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United States of America v. Brent Roger Wilkes

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA SAN DIEGO, CALIFORNIA


June 5, 2012

UNITED STATES OF AMERICA, PLAINTIFF,
v.
BRENT ROGER WILKES, DEFENDANT.

BEFORE HONORABLE LARRY ALAN BURNS, JUDGE PRESIDING

TUESDAY JUNE 5, 2012 9:00 A.M. CALENDAR

REPORTER'S TRANSCRIPT OF PROCEEDINGS EVIDENTIARY HEARING

TRIAL, THAT MOTION IS ALSO DENIED. THE COURT CONFIRMS THE JURY VERDICT AND THE SENTENCE THAT WAS PREVIOUSLY IMPOSED IN THIS CASE.

THOSE ARE MY FINDINGS.

THE ADDITIONAL ISSUE THAT HAS BEEN BRIEFED BY THE PARTIES REGARDS MR. WILKES'S STATUS ON BAIL. I HAVE REVIEWED THE PARTIES' SUBMISSIONS. I HAVE ALSO READ THE CASES FROM THE SIXTH AND SEVENTH CIRCUIT. ONE OF THE CASES I THINK IS ALLUDED TO IN THE GOVERNMENT'S PLEADINGS, THE KRZYSKE CASE, I THINK. THERE IS ANOTHER CASE FROM THE SEVENTH CIRCUIT, UNITED STATES VERSUS BLACK, 543 FED.2D 35.

AND BOTH OF THOSE CASES, MS. CHARLICK, CUT AGAINST YOUR ARGUMENT. YOUR ARGUMENT IS THAT I HAVE LIMITED POWERS UNDER THE MANDATE, AND SINCE BAIL WAS NOT AMONG THOSE POWERS I HAVE NO AUTHORITY TO RECONSIDER THE MATTER OF BAIL.

FIRST -- GIVE ME JUST ONE SECOND HERE TO FIND MY PLACE IN ALL OF THESE DIFFERENT BOOKS.

LET ME SPEAK FIRST TO THE ARGUMENT THAT YOU MAKE ABOUT THE MANDATE.

THE STANDARD SET FORTH IN U.S. VERSUS BAD MARRIAGE AT 439 FED.3RD 534, THE DOCTRINE OF THE RULE OF MANDATE STATES THAT A LOWER COURT -- IT IS ACTUALLY AN INCLUSIVE DOCTRINE. IT SAYS IT MAY DECIDE ANY ISSUE NOT FORECLOSED BY THE COURT'S MANDATE.

IT NOTES THAT THE COURT OF APPEALS MAY LIMIT THE SCOPE OF THE ISSUES FOR WHICH WE REMAND, BUT THAT LIMITATION IS EXPLICIT WHEN IT IS DONE. WHEN WE CLEARLY INDICATE OUR INTENTION TO LIMIT THE MANDATE, THEN THE DISTRICT COURT ORDINARILY LACKS AUTHORITY TO CONSIDER ANY ISSUES NOT WITHIN THE SCOPE OF THE REMAND.

SO, FOR STARTERS, I DON'T FIND THAT THE MANDATE HERE IS SPECIFIC OR IS LIMITED. BUT I REALLY THINK THAT IS BESIDE THE POINT. THE COURT FINDS THAT UNDER BLACK -- AND GIVE ME JUST A SECOND, I AM HAVING TROUBLE RECALLING THE NAME OF THE OTHER CASE. THERE IT IS, KRZYSKE. KRZYSKE IS AT 857 FED.2D 1089, SIXTH CIRCUIT, 1988.

UNDER THOSE TWO CASES, THE RULE IS THAT WHEN A CASE IS REMANDED FOR DETERMINATION OF LEGAL ISSUES THE ISSUE OF BAIL IS OPEN TO THE COURT. I MEAN, THAT ONLY MAKES SENSE. THINK ABOUT THIS FOR A SECOND.

YOUR CLAIM IS THAT I HAVE NO AUTHORITY OVER MR. WILKES REGARDING BAIL. LET'S SAY, YOU KNOW, THIS MORNING HE SHOT SOMEBODY HERE IN THE COURTROOM. YOU WOULD SAY THAT BECAUSE OF THE MANDATE THAT I COULDN'T ADJUST HIS BAIL AT THAT POINT OR TAKE APPROPRIATE ACTIONS, REGARDLESS OF WHETHER HE IS CHARGED WITH A NEW OFFENSE. THAT JUST DOESN'T STRIKE ME AS RIGHT, AND THE CASES SUGGEST THAT IT IS NOT RIGHT. THAT THE DISTRICT COURT RETAINS JURISDICTION OVER THE PERSON OF THE DEFENDANT, AND IN THAT REGARD CAN TAKE INTO CONSIDERATION CHANGED CIRCUMSTANCES.

SO I DON'T FIND THAT THERE IS ANY PROHIBITION HERE, BASED ON THE MANDATE THAT ISSUED IN THIS CASE. I MEAN, FOR ONE THING, THIS COURT NOW HAS JURISDICTION; THE APPELLATE COURT DOESN'T ON THIS ISSUE. IT HAS BEEN REMANDED TO ME. THE MANDATE HAS ISSUED. I AM NOT ACTING BEFORE THE MANDATE WAS SPREAD HERE, THE MANDATE WAS SPREAD AND THE HEARING WAS SET AFTERWARDS. SO I DON'T FIND THAT THE MANDATE CONTROLS THIS CASE AT ALL. AND I DO FIND THAT WITH RESPECT TO BAIL I MAINTAIN JURISDICTION.

NOW, THAT SAID, THE GOVERNMENT HAS TAKEN THE POSITION THAT CHANGED CIRCUMSTANCES ARE THESE. THEY SAY THAT MR. WILKES HAS MADE UNAUTHORIZED WITHDRAWALS FROM AN EMPLOYEE PENSION PLAN, 401K PLAN AND ANOTHER TYPE OF PLAN. THEY POINT OUT THAT HE GOT HIS ENTITLEMENT OUT OF THOSE, BUT THEN HE TOOK LOANS AGAINST IT AND THE LOANS HAVEN'T BEEN FULLY PAID BACK. AND THAT THAT VIOLATES FEDERAL LAW, IT IS A FORM OF CONVERSION.

WHEN I GOT THE PAPERS, BOTH SIDES -- AND I WANT YOU TO SPEAK TO THIS, MS. CHARLICK. IT ALSO OCCURS TO ME THAT JUST THE FACT THAT HE CONTINUES TO OPERATE AS A FIDUCIARY -- AND HE DOES, THERE IS NO DISPUTE ABOUT THAT -- WOULD ALSO VIOLATE FEDERAL LAW, AND IN FACT AMOUNT TO A NEW FELONY OFFENSE UNDER THE LABOR CODE 29 USC 1111.

THE PROVISION IS THAT NO PERSON WHO HAS BEEN CONVICTED OR IMPRISONED AS A RESULT OF A CONVICTION FOR, AMONG OTHER THINGS, BRIBERY MAY ACT AS AN ADMINISTRATOR, FIDUCIARY, OFFICER, TRUSTEE, SO ON AND SO FORTH, OR IN ANY REPRESENTATIVE CAPACITY OF ANY EMPLOYMENT BENEFIT PLAN.

AND I THOUGHT, WELL, OKAY, BUT THE CONVICTION IS GOING TO BE APPEALED AGAIN, DOES THAT AFFECT ANYTHING? WHEN YOU GO ON TO C(2) UNDER 29 USC 1111, THE DEFINITION UNDER C(1) SAYS A PERSON SHALL BE DEEMED TO HAVE BEEN CONVICTED AND UNDER THE DISABILITY OF CONVICTION FROM THE DATE OF THE JUDGMENT OF THE TRIAL COURT, REGARDLESS OF WHETHER THAT JUDGMENT REMAINS UNDER APPEAL.

THE PENALTY FOR MR. WILKES ACTING AS A FIDUCIARY, HAVING BEEN CONVICTED OF BRIBERY, IS A FIVE YEAR PENALTY. THAT IS ACCORDING TO THE U.S. CODE.

I ALSO HAVE CONCERNS THAT IF THE REPRESENTATIONS OF THE UNITED STATES ARE TRUE, THAT HE CONVERTED FUNDS THAT DID NOT BELONG TO HIM. THEY REPRESENT THAT HE GOT HIS MONEY OUT. TO THE EXTENT IT WAS -- FORGET ABOUT THE EMPLOYEE BENEFIT PLAN, LOOK AT THE 401K. CONTRIBUTIONS TO THOSE PLANS ARE MADE BY THE EMPLOYEES OR THEY ARE MADE BY AN EMPLOYER ON BEHALF OF THE EMPLOYEES. I KNOW THAT FROM ERISA LAW. BUT ONCE THE CONTRIBUTIONS ARE MADE THEY ARE IMMEDIATELY VESTED FOR THE BENEFIT OF THE EMPLOYEE. AND MR. WILKES HAD NO RIGHT, NO RIGHT TO WITHDRAW FUNDS THAT WERE VESTED FOR THE BENEFIT OF THE EMPLOYEES FOR HIS OWN USE.

THE GOVERNMENT HAS GIVEN ME A CHART IN THEIR FAVOR SAYING HE MADE, WHAT, $167,000, SOMETHING LIKE THAT, WORTH OF WITHDRAWALS. I UNDERSTAND THAT HE PAID SOME OF IT BACK. BUT IT APPEARS TO ME, ON THE FACE OF THINGS, AND LOOKING AT THE LAW THAT APPLIES, THAT THERE IS PROBABLE CAUSE TO BELIEVE HE COMMITTED A FELONY WHEN HE DID THAT.

SO OF COURSE I WANT TO HEAR FROM YOU ON ALL OF THIS, BUT MY PRELIMINARY BELIEF IS THERE IS CHANGED CIRCUMSTANCES HERE. NUMBER ONE, HE HAS COMMITTED A NEW OFFENSE.

I AM NOT HARKENING BACK TO HIM BEING AN ECONOMIC DANGER. I KNOW THAT THAT WAS RAISED BY THE GOVERNMENT. THE COURT OF APPEALS HAS DEALT WITH THAT. I AM DEALING WITH CHANGED CIRCUMSTANCES NOW, THIS RAIDING OF THE PENSION PLAN.

THE OTHER THING I HAVE TO TELL YOU IS I THINK THE CIRCUMSTANCES HAVE CHANGED IN ANOTHER IMPORTANT REGARD. UNDER 3143 I AM TO EVALUATE, YOU KNOW, WHETHER THE ARGUMENTS THAT HE HAS ON APPEAL ARE FAIRLY DEBATABLE. I AM FULLY FAMILIAR WITH THAT STANDARD.

WHEN THIS CASE WENT UP THE FIRST TIME IT WAS A DIFFERENT ISSUE. HE HAD A HOST OF ISSUES. ALL OF THOSE, NOW, ALL OF THOSE, BY THE APPELLATE COURT, SAVE ONE, HAVE BEEN DECIDED AGAINST HIM, AND I HAVE NOW DECIDED THE OTHER CASE AGAINST HIM.

I HAVE LOOKED AT THE STANDARD FOR REVIEWING THAT. MY FACTUAL FINDINGS ARE REVIEWED FOR CLEAR ERROR. IT IS LIKELY, IN MY JUDGMENT -- ALTHOUGH I DON'T KNOW FOR SURE AND I WON'T PRESUME, BUT IT IS LIKELY, IN MY JUDGMENT, THAT THIS IS GOING TO BE WHAT THE NINTH CIRCUIT CALLS A COME-BACK CASE. WHEN THERE IS GREAT EFFORT EXPENDED BY A PANEL ON A CASE, THEY ARE VERY FAMILIAR WITH THE RECORD AND THEY DO A REMAND, IT COMES BACK TO THEM.

NOW, THAT IS A MATTER OF THEIR DISCRETION. BUT I HAVE SAT WITH THE NINTH CIRCUIT SEVERAL TIMES, I HAVE BEEN ON PANELS WHERE WE HAVE HAD COME-BACK CASES. AND THE BASIS, MUCH LIKE THIS CASE, IS WE REVIEWED THE WHOLE RECORD, WE HAVE REMANDED FOR SOMETHING.

