An Endless Stream of Lies (12 page)

Alex testified that his stock trading continued to produce until June of 2002, at which point the investments started to result in losses. The investors were not informed that they were losing money. Alex prepared quarterly reports keeping the investors “up to date” with false information. During the trial, in an irony of ironies, Alex disclosed that he was sending falsified client reports to his partner, Bryan Noel, regarding the status of his personal investment, as he too was a client.

Q. Well, we’ll come to that. How was the trading going in 2003?

A. It was not going well.

Q. What do you mean?

A. There were trading losses that were being generated above the trading gains.

Q. So first quarter of 2003, were there net gains or net losses in the trading accounts for Pinnacle?

A. I do not recall the exact figures, but most quarters during that time frame had more net losses than net gains.

Q. During 2003, was Mr. Noel aware of the trading losses?

A. No, he was not.

Q. Why not?

A. I had not made him aware of those losses.

Q. Had you done more than simply not make him aware?

A. Yes.

Q. And what’s that?

A. I had continued to send out client reports showing rates of return that were positive.

Q. And how were those client reports sent out throughout 2003?

A. They were sent out via the Postal Service.

Q. Now, during 2003, were you meeting with anybody with regard to your trading progress?

A. Yes, I was.

Q. Who would you meet with?

A. I would meet with Bryan and —

Q. How — I’m sorry. Go ahead.

A. I would meet with Bryan and update him with trading progress.

Q. How frequently were you meeting with him in 2003?

A. On a weekly basis.

Q. And during these meetings, were you providing Mr. Noel with truthful information about how the trading was going?

A. I was not.

Q. What do you mean by that?

A. I was not telling him that there were trading losses being generated.

Q. Let me show you Government Exhibit 45B, which is not yet in evidence, and ask you if you recognize it.

A. Yes, I do.

Q. What is that?

A. This is a client account statement for Wild Kingdom

Trust.

Q. And how do you recognize it?

A. This would have been among those prepared during that time, with figures that I used.

Q. You mentioned that this is for Wild Kingdom Trust?

A. Yes.

Q. And what’s the date on this document?

A. The date is December 31st, 2002.

Q. So for what time period is this account statement?

A. This would have been the fourth quarter of 2002.

Q. And who is Wild Kingdom Investment Trust?

A. That was Bryan Noel’s irrevocable trust.

Q. Well, why was he receiving a client account statement in late 2002?

A. Because he had invested funds into Pinnacle.

Q. And how much had he invested?

A. He had invested approximately 10 to 15,000 initially, and then there were subsequent additions to that during the course of 2002.

Q. So as of the end of 2002, what does this client report reflect was the opening balance on Mr. Noel’s investment in Wild Kingdom Trust?

A. $46,729.61.

Q. Now, there’s a column that says “performance”; is that correct?

A. There is a column for that. And that performance figure is not correct.

Q. It’s not correct?

A. No, it is not.

Q. What do you mean by that?

A. The interest earned would not have been that amount.

Q. Would it have been more or less?

A. It would have been less.

Q. Would it have been positive or negative?

A. It could very well have been negative at that point.

Q. Did you send this to Mr. Noel?

A. Yes.

Q. Why did you send this false account statement to Mr. Noel?

A. Because all clients that had funds invested in Pinnacle got account statements during the final quarter of 2002, and Bryan Noel did have money invested in Pinnacle.

Q. Well, why didn’t you tell him the truth about how his account was doing?

A. I was terrified to tell him about what was really going on for fear of the consequences of losing my position.

Q. Let me show you Government Exhibit 45C. Do you recognize that document?

A. Yes, I do.

Q. What is it?

A. This is the account statement for Wild Kingdom Trust for March 31st, 2003.

Q. And how do you recognize it?

A. This would have been a statement that I had prepared with the figures that were being used at that time.

Q. What’s the date on this report?

A. March 31st, 2003.

Q. What time period did this report cover?

A. The first quarter of 2003.

Q. See the Performance column?

A. Yes, I do.

Q. Does it show that the performance has been positive or negative?

A. It shows it as being positive.

Q. Was that accurate?

A. That was not accurate.

Q. Did you continue to send out false account statements to Mr. Noel for 2003?

A. Yes, I did.

Q. And throughout 2003, did you continue to send false account statements to all of the Pinnacle clients?

A. Yes, I did.

Q. And throughout 2003 up through the end of November, were you doing this on your own?

A. Yes, I was.

Alex’s relationship with his father is one tributary, and Alex’s relationship with his partner is still another tributary. A commonality within the two relational tributaries is Alex.

