30

CASI ILC

CASt LLC

Filed by: Joel BemsIeiD. Esq.c/oSokaoD A Bemaein1178 Broadway. ,. tka:New York. New York 1001

l t t -STATE OF NEW YORKDEPARTMENT OF STATE

t : J I . ~ {} ';;:12FLED ~ ( J G 302002:$. s>s:c

I LO:5 HV Of: ~ . l ' lanzn ~ \ ' - - I " " ' \ I- ~ J .::v:;,--:3

A-1818 KA-1818 KA-1


26/406


A-1819 KA-1819 KA-1


27/406


28/406


Forme.d under the l,hvs of tile State of New York

l\lEIVI8ERSHIP LER'I'IFI(.AT-ECA_SI-LLC

NUlllber of units 4.-...:.-_-

qJiis Certificate certifies tfiat~ r . A6ra/ial1t 7(p.rron

C t ~ r t i i i t a l L No.

Is the o'wnerofOne (l)fufIy paid"units of the abo've LLCtransftTa5k onfy lm tJie 6oof


29/406


Formed under the laws of the State of New York

VlElVIHF:RSHIP CERTIFlf:ATFC.AST '. LLC

Number of units 2- ~ - -

'This Certificate celtij':e.\ tfiat:JUt:. Joe{(jJernstein

C t ; r t i f l c a ~ c No.

Is the o'(t'1U!r ( ~ f O ' n e (l)fu.[fy paid units of the abtyfJc LCtran.sferal;fe ()l l fy OIl tlie 6ook, of trw LLC 6-y tue fiofd"er liereof ,:n- -person or 6y dial d l l t f i o n " z e d - ~ J t t t o r n e y UPOIl sZln-endl!l'of th.1SCertificate propt.>rfy endorsed.

11ie totafnumber LUi.its l : ~ r u e d - is JOO.CJJS I LLC is tfie sU'rvi.piu8 entit)1 after tftc mer8e'r 0:/

C(,mputer.Ait{e,fSuFgt'l) lnL:orpo"lted-


30/406


31/406


FlllTIleJ undtr the laws of the State of Ni:w Y('fk

iVIEl\lDERSILlP CERTlFICATF:1Jiis Certificate certifies tJiat

NUl11her of units._..::::::J _

CAST LLCCertificate No.

~ f r . l{isha gurj'einIs Oie o'U.Jner of'I1iree ('Jfu[[y paidU1lits oftlie a6o-1.;e LLCt r a n ~ f e l ' a 6 r e oufy on trw 6oof


32/406


33/406


h)m-icJ Imder the laws cf the State of New Ynrk

'llzis Certificate c e r t ! f i e ~ tli-atJVIEMRERSHIP C:ERTIFIC.t\'fE

LLCASI~ Lerl t!lC(Hc Ne. , _1_ '_ ~ l l m b c r 01" units-...: .-_-

:Mrs. :Marian 'KflrrOfl.is the ownerofOne (1)fll[[y paidunits qf ti,e ablY(Je LLC

trans./cla6{e 01l(Y on t1ie liook of tlU! LLC 6y tlie horder fiereo..f inpt.lson or 6y did) il1lt!ion'zed";Hf:l l nury 1I1"l1/ surrmu(el' of tliisCert!fi.cate proper(v endorsed.

'11ic t,ot.alnumberof U l l i t . ~ i.\suca is 100.C)1S1 LEe is die surr;i'fJ;tl8 lmt-ity after the merger C),I

CompuUrj4id"ed-...\'urtJery InC01poratea (])/{J3!YI ( , : ~ . s l u ' i t l i C;4.51LLC 111C-lJit.ness fit/liereof, till' LLe has Cd used- tfiis cert!ficate to besi.qIH.do ijJI i ts m c . l 1 l a ( q i l ' J l I 1 f . ( ~ 1 1 l 6 c l :

A-1826 KA-1826 KA-1


34/406


Formed LlllJer the laws of the St,lle of ~ l ; W York

iVI 'El\tlIJERSH IpeERT I ,Fl( 'ArECA"ST' LLC

Number of units,_-:-.__ertific


35/406


Certificate No. _i.)_ Number of umts - ~ - -j70nned wlder the laws of the Sutc ofNew York

Cf\SJ,"LLC1\'1 lVlliE.RSHIP C'ERT IFICArrE

'Ifiis CertifUate certifies t(tat(Professor James Lee CoX

h' t lie pro'(JisioJlafQ'f.')Tler ofOne (1)fully paiaunts tift liea6m'c LLC transjcra6fe 01lY on tile 6ook of tfi.e LLC 6y tlie Iiofder(wreC!.fin persan or 6y dury authorized)lttorlll!)' upon surrcndCrof

t J i l ~ ' > (erttficate propcr{y endorsed.7/1 tota[numberofunits issuelis 100,C')4SJ LLC is tJie SUrfJiH:1l0 entity L!f"tcr the merger ~ f

Compul.er_:4.ideSU1:qcry IncOIpom.te,{(D!Bj/J Cft.Sf witn. CJl5.lLLC.In ''(i1!itrzess 'fIt/tiereof: tfie LLC has causea tfiis certificate to 6e

s ~ q l l e d - ~ ) ' its IIllUla,qiflY mem6er:(Dated: ~ f V O " ( ) e m 6 e r 19, 2002

A-1828 KA-1828 KA-1


36/406

12-2207 Karron v USA Certificate of Appealability Brief Appendix78

Trial TRASCRIPT (Long)

Trial

Transcript

A-1829 KA-1829 KA-1


37/406

1862ZKAR1

1 UNI TED STATES DI STRI CT COURT1 SOUTHERN DI STRI CT OF NEW YORK2 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x23 UNI TED STATES OF AMERI CA, New Yor k, N. Y.3

4 v. S2 07 CR 541 ( RPP)45 DANI EL B. KARRON,56 Def endant .67 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x788 J une 2, 20089 9: 30 a. m.9

10

10 Bef ore:1111 HON. ROBERT P. PATTERSON, J R. ,1212 Di st r i ct J udge131314 APPEARANCES1415 MI CHAEL J . GARCI A15 Uni t ed St ates At t orney f or t he16 Sout hern Di st r i ct of New Yor k16 BY: STEVEN KWOK17 CHRI STI AN EVERDELL17 Assi st ant Uni t ed St ates At t or neys1818 RUBI NSTEI N & COROZZO, LLP19 At t orneys f or Def endant19 BY: RONALD RUBI NSTEI N2020 Al so Present : Rachel Ondr i k, U. S. Dept . of Commerce21 Ki r k Yamat ani , U. S. Dept . of Commerce222324

25 SOUTHERN DI STRI CT REPORTERS, P. C.( 212) 805- 0300

A-1830 KA-1830 KA-1


38/406

2

862ZKAR1

1 THE DEPUTY CLERK: Al l r i se.

2 THE COURT: Pl ease be seat ed.

3 ( Case cal l ed)

4 THE DEPUTY CLERK: I s t he government r eady i n t hi s

5 mat t er?

6 MR. KWOK: Yes, we ar e, your Honor . St eve Kwok f or

7 t he government . Wi t h me at counsel t abl e i s Chr i st i an

8 Ever del l - -

9 MR. EVERDELL: Good mor ni ng, your Honor .

10 MR. KWOK: - - our paral egal and t he speci al agent s.

11 THE COURT: Good mor ni ng.

12 THE DEPUTY CLERK: Def endant r eady i n t hi s mat t er ?

13 MR. RUBI NSTEI N: Def endant i s r eady, good morni ng,

14 your Honor .

15 THE COURT: Good mor ni ng.

16 MR. RUBI NSTEI N: Def endant i s al so r epr esent ed by Ron

17 Rubi nst ei n.

18 THE COURT: Good morni ng, Mr . Rubi nst ei n, and Mr .

19 Kar r on.

20 What i s t he Government ' s pr oj ect i on of t he l engt h of

21 t hi s t r i al ?