THAT ALSO INFORMS MY JUDGMENT ON THE BAIL MATTER HERE. IF THIS IS, INDEED, A COME-BACK CASE, I HAVE A PRETTY STRONG VIEW OF HOW THAT APPELLATE PANEL VIEWS THE RECORD IN THIS CASE. AND I THINK THAT HAS CHANGED, TOO. I THINK YOU ARE GOING TO HAVE A HARD TIME CONVINCING THEM THAT MY FACTUAL FINDINGS, AFTER THIS INQUIRY, ARE CLEAR ERROR, AND THEREFORE IT IS VERY UNLIKELY MR. WILKES IS GOING TO PREVAIL ON ANY SUBSEQUENT APPEAL OF THIS DECISION.

SO THOSE THINGS SAID -- AND THAT IS A MOUTHFUL, I UNDERSTAND -- I AM HAPPY TO HEAR FROM YOU.

MS. CHARLICK: LET ME ADDRESS YOUR LAST POINT FIRST, UNDERSTANDING THAT WE DO BELIEVE THAT THE SCOPE OF THE MANDATE IS LIMITED. WE CITED NINTH CIRCUIT CASES THAT DISCUSSED HOW YOU DO HAVE LIMITED AUTHORITY.

IT IS THE COURT OF APPEALS WHO GAVE MR. WILKES BAIL, AND THEY ISSUED SOME REPEATED ORDERS. AND THEY ARE THE ONES WHO GRANTED HIM BAIL. AND IF THERE ARE CHANGED CIRCUMSTANCES THE GOVERNMENT SHOULD MOVE IN THE COURT OF APPEALS, IF THE COURT OF APPEALS CHOOSES TO REMAND IT TO THIS COURT, THAT IS MY POSITION.

AND I DON'T THINK THAT THE BLACK CASE ADDRESSES CHANGED CIRCUMSTANCES, BUT I THINK THE SIXTH CIRCUIT CASE MERELY ADDRESSES THE FACT THAT THE DEFENDANT LOST HIS APPEAL. SO THEY SAID, LOOK, THERE IS NO MORE SUBSTANTIAL ISSUES.

THERE WASN'T ANY EVIDENTIARY HEARING OR ANYTHING OF THAT NATURE, FROM WHAT I REMEMBER. I BRIEFLY SKIMMED THE CASE, LIKE, LATE LAST NIGHT.

SO I THINK THAT IS DIFFERENT. THE COURT OF APPEALS HERE REMANDED FOR THE EVIDENTIARY HEARING. AND THEN UNDERSTANDING, JUST AS IN STRAUB, THERE IS A POSSIBILITY, A VERY REAL POSSIBILITY, OF A SECOND APPEAL. AND REMEMBER, STRAUB ITSELF WAS REVERSED THAT SECOND TIME.

THE COURT: RIGHT.

MS. CHARLICK: AND SO THAT ISSUE CERTAINLY WAS SUBSTANTIAL. AND BY THE SAME PANEL.

THE COURT: HERE IS WHAT KRZYSKE SAYS ABOUT THAT POINT. IT SAYS: THE FILING OF A NOTICE OF APPEAL, ALTHOUGH TRANSFERRING JURISDICTION OVER THE CASE FROM THE DISTRICT COURT TO THE COURT OF APPEALS, DOES NOT RENDER THE DISTRICT JUDGE POWERLESS OR WITHOUT JURISDICTION TO ENFORCE CONDITIONS OF A BOND UNDER WHICH THE DEFENDANT MAY HAVE BEEN RELEASED PENDING APPEAL. THE COURT ALSO RETAINS JURISDICTION OVER THE PERSON OF THE DEFENDANT AT LEAST FOR THE LIMITED PURPOSES OF REVIEWING, ALTERING OR AMENDING THE CONDITIONS UNDER WHICH THAT COURT RELEASED THE DEFENDANT, AND IS EMPOWERED TO REVOKE OR FORFEIT THE DEFENDANT'S BOND DURING THE PENDENCY OF AN APPEAL FOR ANY OF THE REASONS WHICH WOULD HAVE SUPPORTED AN INITIAL DENIAL OF THE DEFENDANT'S APPLICATION FOR RELEASE.

AND IN THESE CASES, THE COURT OF APPEALS -- BOTH CASES THE COURT OF APPEALS HAD ACTUALLY SET BOND AND THEN IT GOT REVOKED BY THE DISTRICT COURT, IN ONE CASE BEFORE THE MANDATE HAD EVEN ISSUED.

APPARENTLY THE COURT HAD FOUND OUT THAT THE DECISION WAS MADE BUT THE MANDATE HADN'T ISSUED, SO IT REVOKED BAIL. AND THE CONTENTION THERE WAS THAT.

BUT BOTH THE SIXTH AND SEVENTH CIRCUITS, AND I THINK SENSIBLY, FOR THE REASON I GAVE YOU ABOUT, YOU KNOW, NEW CRIMES BEING COMMITTED, SAY THAT THIS ISN'T WITHIN THE SCOPE OF THE MANDATE.

IT MAKES SENSE. IF YOU THINK ABOUT THE MANDATE, IT IS THAT CERTAIN THINGS HAVE BEEN SETTLED BY THE COURT OF APPEALS. THEY HAVE BEEN SETTLED ONCE AND FOR ALL, AND THE DISTRICT COURT SHOULD NOT REVISIT THEM. THAT CAN'T BE SAID WITH RESPECT TO BAIL. BAIL IS A FLUID SITUATION. OBVIOUSLY YOU WOULDN'T CONTEND THAT IF, IN FACT, MR. WILKES HAS COMMITTED NEW OFFENSES THAT HE SHOULD REMAIN OUT ON BAIL, OR THAT SOMEHOW I SHOULD BE HAMPERED IN CONSIDERING THAT, OR THE COURT OF APPEALS, WHICHEVER FORUM YOU WANT.

BUT I JUST DON'T -- HONESTLY, I DON'T SEE THIS AS WITHIN THE MANDATE. I THINK IT IS A COMPLETELY DIFFERENT SET OF CONSIDERATIONS.

THE OTHER POINT I MAKE TO YOU FROM THIS KRZYSKE CASE IS THAT THEY POINT OUT THAT THE DISTRICT COURT, IN MOST INSTANCES, BECAUSE OF ITS FACT FINDING ABILITIES THAT THE COURT OF APPEALS LACKS, IS IN THE BEST POSITION TO MAKE THE TYPE OF DETERMINATION THAT BAIL INVOLVES.

YOU KNOW, OBVIOUSLY, I AM GOING ON WHAT THE GOVERNMENT HAS TOLD ME HERE, AND I READ YOUR RESPONSE TO THAT. BUT THE APPELLATE COURT CAN HARDLY SORT THAT OUT. THEY DON'T HAVE THE ABILITY TO CALL WITNESSES AND FIGURE THAT OUT.

MS. CHARLICK: WELL, BAIL DETERMINATIONS ARE REVIEWED DE NOVO, THOUGH, BY THE APPELLATE COURT. THEY DO REVIEW THE FACTUAL RECORD. YOU KNOW, THAT IS THE STANDARD.

AND WITH RESPECT TO THE CHANGED CIRCUMSTANCES, WE FOUND OUT ABOUT THESE ALLEGATIONS FRIDAY NIGHT AT 5:00, AND THEN I GOT THE OTHER PLEADING LAST NIGHT AT, LIKE, 8:00 OR 9:00. I HAVE HAD THE MOST LIMITED ABILITY, WHILE PREPARING FOR THIS HEARING, TO INVESTIGATE OR TO DO ANYTHING. THERE IS NO ORDER TO SHOW CAUSE ISSUED.

I SPOKE WITH DAVE HORTON FROM PRETRIAL SERVICES WHO SAYS HE KNEW ABOUT THE LOANS, AND IT WASN'T -- MR. WILKES WAS IN COMPLIANCE WITH THE CONDITIONS THAT YOUR HONOR SET FOR REPORTING.

THE COURT: HE WASN'T IF HE IS COMMITTING A NEW FELONY.

MS. CHARLICK: IT DOES NOT SEEM THAT MR. HORTON THOUGHT THERE WAS ANY NEW FELONY.

AND, JUDGE, I AM NOT FAMILIAR WITH THIS LABOR CODE. MAYBE THERE IS A MENS REA ASPECT. I HOPE SO, BECAUSE IT WOULD SEEM VERY HARSH TO PENALIZE SOMEONE WHO DID NOT KNOW.

THE COURT: WITH ALL RESPECT TO THE PRETRIAL SERVICES OFFICER, I DON'T EXPECT HIM TO BE VERSED IN VIOLATIONS OF THE LABOR CODE AND LIKEWISE. SO HE MAY HAVE THOUGHT, WELL, THIS IS ALL HUNKY DORY, HE IS THE TRUSTEE. THE PROBLEM IS YOU CAN'T BE THE TRUSTEE. HE IS FORECLOSED BY VIRTUE OF HIS CONVICTION.

THEN THE SUBSTANTIVE PART OF IT IS, YOU KNOW, YOU TALKED ABOUT, WELL, THESE HAVE ALL BEEN ORPHANED FUNDS.

THAT DOESN'T MEAN THAT MR. WILKES IS ENTITLED TO USE THEM.

MS. CHARLICK: I AM NOT MAINTAINING THAT POSITION, YOUR HONOR.

THE COURT: HERE IS WHAT HAPPENS, MS. CHARLICK, ON AN EMPLOYEE BENEFIT PLAN. IF THE HEIRS OF THE EMPLOYEE, YOU KNOW, IF THE EMPLOYEE IS DEAD OR CAN'T BE FOUND, IF THE HEIRS DON'T HAVE CLAIM TO IT THEN THE STATE HAS FIRST RIGHT TO IT, GOES TO THE STATE. BUT IN NO EVENT DOES MR. WILKES, WHO HAS NO ENTITLEMENT TO THOSE FUNDS, HAVE THE RIGHT TO RAID THE COOKIE JAR AND USE THE FUNDS FOR HIS PERSONAL BENEFIT.

THEN I AM TOLD BY THE GOVERNMENT THAT HE IS GAMBLING. ARE THE FUNDS BEING USED TO SUPPORT GAMBLING HABITS?

MS. CHARLICK: I DIDN'T GET -- I MEAN, MAYBE I READ IT TOO QUICKLY. I DIDN'T SEE THAT, AT ALL, YOUR HONOR.

THE COURT: THE LAST PLEADING FILED LAST NIGHT, I HAD A CHANCE TO LOOK AT IT.

MS. CHARLICK: GAMBLING?

THE COURT: THEY REFER TO HIM AS BRENT "THE ENIGMA" WILKES, WHICH I THINK IS SOME HANDLE OR TITLE WHEN HE PLAYS POKER.

MS. CHARLICK: I DON'T -- YOUR HONOR, THESE ARE ALLEGATIONS THE GOVERNMENT IS MAKING. IF THEY WANT TO SUBSTANTIATE AND PROVE UP THESE ALLEGATIONS, I WANT A HEARING. I WANT THE WITNESSES HERE. HE IS ENTITLED TO THAT.

THEY CAN'T JUST FILE A DECLARATION FROM MS. CHU AND SAY YOU SHOULD REVOKE HIS BOND, HE HAS BEEN RAIDING THE PENSION FUND AND GAMBLING. I MEAN, THIS IS --

MR. HALPERN: WE HAVE WITNESSES RIGHT HERE, YOUR HONOR, THAT WE COULD CALL IF THIS IS REALLY A POINT.

THE GOVERNMENT'S POSITION, OF COURSE, IS THAT ON SECTION 3143 THE COURT MUST REMAND HIM, EVEN WITHOUT REACHING THIS ISSUE, UNLESS YOU BELIEVE THAT YOUR RULING IS SUBJECT TO THE CLEAR ERROR STANDARD OF BEING REVERSED. OTHERWISE, UNDER THE STATUTE, YOU DON'T EVEN GO TO THIS.

THE COURT: WHAT ABOUT THAT, MS. CHARLICK? BECAUSE I HAVE LOOKED AT THAT, AND, YOU KNOW, I SAW IN ONE OF THESE BAIL CASES THAT THE JUDGE, THE TRIAL JUDGE, CHARACTERIZED THE DEFENDANT'S CHANCES AS SLIM TO NONE. I AM NOT GOING TO DO THAT, I AM NOT GOING TO TRY TO QUANTIFY WHAT HIS CHANCES ARE. BUT IT JUST SEEMS TO ME THAT THIS IS A VERY DIFFERENT SITUATION FROM THE ONE THAT EXISTED INITIALLY.

