An Endless Stream of Lies (6 page)

CONTENT – CONTEXT APPLICATION

A district supervisor with the Division of Motor Vehicle License and Theft Bureau was charged with stealing property and misconduct in office. The warrant indicated the supervisor had bought stolen property—three stolen lawn mowers—that were part of an ongoing investigation. The warrant also stated he subsequently concealed the evidence and hindered the investigation into those who were involved in the theft.

In regard to an individual holding a supervisory position in an investigative agency:

1. Would the purchase of three stolen lawn mowers (part of an ongoing investigation) be a function of pressure/motive, rationalization or opportunity?
   
2. Would concealing the evidence and hindering the investigation be a function of either of the same three fraud triangle elements?
   
3. Why would someone functioning within an organization that consistently discovers and prosecutes violators of the law believe that they would be able to successfully prevail?
   
4. What questions would you pose to this individual?
   

CHAPTER FOUR

ALEX MET THE INVESTORS AT THE WELL

HE TOOK THEIR WATER AND THE WELL RAN DRY

From reveries so airy, from the toil

Of dropping buckets into empty wells,

And growing old in drawing nothing up.

—WILLIAM COWPER (1731–1800), ENGLISH POET

NAVIGATION POINT AND HEADING
Let’s walk up another tributary, just a bit, to take a close look at Alex’s involvement with the CEP sales presentations and his meetings with individual prospective clients. He has admitted that from 2002 until 2006, he was sending out false financial reports, deceiving not only the clients, but his partner, Bryan Noel, as well. Concurrently, with the stock trading, financial losses and the falsified financial reports, sales presentations designed to acquire additional investors were ongoing. While the presentations were being conducted and during the subsequent follow-up meetings with potential investors, only one person in the room knew the funds were diminishing and the financial reports were false. That one person was Alex.

NOTHING HAPPENS UNTIL SOMEBODY MAKES A SALE

During Noel’s trial, Alex provided testimony with regard to the marketing and sales endeavors of Certified Estate Planners:

Q. Did you have the opportunity to observe any of these sales presentations?

A. Yes, I did.

Q. How would these — where would these sales presentations occur?

A. These sales presentations would typically occur at restaurants in the Hendersonville area, such as Hubert’s or Blackwater Grill or McGuffy’s.

Q. And how was it that clients were invited to attend these sales presentations?

A. There were mailings that were done to prospective clients, inviting them to attend the sales presentation.

Q. Have you ever seen any of the brochures?

A. Yes, I have.

Q. Let me show you Government Exhibit 20A, which is already in evidence, and ask if you’ve seen it before.

A. Yes, I have.

Q. What is that?

A. That is a seminar brochure for CEP.

Q. And is this one of the brochures that was sent out to invite clients to the seminars?

A. Yes, it was.

Q. Can you tell the jury what these seminars were like.

A. These seminars basically consisted of a sales presentation that involved the four-corners’ approach to estate planning, which is basically investments, legal, taxes, and insurance. Anybody that was interested would then fill out a form saying that they were interested and requested an appointment to discuss this further.

Q. Was any type of meal offered?

A. Yes. A free meal was offered.

Q. Were clients told about any investment strategies at these seminars?

A. They were not told specific investment strategies.

Q. Did that come later?

A. Yes, it did.

Q. Who would be the presenter at these seminars?

A. Bryan Noel was the presenter at the seminars.

Q. Did anybody else speak?

A. Yes, there typically would be some other speakers.

Q. Were you ever the speaker?

A. I was not the speaker, but I was present for many of the seminars in a supportive and administrative role.

Q. Why didn’t you speak?

A. I’m not really much of a salesman.

Q. So why were you there?

A. I was there to show the investors, potential investors — to give kind of a face to the strategy that was going on at CEP, so that they could see everybody that was involved.

Q. When you say give a face to the strategy, what was the strategy?

A. The strategy would be to ultimately tell them about any potential investments that could be made in

Pinnacle.

Q. When clients were advised as to how their funds were being invested, what were they told?

A. They were told those funds were being invested in stocks.

Q. And, specifically, those were the Pinnacle funds?

A. Yes.

Q. Is that what clients were consistently told?

A. Yes, it was.

Q. Now, after the seminars, were there any follow-up meetings with potential clients?

A. Yes, there were.

Q. And can you tell the jury about that?

A. Those meetings would be done at the offices of CEP, where, basically, the clients would be given a further presentation. At that point they would be told about the potential for investment with Pinnacle, and then they could make a decision as to whether they wanted to do business or not.

Q. Who would conduct these private meetings at the offices of CEP?

A. Most of the time those were conducted by Bryan Noel.

Q. Anybody else?

A. Yes, there were.

Q. Who else?

A. Some of the other sales staff would be involved with those meetings as well, and I would be present for some of the meetings in a support role.

Q. What do you mean you were there in a support role?

A. For clients that may have had questions about the strategy, the trading strategy, I would be available to answer those questions.

Q. And did you at times meet with clients?

A. Yes, I did.

Q. Did you tell them about the stock-trading program?

A. Yes, I did.

Q. Did you ever have clients come up to your office and look at your trading system?

A. Yes, I did.

Q. Did you ever meet with clients in these private consultations by yourself?

A. The initial consultations?

Q. Right.

A. No, I did not.

Q. Why not?

A. It was necessary to have somebody that could put together the full estate plan. Basically, what I knew about their estate plan would be the taxation aspect as well as the trading aspect.

