Transcripts - Week 3, 10-13-11

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Criminal Action No. 09-cr-00266-CMA UNITED STATES OF AMERICA, Plaintiff, v. 1. 2. 3. 4. 5. 6. DAVID A. BANKS; DEMETRIUS K. HARPER, a/k/a KEN HARPER; GARY L. WALKER; CLINTON A. STEWART, a/k/a C. ALFRED STEWART; DAVID A. ZIRPOLO; and KENDRICK BARNES,
Defendants. __________________________________________________________ REPORTER'S TRANSCRIPT (Jury Trial Day 13) __________________________________________________________ Proceedings before the HONORABLE CHRISTINE M. ARGUELLO, Judge, United States District Court, for the District of Colorado, commencing at 8:48 a.m. on the 13th day of October 2011, Alfred A. Arraj United States Courthouse, Denver, Colorado. A P P E A R A N C E S FOR THE PLAINTIFF: MATTHEW T. KIRSCH and SUNEETA HAZRA, U.S. Attorney's Office - Denver, 1225 17th St., Suite 700, Denver, CO 80202 FOR THE DEFENDANTS: Pro Se
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado
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I N D E X WITNESSES: SAMUEL THURMAN DIRECT EXAMINATION (Cont'd) BY MR. WALKER DIRECT EXAMINATION BY MR. BANKS DIRECT EXAMINATION BY MR. ZIRPOLO CROSS-EXAMINATION BY MR. KIRSCH REDIRECT EXAMINATION BY MR. BANKS GARY HILLBERRY DIRECT EXAMINATION BY MR. BANKS DIRECT EXAMINATION BY MR. WALKER CROSS-EXAMINATION BY MR. KIRSCH REDIRECT EXAMINATION BY MR. BANKS REDIRECT EXAMINATION BY MR. WALKER SPECIAL AGENT JOHN SMITH DIRECT EXAMINATION BY MR. BANKS DIRECT EXAMINATION BY MR. WALKER DIRECT EXAMINATION BY MR. BARNES DIRECT EXAMINATION BY MR. ZIRPOLO CROSS-EXAMINATION BY MS. HAZRA REDIRECT EXAMINATION BY MR. BANKS E X H I B I T S NO. ......................................... No. ......................................... REFUSED ADMITTED PAGE 1812 1840 1847 1849 1871 1879 1892 1894 1897 1899 1904 1926 1932 1936 1940 1943
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SEPTEMBER 13, 2011 (Proceedings commence at 8:48 a.m.) (The following is had in open court, outside the hearing and presence of the jury.) THE COURT: All right. You may be seated. I understand we do have some issues we
need to discuss before we bring in the jury. MR. WALKER: Your Honor, I wanted to provide first We will be Mr. Gary
a status for witnesses appearing today. completing the testimony of Sam Thurman.
Hillberry who is retained by IRP Solutions as a subject matter expert is also here. John Smith today, as well. We would be calling Agent And that is the extent of
people we have to appear today. We expect that to take through at least the morning, and potentially later. We have several other He is If we He
people who -- Don Vilfer has agreed to testify. available -- today is Thursday -- Friday morning.
could get permission for him to appear telephonically. is wrapping up business with another client late into Thursday, and would not be able to get in until Friday afternoon.
So he would be able to appear telephonically at 9 a.m. tomorrow. THE COURT: All right. What about the other four?
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MR. WALKER:
The other four, we are still awaiting
-- well, we do have a status on Steven Cooper and Bill Witherspoon. The appropriate counsel for those federal And they did return In
agencies have received the subpoenas.
those saying they wanted additional information.
giving the turn around time, it is likely we would not be able to get them successfully served until early next week. And we do have subpoenas for Mr. Vince Rosales and Mikel Nelson. The person who is coordinating that effort
for us is going to give me an update here momentarily via e-mail, but I don't have that right now. My anticipation
is that they would be able to also testify tomorrow morning. THE COURT: MR. WALKER: That would be who? That would be Vince Rosales and Mikel
And also potentially Paul Beebe and Richard I haven't gotten an
Powers, but those are very tentative.
update as to the status of those services and when they would appear. THE COURT: All right. Who are the people you
indicated you have not served? MR. WALKER: Your Honor, the people who are
traveling would be Tiffany Zellenbaba, Lorne Cramer, and two others. I don't have them handy right now.
But one
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is out of the country, and the other three are on vacation. We have left messages with them. One has
returned our message saying they would not be able to get back until Friday. And, as I said, we haven't gotten
messages from the other two. THE COURT: These are people you did not subpoena
and you don't intend to subpoena; is that correct? MR. WALKER: No, Your Honor, we would be
subpoenaing -- certainly Dwayne Fuselier, who has been subpoenaed. THE COURT: subpoenaed. MR. WALKER: THE COURT: confused. MR. WALKER: THE COURT: MR. WALKER: Steven W. Cooper. When is Mr. Cooper scheduled to appear? He was originally scheduled to appear All of the people I just mentioned. Go over them again, because I am Tell me who you have already
tomorrow, but he's one of the gentlemen who works for the federal government, and the subpoena was returned saying send it to counsel and add additional information. THE COURT: served? MR. WALKER: THE COURT: He was served last week. If you have returns of service on any
All right.
So when was he supposedly
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of these people -MR. WALKER: have them sent. THE COURT: They need to be docketed. Those I don't have them with me, but I can
returns of service need to be docketed if you intend to enforce them. So you did not properly serve Mr. Cooper? According to DHS counsel. When was that subpoena served? I believe that was served last week.
MR. WALKER: THE COURT: MR. WALKER:
I don't have the exact date. MR. KIRSCH: Your Honor, I can add a little bit of
information about the two DHS witnesses based on my conversation with counsel for DHS last night. Mr. Witherspoon was served, I believe, while he was here. He was personally served. However, the date on his -- the
appearance date on his original subpoena was November 2nd. Both counsel accepted or was at least served. Counsel for DHS was served yesterday with copies of subpoenas for Mr. Cooper and Mr. Witherspoon, and those subpoenas demanded the appearance of Mr. Witherspoon and Mr. Cooper to testify today. And those initial requests Counsel for DHS
did not comply with the Touhy Regulation.
informed the defendants' representative of that fact, and counsel for DHS is attempting to see whether or not those people can be made available sooner than that.
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It is my understanding both of them have made pre-existing arrangements and are not available -- are not available given those arrangements this week. THE COURT: MR. KIRSCH: All right. And Mr. Cooper -- I am sorry, Your According to the
Honor, Mr. Cooper is the last thing.
information I got from DHS counsel, Mr. Cooper has never been personally served. THE COURT: MR. WALKER: All right. Your Honor, I would agree with that. There were
Mr. Cooper has not been personally served. attempts to serve him. that. served.
We were unsuccessful in doing
As Mr. Kirsch indicated, the counsel for DHS was I have not spoken directly with either of them.
But according to our representative, Mr. Witherspoon has indicated he will not appear. And that's the latest
status I have received on his appearance. THE COURT: And, Mr. Kirsch, you indicated that
they will appear, but they can't appear this week; is that correct? MR. KIRSCH: Your Honor, I know that counsel for
DHS is attempting to make them available, assuming that the requirements are -- that the legal -- the defendants comply with the legal requirements. I certainly didn't
understand that Mr. Witherspoon is going to absolutely

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refuse to appear.
But I think the scheduling -- my
understanding is the scheduling is potentially problematic for him, and it is even more problematic for Mr. Cooper. THE COURT: So other than Mr. Cooper and
Mr. Witherspoon, who else has been served with a subpoena. MR. WALKER: Your Honor, we have -- Mr. Mikel
Nelson has been served. THE COURT: MR. WALKER: Your Honor. When was he served? I believe he was served yesterday,
And to the best of my understanding, he has
agreed to appear tomorrow morning. THE COURT: MR. WALKER: THE COURT: MR. WALKER: subpoenaed. All right. Who else?
Mr. Don Vilfer, the expert witness. He was served with a subpoena? Yes, Your Honor. He has been
And, as I stated earlier, he has agreed to
appear telephonically if that meets the Court's approval. THE COURT: Mr. Kirsch, what is the Government's
position on that since he is an expert? MR. KIRSCH: Your Honor, we have to think about
that some more, but my initial response is we would oppose him appearing telephonically. right just as defendants do. MR. WALKER: If that is the case, the earliest he We have a confrontation
could testify would be Monday morning.

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THE COURT: MR. WALKER:
All right. Also, Mr. Vince Rosales was served
yesterday, and to the best of my knowledge, he would be available tomorrow. But, as I said, I am awaiting
definite status on that. THE COURT: MR. WALKER: All right. Who else?
Your Honor, also Mr. Dwayne Fuselier. Apparently there
From what I have been told, he is away.
was no one at his home all week, and it appears they may be on vacation. So he has not been served. But we will
certainly look to get his testimony. THE COURT: When did you attempt -- when did you
begin to make attempts to serve him? MR. WALKER: Attempts began late last week, Your
Honor, and have been ongoing every day since, I believe, Thursday of last week. THE COURT: Mr. Fuselier is listed as somebody -What is his role?
as a CILC subject matter expertise. MR. WALKER:
Your Honor, he was one of the former,
I believe, federal agents retained by IRP Solutions to provide subject matter expertise. THE COURT: MR. WALKER: THE COURT: MR. WALKER: Similar to Mr. Epke? Yes, Your Honor. And Mr. Hillberry? Mr. Hillberry is here.
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THE COURT: MR. WALKER: THE COURT:
And you subpoenaed him? Yes, Your Honor. He was subpoenaed.
What will Mr. Fuselier add that
Mr. Epke and Hillberry will not? MR. BANKS: Only thing he is going to testify to is
the type of the independent contractor agreement that was actually signed, in the same capacity that Mr. Epke attested to. Mr. Hillberry has different testimony as
relates to that regarding information he provided to the Government through requests for materials related to this case. So we want to question Mr. Hillberry about those
types of things. But I would say that Mr. Fuselier is not going to provide much more than Mr. Epke. THE COURT: All right. So, therefore, his
testimony would be cumulative of what Mr. Epke would provide -- has provided, rather. MR. BANKS: That's correct. But we would like, if
he does not -- if Mr. Fuselier did not come to testify, we would like the documents associated, as far as independent contracts, to be entered into evidence for the jury. THE COURT: You can't do that unless you can lay
foundation for them. MR. BANKS: THE COURT: Then we need him to testify. Well, then you should have had him
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served. MR. BANKS: THE COURT: MR. WALKER: THE COURT: That is where we are. Who else? That's all. Let's go through the people you haven't
subpoenaed that you indicate you need to have testify. Let's begin with Tiffany Zellenbaba. MR. WALKER: Tiffany Zellenbaba is -- she left a She is in Rome.
message on our answering machine. THE COURT:
What is the -- what is the testimony
that she would be providing? MR. BANKS: for Robert Half. Your Honor, Tiffany Zellenbaba worked And there is significant testimony with
regards to the way the contract was actually set up, actually involving, I believe, four different staffing entities; one outside of IRP and DKH or Leading Team -Leading Team and DKH at the time. additionally, Ms. Zellenbaba -THE COURT: What is the relevance of her testimony So as far as --
to the issues in this case? MR. BANKS: First off, they're internal
communications that Ms. Zellenbaba had internally regarding the engagement of -THE COURT: MR. BANKS: Internal communications with whom? Well, her internal communications with
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her boss that she is going to be able to testify to that is actually in discovery. We have e-mails regarding that.
We would like to question her on those e-mail communications. THE COURT: And what is the relevance of those to
the issues in this case? MR. BANKS: It is directly related to her staffing
people at Leading Team and DKH, I believe. THE COURT: And what I'm trying to understand is --
what I'm getting from you is that she has not been served, she is in Rome. back. We don't know when she is going to be
I assume you are going to be asking for some sort In order to get that, you have to show me
of continuance.
who the witnesses are, what their testimony will be, how that testimony is competent and relevant, and that you used due diligence to obtain their attendance. So what I am trying to determine is what is the relevance of her testimony? generalities. You are giving me
I need to know specifically how she will
add to your defense. MR. BANKS: Your Honor, I guess my hesitation is, I
guess, because the Government sits here, and he gets some sort of notice -THE COURT: continuance. Well, you haven't asked for a
If you are going to have to ask for a

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continuance, you are going to have to discuss these things. If you don't want to ask a for a continuance at
this point, fine, we can move on. MR. BANKS: We will go ahead and discuss it.
Ms. Zellenbaba had direct communications about whether or not -- with her supervisors and her managers on whether -how and why she should engage with IRP. She was also
admonished by -- to some extent, at least put on notice by the credit department that this was a risky business proposition, and her motivations to move and to continue engaging with Leading Team is actually annotated in those e-mail communications. THE COURT: Half's testify? MR. BANKS: I don't think the Government called And didn't we have someone from Robert
anybody from Robert Half. MR. KIRSCH: We have not had anybody from Robert
Half, and we don't have those e-mails in evidence, Your Honor, in large part because they would all be hearsay. MR. BANKS: Your Honor, those e-mails were sent to
the Government in the form of -- and Bates numbers were actually mentioned in the form of our proffer. As part of
the representations made, we'll pull those Bates numbers and provide them to the Government. MR. KIRSCH: Your Honor, I am not suggesting we
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don't have them.
What I am suggesting is that they would
be inadmissible in the course of this trial because they constitute hearsay. THE COURT: We do have them. All right. So when did you begin your
efforts to subpoena Ms. Zellenbaba? MR. WALKER: Your Honor, I am not certain of that. I am not certain of a date.
I believe that was last week. THE COURT: MR. BANKS: Who else?
Your Honor, I would like to just
comment on Mr. Kirsch saying these e-mails are hearsay. These e-mails are actually Tiffany Zellenbaba's e-mail. THE COURT: They are still out-of-court statements,
and if you're submitting them to prove the truth of the matter asserted, they would be hearsay, unless there is some exception to them. MR. BANKS: THE COURT: Right. That is all Mr. Kirsch is saying, is he So
is going to object to them on the basis of hearsay.
unless you have an exception to that, they may be excluded as hearsay. MR. BANKS: THE COURT: Okay. So, you mentioned that you did serve He is with Idea
Mr. Rosales, who had not been subpoenaed. Integrations.
He is going to appear tomorrow? Yes, Your Honor. The date and time
MR. WALKER:
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for all of these subpoenas is 9:00 a.m. tomorrow. THE COURT: him? MR. WALKER: with Mr. Beltran. Your Honor, I'm not certain the status Let me check my file. Your Honor, I And, Mr. Beltran, what happened with
don't have the status of Mr. Beltran.
But, to the best of
my understanding, he has been served, and I'll request definitely a status on his subpoena. THE COURT: MR. WALKER: check. THE COURT: Now, you also had -- you said What about Krishnan, Yesterday you told me he was. I believe he has been. I need to
Witherspoon you had served. Francesconi and Hickes? MR. WALKER: not going to call. THE COURT: P-I-S-C-I-O-T-T-A? MR. WALKER:
Your Honor, those individuals we are
What about Mr. Pisciotta,
Your Honor, there was an attempt to
serve him, and that subpoena was returned without service. THE COURT: MR. WALKER: When was the attempt made? That was Friday before last, Your
Honor, or Thursday before last, Your Honor. THE COURT: Thursday the 6th?
Thursday before last, meaning last
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MR. WALKER:
I believe so.
I need to find a file
that has that date on it. of that week. THE COURT:
But it would have been the end
MaryAnn McLaughlin.
You said she had
not been subpoenaed. MR. WALKER:
What is the status of her? That's correct, Your Honor. Your
Honor, we are still attempting to serve her. THE COURT: Ms. McLaughlin? MR. WALKER: week before last. THE COURT: MR. WALKER: THE COURT: MR. WALKER: THE COURT: status of that? MR. WALKER: been served. The last status I have is she has not Meaning? On the -October 6th or 7th? It would have been the 6th. All right. And you don't know the That was made -- that was also the When was the first attempt made with
She is not at the address we have for her. Mr. Lam Ha? Mr. Lam Ha just returned from a trip.
He has been served, but we have determined his testimony would be cumulative. THE COURT: MR. WALKER: You are not going to call him? That's correct, Your Honor.
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Mr. Nelson? Mikel Nelson, he has also been served, We will not
but his testimony would also be cumulative. call him. THE COURT: MR. WALKER: Okay.
Let me double check that one, Your
Let me double check that status. I am sorry, Mikel Nelson has been served for
appearance tomorrow morning. THE COURT: MR. WALKER: Ms. Harris. THE COURT: You said Mr. Vilfer can appear on All right. Ms. Harris?
Your Honor, we will not be calling
Monday or by phone tomorrow? MR. WALKER: THE COURT: Yes, Your Honor. You said Mr. Rosales was served, and he
will be here tomorrow. MR. WALKER: Yes, Your Honor. Your Honor, we are
double checking that.
He was served for an appearance for
tomorrow morning, and we are going to get a status on his availability. MR. BANKS: Your Honor, I did notify the people, as
far as the service -- return of the service on those subpoenas, and all of them will be docketed probably later on this morning.
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THE COURT:
All right.
Mr. Belrose of the New York
PD and Mr. Gianelli of New York PD. MR. WALKER: Your Honor, we received a call from
counsel at the NYPD, who had conversed with Mr. Gianelli. And in that conversation, he related that he does not have good recollection of the matters. We will be calling him
during the lunch time break today to personally interview him. THE COURT: MR. WALKER: THE COURT: MR. WALKER: THE COURT: call him yet? MR. WALKER: THE COURT: MR. WALKER: been served. That's correct. What about Mr. Belrose? Mr. Belrose, Your Honor, he has not Mr. Gianelli? Mr. Gianelli. Has he been subpoenaed? Yes, Your Honor, he has been. So you don't know if you are going to
And we will not be calling Mr. Belrose. All right. Ms. Broerman?
THE COURT: MR. WALKER: been served. THE COURT:
Your Honor, Ms. Broerman has not yet
What is the relevance of her testimony
from Senator Allard's office -- former Senator Allard's office? MR. WALKER: Your Honor, Senator Allard was
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instrumental in us contacting different federal agencies about the CILC application, and also he assisted us in making contacts in Washington, D.C. extent of the involvement there. THE COURT: know about that? MR. WALKER: MR. BANKS: Your Honor, I believe that -She also was, I believe, Your Honor -All right. So what does Ms. Broerman That would be the
she interacted with the Colorado Bureau of Investigations at the time that we were involved with CBI regarding the software. THE COURT: officers couldn't? MR. BANKS: Your Honor. THE COURT: MR. BANKS: So she would be cumulative? Honestly, Your Honor, we were using I don't think she adds anything extra, So what does she add that the other CBI
that witness, as far as just overall company legitimacy. I don't think she will be necessarily relevant. THE COURT: subpoenaed? MR. WALKER: THE COURT: MR. WALKER: That's correct. Have you spoken to her at all? No, Your Honor. She has apparently All right. She has not been
moved on from her job, and we haven't been able to find

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her. THE COURT: MR. WALKER: at this time. THE COURT: MR. BANKS: What is his role or testimony to be? Your Honor, he was one of the companies Okay. Mr. Perry?
No, Your Honor, he has not been served
that we engaged in, obviously, and determined that based on creditworthiness and communication with his business partners, that we were not creditworthy to move forward with. In addition, he could provide testimony that no
mention of a contract in interactions with myself were ever mentioned to him with regards to DHS and NYPD. THE COURT: But he did not -- as I understand,
then, he is going to be similar to the testimony you have already submitted by one or two witnesses that they did not enter into any sort of contract arrangements with IRP or any of the other companies? MR. BANKS: And we think it is important, Your
Honor, that given the fact that the Government -- the Indictment has said we continued to communicate that we had current or impending contracts, this was not communicated to Mr. Perry. And it was our position that
any staffing companies that can testify that we did not provide those type of communications are very relevant, as far as we're concerned, as far as our representations are
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concerned. THE COURT: All right. What efforts -- when did
you begin your efforts to subpoena Mr. Perry? MR. WALKER: Your Honor, that would have been the
same week; on or about October 5th, 6th or 7th. THE COURT: MR. WALKER: THE COURT: So not until late last week, as well? Yes, Your Honor. And what efforts have been made -- you What efforts have been made
said he is not subpoenaed.
other than going out once to try to subpoena him? MR. WALKER: There have been efforts made to find I believe that has been determined.
his current employer.
I would need to get more details on the exact efforts that have been made. been located. But I believe his current employer has But for some reason they haven't been able They don't have a home address for
to serve him there. him. THE COURT:
So with respect to Ms. Broerman and
Mr. Perry, you haven't even pursued their location up until last week? MR. WALKER: earlier. THE COURT: Why are we just now finding out where Yes, Your Honor, that was pursued
he lives or where he can be served? MR. WALKER: Your Honor, I am not certain of what
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means were used to try to locate him. trying to locate him for -THE COURT: MR. WALKER: Who has?
But they have been
The support people who are helping us.
I mentioned yesterday Lisa, and people who are assisting her. THE COURT: MR. WALKER: THE COURT: made? MR. WALKER: THE COURT: has made? MR. WALKER: I talked with her, and she told me she Am I aware? How are you aware of what efforts she Lisa who? Lisa Stewart. How are you aware of what efforts she's
used several sources. THE COURT: When did she first start her efforts to
try to locate these witnesses? MR. WALKER: She has been working on locating The results --
people for at least a month, Your Honor.
some of these people who have appeared have been found through those efforts. THE COURT: status with him? MR. WALKER: Mr. Beebe was out of town. And I But let All right. And Mr. Beebe, what is the
believe that he is coming back in town tomorrow.

