Full opinion text
DECISION AND ORDER ADELMAN, District Judge. On March 31, 1997, plaintiffs filed this lawsuit against Edward Reiser and Gerald, Inc; Plaintiffs asserted that Reiser conspired with Michael Sehwarzmann, a relative of the individual plaintiffs, to defraud plaintiffs of substantial money. In their Amended Complaint, plaintiffs alleged that Reiser (1) violated the Wisconsin Organized Crime Control Act (“WOCCA”), Wis. Stat. §§ 946.80-946.88; (2) engaged with Sehwarzmann in a civil conspiracy to defraud; and (3) negligently misrepresented certain facts to plaintiffs; thereby entitling plaintiffs to both compensatory and punitive damages. According to plaintiffs, Gerald is liable under the respondeat superior doctrine because at all times material, Reiser was acting within the scope of his employment. In a Decision and Order dated April 24, 1998, the estate was substituted for Reiser on the conspiracy and negligent misrepresentation claims. I dismissed the WOCCA claim against Reiser, however, finding that as a penal cause of action the claim expired when Reiser did and thus the estate could not be substituted on that count. I declined, though, to dismiss the count against Gerald at that time just because the claim against Reiser abated, although I suggested that the punitive nature of a WOCCA claim raised questions regarding the applicability of the respondeat superior doctrine. I have diversity jurisdiction over this case pursuant to 28 U.S.C. § 1332 because the amount in controversy exceeds the sum of $75,000, exclusive of interest and costs, and it is between citizens of different states. And, as I determined previously, venue is proper in this district pursuant to 28 U.S.C. § 1391(a)(2). (See Decision and Order of 4/24/98 at 30-31.) Defendants have each filed a motion for summary judgment. Because of the numerous issues presented by the parties and time constraints due to the fast-approaching trial date, I am issuing my Decision and Order in two parts. Matters not addressed today will'be addressed in another decision early next week. Before delving into the facts of the case, though, some evidentiary motions must be decided, as they affect what I will consider regarding summary judgment. In deciding a motion for summary judgment, I may consider only evidence that is admissible at trial. Gustovich v. AT & T Communications, Inc., 972 F.2d 845, 849 (7th Cir.1992). I. MOTION TO EXCLUDE REISER’S DEPOSITION TESTIMONY Reiser died on July 18, 1997, and obviously cannot give present testimony to support plaintiffs’ lawsuit. He once, however, was deposed about the events of this case. On September 3, 1992, plaintiffs filed a lawsuit against Schwarzmann (the “Schwarzmann case”), alleging that Schwarzmann defrauded plaintiffs of over $1 million. Keiser and Gerald were not parties to the lawsuit, and plaintiffs did not then allege that either Keiser or Gerald committed any wrongdoing. In connection with the Schwarzmann case, though, plaintiffs deposed Keiser on January 19, 1994, at which time Keiser was no longer a Gerald employee. At the deposition, Keiser was represented by attorney Jane Low-don, who also was an attorney for Gerald. No one other than Lowdon, plaintiffs’ attorney, and Schwarzmann’s attorney attended or participated in the deposition. Plaintiffs now seek to introduce Keiser’s 1994 deposition testimony into evidence against Gerald in the present lawsuit for purposes of the summary judgment motions and trial. Gerald objects, arguing that under Federal Rule of Evidence 804(b)(1). Keiser’s deposition testimony is inadmissible hearsay. Plaintiffs retort that parts of the deposition testimony are not hearsay at all and that not only is the .testimony admissible under 804(b)(1), but it qualifies under Federal Rules of Evidence 804(b)(3) and 807 as well. Hearsay is “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” Fed.R.Evid. 801(c). Hearsay that does not fall within an exception in the Federal Rules of Evidence is inadmissible for summary judgment motions as well as trial. Eisenstadt v. Centel Corp., 113 F.3d 738, 742-43 (7th Cir.1997). Here, Gerald attempts to exclude as hearsay Keiser’s entire deposition prior to trial. But whether a statement is inadmissible hearsay often hinges on the purpose for which it is offered. United States v. Linwood, 142 F.3d 418, 424-425 (7th Cir.) (if statement offered without reference to the truth of the matter asserted, the hearsay rule does not apply), cert. denied, — U.S. -, 119 S.Ct. 224, 142 L.Ed.2d 184 (1998). As indicated above, when statements are not offered to prove the truth of the matter asserted, they are not hearsay at all. Id.; Fed.R.Evid. 801(c). Plaintiffs contend that parts of Keiser’s deposition will be offered for purposes other than for their truth. For example, Keiser testified that Schwarzmann told Keiser he had taken money from people and