HE HAD A HOST OF ISSUES. WE HAD THE SKILLING CASE THAT THE SUPREME COURT GRANTED CERT IN, AND THE NINTH CIRCUIT DELAYED RESOLUTION OF THIS SO THEY COULD DECIDE SKILLING. ALL OF THAT IS OFF THE TABLE NOW, ALL OF THAT IS OFF THE TABLE. THERE IS A VERY LIMITED, DISCRETE ISSUE, AND IT IS A FACT BOUND ISSUE, AND HE HAS TO SHOW THAT I WAS CLEARLY ERRONEOUS IN MY FACTUAL FINDINGS TO GAIN RELIEF HERE. WITHOUT QUANTIFYING IT, I JUST DON'T THINK THAT THAT MEETS THE STANDARD UNDER 3143 FOR A FAIRLY DEBATABLE POINT. AND THAT IS A CHANGED CIRCUMSTANCE. THE OTHER STUFF SORT OF COLORS THIS.

AGAIN, I AM MINDFUL THAT THE APPELLATE COURT DIDN'T AGREE WITH ME THAT HE WAS AN ECONOMIC DANGER. FINE. BUT EVERYTHING THAT FACTORED INTO THAT CHARACTERIZATION IS OUT OF THE ANALYSIS FOR NOW. THERE IS NEW STUFF. THERE IS NEW STUFF. IF I BELIEVE THE GOVERNMENT HE IS COMMITTING A FELONY AS A PERSON CONVICTED OF BRIBERY THAT IS CONTINUING TO EXERCISE POWERS OF A TRUSTEE OVER AN EMPLOYMENT PLAN. THAT IS PROHIBITED BY LAW, IT IS PUNISHABLE BY UP TO FIVE YEARS. AND SECOND, HE IS CONVERTING MONEY THAT DOESN'T BELONG TO HIM TO HIS OWN USE. SO THOSE ARE THE CHANGED CIRCUMSTANCES HERE.

I APPRECIATE YOU WANT HEARING, AND WE WILL HAVE A HEARING. THEY WILL HAVE TO DOCUMENT SOME OF THIS STUFF. I MEAN, THAT DOESN'T SPEAK REALLY TO THE CHANGED CIRCUMSTANCE REGARDING THE STATURE OF THE CASE AT THIS POINT. BUT AS TO THE FACTUAL ALLEGATIONS, I THINK YOU ARE ENTITLED TO CHALLENGE THOSE, AND THEY HAVE WITNESSES READY.

MS. CHARLICK: WELL, IF YOU WANT ME TO ADDRESS THE 3143(B), DOES THE CASE STILL PRESENT A SUBSTANTIAL ISSUE, IT DOES. THE STRAUB ISSUE WAS ALWAYS OUR STRONGEST ISSUE. IT WAS THE ONLY ONE THAT WAS PRESERVED, SO THAT AUTOMATICALLY ASSISTED US.

STRAUB CAME OUT. IT WAS A VERY HELPFUL CASE. IT IS

THE CASE THAT THE JUDGES FOCUSED ON IN THE ORAL ARGUMENT.

AND WE TAKE ISSUE WITH YOUR HONOR'S CHARACTERIZATION OF THE DIRECT CONTRADICTIONS AS NOT BEING DIRECT CONTRADICTIONS, AND THINK THAT ACTUALLY STRAUB SUPPORTS US ON THAT POINT, PRECISELY. AND ALSO LOOKING AT WHETHER OR NOT THE FACT FINDING PROCESS WAS DISTORTED.

AND STRAUB DID FIND -- JUST BECAUSE THERE WERE, YOU KNOW, 11 OF 12 WITNESSES IMMUNIZED IN STRAUB, THERE WAS ONLY ONE WITNESS THAT CONTRADICTED -- THAT BAUMANN'S TESTIMONY CONTRADICTED, THE ONE GUY. THAT IS ALL THAT MATTERED.

THE COURT: YOU ACKNOWLEDGE, DON'T YOU, THAT MY FACTUAL FINDINGS AS TO THIS ISSUE ARE REVIEWED FOR CLEAR ERROR OF FACTUAL FINDINGS.

MS. CHARLICK: NO, IT IS A MIXED QUESTION OF FACT AND LAW.

THE COURT: STRAUB SAYS MY FACTUAL FINDINGS ARE REVIEWED FOR CLEAR ERROR, WHICH MEANS MORE THAN THE APPELLATE COURT SIMPLY WOULD HAVE REACHED A DIFFERENT CONCLUSION. THEY HAVE TO BE IRRATIONAL OR OFF THE BOARD BEFORE THEY CAN REVERSE FOR CLEAR ERROR ON FACTUAL FINDINGS. AND STRAUB SAYS THAT.

MS. CHARLICK: YOUR HONOR, THE DIRECT CONTRADICTION ANALYSIS, REMEMBER STRAUB REVERSED THE SECOND TIME AND SAID THE DISTRICT COURT ERRED NOT -- I MEAN, IT SAID IT WAS A MIXED QUESTION OF FACT AND LAW.

THE COURT: IT DID. BUT AS I HAVE SAID, AND AS MY RULING ATTESTED TO, IT IS A VERY, VERY DIFFERENT, STARKLY DIFFERENT CASE FROM THIS ONE. I MEAN, JUST START WITH THE NUMBERS, WHICH ARE NOT DISPOSITIVE, 11 OUT OF 12 GOVERNMENT WITNESSES GOT IMMUNITY. SECOND, THEY GOT ALL KINDS OF BENEFITS FROM THAT.

HERE, A COUPLE OF THE WITNESSES THAT GOT IMMUNITY, BORROMEO AND MAX KANE, MR. WILLIAMS OFFERED NOTHING ABOUT THEM. SO THEY ARE KIND OF OUT OF THE EQUATION FOR DIRECT CONTRADICTION.

THE MOST YOU COULD SAY WAS THAT JOEL COMBS, WHO WAS IMMUNIZED, AND WADE, WHO GOT THE BENEFIT OF A PLEA AGREEMENT, WOULD HAVE BEEN IMPEACHED IN SOME OF THE IMPRESSIONS THAT THEY HAVE.

I DON'T NEED TO REARGUE THIS, I AM JUST TELLING YOU THAT THE REVIEW IS FOR CLEAR ERROR WHICH IS A DIFFICULT -- MUCH MORE DIFFICULT STANDARD TO SHOW, YOU KNOW, THAT THERE IS NO SUPPORT FOR THIS. NOT JUST DISAGREEMENTS AMONG JURISTS BUT NO SUPPORT FOR MY FINDINGS.

AND I DON'T KNOW. STRANGER THINGS HAVE HAPPENED, I CAN ATTEST TO THAT, WITH THE NINTH CIRCUIT. BUT I JUST DON'T THINK IN THIS ONE THAT THEY ARE GOING TO FIND THAT MY FINDINGS WERE IRRATIONAL OR NOT BASED IN FACT AT ALL.

MS. CHARLICK: BUT YOU DIDN'T THINK THAT THE NINTH CIRCUIT WOULD GIVE MR. WILKES BAIL PENDING APPEAL, EITHER.

THE COURT: NO, I SURE DIDN'T. PARTICULARLY AFTER THEY STRUCK HIS FINANCIAL AFFIDAVIT BECAUSE THEY FOUND IT WAS FRAUDULENT, JUST AS I DID. THAT WAS --

MS. CHARLICK: WELL, I DON'T --THE COURT: THAT IS MYSTIFYING TO ME THAT THEY WOULD STRIKE HIS FINANCIAL AFFIDAVIT AND THEN STILL LET HIM OUT.

MS. CHARLICK: I DON'T THINK THAT THEY SAID HIS FINANCIAL AFFIDAVIT WAS FRAUDULENT, YOUR HONOR.

THE COURT: THEY STRUCK IT. THEY STRUCK IT BASED ON THE GOVERNMENT'S CONTENTION THAT IT WAS FRAUDULENT. AND I FOUND IT WAS. I FOUND THAT HE DIDN'T REVEAL MONEY THAT HE HAD, THAT HE HAD COMING IN, THAT HE ARRANGED TO HAVE COME IN. YOU KNOW, MY GOSH, I THINK I SAID TO HIM AT THE TIME YOUR ASS IS ON FIRE AND YOU ARE STANDING IN FRONT OF ME HANDING ME A PHONY FINANCIAL DECLARATION?

THAT IS NEITHER HERE NOR THERE, MS. CHARLICK. AGAIN, THEY HAVE RULED ON THAT, AND I ACCEPT THAT RULING. THIS IS A NEW DAY, A NEW SET OF CIRCUMSTANCES HERE. AND THAT IS WHAT I AM ASKING YOU TO ADDRESS AND DEAL WITH.

MS. CHARLICK: I DO THINK, THOUGH, THIS ISSUE REMAINS AS SUBSTANTIAL, ESPECIALLY IN LIGHT OF THE FACT THAT STRAUB ITSELF WAS REVERSED THE SECOND TIME AROUND. AND I THINK IT DID GO BACK TO THE SAME PANEL.

THE COURT: THAT IS TRUE. BUT AGAIN, I DON'T KNOW IF YOU WILL ACKNOWLEDGE THIS, STRAUB WAS A STARKLY DIFFERENT SCENARIO THAN HERE. STARKLY DIFFERENT.

YOU HAVE IDENTIFIED, MR. CAHN HAS IDENTIFIED THE DIFFERENCE. YOU KNOW, I AGREE WITH YOUR CHARACTERIZATIONS. IF YOU HAVE GOT A WITNESS WHO SAYS I NEVER SAID THAT, ANOTHER WITNESS SAYING YES YOU DID, AND IT GOES TO THE HEART OF THE CASE, WHO SHOT THE VICTIM IN THAT CASE. THAT IS COMPLETELY DIFFERENT HERE. THIS THING IS ON THE OUTER BOUNDARIES.

MR. WILLIAMS' TESTIMONY IS AT THE PERIPHERY. HE IS AT, YOU KNOW, PLUTO.

MS. CHARLICK: BUT IT IS A DIFFERENT KIND OF CASE, JUDGE. IT IS A DIFFERENT CASE. IT IS AN HONEST SERVICES FRAUD, BRIBERY, CIRCUMSTANTIAL CASE. THAT ONE WAS, LIKE, A MURDER.

THE COURT: I KNOW.

MS. CHARLICK: SO IT IS VERY, VERY DIFFERENT, SO THE INFERENCES ARE DIFFERENT.

THE COURT: YEAH. EASIER TO CONCEPTUALIZE DIRECT CONTRADICTION IN A BLOOD-AND-GUTS CASE LIKE THAT.

MS. CHARLICK: YES, AND MUCH EASIER AND SO --THE COURT: HERE IS THE PROBLEM, HERE IS THE PROBLEM YOU HAVE. I MEAN, AT MOST THE ARGUMENTS YOU HAVE MADE, I THINK, GO TO THE CONSPIRACY COUNT, THEY DON'T GO TO THESE OTHER THINGS. THEY REALLY DON'T. THEY DON'T SLOP OVER TO WHETHER HE BRIBED CUNNINGHAM; HE DID. THE JURY FOUND HE DID. HE DOESN'T HAVE ANY RELIEF ON THAT.

AND THE APPELLATE COURT SAYS, YOU KNOW, COMBS ISN'T A VERY IMPORTANT WITNESS. THE GOVERNMENT'S CASE IS STRONG, SUBSTANTIAL, AMPLE, OVERWHELMING, NOT A CLOSE CASE.

AND, YOU KNOW, YOU WANT TO TALK ABOUT LAW OF THE CASE, THAT IS LAW OF THE CASE. SO ALL OF THOSE THINGS HAVE BEEN DECIDED. YOU HAVE GOT A TEENY TINY SLIVER OF HOPE HERE THAT THE COURT OF APPEALS WILL FIND THAT I MADE A CLEAR ERROR IN THESE FINDINGS, AFTER LISTENING TO THE WITNESSES, CANVASSING THE RECORD, READING THE CASES CAREFULLY.