22 MR. KWOK: The Government expect s t o concl ude i t s case

23 wi t hi n a week.

24 THE COURT: What about t he def ense?

25 MR. RUBI NSTEI N: Your Honor , I woul d hope t hat t he

SOUTHERN DI STRI CT REPORTERS, P. C.

( 212) 805- 0300

A-1831 KA-1831 KA-1


39/406

3

862ZKAR1

1 def ense wi l l t ake more t han t hr ee days, but I don' t t hi nk t hat

2 t he government has f act ored i n t he potent i al cross- exami nat i on

3 of t hei r wi t nesses i n t hei r one week.

4 THE COURT: I don' t know how many wi t nesses you have,

5 Mr . Kwok.

6 MR. KWOK: Ri ght now we have seven wi t nesses, your

7 Honor .

8 THE COURT: The nat ur e of t hem?

9 MR. KWOK: We have t wo wi t nesses who wi l l be

10 t est i f yi ng about t he pr ogr amand t he r ul es gover ni ng t hat

11 progr am. We have a government wi t ness , an audi t or , who wi l l

12 demonst r at e t hat t he r ul es were broken and demonst r at e how t he

13 money was i n f act spent . We have anot her wi t ness , anot her

14 audi t or account ant t hat t he def endant hi r ed t o conduct a audi t

15 of t he company' s books. And t he r emai ni ng wi t nesses were al l ,

16 at one t i me or anot her , t he def endant ' s company' s empl oyees who

17 woul d t est i f y as t o what happened and t he consi derat i ons t hey

18 had wi t h t he def endant about t hese var i ous t hi ngs t hat are i n

19 di sput e.

20 THE COURT: I see. Those wi l l be shor t wi t nesses, I

21 presume. And t he - -

22 MR. KWOK: I bel i eve t hey woul d be shor t .

23 THE COURT: The account i ng may be l ong.

24 MR. KWOK: Maybe sl i ght l y l onger . But we have t r i ed

25 our best , and we wi l l cont i nue t o t r y t o st r eaml i ne t he


( 212) 805- 0300

A-1832 KA-1832 KA-1


40/406

4

862ZKAR1

1 pr esent at i on of evi dence.

2 THE COURT: Wel l , f r om t he - - I was wonder i ng af t er

3 Fr i day when I got not i ce of t he exper t wi t nesses, whet her some

4 of t he f act s coul dn' t be st i pul at ed. Mr . Rubi nst ei n.

5 MR. RUBI NSTEI N: I was t hi nki ng of t hat mysel f af t er I

6 r ecei ved t he Government ' s l et t er of May 13th. I t seemed t o me

7 t hat i t may wel l be t hat we can st i pul ate, because i t doesn' t

8 sound l i ke t he i ssue as f r amed by t he Government ' s r esponse on

9 May 30t h i s, basi cal l y, we' r e not cont est i ng t hat t hi s can be

10 done. We' r e sayi ng t hat because i t wasn' t agr eed by t he

11 pr ogr am, NI ST or ATP t hat , t her ef or e, i t ' s not al l owabl e.

12 THE COURT: There are t wo prongs, as I under st ood i t ,

13 and I haven' t r ead t he 3500 mat er i al - - I see i t ' s f our

14 vol umes, whi ch i s a l i t t l e daunt i ng.

15 But t he t wo i ssues t hat I ' m r asi ng; one, t hey' r e

16 mai nt ai ni ng t hat t here has t o be a wr i t t en benef i t pr ogr am,

17 and, as I under st and i t , t hey' r e unawar e of any wr i t t en benef i t

18 progr am.

19 Now, secondl y t hey' r e sayi ng t hat t he gr ant di d not

20 pr ovi de f or i t s f unds t o be expended i n t hi s way. Of cour se

21 t hat woul d i nvol ve t hei r pr ovi ng t hat gr ant f unds wer e used as

22 opposed t o CASI ' s f unds, whi ch r ai ses t he quest i on about how I

23 charge t hi s mat t er .

24 MR. RUBI NSTEI N: Wel l , your Honor , our posi t i on i s

25 t hat al t hough t he quest i on i sn' t - -


( 212) 805- 0300

A-1833 KA-1833 KA-1


41/406

5

862ZKAR1

1 THE COURT: Apparent l y t here' s no quest i on t hat t he

2 f unds were expended i n cer t ai n, i n a cer t ai n f ashi on. Some of

3 t he f unds wer e. I n ot her wor ds, I gat her t hat f r om t he nat ur e

4 of t he def ense, t hat t he exper t s who t est i f y, t hat you' r e

5 pr of f er i ng, woul d t est i f y t hat , I guess, but these f unds wer e

6 expended i n t hi s way, but i t ' s per f ect l y appr opr i at e f or t hem

7 t o be expended i n t hi s way i n vi ew of t he, t he l aw per t ai ni ng

8 t o caf et er i a pl ans. That ' s sor t of what I t hought t he def ense

9 was.

10 MR. RUBI NSTEI N: Yes, your Honor . The def ense i s ver y

11 si mpl y t hat Dr . Karr on had no i nt ent t o do anythi ng - - t o do

12 anyt hi ng t hat r i ses t o t he l evel of cr i mi nal r esponsi bi l i t y.

13 And t hat t he f act t hat t her e wasn' t a, quot e, wr i t t en pl an i n

14 pl ace i s not real l y r el evant on t he i ssue of i nt ent . I t goes

15 t o t he i ssue of i nt ent , al l r i ght , and t he quest i on i s t hat , as

16 t he government seems t o concede, t hat t hese ki nd of f r i nge

17 benef i t s under other ci r cumst ances mi ght be bona f i de i f we

18 coul d work out a st i pul at i on on t hat , t hen t her e' s no need f or

19 t he expert wi t nesses. The quest i on t hen comes whet her or not

20 spendi ng t hat money f or t hese f r i nge benef i t s wi t hout a wr i t t en

21 pl an i s a quest i on f or t he j ur y, whet her i t r i ses t o t he l evel

22 of cri mi nal acti vi t y.

23 So t he r eason I was goi ng t o cal l Mr . Sapi n and Mi ss

24 LeCl ai r , was t o est abl i sh t he bona f i de of t he expense i t sel f

25 because t her e are peopl e who may not t hi nk t hat cer t ai n medi cal


( 212) 805- 0300

A-1834 KA-1834 KA-1


42/406

6

862ZKAR1

1 expenses shoul d be r ei mbursed by t he empl oyer , but i n f act

2 t hese ki nd of medi cal expenses are r ei mbur sed by empl oyers i n

3 cer t ai n f i el ds, and my exper t s i nf or m me Mi crosof t per mi t s

4 t hese ki nd of expenses, and so t hat ' s t he i ssue - - t hat ' s our

5 i ssue. I f t hey' re not - -

6 THE COURT: That t hen r ai ses a quest i on - - t her e are

7 t wo quest i ons i nvol ved. One, as I see i t , one was whether or

8 not t he - - i t i nvol ves, i n par t , what f unds wer e used; wer e

9 t hey gr ant f unds or wer e t hey t he cor porat e credi t f or t hese

10 expenses. I f t he cor porat i on coul d af f or d t hese expenses wi t h,

11 or bor r owed f or t hese expenses, t hen t hat ' s - - your def ense i s

12 t hat , okay, maybe t her e wasn' t a wr i t t en pl an. But that goes

13 t o hi s i nt ent .