spent it all on a woman and that Schwarzmann told Keiser he wanted to fake the balance in his account at Gerald. According to plaintiffs, these statements will be offered to show that Keiser had knowledge that Schwarzmann’s investments with Gerald were suspicious yet helped Schwarzmann plan how to deceive Nick and Górecki. Testimony by Keiser offered for such purposes does not constitute hearsay. See Fed.R.Evid. 801(c); 5 Jack V. Weinstein & Margaret A. Berger, Weinstein’s Federal Evidence § 804.04[l][c] (2d ed. 1997 & Supp.1999) (prior testimony need not meet the requirements of Rule 804(b)(1) if it satisfies some other hearsay exception, qualifies for admission under Rule 801, or is used in a nonhearsay way such as for impeachment or to refresh recollection). Therefore, to the extent that plaintiffs do on summary judgment and will at trial offer Keiser’s testimony for purposes other than the truth of the matters asserted, Gerald’s motion to exclude the deposition testimony will be denied. As to statements possibly offered for their truth, under Federal Rule of Evidence 804(a)(4) Keiser is unquestionably an unavailable witness. When a witness is unavailable former testimony is not excluded by the hearsay rule “if the party against whom the testimony is now offered, or, in a civil action or proceeding, a predecessor in interest, had an opportunity and similar motive to develop the testimony by direct, cross, or redirect examination.” Fed.R.Evid. 804(b)(1). Rule 804(b)(1) incorporates a concept of fairness by “screening] out those statements, which although made under oath, were not subject to the scrutiny of a party interested in thoroughly testing [their] validity.” United States v. Pizarro, 717 F.2d 336, 349 (7th Cir.1983). Gerald contends that neither it nor any predecessor in interest had an opportunity and similar motive to develop Reiser’s testimony on two issues key to the present case against Gerald: Reiser’s own involvement in Schwarzmann’s scheme and whether Reiser was acting within the scope of his employment. Plaintiffs respond that Gerald did in fact attend the deposition through the presence of Low-don and had both opportunity and motive to develop Reiser’s testimony on these points. Lowdon’s exact capacity is somewhat unclear. Plaintiffs present evidence that in December 1992 Lowdon responded on behalf of Gerald to a subpoena seeking documents in plaintiffs’ Schwarzmann case. In a letter to plaintiffs’ counsel dated September 17,1996, she wrote: As you may be aware, this office represents Gerald, Inc. in connection with ■ various commodity related matters. Your office certainly should be aware of this fact as Gerald, Inc., through the undersigned, has cooperated fully with your firm and appropriate authorities relating to the Schwarzmann matter in the past. Please be advised that my office continues to represent Gerald, Inc. in connection with this matter. Please further be advised that all future correspondence should be directed to my attention at the address listed above. (Culhane Aff.Ex. D.) Lowdon even agreed to accept service of the summons and complaint in the current case on Gerald’s behalf. Therefore, it appears that she represented Gerald from at least December 1992 to late 1996, including the date of Reiser’s 1994 deposition. Gerald submits an affidavit from Lowdon in which she says Reiser himself contacted her for representation at the deposition and that she did, in fact, represent Reiser, not Gerald, at the deposition. Regardless, though, it is true that because Lowdon was also Gerald’s attorney regarding any involvement in the Schwarzmann case, it is possible to consider Gerald as having had some type of unofficial presence at the deposition. In regard to some key issues in the present case, however, I nevertheless cannot say that Gerald or its attorney had an opportunity and similar motive at the Reiser deposition to develop the testimony. The touchstone of admissibility is a similar motive to develop the testimony on the part of the nonoffering party (or a predecessor in interest in a civil case). The way to determine whether or not motives are similar is to look at the issues and the context in which the opportunity for examination previously arose, and compare that to the issues and context in which the testimony is currently proffered. The similar motive inquiry is essentially a hypothetical one: is the motive to develop the testimony at the prior time similar to the motive that would exist if the declarant were produced (which of course he is not) at the current trial or hearing? 