I DON'T WANT TO SOUND PRESUMPTUOUS ABOUT THIS, AND I AM CERTAINLY NOT ARROGANT. AS I TOLD YOU, I KNOW STRANGER THINGS HAVE HAPPENED WITH MY RULINGS IN THE COURT OF APPEALS BEFORE. BUT I HAVE TO MAKE A JUDGMENT HERE UNDER 3143, AND I JUST DON'T SEE THAT HE HAS A FAIRLY DEBATABLE ISSUE ON THIS. I DON'T. I DON'T SEE THAT HE IS LIKELY TO PREVAIL, AND NONE OF THE OTHER EXCEPTIONS TO PRESUMPTION -- TO THE PRESUMPTION OF DETENTION APPLY HERE.

THAT IS PUTTING ASIDE THE FACT THAT HE IS CONTINUING TO ACT AS TRUSTEE EVEN THOUGH HE IS A CONVICTED OF BRIBER.

MS. CHARLICK: YOUR HONOR, THE COURT OF APPEALS OPINIONS THAT THEY ASSERTED ABOUT THE STATE OF THE EVIDENCE WERE NOT IN THE CONTEXT OF DECIDING THE STRAUB ISSUE.

THE COURT: YOU ARE RIGHT.

MS. CHARLICK: AND I THINK THAT THE REASON IS BECAUSE ONCE WILLIAMS TESTIFIES, IT IS A TOTALLY DIFFERENT BALLGAME. AND THE EVIDENCE IS NOT GOING TO BE SO OVERWHELMING. IT IS CERTAINLY NOT GOING TO BE JUST MR. WILKES HANGING OUT THERE BY HIMSELF. SO I DO THINK THAT IT IS A COMPLETELY DIFFERENT STATE ONCE WILLIAMS TESTIFIES AND THOSE STATEMENTS DON'T MATTER. AND I THINK THE JURY --

THE COURT: I DISAGREE WITH YOU ON THAT. HERE IS THE QUESTION. YOU WANT THEM TO CALL WITNESSES IN SUPPORT OF THE ACCUSATIONS THEY HAVE MADE ABOUT HIM -- I MEAN, IT SEEMED TO ME IMPLICIT AT LEAST IN YOUR RESPONSE THAT YOU ACKNOWLEDGE THAT HE DID THOSE THINGS. BUT YOU SAID, LOOK, THERE IS AN EXPLANATION AND HE HAS PAID THE MONIES BACK, AND SO ON AND SO FORTH. SO I ASSUME THAT, YOU KNOW, THAT HE CONTINUED TO ACT AS TRUSTEE OF THOSE ACCOUNTS.

MS. CHARLICK: YOUR HONOR, I DON'T --THE COURT: MAYBE HE DIDN'T.

MS. CHARLICK: I AM NOT GOING TO BE CONCEDING OR ADMITTING ANYTHING ON THESE POINTS.

THE COURT: ALL RIGHT.

MS. CHARLICK: BUT I DO WANT TO REMIND THE COURT THAT THE JURY DELIBERATED FOR FOUR DAYS IN THIS CASE. IT WASN'T SO CLOSE. AND YOU, YOURSELF, TOLD MR. GERAGOS THAT HE HAD THE JURY ON THE ROPES FOR THE FIRST TEN WITNESSES.

THE COURT: I THOUGHT HE DID. BUT, YOU KNOW, LOOK, THE COURT OF APPEALS SAID IT IS NOT A CLOSE CASE. THAT IS WHAT THEY SAID, IT WASN'T A CLOSE CASE. THEY SAW IT VERY DIFFERENTLY. THERE ARE VERY EXPERIENCED JURISTS ON THAT PANEL. JUDGE ALARCON, HE HAS BEEN AROUND FOR A LONG TIME, HE HAS SEEN A LOT OF THINGS. HE WROTE THE MAJORITY OPINION THERE.

SO, MR. HALPERN, YOU SAID YOU HAVE WITNESSES ON THAT? MR. HALPERN: YES, YOUR HONOR, IF YOU ARE TALKING ON THE SECOND POINT.

WE AGREE WITH EVERYTHING THE COURT SAID ON 3143, WE THINK YOU MUST DO IT UNLESS YOU MAKE A FINDING THAT YOUR OWN FACTUAL FINDINGS ARE CLEARLY ERRONEOUS. CONTRARY TO WHAT MS. CHARLICK SAYS, OR MAYBE NOT, BECAUSE CLEARLY THERE ARE MIXED QUESTIONS INVOLVED. BUT STRAUB IS CLEAR, AS THE COURT NOTED.

IT SAYS, ON 1156, FACTUAL FINDINGS UNDERLYING THE DISTRICT COURT'S RULING ARE REVIEWED FOR CLEAR ERROR.

IT IS NOT AMBIGUOUS, IT IS CRYSTAL CLEAR. SO WE DON'T EVEN GET TO THE SECOND ISSUE UNLESS YOU FIND -- AND I UNDERSTAND MS. CHARLICK'S POSITION. IT IS VERY DIFFERENT FROM THE ONE THE COURT IS TAKING, SHE HAS A VERY DIFFERENT VIEW OF THE FACTS, AS THE COURT DOES.

THE COURT: I KNOW, I KNOW. AND NECESSARILY SO. NECESSARILY SO.

MR. HALPERN: I TAKE NO UMBRAGE ABOUT THAT, BUT AT THE END OF THE DAY IT IS THE COURT'S OPINION THAT ARE REVIEWED, IT IS THE COURT'S FACTUAL FINDINGS THAT ARE ACCEPTED HERE AND REVIEWED, UNLESS THEY ARE CLEARLY ERRONEOUS.

THE COURT: I MADE MY RULING ON THAT. I DON'T THINK HE QUALIFIES, AT THIS POINT, UNDER THE STANDARD OF 3143. I DON'T THINK THERE IS A FAIRLY DEBATABLE ISSUE, GIVEN THE THOROUGHNESS OF THE FINDINGS AND THE STANDARD OF REVIEW THAT APPLIES, AND THE NARROWNESS OF WHAT IS GOING TO BE IN FRONT OF THE COURT OF APPEALS. HE IS NOT GOING TO BE ABLE TO RELITIGATE ALL OF THOSE OTHER ISSUES.

SO LET'S GO TO THE SECOND BASIS FOR YOUR MOTION.

MR. HALPERN: THE SECOND BASIS, YOUR HONOR, GOES TO CHARACTERIZATION USED BY MS. CHARLICK, ADOPTED BY THE COURT, URGED ON PRETRIAL, THAT THIS WAS A LOAN.

EVEN ASSUMING HE COULD BORROW IT, MONEY FROM IT -- WHICH I THINK IT IS CLEAR HE CAN'T UNDER THE TERMS OF THE PLAN.

THE COURT: IF IT IS THE PROCEEDS OF A 401K, EMPLOYEE BENEFIT PLAN, HE CANNOT. THAT IS SELF-DEALING. HE CAN'T USE IT HIS OWN BENEFIT, AT ALL. HE HAS TO ACT AS A FIDUCIARY FOR THE BENEFIT OF THE EMPLOYEES WHOSE MONEY IT WAS. I GET THAT. THOSE ARE SETTLED PRINCIPLES OF LAW.

NOW, SHE IS DISPUTING THAT YOU CAN PROVE THAT. YOU HAVE A WITNESS THAT CAN SAY --

MR. HALPERN: WE HAVE TWO WITNESSES, YOUR HONOR, THAT CAN TESTIFY AS TO THEIR DISCUSSIONS WITH FOUR OF THE INDIVIDUALS INVOLVED IN THIS PLAN WHO WILL TESTIFY --

THE COURT: ALL RIGHT. CALL THE WITNESSES.

MR. HALPERN: WE CALL SPECIAL AGENT JAMIE HARRISON. THE CLERK: PLEASE RAISE YOUR RIGHT HAND.

YOU DO SOLEMNLY SWEAR THAT THE EVIDENCE YOU SHALL GIVE IN THE CAUSE NOW BEFORE THIS COURT SHALL BE THE TRUTH, SO HELP YOU GOD?

THE WITNESS: I DO.

THE CLERK: PLEASE HAVE A SEAT.

PLEASE STATE AND SPELL YOUR FIRST AND LAST NAMES FOR THE RECORD.

THE WITNESS: JAMIE HARRISON. J-A-M-I-E. H-A-R-R-I-S-O-N.

DIRECT EXAMINATION

Q. (MR. HALPERN) AGENT HARRISON, WHERE ARE YOU PRESENTLY EMPLOYED?

A. I AM CURRENTLY EMPLOYED AS AN SPECIAL AGENT FOR THE INTERNAL REVENUE SERVICE.

Q. AS PART OF YOUR DUTIES HAVE YOU HAD OCCASION TO WORK ON A CASE INVOLVING THE DEFENDANT, MR. BRENT WILKES?

A. I HAVE.

Q. APPROXIMATELY HOW LONG HAVE YOU BEEN ASSOCIATED WITH THAT CASE?

A. SINCE ITS INCEPTION.

Q. DID YOU TAKE ANY INVESTIGATIVE ACTIVITY YESTERDAY, ON JUNE 4TH, 2012, IN ORDER TO DETERMINE IF ANY OF THE MEMBERS OF THE EMPLOYEE BENEFIT PLAN, AS TO WHICH MR. WILKES WAS THE TRUSTEE, WERE ABLE TO BE LOCATED?

A. I DID.

Q. AND HOW DID YOU DO THAT?

A. I USED THE INTERNET TO LOCATE TWO EMPLOYEES, FORMER EMPLOYEES.

Q. DO YOU RECALL THE NAMES OF THE EMPLOYEES YOU LOCATED?

A. JOEL COMBS AND DANIEL DENNEY.

Q. SPEAKING FIRST OF MR. DENNEY, DID YOU DISCUSS WITH HIM WHETHER, IN FACT, HE HAD MONEY IN MR. WILKES'S EMPLOYEE BENEFIT PLAN?

A. I DID.

Q. WHAT DID HE TELL YOU?

A. HE SAID HE WAS AWARE THAT HE HAD SOME MONEY LEFT OVER IN THE 401K PLAN SINCE HE LEFT THE BUSINESS.

Q. DID YOU DISCUSS WITH HIM WHETHER MR. WILKES HAD MADE ANY ATTEMPTS WHATSOEVER TO SEE IF HE COULD BORROW MONEY FROM MR. DENNEY?

A. I DID.

Q. AND WHAT DID YOU FOUND OUT?

A. HE SAID HE HAD NOT GIVEN ANYBODY PERMISSION TO BORROW THE MONEY.

Q. DID, IN FACT, HE INDICATE WHETHER ANY TIME IN THE LAST SEVERAL YEARS HE HAD, IN FACT, RECEIVED OR BEEN CONTACTED BY ANYBODY HAVING TO DO WITH THE EMPLOYEE BENEFIT PLAN?

A. YES. HE SAID SEVERAL YEARS AGO, IN APPROXIMATELY IN 2006, 2007 TIME FRAME, HE RECEIVED A LETTER FROM -- I BELIEVE IT WAS REGINA WILKES, STATING THAT THERE IS A LUMP SUM OF MONEY LEFT OVER IN THE 401K PLAN. AND HERE IS THE TOTAL. AND THAT YOU SHOULD BE RECEIVING A CHECK SHORTLY.

Q. DID HE EVER SAY TO MRS. WILKES THAT HE DIDN'T WANT THE MONEY OR IT COULD BE BORROWED AGAINST?

A. NO. THAT WAS THE LAST HE HEARD, AND HE HAD NEVER RECEIVED A CHECK.

Q. WHAT DID HE SAY ABOUT THE MONEY IN TERMS OF DID HE AGREE TO HAVE IT ORPHANED, OR BE RETURNED TO THE STATE OR BE GIVEN TO MR. WILKES?

MS. CHARLICK: YOUR HONOR, I AM GOING TO OBJECT ON HEARSAY. I KNOW THE COURT'S POSITION ON IT AT THESE PARTICULAR PROCEEDINGS BUT -- THE COURT: AT A BAIL PROCEEDING, I CAN CONSIDER HEARSAY. OVERRULED.