14 The second i ssue i s whether or not gr ant f unds were

15 used, and i f t he gover nment can pr ove t hat gr ant f unds were

16 used f or t hese expenses, and t hat i t vi ol ated t he t er ms of t he

17 gr ant , t hen t he quest i on of t he def endant ' s i nt ent wi t h r espect

18 t o t he gr ant f unds i s t he i ssue, whet her i t was r easonabl e f or

19 hi m under t he ci r cumst ances t o bel i eve he coul d expend grant

20 f r om t he moni es f or t hi s pur pose. That ' s a separ at e i ssue f r om

21 whether or not the def endant t hought t hat compani es of t en

22 cover ed peopl e f or ext r aordi nary expenses of t hi s sort under a

23 caf et er i a under thei r pl ans and, t her ef or e, what I ' m doi ng i s

24 per f ect l y al l r i ght as f ar as i t goes as a company expendi t ur e.

25 Now, maybe I ' m - - maybe my anal ysi s i s wr ong, but i t


( 212) 805- 0300

A-1835 KA-1835 KA-1


43/406

7

862ZKAR1

1 seems t o me t hat t hat ' s t he way i t br eaks down; whether t hat

2 was a r easonabl e bel i ef on hi s part t hat he coul d go ahead and

3 do i t because he heard t hat other compani es di d t hat . That ' s a

4 separ at e i ssue f r om goi ng t o hi s i nt ent and t he i ssue of t he

5 gr ant moni es bei ng r easonabl e, a r easonabl e bel i ef t hat t he

6 grant moni es coul d be spent f or t he pur pose. I don' t know how

7 t he pr oof s go, but t hose ar e t he t wo i ssues t hat ar e bei ng

8 r ai sed and shoul d be separat el y addressed.

9 Mr . Kwok woul d l i ke t o t al k?

10 MR. KWOK: No, I t hi nk your Honor i s exact l y r i ght .

11 We poi nt ed out i n our l et t er of May 30t h, we don' t r eal l y

12 concede anythi ng. We j ust t hi nk t hat i t ' s besi de t he poi nt . I

13 don' t know what caf eter i a pl ans adopt ed by ot her compani es say.

14 We si mpl y t ake t he posi t i on t hat i t ' s i r r el evant i n t hi s case,

15 because t he government wi l l prove t hat t he medi cal expenses

16 were expended usi ng grant f unds. And what ot her compani es

17 mi ght have done i n cor por at e Amer i ca si mpl y has no bear i ng on

18 t he f act s at i ssue i n t hi s case.

19 THE COURT: Wel l , t hat ' s what t he - - i f t hat ' s what

20 t he Government ' s pr oof wi l l be, and t hat ' s what t he

21 Gover nment ' s goi ng t o proceed i n t he case, t hen we go back t o

22 t he or i gi nal ar r ai gnment , ori gi nal i ndi ct ment and whet her we

23 have t o - - t hi s morni ng we' ve got t o arr ai gn t he def endant on

24 t he second - - t he pr oposed supersedi ng i ndi ct ment .

25 But i t seems t o me t he proposed super sedi ng i ndi ct ment


( 212) 805- 0300

A-1836 KA-1836 KA-1


44/406

8

862ZKAR1

1 means t hat t he Cour t shoul d onl y r equi r e t hat CASI f unds were

2 used; wher eas as I r ead t he or i gi nal i ndi ct ment , and a more

3 r est r i ct i ve r eadi ng was i nvol ved and t her e t he government had

4 t o prove t hat gr ant f unds were used f or i mpr oper purposes.

5 MR. KWOK: I see.

6 THE COURT: You see my di st i nct i on.

7 MR. KWOK: I see your di st i nct i on, your Honor , and

8 t hat ' s why we went t o super sede t he i ndi ct ment because we want

9 t o pr eser ve t he l egal - -

10 THE COURT: You want t o have i t both ways. But now - -

11 MR. KWOK: And I t hi nk we are ent i t l ed t o argue i t

12 bot h ways t o t he j ur y. Not onl y i s t her e no - -

13 THE COURT: I f you' r e goi ng t o argue i t bot h ways t o

14 t he j ur y, t hen I t hi nk Mr . Rubi nst ei n may be - - maybe, I ' m not

15 sur e, but may be ent i t l ed t hen t o r ai se t he i ssue of t hi s

16 i nt ent i ssue t hr ough t hese exper t wi t nesses by pr oof , t hat

17 ot her compani es i n f act do t hi s and t hat t her e ar e - - i t ' s a

18 r easonabl e bel i ef on hi s par t t hat company f unds coul d be spent

19 f or t hi s way.

20 MR. KWOK: I mean, your Honor , t he government ' s

21 concern i s t hat even what ever ther e may be any sl i ght

22 evi dent i ar y val ue t o t hat t ype of t est i mony, we bel i eve t hat

23 under Rul e 403 i t shoul d not be admi t t ed si mpl y because t he

24 r i sk of unf ai r pr ej udi ce t o t he gover nment , and conf usi on of

25 t he i ssues i s so gr eat . As Mr . Rubi nst ei n j ust pr of f er ed now,


( 212) 805- 0300

A-1837 KA-1837 KA-1


45/406

9

862ZKAR1

1 t hat wi t ness wi l l be t est i f yi ng most l y about , you know, i ssues

2 concerni ng t r ansgender peopl e, whi ch we do not i ntend t o f ocus

3 on at t hi s t r i al . And our f ear i s t hat shoul d t hose t est i mony,

4 whi ch i s on i t s f ace i s i r r el evant , come i n, t hat i s what t hi s

5 t r i al may be i nvol vi ng t o, and we si mpl y have no i nt er est i n

6 pr ol ongi ng t hi s t r i al t o t al k about al l t hese ot her thi ngs.

7 THE COURT: As l ong as t he - - I ' ve got t o be - - you

8 sai d pr ej udi ce t o t he gover nment , but I ' ve got t o t hi nk about

9 pr ej udi ce t o t he def ense. I f you' r e goi ng t o have t he br oader

10 case wi t h t wo pr ongs, t hen I may f eel t hat i n f ai r ness t o t he

11 def ense, t hey have t o be ent i t l ed t o pr esent t hei r def ense t o

12 t hat second prong. And so t hat ' s t he hor ns of t he di l emma you

13 put t he Cour t i n.

14 ( Pause)

15 MR. KWOK: Your Honor , j ust so we' r e cl ear about our

16 opt i ons t hat we ar e l ooki ng at , i s your Honor st i l l goi ng t o be

17 i ncl i ned t o charge t he j ur y about t he absence of a t r aci ng

18 r equi r ement i f we now t el l you t hat we are not - - we' r e si mpl y

19 goi ng t o ar gue t hat CASI f unds are al l f eder al f unds, but ,

20 nonethel ess, when i t comes t i me f or the j ur y charge, woul d t hat

21 l egal i nst r uct i on st i l l be i ncl uded i n t he char ge t o t he j ur y?

22 THE COURT: J ust t he CASI f unds?

23 MR. KWOK: That somet hi ng t o t he ef f ect of , t o sat i sf y

24 t he el ement of pr ovi ng $5, 000 or more of mi sspent money, t he

25 gover nment does not need t o t r ace t he amount t hat i t ' s - -


( 212) 805- 0300

A-1838 KA-1838 KA-1


46/406

10

862ZKAR1

1 THE COURT: I t hi nk you do have t o pr ove t he t r ace - -

2 I don' t t hi nk you have t o t r ace t he amount , but I t hi nk you

3 have t o show t hat t he expendi t ure was made by usi ng t hose

4 f unds.

5 MR. KWOK: Can I have a moment your Honor ?

6 ( Pause)

7 MR. KWOK: Your Honor , we don' t want t o gi ve up on our

8 l egal poi nt . So i f t he def ense i s i ncl i ned because of t he way

9 r equest t o charge i s worded now t o br i ng i n t hese expert s, we

10 st i l l st and on our obj ect i ons, but we are under st and your

11 Honor' s posi t i on.

12 THE COURT: Then we bet t er ar r ai gn t he def endant on

13 t he supersedi ng i ndi ct ment . Do we have a copy of i t , Robert ?