3 Stephen A. Saltzburg, et al., Federal Rules of Evidence Manual 1833 (7th ed.1998). Just because Lowdon also was Gerald’s attorney at the time she attended the deposition does not mean she could abandon her simultaneous allegiance and duty of loyalty to Keiser. (It is unclear whether Gerald and Keiser signed any waiver of the conflicts in Lowdon’s representation— or even whether any conflicts were apparent at the time.) While on the issue of Keiser’s involvement in Schwarzmann’s scheme Keiser and Gerald possibly could have had a similar interest in developing the record, as Keiser’s attorney Lowdon, however, could not attack or develop Keiser’s testimony on the issue of whether he was acting outside the scope of his employment. Keiser’s motivation would not have been to show that he alone was on the hook for any damages and liability for involvement in the Sehwarzmann scheme, but that his employer was as well, in order to spread the liability. Gerald, on the other hand, had every reason to question Keiser with the aim to show he was acting outside of the scope of his job. This assumes, of course, that Keiser and Gerald even realized that the issues of Keiser’s involvement and the scope of his employment needed to be developed at the time. “Mere naked opportunity to cross-examine is not enough; there must also be a perceived real need or incentive to thoroughly cross-examine at the time of the deposition.” United States v. Feldman, 761 F.2d 380, 385 (7th Cir.1985) (internal quotation marks and citation omitted). The testimony must “be ‘subject to the scrutiny of a party thoroughly interested in testing its validity.’ ” Id. at 387 (quoting Pizarro, 717 F.2d at 349). In Feldman, two criminal defendants, Feldman and Martenson, successfully blocked the introduction under Rule 804(b)(1) of a deceased former coworker’s deposition testimony in a prior civil case brought by the Commodity Futures Trading Commission. Feldman and Martenson had been named as defendants in the civil case about their company, but neither had any exposure to personal liability — one had severed his ties with the company and one was willing to let the government agency obtain the declaratory and injunctive relief it sought — and thus did not attend the coworker’s deposition. Unbeknownst to the two, prior to the deposition their former coworker, Sanburg, had agreed with the government to testify against them in return for a promise that he himself would not be a target of later criminal proceedings. Sanburg subsequently died. No criminal charges were filed against Feld-man and Martenson for ten months after the deposition, and the government did not disclose its agreement with the deponent for almost a year. The Seventh Circuit found on appeal of Feldman’s and Martenson’s convictions, that for purposes of Rule 804(b)(1) Feld-man and Martenson had neither the opportunity nor sufficient similarity of motive to develop Sanburg’s testimony in the prior civil proceedings. At the time of Sanburg’s deposition, Feldman and Martenson were not adverse parties to Sanburg and had no reason to believe that Sanburg would later testify against them. The two had little personal or financial stake in the civil litigation and therefore understandably did not attend Sanburg’s deposition; in the later criminal proceeding, however, they faced fines and imprisonment. Questions by the company’s trustee in bankruptcy did not count as cross-examination on behalf of Feldman and Martenson. The trustee was more interested in the movement of assets than in discrediting or attacking Sanburg, “which would have been of utmost importance to the co-defendants.” Feldman, 761 F.2d at 387. In short, no one at the Sanburg deposition had the requisite stake in the proceeding that would be necessary for them to be deemed a predecessor in interest to the criminal defendants, and those who did have the requisite stake had no reason to suspect that they should be there. Id. The deposition thus failed to pass the test of Rule 804(b)(1). Id. The facts of this case are similar to those of Feldman. At the time of Keiser’s deposition, Keiser and Gerald had not even been sued by the plaintiffs; plaintiffs were then pursuing only Sehwarzmann. Gerald, which was not sued until two and half years later, had no reason to suspect that it should nor sufficient motive to officially attend and cross-examine Keiser at the deposition. At the time of the deposition it was not even aware that it would be in an adverse position to Keiser at a later date (regarding the issue of whether Keiser acted within the scope of his employment). In other words, given that neither Keiser nor Gerald were defendants in the Sehwarzmann case and had not yet been sued in this case, and that the focus of the Sehwarzmann case was on Sehwarzmann alone, any similarity of motive between Lowdon at the time of Keiser’s deposition and Gerald in the present case completely dissipates. Plaintiffs and Sehwarzmann obviously were not motivated similarly to present-day Gerald either. As a result, I find that Keiser’s deposition testimony is not admissible former testimony under Rule 804(b)(1). Federal Rule of Evidence 807 provides a residual