GO AHEAD.

THE WITNESS: HE ASKED ME IF I COULD TELL HIM HOW TO GET THE MONEY BACK.

Q. (MR. HALPERN) SO HE INDICATED HE STILL WANTED THE MONEY?

A. THAT'S CORRECT.

Q. AND HE HAD NEVER GIVEN PERMISSION TO MR. WILKES TO BORROW IT.

A. THAT'S CORRECT.

Q. DID YOU ALSO HAVE SUCCESS LOCATING MR. COMBS?

A. YES, USING THE INTERNET.

Q. AND DID YOU HAVE A DISCUSSION WITH HIM REGARDING THE MONEY THAT WAS IN THE EMPLOYEE PLAN?

A. I DID.

Q. WHAT DID MR. COMBS TELL YOU?

A. HE STATED: I THOUGHT I WOULD NEVER SEE THAT MONEY AGAIN.

BUT, LIKE MR. DENNEY, HE HAD RECEIVED A LETTER IN APPROXIMATELY THE '06, '07 TIME FRAME STATING THAT THERE WAS A LUMP SUM OF MONEY STILL IN THE PLAN AND THAT HE WOULD BE RECEIVING A CHECK SHORTLY.

Q. DID HE TELL YOU -- AT ANY TIME THEREAFTER DID HE TELL MR. WILKES OR ANYBODY THAT HE WASN'T INTERESTED IN RECEIVING THAT MONEY?

A. HE DID NOT.

Q. DID HE EVER INDICATE WHETHER ANYBODY HAD TRIED TO SEE IF HE WAS WILLING TO ALLOW MR. WILKES TO BORROW THAT MONEY?

A. HE DID NOT.

Q. DID HE EVER TELL YOU HE GAVE PERMISSION TO MR. WILKES TO BORROW THAT MONEY?

A. HE STATED HE GAVE NO ONE PERMISSION TO BORROW THAT MONEY. MR. HALPERN: NOTHING FURTHER, YOUR HONOR.

THE COURT: MS. CHARLICK, YOU MAY CROSS-EXAMINE.

CROSS-EXAMINATION

Q. (MS. CHARLICK) GOOD AFTERNOON, AGENT.

A. GOOD AFTERNOON.

Q. OTHER THAN THE TWO-PAGE MEMORANDUM OF INTERVIEWS OF THESE TELEPHONE CALLS WITH MR. DENNEY AND MR. COMBS, DO YOU HAVE ANY OTHER REPORTS, E-MAILS, ANYTHING WHERE YOU DOCUMENTED THESE EVENTS?

A. YES. I HAVE NOTES THAT I TOOK AS THE CONVERSATION WAS TAKING PLACE.

Q. AND DO YOU HAVE THOSE WITH YOU?

A. NOT IN MY POCKET, NO.

MS. CHARLICK: I WOULD LIKE PRODUCTION OF THOSE,

JUDGE.

THE COURT: WELL, DID YOU TRANSMIT ALL OF THE INFORMATION FROM THE NOTES INTO THE REPORTS?

THE WITNESS: I DID.

THE COURT: DID YOU LEAVE ANYTHING SIGNIFICANT OUT? THE WITNESS: I DID NOT, NO.

THE COURT: PRODUCTION OF NOTES IS DENIED.

YOU HAVE THE REPORTS, I TAKE IT, RIGHT?

MS. CHARLICK: I HAVE THE MEMORANDUM OF THE INTERVIEWS, YES.

THE COURT: OKAY.

Q. (MS. CHARLICK) DID YOU -- WHEN YOU SPOKE WITH MR. DENNEY, YOU ASKED HIM HAD HE GOTTEN ANY OTHER CORRESPONDENCE ABOUT THE PLAN AFTER THIS CORRESPONDENCE IN THE YEAR '06? DO YOU RECALL THAT?

A. YES.

Q. AND HE TOLD YOU THAT HE HAD RECEIVED SOMETHING FROM ARNOLD BORROMEO ABOUT A YEAR AGO?

A. YEAH. HE SAID APPROXIMATELY A YEAR AGO HE RECEIVED SOME CORRESPONDENCE ARNOLD BORROMEO STATING THAT -- JUST A REMINDER THAT HE SHOULD GET THE MONEY THAT HE HAD LEFT OVER IN HIS 401K PLAN.

Q. AND HE TOOK NO ACTION. THAT IS WHAT HE TOLD YOU.

A. HE TOLD ME THAT WAS THE LAST HE HAD HEARD REGARDING THE EMPLOYEE 401K.

Q. BUT WHEN HE GOT THIS REMINDER ABOUT THE 401K, HE DIDN'T FOLLOW UP ON IT IN ANY WAY.

A. I DON'T BELIEVE THAT HE DID. HE DIDN'T TELL ME THAT HE FOLLOWED UP ON IT.

Q. HAD YOU DISCUSSED WITH HIM WHETHER OR NOT HE HAD MOVED IN THE PAST SEVERAL YEARS?

A. I DID NOT DISCUSS THAT WITH HIM.

Q. HAD YOU DISCUSSED WITH HIM WHETHER OR NOT HE HAD HAD ANY FORWARD OR CHANGE OF ADDRESSES FILLED OUT IN THE PAST COUPLE OF YEARS?

A. I DID NOT DISCUSS THAT WITH HIM.

Q. DID YOU DISCUSS WITH HIM WHETHER OR NOT HE HAD EVER AGAIN ANY DOCUMENTS FROM MR. WILKES THAT ASKED HIM TO SIGN FORMS SO HE COULD -- SIGN RELEASES SO HE COULD GET THOSE FUNDS?

A. THE ONLY THING I ASKED HIM WAS WAS HE AWARE HE STILL HAD MONEY, AND WHETHER HE HAD GIVEN ANYBODY PERMISSION TO BORROW THAT MONEY.

Q. SO YOU DIDN'T ASK HIM IF HE HAD GOTTEN ANYTHING FROM MR. WILKES WITH SOME FORMS FOR HIM TO SIGN?

A. HE TOLD ME THE ONLY THING HE RECEIVED WAS A LETTER IN THE '06, '07 TIME FRAME STATING THAT THERE WAS MONEY LEFT OVER IN THE ACCOUNT, AND HE SHOULD BE RECEIVING A CHECK SHORTLY.

Q. DID YOU ASK HIM IF HE HAD EVER BEEN CONTACTED BY SAN DIEGO PENSION CORP.?

A. I DID NOT ASK HIM THAT, NO.

Q. ARE YOU AWARE THAT SAN DIEGO PENSION CORP. AT ONE TIME WAS THE ADMINISTRATOR FOR MR. WILKES'S 401K CORPORATE PLAN?

A. I WAS NOT AWARE OF THAT.

Q. SO YOU REALLY DON'T KNOW WHETHER OR NOT MR. WILKES EVER MADE ANY EFFORTS TO CONTACT MR. DENNEY.

A. I ASKED HIM IF MR. WILKES HAD EVER ASKED FOR HIS PERMISSION TO BORROW THE MONEY; AND HE STATED NO. AND I ASKED HIM IF MR. WILKES OR ANYBODY ELSE HAD EVER ASKED IF HE CAN REPAY THE MONEY AND HOW TO GET THE MONEY BACK TO HIM; HE SAID NO.

Q. BUT YOU ARE NOT AWARE WHETHER OR NOT MR. WILKES HAD MADE EFFORTS TO MAIL ANY DOCUMENTS TO MR. DENY, RIGHT?

A. I BELIEVE I STATED THAT HE RECEIVED A LETTER IN APPROXIMATELY THE '06, '07 TIME FRAME STATING THAT THERE WAS A LUMP SUM OF MONEY LEFT OVER IN THE 401K PLAN, AND THAT HE WOULD BE RECEIVING A CHECK SHORTLY IN THE MAIL.

Q. BUT AFTER THAT, I MEAN.

A. THAT WAS THE ONLY CORRESPONDENCE HE RELAYED THAT HE HAD RECEIVED.

Q. BUT YOU DON'T KNOW IF MR. WILKES ATTEMPTED TO CONTACT MR. DENNEY AND WAS NOT SUCCESSFUL.

A. I ASKED HIM IF MR. WILKES HAD EVER ASKED HIM TO BORROW THE MONEY; AND HE SAID HE NEVER GAVE PERMISSION FOR ANYBODY TO BORROW THE MONEY.

Q. BUT MY QUESTION IS: YOU DON'T KNOW WHETHER OR NOT MR. WILKES EVER TOOK ACTIONS TO ATTEMPT TO CONTACT MR. DENNEY BUT WAS UNSUCCESSFUL.

A. I DON'T KNOW WHAT ACTIONS MR. WILKES WOULD TAKE. I AM SORRY.

Q. AND ASKING YOU, THEN, ABOUT MR. COMBS. AGAIN, MR. COMBS DIDN'T TELL YOU THAT HE HAD MOVED OR HAD ANY CHANGE OF ADDRESS FORMS, RIGHT?

A. HE DID NOT.

Q. AND MR. COMBS WAS A GOVERNMENT WITNESS, CORRECT?

A. HE WAS.

Q. SO THE GOVERNMENT KNEW EXACTLY WHERE TO FIND MR. COMBS,

RIGHT?

A. NO, WE DID NOT.

Q. THE GOVERNMENT DIDN'T HAVE AN ADDRESS FOR MR. COMBS?

A. THE CASE HAS BEEN OVER FOR QUITE SOME TIME. I DON'T THINK ANYBODY FROM THE GOVERNMENT HAS HAD CONTACT WITH MR. COMBS FOR SEVERAL YEARS.

Q. YOU USED THE GOVERNMENT COMPUTERS TO DO A SEARCH AND LOOK FOR MR. COMBS, RIGHT?

A. GOOGLE.

Q. AND WHERE WAS MR. COMBS?

A. HE WAS A REAL ESTATE AGENT IN VIRGINIA.

Q. ARE YOU AWARE WHETHER OR NOT BRENT WILKES ACTUALLY SENT PENSION DOCUMENTS TO MR. COMBS?

A. I AM NOT AWARE.

Q. YOU DO KNOW, THOUGH, THAT IN ORDER FOR SOMEONE TO RECOVER THE FUNDS THEY WOULD HAVE TO SIGN A RELEASE AND SEND IT BACK TO THE TRUSTEE, RIGHT?

A. MR. COMBS RELATED THAT HE RECEIVED A LETTER IN

APPROXIMATELY 2006, 2007 STATING THAT HE HAS A SUM OF MONEY LEFT OVER IN THE PLAN AND HE WOULD BE RECEIVING A CHECK IN THE MAIL.

Q. WITHOUT SIGNING ANY RELEASE?

A. THAT IS WHAT HE RELATED TO ME, YES, MA'AM.

Q. AND HE NEVER FOLLOWED UP ON ANYTHING.

A. NO, MA'AM.

Q. AND YOU DON'T KNOW WHETHER OR NOT HE EVER GOT ANY DOCUMENTS AND DISCARDED THEM SUBSEQUENT TO 2006.

MR. HALPERN: OBJECTION. ASKED AND ANSWERED, YOUR HONOR.

THE COURT: IT HAS BEEN ASKED AND ANSWERED. SUSTAINED.

Q. (MS. CHARLICK) AND, AGENT, YOU DO NOT KNOW WHETHER OR NOT MR. WILKES ACTUALLY MAILED DOCUMENTS TO MR. COMBS AND NEVER HEARD ANYTHING BACK FROM HIM.

MR. HALPERN: OBJECTION, YOUR HONOR.

THE COURT: THAT IS SUSTAINED. ASKED AND ANSWERED. HE DOESN'T HAVE ANY IDEA WHAT WILKES DID.

MS. CHARLICK: IF I MIGHT HAVE A MOMENT.

Q. (MS. CHARLICK) AGENT, LET ME ASK YOU THIS. IF SOMEONE IS A FIDUCIARY ON A PENSION PLAN AND THERE ARE NO OTHER FIDUCIARIES WILLING TO STEP IN TO TAKE OVER THE PLAN BUT THE PERSON HAS BEEN CONVICTED OF A FELONY, WHAT IS THAT PERSON SUPPOSED TO DO -- MR. HALPERN: OBJECTION, YOUR HONOR.