14 He st epped out . Maybe I have i t , S2?

15 MR. RUBI NSTEI N: I have a copy.

16 THE COURT: Al l r i ght .

17 MR. RUBI NSTEI N: Does t he Court need one, your Honor ?

18 THE COURT: I ' l l arr ai gn t he def endant at t hi s t i me.

19 I s t hat conveni ent ? I have a copy.

20 MR. RUBI NSTEI N: Oh, f i ne.

21 THE COURT: Dani el B. Karr on - - Mr . Rubi nst ei n, have

22 you seen a copy of t he supersedi ng i ndi ct ment chargi ng t he

23 def endant wi t h st eal i ng $5, 000 of pr opert y of CASI , whi l e CASI

24 was a r eci pi ent of f ederal gr ant of more t han $10, 000 i n a

25 si ngl e year ?


( 212) 805- 0300

A-1839 KA-1839 KA-1


47/406

11

862ZKAR1

1 MR. RUBI NSTEI N: Yes, your Honor .

2 THE COURT: And have you di scussed t he supersedi ng

3 i ndi ct ment wi t h your cl i ent ?

4 MR. RUBI NSTEI N: I have, your Honor .

5 THE COURT: You wi sh t o have t he supersedi ng

6 i ndi ct ment r ead t o t he def endant ?

7 MR. RUBI NSTEI N: No, your Honor . We wai ve f or mal

8 r eadi ng of t he super sedi ng i ndi ct ment S2, and def endant ent er s

9 a pl ea of not gui l t y, your Honor .

10 THE COURT: Mr . Kar r on, have you seen a copy of t he

11 supersedi ng i ndi ct ment chargi ng you wi t h st eal i ng $5, 000 or

12 mor e of pr oper t y f r omCASI dur i ng t he per i od t hat i t was

13 r ecei vi ng a $10, 000 gr ant or gr ant i n excess of $10, 000 f r om

14 t he f ederal government ?

15 THE DEFENDANT: Yes, I have, your Honor .

16 THE COURT: And have you di scussed t he supersedi ng

17 i ndi ct ment wi t h Mr . Rubi nst ei n?

18 THE DEFENDANT: Yes, I have, your Honor .

19 THE COURT: Do you wi sh t o have t he supersedi ng

20 i ndi ct ment r ead t o you at t hi s t i me?

21 THE DEFENDANT: No, your Honor .

22 THE COURT: And woul d you l i ke a pl ea of not gui l t y

23 ent er ed i n your behal f at t hi s t i me?

24 THE DEFENDANT: Yes, your Honor .

25 THE COURT: Pl ea of not gui l t y wi l l be ent er ed on


( 212) 805- 0300

A-1840 KA-1840 KA-1


48/406

12

862ZKAR1

1 behal f of t he def endant , Dani el B. Kar r on. Al l r i ght .

2 Now, t he next t hi ng I t hi nk I shoul d br i ng up i s t hat

3 wi t h r espect to t he voi r di r e, I have - - I t hi nk I ' ve i ncl uded

4 i n t he voi r di r e al l t he quest i ons t he gover nment r equest ed,

5 and I have al l t he quest i ons t hat the def ense has r equest ed,

6 except I ' ve had a l i t t l e t r oubl e wi t h t he phr aseol ogy of one of

7 Mr . Rubi nst ei n' s r equest s, whi ch was a r equest t hat , as

8 f ol l ows: Can you r espect an i ndi vi dual ' s bel i ef that he or she

9 was born t he wr ong gender?

10 I have t r oubl e wi t h r espect as wordi ng t hat quest i on.

11 I r ephr ased i t t o say. Can you t r eat , wi t hout bi as or

12 pr ej udi ce, any wi t ness or def endant who st ates t hat he or she

13 bel i eves he or she was bor n of t he wr ong gender .

14 MR. RUBI NSTEI N: That ' s accept abl e, your Honor .


16 MR. RUBI NSTEI N: That ' s f i ne.


18 MR. RUBI NSTEI N: I di d have one addi t i onal - -

19 THE COURT: I t seemed t o me r espect was not r eal l y a

20 t he pr oper quest i on.

21 MR. RUBI NSTEI N: I agr ee.

22 THE COURT: Whet her t here woul d be any bi as or

23 pr ej udi ce - -

24 MR. RUBI NSTEI N: Yes.

25 THE COURT: - - wi t h r espect t o a person of t hat sor t .


( 212) 805- 0300

A-1841 KA-1841 KA-1


49/406

13

862ZKAR1

1 MR. RUBI NSTEI N: I was wonderi ng i f we shoul dn' t , i n

2 vi ew of t he f act t her e' s appar ent l y goi ng t o be vol umi nous

3 f i nanci al r ecor ds or at l east f i nanci al r ecor ds submi t t ed t o

4 t he j ur y i n t hi s case, whet her or not you shoul d i nqui r e as t o

5 t he j ur ors i f t he case i nvol ves a l ot of number s or somet hi ng,

6 i s t hat goi ng t o pr esent a pr obl em.

7 THE COURT: Wel l , t hat ' s a good quest i on. Ar e t her e

8 goi ng t o be si gni f i cant f i nanci al r ecor ds?

9 MR. KWOK: There are a l ot of r ecords, a l ot of

10 f i nanci al r ecor ds i n t he under l yi ng case, but our wi t nesses

11 wi l l t est i f y t o summar y chart s and r ecor ds t hat t hey' ve

12 pr epared i n t he cour se of anal yzi ng t hose r ecords. So our hope

13 i s t hat when t hese wi t nesses t est i f y, i t wi l l come across i n a

14 ver y ver y si mpl e st r ai ght f orward manner about what t hey

15 exact l y di d.

16 THE COURT: What about t he j ury wi l l have a quest i on

17 of whether t he summary chart s, et cet er a, accur atel y r ef l ect

18 t he underl yi ng r ecords.

19 MR. KWOK: I guess t hat coul d be a subj ect f or Mr .

20 Rubi nst ei n' s cross- exami nat i on. But our posi t i on i s t hat i t i s

21 ver y si mpl e. I t ' s essent i al l y not hi ng mor e t han data ent r y and

22 t hen addi ng up t he number s and cr eat i ng some char t s t o see

23 wher e t he money went . I don' t bel i eve t hat f i nanci al

24 sophi st i cat i on of any ki nd i s r eal l y necessar y t o be qual i f i ed

25 as a j ur or i n t hi s case.


( 212) 805- 0300

A-1842 KA-1842 KA-1


50/406

14

862ZKAR1

1 THE COURT: Wel l , t hat ' s why I asked t he quest i on

2 about st i pul at i on, because i t seemed t o me t hat a st i pul at i on

3 t hat t he part i es know what t he r ecords are, and i f we coul d

4 get - - t he i ssue i s whether t hey were pr oper expendi t ur es or

5 not .

6 MR. KWOK: I bel i eve we - -

7 THE COURT: But coul dn' t t he part i es ent er i nt o a

8 st i pul at i on wi t h r espect t o t he f act t hat these expendi t ur es

9 wer e made?

10 That woul d el i mi nat e t he f i nanci al , a l ot of f i nanci al

11 r ecor ds bei ng put i nt o bef ore t he j ur y, who coul d - - t o

12 det ermi ne whether or not the summar i es accur atel y r ef l ect t he

13 underl yi ng r ecords.

