12-2297 Karron CoA Appendix v11

7/28/2019 12-2297 Karron CoA Appendix v11

1/343

12-2207 Karron v USA Certificate of Appealability Brief AppendixPage 28

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

FOR THE SECOND CIRCUIT

Docket No. 12-2297

DANIEL B. KARRON,

Petitioner - Appellant,

v.

UNITED STATES OF AMERICA,

Respondent - Appellee.

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

APPENDIX Volume 11 FOR THE PETITIONER - APPELLANT

D.B.KARRON

pro se

348 East Fulton StreetLong Beach, New York 11561

(516) 515- [email protected]


2/343

Table of Contents

NOTE: Page Numbers are not correct and need to be hand entered because

of hand insertion of PDF. Contents for ordering, not for reference. Citations intopage numbers are being checked.


3/343

Contents

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

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


4/343

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

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

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

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

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


5/343

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

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


6/343

APPENDIX VOLUME PAGES

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

Volume V3 KA-600 KA-899




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




Volume V11 KA-3100 KA-3332 END

Table 1 Appendix Volume Pages


7/343

1265

86bzkar 1 Summat i on - Mr . Kwok

1 Ri l ey' s data base. So l et ' s go t ake a l ook at government

2 Exhi bi t 110, page 38 of 44, t hey ar e al l r i ght t her e.

3 Ms. Ri l ey i s an audi t or . She mi ght not have been t he most

4 art i cul ate wi t ness, but she di dn' t over l ook t hese checks. What

5 gover nment exhi bi t 110, page 38 of 44 shows, i s t hat whi l e Dr .

6 Karr on di d put money i nto CASI , he al so made CASI l oan hi m

7 money, a l ot of money. And at t he end of t he day, once you

8 subt r act t he numbers, and you t ake i nto account t ax

9 wi t hhol di ng, Dr . Kar r on ended up t aki ng out more money f r om

10 CASI t han what he l oaned CASI and what he i s ent i t l ed t o i n

11 sal ary. And t he ATP gr ant ended up bei ng t he onl y sour ce of

12 f undi ng t hat went i nt o CASI ' s busi ness account i n year one.

13 And t hat ' s exact l y what government Exhi bi t 112 shows.

14 But you don' t have t o r el y on numbers al one. You al so

15 heard t he t est i mony of Lee Ger f ei n. Mr . Ger f ei n t ol d you t hat

16 he spent 25 per cent of hi s t i me at CASI f und r ai si ng t r yi ng t o

17 get CASI addi t i onal sour ces f undi ng, asi de f r om t he ATP f und.

18 But Mr . Ger f ei n t ol d you he was unsuccessf ul and di dn' t br i ng

19 i n any money at al l whi l e he was at t he company dur i ng year one

20 of t he gr ant . Hi s t est i mony i s f ul l y consi st ent wi t h what

21 government Exhi bi t 112 shows.

22 Now l et ' s go t o year t wo, government Exhi bi t 113.

23 Agai n f or year t wo, t he pur pl e area r epr esent s how CASI ' s

24 accounts were f unded by t he ATP grant on t hat . You can see f or

25 your sel ves t hat f or vi r t ual l y al l t he money, i t came f r om ATP

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

KA-3100 KA-3100 KA-31


8/343

1266


1 except f or a t i ny sl i ce t here, whi ch summed up t o appr oxi matel y

2 $1700, whi ch came f r om mi scel l aneous r ef und checks. Agai n,

3 t hi s i s f ul l y consi st ent wi t h t he t est i mony of t he l ast

4 busi ness manager , Bob Benedi ct , who t ol d you t hat ATP was

5 CASI ' s onl y sour ce of f undi ng.

6 Let ' s t ur n now t o how t he def endant spent al l t hat

7 money. I sai d how t he def endant spent al l t hat money, because

8 as you heard f r om t he busi ness managers Lee Gur f ei n and Bob

9 Benedi ct , t he def endant was t he onl y person who had si gni ng

10 aut hor i t y. And as you can see f or your sel f i n t he checks, D.

11 B. Kar r on was t he onl y one who act ual l y si gned checks.

12 When J udge Pat t erson i nst r uct s you on t he l aw l ater , I

13 expect you wi l l l ear n t hat t o sat i sf y t he r equi r ement of t he

14 st at ut e, t he amount of mi sappl i cat i on t he government woul d need

15 t o pr ove i s $5, 000 and more. So l et ' s t ake a l ook at

16 government exhi bi t 114 and see what happened t o t he money i n

17 year one.

18 As Ms. Ri l ey expl ai ned t o you, t he chart t o t he l ef t

19 shows t he break down by budget cat egor i es, accordi ng t o t he

20 appr oved budget , how t he money i s supposed t o be spent . The

21 chart t o t he r i ght shows what actual l y happened, what actual l y

22 happened t o t he money. Remember , al l t he government needs t o

23 pr ove i s $5, 000 i n mi sappl i ed f unds. For get about ever yt hi ng

24 el se i n t hi s char t f or now, j ust l ook at t he r ent . Rent al one

25 was $60, 000, 12 t i mes, 12 t i mes, l adi es and gent l emen, above


KA-3101 KA-3101 KA-31


9/343

1267


1 t he $5, 000 t hr eshol d.

2 You heard a l ot of t est i mony about r ent . Hope Snowden

3 t est i f i ed t hat you coul dn' t use r esear ch money t o pay r ent ,

4 per i od. I t doesn' t mat t er whether you used t he condo i n part

5 as an of f i ce. I t doesn' t mat t er t hat ATP i s t he onl y pr oj ect

6 t he company i s worki ng on; no means no. And t hat ' s because t he

7 ATP pr oj ect i s t o f und hi gh r i sk sci ent i f i c r esear ch, not

8 overhead expenses t hat ever y busi ness has t o pay. And t he

9 def endant t r i ed t o get r ent appr oved, usi ng di f f er ent

10 j ust i f i cat i ons, but he was expl i ci t l y t ol d no, t i me and t i me

11 and t i me agai n. And t he def endant di dn' t j ust hear i t f r omt he

12 NI ST peopl e. The def endant got the same no answer f r om hi s t wo

13 busi ness managers, Lee Ger f ei n and Bob Benedi ct , who contact ed

14 NI ST at t he def endant ' s r equest , got t he same no answer and

15 t ol d t he def endant no. The def endant got t he same no answer

16 f r om hi s bookkeeper Frank Spr i ng. Despi t e al l t hese no

17 answers, we al l know what happened. The def endant sai d he

18 coul d do what ever he want ed. He sai d t he peopl e at NI ST l oved

19 hi m. He went ahead and he di d i t anyway.

20 Ladi es and gent l emen, t he government coul d st op r i ght

21 her e and meet t he $5, 000 t hreshol d r equi r ed by t he st at ute, but

22 we di dn' t st op t here because t he cr i me t he def endant commi t t ed

23 got wor se, much wor se. Once t he def endant deci ded t o cheat , he

24 deci ded t o go al l out . Af t er al l , why l i mi t your sel f to r ent .

25 Ut i l i t i es are sort of l i ke rent , r i ght . You can' t wor k or l i ve


KA-3102 KA-3102 KA-31


10/343

1268


1 i n a pl ace wi t hout el ectr i ci t y or ai r condi t i oni ng, r i ght . So

2 l et ' s use gr ant money t o pay f or t hat too. And t hat ' s exact l y

3 what he di d, over $16, 000 i n ut i l i t i es i n year one al one. But

4 wai t . Why l i mi t t o r epr esent and ut i l i t i es? Af t er al l , you

5 can' t l i ve or wor k i n a pl ace t hat ' s t oo messy, r i ght , so l et ' s

6 hi r e a cl eani ng l ady and t o do some dust i ng and wi pi ng and have

7 t axpayer s pay f or t hat too. And t hat ' s exact l y what he di d,

8 cl eani ng over $5, 000 i n year one. Why st op t her e? Af t er al l ,

9 you can' t wor k i f you' r e hungr y, r i ght . So l et ' s t hr ow i n

10 meal s f or good measur e, and have Uncl e Sam pay f or that t oo.

11 Cl ose t o $2, 000 i n year one al one.

12 Now, you r emember Mr . Rubi nst ei n aski ng Ms. Ri l ey

13 quest i ons about meal s. He showed her r ecei pts of meal s t hat

14 Dr . Kar r on had wi t h handwr i t t en not at i on on t he back showi ng

15 t hat he ate wi t h other peopl e. You r emember t hat . Wel l , so

16 what . Does anyone ser i ousl y t hi nk t hat you can go t o I Hop as

17 def endant di d, and have t axpayers pi ck up t he t ab because you

18 cl ai m you t al ked about t he pr oj ect over pancakes? Ther e' s no

19 l i ne i t em i n appr oved budget f or meal s, so you can' t pay f or

20 meal s wi t h gr ant money, per i od. I t i s t hat si mpl e.

21 But no, def ense counsel sai d i t ' s not so si mpl e

22 because t here' s t hi s category cal l ed other s t hat maybe you can

23 f i t i t i n. Wel l , guess what? Thi s i s not a game t o see who

24 coul d come up wi t h t he cl ever est ar gument t o see whet her you

25 coul d make somet hi ng f i t . Ther e ar e r ul es. Ther e ar e wr i t t en


KA-3103 KA-3103 KA-31


11/343

1269


1 budget s. And so l et ' s go t o gover nment exhi bi t 10B, page

2 seven. Thi s i s t he pr oposed budget the def endant hi msel f

3 submi t t ed t hat NI ST l ater appr oved. You can see what others i s

4 r ef err i ng t o. I t ' s ref er r i ng t o audi t s, not meal s; audi t s,

5 t hat ' s i t . And so no, t he def endant coul dn' t go t o a

6 r est aur ant , cl ai m he was t al ki ng about t he pr oj ect over di nner

7 and have t he f eder al gover nment pay f or i t . I nst ead, he needed

8 t o pay f or i t hi msel f f r om hi s own sal ar y, j ust l i ke ever ybody

9 el se i n New Yor k Ci t y who doesn' t get a f ederal gr ant .