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me check to see if I have a status on his service. Mr. Beebe has not been served. THE COURT: All right.
No
Now, you have four, five
witnesses from Philadelphia; Amy Kurland, Dan Heitzer, H-E-I-T-Z-E-R, Everett Gillison, Lorelei Larson, Shonique McCall, M-C-C-A-L-L. MR. BANKS: What is the status of those?
Again, Your Honor, we honestly -- we
chose not to pursue them given the Court's previous position to post-2005 interactions with the Philadelphia Police Department. THE COURT: communications? MR. BANKS: THE COURT: Correct. All right. Lorne Cramer, is that one So they are all post-2005
you said would appear today -MR. WALKER: THE COURT: MR. WALKER: Your Honor --- or tomorrow? Your Honor, Mr. Cramer would not be
available until next week, as well. THE COURT: MR. WALKER: handy. THE COURT: MR. WALKER: THE COURT: Why is he not available this week? Your Honor, he was also traveling. How was he served?
When was he subpoenaed? I don't have the status on Mr. Cramer
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MR. WALKER: THE COURT: MR. WALKER:
I am not certain, Your Honor. Was he served? Yes, Your Honor. Yes, he was served. I remember there
I'm sorry, let me double check on that. was an attempt to serve him. THE COURT:
Yesterday you told me he had been
served and he would be here today. MR. WALKER: I am pretty sure he has been served. Yes, Your Honor.
There are a lot of names in play here.
He has been served, and we anticipate his appearance on Monday. THE COURT: You told me yesterday he would be here
MR. WALKER:
I have an update that it will be
THE COURT: subpoenaed him? MR. WALKER: THE COURT: MR. WALKER:
Why is he not here today if you
Because he asserted his -When was he served? I believe he was served earlier this
THE COURT: be here tomorrow. MR. WALKER:
All right.
And so 48 hours, he could
I need to check on the status for I
exactly why he said he would not be able to make it.

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believe there was some kind of conflict. THE COURT: If he's under subpoena, and it is an If he's
appropriate subpoena, then you need to proceed.
under valid subpoena, we'll not delay this case because of the convenience of the witnesses that have been properly served. MR. WALKER: I understand. I need to get a
definite status on Mr. Cramer. THE COURT: Mr. Brown, Southeast Missouri State. What is the
As of yesterday, he was not subpoenaed. status today? MR. WALKER: subpoenaed. THE COURT: MR. WALKER: Mr. Brown. THE COURT: MR. WALKER: What efforts?
Your Honor, he has still not been
What efforts have been made? Continuing to try to contact
Your Honor, to the best of my
knowledge, they are using several services to locate him. THE COURT: When did you begin the efforts to try
to serve Mr. Brown the subpoena? MR. WALKER: Your Honor, I am not certain when they
started to try to locate Mr. Brown. THE COURT: MR. WALKER: Was it late last week, as well? Your Honor, that one -- he would have
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been earlier, because he was with a law enforcement agency, and those people were given higher priority. it would have been before that time. THE COURT: All right. Rick Gonzales of the Rio So
Grande Sheriff's Department? MR. WALKER: will call him. THE COURT: MR. WALKER: He hasn't been subpoenaed yet? I'm not certain. I need to get a Your Honor, I'm not certain that we
status on his -- an update on his status. THE COURT: All right. Mr. Moen, he was not
subpoenaed as of yesterday. MR. WALKER: defense. THE COURT: MR. WALKER: served. yet. Mr. Powers? Your Honor, Mr. Powers has not been Agent Moen will not be called by the
He has been located, but has not been served as
He was just located yesterday. THE COURT: When were the first attempts to serve
him with a subpoena? MR. WALKER: weeks ago. THE COURT: to 4 weeks ago? MR. WALKER: To the best of my knowledge, he had
Your Honor, I believe that was 3 or 4
And why was he not able to be located 3
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changed locations -- work locations, and was not at the location that we had listed for him. THE COURT: MR. WALKER: And Mr. Gene Anderson? Gene Anderson. There is some The correct identity
confusion as far as Gene Anderson.
for Gene Anderson, the original person located -- named Gene Anderson was deceased. It was determined that was So the support team They believe
not the correct Gene Anderson.
started a new effort to find Gene Anderson.
they have the right Gene Anderson at this point, but that has not been verified yet. THE COURT: MR. WALKER: THE COURT: He has not been served? Gene Anderson has not been served. What is the relevance of Mr. Powers'
and Mr. Anderson's testimony. MR. BANKS: Very relevant. Mr. Powers, at one time
was a Special Agent in Charge in Denver, and he is a highly decorated FBI person that actually wrote a letter to a staffing company, I believe it was Sunny Side Temps, regarding that this was a civil matter, not a criminal matter. THE COURT: MR. BANKS: opinion. the time.
His opinion? Well, I don't know if it is his
He was the Special Agent in Charge in Denver at
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THE COURT:
All right.
And what is the relevance
of that to these charges? MR. BANKS: Well, the Government has asserted that We have always asserted
we engaged in criminal activity. that this was a civil matter.
And an FBI agent who
actually runs the Denver office is making those same assertions in response to a staffing company we feel is extremely relevant. THE COURT: MR. KIRSCH: Mr. Kirsch? Your Honor, if I could just add a Mr. Powers didn't
little bit of context about the letter. write the letter.
The letter was sent out under
Mr. Powers' signature, in the same way that attorneys in my office send out letters underneath the name of the U.S. Attorney, John Walsh, and then sign them ourselves. The letter to which Mr. Banks refers was sent out under Mr. Powers' name. It was signed by a Gene Anderson, We would
who was a Supervisory Special Agent at the time.
expect that Mr. Powers would have no knowledge, and probably didn't even see the letter. And that
Ms. Anderson, we expect, would testify got this packet of information from the staffing company that was sent to the wrong office. It was sent to the Denver office rather
than the Colorado Springs office. And the package didn't come with the FBI tracking
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number that would have allowed the Denver office to recognize that the materials were being provided in response to an ongoing investigation. That is the
testimony that the Government expects that both of those witnesses would provide if they were called. THE COURT: have located her. MR. WALKER: THE COURT: MR. BANKS: Yes, Your Honor. All right. Obviously, we obviously disagree with You haven't yet served her, but you
the Government's position until we have had a chance to speak with her. THE COURT: I did understand correctly, you are not
going to call any of the may-call witnesses other than you're still reserving the rights to call yourself? MR. WALKER: THE COURT: That's correct, Your Honor. All right. Mr. Kirsch, is there
anything further that you have to raise? MR. KIRSCH: Your Honor, there were a couple of
other people that, at least the other day the defendants indicated that they were still planning to call; Shaun Haughton. I believe that's the only other person the
other day they indicated they were planning to call that we didn't discuss today. That is a person that, at least it is our belief,
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would appear without a subpoena.
We would expect him to
be a witness friendly to the defense, and would assume that he would be available this week if the defendants did, in fact, intend to call him. THE COURT: MR. WALKER: call Mr. Haughton. THE COURT: Okay. So, with that being said, then, Mr. Walker? Your Honor, our intention is not to
I assume we probably have enough witnesses for today, with Agent Smith. I don't know. To the extent that you can
get any of these other witnesses in here today, you probably need to do that. point? MR. WALKER: location. Your Honor, I'm not sure of his He Where is Mr. Vilfer at this
His office is based out of California.
indicated that he was out of town on another case that would be wrapping up this evening. THE COURT: MR. WALKER: Why can't he be here tomorrow? Your Honor, he has had no preparation He was
time, and he would -- I was on the phone with him. checking airline flights.
And he indicated to me that the
earliest he could get here is tomorrow -- I am not sure for what reasons -- would be around 3:00 p.m. so not knowing his location -THE COURT: But you indicated he was willing to
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appear by telephone tomorrow. MR. WALKER: THE COURT: Yes, Your Honor. If he doesn't have preparation time,
then how could he appear by telephone tomorrow? MR. WALKER: Well, he would be able to prep
sufficiently for tomorrow morning. THE COURT: fly in tomorrow. MR. WALKER: I would believe it a travel issue. If he is able to fly in, then he should
Not knowing his location, we need to check. THE COURT: I think, in this day and age, you can If he's available --
get anywhere within hours' notice.
home tomorrow, he is available to fly to Colorado tomorrow. MR. WALKER: Your Honor, he didn't state he would
be flying home in the morning, he indicated he would be calling in in the morning. THE COURT: Somebody better get ahold of him to see If he can appear by phone, In addition, he is an
if he can get here tomorrow.
he can certainly appear in person. expert.
And so, therefore, I believe it is necessary to
have him appear in person. MR. WALKER: THE COURT: Yes, Your Honor. All right. I have a note from my He
judicial assistant that one of the jurors called in.

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has either food poisoning or the flu.
He has been up all
night, has a great deal of stomach pain and nausea, and he can't come in. So, Ms. Seeman, could you go do a head count to see if all of the other jurors are here. COURTROOM DEPUTY: THE COURT: four alternates. Yes, Your Honor. We do have 14.
All right.
So that is why I picked
My inclination is to go ahead and
proceed with trial, and we will just excuse Mr. Austin from being a juror in this case. MR. KIRSCH: Honor? MR. HARPER: did you mention? THE COURT: It doesn't really matter. It will be a Your Honor, for the record, whose name May I have just a moment, please, Your
juror I will excuse. MR. HARPER: MR. KIRSCH: Okay. Your Honor, our understanding is that
at least as of now, that there is not a continuance being requested, and that there is not a continuance that is contemplated -- at least from what we heard, the maximum continuance that would be contemplated would be until Monday of next week. If that understanding is correct,
then the Government has no objection to proceeding with and remaining with the two alternate.
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If there was -- if there was going to be some possibility of a continuance much longer than that that would be contemplated, we would have a different position. THE COURT: All right. Mr. Banks, Mr. Walker,
based on what you told me about your witnesses, I am assuming that if you can get them served, we could have everybody report at the latest by Monday? MR. WALKER: THE COURT: Yes, Your Honor. That would probably be the longest I
would extend any continuances on witnesses. MR. WALKER: Your Honor, that is a continuance we
were planning to request. THE COURT: That, to me, would not be unreasonable.
I don't want to delay the jury any longer, but if it is just the weekend -- intervening weekend. But I would
expect to go forward with all of the witnesses we could today and tomorrow. MR. WALKER: MR. BANKS: possible, too. Yes, Your Honor, that is our plan. Your Honor, we want to go as quickly as We We just
We want to put that on the record.
want to get through this as quickly as possible.
want to make sure that everybody that we need to testify on our behalf for our defense is available to do so. THE COURT: All right. So I will expect that you
all will, with all due conscientiousness, get those you

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have not served, served, make sure that they know that they need to appear here no later than Monday. In the
meantime, we are going to move forward with what witnesses we have. If Mr. Vilfer can get here tomorrow, I want him tomorrow. If not, Monday. With that being said, do you
have any objection to my essentially proceeding with the jury trial this morning and excusing the one juror? MR. WALKER: THE COURT: MR. WALKER: plan. May I have a moment, Your Honor? You may. Yes, Your Honor. We agree with that
I want to reiterate what I said earlier this
morning, is that we anticipate the current testimony of Sam Thurman to take up probably an hour, around that time frame, maybe a little bit more. testify. Mr. Hillberry is here to And those would be So we wanted to
We would call John Smith.
our only witnesses we would call today.
just state that again so you can plan properly. THE COURT: Now, there are no other witnesses you
can get here today if we finish with Mr. Smith early? MR. WALKER: THE COURT: tomorrow? MR. WALKER: Your Honor, the people I mentioned No, Your Honor. What about tomorrow? Who will appear
earlier who have been served with an appearance time of

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9:00 a.m. tomorrow. THE COURT: take? How long do you think they're going to
What I don't want to do is irritate the jury by
bringing them back for an hour's worth of testimony and saying you can go home. MR. WALKER: That doesn't do anybody any good.
Well, Your Honor, of the people lined
up for tomorrow, there is no long testimony in that group. Mr. Vilfer would be the longest testimony we would anticipate, if he were to be able to testify tomorrow. THE COURT: So I guess my inclination would be if
there is no objection, to make sure we have enough witnesses to keep the jury going all day, is to go ahead and not have them come in tomorrow; essentially cancel tomorrow as a trial day. I don't want to bring them in That will irritate them.
for an hour, hour and a half.
We start fresh on Monday, with the expectation -- I will hold you to this -- that you are going to subpoena the witnesses you need, and they will appear early next week, starting Monday, and we will just wrap this up. MR. WALKER: THE COURT: MR. WALKER: Could I have one moment, Your Honor? You may. Your Honor, the only exception there,
and witnesses we believe are critical, will certainly be Steven Cooper and also Bill Witherspoon of DHS. THE COURT: Both of those you indicated have been
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served. MR. WALKER: THE COURT: MR. WALKER: Your Honor -Their counsel has been served. Their counsel has been served. I did
get a notice last night saying they were not properly served, and they wanted additional information. THE COURT: You need to take care of that
immediately and make the appropriate arrangements. MR. WALKER: MR. BANKS: That will be taken care of today. Your Honor, I did receive status this Lisa Stewart had
morning with regard to Mr. Witherspoon. a conference with counsel. their testimony.
They discussed the nature of
DHS' counsel doesn't see an issue with Right now, we are only So I should
what they'll be testifying about.
dealing with the logistics of them coming.
have something more -- maybe something more definitive this afternoon. THE COURT: It is possible, since they are more
fact witnesses, and probably will be fairly short, as have the others, that you could try to do them by video conference, if it is the logistics trying to get them from -- are they in D.C.? MR. BANKS: THE COURT: Most likely D.C. Unless there is an objection by the
Government, a good compromise would be -- if the problem

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is logistics, we can hook up -- we have the video conference. So it is not just a telephone. The jury
actually gets to see their face while they are doing it. We can have them sworn in. probably use. That is an alternative we can
If, on the other hand, they make the
arrangement to get them to some place where they can do video conferences -MR. BANKS: Your Honor. THE COURT: now. You don't have to make that decision Your Honor, obviously -one moment,
I am just telling you that is an alternative that is We can
available that I am willing to make available. proceed that way.
When you talk to them, if it is a
problem -- now, if you subpoenaed them and you've properly subpoenaed them, you can insist that they come in person. But that is an alternative that is available if we have a problem for everybody, except for the expert witnesses, because I think expert witnesses need to be here in person. MR. BANKS: closed to that. Your Honor, we are not, obviously,
We will brief that issue with DHS counsel
and get back to you. THE COURT: That is fine. I offered it as an
option in the event that is a problem that could be resolved.

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MR. WALKER: Mr. Vilfer.
Your Honor, I just got an update on
In fact, he is still involved in a case He was going to call in before that
tomorrow morning.
case started, since it is on west coast time, and he would call in at 9 o'clock our time, 8 o'clock west coast time, and then go to the trial, whatever he is doing. THE COURT: So, I think then my resolution would be I would not have
that we do not conduct trial tomorrow.
the jury come in at all, give them the day off, but we will start on Monday morning, and I will expect all of the defense witnesses to proceed accordingly. MR. WALKER: our plan. THE COURT: both sides? MS. HAZRA: Yes, Your Honor. I have one scheduling All right. So is that satisfactory to Yes, Your Honor. That is certainly
request, Your Honor.
I had alerted the Court I had a I filed late
hearing in another court tomorrow at 3:00. last night a motion to continue that.
Is there a way I
could let my office know they could call Judge Krieger's chambers and tell them I will be available, and she doesn't need to reschedule the hearing? THE COURT: Ms. Seeman, can you have Ms. Ross call
upstairs to Judge Krieger to let her know the motion filed -- do you know the case number?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in. regard?
MS. HAZRA:
10-cr-502.
It is set for 3 o'clock
tomorrow, and I now will be available, and I am withdrawing my motion to move it. THE COURT: Tell her she is in trial, but have
Ms. Ross contact her. MS. HAZRA: THE COURT: Thank you, Your Honor. Any objection to proceeding in that
MR. WALKER: THE COURT: bring the jury in.
No, Your Honor. So, then, I'm going to go ahead and We will proceed with the 14 we have.
And the juror who is ill will be excused from any further service. That still leaves us with two alternates. So
hopefully we will get it done before anything happens to any other jurors. Ms. Seeman, you can bring in the jury. Is Mr. Thurman here? MR. WALKER: THE COURT: Yes, Your Honor. Why don't you go ahead and bring him
(The following is had in open court, in the hearing and presence of the jury.) THE COURT: You may be seated. I
Well, good morning, ladies and gentlemen.
apologize for keeping you waiting, but there are always

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matters I have to take care of beforehand. for keeping you waiting.
So I apologize
As you noted, one of your jurors is not here. is ill, so I'm excusing him from the jury. All right. We may proceed. The defense may
He
proceed with their examination of Mr. Thurman. SAMUEL THURMAN having been previously duly sworn, testified as follows: DIRECT EXAMINATION (Cont'd) BY MR. WALKER: Q. A. Q. Good morning, Mr. Thurman. Good morning. Okay. If you recall, we were discussing yesterday Do you recall
the meetings IRP Solutions had with DHS. that testimony? A. Q. Yes, I do.
And do you recall a meeting that included a
Mr. Gilbert Trill? A. Q. I do. Could you, just to backtrack just a bit for the Who was the meeting --
jury's memory and refreshment.
what organization and entity was that meeting with where Mr. Gilbert Trill was in attendance? A. That was with the Department of Homeland Security,
who at the time had a working group, which was the

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Consolidated Enforcement Environment Initiative working group. Q. And the working group that that meeting was held
with, did that consist of different investigative offices? A. Q. It did. And do you know some of the investigative units that
were involved there? MR. KIRSCH: answered. THE COURT: Q. Sustained. Mr. Thurman, what groups were Objection, Your Honor, asked and
(BY MR. WALKER)
represented in that meeting? MR. KIRSCH: THE COURT: Same objection, Your Honor. Sustained. We went over this, I
believe, yesterday Mr. Walker. MR. WALKER: Q. (BY MR. WALKER) Yes, Your Honor. Mr. Thurman, in response to the
meetings at DHS, IRP Solutions -- did IRP Solutions make enhancements to CILC? A. Q. Yes. And were those enhancements for use by general
police? A. When you say general police, you mean local and
state? Q. Yes.
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A. Q.
It would be conducive to their environments, as well. And would they also be conducive to DHS and federal
agencies? A. Q. Yes, they would. Were there subsequent communications with DHS
following that working group meeting and presentation? A. Q. Yes, there was. And what did you communicate to DHS following those
meetings? A. One of the things was communicating to DHS that IRP One of the
had put a "federal face" on the solution.
things that Mr. Cooper had requested, and felt that it would help the overall look and feel, was to put a "federal face" on it. Q. A. What does that "federal face" mean? Well, there were certain terms and certain
operational procedures that they needed incorporated into the software. And then one of the other things, too, was And the
CILC started off as a client server solution.
request was made that it be web enabled so that it would be more far reaching to the user community. Q. And in what you term as web enabling, did that change
how DHS would potentially use the product? MR. KIRSCH: THE COURT: Objection, lack of foundation. Overruled.
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THE WITNESS:
Yes, it would.
They wanted to have
capability where folks in the field, at the field offices would be able to use it, and then even if they were out on a mission or what have you. Q. (BY MR. WALKER) And as a result of these changes
that you mentioned, the federal face, did the company pursue additional meetings with DHS? A. Q. A. Q. A. Q. Yes, IRP did pursue it. IRP did? Yes, follow-up meetings. Did DHS grant the request for follow-up meetings? Yes, it did. And what time frame -- were you involved in setting
up subsequent -- a subsequent meeting? A. Q. Yes, I was. And who did you work with to set up a meeting
subsequently at DHS? A. There were three main people; Steven Cooper, Bill
Witherspoon and Paul Tran. Q. And were all three of these gentlemen at DHS involved
in setting up the next meeting with you? A. Q. At one point or another. And at some point did DHS and IRP agree to a meeting
day or a subsequent meeting? A. Yes.