14 MR. KWOK: Your Honor , we have sent over a proposed

15 st i pul at i on t o - -

16 THE COURT: Why don' t you t al k t o Mr . Rubi nst ei n now.

17 I don' t want t o get i nt o t hat . I was j ust tr yi ng t o see i f - -

18 MR. RUBI NSTEI N: There' s - - we have cert ai n probl ems

19 wi t h t hei r ver si on of f i nanci al r ecor ds. That ' s why we

20 haven' t - - t her e' s one st i pul at i on out st andi ng t hat we ar e

21 st i l l t r yi ng t o wor k out . Because, f r ankl y, J udge, i t ' s a ver y

22 unusual s i t uat i on t hat t he government does not have a general

23 l edger , and so - -

24 THE COURT: Who has t he gener al l edger , no one?

25 MR. RUBI NSTEI N: We' ve cr eat ed one r ecent l y of f


( 212) 805- 0300

A-1843 KA-1843 KA-1


51/406

15

862ZKAR1

1 document s t hat we have, but - - i n other words, t hey' r e goi ng t o

2 have wi t nesses t est i f yi ng as t o what t hey cal l summari es, but

3 t he quest i on i s goi ng t o be, what i s t he basi s f or the summary

4 and wher e i s - - wher e are t he r ecor ds t hat t hese summar i es were

5 based upon, so t hat a - - and t hat , dependi ng on t hose

6 wi t nesses' t est i mony, wi l l det er mi ne what the def ense - -

7 THE COURT: I woul d' ve t hought t hat t hose quest i ons

8 coul d be l i ned up pr et r i al .

9 MR. RUBI NSTEI N: We t r i ed t o, J udge, but we kept

10 aski ng f or - -

11 THE COURT: Because you have t he si t uat i on wher e t he

12 comput ers were - - r ecor ds were. So I don' t know how t o

13 descr i be i t , unusual .

14 MR. RUBI NSTEI N: That ' s a ki nd way t o descr i be i t ,

15 your Honor . 19 t er abytes of i nf or mat i on i s ki nd of

16 ext r aor di nary, but apparent l y t hese comput er s t hat account ant s

17 have have t hei r own progr ams t hat t hey i nser t and what have

18 you. But t here are i ssues as t o t hese r ecords. So f ar we

19 haven' t been abl e t o r esol ve i t . We' r e st i l l wor ki ng on i t .

20 THE COURT: Wel l , i s t her e any di sput e t hat t he

21 cer t ai n f unds wer e expended f or cer t ai n pur poses? I t seems t o

22 me t hat t hat ought t o be abl e t o be, t o be st i pul at ed. I f

23 t her e were t hese cost s, t hey have t o be pai d f or by somebody,

24 and t her e ought t o be ent r i es showi ng t hat t hose expenses were

25 made and t hat woul d put an end t o i t . I t doesn' t mat t er - - I


( 212) 805- 0300

A-1844 KA-1844 KA-1


52/406


53/406

17

862ZKAR1

1 MR. RUBI NSTEI N: I f t he government gi ves me what

2 checks and what have you, t hat t hey' r e cl ai mi ng were aut hored

3 and t hat ar e i mproper , and t hey squar e wi t h my r ecords of what

4 has been aut hor ed at t hi s poi nt , I assure you we wi l l do

5 ever yt hi ng we can t o work i t out .

6 THE COURT: Okay.

7 MR. KWOK: I woul d - -

8 THE COURT: How l ong i s t he t r i al goi ng t o t ake?


10 MR. KWOK: I t hi nk t he government has al r eady provi ded

11 t hese mat er i al s. I di r ect t he def ense' s at t ent i on t o

12 gover nment exhi bi t s 110 t o 115. Those ar e, essent i al l y, t he

13 summar i es and spr ead sheet s and char t s t hat we cont i nued t o

14 el i c i t f romt he wi t ness. I f t he def ense i s wi l l i ng t o

15 st i pul ate t o t hat , we wel come t hat very much, and I t hi nk i t

16 woul d shor t en t he t r i al dr ast i cal l y.

17 THE COURT: Wer e t he payment s made, Mr . Kwok, by

18 check?

19 MR. KWOK: They wer e.

20 THE COURT: Or wer e t hey made by el ect r oni c payments?

21 MR. KWOK: They wer e made by var i et y of means,

22 i ncl udi ng wr i t t en checks, i ncl udi ng el ectr oni c t r ansmi t t al s,

23 i ncl udi ng an Ameri can Express cards. We have provi ded al l

24 t hose under l yi ng r ecor ds. And t he exhi bi t s t hat I j ust

25 ment i oned are summar i es of ever y l i ne i t em of t hose ent r i es.


( 212) 805- 0300

A-1846 KA-1846 KA-1


54/406

18

862ZKAR1

1 And i t al so shows where t he money came f r om, how t he

2 out st andi ng bal ances were pai d. And i f t he def ense woul d l ook

3 at t hat and compare t hose and do a spot check of t he under l yi ng

4 r ecor ds, and so t hat t hey have conf i dence t hat we f ai r l y and

5 accur at el y capt ur ed t he r aw dat a, agai n, we woul d ver y much

6 wel come t hat st i pul at i on.

7 MR. RUBI NSTEI N: I ' l l l ook at i t , J udge. But I t hi nk

8 what t hey' r e mi ssi ng i s t hat t hey t hey' r e goi ng on t he

9 assumpt i on t hat ever y penny t hat CASI spent was money t hat t hey

10 r ecei ved f r om t he f eder al government pur suant t o t hi s ATP

11 gr ant , and t hat ' s j ust not accur at e. So I ' l l l ook at t hose

12 r ecords, J udge, dur i ng t he break bet ween now and when t he j ury

13 get s up, i f we have a br eak. And I have t hemi n t he back. I

14 have bi g books.

15 THE COURT: Wel l , t hen, Mr . Rubi nst ei n i s aski ng f or

16 t hr ee al t er nat es, because he t hi nks i t ' s goi ng t o go t hr ee

17 weeks.

18 MR. KWOK: We have no obj ect i on t o t hat . I don' t - - I

19 hope i t doesn' t t ake t hree weeks, but we have no obj ect i on.

20 THE COURT: I don' t want t o t el l t he j ur y i t ' s goi ng

21 t o t ake t hr ee weeks, but I f eel t hat I ' l l have t o t el l t hem i t

22 mi ght . We' r e i n J une, that ' s gr aduat i on per i od, and we' r e

23 goi ng t o l ose j ur or s f or t hat r eason.

24 MR. RUBI NSTEI N: Lot s of weddi ngs, your Honor .

25 THE COURT: What ?


( 212) 805- 0300

A-1847 KA-1847 KA-1


55/406

19

862ZKAR1

1 MR. RUBI NSTEI N: Lot s of weddi ngs.

2 THE COURT: Lot s of weddi ngs and l ot s of graduat i ons.

3 Do we have a j ur y?

4 THE DEPUTY CLERK: Not yet . They' r e st i l l downst ai r s.

5 MR. RUBI NSTEI N: Your Honor , t here' s t wo ot her mat t ers

6 I ' d l i ke t o addr ess wi t h t he Cour t .

7 THE COURT: Yes.

8 MR. RUBI NSTEI N: Fi r st , t he manner i n whi ch t o r ef er

9 t o Dr . Kar r on dur i ng t he cour se of t he t r i al . He has been

10 i ndi ct ed as Dani el B. Kar r on, and act ual l y t hat was - - he

11 doesn' t real l y go by t hat name any l onger . I was t hi nki ng t hat

12 possi bl y cal l hi m Dr . D. B. Kar r on, because I j ust i nt end t o

13 r ef er t o hi m as Dr . Kar r on, per sonal l y.

14 THE COURT: He' s a Ph. D. , i s t hat r i ght ?


16 MR. KWOK: We have no obj ect i on. We' l l t r y t o r ef er

17 t o hi m as Dr . Kar r on as wel l .