Q. (MS. CHARLICK) : -- IN THAT CASE?

THE COURT: SUSTAINED. THERE IS NO FOUNDATION FOR

HIM TO OFFER THAT, IT IS A LEGAL OPINION.

MS. CHARLICK: THEN I DON'T THINK I HAVE ANYTHING FURTHER.

THE COURT: THANK YOU. YOU MAY STAND DOWN.

NEXT WITNESS.

MR. HALPERN: SPECIAL AGENT ERIC HELFAND.

THE CLERK: PLEASE RAISE YOUR RIGHT HAND.

YOU DO SOLEMNLY SWEAR THAT THE EVIDENCE YOU SHALL GIVE IN THE CAUSE NOW BEFORE THIS COURT SHALL BE THE TRUTH SO HELP YOU GOD?

THE WITNESS: YES.

THE CLERK: PLEASE HAVE A SEAT.

PLEASE STATE AND SPELL YOUR FIRST AND LAST NAMES FOR THE RECORD.

THE WITNESS: ERIC, E-R-I-C. LAST NAME H-E-L-F-A-N-D. THE CLERK: THANK YOU.

DIRECT EXAMINATION

Q. (MR. HALPERN) HOW ARE YOU CURRENTLY EMPLOYED?

A. I AM A SPECIAL AGENT WITH IRS CRIMINAL INVESTIGATION.

Q. AND WERE YOU ONE OF THE CASE AGENTS ASSIGNED TO THE PROSECUTION OF MR. WILKES?

A. YES.

Q. APPROXIMATELY HOW LONG HAVE YOU BEEN ON THE INVESTIGATIVE TEAM?

A. SINCE LATE 2005.

Q. DID YOU HAVE OCCASION TO TAKE ACTION IN RELATION TO THE CASE YESTERDAY, ON JUNE 4TH, 2012?

A. YES, I DID.

Q. COULD YOU TELL THE COURT WHAT, IN FACT, YOU DID YESTERDAY.

A. I MADE TELEPHONIC CONTACT WITH MARC COUILLARD.

Q. OKAY. HOW DID YOU -- AT THAT TIME DID YOU HAVE MR. COUILLARD'S PHONE NUMBER?

A. YES, I DID, FROM A PREVIOUS ATTEMPT TO CONTACT HIM RECENTLY.

Q. HOW DID YOU FIND IT ORIGINALLY?

A. ON OPEN SOURCE, ON THE INTERNET.

Q. SO YOU JUST LOOKED IT UP ON THE INTERNET?

A. YES.

Q. WHEN YOU GOT IN CONTACT WITH MR. COUILLARD DID YOU ASK HIM ABOUT THE FUNDS THAT HE HAD IN MR. WILKES'S EMPLOYEE BENEFIT PLAN?

A. YES, I DID.

Q. WHAT DID HE TELL YOU ABOUT THOSE FUNDS?

A. HE SAID THAT HE WAS AWARE THAT HE HAD FUNDS IN THE PLAN.

Q. AND DID HE TELL YOU IF AT ANY TIME SINCE HE PUT THOSE FUNDS IN THE PLAN HAD HE SPOKEN WITH BRENT WILKES ABOUT HIS BORROWING MONEY FROM MR. COUILLARD?

A. NO. HE SAID HE HAD NOT BEEN CONTACTED REGARDING THE FUNDS THAT HE HAD IN THE PLAN.

Q. SO HE DIDN'T INDICATE THAT HE HAD AGREED TO GIVE A LOAN TO MR. WILKES FROM THE PLAN?

A. THAT IS CORRECT. HE SAID HE DID NOT GIVE --Q. DID HE STATE HE HAD ANY CONTACT WITH ANYBODY FROM THE WILKES CORPORATION REGARDING THE MONEY IN THE PLAN?

A. NO. HE SAID HE HAD NOT BEEN CONTACTED REGARDING THE FUNDS.

Q. WHAT WAS HIS POSITION REGARDING THE FUNDS THAT HE HAD IN THE PLAN?

A. HE ASKED ME HOW HE COULD GET THEM BACK.

Q. DID YOU HAVE OCCASION TO CONTACT ANY OTHER INDIVIDUALS?

A. YES. I CONTACTED LAWRENCE MULVANEY.

Q. HOW DID YOU FIND MR. MULVANEY?

A. AGAIN, OPEN SOURCE ON THE INTERNET.

Q. DID YOU ASK HIM ABOUT THE FUNDS THAT HE HAD IN MR. WILKES'S EMPLOYEE BENEFIT PLAN?

A. YES, I DID.

Q. WHAT DID HE TELL YOU?

A. HE SAID THAT AT ONE TIME HE DID HAVE FUNDS IN THE PLAN, AND THAT I BELIEVE IT WAS IN 2003 THAT HE SEPARATED FROM ADCS. AND IT WAS HIS BEST RECOLLECTION THAT HE HAD RECEIVED THOSE FUNDS UPON HIS SEPARATION.

Q. HAD ANYBODY CONTACTED HIM REGARDING THOSE FUNDS SUBSEQUENT TO THAT DATE?

A. NO.

MR. HALPERN: NOTHING FURTHER.

THE COURT: MS. CHARLICK.

CROSS-EXAMINATION

Q. (MS. CHARLICK) SORRY, AGENT. DID YOU JUST SAY THAT IN 2003 MR. MULVANEY RECEIVED THE FUNDS FROM THE PLAN?

A. NO. WHEN I ASKED HIM ABOUT THE FUNDS, HE SAID THAT HE THOUGHT THAT HE HAD SEPARATED FROM ADCS IN 2003. AND HE THOUGHT THAT UPON HIS SEPARATION HE HAD RECEIVED THE FUNDS.

Q. HE THOUGHT HE HAD, AND YOU DON'T KNOW WHETHER HE DID OR DIDN'T RECEIVE THE FUNDS.

A. THAT IS CORRECT.

Q. OKAY. ASKING YOU ABOUT MR. COUILLARD. MR. COUILLARD WAS A GOVERNMENT WITNESS AT TRIAL, RIGHT?

A. THAT IS CORRECT.

Q. MR. COUILLARD WAS ACTUALLY THE SECOND IN CHARGE OF THE --OR HE WAS THE CONTROLLER FOR THE FINANCES FOR ADCS CORPORATION, RIGHT?

A. THAT HE WORKED IN THE ACCOUNTING DEPARTMENT FOR ADCS, YES.

Q. SO HE IS SOMEONE WHO PROBABLY WOULD BE UP ON MATTERS OF FINANCE, YES?

A. I AM ASSUMING SO, YES.

Q. AND MR. COUILLARD, ACCORDING TO YOUR CONVERSATION WITH HIM, HAD NEVER FOLLOWED UP ON THE WHEREABOUTS OF HIS PENSION FUNDS, RIGHT?

A. THAT IS THE IMPRESSION THAT MR. COUILLARD GAVE ME.

Q. AND MR. COUILLARD DIDN'T ALSO TELL YOU THAT HE HAD MOVED

RECENTLY.

A. NO.

Q. DID YOU ASK HIM ABOUT IT?

A. NO, I DID NOT.

Q. DID YOU ASK HIM IF HE WAS HAVING HIS MAIL FORWARDED ANYWHERE?

A. NO, I DID NOT.

Q. DID YOU ASK HIM IF HIS MAIL WAS STOLEN FROM ANYWHERE AT ANY TIME?

A. NO, I DID NOT.

Q. AND YOU ARE UNAWARE WHETHER MR. WILKES MADE ANY EFFORTS TO CONTACT MR. COUILLARD TO MAIL HIM DOCUMENTS ABOUT THE RETURN OF HIS PENSION FUNDS.

A. I AM NOT AWARE OF WHAT MR. WILKES'S EFFORTS WERE TO CONTACT HIM, NO.

Q. AND WHAT ABOUT SAN DIEGO PENSION CORP., ARE YOU AWARE OF WHETHER OR NOT THEY MADE EFFORTS TO CONTACT MR. COUILLARD?

A. NO.

Q. AND AS AN IRS AGENT YOU HAVE SOME FAMILIARITY WITH ERISA LAW, CORRECT?

A. NOT IN PARTICULAR, NO.

MS. CHARLICK: I DON'T HAVE ANY FURTHER QUESTIONS.

MR. HALPERN: YOUR HONOR, IF I COULD, JUST BRIEFLY.

REDIRECT EXAMINATION

Q. (MR. HALPERN) I WOULD LIKE TO GO BACK TO MR. MULVANEY.

HAVE YOU HAD THE OPPORTUNITY TO REVIEW A LISTING OF THE FUNDS IN THE EMPLOYEE BENEFIT PLAN AS PREPARED BY MERRILL LYNCH?

A. YES, I DID REVIEW A LIST OF --MS. CHARLICK: YOUR HONOR, I AM GOING TO OBJECT TO

THIS. THIS IS -- THESE ARE DOCUMENTATIONS THAT ARE NOT WITHIN HIS AGENCY, THEY ARE FROM -- PREPARED BY ANOTHER AGENCY. I HAVE NOT SEEN ALL OF THE DOCUMENTS UNDERLYING THESE FUNDS.

THE COURT: AT A BAIL PROCEEDING THE GOVERNMENT IS PERMITTED TO PROCEED BY PROFFER. THERE IS A DECLARATION HERE FROM MS. CHU, WHO IS AN OFFICER OF THE COURT. SHE SAYS SHE HAS REVIEWED DOCUMENTATION THAT RELATES TO THESE BENEFIT PLANS AND SHE PUTS OUT THE WITHDRAWALS. SO I DON'T HAVE ANY PROBLEM WITH YOU SHOWING HIM THAT.

AND WHETHER PEOPLE SAID THEY GAVE PERMISSION OR DIDN'T GIVE PERMISSION IS REALLY IS KIND OF BESIDE THE POINT HERE. IF HE DIDN'T HAVE AUTHORITY TO DEAL WITH THE FUNDS AT ALL, BORROW THEM, WHETHER THEY GAVE PERMISSION OR DIDN'T GIVE PERMISSION DOESN'T AMOUNT TO A HILL OF BEANS HERE.

MS. CHARLICK: THEN WHY ARE WE HEARING FROM THESE WITNESSES?

THE COURT: I DON'T KNOW. I AM KIND OF CURIOUS ABOUT THAT MYSELF. I MEAN, THE QUESTION IS, YOU KNOW, TO MY WAY OF THINKING: DID MR. WILKES TAKE MONEY OUT OF THESE FUNDS? DID HE ACT AS TRUSTEE AFTER HE HAD BEEN CONVICTED OF A BRIBERY?

IF THOSE ISSUES ARE ADDRESSED THEN MAYBE THERE IS PROBABLE CAUSE TO BELIEVE THAT HE HAS VIOLATED THE CRIMINAL LAW AND I CANNOT MAKE A FINDING BY CLEAR AND CONVINCING EVIDENCE THAT HE IS NOT AN ECONOMIC DANGER, WHICH I HAVE MADE THAT FINDING BEFORE. AGAIN, I SAY I AM NOT RELYING ON ANYTHING THAT HAS BEEN SAID AND DONE IN THE PAST, THIS IS NEW INFORMATION.

YOU KNOW, I GET IT THESE PEOPLE DIDN'T -- I SUPPOSE, OH, MY GOSH, 35 YEARS AGO I USED TO PUT ON PRE-LIMS IN BURGLARY CASES AND WE HAD TO CALL THE HOMEOWNER IN TO SAY I DIDN'T GIVE THE BURGLAR PERMISSION TO ENTER MY HOUSE.

SO MAYBE THIS IS IN THE NATURE OF THAT. I DON'T KNOW. BUT I AM CONVINCED THAT AT LEAST THREE OF THE FOUR WHO THOUGHT THEY HAD SOMETHING IN THE PLAN DIDN'T GIVE MR. WILKES ANY PERMISSION TO TAKE THEIR MONEY.

MR. HALPERN: YOUR HONOR, IF I MAY. THE REASON WE ARE HERE LISTENING TO THIS IS BECAUSE THE DEFENSE FILED A PLEADING, PRESUMABLY MS. CHARLICK DIDN'T MAKE THIS UP. I AM ASSUMING SHE GOT IT FROM MR. WILKES. SHE IS AN OFFICER OF THE COURT.