10 Bef ore I l eave gover nment exhi bi t 114, l et me j ust

11 make one mor e poi nt . Remember when Ms. Ri l ey was up on t he

12 st and. Mr . Rubi nst ei n spent a good part of t he morni ng

13 cr oss- exami ni ng her about her audi t f i ndi ng about Lee Ger f ei n' s

14 sal ary. Remember t hat? Mr . Rubi nst ei n kept aski ng Ms. Ri l ey

15 why she di sal l owed 25 per cent of Mr . Gerf ei n' s sal ary, when t he

16 appr oved budget - - i t was made cl ear that Mr . Ger f ei n coul d

17 spl i t hi s t i me 75 on t he pr oj ect , 25 on ever ythi ng el se? And

18 Mr . Rubi nst ei n kept pushi ng and pushi ng t o t r y Ms. Ri l ey t o

19 admi t t hat she made a mi st ake i n her audi t . And Ms. Ri l ey

20 t r i ed t o expl ai n how she di dn' t make a mi st ake t hat had

21 somethi ng t o do wi t h t ax wi t hhol di ng and t he di f f erence between

22 expect ed and act ual sal ary; you r emember al l t hat ? But you

23 know what , l adi es and gent l emen, at t he end of t he day, none of

24 t hat mat t er s. As you can see on t hi s chart , when Ms. Ri l ey di d

25 her anal ysi s usi ng t he bank r ecords as opposed t o her audi t s,


KA-3104 KA-3104 KA-31


12/343

1270


1 whi ch were based on t he company' s books and r ecor ds, she gave

2 t he def endant ever y benef i t of t he doubt . Look at t hi s

3 your sel f . Under t he budget f or ot her empl oyees sal ar y, l et ' s

4 go back t o t he l ast page. For ot her empl oyees sal ary budget ed

5 f or $450, 000, not a si ngl e cent of ot her empl oyees sal ary was

6 di sal l owed. I n f act , accor di ng t o gover nment Exhi bi t 114, t he

7 company was act ual l y under budget under t he cat egory of ot her

8 empl oyees sal ar i es. For equi pment , Mr . Rubi nst ei n al so asked

9 Ms. Ri l ey about whet her she exami ned ever y pi ece of equi pment

10 t hat CASI bought . Remember al l t hat ? Agai n, Ms. Ri l ey gave

11 t he def endant ever y benef i t of the doubt . Agai n, i n t hi s

12 anal ysi s, Ms. Ri l ey wasn' t even second guessi ng whether

13 def endant bought t he equi pment r el ated t o hi s r esear ch f or

14 equi pment . The onl y amount that she di sal l owed was t he amount

15 over budget , t hat ' s i t .

16 So what i s t he end r esul t of t he def endant ' s conduct ?

17 Even gi vi ng hi m t he benef i t of t he doubt ? Over $268, 000 i n

18 mi sappl i ed f unds i n year one al one. Make no mi st ake, t hi s i s

19 t axpayer s money, because as you saw i n t he pur pl e char t s j ust

20 now, t he ATP pr ogr am was t he onl y sour ce of f undi ng i n CASI ' s

21 busi ness accounts i n year one.

22 And i n year t wo, def endant di dn' t get t hr ough t he

23 whol e year because he got shut down, but he bl ew away over

24 $196, 000 i n j ust ni ne months, spendi ng money on t he same i t ems

25 t hat he was t ol d t i me and agai n he coul d not spend grant money


KA-3105 KA-3105 KA-31


13/343

1271


1 on; t hi ngs l i ke r ent , ut i l i t i es, cl eani ng l ady, and meal s.

2 Now t hat we' ve wal ked t hr ough t he number s, l et ' s t ur n

3 t o t he def endant ' s i nt ent . I expect J udge Pat t er son wi l l

4 i nst r uct you l at er t hat t o f i nd t he def endant gui l t y you need

5 t o f i nd t hat he i nt ent i onal l y mi sappl i ed t he gr ant money; i n

6 other words, t hat t he def endant ' s conduct wasn' t si mpl y t he

7 r esul t of a mi st ake or mi sunder st andi ng. So what i s t he

8 evi dence t o show you t hat t he def endant knew f ul l wel l what he

9 di d was wr ong? Let ' s st art f r om t he begi nni ng wher e t he

10 def endant hi r ed Mr . Lee Ger f ei n as hi s busi ness manager .

11 Mr . Ger f ei n t ol d you t hat when he was f i r st hi r ed, t he

12 def endant agr eed t o an ar r angement wher e each check over $250

13 woul d have t o be co- si gned by hi msel f , Mr . Ger f ei n, and Dr .

14 Kar r on. That was t he under st andi ng Mr . Ger f ei n had when he got

15 j ob. Then what happened? Wi t hi n a week t he grant money came

16 i n, t he def endant wr ot e t hi s l et t er , Gover nment exhi bi t 21,

17 page t hr ee, t aki ng t he si gni ng aut hor i t y away f r om Mr . Ger f ei n.

18 Now, l adi es and gent l emen, why di d t he def endant do t hat? I t ' s

19 si mpl e. The def endant di d t hat because he want ed excl usi ve

20 cont r ol of the gr ant money. St r i ppi ng Lee Ger f ei n of hi s

21 si gni ng aut hor i t y was necessar y because def endant was al r eady

22 pl anni ng t o use money f or hi s own benef i t . One week i nt o t he

23 progr am, and t he def endant was al r eady t hi nki ng ahead. I n

24 f act , t he def endant made no secret of t hi s at t he t i me.

25 Mr . Ger f ei n t ol d you t hat when t he grant money came i n, Dr .


KA-3106 KA-3106 KA-31


14/343

1272


1 Karr on t r ansf er r ed $75, 000 i nt o hi s own account t o pay of f

2 f ami l y and cr edi t card debt t hat he had been r acki ng up f r om

3 ever y day l i vi ng expenses. Mr . Ger f ei n t est i f i ed t hat he t ol d

4 t he def endant he coul dn' t do t hat , he coul dn' t spend gr ant

5 money t hi s way. The def endant sai d he had t o do i t , he had t o

6 pay t he bi l l s. And Mr . Ger f ei n, af t er he had been st r i pped of

7 hi s si gni ng aut hor i t y, coul dn' t st op hi m because t hi s was

8 al r eady a done deal .

9 What el se shows you t he def endant knew f ul l wel l what

10 he di d was wr ong? Let ' s f ocus on r ent agai n, because i t ' s such

11 a bi g i t em. Ti me and agai n, peopl e t ol d hi m he coul dn' t use

12 grant money t o pay r ent , no mat t er what . The grant peopl e,

13 Ms. Li de, Ms. Snowden, t ol d hi m no at t he ki ckof f meet i ng, t hey

14 t ol d hi m no i n t el ephone and i n per son conver sat i ons.

15 Def endant ' s own empl oyees t ol d hi m no. Dr . Kar r on asked Lee

16 Ger f ei n t o cal l t he gr ant on hi s behal f . And when Mr . Ger f ei n

17 got the no answer , he r el ayed t hat i nf ormat i on back t o t he

18 def endant . And Bob Benedi ct even bef ore he was hi r ed, t ol d t he

19 def endant no, and he kept t el l i ng t he def endant no af t er he

20 came on board t o CASI .

21 Af t er al l t hese conver sat i ons, does anyone bel i eve f or

22 a mi nute t hat t he def endant di dn' t know he coul dn' t use gr ant

23 money t o pay r ent ? Of cour se not .

24 But what cl i nches t he case agai nst t he def endant on

25 hi s i nt ent i s t he def endant ' s own st atement s. Look now at


KA-3107 KA-3107 KA-31


15/343

1273


1 gover nment Exhi bi t 213. Thi s i s an e- mai l you saw a f ew days

2 ago f r om Dr . Kar r on t o someone named Ti a Lor r ai ne, dat ed

3 December 18t h, 2002. Readi ng f r om t he f our t h l i ne of t he

4 bot t om of t he page, l et ' s zoom t hat i n.

5 " I wi l l make a l ease wi t h Wi ndy and make l i ke I onl y

6 keep a f ol di ng bed on 33r d St r eet . I f ATP buys i nt o t hi s i dea,

7 t hen I can char ge my r ent on t he apar t ment t o t he grant and pay

8 my mor t gage. "

9 Ther e' s no mi st aki ng t he def endant ' s i nt ent her e. He

10 t ol d a f r i end he woul d "make l i ke" that he keeps a f ol di ng bed

11 on 33r d St r eet and he was hopi ng t hat ATP woul d "buy i nt o t hi s

12 i dea. " Thi s e- mai l i s devast at i ng pr oof of t he def endant ' s

13 i nt ent i n hi s own words. But i f you need more pr oof of t he

14 def endant ' s cr i mi nal i nt ent , t ake a l ook at t hese i t ems; a

15 bl ender , a GPS t r acki ng devi ce, di gi t al camer a, a box of

16 dr i l l s, a dust bust er .

17 Now, l adi es and gent l emen, t hese may not be t he most

18 expensi ve i t ems i n t he wor l d, but can anyone ser i ousl y t hi nk

19 t hat t hese i t ems are r el ated t o t he def endant ' s r esear ch on

20 sur ger y and comput er i magi ng? These i t ems he bought j ust show

21 you hi s mi nd set . They t el l you t hat , when t he def endant sai d

22 he coul d do what ever he want ed, t hat he coul d j ust schmooze

23 wi t h peopl e and t ake t hem out t o l unch and everyt hi ng woul d be

24 okay, he meant every word he sai d. But t her e' s more. When

25 year one was over and t he audi t or was begi nni ng t o l ook at t he


KA-3108 KA-3108 KA-31


16/343

1274


1 books, what di d t he def endant do? Fr ank Spr i ng t ol d you what

2 t he def endant di d, t he def endant changed t he books. You saw

3 t hose e- mai l s. Mr . Spr i ng asked def endant t o st op mucki ng

4 about i n t he books, and st op r echaracteri zi ng expenses as

5 r el ated t o t he gr ant when t hey r eal l y wer en' t . And what

6 happened? The def endant kept changi ng t he books. I s t hat t he

7 behavi or of someone who has no cl ue what he di d was wr ong? Of

8 cour se not . Common sense t el l s you t hat ' s t he behavi or of

9 someone who knew what he di d was wr ong and was doi ng hi s mi ght y

10 best t o hi de i t as best he coul d.