Alex, in his relationship with his partner as shown by his testimony, was willing to manipulate things—the investor financial reports, for example. Additionally, Alex was willing to manipulate people—he concealed from Noel the continual investment losses. Additionally, he deceived the FBI with regard to the extent of Noel’s knowledge.

THOUGHTS, COMMENTS AND ANALYSIS

What are your impressions, to this point, with regard to this circumstance?

Exactly what do you know?

What is it that you
know
that you don’t know?

What questions would you ask in order to know?

What steps would you take in order to know?

POINTS TO PONDER

1. If Alex was willing to manipulate all that he did in his relationship with his partner, to what extent might he do so in his relationship with others, to include:
   
   • Clients,
     
   • Federal prosecutors
     
   • Representatives from the Federal Bureau of Investigation
     
   • His father
     
   • Others?
     
2. What questions would you pose to Alex at this point?
   

CONTENT – CONTEXT APPLICATION

An office manager and bookkeeper reached a plea deal with federal prosecutors regarding charges to include wire fraud and filing a false tax return. The bookkeeper reportedly took between $120,000 and $200,000 from the employer. The investigation was conducted by the Internal Revenue Service Criminal Investigation Division. The attorney for the bookkeeper described her as a “decent, lovely, wonderful person who cooperated completely with the government.”

1. How do the descriptors
   decent, lovely, wonderful
   relate to the referenced fraud and the filing of a false tax return?
   
2. If the descriptors had been polar opposites—
   decadent, ugly, awful
   —would they have been factors to consider toward a different outcome?
   
3. What questions would you pose to this individual?
   

CHAPTER EIGHT

NO LONGER AT LIFE’S HELM

INTO THE CITY OF WOES

There is a tide in the affairs of men
Which taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.

—WILLIAM SHAKESPEARE,
JULIUS CAESAR
, ACT IV, SCENE III

NAVIGATION POINT AND HEADING
Now that Alex had pled guilty, the irony of ironies would spring forth: Alex—who in his undertakings to deceive, manipulate and control the resources and thus adversely distress the lives of so many people—would now find his own life in the hands of others. In that, Alex had abdicated control of his own destiny. Those within the federal office of probation would, through a complex maze of guidelines, evaluations, regulations, rationalizations and subsequent interpretations, place their hands on the ship’s wheel of Alex’s life.

All of these undertakings are designed for making a pre-sentencing recommendation to the judge, regarding Alex’s punishment. For this voyage, others would set the sails, determine the destination and chart the course. Alex would become nothing more than cargo, to be off-loaded somewhere and for so long a time. This process would be the result of a ship’s manifest, into which Alex would have no voice. In Alex’s young life, the ship was going out with the rising tide and he was, for all practical purposes, tied to the mast.

What must it be like to know you no longer are the captain of your own fate? In Edgar Allen Poe’s, “A Descent into the Maelström,” there is an account of a man caught in an awesome whirlpool. His goal was to avoid being driven into the bottom of the whirlpool and perish. He desperately noted all that was going on around him. Like Alex, he formulated a plan. In his narrative he noted, “. . . that as a general rule, the larger the bodies were, the more rapid their descent.” Additionally, he observed that “. . . a cylinder, swimming in a vortex, offered more resistance to its suction, and was drawn in with greater difficulty than an equally bulky body, of any form whatever.” Continuing, he explained, “I no longer hesitated what to do. I resolved to lash myself securely to the water cask upon which I now held, to cut it loose from the counter, and to throw myself with it into the water.” Alex had endeavored to lash himself to the strategy of his deception with regard to Bryan’s knowledge regarding the false reports. After all, as he said, “It was easier.” The plan devised by the character in Poe’s story saved his life. Alex’s plan had not been nearly so successful.