IN HER PLEADING SHE MAKES STATEMENTS, ASSERTIONS, AS TO WHAT MR. WILKES SAID ABOUT THESE FUNDS. HE SAID THAT IN RELATION TO THESE FUNDS THAT, IN FACT, HE ATTEMPTED TO CONTACT THE PEOPLE. HE COULDN'T GET AHOLD OF THESE PEOPLE.

THE COURT: WHAT DIFFERENCE DOES ANY OF THAT MAKE, MR. HALPERN, IF HE DIDN'T HAVE THE RIGHT TO TOUCH THE FUNDS IN ANY EVENT, WHETHER THEY TOLD HIM YES OR NO OR ANYTHING ELSE. I MEAN, THERE IS NO CLAIM HERE THAT THEY SAID YES, DRAW MY FUNDS OUT AND SEND THEM TO ME.

AND UNDER THIS LABOR CODE SECTION HE WOULD NOT BE AUTHORIZED TO DO THAT NOW THAT HE HAS BEEN CONVICTED OF BRIBERY ANYWAY. HE CAN'T BE ANYWHERE NEAR THE MONEY.

MR. HALPERN: YOUR HONOR, I AGREE WITH ALL OF THAT. HOWEVER, I WAS SIMPLY SAYING, ON TOP OF THAT, THERE IS A DIFFERENT LEVEL OF MENS REA BECAUSE WE HAVE TO LOOK AT INTENT HERE AS WELL.

THE TESTIMONY OF THESE WITNESSES GOES DIRECTLY TO THE INTENT OF MR. WILKES. MR. WILKES, ONCE AGAIN, IN HIS LATEST PLEADING, IS ATTEMPTING TO COMMIT A FRAUD ON THE COURT.

YOU ARE CORRECT THAT IT IS PROBABLY ENOUGH THE FACT THAT SIMPLY HE TOOK THE MONEY OUT. I DON'T THINK HE EVEN DISPUTES THAT. IF THE COURT WANTS TO REST ITS FACTUAL FINDINGS ON THAT WHAT I WILL DO IS THE COURT: I HAVE A DECLARATION FROM MS. CHU. AND THE DECLARATION IS OF CONCERN TO ME BECAUSE IT IMPLICATES THE COMMISSION OF FEDERAL -- OF A FEDERAL FELONY AND IT IMPLICATES ALSO CONVERSION OF MONEY THAT DOES NOT BELONG TO MR. WILKES WHILE HE IS OUT ON BAIL.

THAT IS OF CONCERN TO ME IN THE CONTEXT OF 3143 AND WHETHER I CAN MAKE THE FINDINGS THAT SUPPORT HIS CONTINUED RELEASE. IF THE THINGS IN THE DECLARATION ARE TRUE, AND AGAIN, YOU KNOW --

MR. HALPERN: IF THE COURT IS HAPPY WITH THE DECLARATIONS, THE DECLARATION YOU HAVE --

THE COURT: IT IS NOT A MATTER OF BEING HAPPY. I WANTED TO GIVE MS. CHARLICK WHO, YOU KNOW, DISPUTES THE GOVERNMENT'S MOTION THE CHANCE TO DISPUTE ANY OF THIS. I DON'T KNOW THAT THIS GENTLEMAN INFORMS ANY OF IT.

YOU MAY STAND DOWN.

MR. HALPERN: THAT IS FINE, YOUR HONOR.

MS. CHARLICK: YOUR HONOR, I DO WANT TO JUST TELL THE COURT, I DID NOT MAKE UP THE STUFF THAT IS IN MY PLEADING. WE SPOKE WITH MS. NORMA BANUELOS FROM THE SAN DIEGO PENSION CORP. AND SHE CONFIRMS THAT THERE WERE EFFORTS TO LOCATE PEOPLE. AND THAT WENT ON, I THINK, THROUGH, LIKE, 2010. AND SHE WAS INVOLVED IN IT.

THE COURT: HERE IS WHAT IS OF CONCERN TO ME, MS. CHARLICK, AND WHAT IS SALIENT.

THE GOVERNMENT MAKES THESE REPRESENTATIONS: ONE, CONVICTED OF BRIBERY HE IS ACTING AS A TRUSTEE.

THAT IS A PROBLEM IF THAT IS TRUE.

TWO, THAT HE GOT ALL OF THE MONEY ENTITLED -- THAT HE WAS ENTITLED TO FROM HIS OWN CONTRIBUTIONS OUT OF THE PENSION PLAN. I DON'T HAVE A PROBLEM WITH THAT. IT IS HIS MONEY, HE CAN GET IT. BUT THEN HE TOOK MONEY THAT DIDN'T BELONG TO HIM, THAT HE HAD NO CLAIM TO -- WHETHER YOU WANT TO CALL IT ORPHANED, WHICH IS NOT A TERM OF ART UNDER ERISA, OR NOT -- AND HE USED THAT FOR HIS OWN BENEFIT.

NOW, I HAVE GOT A PROBLEM WITH THAT. IF HE IS A FIDUCIARY THEN HE HAS TO ACT FOR THE BENEFIT OF THE EMPLOYEES, AND HE IS NOT DOING THAT BY TAKING MONEY OUT AND USING IT FOR HIS OWN PURPOSES.

SECOND, IT AMOUNTS TO A CONVERSION. IT IS NOT HIS MONEY. HE HAS NO RIGHT OR CONTROL OVER IT, INDEPENDENT OF HIS STATUS AS A CONVICTED BRIBER.

SO THOSE ARE PROBLEMS. IF HE IS DOING THAT, THAT IS VIOLATIONS OF LAW. AND, AGAIN, I HEARKEN BACK TO THE CONCERNS I HAVE ABOUT MR. WILKES NOT FOLLOWING, YOU KNOW, ANY COMPASS BUT HIS OWN. NOT BEING SUSCEPTIBLE TO CONDITIONS THAT I WOULD SET TO PREVENT THINGS LIKE THIS FROM HAPPENING.

IF THIS IS TRUE, HE TOOK MONEY OUT BELONGING TO OTHER PEOPLE, HE HASN'T REPAID IT. YOU KNOW, MAYBE IT IS NOT A FEDERAL CASE, BUT HE HAS STOLEN MONEY FROM THEM IF THESE THINGS ARE TRUE.

SO THOSE ARE MY CONCERNS HERE.

MS. CHARLICK: WELL, YOUR HONOR, WHAT STATUTE IS IT THAT YOU REFER TO AS A FEDERAL LAW VIOLATION? BECAUSE THE DEPARTMENT OF LABOR HAS JUST INSTITUTED A CIVIL --

THE COURT: I HAVE IT HERE. IT IS 29 USC 1111. IT PROVIDES NO PERSON WHO HAS BEEN CONVICTED OF OR IMPRISONED AS A RESULT OF -- AND AMONG OTHER OFFENSES IT LISTS BRIBERY -- SHALL SERVE OR BE PERMITTED TO SERVE AS AN ADMINISTRATOR, FIDUCIARY, SO ON AND SO FORTH.

THE PENALTY PROVISION PROVIDES THAT IT IS PUNISHABLE BY UP TO FIVE YEARS.

THEN THE ANOTHER OPERATIVE PART IS I THOUGHT, WELL, OKAY, IF HIS CONVICTION NOMINALLY IS ON APPEAL, DOES THIS APPLY. AND THEY SAY A PERSON IS DEEMED CONVICTED IF HE IS UNDER THE DISABILITY OF A CONVICTION FROM THE DATE OF THE JUDGMENT OF THE TRIAL COURT REGARDLESS OF WHETHER THE JUDGMENT REMAINS UNDER APPEAL.

SO THAT DOESN'T -- YOU KNOW, THE FACT THAT THE CASE IS GOING TO BE APPEALED OR HAS BEEN ON APPEAL DOESN'T COVER IT ANYWAY. AND IT IS A FIVE YEAR FELONY. THAT IS A CONCERN.

MS. CHARLICK: BUT I WOULD WANT TO RESEARCH THE MENS REA ATTENDANT TO THAT STATUTE. BECAUSE IF YOU HAVE TO KNOW THAT YOU CANNOT BE A FIDUCIARY -- I DON'T KNOW IF IT IS A MENS REA SIMILAR TO THE --

THE COURT: IT DOESN'T --MS. CHARLICK: FELON IN POSSESSION. I DON'T KNOW. I

HAVE NOT EVER HEARD OF IT BEFORE.

THE COURT: THERE IS NOTHING -- WELL, IT IS AN UNCOMMON -- IT IS AN UNCOMMON SECTION. BUT THERE IS NOTHING SUGGESTIVE IN THE TEXT OF IT THAT YOU HAVE TO ACT WITH THE INTENT TO DECEIVE, OR ANYTHING LIKE THAT. IT IS A DISABILITY THAT ATTACHES TO A PERSON'S CONVICTION FOR BRIBERY.

MS. CHARLICK: WELL, MENS REA, THOUGH, THE MORE HEIGHTENED MENS REA IS THE RULE RATHER THAN THE EXCEPTION UNDER OUR CASE LAW.

THE COURT: YOU STILL HAVE THE PROBLEM, MS. CHARLICK, EVEN IF YOU ARE RIGHT, I MEAN, EVEN IF HE HAS TO KNOW THAT HE CAN'T DO THIS, YOU STILL HAVE THE PROBLEM OF HIM BORROWING OTHER PEOPLE'S MONEY AND NOT PAYING SOME BACK. I MEAN, WHAT IS THE EXPLANATION FOR THAT? WHY IS HE TOUCHING PENSION PLAN FUNDS THAT BELONG TO OTHER PEOPLE AND HAVE BELONGED TO THEM FROM THE DAY THAT THEY WERE CONTRIBUTED? HE DOESN'T GET TO DO THAT.

MS. CHARLICK: NEITHER OF THOSE TWO WITNESSES ADDRESSED THOSE POINTS, YOUR HONOR.

THE COURT: NO, NO. BUT I UNDERSTAND THAT FROM ERISA LAW. THOSE ARE THE -- AND THAT IS THE ALLEGATION HERE, IS THAT HE HAS GOTTEN HIS FAIR SHARE OUT OF THAT, HE HAS GOTTEN EVERYTHING OWING TO HIM, AND THEN HE IS TAKING OTHER PEOPLE'S MONEY.

AND I CAN TELL YOU THAT I KNOW FROM ERISA LAW THAT

ONCE THOSE CONTRIBUTIONS ARE MADE, EITHER BY THE EMPLOYER ON BEHALF OF THE EMPLOYEE, THEY VEST IMMEDIATELY AND THEY ARE THE PROPERTY OF THE EMPLOYEE. THERE IS NO SCENARIO WHERE MR. WILKES GETS THOSE BACK.

I MEAN, EVEN THE STATE HAS A SUPERIOR RIGHT TO HIM, EVEN IN THE EVENT THAT, YOU KNOW, WE WILL USE YOUR TERM, ORPHANED, THAT THEY CAN'T FIND THE PEOPLE. I MEAN, THERE IS A HOST OF PEOPLE IN LINE, AND MR. WILKES IS NOT ONE OF THEM. SO THAT'S THE PROBLEM.

MS. CHARLICK: IT IS MY IMPRESSION THAT BOTH THE DEPARTMENT OF LABOR AND THE SAN DIEGO PENSION CORP. WERE AWARE THAT MR. WILKES HAD BEEN CONVICTED, I BELIEVE, BECAUSE HE HAD BEEN INCARCERATED FOR SOME TIME. I KNOW SAN DIEGO PENSION CORP. KNEW. I THINK DEPARTMENT OF LABOR KNEW.

THE COURT: THAT MIGHT BE TRUE. BUT, YOU KNOW, THEY DON'T HAVE ANY AUTHORITY TO EXCUSE A VIOLATION OF THE STATUTE, SO --

MS. CHARLICK: UNDERSTANDING, BUT IF THEY DIDN'T TELL HIM ANYTHING OR ADVISE HIM THAT HE SHOULDN'T BE ACTING THIS WAY. I MEAN, IF HE IS A TRUSTEE AND NO ONE ELSE WILL STEP IN, HE CAN'T ABANDON THE PLAN. THAT IS A BREACH OF FIDUCIARY DUTY.