11 Ladi es and gent l emen, make no mi st ake, t hi s i sn' t a

12 case about a mi sunderst andi ng. Thi s i sn' t a case about someone

13 get t i ng caught up i n some compact grant r ul es and f orgot t o dot

14 t he I ' s or cross t he T' s. Thi s i s a si mpl e case about t he

15 def endant , a Ph. D. sci ent i st , wi l l f ul l y cheat i ng t he gover nment

16 wi t h hi s eyes wi de open.

17 When you appl y your common sense t o t he evi dence

18 pr esent ed bef ore you, and when you l i st en cl osel y t o J udge

19 Pat t er son' s i nst r uct i ons on t he l aw, t her e' s one and onl y one

20 concl usi on t hat ' s support ed by t he evi dence and t he l aw, and

21 t hat i s a ver di ct of gui l t y on t he count t hat ' s char ged i n t he

22 i ndi ct ment . Thank you.

23 THE COURT: Al l r i ght . Mr . Rubi nst ei n.

24 MR. RUBI NSTEI N: Coul d I st ep out f or a mi nut e J udge?

25 Coul d I have a personal moment? Thank you.


KA-3109 KA-3109 KA-31


17/343

1275


1 THE COURT: Al l r i ght . Does t he j ury need a br eak?

2 Anyone of you need a br eak? Al l r i ght .

3 ( Cont i nued on next page. )

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


KA-3110 KA-3110 KA-31


18/343

1276

86B7KAR2 Summat i on - Mr . Rubi nst ei n

1 MR. RUBI NSTEI N: May I proceed, your Honor ?

2 THE COURT: Yes. Go ahead.

3 MR. RUBI NSTEI N: I f t he Cour t pl eases, peopl e of t he

4 pr osecut i on, Dr . Karr on and my associ ate you never met , Wi l l i am

5 Di Sent o, madam f or el ady, l adi es and gent l emen of t he j ur y, thi s

6 i s my oppor t uni t y t o shar e wi t h you what I bel i eve t hat t he

7 evi dence showed.

8 Now, l et me say at t he out set t hat i t ' s your

9 r ecol l ect i on t hat cont r ol s. You have been si t t i ng her e

10 wat chi ng t he wi t nesses, observi ng t he exhi bi t s t hat ar e i n

11 evi dence. I have been concent r at i ng on my exami nat i on of t he

12 wi t nesses, and i f I mi sspeak as t o what any par t i cul ar wi t ness

13 may have sai d, i t ' s your recol l ect i on t hat cont r ol s, not mi ne.

14 I f t here i s a quest i on amongst you as t o what a

15 part i cul ar wi t ness sai d, you have t he r i ght t o come back and

16 ask f or t he t r anscr i pt t o be gi ven t o you or r ead t o you by t he

17 cour t r epor t er , what ever the syst em i s t hat J udge Pat t er son may

18 have. But you get t he exact words t hat were sai d. And I wi l l

19 at t empt t o be as accur at e as humanl y possi bl e.

20 What i s t he pur pose of summat i on? The pur pose of

21 summat i on i s f or each par t y t o gi ve t he j ur y t hei r sense of

22 what t he evi dence shows and what i nf erences can f ai r l y and

23 r easonabl y be drawn.

24 Now, af t er I f i ni sh speaki ng, t he pr osecut or has an

25 opport uni t y t o r ebut . He can si t t her e wi t h a pad, wr i t e down


KA-3111 KA-3111 KA-31


19/343

1277


1 notes and gi ve you answer s t o what I have r ai sed i n t hi s

2 summat i on. And ever ybody i n l i f e l i kes t o have t he l ast word,

3 but t he r eal i t y i s t hat you f ol ks have t he l ast wor d, because

4 you col l ect i vel y and i ndi vi dual l y coul d answer t hei r argument s

5 f or Dr . Kar r on t hat I ' m not abl e t o because I don' t have a

6 chance t o t al k agai n.

7 As a mat t er of f act , no mat t er how hard I may prepare,

8 t her e i s no way i n t he wor l d t hat I am goi ng t o come and gi ve

9 you al l t he argument s t here are or even t he best ar gument s.

10 You f ol ks have a f ant ast i c oppor t uni t y as j ur or s. The

11 second hi ghest cal l i ng i n t hi s count r y next t o war t i me servi ce

12 i s si t t i ng on a cr i mi nal j ur y, j udgi ng a f el l ow human bei ng.

13 Thi s i s a hi gh cal l i ng. I t ' s what di st i ngui shes our soci et y

14 f r om many ot her s, because you st and bet ween j ust i ce and

15 i nj ust i ce. Ever y pl ace has a pr osecut or, but not many pl aces

16 have j ur ors who come and si t and del i berat e.

17 Now, you may not i ce t hat when you come i nt o t hi s

18 cour t r oomand when you l eave t hi s cour t r oom we al l r i se f or

19 you, and we do t he same when J udge Pat t erson comes i n, because

20 t hat i s t he r everance and t he r espect t hat we have f or each and

21 ever y one of you as j ur ors.

22 You ar e t he sol e and excl usi ve j udges of t he f act s.

23 They can' t t el l you what t he f act s ar e. I can' t t el l you what

24 t he f act s are. You t el l me what t he f act s are.

25 I can t al k about t he evi dence. I can t al k about t he


KA-3112 KA-3112 KA-31


20/343

1278


1 l ack of evi dence. I can t al k about bur dens, but you are t he

2 sol e t r i er s of t he f act s. You deci de what you bel i eve, what

3 you accept , what you don' t bel i eve, what you quest i on. That i s

4 your r ol e.

5 The j udge, he i s t he j udge of t he l aw, t he sol e and

6 excl usi ve j udge of t he l aw. I as a l awyer have a r i ght to

7 di sagr ee wi t h hi m r espect f ul l y, but I t el l you one t hi ng about

8 J udge Pat t erson t hat you know by now: Nobody r espect s j ur ors

9 more t han he does. Get t i ng i n on t i me, keepi ng hi s commi t ment

10 t o you of endi ng a case, t hat ' s t he way he f unct i ons, because

11 he under st ands what a hi gh dut y you have and what a ser vi ce you

12 are per f ormi ng.

13 Now, when you come i nt o t hi s cour t house and you ar e

14 goi ng t owards t he el evat ors you have seen t he Lady of J ust i ce

15 wi t h her scal es out t her e. And i t ' s i nt er est i ng t hat our

16 f or eper son i s a l ady. And what i s she? She i s bl i ndf ol ded;

17 she i s not bl i nd. She i s bl i ndf ol ded. The r eason t hat she i s

18 bl i ndf ol ded i s t hat she has t he scal es, she want s t o t r eat

19 ever ybody f ai r l y r egardl ess of your backgr ound, or how you

20 l ook, or how you act , whet her you are a bowery bum or a per son

21 of hi gh st andi ng. And t hen she put s on t hose scal es of

22 evi dence and t hen she sees, she f eel s because she i s

23 bl i ndf ol ded. But she can see - - she i s not bl i nd. She i s onl y

24 bl i ndf ol ded - - whether or not t he bur den has been met by t he

25 government , whet her or not t hey have proved t hei r case beyond a


KA-3113 KA-3113 KA-31


21/343

1279


1 r easonabl e doubt .

2 We' r e her e because t her e was an i ndi ct ment f i l ed

3 agai nst Dr . Kar r on. You heard how many year s t hey were

4 i nvest i gat i ng hi m. The j udge wi l l t el l you t he i ndi ct ment i s

5 no evi dence of gui l t . Dr . Kar r on came i nt o t hi s cour t and he

6 sai d I am not gui l t y, I di dn' t do anyt hi ng wr ong i n t hi s case,

7 and I chal l enge t he government t o prove me gui l t y beyond a

8 r easonabl e doubt . And I submi t t o you t hat t he j udge i s goi ng

9 t o char ge you wi t h what a r easonabl e doubt i s, but each one of

10 you coul d have a di f f er ent r easonabl e doubt , whet her or not you

11 f eel t hat t he pr osecut i on hasn' t br ought enough evi dence bef ore

12 you, whether or not t hey' r e aski ng you t o be specul at i ve,

13 whet her or not you t hi nk t hat some of t hei r wi t nesses weren' t

14 cr edi bl e t hat you woul d r el y upon i n t he ordi nary cour se of

15 l i f e. Each one coul d have one r easonabl e doubt .

16 I f any of t he 12 of you have a r easonabl e doubt - - you

17 don' t have t o agr ee on t he same r easonabl e doubt - - you have t o

18 vot e not gui l t y, because our syst em af t er Dr . Kar r on pl ed not

19 gui l t y, our syst em pr esumes hi m i nnocent , and as you si t her e

20 now and as you ent er t he j ur y r oom you have t o st ar t out sayi ng

21 I pr esume hi m i nnocent , I pr esume t hat he di d not i nt end t o

22 i nt ent i onal l y mi sappr opr i at e any f unds and he di d not i nt end t o

23 commi t a cr i me by spendi ng grant money on purchases.

24 I n f act , when he spent money, he spent money wi t h t he

25 i nt ent t hat t he ATP pr oj ect t hat he was worki ng on woul d


KA-3114 KA-3114 KA-31


22/343

1280


1 succeed and he woul d be successf ul , because I t hi nk i t ' s f ai r

2 t o say t hat a sci ent i st l oves doi ng what t hey do and t hey l ove

3 sci ence.