Alex, at this time, is most certainly caught in the whirlpool of the pre-sentencing, determination functioning of the federal courts. In the cargo-weighing operation of the United States courts, how large a body would Alex’s machinations turn out to be? How rapid would be his descent?

The pre-sentencing, job-task responsibilities of the assigned probation officer are intricate in the extreme. A search of the United States Courts’ website shows over fifty pages containing a list of various documents addressing the complexities. Additionally, at the website we find:

“The U.S. Probation and Pretrial Services System carries out probation and pretrial services functions in the U.S. district courts. Through its officers and other employees, the system works to make the criminal justice process effective and the public safe.

The system’s mission reflects its dedication to serve the community, the courts, and the people who come before the courts. The system’s
Charter for Excellence
states the shared professional identity, goals, and values of probation and pretrial services officers”.

The probation officer’s investigative protocol and subsequent finding are steered by an established set of ethical guidelines. The United States Probation and Pretrial Services’ “Charter for Excellence” states the following:

“We are a unique profession.

Our profession is distinguished by the unique combination of:

• A multidimensional knowledge base in law and human behavior;
  
• A mix of skills in investigation, communication, and analysis;
  
• A capacity to provide services and interventions from pretrial release through post-conviction supervision;
  
• A position of impartiality within the criminal justice system; and
  
• A responsibility to positively impact the community and the lives of victims, defendants, and offenders.”
  

The Federal Sentencing Guidelines Manual contains the following:

“
Authority
: The United States Sentencing Commission (“Commission”) is an independent agency in the judicial branch composed of seven voting and two non-voting,
ex officio
members. Its principal purpose is to establish sentencing policies and practices for the federal criminal justice system that will assure the ends of justice by promulgating detailed guidelines prescribing the appropriate sentences for offenders convicted of federal crimes.

The
Statutory
Mission
: The Sentencing Reform Act of 1984 (Title II of the Comprehensive Crime Act of 1984) provides for the development of guidelines that will further the basic purposes of criminal punishment: deterrence, incapacitation, just punishment, and rehabilitation. The Act delegates broad authority to the Commission to review and rationalize the federal sentencing process.

The Act contains detailed instructions as to how this determination should be made, the most important of which directs the Commission to create categories of offense behavior and offender characteristics. The Commission is required to prescribe guideline ranges that specify an appropriate sentence for each class of convicted persons determined by coordinating the offense behavior categories with the offender characteristic categories”.

The officer will begin a process to discover every facet of Alex’s life. The officer will review the files of the U.S. attorney and the investigating agent’s reports. Additionally, interviews with the federal agents involved in the CEP investigation will be conducted.

In Dante Alighieri’s
Inferno
, Dante (the character) is guided by the Roman poet Virgil to a great river. The river is named Acheron
and it marks the borders of hell.
They are carried across the river in a boat. The boat is steered by an old man named Charon. At the top of the gates of hell, there is an inscription that reads, “
THROUGH ME YOU ENTER INTO THE CITY OF WOES.
” Eventually, they come face to face with a monster named Minos.
A long line of sinners stand before Minos. Eventually, each person stands alone before Minos and confesses their sins. Minos, then wraps his tail around himself a specific number of times. The number of times the tail is wrapped, is indicative of the circle of hell to which the sinner is assigned.

In the
Inferno
, there are nine circles of suffering depicted in hell. Each circle, from one to nine, represents a more reprehensible sin, with the punishment meted accordingly. There are no mitigating circumstances taken into consideration. The eighth circle of hell is for those having committed fraud. The eighth circle is guarded by a beast named Geryon. Representing dishonesty and fraud, Geryon has the head of an innocent man and the body of a serpent.

Alex’s future now came down to the completion of a form by the assigned officer. This form is divided into four segments—A, B, C and D. The prefix to Alex’s name would no longer be “Mister,” but rather “Defendant.” Whatever comprised that which was the essence of Alex as a sentient being would now be reduced to “Docket Number (Year-Sequence-Defendant No.).”

The first segment of the form is titled “Worksheet A – (Offense Level).” The initial instructions bear witness of the intricacies involved:

“For each count of conviction (or stipulated offense), complete a separate Worksheet A. Exception: Use only a single Worksheet A where the offense level for a group of closely related counts is based primarily on aggregate value or quantity (
see
§3D1.2(d)) or where a count of conspiracy, solicitation, or attempt is grouped with a substantive count that was the sole object of the conspiracy, solicitation, or attempt (
see
§3D1.2(a) and (b)).”