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Q.
Do you recall the time frame of that subsequent
meeting? A. Q. A. Q. A. It was probably mid 2004. And do you recall the location of that meeting? It was in D.C. Washington, D.C.
And where in Washington, D.C.? At the -- I can't say it was DHS headquarters. It
was -- I just remember I Street. I Street. certain. Q. A. Q.
There was a building on I can't be totally
I believe that is where.
Would that be a DHS office, then? DHS did have offices in there, yes. And what was the purpose of this meeting that was
held at that location? A. Again, to do a follow-up on the CILC Federal
solution, and to present it to the working group, and then also just to show the enhancements that had been made to the solution. Q. And you just said "the working group." Is that the
same working group that was in attendance at the previous meeting, to the best of your knowledge? A. There may have been different players. So I can't be
certain as to any specific names of all of the folks who were there. But Mr. Cooper and Mr. Witherspoon, I
believe, were in attendance, along with some of the other

1817
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representatives from some of the other agencies. couple of defense contractor representatives were. Q. A.
Then a
And what activities were undertaken in that meeting? Well, there was a software demonstration. And then
for those who were not aware of IRP, basically, a typical presentation would include doing an overview, if you will, of the company, and what the thought process and methodology that went into developing the software, and then a software demonstration. Q. Do you recall who else, other than yourself, from IRP
Solutions attended that meeting? A. You were there, Gary Walker, David Banks, I believe
Clinton Stewart would have been there, and myself. Q. And subsequent to the meeting, after its completion,
did IRP Solutions have conversations with DHS representatives? A. Q. Yes. Did IRP Solutions have conversations with DHS in the
meeting room after the conclusion of the meeting? A. There were conversations in the meeting room, as well
as via teleconference, e-mail. Q. And were you involved in those e-mail communications
with DHS subsequent to that meeting? A. Q. I was. And what were your -- what were your communications
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to DHS? A. At that time, DHS became particularly interested in a
particular module, what was called confidential informant module. And I don't know exactly, you know, the
application that -- why they were focusing in on that, but that was one of the modules that they wanted. Q. And you said they wanted to start with that. Could
you clarify that a little bit? A. Well, Case Investigative Life Cycle -- Case
Investigative Life Cycle software includes several modules. And the software is designed to take an
investigator from the crime scene through the courtroom, and includes -MR. KIRSCH: non-responsive. THE COURT: Q. Sustained. So let me repeat my question, Your Honor, I object to this answer as
(BY MR. WALKER)
Mr. Thurman. A. Q. Okay. You said that DHS wanted to start with the
confidential informant module? A. Q. Correct. So can you clarify that statement, "start with the
confidential informant module"? A. Well, CILC was larger than just that one module.
And
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so they indicated they had a need -MR. KIRSCH: THE COURT: Objection, hearsay. Overruled. I think it's not being
offered for the truth of the matter asserted, it is offered for why they did what they did. THE WITNESS: You may proceed.
They had a need for being able to And
maintain their confidential informant information.
they wanted to provide that to, I think, at the time, we were given a number of 30,000 users. And so it would give
them the ability of sharing information and collaborating on the confidential informant information. Q. (BY MR. WALKER) And in that communication, did DHS
request that IRP Solutions deliver the confidential informant software? A. Q. DHS requested a quote for that solution. And did IRP Solutions deliver a quote for the
confidential informant module? A. Q. A. We did. What was the quote delivered to DHS? I believe that quote was in the neighborhood of
somewhere between 7- and $8 million. MR. WALKER: THE COURT: MR. WALKER: Your Honor, may I have a moment? You may. Your Honor, I would like to refresh
Mr. Thurman's memory on the quotation provided to DHS on

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the confidential informant module.
This quotation has I need to
already been entered into evidence by defense. reference the number. THE COURT: What is the number?
So this has
already been introduced into evidence -MR. WALKER: THE COURT: MR. WALKER: MR. KIRSCH: Yes, Your Honor. -- as opposed to marked? It may have just been marked. Your Honor, I believe they are
referring to Government Exhibit 502.03 -THE COURT: MR. KIRSCH: MR. WALKER: THE COURT: Is that correct? -- which is admitted into evidence. That's correct, Your Honor. Then you may.
Ms. Seeman could you get 502.03? MR. BANKS: Honor. THE COURT: MR. BANKS: THE COURT: You may. We'll just use the elmo. Use it on the elmo. Okay. So if you Ask permission to publish that, Your
can turn on the elmo. Q. (BY MR. WALKER) Mr. Thurman, can you see that
document that is being displayed? A. Q. Yes, I can. If you can just take a moment to look at that.
And
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once you have looked it over, let me know. down for you. A. Q. Okay. If you can scroll down. Okay.
I can scroll
All right.
And after looking at that, to the best of your
knowledge, is that the quotation that was provided to the Department of Homeland Security by IRP Solutions? A. That looks to be correct. The only thing I see
different is -- not saying it is different from what was stated, just from what I stated earlier, I indicated 30,000 users, and this indicates 10,000 users. is -Q. A. Q. Were you involved in producing this quotation? I was. And you said earlier, before seeing this document, And now we see it was But this
you believed it was 30,000 users.
10,000 concurrent users; is that correct? A. Q. That's correct. And for this quotation, did the quotation involve
elements other than just software licenses? A. Q. A. Q. Oh, as you showed there, support. Support? Yes. And how was the support figure arrived at by you and
IRP Solutions? MR. KIRSCH: Objection, relevance.

1822
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Q.
THE COURT:
Sustained. And so you would agree that this
(BY MR. WALKER)
quotation was delivered to the Department of Homeland Security? A. Q. A. Q. A. Q. Yes. And that was delivered at their request? Yes. Is that right? Yes, sir. And subsequent to delivering this quotation to the
Department of Homeland Security, did IRP Solutions receive any communications from the Department of Homeland Security regarding the quotation? A. Q. A. Q. A. Yes, IRP did. Were you a party to that communication? Yes. And who, from DHS, communicated to you? Bill Witherspoon was the main person that was
communicating at that time. Q. And what did you -- what was your conversation with
Mr. Witherspoon? MR. KIRSCH: THE COURT: Objection, hearsay. Sustained. And in response to Mr. Witherspoon's
(BY MR. WALKER)
communications, did you have a reply or information for

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Mr. Witherspoon? A. I required us to -- the status of the quote, and from
a standpoint of, you know, how far along they had gotten, based on feedback that I had gotten from Mr. Witherspoon. Q. And subsequent to the quotation and your
communications with Mr. Witherspoon, were there any additional meetings with the Department of Homeland Security? A. Q. There were. And do you recall the time frame of the next meeting
with the Department of Homeland Security? A. That was probably around the September 2004 time
frame. Q. And what was the nature of this -- I am sorry, did
you say there was a meeting scheduled in the September 2004 time frame? A. Q. It was around that time frame, yes. Were you involved in setting up that meeting in
September of 2004? A. Q. I was. And did you work with someone at DHS to set up the
September 2004 meeting? A. Q. A. Steven Cooper. Steven Cooper? Actually, it started off Steven Cooper.
He ended up
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getting pulled away on something, and he shifted it to Bill Witherspoon. But between Bill Witherspoon and Steven
Cooper, that is who I coordinated with. Q. And were you aware of the purpose of this meeting in
2004 between DHS and IRP? A. Q. A. Yes. And what was the purpose of this meeting? This was another joint meeting between DHS and They had a requirement -- not a
representatives from DOJ.
requirement, but they were sort of shifting gears, whereby DOJ was working with DHS on a solution that could be used by all agencies together. next step in the process. Q. You referenced DOJ. What does DOJ mean in this I think it was basically the
context? A. Q. A. Q. Department of Justice. Department of Justice? Yes. And that meeting, September of 2004, that you say was
between DOJ and DHS, was that a meeting that included management at DOJ? A. Q. Yes. Do you recall names of the DOJ representatives at
that meeting, or their roles? A. There was a Price Roe from DOJ. And then there
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was -THE COURT: THE WITNESS: THE COURT: THE WITNESS: THE COURT: THE WITNESS: escapes me right now. one. Q. A. Q. A. (BY MR. WALKER) Okay. ROWE? P-R-I-C-E. Last name? R-O-E. Okay. And then the CIO of DOJ, whose name I will have to think about that
I am sorry, Van Hitch. Van Hitch. Could you repeat his role at DOJ? I can't be certain, but I
I believe he was the CIO.
believe he was the CIO. Q. And you said there were also DHS representatives
there? A. That one I'm not certain of who from DHS was there.
I can't recall specifically the names. Q. And what was presented by IRP Solutions to these two
Government entities? A. Q. The CILC Federal solution again. And subsequent to this meeting, were you involved in
any communications with attendees of the meeting? A. Q. Yes. And who did you communicate with subsequent to the
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meeting? A. Well, that would have been Steven Cooper, obviously,
to follow up with him on that meeting, because I don't believe Steven Cooper was in attendance at that particular meeting. Q. Mr. Thurman, beginning yesterday, you recounted
several meetings with DHS. A. Q. Yes. Do you know the number of meetings to this point that
IRP Solutions had with DHS? A. Do you want me to state what the meetings were or
just give a number? Q. A. Q. Just a count would be fine, Mr. Thurman. Okay. I would say there were a minimum of five. And to the best of your
A minimum of five.
recollection, how many of those meetings involved Steven Cooper? A. I would say three of those involved Steven Cooper.
And if I might clarify, when I say a meeting, what constituted a meeting, in my mind, was even a one on one with Steven Cooper or a one on one with Bill Witherspoon via WebEx. Q. Would you classify a phone call with Steven Cooper as
a meeting? A. Pretty much, yes.

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Q.
And how many of those meetings involved
demonstrations of IRP Solutions' software? A. Again, it could be either one on one or a group That's just
session; that would still be around five. with DHS. meetings. Q.
There were other agencies that followed those
And of those approximate five meetings, how many of
those involved demonstrations where Bill Witherspoon was involved? A. That would probably be, I would say a minimum of I'm certain there were three.
three. Q.
And, to the best of your knowledge, were you in
attendance at all of the meetings between DHS and IRP Solutions? A. There may have been a meeting that I was not in
attendance at later in 2004. Q. And, Mr. Thurman, you just recounted a meeting that
you say happened about the September 2004 time frame -A. Q. A. Q. Right. -- with DHS and DOJ; is that right? Right. Were there any -- were there any other meetings
between IRP Solutions and DHS subsequent to that meeting? A. Well, DHS was part of a large group that IRP was part
of, a meeting.
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Q. A.
What group was that? That was the FICMS. Acronym for Federal
Investigative Case Management System. Q. And there was a meeting -- I just want to clarify.
There was a meeting related to the subject of FICMS that included DHS, and IRP attended that meeting? A. Q. A. Q. Yes. Do you recall the time frame of that meeting? That was the September/October 2004 time frame. Would that have been immediately after the meeting
that you believe was September 2004? A. Q. A. Q. A. Q. A. In close proximity. And do you recall where that meeting occurred? It was in Washington, D.C. And who from IRP Solutions attended that meeting? The FICMS'? Yes, the FICMS' meeting? Well, for the FICMS' RFI meeting, a request for
information, that would have been yourself, Gary Walker, David Banks, Clinton Stewart and myself. I can expound on that just a bit. And, however, if
Because of the limited
space, the government would only allow in two representatives from each company into the session, itself. So yourself, Gary Walker and David Banks sat in
on the RFI meeting.

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Q.
And although you didn't sit in on the meeting,
itself, were you at the venue where the meeting was held? A. Q. RFI? A. Q. Request for information. At that FICMS' RFI meeting, did you see or meet any Yes, sir. And at the FICMS' RFI meeting -- could you clarify
DOJ -- I am sorry, DHS employees at that meeting? MR. KIRSCH: Objection, Your Honor, he just
testified he wasn't at the meeting. THE COURT: foundation. MR. WALKER: Q. (BY MR. WALKER) Yes, Your Honor. Mr. Thurman, you just stated that Sustained. You need to lay more
myself, Mr. Walker and Mr. Banks actually entered into the meeting room; is that correct? A. Q. That's correct. Were you at the site, the venue where the meeting
occurred? A. Q. Yes, sir. So you were at the building where the FICMS' RFI
meeting occurred? A. Q. At the Aerospace Corporation, that's correct. You were not allowed into the room where the meeting
occurred because of what reason?

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A. Q.
Limited space. And so while you were at that venue, for the FICMS'
RFI meeting, did you meet or talk to any DHS employees? A. Q. A. Q. I did see Mr. Cooper. Did you speak with Mr. Cooper? Briefly. Subsequent to this meeting that IRP Solutions
attended, were there any other meetings with the Department of Homeland Security? A. Q. Not following that RFI -- the RFI session, no. Subsequent to that meeting, did IRP Solutions have
any, or did you have any communications with DHS? A. Q. A. Q. Yes. And who did you communicate with? Bill Witherspoon. Bill Witherspoon. And do you recall the time frame
of your next communication with Mr. Witherspoon? A. That would have been the November time frame,
November-December 2004 time frame. Q. Would it be correct to say that was approximately
one, or maybe two months following the FICMS' meeting you just mentioned? A. Q. That's correct. Before I move on, I want to go back to your statement
that you did speak with Mr. Cooper at the FICMS' meeting;
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correct? A. Q. Correct. And in that meeting, what were the results of that
meeting with Mr. Cooper? A. Prior to the FICMS' RFI -- I'm sorry, restate the
question. Q. Okay. I believe you said that you did meet briefly
with Mr. Cooper following the FICMS' RFI meeting. A. Q. A. Q. Right. Was that a face-to-face meeting with Mr. Cooper? There were teleconference calls. Okay. Thank you. We did have calls.
And what was the result of the
teleconference you had with Mr. Cooper? A. The Department of Homeland Security, speaking, you
know, as part of the aside from the FICMS Initiative, wanted to get an additional quote. MR. KIRSCH: THE COURT: Objection, hearsay. I'm going to allow it, because I
believe they are not offering it for the truth of what was said, but offering it to show what IRP did in response. And I don't think that is hearsay. overrule the hearsay. offering it for. MR. WALKER: Honor.
So I am going to
I assume that is what you are
That is a correct assumption, Your
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THE WITNESS:
DHS wanted to get a separate quote
for its solution in the event that the FICMS Initiative didn't keep a report. Q. (BY MR. WALKER) And did IRP Solutions provide a
quote subsequent to your conversation with Mr. Cooper? A. Q. Yes. And for what software did that -- what software did
that quote incorporate? A. That was for CILC Federal. And, by that time, and
maybe prior to that, it was being called CILC Federal Trusted, because of the security that they wanted built into it; they being DHS. Q. And did IRP Solutions deliver a quote to DHS for that
product? A. Q. A. Yes. And do you recall the amount of that quotation? There were a couple. I believe one was about 87
million, I think.
And then I think, based on other
requests that were made by DHS, there was -- I think there was a separate one that was submitted even after that. But I do recall one around 80-, to 85-, $87 million. Q. And this quotation for what you called CILC Federal
Trusted, is it correct that this was at the request of the Department of Homeland Security? A. Yes, it was.
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Q.
And you also said there may have been two quotations
delivered -A. Q. A. Q. Correct. -- around that time frame? Correct. And why were there two delivered, when you just
stated there was -- they requested one quotation? MR. KIRSCH: foundation. THE COURT: Q. Sustained. So, Mr. Thurman, were you involved Objection, Your Honor, lack of
(BY MR. WALKER)
in providing a quotation to the Department of Homeland Security? A. yes. Q. And was this quote in response to a request from the I was involved in helping to compile the numbers,
Department of Homeland Security? A. Yes, sir. MR. KIRSCH: quote? THE COURT: quotes. Clarify, because we have had several Objection as to vagueness, which
I assume this is different from the one we saw
previously. MR. WALKER: THE COURT: Yes, Your Honor. All right. Clarify.
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Q.
(BY MR. WALKER)
And this would be -- would this be a
quotation subsequent to the CILC confidential informant quotation that you referenced earlier? A. Q. Yes. So would it be fair to say this would be the second
quotation provided to DHS from IRP Solutions? A. I wouldn't qualify it as the second. But the one
that I made reference to is the 87- or in the mid $80 million range, yes. Q. Okay. You said that you were involved in preparing
the quotation to DHS for the mid $80 million quote; is that correct? A. Q. Yes. Subsequent to delivering the mid $85 million quote,
did DHS request any additional quotations? A. Q. Yes. And were you involved in conversations and the
request from DHS for a subsequent quotation? A. Q. Yes. And this subsequent quotation, was it different in
requirements from the previous quotation requested by DHS? A. Q. Yes, it was. And how did this quotation request differ from the
previous quotation request? A. Well, different requirements. Different number of
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views.
Different security requirements. Different support, in general.
Different That's kind of
licensing.
what was driving the difference in quotes. Q. Would it have been a quotation of reduced scope or
increased scope? A. Q. Increased scope. Increased scope. Increased scope. Do you recall the price quoted for
this increased scope request? A. I don't remember the exact number. It was in excess
of a hundred million dollars. Q. And do you recall who from the Department of Homeland
Security requested that quotation? A. Q. A. Q. That quote was also sent to Bill Witherspoon. It was sent to Bill Witherspoon? Yes. Was it requested by Bill Witherspoon, to the best of
your knowledge? A. Yes, to the best of my knowledge. MR. WALKER: THE COURT: MR. WALKER: Could I have one moment, Your Honor? You may. Your Honor, I would ask to publish
Government Exhibit 502.03, the quotation to the Department of Homeland Security from IRP Solutions. THE COURT: MR. WALKER: Is that the one we just published? Yes, Your Honor. That is the one we
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just published. THE COURT: MR. WALKER: quotation, first. please. Okay. You may.
If you could scroll down to the actual Let's go to the top of the quotation, Okay, thank you. Just
All of the way to the very top.
Let's go back to the company information, please. above this. Q. Okay. Thank you.
(BY MR. WALKER)
Mr. Thurman, is this the quotation
you recall providing to the Department of Homeland Security? A. That would be correct. MR. WALKER: Q. (BY MR. WALKER) And if you could scroll down, please. And you said earlier that this quote
had expanded requirements from the previous quote, which you mentioned was about 85 million -- 85- range? A. Q. A. Q. Correct. And what is the total you see there for the quote? I see 93.5 million. And, Mr. Thurman, were you involved in any meetings
with DHS subsequent to providing this quotation to the Department of Homeland Security? A. Q. Phone calls. And do you recall who you next spoke with at DHS on
the phone? A. Bill Witherspoon.