4 The government wants you t o presume Dr . Kar r on t o be

5 gui l t y. They show you a GPS system - - t hi s i s hi s pi ggy

6 bank - - he bought a GPS syst em so he coul d use i t i n hi s car

7 f or personal use. Di d anybody t est i f y t hat he used t he GPS

8 syst em t o dr i ve around Manhat t an? Di d anybody br i ng any

9 evi dence t o you t hat he needed a GPS syst em f or hi s dai l y l i f e?

10 Wher e di d t hey f i nd t he GPS syst em? Not i n t he car .

11 They f ound i t i n t he apart ment . What does t hat t el l you? He

12 uses i t when he goes on a t r i p. Wher e does he go on t r i ps? He

13 goes t o Washi ngt on D. C. on a grant .

14 Do t hey come and t hey t ake t he GPS syst em and check i t

15 out and see where t he l ast dest i nat i on i s? These GPS syst ems,

16 t hey' r e el ect r oni c, and you can f i nd out where he went i f he

17 set hi s cour se.

18 Have any of you ever gone t o Washi ngt on D. C. and got

19 l ost on t he bel t way and coul dn' t f i nd your way around? No,

20 t hey want you t o specul at e and assume he used t he GPS syst em

21 f or an i mpr oper purpose. They don' t want t o show you anyt hi ng.

22 They t al k about a camera. A camera. They have t he

23 ar r ogance t o suggest t o you t hat he used t he camera f or hi s

24 per sonal use. Show us t he pi ct ur es. I t ' s a di gi t al camer a.

25 No, her e i s t he camera, you don' t use a camera. Why


KA-3115 KA-3115 KA-31


23/343

1281


1 don' t you use a camera i f you are a sci ent i st ? Maybe somethi ng

2 breaks on t he machi ne, on one of t he comput ers, and you t ake a

3 di gi t al pi ct ur e of i t and you e- mai l i t out t o t he manuf act ur er

4 and he t el l s you how t o f i x i t . Or you t ake pi ct ur es of t he

5 peopl e worki ng i n t he l abs so t hat when you make

6 pr esent at i ons - - you know he went al l over maki ng pr esent at i ons

7 about t hi s ATP gr ant . Why can' t he use t he camera? I f he was

8 a dent i st , he coul d have a camera. No, he can' t have a camera,

9 t hat ' s f or hi s per sonal use.

10 Di d t hey show you pi ct ur es of Dr . Karr on on hi s bi ke

11 wi t h Wi ndy Farnswor t h r i di ng around Manhat t an? No. No. But

12 t hey want you t o specul at e. They want t o suggest t o you t hat

13 ei t her i t ' s not i n t he budget , or i f i t ' s i n t he budget i t ' s

14 unr el at ed t o t he grant . Wher e di d t hey show you t hat anyt hi ng

15 was unr el ated t o t he gr ant except f or specul at i on and smi l es?

16 You know, t hey t al k about t hese ATP r ul es as i f t hey

17 were t he Ten Commandment s. These ar e broad r ul es. You don' t

18 go t o j ai l because you don' t f ol l ow some gr ant rul es. What

19 ki nd of count r y woul d t hi s be i f t hose wer e t he r ul es? You

20 t hi nk t hey had a bi g si gn l i ke where t hey have t he no smoki ng

21 si gn and t hey have t he ci r cl e and t he t hi ng, vi ol at e any of

22 t hese r ul es you go di r ect l y t o j ai l ? Thi s i s a quest i on of

23 peopl e havi ng di sagreement s on what i s al l owed and what i s not

24 al l owed. That ' s what i t i s.

25 And does Dr . Karr on have t he r i ght t o di sagr ee wi t h


KA-3116 KA-3116 KA-31


24/343

1282


1 peopl e t hat work f or hi m or di sagr ee wi t h peopl e i n ATP? Does

2 he have a r i ght t o di sagr ee and say t hat I t hi nk t hat t hese

3 expenses are al l owabl e? Or i s he compel l ed t o be l i ke t he

4 pr osecut or, say t hese are t he r ul es, you br eak one r ul e you go

5 di rect l y to j ai l ?

6 Wher e does t he evi dence come f r om? They t al k about

7 Ri l ey' s work. Remember , Ri l ey' s work was cr eated af t er t hey

8 cl osed t he gr ant down. I cr oss exami ned her . When di d you

9 pr epar e t hi s; i t says 2008 on i t ? She says, no, no, no, I di d

10 i t bef or e; thi s i s j ust a r edone.

11 So, af t er t hey cl osed t he gr ant down, t hey go and

12 l ook, how do we j ust i f y what we di d? And now we' r e goi ng t o

13 t ake ever y pi ece of paper you have, and we' r e goi ng t o show you

14 t hat you spent your money wr ong.

15 Wel l , i t r emi nds me of an ol d st or y i n j ol l y ol d

16 Engl and when t her e were l ords and bar r ons and bi shops, and t hi s

17 baron was r i di ng t hr ough t he f orest , and he not i ced t hat on a

18 number of t r ees t her e was an ar r ow, and t her e was a ci r cl e

19 dr awn around t he arr ow, a bul l s- eye, and he was r eal l y

20 i mpr essed. So he cal l ed hi s kni ght s i n, and he sai d I want you

21 t o f i nd t hat ar cher , I want t o make hi m t he kni ght of archer y

22 of my f i ef dom. And t hey went and t hey scour ed t he f orest and

23 t hey f ound t hi s f el l ow who was t he archer . The barr on i nvi t ed

24 ever ybody i n t he area t o come and see hi s new kni ght of ar cher y

25 per f orm. There were hundreds of peopl e, and t he archer , t hey


KA-3117 KA-3117 KA-31


25/343

1283


1 put out a t ar get , a hundr ed yar ds, 200 yar ds, t he archer f i r es,

2 mi sses t he t arget by a mi l e. He t r i es agai n, mi sses agai n.

3 They now move t he t ar get i n, he st i l l can' t hi t t he t ar get .

4 Now, t he bar r on i s pr et t y embar r assed by t hi s showi ng,

5 so he says t o t he archer, bef ore I behead you t el l me t hat you

6 are not t he man who f i r ed t hose arr ows t hat were i n t hose

7 t r ees. He sai d, I am, si r e. He sai d, wel l , how wer e you abl e

8 t o hi t al l of t hose bul l s- eyes? He says, si r , I st ood on t he

9 edge of t he f or est , I f i r ed my ar r ows i nt o t he ai r , and

10 wher ever they l anded I drew a ci r cl e around i t .

11 And t hat ' s what t hey di d her e. They have no

12 bul l s- eyes. They don' t have one. They put an exhi bi t up

13 dur i ng summat i on; t hey don' t check anythi ng out . I t i s

14 absol ut el y amazi ng, t hey check nothi ng out . Dr . Karr on ate at

15 I HOP. Wow, check your Amer i can Expr ess bi l l , see i f I HOP i s i n

16 Vi r gi ni a, r i ght near Washi ngt on D. C. , wher e he goes on busi ness

17 t o vi si t t he gr ant peopl e i n Mar yl and and Vi r gi ni a and

18 Washi ngton D. C.

19 Ask your sel f - - and I say t o you t he arr ows are t he

20 i nt ent her e - - whether or not he i nt ended t o do anyt hi ng wr ong.

21 Ar e t hey ki ddi ng, you can' t go on a meal ? Do you t hi nk t hat

22 Ri l ey pai d f or her own l unch? The government pai d f or her own

23 l unch when she went out wi t h Dr . Kar r on, Hayes and Benedi ct .

24 Who do you t hi nk pai d f or her l unch? She came i n f r om At l ant a.

25 You don' t t hi nk she get s r ei mbur sed f or her l unch? You don' t


KA-3118 KA-3118 KA-31


26/343

1284


1 t hi nk peopl e have a r i ght i n busi ness i f t hey have a busi ness

2 l unch t o deduct i t ?

3 Ri l ey even deduct ed t he l unch she went t o. She

4 deduct ed t he cost of t he l unch she went t o wi t h Dr . Karr on,

5 Benedi ct and Hayes. And she di sal l owed hi s l unch and every

6 other meal f or t hat mat t er.

7 I guess t he ol d Br ookl yn expressi on "you t hr ow enough

8 agai nst t he wal l , somet hi ng i s goi ng t o st i ck" i s what t hi s

9 case i s al l about .

10 The pr osecut i on st art ed t hi s case i n 2003. When di d

11 t hey speak t o t he wi t nesses? Di d t he pr osecut ors i n t hi s case

12 speak t o one wi t ness bef ore Apr i l or May of 2008? I t ' s a

13 si mpl e case. We got t he GPS, we have di f f er ent t hi ngs, we' ve

14 got r oach ki l l er .

15 So, I submi t t o you r espect f ul l y t hat you can' t use

16 suspi ci on - - as t hey have - - or specul at i on t o convi ct

17 somebody. Dr . Kar r on di d not use t he NI ST ATP money as hi s own

18 pi ggy bank.

19 The quest i on i s even i f i t ' s nonal l owabl e, at t he end

20 of t he day does t hat equal cr i mi nal i t y?

21 Remember , t her e was a whol e audi t process, an ent i r e

22 audi t pr ocess where t hey had t hi s agr eement r esol ut i on t hat was

23 never af f or ded t o Dr . Kar r on. I n other words, under t he syst em

24 i f af t er Ri l ey does her audi t , you t hen can appeal t he audi t t o

25 t he ATP NI ST peopl e t o see whether or not t hey are goi ng t o


KA-3119 KA-3119 KA-31


27/343

1285


1 al l ow t hose expenses. They never had t hat process. So, you

2 don' t know as you si t t here now - - and you can' t specul ate I

3 submi t t o you - - whether or not ATP woul d have appr oved i t .