exception from the hearsay rule: A statement not specifically covered by Rule 803 or 804 but having equivalent circumstantial guarantees of trustworthiness, is not excluded by the hearsay rule, if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rules and the interests of justice will best be served by admission of the statement into evidence. Plaintiffs argue that because Keiser’s deposition is offered as evidence of material facts, many of which were raised first by Gerald itself, the evidence is more probative on thfe point than any other evidence plaintiffs can procure, and the interests of justice will best be served by admission of the statement, I should deem the deposition testimony admissible under Rule 807. Another court within this district has found that the general Rule 807 does not apply, however, when a more specific hearsay rule actually deals with a certain situation. Acme Printing Ink Co. v. Menard, Inc., 812 F.Supp. 1498, 1527 (E.D.Wis.1992) (noting that testimony generically of a type covered by another specific hearsay exception, but which fails to meet the precise requirements of that exception, should not be admitted under the rule). The text of Rule 807 basically says as much. A statement must have “equivalent circumstantial guarantees of trustworthiness.” A statement that almost meets a subsection of Rule 804 but fails cannot have equivalent guarantees of trustworthiness as a statement that meets all the requirements — otherwise Rule 804 would have allowed it. Various commentators agree. According to Saltzburg, supra, [i]t is clear ... that the intent of the drafters was that the exception would be sued sparingly; the concern was that overuse of the residual exception would undermine the categorical approach to the hearsay exceptions set forth in the Federal Rules.... ... A broad application of the residual exception could permit the case-by-case exception to swallow the categorical rules. Saltzburg, supra, at 1931. “The residual hearsay exception was meant to be reserved for exceptional cases. It was not intended to confer a broad license on trial judges to admit hearsay statements that do not fall within one of the other exceptions contained in rules 803 and 804(b).” Weinstein, supra, § 807.02[1] (internal quotation marks omitted); see also United States v. Dent, 984 F.2d 1453, 1465-66 (7th Cir.1993) (Easterbrook, J. and Bauer, C.J., concurring) (arguing that because grand jury testimony is covered by the exception for prior testimony, residual exception cannot be used as a means for admission). That is the case here. Rule 804(b)(1) addresses former testimony from a person now dead. Keiser’s deposition testimony does not qualify under Rule 804(b)(1) and therefore should not get in through the back door of Rule 807. Various courts, though, have read Rule 807 more broadly. See, e.g., United States v. Earles, 113 F.3d 796, 799-800 (8th Cir.1997) (statement may be considered for admission under residual exception even if statement is of type addressed by specific hearsay exception but does not qualify for admission under that exception); United States v. Clarke, 2 F.3d 81, 83 (4th Cir.1993) (residual exception “rejects formal categories in favor of a functional inquiry into trustworthiness, thus permitting the admission of statements that fail the strict requirements of the prior exceptions, but are nonetheless shown to be reliable”). Even under this broader interpretation of Rule 807, however, I choose to exclude Reiser’s deposition testimony because I am not satisfied that it has “equivalent circumstantial guarantees or trustworthiness” nor that the general purposes of the evidence rules and the interests of justice are best served by its admission. Although Reiser was under oath at his deposition, he was not heavily cross-examined at all by anyone attending. Further, plaintiffs are arguing two inconsistent positions. They assert in the present case that Reiser intentionally conspired to cover up Schwarzmann’s fraud and improperly and intentionally used his employer’s stationery and statement forms to assist Schwarzmann, but also argue that Reiser’s statements under oath in 1994 are rehable. And finally, as stated above, Reiser’s posture then of being a witness in the Schwarzmann case differs greatly from the posture in which Gerald, as Reiser’s former employer, now finds itself. For all of these reasons, I am unconvinced that admission under Rule 807 is warranted. Nevertheless, Reiser’s deposition testimony, or at least certain parts of it, may be admitted under Rule 804(b)(3). Rule 804(b)(3) provides that the hearsay rule does not exclude [a] statement which was at the time of its making so far contrary to the declar-ant’s pecuniary or proprietary interest, or so far tended to subject the declarant to civil or criminal liability ... that a reasonable person in the declarant’s position