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Q.
And also do you recall in what time frame after
providing this quote to DHS that that telephone call occurred? A. I generally remember an immediate phone call upon
sending the e-mail. Q. And what information did you provide to
Mr. Witherspoon? A. I wanted to confirm that he received the quote, and
that he check on the status. Q. Did Mr. Witherspoon provide any further instruction
to you in that phone call? A. Mr. Witherspoon indicated that the quote was being
reviewed, and that he was -- that they were looking to get it included into the next budget. discussions at that time. Q. Did Mr. Witherspoon indicate who was involved in the They were in budget
budget exercise? A. DHS -MR. KIRSCH: THE COURT: MR. WALKER: THE COURT: Q. Objection, hearsay. Sustained. May I have one moment, Your Honor? You may. Mr. Thurman, who was involved in the
(BY MR. WALKER)
budget exercise? A. Well, Mr. Witherspoon was involved in them, according

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to his communications. Q. And subsequent to that telephone call you just
related with Mr. Witherspoon, did you have any communications with the Department of Homeland Security employees? A. Q. A. Q. I did. And who would that have been with? Again, Mr. Witherspoon. And what time frame was that communication relative
to the previous communication? A. Q. Late -- December 2004 to January 2005 time frame. And what was your communication to Mr. Witherspoon in
that phone call? MR. KIRSCH: THE COURT: THE WITNESS: Objection, hearsay. Overruled. Again, checking on the status of the
budgeting process for this particular quote. Q. (BY MR. WALKER) And subsequent to this phone call,
did you receive any other status from the Department of Homeland Security? A. The status I got around the January time frame was
that they were tied up with the Presidential Inauguration. So all law enforcement agencies in Washington, D.C. were affiliated with the Presidential Inauguration, and that they would pick it up after that.
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Q.
Was that your final communication with the Department
of Homeland Security in January of 2005? A. Q. I can't be certain. I may have late January of 2005.
And to the best of your recollection, who would that
communication have been with? A. Q. It would have been with Bill Witherspoon again. Did you have any subsequent communication with the
Department of Homeland Security? A. Q. bit? A. Q. Probably March, April 2005. And what did you communicate with the Department of Not until later in 2005. What time frame? Could you narrow it down a little
Homeland Security? MR. KIRSCH: Objection to the relevance of that
time period, Your Honor. THE COURT: Q. Sustained. And was there any event that was the
(BY MR. WALKER)
termination of your communications with DHS? A. DHS. Q. A. Q. I am sorry? There was an impact to our communication with DHS. What was that impact? MR. KIRSCH: Objection, relevance, Your Honor.
Yes.
There was an impact to our communication with
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Q.
THE COURT:
Sustained. Mr. Thurman, were you still working
(BY MR. WALKER)
at IRP Solutions when the FBI conducted their search warrant on IRP Solutions in February 2005? A. Q. that? MR. KIRSCH: THE COURT: MR. WALKER: THE COURT: Objection, Your Honor, relevance. Sustained. Could I have one moment, Your Honor? You may. Mr. Thurman, why did you stop Yes. Did you have any communication with DHS following
(BY MR. WALKER)
communicating with DHS? MR. KIRSCH: THE COURT: MR. WALKER: Objection, relevance. Sustained. Your Honor, I have no further
questions for the witness. THE COURT: MR. BANKS: THE COURT: Anybody else? Yes, Your Honor. Mr. Banks. DIRECT EXAMINATION BY MR. BANKS: Q. Mr. Thurman, did you ever meet -- have any meetings
outside of the Department of Homeland Security's office? A. Yes.

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Q. A.
Where? There was a meeting that we had with Steven Cooper at I think it was at the JW
the -- at one of the hotels. Marriott. Q. A.
What was the nature of that meeting? He wanted to prep us for a meeting with the DOJ,
Department of Justice. Q. And you had mentioned on or about. What time frame You mentioned a
and what meeting were you referring to? September meeting, October meeting.
In which one of those
meetings did this preparatory meeting occur? A. To the best of my recollection, I believe that would
have been around the September time frame. Q. A. And what were the results of that meeting? Well, the following day we had a meeting with the
Department of Justice. Q. Okay. Did -- were there any -- were there any
changes to your agenda as a result of that meeting? MR. KIRSCH: THE COURT: MR. BANKS: Your Honor. THE COURT: Q. (BY MR. BANKS) All right. Thank you. Objection, relevance. Have we not covered all of this? We may have. I will withdraw that,
Now, you had mentioned that you had
numerous communications with Bill Witherspoon; correct?

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A. Q.
Yes. What meetings or communications were provided to you
by Mr. Witherspoon? A. Q. Telephonically, and then also via e-mail. Any particular -- what e-mail addresses, what
telephone numbers? A. I had both his government e-mail address, as well as
his personal e-mail address, and his government phone number, as well as his cell phone number. Q. Okay. I want to go back to Paul Tran and meetings Was there ever a meeting with --
you had with Paul Tran.
concerning a pilot program? A. Mr. Tran spoke of the pilot program early on in our
discussions. Q. for? A. Q. I believe it was 10- -- I think it was $12 million. Okay. And what were the requirements for What was required to What was needed? Okay. Do you recall how much that pilot program was
participating in that pilot program? participate in that pilot program? A.
The CILC software was the focus of that pilot
program. Q. And what purposes would the CILC software be used in
that pilot program? MR. KIRSCH: Objection, relevance.

1843
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Q. Q. Q.
THE COURT: (BY MR. BANKS)
Sustained. Mr. Thurman, during this time in the
September/October time frame of 2004, what was your expectations with the business at the Department of Homeland Security? MR. KIRSCH: THE COURT: (BY MR. BANKS) Objection, relevance. Sustained. Did you have any plans to deliver
software to Homeland Security? MR. KIRSCH: THE COURT: (BY MR. BANKS) Objection, relevance. Sustained. Did you anticipate gaining a contract
with the Department of Homeland Security? MR. KIRSCH: THE COURT: Objection, relevance. I'm just going to let it go. You may answer.
Overruled, so we can move on. THE WITNESS: (BY MR. BANKS) Yes.
I want to take you back to a
presentation -- this is in a little different area, but it is related to Homeland Security. Do you remember
providing a presentation for both DHS and NYPD to a man by the name of Sammy Thompson? A. Q. A. Yes. Who was Sammy Thompson? He was -- you mean personally, or business wise?
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Q. A.
Both. He was married to my cousin. And he was a senior --
former senior executive vice president of Motorola. THE COURT: THE WITNESS: I am sorry? A former senior executive vice
president of Motorola. Q. (BY MR. BANKS) And what was -- as related to DHS and
NYPD business, what was Mr. Thompson's role with IRP? MR. KIRSCH: THE COURT: I'll overrule. THE WITNESS: and acquisitions. Mr. Thompson was involved in mergers Objection, relevance. I'm going to allow some leeway here.
And Motorola is a major contractor with And he also was an investment
regards to law enforcement.
advisor to IRP, as far as trying to determine how we can go about getting investments to further the company. Q. (BY MR. BANKS) Okay. I want to go back to meetings
at the NYPD. A. Q. Yes. How many meetings do you recall actually took place
at the NYPD? A. I'm going to say -- again, I'm not certain of an
exact number, but I would say a minimum of three. Q. Okay. Do you recall a meeting at the Millennium
Hilton Hotel?
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A. Q.
I do. Was this meeting regarding IRP delivering software to
the NYPD? A. Yes, it was. MR. KIRSCH: answered. THE COURT: yesterday. Sustained. You covered all of this Objection, Your Honor, asked and
So if there is anything new you want to
inquire about, but we will not repeat or rehash yesterday's testimony. MR. BANKS: THE COURT: I don't recall this being -I recall the Millennium Hotel.
Have you testified to this before, sir? THE WITNESS: THE COURT: THE WITNESS: MR. BANKS: THE COURT: MR. BANKS: Q. (BY MR. BANKS) I testified to the hotel. And about that meeting? Yes, ma'am. I am sorry, Your Honor. That's all right. I forgot if that was there. Do you recall meetings with the New
York State Department of Insurance? THE WITNESS: I was not a part -- I do recall IRP
having meetings with the New York Department of Insurance. Q. (BY MR. BANKS) Do you recall any RFP that was
responded to by IRP?
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A. Q. A. Q.
Yes. Did you participate? I participated in the writing of that RFP response. Okay. Do you recall how IRP was referred to the New
York State Department of Insurance? MR. KIRSCH: THE COURT: THE WITNESS: Objection, relevance. I'll give him some leeway. Overruled.
We had made several contacts with And I don't
several law enforcement agencies in New York.
remember specifically who, but someone within the department gave me this, and was looking out for business opportunities within New York. Q. A. Q. (BY MR. BANKS) NYPD. Okay. THE COURT: Now I am confused, because I think we What department?
were talking about a different department; is that correct? MR. BANKS: I was getting to, Your Honor -- the
NYPD referred us to -THE COURT: MR. BANKS: THE COURT: Q. (BY MR. BANKS) The Department of Insurance. -- the Department of Insurance. All right. You don't recall who at the NYPD
referred; correct?
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A. Q.
No, I don't. Did you attend the meeting with -MR. BANKS: THE COURT: MR. BANKS: May I have a second, Your Honor? You may. Your Honor, I have no further
questions. THE COURT: Mr. Zirpolo? DIRECT EXAMINATION BY MR. ZIRPOLO: Q. A. Q. Good morning, Mr. Thurman. Good morning. I just have a few questions. THE COURT: Q. Could you speak into the microphone. I just have a few questions. You All right. Anybody else?
(BY MR. ZIRPOLO)
said you have a security background? A. Q. Yes, I do. Did you have the opportunity to write a security
procedures document for IRP? A. I did. MR. KIRSCH: THE COURT: MR. ZIRPOLO: Objection, relevance. What is the relevance, Mr. Zirpolo? Mr. Kirsch had a number of witnesses
come up and talk about how it was -- the different ways they got into the building and searches.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q.
THE COURT: THE WITNESS:
Overruled. Yes, I did. And in that document, what were
(BY MR. ZIRPOLO)
some of the features of that document? A. Entry authorization. Processes for gaining access So, basically,
into the facility.
Also document control.
as far as going in and out, badging. briefcases, purses would be searched.
Going in and out, No documentation We
would leave the facility with regard to software code. had a check in/check out process for document control. So, at the end of the day, developers, testers
would turn their document in to document control, sign it in, lock it up. Then at the beginning of the next day,
sign it out and check it out. Q. And were there exception procedures so that if
somebody wanted to bring something into the office or out of the office? A. Q. You had to have an authorization to do that. Thank you. And did you have the opportunity to
implement those procedures at IRP? A. Q. A. Yes. And why did IRP implement those procedures? Well, although IRP was not a "secured facility," in
government language, the nature of the business was sensitive enough to where we wanted to protect the
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software, proprietary data.
And, then, as looking forward
to engagement with law enforcement agencies, you wanted to ensure that if any of their data was on site, you wanted to protect that, as well. MR. ZIRPOLO: One moment, Your Honor. No further
questions, Your Honor. THE COURT: MR. WALKER: THE COURT: MR. KIRSCH: All right. Anybody else? No.
No, Your Honor. All right. Cross-examination?
Thank you, Your Honor. CROSS-EXAMINATION
BY MR. KIRSCH: Q. A. Q. Good morning, Mr. Thurman. Good morning. You, Mr. Thurman, have been friends with the
defendants for some time; right? A. Q. A. Q. A. Q. A. Q. A. Yes. And your wife did some work at IRP, as well? My wife volunteered at IRP. She volunteered there? Yes. All right. And --
Very infrequently. I am sorry? Very infrequently.

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Q. A. Q.
Very infrequently. I don't recall.
She still had a title, however?
You don't ever recall seeing any documents that
listed a title for your wife there? A. Q. I don't recall what the title was. All right. Didn't have something to do with
marketing and sales, like you were working on? A. Q. I don't recall what the title was. All right. Is that what she did when she volunteered
there? A. She did several things. As with any start-up,
friends, family, help out where ever they can. Q. All right. One of your sons, Samuel K., worked there
for some time; is that correct? A. Q. That's correct. Another one of your sons, Joseph, works for a
staffing company now; right? A. Q. Yes, he does. Now, I want to start off by asking you a little bit
about the chronology of some of the events that you referred to. A. Q. Okay. What I understood you to say was that there was a
request for a quote from the Department of Homeland Security related to the confidential informant module, and
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that that got -- you got that in about September of 2004. Did I hear that right? A. Q. I believe that -- in that time frame. Okay. And that after that was provided, you had
another meeting, or series of meetings with folks from DHS. And after that meeting or series of meetings, you
provided a separate quote for the CILC Federal program? A. Q. A. Q. I didn't phrase it that way. Oh, you didn't? I did not. I thought you said that that quote was provided
sometime after the quote was provided for the confidential informant. A. I am making reference to your comment about "series I didn't state that. I'm not attempting to misstate your
of meetings." Q.
I'm sorry.
testimony.
Let's just focus on the time -- let's just
focus on the timing. A. Q. We can do that. Did I correctly understand your testimony that the
CILC Federal quote was provided sometime after the confidential informant module quote, as you called it, was provided? A. Q. That is correct. All right.
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MR. KIRSCH:
Your Honor, could I please publish
again Government Exhibit 502.03? THE COURT: MR. KIRSCH: exhibit. please. Q. (BY MR. KIRSCH) You remember sending this e-mail, You may. Can we start with page 1 of that
Can you highlight that e-mail on the top,
Mr. Thurman, to Mr. Witherspoon? A. Q. A. It looks correct, yes. And you see that that's dated December 9th of 2004? I see the e-mail. I don't know what these quotations
are that are attached, though. Q. Well, let's look at those. MR. KIRSCH: exhibit? Could we please publish page 3 of this
Can you highlight the top half of that, please.
Could we go down to the subtotal. Q. A. Q. (BY MR. KIRSCH) I do. All right. And this is, in fact, the quote that you Do you see that now, Mr. Thurman?
provided with respect to the confidential informant module; right? A. Q. A. That's correct. Okay. Okay. And the date on the quote is December 7, 2004? So that was several years ago. I was off by a
couple of months.
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Q. A. Q. A.
Okay. But that is the quote? That is the quote? That is the quote that DHS requested. MR. KIRSCH: All right. Could we please go to page And highlight the top half The quote is correct?
6 of that exhibit now, please. again. Q. (BY MR. KIRSCH)
And this is the quote that was
provided -- this is the other quote that was provided in connection with that e-mail for CILC Federal? A. Q. A. Q. Correct. Okay. Okay. Okay. So this quote wasn't provided at a different Same date?
time than the quote for the confidential informant module? A. Again, long time ago. And so I was off on that. But
the quote was requested by DHS, and the quote was submitted. Q. A. Q. I just need you to answer my questions. Okay. All right.
My question is, both of these quotes were provided on
the same date, right? A. Q. A. According to this, yes. Do you disagree with those dates? No. This is a correct quote.
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Q.
Okay.
And you are referring to these -- you used the
term in your testimony "request for information"? A. This has nothing to do with a request for
information. Q. Did you use the term "request for information" in
your previous testimony? A. Q. Not related to this quote. Let me try it again. Did you use the term "request
for information" in your previous testimony? A. Not related to this quote. THE COURT: THE WITNESS: Q. (BY MR. KIRSCH) Sir, answer whether you used it or not. Yes, I did. All right. What did you -- what do
you understand the term "request for information" to mean? A. Just that; a request for information. The government
is requesting information. Q. A. How is that different in your mind from a quote? A quote is asking for dollars or the amount of money
that it is going to take to deliver a product solution or service. A request for information, in my mind, is For
requesting information about a proven concept.
instance, we have this idea, and what is it going to take to deliver this product, service or solution? Q. You don't understand -- in your mind, is a quote --
are you familiar with procedures called a request for

1855
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proposal or a request for a quote? A. Q. A. Q. I do. RFP or RFQ? I am familiar with those terms. You are familiar with those terms. You know those
are terms that the government uses in the course of doing its contracting; right? A. Q. Yes. You know that government contracting starts -- the
process of government contracting starts with the issuance of either a request for a quote or a request for a proposal? A. Q. A. I am not are a contracts officer. So you don't know that? I am not a contracts officer. So to say I know
exactly the contracts procedure; I was following the request of DHS. Q. Okay. But just to make sure, I would like to ask it
again -- my question again. Do you or do you not know that that's what starts the Government contracting process? A. I am familiar with the terms "request for proposal"
and "request for quote." Q. And do you know whether the government contracting
process starts with an RFQ or RFP?

1856
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A. Q.
I do not. Thank you, sir. So you don't -- do you know the difference, for
government contracting purposes, between a request for information and a request for quote. A. Q. I do not. All right. And the fact, then, that those documents
are -- were titled "Quote," is because that's how IRP chose to caption it; right? A. Q. A. Q. We chose that because DHS asked for a quote. They asked you how much the software would cost? No, DHS asked for a quote. Okay. I want to ask you about a couple of other
terms that you used during the testimony. A. Q. A. Q. Okay. You used the term "meeting," didn't you? Yes. And then did I correctly understand you to say that
your definition of the term "meeting" includes telephone calls? A. In this day and age, with technology, a meeting can
be a telephone conference call. Q. Okay. So just to be clear, when you talked about the
five meetings that you had with DHS, that included at least one telephone call?
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A. Q. A.
I said approximately five. Okay. I did not give specifically, because it could have It could have been --
been more. Q.
Did that approximately five number, give or take -Does your
let's assume it could have been more or less. estimate include telephone calls? A. Q. Yes. All right.
And you also, I believe, yesterday,
used -- you said that IRP had retained outside consultants who are retired law enforcement agents. correctly? A. Q. A. I don't think I used the word "retained." You don't think you used the word "retained"? If I did, we did have -- we did have on staff subject Did I hear that
matter experts. Q. A. Q. A. Q. Right. But they weren't paid?
I don't know. You don't know whether they were paid? I don't know. All right. So if you used the word "retained," in
your mind that doesn't necessarily connote they were paid, because you don't know if they were paid? A. Q. Correct. Okay. You also yesterday, I think, indicated at one
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point that you made changes in the software to accommodate the customer. A. Q. A. Q. Do you recall saying that?
If you say I did. Well, I am asking if you remember saying that. I don't remember those exact words. Okay. You don't remember saying, in response to
questions about the Department of Homeland Security, that you made changes to accommodate the customer? A. I remember saying that we made changes to the
software to accommodate the Department of Homeland Security's request. Q. A. Q. But you don't remember using the term "customer"? I do. If you had used the term "customer," I take it by
that word you hadn't meant somebody who had actually purchased your software? A. Q. Restate that question. If you used the term "customer," you didn't mean
someone who had actually purchased your software, did you? A. Depends on the context. A customer could mean
prospective customer. context. Q.
You know, it depends on the
Well, Mr. Thurman, I am asking about the context of
your testimony yesterday. A. Okay.