4 I t hi nk sadl y - - and I ' m goi ng t o get i nt o t hi s wi t h

5 Benedi ct - - t hat t hey pr obabl y woul d have been f orced not t o go

6 al ong wi t h i t f or reasons t hat I wi l l t al k about .

7 Al so, you know, i t ' s i nt er est i ng, t he gover nment sai d

8 i n t hei r openi ng on page 39, " Fi nal l y, you wi l l be seei ng a

9 number of document s t hat wi l l show you t he f r aud i n cl ear bl ack

10 and whi t e, and i n par t i cul ar you wi l l see an anal ysi s of t he

11 def endant ' s per sonal bank account and bank accounts at CASI . "

12 Do you r emember when I cr oss- exami ned Ri l ey? She

13 never saw t he def endant ' s per sonal bank account , she never

14 l ooked at hi s per sonal bank account . She di dn' t gi ve a darn

15 about hi s per sonal bank account because she was l ooki ng t o put

16 ci r cl es ar ound ar r ows. So, she has t hi s chart t hat they put up

17 on t he board, Gover nment Exhi bi t 115, and she has no

18 cont r i but i ons. And when does she f i nd any cont r i but i ons? I n

19 2004, af t er t he gr ant i s st opped and she i s l ooki ng over .

20 By t he way, Ms. Ri l ey f r om t he OI G, what cr edi t car ds

21 of Dr . Karr on' s di d you happen t o l ook at? Hi s Ameri can

22 Express car d.

23 And of cour se you di sal l owed ever yt hi ng on hi s

24 Amer i can Expr ess card t hat he used f or busi ness.

25 Basi cal l y.


KA-3120 KA-3120 KA-31


28/343

1286


1 What about hi s Mast ercar d?

2 Wel l , I never l ooked at hi s Master car d. I never saw

3 hi s Mast er car d. I di dn' t ask f or hi s Mast er car d. I di dn' t

4 l ook f or hi s per sonal account s, I di dn' t l ook f or hi s

5 Mast ercar d.

6 The def ense put i n t he Mast ercar d, and when you l ook

7 at t he Mast er card you are goi ng t o f i nd t hat on t he Mast er car d

8 st at ement i n Oct ober of 2001, March of 2003, you are goi ng t o

9 see Dat avi si on, t he same t hi ng you see on t he Amer i can Express.

10 I n ot her words, he i s spendi ng hi s own money on grant - r el at ed

11 i t ems wi t h hi s own cr edi t car d. That ' s what he' s doi ng. Al l

12 r i ght ? And you are goi ng t o see t hat i n a number of di f f erent

13 ar eas. You ar e goi ng t o see t hat - - you wi l l see al l t he

14 r est aur ant s t hat he went t o and charged t o hi s Mast er card.

15 Does t hi s show you he i s a man t hat i s at t empt i ng t o keep hi s

16 busi ness expenses separate and apart f r om hi s per sonal

17 expenses? Do t hey have expenses ever y day on hi s Amer i can

18 Expr ess t hat he was eat i ng out and chargi ng i t t o t he

19 gover nment ? No.

20 You know f r om t he evi dence t hat he has backup i n hi s

21 comput ers of every si ngl e t hi ng he ever spent . And we showed

22 you t he r ecei pt s j ust as an i l l ust r at i on of t he l unch t hat he

23 had wi t h Ri l ey. And he si gned i t , and he si gned i t , and

24 Benedi ct si gned i t , and i t ' s i n evi dence f or you. Because he

25 was at t empt i ng t o do everyt hi ng honest . He di d everyt hi ng he


KA-3121 KA-3121 KA-31


29/343

1287


1 coul d. But t hey dr aw t he ci r cl e, I HOP, St ar bucks. Wer e t hey

2 t her e when t hi ngs were di scussed? Di d t hey car e enough t o get

3 t he backup t o hi s expenses? No.

4 So we brought you Ms. Farnswor t h. J ust t o show you an

5 i l l ust r at i on, i magi ne t hi s. I t hi nk t hi s i s 125. They see

6 somet hi ng. They f i nal l y di d some i nvest i gat i on. They saw - -

7 when t hey gr abbed ever yt hi ng i n Dr . Kar r on' s apart ment , I t hi nk

8 i t was i n 2006 t he t est i mony i s, t hey cl eaned out hi s

9 apart ment , t hey f ound t hi s. Wel l , i t must have been everyt hi ng

10 he has. Everyt hi ng he has, ever yt hi ng he owns must have been

11 bought wi t h ATP money, so we wi l l t ake ever yt hi ng i ncl udi ng t he

12 shoe r ack.

13 Then t hey f i nd i n t hei r ar r ow search, wow, we f ound a

14 shoe r ack i n t hi s st atement , and t hat must be t he shoe r ack. I

15 submi t t o you t hat i t ' s not t he shoe r ack, and you have more

16 t han a r easonabl e doubt about t hat . And I submi t t o you t hat

17 t he ot her t hi ng t hat was char ged was somet hi ng about t en,

18 somet hi ng wi t h a r ack. Do you know i f Mason used t hat as

19 mater i al t o do const r uct i on t her e? Do you know what i t was

20 used f or ? They di dn' t f i nd i t t her e. Why di dn' t t hey f i nd t he

21 shoe r ack t hat they had on t he bi l l ? Because i t was used f or

22 somethi ng gr ant r el ated.

23 What i s wr ong wi t h havi ng f l ashl i ghts? You know t hese

24 comput ers, you heard about t hem, t hey come out , t hey go behi nd.

25 Thi s i s i n 2001 and 2002. Computers are a l ot smal l er now.


KA-3122 KA-3122 KA-31


30/343

1288


1 And of cour se comput ers t hat Dr . Kar r on cr eat ed were bi g

2 t hi ngs, and so you have f l ashl i ght s. Al l of a sudden t hat ' s a

3 pr obl em.

4 Bi g scr een. Do you r emember t here was al l t hat t al k

5 about Gover nment ' s 120- A? He has a bi g scr een i n t he r oom

6 t hat ' s used as t he CASI headquar t er s. I n t he pi ct ur e you wi l l

7 see a bi g scr een.

8 And a pr oj ector . They have a pr oj ector , you know,

9 l i ke t hi s. And t hey have a scr een l i ke t hat . And he pai d

10 grant money so t hat he can make present at i ons t o peopl e of what

11 t hei r pr oj ect i s and what t hey' r e doi ng. And of cour se t he

12 pr osecut i on want s you t o bel i eve t hat t hat ' s not deduct i bl e,

13 t hat ' s not al l owabl e.

14 They al so suggest he had t oo many comput er s. Who ar e

15 t hey t o t el l Dr . Karr on what he needs t o accompl i sh what t he

16 gover nment gave hi m $2 mi l l i on over t hr ee years?

17 One t hi ng you know. Ther e wasn' t one ki ck- back t hat

18 Dr . Kar r on got f r om buyi ng anythi ng. He di dn' t sel l anythi ng

19 t hat he bought so t hat he coul d st i ck some money i n hi s pocket .

20 He had no i nt ent i on of doi ng anyt hi ng wr ong.

21 And do you know what t he bl ender was used f or ? And

22 l et ' s say i t wasn' t used f or gr ant pur poses, so he made a

23 mi st ake. I n t hei r worl d you can' t make a mi st ake.

24 How about t he f act t hat Mason t est i f i ed he di d work i n

25 t he apar t ment , and t hey want you t o t hi nk t hat t hey i mpr oved


KA-3123 KA-3123 KA-31


31/343

1289


1 t he val ue of that apar t ment . That apar t ment shoul d have been

2 wort h cl ose t o $700, 000. I t was sol d f or what , $510, 000,

3 because of al l t he changes t hat he made i n t he apar t ment . I f

4 one want ed t o buy i t and move i t , i t had t o be r i pped out

5 because i t wasn' t sui t abl e f or somebody t o l i ve i n.

6 And what di d Mason t el l you? Oh, I di d some work i n

7 t he ki t chen.

8 Oh, you di d work i n t he ki t chen? What di d you do i n

9 t he ki t chen?

10 I f i xed a cabi net .

11 Di d you get pai d f or t hat?

12 Yes, I di d.

13 Wel l , I wi l l show you t hi s check, Mr . Mason. I s t hi s

14 t he check you got ? I s t hi s a CASI check?

15 No.

16 Thi s i s a per sonal check f r om Dr . Kar r on, because i t ' s

17 a personal expense. So t he man wi t h t he pi ggy bank i s goi ng

18 i nt o hi s own pocket to pay f or t hi ngs t hat he under st ands are

19 not al l owabl e under t he gr ant and are per sonal i n natur e.

20 That ' s what we have her e.

21 And who are we t al ki ng about ? We are t al ki ng about

22 Dr . Kar r on, a man who goes to a meet i ng, an ATP meet i ng wher e

23 he i s event ual l y goi ng t o get a gr ant , and he st ands up and

24 says i s t her e anybody her e t hat can hel p me? Because I am bad

25 wi t h f i nances and I don' t know how t o do t hi s st uf f . You know?


KA-3124 KA-3124 KA-31


32/343

1290


1 Thi s i s t he guy t hat t hey' r e dr awi ng ci r cl es ar ound what he i s

2 doi ng.

3 And di d he dest r oy one r ecor d? One r ecor d? No. What

4 i s t hei r compl ai nt ? Spr i ngs t est i f i ed he went i nt o t he

5 computer and he changed somet hi ng. What di d he change? He

6 changed whether or not i t shoul d be al l owabl e or not . He

7 di dn' t change an i nvoi ce. He di dn' t change what was marked on

8 t he check.

9 Anybody except f or Ri l ey coul d l ook at t he checks.

10 I magi ne an audi t or never l ooked at t he checks, never di d a bank

11 r econci l i at i on t o deci de what he spent .

12 Every check you saw had a memo on i t . You heard Dr .

13 Karr on woul dn' t si gn a check unl ess he had backup t o i t , t her e

14 was an i nvoi ce. Al l of that was i n t he comput er . I s t hi s a

15 guy l ooki ng t o do somet hi ng wr ong?