would not have made the statement unless believing it to be true. The guarantee of reliability for declarations against interest “is the assumption that persons do not make statements which are damaging to themselves unless satisfied for good reason that they are true.” Fed.R.Evid. 804 advisory committee’s note; Williamson v. United States, 512 U.S. 594, 599, 114 S.Ct. 2431, 129 L.Ed.2d 476 (1994). A statement against interest as defined in Rule 804(b)(3) is admissible against a declarant’s codefendant. Once it is determined that testimony is excepted from the general prohibition against hearsay by virtue of Rule 804(b)(3) a plaintiff is able to use a declarant-codefendant’s extrajudicial statements against interest against the nondeclarant-codefendant as well. United States v. Hamilton, 19 F.3d 350, 355-56 (7th Cir.1994). That is especially true in a case like this one, where the nondeclarant-codefendant’s liability is predicated solely on the doctrine of re-spondeat superior. Reiser may have made some such statements. He testified, for instance, that he verified an account balance for Nick and Górecki shortly after Schwarz-mann deposited a check for a substantial amount of money, which itself occurred soon after Schwarzmann had asked Reiser how to fake an account balance and Reiser said the way to get money in the account was to deposit a check and see if it clears. Said Reiser: “Obviously he gave me a wooden check to get the balance to look good so I would authenticate it in front of the uncle and his CPA, which I did do.... I didn’t mention the check. I didn’t mention anything.” (Reiser Dep. at 103-04.) Taken together, these very well may be statements against interest. It does not follow, however, that the entire deposition transcript is admissible. On the contrary, statements that do not incriminate Reiser will not be admitted under this rule. See Williamson, 512 U.S. at 599-602, 114 S.Ct. 2431 (the exception applies only to individually self-inculpatory statements; neutral or self-serving portions of a broader narrative that is generally self-inculpatory are not admissible under the rule); Carson v. Peters, 42 F.3d 384, 386 (7th Cir.1994) (portions of inculpatory statements that pose no risk to declarant “are just garden variety hearsay”); Weinstein, supra, § 804.06[4][d][ii] (“statement” as used in “statement against interest” refers not to declarant’s entire narrative but only to the parts of it that inculpate defendant). I must apply a statement by statement approach. See Williamson, 512 U.S. at 599-604, 114 S.Ct. 2431. Gerald’s current motion, however, only attacks Reiser’s deposition as a whole, and its objections to proposed findings of fact based upon Reiser’s deposition refer only to Rule 804(b)(1). Moreover, “whether a statement is self-inculpatory or not can only be determined by viewing it in context,” Williamson, 512 U.S. at 603, 114 S.Ct. 2431, which the parties have not had the chance to address. Any decision as to the exclusion of particular portions of Reiser’s testimony therefore must await more specific objections by Gerald at trial. My factual summary below, therefore, will' include these statements. II. MOTION TO STRIKE OTHERS’ TESTIMONY REGARDING REISER Gerald next asks that I declare plaintiff Nick Schimpf (“Nick”) and witness Schwarzmann incompetent to testify about their alleged communications and transactions with Reiser and strike any such testimony from the record, including the summary judgment materials. Reiser’s estate did not join in the motion. It did, however,. join in the portion of Gerald’s reply brief in which Gerald objects to numerous statements by Schwarzmann and Nick based on their incompetency to testify. I therefore will treat the motion as if it were brought by and the decision applies to the estate as well. Federal Rule of Evidence 601 provides that when state law applies to an element of a claim, the competency of a witness to testify regarding that element also is determined in accordance with state law. The parties agree that Wisconsin law applies to all claims in this case, so I look to Wisconsin law- to determine Nick’s and Schwarzmann’s competency. Wisconsin still has what is commonly referred to as a “dead man’s statute.” Under Wis.Stat. § 885.16 [n]o party or person in the party’s or person’s own behalf or interest, and no person from, through or under whom a party derives the party’s interest or title, shall be examined as a witness in respect to any transaction or communication by the party or person personally with a deceased or insane person in any civil action or proceeding, in which the opposite party derives his or her title or sustains his or her liability to the cause of action from, through or under such deceased or insane person.... See also Wis.Stat. § 906.01 (“Every person is competent to be a witness except as provided by [§§ ] 885.16 and 