19 MR. RUBI NSTEI N: Your Honor , t he l ast mat t er r ef ers t o

20 a subpoena t hat t he government has ser ved on def ense, and I

21 woul d ask your Honor t o quash t hi s subpoena, 17C subpoena.

22 THE COURT: And t he gr ounds?

23 MR. RUBI NSTEI N: Yes, your Honor ; t hat t he government

24 must est abl i sh under Rul e 16C t hat the mater i al t hey are

25 seeki ng ar e r el evant , admi ssi bl e and speci f i cal l y i dent i f i ed.


( 212) 805- 0300

A-1848 KA-1848 KA-1


56/406

20

862ZKAR1

1 By t hi s def i ni t i on, t hey can not use t hi s subpoena as an end

2 r un ar ound Rul e 16.

3 Mor eover , i t i s evi dent f r om t he nat ur e of t he

4 subpoena, whi ch i s condi t i onal t he def endant test i f yi ng.

5 THE COURT: I ' m sor r y?

6 MR. RUBI NSTEI N: Whi ch i s condi t i onal i f t he def endant

7 t est i f i es, that t he gover nment i s seeki ng i mpeachment materi al .

8 And I submi t t hat t hi s i s absol ut el y pr ohi bi t ed on t he use of

9 Rul e 17C subpoena f or i mpeachment purposes. And I ci t e U. S.

10 versus Wei ssman, 2002 West l aw, 31857510 - - 31857510, Sout her n

11 Di st r i ct of New Yor k case.

12 THE COURT: 318?

13 MR. RUBI NSTEI N: 575.

14 THE COURT: Federal Suppl ement , 575?

15 MR. RUBI NSTEI N: I t ' s West l aw, your Honor .

16 THE COURT: Oh, I ' m - - W- e- i - s- m- a- n?

17 MR. RUBI NSTEI N: I t ' s W- e- i - s- s- m- a- n.

18 THE COURT: I bet t er get t he ci t e agai n because I ' m

19 used t o Feder al - -

20 MR. RUBI NSTEI N: I ' l l gi ve i t t o you. The J udge

21 was - -

22 THE COURT: 1990?

23 MR. RUBI NSTEI N: BSJ , December 26, 2002. I ' l l gi ve

24 you - -

25 THE COURT: BSJ , Barbara J ones.


( 212) 805- 0300

A-1849 KA-1849 KA-1


57/406

21

862ZKAR1

1 MR. RUBI NSTEI N: Rober t .

2 THE DEPUTY CLERK: Thank you.

3 THE COURT: You got a copy?

4 Wel l , as I r ead t he case, you' r e r el yi ng on Mr . , t he

5 J ones, Bar bar a J ones case. She was deal i ng wi t h a si t uat i on

6 wher e t he def endant sought t o obt ai n t he r ecords of a t hi r d

7 par t y pr i or t o t r i al , t hi r d par t y bei ng not -- not the

8 def endant ' s r ecor ds. So why i s i t rel evant to t hi s case, Mr .

9 Rubi nst ei n?

10 MR. RUBI NSTEI N: Wel l , i t shows t hat t hey' r e j ust not

11 ent i t l ed t o r ecor ds f or cr oss- exami nat i on pur poses. You know,

12 we al so have t he potent i al of a f i f t h amendment i ssue. I never

13 saw a def endant bei ng subpoenaed t o get t he def endant ' s

14 per sonal r ecords and t ax r etur ns. I mean, t hey have t he

15 abi l i t y t o get t ax r et ur ns.

16 THE COURT: Wel l , t hi s subpoena i s onl y t o t ake pl ace

17 i n t he event t hat t he def endant t akes t he st and. Now, I don' t

18 know whet her - - I don' t see t he - - I ' l l t ake f ur t her br i ef i ng

19 on i t , but I don' t t he Bar bar a J ones deci si on her e deal s wi t h

20 t hi s si t uat i on. Thi s was t o use i n cross- exami nat i on, as I

21 underst ood i t , subpoena i n t he event . So I need some, I need

22 some memorandum suppor t i ng your mot i on t o quash, Mr .

23 Rubi nst ei n, and t he gover nment can r epl y. You can gi ve t hat t o

24 me i n t he next day or so.

25 MR. RUBI NSTEI N: Fi ne, your Honor .


( 212) 805- 0300

A-1850 KA-1850 KA-1


58/406

22

862ZKAR1

1 THE COURT: Okay, anyt hi ng el se t o t ake up?

2 MR. RUBI NSTEI N: Yes, your Honor. I j ust want t o

3 submi t t o your Honor - - I hope i t ' s l egi bl e enough, and some of

4 t hese are dupl i cat e names what t he government has i ndi cat ed

5 mi ght be r el evant names t hat wi l l come up.

6 THE COURT: Oh, yeah, we bet t er have t he names of

7 peopl e who wi l l t est i f y.

8 MR. RUBI NSTEI N: Let me check t he t wo so I coul d cr oss

9 out my l i st so you don' t have t o - -

10 THE COURT: I don' t have t he Government ' s l i st .

11 MR. KWOK: I have an ext r a copy. I bel i eve I handed

12 one t o your Deputy.

13 THE COURT: My cl er k? He' s not her e.

14 MR. KWOK: I can hand you my copy.

15 THE COURT: How woul d I know who t hese peopl e ar e? I n

16 ot her words, some of t hese names are pret t y pret t y common, Mr .

17 Kwok. I need some i dent i f i cat i on f or t he j ur or s.

18 MR. KWOK: Whi ch names are you r ef er r i ng t o, your

19 Honor ?

20 THE COURT: Wel l , t here' s a name - - number f i ve i s t he

21 per son named Farnswor t h, who i s a - - I don' t know wher e t hey

22 come f r omor wher e t hey' r e l ocat ed or anythi ng of t hi s sor t .

23 Ther e' s a pi t cher f or t he Yankees by t hat name and - - ki nd of

24 wi l d - - but I suppose he mi ght have a wi f e or somethi ng, but

25 i t ' s not an uncommon name. Fel dman i s a pret t y common name.


( 212) 805- 0300

A-1851 KA-1851 KA-1


59/406

23

862ZKAR1

1 MR. KWOK: I under st and, your Honor . I f we coul d

2 pr opose maki ng f ur t her i nqui r i es i f t hey answer af f i r mat i vel y

3 t o t hose, because I under st and - -

4 THE COURT: J ust where t hey l i ve. I mean, t hese

5 peopl e, t he j ur or s come f r om t he Sout her n Di st r i ct . I f these

6 peopl e l i ve i n Washi ngt on or somet hi ng l i ke t hat , t hen t hei r

7 concer ns wi l l be al l evi at ed. I f t hat per son i s a member of

8 such and such f ami l y t hat l i ves down t he st r eet , you know.

9 MR. KWOK: Sur e, we' l l t r y t o r ef i ne t he l i st f or your

10 Honor .

11 THE COURT: The j ury shoul d be i n i n about f i ve

12 mi nut es, t en mi nut es. So l et ' s - - and I have t o go get a and

13 so l et ' s - - t r y and get t hem up her e earl y. Somebody - - I need

14 some i dent i f i cat i on. We have some addr ess or somethi ng of that

15 sor t , Mr - -

16 MR. RUBI NSTEI N: Yes, I ' l l gi ve you t he out - of - st at e

17 ones, your Honor .

18 THE COURT: Thi s l i st - - my Lor d, t hi s i s a l ong l i st .

19 MR. RUBI NSTEI N: The names ar e goi ng t o come up dur i ng

20 t he t r i al . They' r e not necessar i l y - - t hey' r e not al l

21 wi t nesses, J udge, but t hey' r e j ust names t hat ar e goi ng t o be

22 ment i oned, we bel i eve, dur i ng t he cour se of t he t est i mony. I

23 t hought t hat ' s one of t he t hi ngs t hat t he Cour t want ed.