16 They make t hi s broad brush, he changed somet hi ng

17 t her ef ore he must have changed i t t o do wr ong. No, i t ' s

18 arguabl e. He doesn' t have t o agr ee wi t h hi s account ant . He

19 doesn' t have t o agr ee wi t h hi s busi ness manager . He doesn' t

20 even have t o agr ee wi t h t he gr ant peopl e. At t he end of t he

21 day, i f t hey t el l hi m i t ' s not al l owabl e, he has t o pay t he

22 money back. That ' s t he syst em. That ' s t he syst em.

23 Thi s man hi d not hi ng. How do you st eal when you don' t

24 hi de anyt hi ng and you make a not e of ever yt hi ng you do, and you

25 never ask anybody el se t o do anyt hi ng wr ong t o hi de anyt hi ng


KA-3125 KA-3125 KA-31


33/343

1291


1 because i t ' s al l out t her e? Ever y checki ng account he has a

2 di f f er ent col or check. He post ed t he r ecor ds or i gi nal l y. Then

3 he hi r ed peopl e t o do t hat , t o scan t he st uf f i n.

4 And i n t hei r openi ng t hey suggest ed t hat he di d

5 somethi ng t hat was i mpr oper i n f i l i ng t he r ecords. And you

6 f ound out when I cr oss- exami ned Spr i ngs and i n one of hi s

7 e- mai l s about what ' s cal l ed an audi t t r ai l . You can go back

8 i nt o t he comput er i f you want t o pr ove gui l t beyond a

9 r easonabl e doubt and show what per son made what change, and

10 t hen argue f r om t hat t hat t hey had gui l t y knowl edge or a gui l t y

11 mi nd.

12 Don' t argue - - I have t oo much r espect f or your common

13 sense t o t hi nk you won' t cr edi t i t . The bot t om l i ne i s how can

14 you ar gue and have t est i mony he changed somet hi ng wi t hout

15 knowi ng what he changed? How coul d you say t hat? There i s no

16 evi dence at al l . The man had backup; he had audi t t r ai l s.

17 I submi t t o you t hat t he e- mai l s are t he DNA i n t hi s

18 case, and t hey wi l l pr ove, as I sai d i n my openi ng, t hat Dr .

19 Kar r on i s i nnocent .

20 The gover nment i s goi ng t o argue, and t hey have

21 argued, t hat wi t hout pr i or appr oval he mi sappl i ed t he f unds.

22 And I submi t t o you t hat the evi dence i s other wi se.

23 The t hi r d el ement i s dur i ng a one- year per i od t he

24 def endant i nt ent i onal l y mi sappl i ed money. I submi t t o you he

25 had t he t aci t aut hor i t y f r omt he gr ant to r evi se any expense


KA-3126 KA-3126 KA-31


34/343

1292


1 t hat he had, t hat t hi s gr ant per mi t s and i t ' s under st ood t hat

2 you coul d change t hi ngs as l ong as you are doi ng i t f or the

3 pur pose of succeedi ng on t he pr oj ect .

4 I f you have a r easonabl e doubt whet her or not t hat was

5 i mpl i ed by ever ybody t hat Dr . Kar r on met , l ook at t hi s 10

6 per cent r ul e. He can move $80, 000 anypl ace he want s i n t hat

7 budget as l ong as he doesn' t go over t he $800, 000 f or t he year .

8 El ement f our pr ovi des t hat t he money was i nt ent i onal l y

9 mi sappl i ed. I submi t t o you t hat no money was i nt ent i onal l y

10 mi sappl i ed, because you knew and you hear d a l ot of t est i mony

11 about budget r evi si ons, budget amendment s and what have you.

12 And t he f act - - even i f t he f i ndi ngs on t he audi t wer e

13 accur at e - - whi ch I submi t t hey wer e not - - by Ri l ey, i t st i l l

14 woul d not become cr i mi nal because t her e was no i ntent t o do

15 anyt hi ng wr ong i n mi sappl yi ng t he f unds.

16 Now, t hi s i s not I BM. They do not have an HR

17 depar t ment . Thi s i s a ma and pa sci ence company, and i t was

18 r un t hat way wi t h a l ot of i nef f i ci enci es i n t he f i nances but

19 not i n t he sci ence. And apparent l y t he peopl e at ATP NI ST were

20 mor e i nt er est ed i n t he sci ence t han i n t he f i nances.

21 And I have been wonder i ng, wonder i ng f or a l ong t i me

22 now why are we al l her e, how di d t hi s case get so out of

23 cont r ol . Wel l , what you l ear ned at t hi s t r i al i s t hat ATP

24 doesn' t exi st anymor e. The pr oj ect t hat had $60 mi l l i on - -

25 whi ch t o you and I i s enough money f or me t o buy a coupl e of


KA-3127 KA-3127 KA-31


35/343

1293


1 l ot t o t i cket s ever y week i n t he hope of acqui r i ng i t - - i n t he

2 wor l d of gover nment t hi s i s not a l ot of money, i t ' s not a l ot

3 of money. But who get s t he $60 mi l l i on? Two t hi r ds of t he

4 gr ant s are gi ven t o peopl e l i ke Dr . Kar r on, who need st art - up

5 money. They don' t have money l i ke I BM got a gr ant f or $2

6 mi l l i on; t hey al so got a gr ant f or $50 mi l l i on, but put t hat on

7 t he si de.

8 And t her e i s somet hi ng t hat smel l s her e, i t r eal l y

9 smel l s bad. And I coul d be dead wr ong, and i f I am, and i f you

10 don' t f eel t hi s way, you r ej ect i t . I hope you wi l l credi t

11 some of t he other thi ngs t hat I present t o you.

12 The gover nment want ed t o get r i d of t hi s pr oj ect - -

13 I ' m not t al ki ng about t he pr osecut ors her e. They get t he case

14 f r om ot her agenci es - - t hey di dn' t l i ke t he i dea of $40 mi l l i on

15 goi ng t o l i t t l e guys. Why not gi ve i t al l t o t he I BMs and t he

16 Hal l i bur t ons of t hi s wor l d? Hey, we f ound Dan Karr on. Who

17 bet t er t han t hi s guy, who i s a cook but he i s no cr ook? And

18 t hat ' s what happened her e. And now we l ook at hi m and we

19 specul at e what he di d.

20 And I submi t t o you t hat when you eval uate al l of t he

21 evi dence, and you see hi s payr ol l checks whi ch I put i nt o

22 evi dence as P- 1 t hr ough P- 6, where hi s t otal amount f or t he

23 year i s about $35, 000. Ask your sel f , he get s $175, 000, how

24 does he onl y have $35, 000? Because he t ook an advance of

25 75, 000 t o begi n wi t h t hat ' s not ref l ect ed i n a check because he


KA-3128 KA-3128 KA-31


36/343

1294


1 di dn' t get a check f or t hat $75, 000, i t was a wi r e t r ansf er .

2 He wi r ed i t i nt o an account , i nt o hi s CASI account t he evi dence

3 i s, and so, t her ef or e, he got net $110, 000. And t hat ' s wher e

4 hi s money was. And he commi ngl ed, and t her e was no r ul es he

5 coul dn' t comi ngl e. He put t he NI ST money wi t h hi s own money,

6 wi t h hi s CASI money. Oh, CASI had no ot her busi ness, but t hey

7 got $110, 000 cash f or t hi s man. Can' t t hey spend i t any way

8 t hey want?

9 And t hen, yeah, whenever t he bank bal ance - - i f you go

10 t hr ough al l t he bank bal ances you wi l l see t hat whenever t hey

11 get l ow, who comes up wi t h money? Dr . Kar r on. When t her e i s

12 no money at al l around, whose cr edi t car d i s used? Dr . Kar r on.

13 Oh, he i s a bad guy. You know, we set up t hi s whol e syst em,

14 and we t ol d hi m he can onl y si gn checks, he can' t spend any

15 money wi t hout appr oval . And we had t hi s PayPal syst em i n

16 ef f ect . And what does Dr . Kar r on do? And t hese are i n

17 Government Exhi bi t 110, I bel i eve, t hey have t he PayPal

18 r ecor ds. Obvi ousl y up unt i l Mar ch 1, ' 03 Benedi ct i s not

19 t her e, so he has one, t wo, t hr ee, f our t r ansact i ons i n PayPal ,

20 t he l argest of whi ch i s $476. 55. He bought 12 i t ems of

21 somethi ng t hat ' s i n PayPal , i n other words $40 an i t em, he

22 spent $13. 20, $168. 16 and $283 f or ever y i t em, $168 i s f or 11

23 i t ems.

24 Do you t hi nk t hat t hi ngs were happeni ng at CASI

25 r el ated t o t he pr oj ect t hat he needed t o do somet hi ng qui ck t o


KA-3129 KA-3129 KA-31


37/343

1295


1 get a coupl e of dol l ar s? Oh, he vi ol at ed, he doesn' t l i st en t o

2 anybody, he doesn' t do anyt hi ng, he i s arr ogant .

3 I gr ew up i n Br onxvi l l e, Br ookl yn, and my dad worked

4 f or the I RS, and he used t o say, son, don' t make a f eder al case

5 out of t hi s. You know, my f ather was a smart man. I di dn' t

6 know what he was t al ki ng about , but I sure have l ear ned.

7 Your j ob, your j ob i s t o eval uat e t he evi dence, t o

8 eval uat e t he wi t nesses who come bef ore you. And t he one t hi ng

9 t he def ense has - - t he onl y t hi ng t hey have - - i s t he r i ght of

10 cr oss- exami nat i on. I t ' s l i ke a pr od. Somebody says somet hi ng,

11 and you pr od t hem a l i t t l e bi t t o see whet her or not what t hey

12 say makes sense, whether or not t hey have backup f or i t ,

13 whet her or not i t ' s bel i evabl e beyond a r easonabl e doubt .