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Q.
For the purposes of this question, I will represent
to you that you said when you were talking about the Department of Homeland Security, that you made changes to accommodate the customer? A. Q. A. Q. Okay. Okay? Okay. In that context, you couldn't have meant customer to
mean someone who had purchased your software; right? A. Q. A. Q. A. Q. A. Q. DHS had not purchased the software at that time. And never did? Correct. Neither did the New York Police Department? Correct. Neither did the New York Department of Insurance? Correct. Neither did any of the various entities about which
you testified there were presentations made? A. Q. A. Q. Incorrect. Which one bought? There was a CILC Basic solution that was purchased. Which entity, that you testified about, purchased
that software? A. I didn't -- I wasn't asked about a purchase
yesterday.
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Q.
I just asked you whether any of the entities that you
named yesterday purchased the software? A. The entities that I mentioned yesterday, as far as
the ones you just mentioned; NYPD, Department of Homeland Security -- and I didn't mention the Department of Insurance yesterday, that was mentioned today. Q. A. I stand corrected. You are correct in the sense, none of those
purchased. Q. A. Who purchased it? Again, there was a CILC Basic solution that was
purchased. Q. A. Q. A. Q. A. Q. A. Q. A. Q. A. Who purchased it, Mr. Thurman? It was Kinnet County Sheriff's Department. How do you spell that, sir? K-I-N-N-E-T. Where is that? In Missouri. In Missouri? Yes. Okay. So I have another one. Please? Southeastern Missouri State University. I am not
sure if it is Southeastern State Missouri or Southeast

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Missouri University. Q. A. Q. A. Who else? There was a university -- or St. George's University. Where is that? Their offices are in New York. And the university is
actually in -- I'm not sure. Grenada, I believe. Q. A. Q. A. Q.
I'm not exactly sure.
Somewhere in the Caribbean? I believe so. And those agencies actually purchased the software? That's correct. They paid money to IRP, as opposed to getting it for
free from IRP? A. Q. A. That's correct. Do you remember how much they paid? That was, again, the CILC Basic solution. And so the
amount of that I cannot recall exactly. small. That was our smallest solution.
The amount was And we did have
several sales promotions going on.
And at that time,
those were the first agencies that got on board, as far as purchasing. Q. paid? A. It was probably in the neighborhood of, I don't know, And then right after that IRP was raided.
So give us a ballpark of how much those agencies
a couple thousand dollars per sale.

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Q. A. Q.
Per sale? Right. That information, as far as you know -- I am sorry,
the proceeds from those sales would have gone into the IRP bank account; right? A. Q. A. Q. I'm not in finance. Would you have expected them to go somewhere else? Where would you expect it -The way this works, Mr. Thurman, is I ask you the
questions. A. Okay. As far as handling of the financial part,
again, I was not in finance. Q. A. You don't know anything about that? No, I don't. MR. KIRSCH: Your Honor, could I please publish
Government Exhibit 502.04? THE COURT: MR. KIRSCH: Agent Smith. Q. (BY MR. KIRSCH) Do you remember getting this e-mail You may. Can you enlarge that message, Special
from Steven Cooper, Mr. Thurman? A. I do. MR. KIRSCH: And if we could just go to the next
page of that, please. Q. (BY MR. KIRSCH) Are you able to see that on the
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screen, or do you need it enlarged? A. Q. A. Q. Enlarge it, please. Did that get big enough for you? That is good. Do you recognize that this was the operations order
that Mr. Cooper attached to that e-mail? A. Q. Yes. Okay. Now, yesterday you testified that Homeland
Security had sent you some scenarios, and this is one of those scenarios. A. Q. A. Q. This was the operation plan. Okay. This is one of the things they sent you?
This was one of the things they sent, yes. And on this e-mail, it doesn't have any directions
about keeping it confidential or anything? A. Q. Not on this one. It was on the other one. Those directions are on
Those are on different ones?
other e-mails? A. Q. A. Correct. All right. And it didn't say "keep it confidential." So, again,
it said not to be released outside of IRP -Q. A. All right. -- or something to that effect. MR. KIRSCH: Thank you, Special Agent Smith.
1864
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 please.
I am sorry, Your Honor, I need just one moment, Your Honor, could I publish Government Exhibit
502.01, please? THE COURT: MR. KIRSCH: You may. Special Agent Smith, can you expand
the e-mail on the top there, please. Q. (BY MR. KIRSCH) Are you able to read that e-mail
now, Mr. Thurman? A. Q. A. Q. A. Q. A. Q. Yes. This was an e-mail that you got from Paul Tran? Yes. Right? Yes. In May of 2004? Yes. You testified before that someone from the Department
of Homeland Security, in the fall of 2004, had talked to you about wanting to have the software included in the next round. There is a reference in this e-mail to And
getting IRP included on the list for the next round.
I was wondering if, perhaps, you had been mistaken about the timing of that exchange, as well? A. Again, I could have been. As I have stated So I'm not going to
previously, that was a long time ago. state a specific date.
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Q.
I am not being critical, Mr. Thurman, I am asking if
it was possible. A. You are correct. But the meeting was requested -- or
the outcome of that meeting was stated. Q. A. Q. All right. Yes. Now, your background, I think you said yesterday, is
essentially in two areas; sales and security; is that right? A. Q. That's part of my background. Okay. Those were the two roles that I believe you
said you fulfilled at IRP? A. Q. A. Q. That's correct. Okay. You were not a technical person at IRP?
That's correct. In fact, did you say the other day that particularly
in the presentations, that the technical questions were handled by someone other than you? A. Q. A. Q. A. Q. That's correct. Okay. Now, you know Mr. Barnes as well; right?
Yes, I do. And you know he is a technical person? Yes, he is. He has a pretty extensive technology background; Do you know?
right.
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A. Q.
I do know he is a technical person. Okay. But you don't know the extent of his technical
background? A. I know he is very capable. As far as the extent, no,
I don't know. Q. Okay. MR. KIRSCH: Your Honor, could we please publish
Government Exhibit 608.57? Can you expand that top left for me. Your Honor, I am not sure the jury is able to see that yet. Q. (BY MR. KIRSCH) Can you see that on the screen now,
Mr. Thurman? MR. WALKER: scope. THE COURT: THE WITNESS: Q. (BY MR. KIRSCH) Overruled. Yes. Okay. Do you see your name next to Objection Your Honor, beyond the
the position, "security engineer"? A. Q. A. Q. A. Yes. Was that your position at IRP? I did do security. Was your position at IRP a security engineer? My position was not security engineer. I didn't have
a title security engineer.

1867
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Q.
Okay.
Do you know why your name is next to "security
engineer" on this list? A. Q. I do not. Do you know why Cliff Stewart is also next to the
position "security engineer" under the column "alias"? MR. WALKER: THE COURT: THE WITNESS: Q. A. Q. (BY MR. KIRSCH) No, I don't. You don't know anything about anybody at IRP ever Your Honor, objection. Overruled. I do not. You have no idea about that?
submitting time cards under different names? A. No. MR. KIRSCH: Your Honor, could I please publish
Government Exhibit 609.01, the white board? THE COURT: Q. You may. Mr. Thurman, from previous
(BY MR. KIRSCH)
experience, I know I am going to need you to step out of the witness box and down here so everyone in the courtroom can see this. I want to make sure that you are able to
see the board there. A. Q. A. Q. Okay. Can you do that? Yes. Okay. And do you see the column that says "Headway
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Staffing," right in the middle of the board in red? A. Q. Yes. Do you see that there are a set of initials "DB"
under "Headway Staffing"? A. Q. Yes. And then in parentheses after "DB" there are the
initials "ST"? A. Q. Yes. Do you know whether or not Mr. Darrell Brantley was a
payrolled employee at Headway Staffing? A. Q. A. Q. I do not. You don't know about that? No, I don't. I take it that you never submitted any time that you
worked under Mr. Brantley's name to Headway Staffing? A. Q. A. Q. A. Q. No. I don't recall anything like that.
You don't recall, or you didn't? No, I didn't. You wouldn't have done that, would you? No, I wouldn't. All right. Thank you, sir. That is what I wanted to
ask you about that. MR. KIRSCH: Your Honor, could I please publish
Government Exhibit 158.01. THE COURT: You may.

1869
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor. Q.
JUROR: the witness?
Can we move the white board so we can see
MR. KIRSCH: I apologize.
I would be happy to do that, Your
(BY MR. KIRSCH)
Have you had a chance to look at
that now, Mr. Thurman? A. Q. Which part? Well, let's start with the date. October 28, 2003.
Do you see that? A. Q. A. Q. A. Q. A. Okay. Do you see your name in the "To" line? I do. So you would have gotten this e-mail; right? Is that an e-mail? It is. I don't know. I don't recall. It doesn't look
familiar to me, but my name is there. Q. Okay. We have established that you don't remember
everything that occurred over this period of time; right? A. Q. Right. Okay. So you don't remember being told that there --
this was going to be the official start date for other people at the company, including Gary Walker, and that you should act accordingly? A. No, I don't.
1870
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A.
You don't have any idea what that means? No, I don't. MR. KIRSCH: Your Honor, can we please publish
Government Exhibit 608.01? THE COURT: MR. KIRSCH: Q. (BY MR. KIRSCH) You may. Can we expand that, again, please. You see this is another e-mail,
Mr. Thurman? A. Q. A. Q. A. Right. Your name is on the "To" line again? Right. Dated about a month later? Can I see the top of this? MR. KIRSCH: Q. A. (BY MR. KIRSCH) Can you expand that entire page there. Is that what you wanted to see, sir?
It is just the format there does not look like a That is why I ask. But go ahead.
standard e-mail format. Q.
I would agree with you, it doesn't look like a
standard e-mail format. And this message also references to official start dates for Dave Zirpolo and Ken Barnes in November of 2003 and has a direction to "act accordingly." A. Q. A. Okay. Do you remember getting this e-mail? No, I don't.
1871
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Q.
I take it you don't have any explanation for what
"act accordingly" means in this e-mail, either? A. Q. I do not. Why would you have had an official start date for
Dave Zirpolo and Ken Barnes when both of them had been working at the company for a year? A. Q. A. Q. I wasn't in personnel, so -You don't know anything about that, either? No, I don't. All right. MR. KIRSCH: Thank you, Mr. Thurman. Those are all
of my questions, Your Honor. THE COURT: MR. BANKS: THE COURT: MR. BANKS: Honor. THE COURT: We'll proceed, then take a break after. How long will redirect take? I don't know. All right. Maybe shorter. I am not certain, Your I would say 15 minutes.
You may proceed, Mr. Banks. MR. BANKS: Your Honor, permission to republish
Government Exhibit 502.03. THE COURT: You may. REDIRECT EXAMINATION BY MR. BANKS: Q. Mr. Thurman, what does the "Subject" line say on that
1872
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
e-mail? A. "Re-transmission case management pricing estimates,
IRP Solutions." Q. A. And down below, after, "Hi, Bill," what does it say? "Per our conversation a few moments ago, this is a We look
re-transmission of what we sent out on Tuesday. forward to speaking with you again soon." Q. Okay.
I want to take you to the FICMS' industry day,
which was the RFI day. A. Q. Okay. How many participants did you estimate participated
in the RFI process industry day? A. Q. Probably a hundred. Okay. Was this e-mail that you just read sent to 100
people? A. Q. No. Was it -MR. KIRSCH: THE COURT: Q. (BY MR. BANKS) Objection, lack of foundation. Sustained. Was this e-mail sent to you directly
from Mr. Witherspoon? A. Q. "This e-mail," you mean from me to Bill Witherspoon. No, I am sorry, let me rephrase. Did Bill
Witherspoon contact you directly and personally about the quote?

1873
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A. Q.
Yes. And what were the conversations leading up to the
quote, if you can recall? A. Well, they. Again, DHS wanted to have a solution in
the event the FICMS Initiative did not continue to move forward. Mr. Witherspoon stated that if the DOJ doesn't
do anything; DHS had to do something. Q. Were you communicated to that that was part of an RFI
process? A. No. They requested a quote because they wanted to They were having budget
put it into their budget. discussions. Q. All right.
Thank you.
Do you know the terms of the
agreement?
We talked about the law enforcement
consultants that worked at IRP; correct? A. Q. Correct. Do you know the terms of the agreement that those law
enforcement consultants signed? A. Q. No, I don't personally. So you would have no idea what they agreed to be
paid; correct? A. Q. Correct. Now -- that the question has been asked. Why do you think DHS didn't purchase the software? MR. KIRSCH: Objection, relevance.
1874
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that. Q.
THE COURT: Sustained. MR. BANKS:
Speculation.
Lay more foundation.
Your Honor, the Government opened the
door and asked him -THE COURT: You have to lay foundation, otherwise
it is pure speculation. MR. BANKS: Okay, Your Honor. I will come back to
(BY MR. BANKS)
You talked about -- I want to go back
a little bit on the term "customer." A. Q. A. Q. Right. You do have a sales background; is that correct? That's correct. And in your -- how do you define the term "customer,"
as relates to business? A. A customer could be an established customer who you
have a standing relationship with or agreement with, or it could be prospects. So when I use that term, it is not
necessarily specific to someone who is actively buying something. Q. If you are actually doing work on behalf of a
company, do you consider them a customer? A. Q. Yes. Thank you. Now, you also talked about the type --
some software of the CILC Basic solution that was

1875
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delivered to some agencies, and you gave a general estimate about the price of those solutions, correct? A. Q. Correct. Was there any other program that was implemented at
IRP that was a part of that delivery? A. Q. A. Yes, there was. And what was that program? We had sort of a bundle product or bundle offering
whereby we would provide a Dell computer to the agency, as well. Q. And did these companies also receive a Dell computer
as a result of that purchase? A. Q. Yes. Now, was that program implemented between a
business-to-business relationship between Dell and IRP? MR. KIRSCH: THE COURT: Q. (BY MR. BANKS) Objection, relevance. Sustained. Now, regarding the white board, did
you create that white board? A. Q. No. And you have no idea what that white board -- who
created that white board? A. Q. That's correct. Do you happen to know Darrell Brantley's educational Are you aware of his educational background?
background?
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A. Q. A. Q. A.
A little bit.
Not extensive.
What do you know about his background? I think he has a master's degree. In what area? Information technology. MR. BANKS: THE COURT: MR. WALKER: THE COURT: No further questions, Your Honor. Anybody else? No, Your Honor. All right. May this witness be
excused? MR. BANKS: THE COURT: are excused. Yes, Your Honor. Thank you very much, Mr. Thurman. You
We are going to go ahead and take a We
15-minute recess; a little longer than 15 minutes. will reconvene at 11:30. Court will be in recess.
(A break is taken from 11:12 a.m. to 11:30 a.m.) (The following is had in open court, outside the hearing and presence of the jury.) THE COURT: All right. bring in the jury. MR. WALKER: Your Honor, just a matter of We have Mr. Hillberry. You may be seated. Let's go ahead, any matters before we
scheduling, for your information. We are ready to call him now.
We anticipate that would
probably be potentially only 15 minutes, direct for us.

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We're prepared to call John Smith -- Agent Smith, I am sorry. But we would offer we could call him Monday, and
just at your discretion we could recess for the day after Mr. Hillberry. THE COURT: We'll proceed with Mr. Smith today, and
get and as much of that done, since we will be recessing tomorrow. MR. WALKER: Your Honor, we expect that to be
relatively short, as well. THE COURT: I did want to mention, we did receive a
call on behalf of Robert Gianelli, my judicial assistant did, from Jim Conroy, who is counsel, I guess, for the NYPD -- New York City Police Department. He says
Mr. Gianelli is in Florida on business, and is willing to do whatever the Court wishes, and needs some guidance. indicated they had called you, or the last time he spoke with Mr. Walker was Tuesday -- this past Tuesday, and that you have not returned any telephone messages. MR. WALKER: Your Honor, I called Mr. Conroy back. I will call him on He
I have not been able to contact him. break and leave him a message. THE COURT: that.
You just need to call him and discuss
Mr. Vilfer's attorney also called in, and I indicated, through my JA, that I would have you inform him
1878
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that Monday would be sufficient. MR. WALKER: Yes, Your Honor. We have also
received confirmation from the Department of Homeland Security that Mr. Witherspoon and Mr. Cooper will be here on Monday. THE COURT: MR. KIRSCH: All right. Very good.
Your Honor, I don't think that
information is accurate about the Department of Homeland Security. break. It is different than what we got over the
I know that there have been discussions between
someone for the defense and the Department of Homeland Security. But it is, at least not our understanding, that
they will definitely be here -- that both of them will definitely be here on Monday. THE COURT: All right. So you need to make sure
you get that clarified, and make arrangements, however we do it, to get the witnesses here. MR. WALKER: THE COURT: Yes, Your Honor. Nothing further? Let's go ahead and
bring in the jury so we can get the next witness done and let them go off to lunch, and let you go off to lunch. Ms. Seeman. (The following is had in open court, in the hearing and presence of the jury.) THE COURT: You may be seated.
1879
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor.
Defense may call their next witness. MR. BANKS: Defense calls Gary Hillberry, Your
COURTROOM DEPUTY:
Your attention, please.
GARY HILLBERRY having been first duly sworn, testified as follows: COURTROOM DEPUTY: Please be seated.
Please state your name, and spell your first and last names for the record. THE WITNESS: H-I-L-L-B-E-R-R-Y. THE COURT: Mr. Banks, you may proceed. DIRECT EXAMINATION BY MR. BANKS: Q. Mr. Hillberry, could you start by giving us a little Gary Lee Hillberry. G-A-R-Y
bit, as far as your background and job description? A. I was with the United States Customs Service for 31 I retired
years as a Criminal Investigator/Special Agent. from that agency in January 2001.
Over the last 10 years,
I have been employed as a consultant working with the Department of Justice, U.S. Department of State, and the United States Treasury Department, as well as various private companies like IRP. Q. A. Now, Mr. Hillberry, you were subpoenaed here today? I was.
1880
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Q.
Did you have any -- did you have any discussions with
the Government regarding your testimony today? A. Q. No. But you did contact the Government related to the
subpoena; correct? A. Yes, I did. MR. KIRSCH: THE COURT: Q. (BY MR. BANKS) Objection, relevance, Your Honor. Overruled. I want to -- after your retirement,
did you have the opportunity to contract with a company called IRP Solutions? A. Q. Yes, I did. And what was the nature of the work you were
contracted to do with IRP? A. I was contracted as an expert on U.S. Border and U.S.
Customs matters, to assist the IRP company in developing a software package on case management for investigative law enforcement agencies. Q. Okay. And what type of work or deliverables -- work
product did you provide during the course of your work for IRP? A. Basically, my knowledge and background as an expert I participated in
in the area of U.S. border activities.
panel discussions in your office, where we reviewed a screen of some program that you had developed.
And you
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were asking for our input -- my input as to the correct terminology, how the activities of the investigative case agency operate, to assist you in developing this software program. Q. Thank you. Did you work with any other law
enforcement consultants? A. Q. A. Q. A. Epke. Q. Do you recall -- do you recall -MR. BANKS: THE COURT: Q. (BY MR. BANKS) May I have one moment, Your Honor? You may. Do you recall what the purpose was On this project? Yes. Yes, I did. And who were they? Two gentlemen from the FBI; Mr. Fuselier and John
that IRP brought both contractors from the FBI and Customs? A. I assumed for the same reason. I was first contacted
by Mr. Epke, and told about an opportunity to work on this project with you. And I did contact Mr. Banks at IRP. I agreed to the We
had a discussion about the contract.
terms, after speaking again with Mr. Epke, to find out that the terms that I was being offered were similar to the terms being offered to the two other gentlemen.
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Q.
Can you expound on what terms you agreed to work
under at IRP? A. I was offered a specific hourly salary that I would
be on a part-time, as-needed basis, to come to the office or work on projects at my home that were devised or developed from our discussions at the office, and that I would subsequently be paid -- I would not be paid until either IRP found a funding source or got their first contract. contract. Q. A. Q. Either or, correct? Either or. Do you recall being contacted by Special Agent John Those were the terms, I believe, of the
Smith as related to this case? A. I don't remember the names. If you are referring to
an FBI agent, yes, I did speak with an FBI agent. Q. A. Q. And did you provide information to the FBI? Yes, I did. Do you recall the nature or what information you
provided to the FBI regarding IRP Solutions? A. Basically, what I have just told you about my
contract responsibility, and the contract agreement for payment. That's about the total involvement that I had
with IRP over a 6-month period. Q. Now, do you recall a time when you had not yet been
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paid by IRP Solutions? A. Q. Yes, I do. Do you recall a meeting that you had with
Mr. Fuselier and Mr. Epke regarding that? A. Since Mr. Fuselier, Epke and I were from the Denver
area, we would drive together to your office per our assigned dates and meeting dates. fact we were not being paid. Q. A. Okay. And we would bring that up with you, Mr. Banks, on a We would discuss the
regular basis after the first few days of work that was being provided. And if you are referring to a specific
meeting, I don't necessarily recall a specific meeting. But I do recall we did speak to you about it on a number of occasions. Q. Do you recall why you continued to work after you
were dissatisfied with regards to your payment? A. Because you would always tell us that you were
honorable men, and that you would make good on the required compensation to us and future work. Q. Did you have any discussions about the viability of
the product as a reason for staying? A. Initially, when I first began working for IRP, I
listened to your presentations, and saw your work product at the time. And if, in fact, it could be developed, I
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thought it could be a viable program for law enforcement agencies. Q. Now, at any time did you have a meeting with Mr. Epke
and Mr. Fuselier that you would agree to stay on because you thought we would gain a contract, or IRP would gain a contract? A. Yeah. You would tell us you were close to a contract I believe even
with the NYPD and other federal agencies. Philadelphia law enforcement agencies.
And that was
incentive to us to continue in the program. Q. Did you have a discussion specifically,
Mr. Hillberry, about your belief that the software was good enough to gain state and federal contracts? A. I don't remember having a specific discussion with That's
them about that, but it's possible that we did.
why I stuck -- stayed, because I thought that, one, I've already invested in this with no income, no payment. I
might as well stay and ride it out and see if I can get paid. Quite frankly, my decision was as soon as I got my
first paycheck, I was going to terminate my contract with IRP. Q. A. Are you aware of the raid that took place on IRP? Not really. Only the fact that there was going to be And that was all
law enforcement action involving IRP.
the extent of what I knew and know to this day.