24 THE COURT: Wel l , I see one i s a pl umbi ng company so.

25 The Fi nanci al I nst i t ut e of St andards and Technol ogy i n


( 212) 805- 0300

A-1852 KA-1852 KA-1


60/406

24

862ZKAR1

1 Washi ngton?

2 MR. KWOK: Gat er sburg, Mar yl and.

3 THE COURT: Ti a Lor r ai ne.

4 MR. KWOK: That we don' t know. We got t hat name f r om

5 one of t he e- mai l s t he def ense produced.

6 THE COURT: Okay. What am I goi ng t o do about your

7 l i st , Mr . Rubi nstei n?

8 MR. RUBI NSTEI N: Wel l f or out - of - st at er s, your

9 Honor - -

10 THE COURT: I mean Dunn Levy i s a ver y common name.

11 MR. RUBI NSTEI N: Par don?

12 THE COURT: Dunn Levy and Levi n Mason, ver y common

13 names.

14 MR. RUBI NSTEI N: Dunn Levy i s a bookkeeper f r om New

15 York.

16 THE COURT: Murphy i s a common name, but t hat ' s got

17 some i dent i f i cat i on her e. J ohn Mason, Mi l l er , Ross.

18 MR. RUBI NSTEI N: Mi l l er i s an at t orney, your Honor .

19 THE COURT: I n New Yor k?


21 THE COURT: Maybe I ought t o gi ve you t he l i st and put

22 some address on i t .

23 MR. RUBI NSTEI N: Okay. Murphy i s a prof essor .

24 THE COURT: I ' l l gi ve you back t he l i st so you can - -

25 MR. RUBI NSTEI N: Okay.


( 212) 805- 0300

A-1853 KA-1853 KA-1


61/406

25

862ZKAR1

1 THE COURT: The j ury' s her e.

2 Why don' t I gi ve t hi s t o you, Mr . Rubi nst ei n. You can

3 f i l l i t i n. We' l l get t he j ur y i n and send t hem t o - - i t ' s my

4 pr act i ce t o get t hem t o go t o t he men' s and l adi es' r oom bef or e

5 we st ar t .

6 Maybe you ought t o do t he same.

7 THE COURT: Al l r i ght ? Br i ng t hem i n.

8 THE DEPUTY CLERK: J udge, i f t hey' r e goi ng t o use - -

9 i f counsel are goi ng use t he r est r oom, t hey' l l have t o use t he

10 r est r oom out si de because t he j ur or s are goi ng t o be usi ng t he

11 one i n her e.

12 MR. RUBI NSTEI N: You want us t o do t hat bef ore t hey

13 come i n?

14 THE DEPUTY CLERK: I don' t know.

15 THE COURT: What do you want t o do? You want t o use

16 t he r est r oom now?

17 MR. RUBI NSTEI N: Yeah, but I guess I ' l l wai t t i l l t hey

18 al l wal k i n r at her t han col l i de wi t h t hem.

19 THE COURT: Al l r i ght . Okay. They' l l do i t af t er

20 t hey' ve st art ed usi ng t he r est r ooms, t hey' l l use t he one

21 out si de.

22 Don' t f or get t he bi ogr aphi cal mat er i al f or t hose

23 wi t nesses, Mr . Rubi nst ei n.


25 ( Recess)


( 212) 805- 0300

A-1854 KA-1854 KA-1


62/406

26

862ZKAR1

1 ( A j ur y of 12 and 4 al t ernat es was chosen and sworn)

2 THE COURT: Mr . Mont eguedo has t o gi ve t hose j uror s

3 s l i ps .

4 So, I wi l l gi ve you t hese st ar t i ng i nst r ucti ons,

5 because some of you may never have ser ved as j uror s bef or e and

6 not know exact l y what t o expect , and al so some peopl e may not

7 have ser ved f or some t i me and coul d use a brush- up on what j ury

8 ser vi ce wi l l be l i ke i n t hi s case.

9 So, as I t ol d you t hi s mor ni ng, i n t he Amer i can syst em

10 of j ust i ce t he j udge and t he j ur y have separ at e r ol es. My j ob

11 i s t o i nst r uct you as t o t he l aw t hat gover ns or cont r ol s t he

12 case, and I wi l l gi ve you t hose i nst r uct i ons at t he end of t he

13 t r i al . Your j ob as j ur or s i s t o det er mi ne t he f act s based on

14 t he evi dence pr esent ed at t he t r i al .

15 You ar e t he onl y t r i er s of f act , and your deci si ons on

16 t he f act ual i ssues wi l l det er mi ne t he out come of t hi s l awsui t .

17 I want t o caut i on t hose of you t hat have watched TV

18 ver si ons of t r i al s not t o be di st r act ed i nt o at t empt i ng t o

19 eval uate t he per f ormance of t he l awyer s i n t he cour t . I t i s

20 t he part i es whose i nt er est wi l l be af f ect ed by t he out come of

21 t hi s t r i al , and your det er mi nat i on shoul d be based sol el y on

22 t he evi dence i n t hi s case.

23 You must pay cl ose at t ent i on t o al l t he evi dence

24 pr esent ed. Evi dence consi st s onl y of t he t est i mony of

25 wi t nesses, document s and ot her t hi ngs admi t t ed as evi dence or


( 212) 805- 0300

A-1855 KA-1855 KA-1


63/406

27

862ZKAR1

1 agr eed t o by t he at t orneys.

2 Cert ai n t hi ngs are not evi dence and must not be

3 consi der ed by you. I wi l l l i st t hem f or you now:

4 One, st at ement s, argument s and quest i ons by l awyers

5 are not evi dence, nor are my own st at ement s t o you.

6 Two, obj ect i ons t o quest i ons are not evi dence.

7 Lawyer s have an obl i gat i on t o t hei r cl i ent t o make an obj ect i on

8 when t hey bel i eve evi dence bei ng of f ered i s i mproper under the

9 l aws of evi dence. You shoul d not be i nf l uenced by t he

10 obj ect i on or by t he cour t ' s r ul i ng on t hat .

11 I f t he obj ect i on i s sust ai ned, i gnor e t he quest i on and

12 any answer t hat has been gi ven. I f i t i s over r ul ed, t r eat the

13 answer l i ke any ot her . I f you are i nst r uct ed t hat some i t em of

14 evi dence i s r ecei ved f or a l i mi t ed pur pose onl y, you must

15 f ol l ow t hat i nst r ucti on.

16 Thi r d, t est i mony of t he cour t i s excl uded. I t ol d you

17 t o di sr egard t hat t est i mony, and i t must not be consi der ed.

18 Four t h, anyt hi ng you may have seen or heard out si de of

19 t he cour t r oom i s not evi dence and must be di sr egarded.

20 You are t o deci de t he case sol el y on t he evi dence

21 pr esent ed her e i n t he cour t r oom. I n deci di ng t he f act s of t he

22 case, you wi l l have t o deci de t he credi bi l i t y of t he wi t nesses,

23 t hat i s, how t r ut hf ul and bel i evabl e t hey ar e.

24 Now, how do you deci de what t o bel i eve and what not t o

25 bel i eve? Wel l , you ar e goi ng t o l i st en t o t he wi t nesses, wat ch


( 212) 805- 0300

A-1856 KA-1856 KA-1


64/406

28

862ZKAR1

1 t hem and obser ve t hem and t hen deci de as you woul d deci de such

2 quest i ons i n your ordi nary l i f e. Di d t hey know what t hey wer e

3 t al ki ng about ? Wer e t hey candi d, honest , open and t r ut hf ul , or

4 di d t hey have a r eason t o f al si f y, exagger at e or di st or t t hei r

5 t est i mony? Somet i mes i t ' s not what a wi t ness says but how he

6 or she says i t t hat may gi ve you a cl ue as t o whether or not t o

7 accept t hat wi t ness' s ver si on of an event or an i nci dent as

8 credi bl e and bel i evabl e. I n shor t , t he way a wi t ness t est i f i es

9 may pl ay an i mpor t ant par t i n your r eachi ng a j udgment as t o

10 whether or not you can accept t he wi t ness' s t est i mony as

11 r el i abl e.