14 I don' t st and up her e and t el l you who l i ed about what

15 or sai d what . I l eave t hat t o your eval uat i on. Al l ri ght ?

16 You t ake t he di r ect , you t ake t he cr oss- exami nat i on. And t he

17 beaut i f ul t hi ng i n our syst em of j ust i ce i s t hat we have a

18 r i ght to def end our cl i ent s vi gor ousl y i n t hi s gr eat count r y,

19 and I hope t o god t hat none of you ever need t hat ki nd of

20 vi gorous def ense. And next t o Dr . Karr on, t he person I f eel

21 sor r i est f or i n t hi s whol e case i s Bob Benedi ct .

22 You have t o ask your sel f , how does t hat happen? How

23 does t hi s happen? Her e i s f r om al l you can see about t he man' s

24 backgr ound a t r ul y decent guy. He vol unt eer ed t o hel p Dr .

25 Kar r on f r om day one i n t hi s pr oj ect f or nothi ng. He came


KA-3130 KA-3130 KA-31


38/343

1296


1 onboar d f or $60 an hour , whi ch you can f i gur e out i s a hel l of

2 a l ot l ess t han Gur f ei n was get t i ng. Sur e.

3 And t hi s i s a l et t er , t hi s i s an e- mai l t hat ' s i n

4 evi dence as Def endant ' s U, and t hi s i s I submi t t o you par t of

5 t he DNA t hat I am t al ki ng about . And t hi s i s a l et t er , an

6 e- mai l he sends t o Dr . Karr on on Apr i l 19, 2004, and t he gr ant

7 i s st opped si nce J une. He i s out of t he l oop si nce about

8 August or September or Oct ober , and you can j ust i magi ne how

9 t hi s t hi ng i s ki l l i ng hi m, what happened at CASI and t hat t he

10 gr ant was st opped. And he says, "RE: Speci f i c i nst ances of

11 Hope Snowden i gnor i ng r equest s, or not pr ovi di ng document at i on

12 f or under st andi ngs, J oan' s bungl i ng upset t i ng Hope; J oan maki ng

13 cert ai n Hope acknowl edged al l er r ors as due t o Dr . K. " He goes

14 on. That was t he subj ect .

15 "As you know, one of my f i r st act s was t o assi st i n

16 t he submi ss i on of t he CASI r esponse t o t he mul t i page

17 quest i onnai r e t ossed at CASI . Thi s r esponse i ncl uded a budget

18 amendment al ong wi t h a r equest t o have me acknowl edged as your

19 admi ni st r at or .

20 "Hope i gnored bot h r equest s. We never r ecei ved any

21 acknowl edgment , ver bal or i n wr i t i ng, t hat our

22 r esponse/ amendment request woul d or woul d not be appr oved. As

23 such, I was never approved as t he admi ni st r at or and Hope woul d

24 not answer or ret ur n my cal l s. I was a "nonpar t i ci pant " and

25 t her ef ore someone t o be i gnored.


KA-3131 KA-3131 KA-31


39/343

1297


1 "The f act t hat I had ei ght years exper i ence wi t h ATP

2 pr oj ect s, as an admi ni st r at or , wi t hout any audi t pr obl ems, and

3 a l i t any of ATP r ef erences, whi ch Hope never bot her ed t o check,

4 di dn' t appear t o be vi ewed as a posi t i ve addi t i on t o t he

5 pr oj ect .

6 "The r are communi cat i ons we di d r ecei ve were addressed

7 t o Dr . Kar r on or Pet er Ross, i gnor i ng t he f act t hat ATP was

8 i nf ormed Pet er was no l onger i nvol ved.

9 " I t was VERY FRUSTRATI NG and appar ent l y i n di r ect

10 opposi t i on t o what woul d have been i n t he best i nt erest s of

11 both CASI and NI ST.

12 "Ms. Snowden appeared t o be a bur eaucr at , t ot al l y

13 di si nt er est ed i n t he success of t he pr oj ect and onl y i nt er est ed

14 i n whet her CASI dot t ed al l t he I s and cr ossed al l t he Ts,

15 associ ated wi t h her r i gi d unders t andi ng of t he ATP and other

16 r el evant f eder al gui del i nes. She consi st ent l y i gnored CASI

17 at t empt s t o pr ovi de servi ce whi ch woul d hel p t he pr oj ect and

18 her i n t he meant i me. She bel i eved CASI was out of cont r ol f r om

19 t he begi nni ng and t he number of personal changes and amendment

20 r equest s pr oved her r i ght , i n her mi nd. There was no wei ght

21 gi ven t o t he possi bi l i t y t hat changes wer e dr i ven by Dr . K' s

22 l ack of ATP exper i ence or assi st ance of f er ed t o hel p Dr . Kar r on

23 grappl e wi t h t he ATP quagmi r e.

24 "ATP i s as r esponsi bl e f or t he st at e of t he CASI

25 proj ect as anyone.


KA-3132 KA-3132 KA-31


40/343

1298


1 "Sor r y, but t hat ' s t he best r ecol l ecti on I can

2 must er . "

3 How does t hi s man who wr ot e t hi s l et t er come her e and

4 t est i f y bef or e you t he way he di d? Ask your sel f that . How

5 does he come here and i ni t i al l y say he knew not hi ng about Dr .

6 Karr on advanci ng af t er t he gr ant was suspended i n J une, J une

7 27, ' 03, t hat he knew not hi ng about Dr . Karr on advanci ng money?

8 How coul d he say t hat ? I showed hi m an e- mai l wher e he sai d

9 t hat Dr . Kar r on had put $47, 000 i n, 47K and t hat t her e was 21K

10 i n cof undi ng. He deni ed t hat we ever had any equi pment i ssue

11 under cof undi ng. How does t hat happen t o a guy t hat you l ook

12 at , who i n Oct ober , who i n 2004, sai d j ust t he opposi t e of what

13 was goi ng on t han what he sai d on t he st and?

14 I r eal l y t hi nk at t he end of t he day Dr . Kar r on i s

15 goi ng t o get a cal l one day f r om Bob Benedi ct apol ogi zi ng.

16 Here i s a man who worked f or I BM f or over 20 years. You heard

17 f r om our char act er wi t ness, t hese peopl e get humongous

18 pensi ons. They got st ock probabl y when I BM was wor t h t en cent s

19 and pr obabl y t hei r shar es are pr obabl y wor t h a mi l l i on dol l ar s

20 a shar e t hat they have. How does a man l i ke t hi s t ur n agai nst

21 Dr . Karr on t hi s way and get embraced by t he prosecut i on?

22 Wel l , you know, t hi s i s t he l ast t hi ng I wi l l say t o

23 you about my dad. I t ol d you he worked f or t he I RS. I once

24 got hi m, t hrough a f r i end of mi ne who managed a Ford

25 deal er shi p, a car . I got a cal l f r om t hi s f r i end of mi ne and


KA-3133 KA-3133 KA-31


41/343

1299


1 he i s al l upset . I sai d, what ' s t he mat t er ? He says, your

2 f ather . I sai d, what do you mean? He says, I got back f r om

3 l unch, a Mr . Rubi nst ei n f r om I RS cal l ed; I al most l ost my

4 l unch. I t was my f at her , he was havi ng pr obl ems wi t h t he br ake

5 l i ght .

6 Wel l , when t he prosecut i on shows up at your door and

7 you are t he guy who submi t t ed document s, al l of a sudden you

8 get your sel f on t he t eam, and i t ' s t r agi c. He t el l s you - -

9 her e i s a r esponsi bl e busi nessman - - oh, I have a CASI e- mai l

10 but I never accessed i t , I never l ook at t he e- mai l s at CASI ,

11 you see, I have a di f f er ent e- mai l .

12 Wel l , when my wi f e and I are on vacat i on, she get s her

13 e- mai l s f r om t he house wher e we are. I mean who doesn' t l ook

14 at t hei r e- mai l s? Peopl e are anal about t hi s st uf f . You mean

15 you are t he manager , t he busi ness manager of CASI , and you are

16 not accessi ng your e- mai l s, t hat maybe you have e- mai l s i n your

17 ot her account wherever you are? Pl ease, pl ease.

18 Now, t he j udge i s goi ng t o t el l you t hat wi t nesses are

19 avai l abl e t o bot h si des. And you can f i nd - - t he di f f er ence i s

20 t hat t he government has t he power t o gi ve i mmuni t y t o peopl e,

21 t hey can make deal s wi t h peopl e, t hey can do a whol e l ot of

22 t hi ngs. And of cour se t hey have t he burden of pr oof beyond a

23 r easonabl e doubt . So, you coul d say t hat i f t hey woul d have

24 cal l ed t hi s wi t ness, and i f we woul d have cr edi t ed t hi s

25 wi t ness, we woul d not have a r easonabl e doubt , because i n t hi s


KA-3134 KA-3134 KA-31


42/343

1300


1 case J oan Hayes, who we onl y hear d t he name but never saw, i s

2 not a person whose t est i mony i s cumul at i ve.

3 The government r el i ed on J oan Hayes t hroughout t hi s

4 ent i r e case, and you never got an opport uni t y t o see her , and

5 we never got an oppor t uni t y t o ask her quest i ons.

6 You know i t ' s i nt erest i ng, Benedi ct and Hayes, makes

7 you t hi nk of Benedi ct Ar nol d, r i ght ? Her e i s t he per son who i s

8 your accountant , who i nappr opr i at el y becomes your audi t or

9 because peopl e t el l you you can' t wear two hat s.

10 Do you r emember Benedi ct ? I asked hi m, di d you ever

11 see Hayes' audi t ? Remember , she was supposed t o submi t t he

12 audi t . She got a 90- day ext ensi on i n Oct ober of 2002. You are

13 supposed t o submi t t he audi t . She got a 90- day ext ensi on unt i l

14 December 31, 2002 f or t he f i r st year , and i n August of 2003 Bob

15 Benedi ct hasn' t seen t he audi t and Dr . Kar r on hasn' t seen t he

16 audi t . Wow. You know who saw t he audi t ? Ri l ey, Hope Snowden.