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Q.
Would you expect IRP to continue to conduct business
under that umbrella? MR. KIRSCH: foundation. THE COURT: MR. BANKS: Sustained. Your Honor, I would like to refresh Objection, relevance. Lack of
Mr. Hillberry's recollection of an Affidavit he signed concerning conversations between him and Mr. Fuselier and Mr. Epke. THE COURT: this point. Well, there is nothing to refresh as of If he
You need to ask him a question.
doesn't remember, then you can refresh. Q. (BY MR. BANKS) Do you recall specifically a meeting
with John Epke and Dwayne Fuselier where it was your position that IRP Solutions had a viable law enforcement product? MR. KIRSCH: Your Honor, object to Mr. Banks
reading from the document. THE COURT: Sustained. Ask him if he recalls a I think he didn't
specific -- I think you already did. know.
But lay some foundation without reading from the
document. MR. BANKS: Q. (BY MR. BANKS) Very well, Your Honor. Do you recall a meeting with Epke and
Fuselier related to the viability of IRP's product and the

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ability, with that product, to gain contracts at the state and federal level? A. I don't recall a specific meeting. However, we did
talk about this on many occasions when we were driving from Denver down to the Springs. When we were in our
office and you were not available or you had something else, we would talk about it. We approached you about
this, about the program, and why we were staying on and when we would be paid. But I may have said something -- you, apparently, are referring to something I may have stated or written. I don't recall a specific date. But we did talk about it
on a number of occasions, and we did think you had a viable product. But I never saw the end product. I never
saw a full presentation of the product. Q. Would you agree that you were there to support the
development of that product at the federal level? A. That was what my contract was, was to provide
information to allow you to get to that point. Q. Did you have any conversations with anybody else
outside of Mr. Epke and Mr. Fuselier related to IRP's product? MR. KIRSCH: THE COURT: THE WITNESS: Objection, relevance and hearsay. Overruled. The FBI, when they interviewed me.
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And I believe there might have been someone several years ago who contacted me as a representative of the court saying they were collecting information to assist in preparation for the trial that IRP was proceeding on. But
I can't recall who that person was, but it was, I believe, a representative of the court at that time. Q. (BY MR. BANKS) So I am going to ask, just for Did you
clarification, I will ask this one more time.
believe IRP had a viable product capable of acquiring contracts at the state and federal level? belief? A. Q. A. When I initially started with IRP, yes. And when did you start with IRP? It was either -- I had no time to refresh myself on But I Was that your
the files I maintained, they are in storage.
believe it was November or December 2003, sometime into the spring of 2004. involved. Q. Do you recall when the date of your Affidavit was I believe that was the period I was
where you may have communicated to the FBI about IRP's product viability? A. The FBI interviewed me months after we were basically
separated from any further involvement with IRP because of the investigation involving IRP. met with them. The FBI contacted me. I
They asked me to write down what I

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believed I was doing there. them. MR. BANKS:
And I did, and provided it to
Your Honor, I would like at this point
to provide greater recollection to Mr. Hillberry regarding his statements. THE COURT: Ask him specific questions. If he
doesn't understand, then you can refresh recollection. MR. BANKS: THE COURT: remember anything. MR. BANKS: Q. (BY MR. BANKS) Okay. Do you remember -- again, I will put Do you remember, again, your He has already. But I haven't heard him say he didn't
a different term in here.
conversation with Dwayne Fuselier and Mr. Epke that IRP and their product had the ability to gain federal and state contracts? A. I don't remember the exact context of that
conversation, but it probably occurred. Q. You don't remember what you said to the FBI in your
Affidavit? A. No, I don't. MR. BANKS: recollection. THE COURT: You may, although I think you asked him But you may have it marked Your Honor, permission to refresh his
and he answered this question.
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for identification. MR. BANKS: MR. KIRSCH: Do you have a copy of this, Mr. Kirsch? I do, thank you, Mr. Banks. I have marked this as
COURTROOM DEPUTY: Defendants' Exhibit D405. THE COURT: Okay.
That has been marked for
identification as D405. Q. (BY MR. BANKS) Mr. Hillberry, if you could go to the
second page, third paragraph, and privately refresh your recollection. A. Q. Yes, sir. Now, would you agree that you stayed on with IRP
Solutions because they had software that was viable enough to acquire state and federal contracts, and that was your reason for continuing, correct? A. Well, I can take from my own comment here, which is
in an Affidavit I signed in January of '05 to the FBI, that we had many private discussions, which I state, and that I believed you had a viable program, and it was moving forward. I agreed to that. But I stayed on, in
addition to thinking you had a product, to get paid, because you kept telling us, as the paragraph preceding that states, that you are an honorable man. going to make good on payment to us. That you are
So that was another
incentive for me to stay, because I had money invested

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that I did not get paid for. Q. Did you not sign a contract to get paid upon the sale
of the software? A. Correct. You kept telling us you had one with the
NYPD imminently, and possibly Philadelphia and other federal agencies. Q. So I believed that.
And were you aware of meetings that we were engaged
in at both Homeland Security and the New York City Police Department? A. Q. A. Only to what you told us, yes. Okay. I had no personal knowledge that there were such
meetings. Q. So you had no reason to doubt at the time that we
were not engaged in significant meetings with those agencies? A. I was starting to lose doubt in that. I took you at Ultimately, I And about at
your word that you were an honorable man.
chose to believe this was not going to work.
the same time is when the FBI apparently conducted a search of your office. Q. You would agree that there is nothing predictable
about business; correct? A. Q. I'm not a businessman, so I really can't say. Predictable about life?
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A. Q.
I agree with that. Now, you stopped -- I have brief question. You
stopped short at moving forward. forward. A. Q. Okay.
It appeared to be moving
What did IRP agree to move forward, in your opinion,
in accordance with your Affidavit? A. When we would meet with you and we would confront you
about not being paid, you would tell us about your final days and final closings with the NYPD, which would result in a contract. Q. Excuse me, Mr. Hillberry I am relating specifically
to your sworn Affidavit to the FBI. A. Yes. I thought I answered that, but -Your Honor, can I move to have this
MR. BANKS:
document deemed admissible? THE COURT: Q. (BY MR. BANKS) THE COURT: No, you may not. So, does your statement read -I should tell you, you may move its
admission, but I deny it. MR. KIRSCH: Your Honor, I object to Mr. Banks
reading from the document, however. MR. BANKS: May I have Mr. Hillberry read the
language from the Affidavit? THE COURT: Ask him a question.

If he gives you an
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answer -- no, it is not admitted. document.
You can't read from the
That is why he is here, for you to ask him the
questions you want to ask him, and have him testify today. Q. (BY MR. BANKS) Did you agree, based on your
testimony -- or your Affidavit to the FBI, that IRP was moving forward to acquire state and federal contracts? A. That's in my Affidavit, yes, it is. MR. BANKS: questions. THE COURT: MR. WALKER: THE COURT: All right. Anybody else? Thank you. I have no further
Yes, Your Honor. All right. Mr. Walker.
DIRECT EXAMINATION BY MR. WALKER: Q. Mr. Hillberry, you stated earlier that in the course
of providing your expertise -- your expertise to IRP Solutions, you also viewed the product that was being built by the company; is that correct? A. Q. Yes. Do you recall on how many occasions you viewed the
product, itself? A. Q. Three or four. And in those viewings that you had, did you see
advancement in the product in reference to the recommendations that you were making about the product?
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A.
I did.
But when we reviewed the product, after a
previous meeting and made recommendations, the language from the drop downs that were being discussed would be in there, with some other language that we may not -- at least I did not necessarily agree with, but discussed that to kind of clean that up. But what I sensed out of this is that from meeting to meeting -- and I probably only attended 10 sessions at your office. moving much. that's -Q. Let me stop you there. You would agree that But over those sessions, it really wasn't You were developing a few screens, but
recommendations that you made, you did see in the product; is that right? A. Q. Yes. And you also stated that you believed that IRP
Solutions had a viable product for state, local and federal; is that correct? MR. KIRSCH: answered. THE COURT: Q. Sustained. Did you believe IRP had a viable Objection, Your Honor, asked and
(BY MR. WALKER)
product? MR. KIRSCH: THE COURT: Objection. Sustained. We covered this many times,
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Mr. Walker. Q. (BY MR. WALKER) And given those statements, would
you believe that an FBI investigation would hamper IRP's business prospects? MR. KIRSCH: THE COURT: Sustained. MR. WALKER: Your Honor. THE COURT: MR. BANKS: THE COURT: MR. KIRSCH: Anybody else? No, Your Honor. All right. Cross? No further questions for the witness, Objection, relevance. Speculation, lack of foundation.
Thank you, Your Honor. CROSS-EXAMINATION
BY MR. KIRSCH: Q. Mr. Hillberry, it sounded like you hadn't finished
your answer about the movement that you saw in the software from meeting to meeting. explain what you saw there, please. A. I didn't feel it was moving quickly enough to get to Can you go ahead and
ultimately be presented in the near future to a law enforcement agency. I never did see a full product. We
were working in pieces each time I was there.
And they
would talk with us, and we would try to give them our guidance as to the right language and how many spaces are
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needed for case numbers, and that would occur. see that in the next session. have moved a lot quicker. Q. All right.
We would
But I thought we should
Now, you said, I think, several times, in
fact, that you believed, at least at one point, that IRP had a viable product? A. Q. Early on, yes, sir, I did. Okay. Now, when you say "early on," did that belief
change at some point? A. Q. A. Yes. When was that? When I never saw the product moving forward or seeing I never saw
the full product that was being discussed. that. Q. A. And when is it that you were there?
My best recollection is like November, December of And then I was
2003, through probably March, April, 2004.
notified that the FBI had served a warrant at their office. Q. And so it was -- am I right that it was in the second
half, at least, of your time at IRP, that your belief about the viability of their product changed? A. Q. That's correct. Now, you said, I think, that you were a custom's
agent for over 30 years; is that right?

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A. Q. time? A. Q. A.
Thirty-one. I take it you conducted some interviews during that
Yes, I have. How many interviews do you think you have conducted? Thousands. MR. BANKS: THE COURT: Objection, Your Honor, relevance. Overruled. Was one of the things that you tried
Q.
(BY MR. KIRSCH)
to do over the course of those interviews, in your career, was determine whether or not people were telling you the truth? A. Q. Yes, sir. And when Mr. Banks told you that repeatedly; told you
that they were close to signing a contract with the New York Police Department or the Philadelphia Police Department or a federal agency, did you believe him? A. Q. Initially, yes, I did. Okay. And the basis for your belief initially that
they had a viable product, what was that basis? A. Because of our discussions; what their approach was
to be, to develop a virtual case management product. Having been in management in my agency, I knew that would be something of interest to an agency. move forward.
But I never saw it
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Q.
So, again, the basis for your belief that it was a
viable product was what Mr. Banks told you? A. That's correct. MR. KIRSCH: THE COURT: MR. BANKS: Thank you, sir. Redirect? Yes, Your Honor. REDIRECT EXAMINATION BY MR. BANKS: Q. You said a minute ago, Mr. Hillberry, you were not
aware of meetings that IRP representatives had with the Department of Homeland Security; is that correct? A. Q. That's correct. So you would not have known what requirements, if
any, the company was doing on behalf of the Department of Homeland Security; is that correct? A. I don't recall ever hearing a discussion about
Homeland Security. Q. You said a moment ago that you were aware of -- that
Mr. Banks told you about meetings they were having with Homeland Security and the NYPD; correct? A. No. If I said Homeland Security, I was mistaken. It
was the NYPD, I believe Philadelphia, and other federal agencies. Q. But I didn't know the name of the agencies.
What purpose were you there if it was not for federal
purposes?
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A.
I was there to provide expertise and help you devise
the software package that you were developing and to give the right language the law enforcement people speak. And
then with the type of affidavits and the numbers and the actual case names and numbers of things we do in our daily work. Q. A. Q. You were a federal agent; correct? That's correct, as were the other two gentlemen. All right. Thank you. Can you testify conclusively
to what Mr. Banks believed? A. Q. I don't understand the question. You don't know what Mr. Banks believed in his own
mind as it related to closing business with those agencies; correct? A. Q. A. Q. No, I don't. Are you a technology person? No, I'm not. Do you know what it takes to implement software code
for a law enforcement product of this nature? A. Q. No, I don't. Do you know the time element involved in delivering
this type of capability or preparing this type of capability for presentation? A. Q. No, I don't. And, again, you were unaware of what the requirements
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were that DHS provided to IRP; correct? MR. KIRSCH: THE COURT: Q. Objection, asked and answered. Sustained. Now, you talked about -- you started
(BY MR. KIRSCH)
with IRP sometime in 2004; correct -- Early 2004? A. I believe I said November, December 2003 through
spring, April of 2004. Q. Okay. So if your independent contractor agreement
was January of 2004, you wouldn't have any reason to dispute that, would you? A. No, I don't. Again, as I mentioned, I have not had a
chance to review any files on this prior to arriving today. Q. They are in storage. You would agree that you submitted your
Okay.
Affidavit regarding IRP Solutions on 1/18/05, correct? MR. KIRSCH: THE COURT: MR. BANKS: THE COURT: MR. WALKER: Objection, beyond the scope of cross. Sustained. No further questions, Your Honor. Anybody else? Yes, Your Honor. REDIRECT EXAMINATION BY MR. WALKER: Q. Mr. Hillberry, you said that you had ended your
engagement with IRP Solutions about summer of 2004; is that right?

1900
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A. Q.
Spring. Spring of 2004. And so given that, you wouldn't have
had any opportunity to view the software past that day, would you? A. Q. That's correct. And you would have no knowledge of any improvements
made on the federal product after that date, would you? A. That's correct. MR. WALKER: THE COURT: excused? MR. BANKS: THE COURT: are excused. Parties please approach. (A bench conference is had, and the following is had outside the hearing of the jury.) THE COURT: You all said your examination of Agent Yes, Your Honor. Thank you very much, Mr. Hillberry, you No further questions, Your Honor. All right. May this witness be
Smith is going to be relatively short? MR. BANKS: THE COURT: Very possible. Because what I don't want to do is send
the jury away, have them come back, then 15 minutes after they are back say you can go home. MR. BANKS: THE COURT: So I just --
It should be brief. Should we keep them here, call him, and

1901
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I can let them go for the rest of the day? MR. BANKS: them home. Your Honor, it is my suggestion to send
We don't know how involved -I am not sending them home. So we do
THE COURT:
it now or we go through until 1:00, then I let them go home, or, take lunch and come back. MR. WALKER: THE COURT: Can we have a moment, Your Honor? I don't have a problem with recessing We can come
now, but we have to do his testimony today. back. MR. BANKS:
I don't want to do it, either, Your
Honor, at this point. THE COURT: Well, if you think it is going to take
longer than half an hour, I don't want to cut you short, so I think we should recess for lunch. MR. BANKS: THE COURT: Minimum of half hour. Then let's recess for lunch.
(The following is had in the hearing of the jury.) THE COURT: All right. Ladies and gentlemen, we It is
are going to go ahead and recess for lunch now. 12:09. If we can reconvene at 1:15. COURTROOM DEPUTY:
Your Honor, we have a 1 o'clock
telephone status conference. THE COURT: That won't take long, though. Let's
make it 1:30, because I don't want to keep you waiting

1902
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unnecessarily. long.
But I don't think that will take very
We will reconvene at 1:30 for the next witness. So, remember not to discuss this with anybody else.
Go out, enjoy lunch, and be back ready to go.
Hopefully
we won't keep you waiting, and we will get going at 1:30. Court will be in recess. The jury may leave. The parties remain. I do have
one matter to discuss with you. (The following is had in open court, outside the hearing and presence of the jury.) THE COURT: All right. You may be seated. I
wanted to make sure I know -- I will forget if I wait until later on this afternoon. I suspect we will be With that in mind, I
wrapping this up sometime next week.
need to get the final jury instructions. So, I wanted to let you know, that it is my intention that the preliminary instructions that I gave, with only perhaps minor changes on some of the things, no other substantive changes, but including the instruction on the Indictment, the instruction on jury deliberations and the instruction on communication with the Court, that is what I would give as the final jury instructions right now. You all need to get to me any additional instructions that you think are merited based on what
1903
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happened here in the trial, I would like to have those, if we could, by noon on Sunday, so that I can review those and we can be ready to go. I can work on those on Sunday
afternoon, and make sure we will have as close to a final version so we can have a charging conference with respect to those as soon as the parties close. MR. WALKER: Yes, Your Honor. Would you like to
specify a specific time as a deadline? THE COURT: didn't -MR. WALKER: THE COURT: afternoon Sunday. I am sorry, I was typing. Noon Sunday. That will give me the Noon. I thought I said noon. If I
If you can submit those the same way. Just send
Those don't need to be submitted in CM-ECF.
them to chambers with a copy to opposing counsel, and then the Government to the parties. But that way we will be
ready to go, and I can get out, hopefully, a set to you of the final instructions, and then we can have a charging conference as soon as the defense rests. All right. I just didn't want to forget it. All right. If I
don't do it now, I will forget about it.
Anything else that needs to be brought to my attention? MR. BANKS: THE COURT: No, Your Honor. All right. See you back at 1:30.
(Lunch break is taken from 12:12 p.m. to 1:36 p.m.)