885.17.”). Therefore, in order to render an otherwise competent witness incompetent under the dead man’s statute, a party must show that: (1) there was a transaction or communication between the decedent and the witness; (2) the witness has an interest in the matter at hand; and (3) the liability or cause of action of the party advocating incompetence arose from, through or under the deceased. Havlicek/Fleisher Enters., Inc. v. Bridgeman, 788 F.Supp. 389, 397 (E.D.Wis.1992). An interested surviv- or not only is incompetent to testify about a course of conduct between himself and the deceased that may constitute a transaction, but he also may not testify regarding conduct between himself and the deceased that may provide the basis for an inference that a transaction occurred. Johnson v. Mielke, 49 Wis.2d 60, 71, 181 N.W.2d 503 (1970). The dead man’s statute stems from the common law belief that a party to a case has a powerful temptation to misrepresent the transaction or communication he had with a deceased person, who obviously cannot rebut the testimony. Havlicek/Fleisher, 788 F.Supp. at 396-97. Because of the Wisconsin Supreme Court’s feeling that the statute rests upon an archaic view of the law — that one who has an interest in a controversy should not be allowed to testify' — it has mandated that the statute must be strictly construed: “Were the rule simply one of common law its pernicious effect would long ago have dictated its abolition. Since it is a rule of statutory law, the courts have merely been able to alleviate the harshness of the rule by insisting upon exceptionally strict rules for its invocation.” Long v. Molay (In re Estate of Molay), 46 Wis.2d 450, 459, 175 N.W.2d 254 (1970); see also State v. Fonk’s Mobile Home Park & Sales, Inc., 133 Wis.2d 287, 298, 395 N.W.2d 786 (Ct.App.1986) (court stated it was reading § 885.16 strictly, citing Molay). Plaintiffs do not dispute that element (3) above is satisfied: Gerald’s potential liability arises through respondeat superior because of its employment of Reiser. The dispute instead focuses on item (1) in regard to Nick, i.e. whether he personally was involved in a transaction or communication, and item (2) in regard to Schwarz-mann, i.e. whether he has an interest that disqualifies him. A. Nick Schimpf: Transaction or Communication The only specific factual situation involving Nick that the parties note in their motion papers as being at issue is a meeting on September 20, 1991 in Chicago between Nick, Reiser, Schwarzmann, and Nick’s accountant Dan Górecki. Nick, Gó-recki, and Schwarzmann went to Chicago to meet Reiser at Nick’s own request and insistence, to check on his supposed financial investments made with Gerald through Schwarzmann. Plaintiffs do not dispute that Nick meets element (2) of the test of the dead man’s statute — that he has an interest in the current proceedings that could disqualify him from being competent to testify about Reiser’s acts and statements. (See R. 100 at 4-5.) Instead, they assert that in regard to this particular meeting, Schimpf was a mere bystander and witness to a transaction between Reiser and Górecki. “Transaction” as used in § 885.16 means “a personal transaction with the deceased; a transaction in which each is an active participant[;] ... a mutual transaction between the deceased and the surviving party, one in which they both actively participate.” Seligman v. Orth, 205 Wis. 199, 206, 236 N.W. 115 (1931). The statute “does not prohibit the survivor from- describing an event or physical situation, or the movements or actions of a deceased person, quite independent and apart, and in no way connected with, or prompted or influenced by reason of, the conduct of the party testifying.” Id. Further, the statute does not forbid testimony regarding transactions or communications between the deceased- and third persons, though in the witness’s presence, if the witness did not participate in the transaction and the participants were not affected by the witness’s presence: “Unless the transactions or communications are personal, and had with the deceased by the party, either literally or in practical effect, as by participating in or influencing them, they do not fall under the prohibition of the statute.” Wollman v. Ruehle, 104 Wis. 603, 607, 80 N.W. 919 (1899); see Havlicek/Fleisher, 788 F.Supp. at 397 (“a witness to these transactions or communications is competent to testify as to their substance if he was not a party to the transaction and did not influence it in any way.”). The reason: the dead man’s statute was apparently intended to offset an interested party’s lack of objectivity; therefore, when a witness has no interest in the outcome of the transaction, he or she has no reason to conceal or lie about facts surrounding it. See id. According to Nick’s testimony, at the September 1991 meeting he did not himself speak