Q. In 2004, even in late 2004, are you conducting private client consultations for potential investors in CEP?

A. There were some contacts that I had with clients, but at that point it would typically involve the sales staff making presentations to them.

Q. In 2005, are you doing private consultations with potential CEP clients?

A. In 2005, there were one or two clients that were referrals from existing clients that I did have initial contact with, but I did not have contact with new clients that were coming in without any familiarity with the business.

WELLS

In past times, water wells served a multitude of societal purposes and were of significant importance. As an example, after over two hundred years, the old well at the University of North Carolina at Chapel Hill holds a place of prominence and esteem for faculty, students and alumni. Pictures dating from over a hundred years old to today show people standing, socializing and interacting with one another at the old well site.

Aside from the obvious functioning of a well—a source of water—it also operated as the information-exchange device of the day. People of the time could meet face to face, barter, buy, sell, exchange news and information, and interact as members of a society. In the Bible, John 4, there is a classic example of the multi-functionality of a well through which we can examine the actions of Alex and his partner to obtain investors:

John 4: “So He came to a city of Samaria called Sychar, near the parcel of ground that Jacob gave to his son Joseph;
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and Jacob’s well was there. So Jesus, being wearied from His journey, was sitting thus by the well. It was about the sixth hour.

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There came a woman of Samaria to draw water. Jesus said to her, “Give Me a drink.”
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For His disciples had gone away into the city to buy food.
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Therefore the Samaritan woman said to Him, “How is it that You, being a Jew, ask me for a drink since I am a Samaritan woman?” (For Jews have no dealings with Samaritans.)
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Jesus answered and said to her, “If you knew the gift of God, and who it is who says to you, ‘Give Me a drink,’ you would have asked Him, and He would have given you living water.”
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She said to Him, “Sir, You have nothing to draw with and the well is deep; where then do You get that living water?
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You are not greater than our father Jacob, are You, who gave us the well, and drank of it himself and his sons and his cattle?”
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Jesus answered and said to her, “Everyone who drinks of this water will thirst again;
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but whoever drinks of the water that I will give him shall never thirst; but the water that I will give him will become in him a well of water springing up to eternal life.”

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The woman said to Him, “Sir, give me this water, so I will not be thirsty nor come all the way here to draw.”
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He said to her, “Go, call your husband and come here.”
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The woman answered and said, “I have no husband.” Jesus said to her, “You have correctly said, ‘I have no husband’;
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for you have had five husbands, and the one whom you now have is not your husband; this you have said truly.”
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The woman said to Him, “Sir, I perceive that You are a prophet.”

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So the woman left her waterpot, and went into the city and said to the men,
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”Come, see a man who told me all the things that I have done; this is not the Christ, is it?”
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They went out of the city, and were coming to Him.

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From that city many of the Samaritans believed in Him because of the word of the woman who testified, “He told me all the things that I have done.”
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Many more believed because of His word.”

Jesus used his encounter with the woman to offer her the opportunity to make a decision that would change her life. How does the narrative of the meeting at the well relate to the fraudulent actions of Alex and his partner, Bryan Noel? They too needed a gathering place where they could interact and endeavor to convince people to invest in Certified Estate Planners.

Rather than a well, as Alex testified, CEP’s sales presentations would “typically occur at restaurants in the Hendersonville area, such as Hubert’s or Blackwater Grill or McGuffy’s.” Additionally, their presentations at the restaurants were such that “[a] free meal was offered.” They utilized a myriad of methodologies for drawing attention to their investment proposition—“flyers, conferences and via their website” (“Complaint For Permanent Injunction And For Other Relief,” #20). The sales presentation tactics of Jesus with the woman at the well and CEP’s presentations with the potential investors were tactically similar with a comparable goal—have the individual to “make a decision.” CEP’s “seminars basically consisted of a sales presentation that involved the four-corners’ approach.” Tactical similarities aside, the purposes of their encounters were polar opposites—one sales presentation was designed to give, and the other sales presentation was ultimately destined to take.

TALES

CEP’s goal was also to get people to believe and to act on that belief. Just as importantly, CEP hoped that current investors would in turn “bring in” other investors by sharing the good news. But CEP also had a gap that they had to overcome—a gap between people having money and those same people deciding to entrust their money to CEP.

CEP was actively involved in marketing. The targets were “primarily wealthy, elderly customers.” The marketing “advertisements falsely claimed that the customers would be able to avoid their income taxes by placing their assets in trust while still continuing to ‘manag[e] everything‘ but ‘own nothing‘” (20). So, the complexity of CEP’s sales presentations’ deception increased exponentially. Not only are the sales presentation claims regarding the avoidance of taxes false, but the report of the financial health of CEP itself is a fabrication.

Jesus was handling his marketing directly. CEP had a multi-faceted approach. The goals, however, were the same: to draw people in, conduct the presentation and cause a positive response on the part of the individual. Jesus wanted to offer something to the person freely, that would flow continually. CEP wanted the person to initially entrust them with his or her money. They declared that they would, in turn, multiply that investment into an endless stream of revenue. Jesus turned water into wine. Conversely, CEP turned their client’s liquidity into dust. Jesus fed the multitude with just a few loaves of bread and a couple of fish. The few in CEP devoured that which had belonged to the multitude.