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THE COURT:
You may be seated.
Are we ready to bring the jury in? MR. KIRSCH: MR. BANKS: THE COURT: the jury. (The following is had in open court, in the hearing and presence of the jury.) THE COURT: You may be seated. Yes, Your Honor. Yes. All right. Ms. Seeman, please bring in
Defendants may call their next witness. MR. BANKS: Agent John Smith. COURTROOM DEPUTY: Your attention, please. Your Honor, the defendants call Special
SPECIAL AGENT JOHN SMITH having been first duly sworn, testified as follows: COURTROOM DEPUTY: Please be seated.
Please state your name, and spell your first and last names for the record. THE WITNESS: S-M-I-T-H. THE COURT: MR. BANKS: You may proceed. Thank you, Your Honor. DIRECT EXAMINATION BY MR. BANKS: Q. I guess for the Court, can you tell the jury what you
It's John Smith.
J-O-H-N.
Last name
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do for a living. A. Q. Yes. I am a Special Agent of the FBI.
And what does your role as a Special Agent -- what
are your job duties as a Special Agent? A. As a Special Agent, I investigate crimes.
Investigate crimes. Q. Did you -- now, during -- a standard part of your job
is to conduct search warrants; execute search warrants? A. Q. Yes, that's part of our job. And around February of 2005, February 9, 2005, did
you execute a search warrant on a company called IRP Solutions? A. Q. A. Yes, we did. And where was that search warrant conducted? The search warrant was in Colorado Springs at the
offices of IRP, Leading Team and DKH Enterprises. Q. And as -- what was your role in the case associated
with IRP? A. At the time of the search warrant, I was the case
agent for that case. Q. case? A. I was the case agent from when I started the case in And how long did you remain the case agent for that
2004, until I moved in July -- I am sorry, end of June of 2007.

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Q.
So you were replaced by another case agent, or were
you still considered the case agent for this matter? A. When I moved, there was a new case agent assigned
from Colorado Springs. Q. A. And do you know who that is? I'm not -- I believe -- there were a couple case So, yes, I know the names of those.
agents after me. Q.
And did -- after that, did you continue to provide
some type of support on -- with regards to the IRP case? A. Q. Yes, I did. Now, can you describe a little bit what the process
is to acquire a search warrant? A. The process to acquire a search warrant is you have
to write an affidavit that supports why you would want to search a business. And that affidavit is presented to a I brought it to this
United States Magistrate Judge here.
courthouse, and it is signed by a judge. Q. And what type of information do you typically put in
a search warrant affidavit? MS. HAZRA: I'm going to object on relevance
grounds, Your Honor. THE COURT: Approach.
(A bench conference is had, and the following is had outside the hearing of the jury.) MS. HAZRA: He is asking generally about search
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warrants.
He is asking generally about search warrants,
and he is not directing it to any particular case in general, either. MR. BANKS: THE COURT: Related to IRP, Your Honor. What is the relevance of this whole
line of questioning? MR. BANKS: We are going into the search warrant
and execution and things that happened on the day of the search warrant. THE COURT: warrant? MR. BANKS: Not challenge the search warrant, but Are you trying to challenge the search
the Government's activities and his creation of the search warrant and information that he will actually provide to the judge. THE COURT: here. But that's not something that gets done
That is something that you do as part of your
challenge to the search, itself. MR. BANKS: Honor. THE COURT: I need to know the relevance of any of We are not challenging the search, Your
that information to the defense. MR. BANKS: He's contacted members of -- not only
Steven Cooper, with regards to conducting the search warrant, but actually Melissa McRae and other people who
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he contacted, he provided and utilized their testimony with regards to the search warrant. THE COURT: your defense? MR. BANKS: The Government's motivations in this How is that relevant to the issues to
particular case is going to be brought clear as we question Mr. Smith, and the reasons that they actually started investigating this case. MS. HAZRA: Your Honor, it seems to me defendant is
making some sort of Franks argument -- that is what I think -- in challenging the search. motion. That is a pretrial
That is not litigated in front of the jury. THE COURT: Franks is a case. But if you wanted to
challenge the search -- you are saying you don't want to challenge that, but that is something that needs to be done pretrial. In this particular case, I need to find --
I need to understand better what the relevance is of the search warrant and what's in the search warrant to your defense. You admitted, without objection, all of the fruits of that search that were offered by the Government. am trying to understand why this is relevant. MR. BANKS: wrong. Information -- maybe I'm going about it So I
Information Mr. Smith provided as far as the
language he provided in the search warrant is inconsistent

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with testimony he received from individuals to do that search warrant. THE COURT: MR. BANKS: How do you know that? Because I see the inconsistency. That
is what I'm trying to lay foundation for. THE COURT: I'm not sure -- if you are trying to
say the information contained in the search warrant affidavit -MR. BANKS: I will ask him questions why he did
certain things a certain way, Your Honor. THE COURT: We need to get to that. But whether or
not -- it sounds to me like you are trying to challenge the search warrant. MR. BANKS: THE COURT: Not at all. You need to move on and ask him direct
questions, but not into the validity of the search warrant, itself, because that is something that needed to be raised before trial. MS. HAZRA: Seems they are calling Special Agent
Smith purely to impeach him, which is improper under 608. THE COURT: So ask him substantive questions, then But if the sole question
the Government doesn't object.
is to call him to impeach him, that should have been done on cross-examination. MR. BANKS: This is all new grounds.
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THE COURT:
Remember, you have to ask him direct
questions, but we will not get into the substance of the search warrant. MR. BANKS: Very well, Your Honor.
(The following is had in the hearing of the jury.) (BY MR. BANKS) Mr. Smith, during your investigation,
did you -- how did you -- did you actually contact staffing companies? A. Q. Yes, I did. And how did you go about contacting those staffing
companies? A. I had received information from the search, and that
staffing companies had lost money to DKH, IRP and Leading Team. So I researched the name of that staffing company
and got their phone number and called them to figure out what the relationship was with those three companies. Q. Okay. And during the course of those -- that
contact, did you request information? A. Q. Yes, I did. And what type of information did you request from the
staffing companies? A. I requested all of the information that they had
related to their relationships with either IRP, DKH or Leading Team, to include things such as invoices, time cards and things about the business relationship.
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Q.
Also, I want to ask you a question, are you aware of
a newspaper article that was generated from the raid? A. There was a newspaper article in the Colorado Springs
newspaper, yes. Q. A. Q. Did you contribute to that article? No, I did not. Did you at any time use that article in your contact
with staffing companies? A. Q. Yes, I did. For what purpose -- now, let me back up there. You said a minute ago that you wanted to -- you contacted staffing companies in an effort for them to provide you information on their dealings with IRP, DKH, et cetera, as related to the matters in this case; correct? A. Yes. I called them to find out about their
relationship with those three companies. Q. So if you sent the newspaper -- did you send the
newspaper article, then, as part of your transmissions to them to collect information? A. Yeah. I would call the people first and try to
determine if there was a relationship with one of the three companies. And then after I determined -- and we
talked about how I had got their name from the search warrant and had documents related to their company.
Yes,
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sometimes I would send the newspaper article to them if they asked me. Q. A. If they asked you? Let me rephrase that. I told them a search warrant
had occurred, that is how I got the documents with their names on it. And, then, to follow up with that, I would
send them the newspaper article. Q. And what was the purpose of sending the newspaper
article? A. The purpose was just to -- we had talked about it on
the phone, and I told them I got their documents during a search warrant of those offices, and that I had an article. And they were happy to -- instead of looking it
up on the internet, I had it, and I could send it to them, instead of -- saving them time. Q. You didn't tell them just what you were investigating
about, you sent them a newspaper article; correct? A. Yes. I called them and told them that I had seized
documents related to their company during the search warrant. And we talked a little bit to see if they had a And then to
relationship with DKH, IRP or Leading Team.
follow up on that phone call, sometimes I would send the newspaper article. Q. Did you send the newspaper article to a gentleman by
the name of Greg Goldberg, as well, during the course of

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your investigation? A. Q. I don't remember sending it to Greg Goldberg. Did you have contact with Mr. Goldberg with regard to
this investigation? A. Q. I don't remember having contact with him. You remember no contact with Greg Goldberg of Holland
& Hart? A. That's correct. MR. BANKS: THE COURT: Q. (BY MR. BANKS) May I have a moment, Your Honor? You may. Would you doubt the fact that you
actually sent -- you doubt that you actually sent the newspaper article to Greg Goldberg; correct? A. I just said, I don't remember contacting Greg
Goldberg at this time. Q. In the entire -- do you recall a letter that was sent
to the Government from Mr. Goldberg as information that related to some of the staffing companies he had been associated with? A. Yes. I remember Greg Goldberg works -- he is a
lawyer at a firm, and his firm -- he wrote a letter and sent it to the Government. Q. A. And you are aware of the contents of that letter? Yes. MR. BANKS: Your Honor, I would like to provide
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Mr. Smith with the FBI fax sheet sent to Greg Goldberg to refresh his recollection. THE COURT: MR. BANKS: With respect to what? Mr. Smith just testified he never sent
anything to Mr. Goldberg. THE COURT: MS. HAZRA: MR. BANKS: MS. HAZRA: Have it marked. May I see it? You can keep that. Okay. Thank you. I have marked this as
COURTROOM DEPUTY: Defendants' Exhibit D406. Q. (BY MR. BANKS)
Let me ask you this.
Did
Mr. Goldberg have some affiliation with some of these staffing companies? A. I remember Mr. Goldberg was an attorney at a firm in And the staffing companies had reached out -- he
Denver.
had accumulated data from staffing companies that had lost money to DKH, IRP and Leading Team. He compiled that
data, and also the statements from the staffing companies that he had received, and sent that to the Government. And that's how this case started, because we became aware that those companies had been contacting staffing companies and not paying their bills. data and sent it to the Government. aware of Mr. Goldberg.
And he compiled the
That is how I became
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Q.
So what purpose -- if he had knowledge of -- and you
are saying he was not participating in his attorney role, as an agent in this case or a member of the Government's case; correct? A. firm. Q. A. No, that's not correct. He was an attorney, private
He wasn't with the United States Government. So what purpose did you send him the article? I faxed him this newspaper article. He must have
reached out to me about the case at some point, and I can't tell him about ongoing investigations, but I sent him an article that was public in the newspaper. Q. Are you sure you didn't send the article to him and
staffing companies to frame your response from the staffing companies? A. Q. I absolutely did not do that. Wouldn't it have been simpler to say, send me
information regarding your dealings with IRP? A. Q. I told them to send me information, yes. Did you send this article to any businesses that IRP
was doing business with during the course of your investigation? MS. HAZRA: Honor. THE COURT: Q. (BY MR. BANKS) Overbroad. Did you send this article to IBM?
Object to the relevance of this, Your
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A. Q. A.
I don't remember sending it to IBM. Do you remember sending it to any company? Yes. I sent it to staffing companies that I obtained
data during the search warrant that I thought could have had relationships with DKH, IRP or Leading Team. And the
purpose of sending it to them was to see if they had lost money to those companies and to determine their relationship. Q. What were the contents of that article? MS. HAZRA: THE COURT: MR. BANKS: article to -THE COURT: it. But they didn't issue it. They sent Objection, Your Honor, it's hearsay. Mr. Banks? Your Honor, if the Government issued an
The objection is hearsay. MR. BANKS: Okay. Did you have a chance to read the
Q.
(BY MR. BANKS)
article? A. Q. A. Yes. And what type of information did the article contain? I haven't read the article since it came out in the But it contained
newspaper in February of 2005.
information about the business activities of DKH, IRP and Leading Team. Q. Do you recall the article saying that the companies
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were doing -- it was found the companies did some development -- software development? A. Q. I haven't read the article since February of 2005. Would you like to read the article now to refresh
your recollection? A. Q. Sure. It should be there in front of you in that defense
exhibit we just gave you. A. Q. Okay. Now, at the bottom of that article, would you agree
it says that "investigators found evidence that there was some software development going on"? A. It's cut off here at the bottom, but it says -- it
says something similar to that, yes. Q. Didn't you already know that the company was
developing software? A. At the time of the search warrant, it was unclear
what the exact business activities of DKH, IRP and Leading Team were. And people we talked to said that they were But
told that those companies made some kind of software.
it was uncertain on the status of the software and how far along it was. So I didn't really know how far along or
what exactly they were doing. Q. Well, prior to executing the raid, didn't you have an
opportunity to speak to members of the Department of

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Homeland Security; specifically Steven Cooper? A. Q. Yes. Did you also have an opportunity to interview an FBI
agent from the CIO office of the Department of Justice by the name of Melissa McRae? A. Q. Yes, I did. And what was Ms. McRae's -- what was the nature -- do
you know when you interviewed her? A. I don't know the exact date. I don't know the exact
date, no. Q. Okay. What was -- what type of information did she
provide you about the company? MS. HAZRA: Your Honor. THE COURT: Q. (BY MR. BANKS) Sustained. What did you report in your FBI What did you report as it I am going to object as to hearsay,
report of February 3, 2005? relates to Melissa McRae? MS. HAZRA: THE COURT:
Objection, Your Honor, hearsay. Mr. Banks, why is that not hearsay? It
is talking about her statement, not a statement he made, correct? MR. BANKS: report. THE COURT: About what she said?
This is what the FBI annotated in their
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MR. BANKS: THE COURT:
About what she said. You have to ask her what she said, not
(BY MR. BANKS) THE COURT:
What was communicated to you? It's -- unless you have an exception to
hearsay, a statement by someone who is not here in court is hearsay. MR. BANKS: THE COURT: (BY MR. BANKS) May I have a moment, Your Honor? You may. During your drafting of your Search
Warrant Affidavit, did you include information received from Melissa McRae as a part of your Search Warrant Affidavit? MS. HAZRA: THE COURT: (BY MR. BANKS) Objection, Your Honor, relevance. Discuss the relevance of that. During the course of your
investigation, did you speak to Melissa McRae? A. Q. A. Yes, I did. And who is Melissa McRae? She's an FBI agent. At the time she was a
Supervisory Special Agent at FBI headquarters. Q. Are you aware if she attended any software
presentations or demonstrations of IRP? A. Q. Yes, I am. Do you know when she attended that presentation or
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demonstration? A. Q. A. Q. Sometime in 2004, in the fall. Prior to the raid; correct? Yes, prior to the search warrant. So you said you were unaware that IRP was developing
software; correct? A. That's not what I said. I said I was uncertain on I
the status of the software and how far along it was.
talked to various people, and we didn't know for sure at the time how far along it was or what the status was. Q. A. Q. But Melissa McRae is an FBI agent; correct? Yes, she is. And your testimony is she attended a meeting where
IRP was doing a software demonstration? A. She attended a meeting. I don't know if she actually
saw a software demonstration or some other type of Power Point or something similar to that. Q. What about Steven Cooper? Did you speak to him
concerning IRP? A. Q. A. Yes, I did. And who is Steven Cooper? At the time, he was an executive in charge of One of the executives at the
information technology.
Department of Homeland Security. Q. And were you aware of any interactions or meetings he
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had with IRP? A. Q. A. Yes, I was. Do you know the nature of those meetings? Those meetings were similar to the meeting that we Mr. Cooper
just talk about with Ms. McRae, I believe. attended that meeting, also. Q.
Would it be safe to say you knew IRP was a software
development company? A. Q. Yes, that's fair. Would it also be safe to say that you in your Search
Warrant Affidavit, you classified them as a "purported software development company"? MS. HAZRA: Leading. THE COURT: Q. (BY MR. BANKS) Sustained. Do you know a gentleman by the name Objection, Your Honor, relevance.
of Richard Powers? A. Q. A. Yes, I do. Who is he? He, at one point, was the Special Agent in Charge of
the Denver division of the FBI. Q. A. What about a Gene Anderson? I know her. I don't know if I have ever met her, but
I know her -- know the name. Q. What does she do?

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A.
She is still an FBI agent.
Somewhere else in the
Bureau, but at the time I knew her, she was a supervisor in the Denver office. Q. During the course of your investigation -MR. BANKS: THE COURT: Q. (BY MR. BANKS) May I have a moment, Your Honor? You may. During the course of your
investigation, was one of the staffing companies that you had that you interfaced with, was a company called Sunny Side Temps? A. Q. Yes, that's correct. Are you aware of any contact that either Gene
Anderson or Mr. Powers had with Sunny Side Temps? A. Q. them? A. I have seen a letter in my file that was signed -But at Yes, I am. What is your knowledge of their communications with
the letter was actually signed by Gene Anderson.
the bottom it has Mr. Power's name on it, because he is the Supervisory Special Agent in Charge, SAC. But
Ms. Anderson signed the letter because she had the authority to do that, and she sent that letter to Sunny Side Temp. Q. A. Do you know what the nature of that letter was? Yes, I do.
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Q. A.
Can you expound on that for the Court? Yes. I had sent a letter to Sunny Side Temp asking
them to send me documents related to their interactions with IRP, DKH or Leading Team, and to get invoices, payroll records and the like; stuff like that that they had sent, the stuff they were going to send me, they sent it to the wrong address. Denver. They sent it to FBI office in
I work in Colorado Springs. The package of stuff made it into the Denver
office, and somehow got routed to Gene Anderson, because she was the white collar supervisor at that time; in charge of white collar crime. Based on her getting that,
she sent the letter back to the person at Sunny Side Temp. I didn't know anything about it at that time because it came to Denver. Q. A. She sent the letter back to them.
Do you know what the contents of that letter were? Yes. It was just basically -- she wrote back and
said that the FBI was not going to pursue the allegations -- pursue a crime against Sunny Side based on what they received from Sunny Side. Q. I will ask again. You said based on what they
received from Sunny Side? A. Yes. Ms. Anderson got this letter and this package
from Sunny Side, and did not know I had a case in Colorado Springs. She thought it was just a packet from one
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company, and didn't realize I had an ongoing investigation with multiple companies that had lost money. She didn't So
understand Sunny Side was just one of these companies. she wrote a letter back to the person at Sunny Side
saying, thanks for sending us this stuff, but we are not going to pursue a federal investigation at this time. Q. For what reason? MS. HAZRA: THE COURT: THE WITNESS: Objection, Your Honor, speculation. Overruled. She did not know that I had an So she wrote
investigation in Colorado Springs going.
back and said -- I haven't seen the letter in awhile, but said something to the effect, thanks for sending us the stuff. We will not open an investigation. You should
pursue this civilly. Q. (BY MR. BANKS) So she thought it was a civil matter;
correct? MS. HAZRA: THE COURT: THE WITNESS: Q. A. Q. A. Q. (BY MR. BANKS) Yes. And what is that? Just what I just said a minute ago. That it was a civil matter?
Your Honor, objection, speculation. If you know what she thought. I don't know what she thought. Do you know what she wrote?
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A. Q.
Yes.
That they should pursue that civilly, yes.
And you said she was the head of white collar crime
here in Denver; correct? A. She was the supervisor of a white collar squad. I
don't know if there is more than one squad. the supervisors. Q.
She is one of
Does the Colorado Springs office fall under the
purview of the Denver office? A. Yes. The Colorado Springs office is a sub office of But we have different supervisors over
the Denver office. our squads. Q. A. Q.
She wasn't your supervisor, was she? No. Are you aware of whether or not the article was
distributed over the internet? A. Q. Can you be more specific? Are you aware the article -- the specific article you
passed to staffing companies, was also on the internet? A. Q. IRP? A. Q. Absolutely not. So why send an article to staffing companies? MS. HAZRA: asked and answered.
I believe it was on the newspaper's website. Was that the goal of the Government, was to smear
Your Honor, I am going to object as
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THE COURT: (BY MR. BANKS)
Sustained. Now, did you have -- you testified a
minute ago that you had no interactions with Greg Goldberg. And, specifically, you had not sent him a fax.
Did you have any other communications regarding this case with Greg Goldberg? A. Like I said earlier, we had got a letter in from Greg
Goldberg's firm that started the case about staffing companies that had lost money to DKH, IRP or Leading Team. And then I have this fax that I sent in with the letter that you showed me earlier. And that's all I can remember
about personal interaction with Greg Goldberg. MR. BANKS: questions. THE COURT: MR. WALKER: THE COURT: All right. Anybody else? Your Honor, I have no further
Yes, Your Honor. Mr. Walker? DIRECT EXAMINATION
BY MR. WALKER: Q. Agent Smith, you said earlier that -- I believe you
said that you weren't sure how far along the software was; is that correct? A. Yes. Yes, at the time of the search, I talked to And I'm not a software expert, so I
various people.
didn't know how far along it was.