12 As t he t r i al pr oceeds, you may have i mpr essi ons of a

13 wi t ness, but you may not al l ow t hese i mpr essi ons t o become

14 f i xed or hardened, because i f you do, i n a sense you f orecl ose

15 consi der at i on of t he t est i mony of other wi t nesses or other

16 evi dence t hat may be pr esented af t er the wi t ness you heard, and

17 t hat woul d be unf ai r t o one si de or t he ot her .

18 A case can be pr esent ed onl y st ep by st ep, wi t ness by

19 wi t ness, bef ore al l t he evi dence i s bef or e you.

20 We know f r om exper i ence t hat f r equent l y we wi l l hear a

21 per son gi ve hi s ver si on of an event whi ch sounds most

22 i mpressi ve and even compel l i ng, and yet when we hear anot her

23 per son' s ver si on of t he same event , or even t he same wi t ness

24 cr oss exami ned wi t h r espect t o i t , what seemed t o be ver y

25 compel l i ng and i mpressi ve may be compl etel y di ss i pat ed or


( 212) 805- 0300

A-1857 KA-1857 KA-1


65/406

29

862ZKAR1

1 weakened. I am si mpl y sayi ng or t r yi ng t o say t o you i n ver y

2 si mpl e t erms: Remember t hat t her e may be anot her si de t o any

3 wi t ness' s t est i mony.

4 You wi l l use your common sense and good j udgment t o

5 eval uate each wi t ness' s t est i mony based on al l of t he

6 ci r cumst ances.

7 I cannot emphasi ze t oo st r ongl y t hat you must keep an

8 open mi nd unt i l t he t r i al i s over . You shoul d not r each any

9 concl usi ons unt i l you have al l t he evi dence bef or e you. I n

10 order to ensure t hat you deci de t he case onl y on t he evi dence

11 and are not i nf l uenced by anyt hi ng t hat mi ght occur out si de t he

12 cour t r oom, I must gi ve you a set of speci f i c i nst r uct i ons.

13 Fi r st , do not di scuss t hi s case amongst your sel ves or

14 wi t h any other per son. You wi l l have t he opport uni t y and

15 i ndeed t he dut y t o di scuss t he case amongst your sel ves af t er

16 al l t he evi dence i s i n and t he case i s gi ven t o you t o di scuss

17 and deci de i n t he j ury r oom. Now l et me expl ai n t he r easons

18 f or t hat .

19 The reason f or t hat r ul e i s, f i rst , i f you start

20 di scussi ng i t bef orehand, bef ore you have al l t he evi dence

21 bef ore you, you won' t have al l t he evi dence bef ore you, and you

22 are apt t o r each a prej udgment i nst ead of r eachi ng a bal anced

23 j udgment based on al l of t he evi dence. J ur y del i ber at i ons

24 cont empl at e t hat t hose conf er ences wi l l t ake pl ace af t er t r i al

25 when al l of you ar e assembl ed i n t he j ur y r oom si t t i ng around


( 212) 805- 0300

A-1858 KA-1858 KA-1


66/406

30

862ZKAR1

1 t he t abl e, each of you exchangi ng vi ews and what have you, and

2 each of you l i st ens t o t he ot her s, and t hat ' s t he way t he j ur y

3 del i berat i on i s supposed t o be conduct ed.

4 I f you st ar t havi ng conf er ences bef or e al l t he

5 evi dence i s i n, t he chances are you won' t have everyone around

6 t he r oom or si t t i ng ar ound t he t abl e di scussi ng t hat i ssue but ,

7 r ather , you onl y have a f ew of you. Fur t her more, t her ef ore t he

8 other peopl e woul d be excl uded f r om t he del i ber at i on and

9 woul dn' t be abl e t o exchange t hei r vi ews. Fur t hermore, you

10 woul dn' t have al l of the evi dence bef or e you. So, the r ul e i s

11 you shoul d not di scuss t he case unt i l t he case has been

12 compl et ed.

13 Next , you are not t o r ead anyt hi ng i n t he newspaper s

14 or el sewher e about t hi s case i f t hat shoul d occur . Now, I

15 don' t t hi nk t hat t hat ' s goi ng t o occur , but what somet i mes

16 occur s i s t hat ther e ar e ar t i cl es i n t he newspaper t hat bear on

17 a case and t hat ar e not di r ect l y r el evant but t hey have some

18 r el evance. The t r oubl e wi t h vi ewi ng t hat or r eadi ng t hose

19 ar t i cl es i f t hey seem t o bear on t he case, i s t hat you ar e

20 obl i ged t o t el l me t hat you have r ead somethi ng t hat bear s on

21 i t , and t hen I have t o conduct what i s cal l ed a t ai nt i ng

22 hear i ng, and what I have t o do i s make sure t hat t hi s out si de

23 bi t of newspaper or what you saw on t el evi si on di dn' t t ai nt

24 you, i n other words, cause you t o be l ess t han f ai r and

25 i mpart i al i n t he case, and t hat you by r ecount i ng what you saw


( 212) 805- 0300

A-1859 KA-1859 KA-1


67/406

31

862ZKAR1

1 on t el evi si on or r ead on t he r adi o di dn' t t ai nt t he ot her

2 j ur ors. So, I have been t hr ough a case i n whi ch i t t ook al most

3 hal f a morni ng t o conduct a t ai nt hear i ng, and no j ur y needs

4 t hat . That ' s an ext r a day of servi ce, and you have bet t er

5 t hi ngs t o do. You ar e al l gi vi ng up your t i me. So, don' t r ead

6 anyt hi ng t hat bear s on t he case. J ust don' t do i t . I t j ust

7 means t hat we wi l l have t o have a t ai nt hear i ng, and t hat ' s

8 t i me.

9 Next , you are not t o al l ow anyone t o speak t o you

10 about t hi s case. I f you are approached by anyone t o speak

11 about t he case, pol i t el y t el l t hem t hat t he j udge has di r ected

12 you not t o do so. I f any per son seeks t o cont act you about t he

13 case, you are r equi r ed t o r eport t he i nci dent pr ompt l y t o me.

14 Al so, be sur e t hat I am i nf ormed i f any per son t hat

15 you know comes i nt o t he cour t r oom. Now t hi s i s a publ i c t r i al ,

16 and i t ' s per f ect l y appr opr i at e t hat t hey come i nt o t he

17 cour t r oom, but i t i s i mport ant t hat you do not hear f r om your

18 f r i end what may have happened i n t he cour t whi l e t he j ury was

19 not pr esent . I f you shoul d see a f r i end or rel at i ve come i nt o

20 t he cour t , pl ease send a not e t o me t hr ough t he cl erk at your

21 f i r st oppor t uni t y, and t hen I can t ake st eps t o make sur e t hat

22 t hey don' t hear somethi ng t hat coul d possi bl y be r el ated t o you

23 and t ai nt t he j ur y.

24 The at t orneys, t he part i es and t he wi t nesses are not

25 supposed t o t al k t o t he j ur y out si de t he cour t r oom, even t o


( 212) 805- 0300

A-1860 KA-1860 KA-1


68/406

32

862ZKAR1

1 of f er a f r i endl y gr eet i ng, and t he j ur y i s not supposed t o t al k

2 t o t hem. So, i f you happen t o see any of them out si de t he

3 cour t r oom, t hey wi l l not and shoul d not speak

12-2297 karron coa appendix v07

Documents