17 They saw t he audi t . And t he t est i mony i s i n t he r ecor d, Ri l ey

18 saw t he audi t ed bef ore she went t o make t he per sonal vi si t , t he

19 si t e vi si t . Bef or e she cl osed t he pr oj ect down she used J oan

20 Hayes' numbers.

21 Wher e are t hose number s? I asked Ri l ey, do you have

22 any numbers? Do you have any audi t sheet s? Do you have any

23 general l edgers showi ng us how you base t hi s?

24 No. No, I used J oan Hayes' .

25 Wel l , wher e ar e t hey? What di d she gi ve you? What


KA-3135 KA-3135 KA-31


43/343

1301


1 was her mot i vat i on, Hayes' s mot i vat i on? She cl ear l y poi soned

2 everybody at ATP agai nst Dr . Kar r on.

3 Coul d you i magi ne, t hey have a man, Dr . Kar r on, who

4 t hey know i s not a busi ness manager , and he gets a guy l i ke

5 Benedi ct t o be hi s busi ness manager and t hey won' t approve hi m.

6 They l eave Dr . Karr on wi t hout a busi ness manager f r om t he t i me

7 t hat Pet er Ross l eaves unt i l I t hi nk t he dat e on t he e- mai l was

8 i n ear l y March, t hat Benedi ct comes aboar d, and t hey won' t

9 appr ove hi m. Why won' t t hey appr ove hi m? Why won' t t hey

10 appr ove a r evi sed budget ? Why won' t t hey do anyt hi ng? Why ar e

11 t hey st onewal l i ng t hi s? Ask your sel f : Who came i n t he mi ddl e

12 of t he ni ght t o t al k t o t hem? Same peopl e t hat came and t ook

13 ever ythi ng i ncl udi ng t he shoe r ack out of Dr . Kar r on' s house.

14 THE COURT: You' r e a l i t t l e over 45 mi nutes.

15 MR. RUBI NSTEI N: Hal f way t here, J udge, but t hank you.

16 Who wr ot e t he books? Whose books were t hey t hat t hey

17 used? She and Fr ank Spr i ng cr eat ed what ever books t her e were.

18 What di d t hey submi t ?

19 THE DEFENDANT: Excuse me. I have t o go t o t he

20 bathr oom. Do I have your per mi ssi on, si r ?

21 MR. RUBI NSTEI N: J udge, I wi l l keep goi ng.

22 THE COURT: Somebody was sayi ng somet hi ng.

23 MR. RUBI NSTEI N: Yes, Dr . Kar r on needs a per sonal

24 moment , but I wi l l keep goi ng.

25 THE COURT: Do you want t o br eak now?


KA-3136 KA-3136 KA-31


44/343

1302


1 MR. RUBI NSTEI N: Onl y i f t he j ur y does, J udge. I have

2 no pr obl em wi t h excusi ng hi m on t he r ecor d.

3 THE COURT: You sai d anot her 45 mi nut es.

4 I f he needs a br eak, l et ' s t ake a ver y short br eak.

5 The j ur y i s excused f or a shor t br eak.

6 ( J ur y not pr esent )

7 MR. RUBI NSTEI N: We mi ght as wel l st ep out our sel ves,

8 i f you don' t mi nd, J udge.

9 THE COURT: Wel l , al l r i ght , but come r i ght back. I

10 have t o have some t i me f or the char ge. Leave me a l i t t l e t i me,

11 Mr . Rubi nst ei n.

12 ( Recess)

13 THE COURT: Al l r i ght . Let ' s br i ng t he j ur y i n.

14 I hope you won' t be t oo much l onger , Mr . Rubi nst ei n.

15 MR. RUBI NSTEI N: I ' m t r yi ng not t o.

16 THE COURT: Because I have a r ebut t al , t hen I have t o

17 have a l i t t l e r oom f or my charge, and we' ve got t o have l unch.

18 ( Cont i nued on next page)

19

20

21

22

23

24

25


KA-3137 KA-3137 KA-31


45/343

1303

86bzkar3 Summat i on - Mr . Rubi nst ei n

1 THE COURT: Al l r i ght , pl ease be seated.

2 Mr . Rubi nst ei n.

3 MR. RUBI NSTEI N: Thank you, your Honor .

4 Hayes i s - - a l et t er i n evi dence, gover nment exhi bi t

5 51. Thi s i s af t er she' s cooper ated wi t h t he gover nment f r om

6 God knows when. I submi t t ed f i gur es t hat she cr eat ed t o get

7 t hi s gr ant suspended. 51, she wr i t es a l et t er , or Dr . Kar r on

8 wr i t es a l et t er t o Hayes, so she' s st i l l i n communi cat i on wi t h

9 Dr . Karr on, even t hough you know f r om e- mai l s - -

10 MR. KWOK: Obj ect i on, not i n evi dence.

11 MR. RUBI NSTEI N: Oh, I ' m sor r y. Okay.

12 THE COURT: Exhi bi t 51 i s not i n evi dence.

13 MR. RUBI NSTEI N: I t ' s i n t hei r book.

14 So I submi t t o you t hat , t hat you have a l ack of

15 evi dence j ust on t he absence of Hayes.

16 And you know f r om t he t est i mony t hat Benedi ct had no

17 i dea t hat Hayes had gi ven t he audi t r epor t t o Ri l ey pr i or t o

18 t he meet i ng. I magi ne, she went t o t he meet i ng i n J une and

19 was - - i n J une t hey had t he meet i ng. Ri l ey came t o t he si t e

20 vi si t and Benedi ct , Hayes and Dr . Kar r on wer e pr esent - - t hat ' s

21 t he l unch t hat i s i n evi dence. And she st ayed aboar d, because

22 she kept f eedi ng, f eedi ng number s t o Benedi ct , not t o Dr .

23 Kar r on. Dr . Kar r on' s a sci ent i st . You know, he di dn' t creat e

24 t hese number s. And we know t hat Benedi ct kept gi vi ng

25 numbers - - I mean Hayes kept gi vi ng numbers because we have


KA-3138 KA-3138 KA-31


46/343

1304


1 t hose amended f i nanci al st atus r eport s t hat wer e f i l ed

2 August 13, 2003. And Benedi ct t el l s you where he got t hose

3 number s f r om. And you al so know t hat Benedi ct was pai d - - t hat

4 Dr . Kar r on pai d af t er t he gr ant was suspended - - he' s not

5 supposed t o, but he want s - - he want s t he pr oj ect t o work. So

6 he' s payi ng expenses. He put s - - you know about $47, 000 i n

7 cash t hat he r ef i nanced - - i t ' s i n t he e- mai l s - - he r ef i nanced

8 hi s apar t ment , put t he money i nt o t he grant t o keep t he gr ant

9 goi ng. I s t hat - - does t hat sound l i ke somebody who i s l ooki ng

10 t o i nt ent i onal l y mi sappr opr i at e f unds? Thi s i s a hi gh r i sk,

11 i nnovat i ve t echnol ogy t hat he' s wor ki ng on t hat requi r es

12 changes as you go al ong. Everybody t el l s you. And mi st akes i n

13 sci ence, I submi t t o you, ar e mer el y exper i ment s t hat di dn' t

14 work out . Those are mi st akes. So you keep changi ng t hi ngs.

15 You need more workers. So he get s vol unt eer s. You heard about

16 al l t he peopl e t hat are i n t he apart ment . He get s st udent s.

17 What are al l t hese peopl e doi ng t here? They' r e al l worki ng on

18 a pr oj ect . Does anybody suggest that he' s not worki ng on a

19 proj ect every mi nute t hat he has?

20 And you know t hat t he mant r a of ATP i s, i t ' s your

21 busi ness , your money, do what ever you want and we' l l back you

22 up because we' r e i nt er est ed i n sci ence her e. But t hen t he bean

23 count ers come i n and t hey st ar t dr awi ng ci r cl es around every

24 number t o suggest you' r e doi ng somethi ng wr ong. And t hat ' s

25 what we have her e. I magi ne l eavi ng t hi s company wi t hout a


KA-3139 KA-3139 KA-31


47/343

1305


1 busi ness manager .

2 Now, you know t hat t he gr ant i s a f ungi bl e t hi ng,

3 because exhi bi t s f our - - do we have t hat exhi bi t ? I t hi nk i t ' s

4 page 11. I t t el l s you you coul d seek a r evi si on at t he end of

5 t he year . Not t he end of t he year of t he gr ant , whi ch i s

6 Oct ober - - i n t hi s case Sept ember 30t h, 2002, but at t he end of

7 t he year . And al l of t hese r evi si ons t hat wer e submi t t ed by

8 Ross and what have you, r el ated t o 2001. I n ot her words,

9 you' r e al l owed t o go backwards. You don' t need approval

10 bef ore. You know, f or ever y r ul e t hat t hey have, i f you l ook

11 t hr ough t hese books, you' r e goi ng t o f i nd a r ul e t hat says t he

12 opposi t e. And t hey expect peopl e t o r ead a coupl e of hundred

13 pages of i nf ormat i on. Somebody' s gi vi ng you a check f or

14 $800, 000, you si gn on t he bot t om l i ne and you' r e not worr yi ng

15 about the det ai l s. You know you' r e not goi ng t o do anyt hi ng

16 wr ong. Do you r ead everyt hi ng t hat t he cr edi t card company

17 sends you? They send you t hese t hi ngs about changes i n your

18 cr edi t car d st uf f . Got t o make an admi ssi on, I don' t .

19 Do you have t hat ?

20 MR. Di CENZO: No.

21 MR. RUBI NSTEI N: Al l r i ght , we' l l f i nd i t and put

12-2297 Karron CoA Appendix v11

Documents

Transcript of 12-2297 Karron CoA Appendix v11