On this form there are blank spaces to be completed and boxes to be checked. Each blank and box is a determinate of Alex’s future. A stream comprised of blank spaces and boxes carrying Alex to a destination that remains, at this point, too far around the turn to even be speculated.

The next segment is “Worksheet B –
(
Multiple
Counts or Stipulation to Additional Offenses).” The instructions here require:

“Step 1:
Determine if any of the counts group. (Note: All, some, or none of the counts may group. Some of the counts may have already
been grouped in the application under Worksheet A, specifically, (1) counts grouped under §3D1.2(d), or (2) a count charging conspiracy, solicitation, or attempt that is grouped with the substantive count of conviction (
see
§3D1.2(a)). Explain the reasons for grouping:

Step 2:
Using the box(es) provided below, for each group of closely related counts, enter the highest adjusted offense level from the
various “A” Worksheets (Item 5) that comprise the group (
see
§3D1.3). (Note: A “group” may consist of a single count that has not grouped with any other count. In those instances, the offense level for the group will be the adjusted offense level for the single count.)

Step 3:
Enter the number of units to be assigned to each group (
see
§3D1.4) as follows:

• One unit (1) for the group of closely related counts with the highest offense level
  
• An additional unit (1) for each group that is equally serious or 1 to 4 levels less serious
  
• An additional half unit (1/2) for each group that is 5 to 8 levels less serious
  
• No increase in units for groups that are 9 or more levels less serious”.
  

The process increases in complexity, the formality begins to give way to subjectivity as the officer completing the form must now, “Explain the reasons for . . .” Now, no matter how professionally objective the person completing the form may be, opinions come into play—opinions with which others, including the federal judge that ultimately imposes the sentence upon Alex, may or may not agree. At this point, there are even more hands on the ship’s wheel of Alex’s life. More waters flow in and the stream begins to course just a bit faster.

In the third segment, “Worksheet C (Criminal History),” the officer delves deeply into Alex’s past activities. The appropriate completion of this segment serves as a source of professional pride for the officer. No related detail of Alex’s past is to be overlooked. The extreme detail for this portion involves, among other activities, obtaining letters of verification. The officer seeks to determine, “Who is Alex? What are his characteristics?”

The fourth segment, “Worksheet D (Guideline Worksheet),” is the longest portion, comprising four pages. The “Sentencing Options” portion is divided into zones A through D. Beside each zone is a box that can be checked. A check in a given box is a determinate for the course of Alex’s life. Each zone provides criteria for the selection process. For example:

“Zone A If checked the following options are available (see 5B1.1):

C Fine(See 5E1.29a))

C “Straight” Probation

C Imprisonment”

Other segments in Worksheet D are: Length of Term of Probation, Conditions of Probation, Supervised Release, Conditions of Supervised Release, Restitution, Fines, Special Assessments and Additional Factors.

The Additional Factors section provides the most opportunity for the officer’s narrative. The instructions for this segment are the most lengthy and involved:

“List any additional applicable guidelines, policy statements, and statutory provisions. Also, list any applicable aggravating and factors that may warrant a sentence at a particular point either within or outside the applicable guideline range. Attach additional sheets as necessary.”

Would the fact that Alex had deceived the federal officials for four years and continued to divert assets to himself after having gone to them in 2006 serve as “applicable, aggravating factors” in the sentencing determination? At some point, because of his continued deception and actions, Alex’s initial deal would be taken off of the table. No longer would the navigation buoy be set at “up to five years,” but rather placed at “up to twenty years.”

In the fullness of time, the form and the examination are completed. Copies are provided to the prosecution and the defense. They have two weeks to file objections. But there is just a bit more to consider—additionally, a “judge’s eyes only” recommendation page is also prepared. On this page, the officer relays his/her “here’s what I think” contribution. The complex and convoluted examination of Alex, his life and his actions all come down to one page. It is a one-page trip sheet playing no small role in the determination as to what would be Alex’s next port-o-call.