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Q.
And how was the presence or absence or progress of
the software a factor for the FBI's investigation? A. Honestly, the software -- the case was initiated
because staffing companies had engaged in business with IRP, DKH and Leading Team, and they were not paying those invoices. So that was the focus of my investigation.
Talking to staffing companies before the search warrant, they were told that there was impending or imminent contracts, or they had contracts with NYPD or other agencies. So that is how software became involved,
because they were told there were contracts for software, and that's how the invoices would be paid. But my focus was to gather documents related to staffing companies and their interactions with DKH, Leading Team and IRP. Q. Was the absence or presence of software a factor that
would help the FBI determine whether or not there was a so-called scam? A. Just the same answer to the question I had. The
staffing companies said that there was an imminent sale or there was a sale of the software at NYPD. they did business with those companies. That is why
So there were
representations made to those companies by IRP, DKH and Leading Team. Q. And at some point, would it be true that the FBI
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determined that there was software being developed at IRP Solutions? A. Yes, that's true. You know, after the search, it was
obvious there were some software there. Q. And is it also true that at some point the FBI
determined that IRP Solutions was, in fact, attempting to sell software to the Department of Homeland Security? A. They had meetings with the Department of Homeland
Security about their software. Q. And were those meetings in regard to selling the
software to the Department of Homeland Security? A. My remembering is that Homeland Security was getting
information about software that was available, you know, in all of the different software products that were available, and IRP was one they were looking at to see what was available there. Q. I'll ask the question again, Agent Smith. Were those
meetings with DHS attempts to sell software to DHS as determined by the FBI? MS. HAZRA: Your Honor, I'm going to object, either
asked and answered or speculation. THE COURT: I think you need to lay more foundation
as to what he would know about what DKH and the others were doing. Q. So lay more foundation. Overruled.
(BY MR. WALKER)
Agent Smith, at what time did you --
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at what time did you leave the FBI in Denver? A. I left this division -- I moved from Colorado Springs
in June of 2007. Q. And were you involved in the investigation of IRP
Solutions up to June of 2007? A. Q. Yes. Did you have occasion to interview employees at the
Department of Homeland Security prior to June 2007? A. Q. Yes, I did. And in those interviews, did DHS tell you the nature
of meetings they had with IRP Solutions? A. Q. Yes, they did. And did they relate to you that IRP Solutions was
attempting to sell their product to DHS? A. Yes. They said that IRP was there to present their
software, and they were there to -- DHS was trying to figure out what all of the software products were at the time. Q. A. Q. So that answer is a yes; correct? I don't know if that is a yes or no. Let me stop you. You started your answer with yes,
then you expounded. A. Q. It's a yes. Thank you.
So is that a yes or is that a no?
And in the course of your being with the
FBI here in Denver, and involved in this case up until

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June of 2007, did you have the occasion to interview anyone from the NYPD about IRP Solutions? A. I know there were interviews. I don't know if I
personally did them. Q. Were you, up until June 2007, still the Supervisory
Special Agent? A. Q. A. Q. No. That is incorrect, I was not a supervisor.
Can you just clarify your role up until June of 2007. Yes. I was a Special Agent. And as a Special Agent, through June
Special Agent.
of 2007 on this case, did you have the opportunity to speak with anyone about interactions between IRP Solutions and the NYPD? A. Q. with? A. I remember contacting the FBI in New York City, to go Yes, I did. And who did you discuss IRP's dealings with the NYPD
out and do an interview -- do interviews at the NYPD regarding the IRP case. Q. And in your discussions with the FBI in New York
City, did you determine that IRP Solutions was meeting with the NYPD? MS. HAZRA: I am going to object, Your Honor. This
is now double hearsay. THE COURT: Well, it is did you determine they were
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meeting.
I'll overrule.
I'll allow it.
MR. WALKER: THE WITNESS:
Thank you, Your Honor. Yes. So an FBI agent in New York
City went to the NYPD and conducted an interview with somebody at the NYPD, and determined that IRP had been in contact with NYPD. Q. (BY MR. WALKER) And as a Special Agent involved in
this case, did you follow up on that information provided to you? A. I know -- I wasn't the Case Agent for the whole case,
but I know there were follow-ups about the NYPD. Q. And what is your knowledge about what was determined
in those follow-ups regarding the NYPD with IRP Solutions? A. I know that the NYPD never sold their software to IRP
(sic). Q. Okay. So you know that IRP never sold products to Do you also then know that IRP was attempting
the NYPD.
to sell products to NYPD? A. Again, I knew that IRP -- based on the case, that IRP
had contacted the NYPD and was doing software demonstrations. Q. And how, specifically, do you know that IRP was doing
software demonstrations at the NYPD? A. I know that -- I have read interview reports that
other FBI agents did from people at the NYPD that had met,
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or at least knew about meetings with people from IRP at the NYPD. Q. And so in that knowledge, do you also know that those
meetings weren't philosophical, they were sales meetings? A. Yes, they were meetings about software, yes. MR. WALKER: THE COURT: MR. BARNES: THE COURT: No further questions, Your Honor. Anybody else? Yes, Your Honor. Mr. Barnes. DIRECT EXAMINATION BY MR. BARNES: Q. Agent Smith, did you have any contact with any of --
anybody working at IRP prior to the raid, until you left? A. I can't remember specifically. I know I didn't have
contact with anybody here at this table. Q. Did you have any contact with any of the subject
matter experts; with your former federal agents prior to the raid in 2005? A. I don't know if it was before or after the raid.
But, yes, I contacted those retired federal experts, yes. Q. And did they provide you information about what was
going on inside IRP at the time? A. Q. Yes, they did. Could you explain what information you received
during that -- those interactions with those former FBI

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agents? A. My memory of that is I received information from I got a retired FBI agent name John Epke, a
three people.
retired FBI Agent named Dwayne Fuselier, and a retired Custom's Agent named Gary Hillberry. They relayed to me
that they had been contacted by IRP Solutions to be subject matter experts. They had went to IRP's offices
and performed work that they were never paid for. Q. Did they initiate that contact, or was that contact
initiated by you? A. I can't remember if they called the FBI or somehow I
had seen documents and knew to call them. Q. So if they called the FBI, how would they have known
there was an investigation going on prior to a raid? A. I don't know if they knew there was a raid. They
might have just -- I can just only speculate. know if they called me or I called them. Q.
I don't
But the question is, how would they have known any
sort of legal action, investigation was going on to contact you first? MS. HAZRA: speculation. THE COURT: may answer it. To the extent that you would know, you Objection, Your Honor, calls for
If you are speculating, you may not. I don't know if I called them or if
THE WITNESS:
1934
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
they called me. Q. (BY MR. BARNES) Was there any other e-mail Was there electronic
communication, besides calling.
communication, face-to-face, any of that happen prior to 2005? A. I don't know. I know the three gentlemen, they lost I don't
money -- they worked at IRP and never got paid. remember the interactions with them. Q.
But you did get information from them about IRP
Solutions; is that correct? A. Yes, I did. But I don't remember how I got the
information. Q. Outside of those three, was there any other contact
you had with any other persons; working contract or volunteer from IRP Solutions related to your investigation, prior to the raid in 2005? A. Like I said, I talked to those three gentlemen at And I don't remember contacting any of you
some point.
gentlemen before the search warrant. Q. So, for lack of a better word, were they like your
spies inside of IRP? A. Absolutely not spies. They were just gentlemen, just
like anybody else, that had lost money -- had worked there and didn't get paid. And they relayed that to me; that
they didn't get paid for services they performed.

1935
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
You didn't see the need to contact anyone at IRP to
maybe question them about their, you know, dealings with staffing agencies; what they were doing prior to the raid in 2005? A. That is an investigative decision, and I chose not to
do that. Q. But you chose to contact the former FBI agents, maybe
get information from them, but not from the people who may actually know what is going on? A. Like I said, I don't know if they called me or I But I know I talked to them.
called them. Q. A.
About IRP Solutions; correct? Yes. About them working at IRP, DKH or Leading Team
and never getting paid. Q. So, again, you testified earlier that after 2007 you
were basically no longer, I guess, the case head of this investigation; is that correct? A. Yes. I moved to another office and was no longer the
primary case agent. Q. So how far -- how far would you say you were involved
with this case after 2007? A. I have always maintained involvement. I have known
the other case agents, and they call me with questions. And I help them on interviews and other things that they needed to help complete the investigation.
1936
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
So were you -- did you help coordinate any
investigation with the Philadelphia Police Department in 2009? A. Q. A. Q. No, I did not. Were you aware that was happening? No, I was not. So you are not aware of any contact with the
Philadelphia Police Department at all during the course of the investigation of IRP Solutions? A. No. I know that there was FBI contact with the But I wasn't involved in
Philadelphia Police Department. any of that. MR. BARNES: THE COURT:
No further questions, Your Honor. Anybody else. Mr. Zirpolo?
DIRECT EXAMINATION BY MR. ZIRPOLO: Q. A. Q. A. Q. A. Good afternoon, Agent Smith. Good afternoon. Do you know what an InfraGard is, I-N-F-R-A-G-A-R-D? Yes, I do. What is that? It's an FBI program that relates to liaison contacts
with members of the information technology field or community. Q. Were members of IRP members of InfraGard?
1937
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q.
MS. HAZRA: THE COURT: MR. ZIRPOLO:
Objection, Your Honor, relevance. Mr. Zirpolo? Just setting a basis for his contact
with some InfraGard personnel. THE COURT: MR. ZIRPOLO: What is the relevance of that? It shows that InfraGard accepted IRP
employees as members of their group, and that IRP was actually trying to sell their software package to InfraGard. THE COURT: MR. ZIRPOLO: What is the relevance of that? It is going to the integrity -- or
the company, and how they were going forth trying to sell their package. THE COURT: Sustain the objection. Irrelevant.
(BY MR. ZIRPOLO)
Mr. Smith, do you remember
testifying under oath that we wouldn't be here if we had paid the software companies? A. Q. No, I do not. During the James hearing on November 17th, do you
remember testifying to that under oath? A. No, I do not. MR. ZIRPOLO: moment, Your Honor. Q. One moment, Your Honor, please. I'm sorry. So let me be a little bit more One
(BY MR. ZIRPOLO)
specific.
You were asked a question if they?

1938
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q.
THE COURT:
He doesn't remember.
Do you have
anything to refresh his recollection? MR. ZIRPOLO: I have the James hearing. I don't
have it printed, Your Honor. THE COURT: Show him what you have. Let him read
it, see if that refreshes his recollection. MS. HAZRA: THE COURT: Will you refer me to a page? You can hand that to Ms. Seeman. Just
for the record, this is a transcript of a hearing on what date? MR. ZIRPOLO: THE COURT: MR. ZIRPOLO: THE COURT: MR. ZIRPOLO: THE COURT: THE WITNESS: (BY MR. ZIRPOLO) November 19, I believe it was. Of last year? Yes. This is page? 92. 92. All right.
Okay. So based off of that, if IRP was
successful in selling software, we wouldn't be here today? THE COURT: Ask him your question. Does he now
remember making that statement? Q. that? A. Just to clarify, like, I read the statement here, but What page? It is just (BY MR. ZIRPOLO) Do you now remember testifying to
I can't tell if this is me or not.
1939
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
questions. Q.
It doesn't say my name.
If we can scroll up to where he was sworn in. MR. ZIRPOLO: THE COURT: MS. HAZRA: May I approach? Yes, you may. Your Honor, we have a paper copy we are
happy to provide. THE COURT: THE WITNESS: THE COURT: That would probably be more helpful. I read it. It is fine.
Can we mark that for identification so
we have it for the record? MS. HAZRA: Q. Certainly. So, having seen that, that was you
(BY MR. ZIRPOLO)
testifying; correct? A. Q. A. Yes. And so do you remember testifying to that now? The question that is right there was, "Is it fair to
say that if IRP would have paid, you never would have been called?" Q. And I said "Yes, that's probably fair to say."
So if IRP was -- so, in other words, if IRP was
successful in selling their software, we wouldn't be here today? A. If IRP was successful and had sold it and had paid
the staffing companies, of course my belief is they probably wouldn't have called, because you all would have paid them, and they wouldn't be here.
1940
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
COURTROOM DEPUTY:
I am sorry to interrupt.
This
transcript is marked as Defendants' Exhibit D407. THE COURT: MR. ZIRPOLO: THE COURT: MR. ZIRPOLO: THE COURT: MR. WALKER: THE COURT: All right. One moment again. You may. No further questions, Your Honor. Anybody else? No, Your Honor. All right. Cross-examination?
CROSS-EXAMINATION BY MS. HAZRA: Q. A. Q. Good afternoon, Special Agent Smith. Good afternoon. You were just asked on direct examination about your
statement that you think it would be fair to say you wouldn't be here, or words to that effect? A. Q. Exactly, correct. But isn't it true, Special Agent, that means,
according to your testimony on direct, that the staffing agencies wouldn't have reported it to the FBI if they had gotten their money? A. Q. Yes. That is what I would assume.
It doesn't mean there wouldn't have been a scheme to
defraud, does it? A. No, it does not.

1941
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
It doesn't mean that the defendants -- that the
defendants didn't necessarily make misrepresentations, does it? A. Q. No, it does not. It means the staffing companies wouldn't have
reported it if they hadn't lost money? A. Q. Right. If they hadn't reported the crime, you wouldn't be
investigating the crime? A. Q. Correct. You can only investigate crimes that are reported or
that you have knowledge of; is that right? A. Q. Yes, that's correct. You were asked a series of questions about an I just wanted to clarify. That is a newspaper
article.
article, isn't it? A. Q. A. Q. Yes, it's a newspaper article. That wasn't written by the FBI? No. It was written by a newspaper person.
I want to talk to you a little bit about the steps
you took before you executed a search warrant at IRP, DKH and Leading Team. A. Q. Okay. In the course of that investigation, you talked to a
couple retired federal law enforcement officers; is that

1942
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
right? A. Q. Yes, I did. And in your sort of experience and training, do you
tend to believe that they are reliable witnesses? A. Q. Yes, I do. Did you also talk to some people from the staffing
companies? A. Q. Yes, I did. And, specifically, you talked to some victims of the
defendants' staffing companies? A. Q. Yes, I did. So you talked to a couple -- several different
sources in the course of your investigation? A. Q. Yes, that's correct. And you also talked to, eventually, people in the
federal government agencies; is that right? A. Q. Yes. Just to be clear, you did all of these things prior
to executing the search warrant? A. Q. Yes, I did. So you talked to all those various different sources
before the FBI searched in February of 2005? A. Yes, that's correct. MS. HAZRA: further questions.
One moment, Your Honor?
I have no
1943
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
THE COURT: MR. BANKS:
Redirect? Yes, Your Honor. REDIRECT EXAMINATION
BY MR. BANKS: Q. You were just asked by -- in your cross-examination,
whether or not, as regarding your statements, is it fair to say you wouldn't have been contacted if the companies had been paid; correct? A. Q. Yes. And you also said that that doesn't mean that a
scheme to defraud was not under way; correct? A. Q. Yes, I did. Are you aware that intent is a part of a scheme to
defraud? A. I'm not an attorney. I don't know the whole legal
definition of a scheme to defraud, what parts. Q. You know a scheme to defraud, but you don't know any
more about the scheme to defraud as it applies to the law? A. Q. A. I know that -- can you ask me a question, please? Do you know what the intent to defraud is? I mean, I could give you -- I couldn't give you an
absolute legal definition. Q. Just your understanding. THE COURT: the law. That is inappropriate. I instruct on
If he knows what it is, he can give it, but I

1944
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
instruct on the law. Q. A. (BY MR. BANKS) Do you know what it is?
I don't know the legal definition. MR. BANKS: THE COURT: MR. WALKER: THE COURT: No further questions, Your Honor. Anybody else? No, Your Honor. May this witness be excused? All right. Thank you.
You may step down.
Ladies and gentlemen, at this time I understand that we don't have any other witnesses for today. am going to give you a break. I also
We are not going to convene
tomorrow, so you don't have to report back until Monday morning at 9:00 a.m. Now, I do want to remind you, you have your jury instructions. In particular, and I tell you this kind of
very briefly every time we break, but I really want to emphasize, because you heard some testimony today about a newspaper article. It would be inappropriate for you to
go try to find that newspaper article on the internet. So I want to point you to the first jury instruction that tells you about you cannot engage in any outside type of research in this matter because your decision is to be based on the evidence that is received here in court. So I know the natural inclination would be
because of curiosity, and I want to warn you against doing

1945
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
anything like that. So don't talk to anybody about this case. any additional research. Don't do
You can have tomorrow off, and
we will reconvene at 9 o'clock on Monday morning. All right. The jury is excused.
(The following is had in open court, outside the hearing and presence of the jury.) THE COURT: All right. You may be seated. I want
the parties here at 8:30 on Monday morning, just in the event there are matters, so we can start promptly at 9:00. And you can give me an update as to where we stand with our witnesses, okay. MR. WALKER: THE COURT: Yes, Your Honor. Any other matters that need to be
brought to my attention before we recess until Monday. MR. BANKS: MR. KIRSCH: THE COURT: Not from us, Your Honor. No, Your Honor, thank you. Thank you very much, then. We will see
you at 8:30 on Monday morning.
Court is in recess.
(Court is in recess at 2:39 p.m.)
1946
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
R E P O R T E R ' S
C E R T I F I C A T E
I, Darlene M. Martinez, Official Certified shorthand Reporter for the United States District Court, District of Colorado, do hereby certify that the foregoing is a true and accurate transcript of the proceedings had as taken stenographically by me at the time and place aforementioned.
Dated this 5th day of December, 2011.
_____________________________ s/Darlene M. Martinez RMR, CRR

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1773

The other four, we are still awaiting

agencies have received the subpoenas.

those saying they wanted additional information.

And also potentially Paul Beebe and Richard I haven't gotten an

Powers, but those are very tentative.

So when was he supposedly

MR. WALKER: THE COURT: MR. WALKER:

did not comply with the Touhy Regulation.

Honor, Mr. Cooper is the last thing.

We were unsuccessful in doing

understand that Mr. Witherspoon is going to absolutely

But I think the scheduling -- my

And to the best of my understanding, he has

And, as I stated earlier, he has agreed to

could testify would be Monday morning.

THE COURT: MR. WALKER:

All right. Also, Mr. Vince Rosales was served

Your Honor, also Mr. Dwayne Fuselier. Apparently there

From what I have been told, he is away.

as a CILC subject matter expertise. MR. WALKER:

Your Honor, he was one of the former,

THE COURT: MR. WALKER: THE COURT:

And you subpoenaed him? Yes, Your Honor. He was subpoenaed.

What will Mr. Fuselier add that

message on our answering machine. THE COURT:

What is the -- what is the testimony

I need to know specifically how she will

If you are going to have to ask for a

don't have them.

What I am suggesting is that they would

Your Honor, I would like to just

is going to object to them on the basis of hearsay.

Mr. Rosales, who had not been subpoenaed. Integrations.

don't have the status of Mr. Beltran.

But, to the best of

Your Honor, those individuals we are

What about Mr. Pisciotta,

Your Honor, there was an attempt to

Thursday before last, meaning last

I need to find a file

that has that date on it. of that week. THE COURT:

But it would have been the end

You said she had

not been subpoenaed. MR. WALKER:

What is the status of her? That's correct, Your Honor. Your

THE COURT: MR. WALKER:

THE COURT: MR. WALKER:

Let me double check that one, Your

Your Honor, we will not be calling

double checking that.

He was served for an appearance for

Mr. Belrose of the New York

THE COURT: MR. WALKER: been served. THE COURT:

Your Honor, Ms. Broerman has not yet

What is the relevance of her testimony

moved on from her job, and we haven't been able to find

No, Your Honor, he has not been served