THE COURT: MS. CHARLICK, LET'S CUT THROUGH FOR A SECOND. WE ARE DEALING WITH A FELLOW WHO IS FINANCIALLY SOPHISTICATED. HE HAS GOT A BACKGROUND IN NUMBERS. HE WAS ALWAYS GOOD WITH NUMBERS. THAT IS WHAT MR. GERAGOS USED SAY, HE IS GOOD WITH NUMBERS. WE ARE TALKING ABOUT THE RESPONSIBILITIES OF A FIDUCIARY. HIS EXPERIENCE AND HIS BACKGROUND WOULD HAVE ACQUAINTED HIM WITH THAT. THIS ISN'T SOMETHING THAT HE HAS TO BE TOLD.

PUTTING ASIDE MAYBE HE WAS UNAWARE THAT HE COULDN'T CONTINUE TO ACT AS A FIDUCIARY, FIDUCIARIES KNOW THAT THEY CAN'T MISAPPROPRIATE MONEY BELONGING TO OTHER PEOPLE. THAT THEY CAN'T TAKE ACTIONS WITH RESPECT TO THAT MONEY THAT IS IN THEIR INTEREST AND NOT IN THE INTEREST OF THE PEOPLE FOR WHOM THEY ARE ACTING AS A FIDUCIARY.

MR. WILKES KNOWS THAT. MY GOODNESS, I HAVE LISTENED TO DAYS OF TESTIMONY ABOUT HIS BACKGROUND AND HIS LEVEL OF SOPHISTICATION. SO HE KNOWS ALL OF THAT. THAT'S --

MS. CHARLICK: HE WAS A CPA YEARS AGO, JUDGE. HE HAD BEEN OUT OF THAT.

THE COURT: I HAVE NEVER BEEN A CPA, I KNOW THOSE THINGS.

MS. CHARLICK: YOU ARE A JUDGE. YOU HAVE TO RULE ON THESE CASES.

THE COURT: ALL RIGHT. ANYTHING ELSE ON THIS, THEN? IF THIS IS SOME RELIEF TO YOU, YOU HAVE A RECORD HERE, I AM NOT GOING TO REMAND HIM IMMEDIATELY TODAY. I WILL GIVE YOU A CHANCE TO PURSUE A STAY ON ANY ORDER I ISSUE. SO YOU DON'T HAVE TO WORRY ABOUT HIM GOING INTO THE CAN THIS AFTERNOON. THERE IS NO REASON FOR ME TO DO THAT.

HERE IS THE OTHER THING THAT NEEDS TO BE SAID THAT IS IN THE BACKGROUND. THIS WAS IN THE MOTION DENYING THE CONTINUANCE.

IN FLANAGAN VERSUS THE UNITED STATES, A CASE FROM THE UNITED STATES SUPREME COURT, DECIDED IN 1984, THE SUPREME COURT SAID THIS: WHEN A CRIME IS COMMITTED AGAINST A COMMUNITY THE COMMUNITY HAS A STRONG COLLECTIVE PSYCHOLOGICAL AND MORAL INTEREST IN BRINGING THE PERSON RESPONSIBLE TO JUSTICE. CRIME INFLICTS A WOUND ON THE COMMUNITY, AND THAT WOUND MAY NOT BEGIN TO HEAL UNTIL CRIMINAL PROCEEDINGS HAVE COME TO AN END.

THIS CASE HAS DRAGGED ON FOR FIVE YEARS NOW. IT HAS DRAGGED ON FOR A LONG, LONG TIME. AND I, YOU KNOW, AM NOT CALLED UPON TO MAKE DETERMINATIONS HERE OF WHETHER IT HAS BEEN DELIBERATELY DRAWN OUT, WHETHER THE REQUESTS FOR EXTENSIONS OF TIME AND THE LIKE.

I MEAN, WHAT IS CLEAR TO ME IS THAT EVERY LEGAL AVENUE HAS BEEN EXPLORED BY MR. WILKES'S COUNSEL. BUT THE EFFECT IS, HERE WE ARE, FIVE YEARS AFTER HE WAS CONVICTED BY A JURY, AND THERE IS NO CLOSURE HERE.

THIS IS REMANDED TO ME FOR A VERY LIMITED PURPOSE, AND I HAVE DONE MY BEST TO BE WISE ABOUT THIS, TO FOLLOW THE PRECEDENTS. I HAVE GIVEN MY BEST JUDGMENT CONSCIENTIOUSLY TO THIS. I THINK IT IS VERY UNLIKELY THAT THE APPELLATE COURT IS GOING TO FIND FAULT IN WHAT I HAVE DONE OR THE CONCLUSIONS I HAVE REACHED. SO, AS I SAID UNDER 3143, I DON'T FIND THAT THIS MEETS THE STANDARD.

WE ARE IN A VERY, VERY DIFFERENT SITUATION THAN THE ONE THAT FOLLOWED HIS CONVICTION. WE ARE DOWN TO A SINGULAR ISSUE NOW. HE HAS BEEN TO THE SUPREME COURT, THEY DIDN'T WANT TO HEAR HIS CASE OR HIS FURTHER APPEALS ON THAT. AND THE STANDARD BY WHICH THIS ISSUE THAT IS IN FRONT OF ME IS JUDGED, AT LEAST IN PART, AS A VERY DIFFERENTIAL STANDARD OF THE TRIAL COURT.

SO TO MAKE IT CLEAR, I FIND UNDER 3143 THAT THERE IS A PRESUMPTION FAVORING THAT HE BE DETAINED. TO GET AROUND THAT PRESUMPTION HE HAS TO CONVINCE ME BY CLEAR AND CONVINCING EVIDENCE THAT HE IS EITHER NOT A FLIGHT RISK -- AND I DON'T THINK HE IS. I HAVE SAID THAT ALL ALONG. I LET HIM GO TO HIS DAUGHTER'S HIGH SCHOOL GRADUATION, EVEN AFTER HE HAD BEEN CONVICTED AND REMANDED THE FIRST TIME. HE IS NOT GOING TO SPLIT, I DON'T THINK.

BUT THE OTHER PART OF THAT EQUATION CONCERNS ME, CLEAR AND CONVINCING EVIDENCE THAT HE IS NOT A DANGER. THE CASES HAVE RECOGNIZED ECONOMIC DANGER IS A PART. AGAIN, WITHOUT REFERENCE TO ANYTHING I HAVE REFERRED TO IN THE PAST, THIS IS NEW AND DIFFERENT INFORMATION, AND IT CAUSES ME NOT TO BE ABLE TO MAKE A FINDING THAT CLEARLY AND CONVINCINGLY HE IS NOT AN ECONOMIC DANGER. I THINK HE IS.

IF HE IS DOING WHAT I HAVE PROBABLE CAUSE TO BELIEVE HE IS DOING, BASED ON THE AFFIDAVIT OF MS. CHU AND THE TESTIMONY THAT NO ONE GAVE HIM PERMISSION, NUMBER ONE, HE IS IN VIOLATION BECAUSE OF HIS STATUS. AS A CONVICTED BRIBER HE CAN'T ACT AS A FIDUCIARY. IT APPEARS TO ME THAT HE HAS DONE SO.

NUMBER TWO, AS I SAID, HE HAS NO ENTITLEMENT TO ANY OF THESE FUNDS. AND TAKING THESE FUNDS, EVEN TEMPORARILY FOR THE PURPOSE OF A LOAN, AMOUNTS TO A CONVERSION, A THEFT, IF YOU WILL. AND THAT GIVES ME NO CONFIDENCE THAT HE IS NOT AN ECONOMIC DANGER. HE IS STEALING MONEY THAT DOESN'T BELONG TO HIM.

THIRD, HE HASN'T ACTED AS A FIDUCIARY SHOULD ACT IN THE BENEFIT OF THE PEOPLE FOR WHOM HE IS ENTRUSTED TO LOOK OVER THEIR MONEY.

ALL OF THOSE THINGS PREVENT ME FROM FINDING BY CLEAR AND CONVINCING EVIDENCE THAT HE IS NOT A DANGER.

EVEN IF I AM WRONG ON THAT, MS. CHARLICK, I DON'T FIND, GIVEN THE HIGHLY DIFFERENTIAL STANDARD IN FAVOR OF REVIEW OF LEGAL ISSUES, THAT THIS CASE, IN THIS POSTURE, MEETS THAT. THERE HAS BEEN A CLEAR CHANGE IN CIRCUMSTANCES NOW WITH THE ELIMINATION OF ALMOST ALL OF THE ISSUES THAT MR. WILKES RAISED IN HIS ORIGINAL BRIEFS.

THEN FINALLY, AS I SAID, UNDER FLANAGAN, AT SOME POINT I THINK I AND THE COURT OF APPEALS HAS TO BE CONCERNED ABOUT THE APPEARANCE OF JUSTICE HERE, AND WHETHER A GUY IS KIND OF FLAUNTING EVERY POSSIBLE RULE TO FORESTALL DOING THE SENTENCE THAT HE IS GOING TO HAVE TO DO. AND I AM CONCERNED ABOUT THAT.

THAT DOESN'T FIT NEATLY, I ACKNOWLEDGE, INTO THE 3143 FRAMEWORK. BUT IT OUGHT TO BE ON THE BACK OF THE MIND OF ANY JUDGE WHO IS REVIEWING A BAIL APPLICATION AT A LATE DATE, FIVE YEARS AFTER A CONVICTION THAT HAS BEEN RETURNED IN, WHAT, OCTOBER, I THINK, THE APPELLATE COURT RENDERED ITS DECISION. THE MANDATE DIDN'T ISSUE FOR SOME TIME AFTER THAT, BUT IT HAS BEEN SINCE OCTOBER THAT THE APPELLATE COURT TURNED HIM DOWN AND USED THE CHARACTERIZATIONS THAT I SPOKE TO.

I ALSO HAVE IN MIND, LOOKING AT 3143, THAT IN MY JUDGMENT THIS IS LIKELY TO BE A COME-BACK CASE, AND SO THE THINGS THAT THE THREE-JUDGE PANEL SAID ABOUT THE STATE OF THE EVIDENCE ALSO INFORMS MY DECISION ABOUT THE JUSTICIABILITY OR THE LIKELIHOOD THAT HE IS GOING TO PREVAIL ON THE ISSUE THAT HE HAS RAISED HERE.

SO, IN SHORT, I FIND THAT 3143 APPLIES. THAT THERE IS CHANGED CIRCUMSTANCES HERE, BOTH IN THE POSTURE OF THE CASE AND IN THINGS THAT MR. WILKES, I FIND PROBABLE CAUSE TO BELIEVE AT THIS POINT, BASED ON THE DECLARATIONS, HAS DONE. I ORDER HIM DETAINED AT THIS POINT. I ORDER HIM TO START SERVING THE SENTENCE AND DETAINED.

I AM GOING TO STAY THE ORDER BECAUSE I KNOW YOU DISAGREE WITH THIS AND I KNOW YOU PROBABLY VIGOROUSLY DISAGREE, SO I AM NOT GOING TO HAVE HIM GO INTO CUSTODY. I WILL GIVE YOU

A CHANCE TO GO TO THE COURT OF APPEALS AND SEE IF YOU CAN GET A STAY.

TODAY IS TUESDAY, YOU HAVE UNTIL FRIDAY AT NOON TO OBTAIN THAT STAY FROM THE COURT OF APPEALS. THAT WOULD BE THE 8TH OF JUNE AT NOON.

MR. WILKES, IF THERE IS NO STAY ISSUED BY THEN FROM THE COURT OF APPEALS, THEN YOU ARE TO REPORT TO THE MARSHALS AT NOON ON FRIDAY AND TURN YOURSELF IN TO BEGIN SERVING YOUR SENTENCE.

ANYTHING ELSE?

MR. HALPERN: NO, YOUR HONOR. MS. CHARLICK: THANK YOU.

THE COURT: THANK YOU.

WE ARE IN RECESS.

I CERTIFY THAT THE FOREGOING IS A CORRECT TRANSCRIPT FROM THE RECORD OF PROCEEDINGS IN THE ABOVE-ENTITLED MATTER.

S/LEEANN PENCE 6/6/12

LEEANN PENCE, OFFICIAL COURT REPORTER DATE

20120605

© 1992-2012 VersusLaw Inc.



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