with Keiser: “I didn’t ask nothing of Mr. Keiser. I did not talk to him.. Mr. Górecki ... was talking and Mike and myself, we were standing on the side here and we weren’t" talking.” (Nick Dep. at 84.) Plaintiffs contend that because Nick was merely listening to a conversation that was solely between Keiser and Górecki and no way influenced the conversation, he is competent to testify regarding the substance of the conversation. Plaintiffs’ argument is unconvincing. Górecki was not conversing with Keiser regarding his own affairs, but instead spoke with Keiser as Nick’s accountant and agent. Moreover, notwithstanding that Górecki was at the meeting and spoke solely because he was working on Nick’s behalf, any argument that the Gorecki/Keiser conversation was “independent” of and “in no way connected with, or prompted or influenced by” Nick’s presence and conduct is untenable. Nick, Górecki, and Schwarzmann went to Chicago to meet Keiser at Nick’s own request and insistence, to check on Nick’s own investments, and to ease Nick’s own mind about his money. The entire transaction and conversation thus was prompted by and was solely aimed at satisfying Nick. Nick was in no way as disinterested as the bystander witness in Wollman, who merely listened as a transaction occurred and “in no wise participated in or influenced the proceedings, so far as appears.” Wollman, 104 Wis. at 607, 80 N.W. 919. As a result, the dead man’s statute applies to render Nick incompetent to testify about the September 20, 1991 transaction involving Keiser in Chicago. As in connection with its motion Gerald provides no other specific factual situation to which Nick may be incompetent to testify, my granting of the motion to strike regarding Nick’s testimony is limited to just that September 20,1991 transaction. B. Michael Schwarzmann: Disqualifying Interest Gerald’s objection to Schwarzmann’s competency is not tied to any particular or specific transaction or communication, but that is immaterial for present purposes because plaintiffs’ retort is not based on whether he was personally involved in any transaction but whether he has any interest in the current matter that disqualifies him. The dead man’s statute renders a witness incompetent “only when the witness is a party, or is a person from, through or under whom a party derives his interest, or is a person who will be testifying in his own behalf or interest while offering such testimony for a party.” Bethesda Church v. Menning (In re Estate of Christen), 72 Wis.2d 8, 11, 239 N.W.2d 528 (1976). The test of a disqualifying interest of the .witness “is whether he or she will gain or lose by the direct legal operation and effect of the judgment, or that the record will be legal evidence for or against him [or her] in some other action.” Fonk’s, 133 Wis.2d at 298, 395 N.W.2d 786; see also Johnson, 49 Wis.2d at 74, 181 N.W.2d 503. The interest must “be realized (a gain or loss) by the effect and direct legal operation of the judgment on the cause in issue.” Christen, 72 Wis.2d at 13, 239 N.W.2d 528. “The interest must be presént, certain and vested, and not an interest uncertain, remote, or contingent.” Fonk’s, 133 Wis.2d at 298, 395 N.W.2d 786 (internal quotation marks and citation omitted). Gerald contends that Schwarzmann is an interested party because plaintiffs, who in 1992 sued Schwarzmann for fraud concerning the same losses they now attribute to Reiser and Gerald as well, have a judgment against Schwarzmann for over $1 million and have not yet collected on the judgment. According to Gerald, if plaintiffs prevail in this case, because Gerald (unlike Schwarzmann) is capable of paying a judgment, Schwarzmann’s liability to plaintiffs will be reduced, because plaintiffs cannot recover twice for a single loss. Gerald contends that this interest of Schwarzmann is direct, present, and vested, and that a gain or loss for Schwarzmann is tied directly to this case.' I disagree. Because the dead man’s statute must be construed strictly, courts have held fast to the idea that a disqualifying interest must be direct, present, certain, and vested. For instance, a mere employee has been found to have too remote an interest to prevent him from testifying under § 885.16. Havlicek/Fleisher, 788 F.Supp. at 401. In Johnson, a witness was allowed to testify about a decedent’s communications and transaction regarding retitling of a bank account into the name of the witness’s mother-in-law. The witness “had no right or interest in that account during decedent’s lifetime, nor could he receive any interest in it under any judgment rendered in this action.” Johnson, 49 Wis.2d at 72, 181 N.W.2d 503. In Christen, the Supreme Court of Wisconsin found that-the husband of a woman incompetent to testify because of her interest in proceeds from a contested will was not himself incompetent to testify. Christen, 72 Wis.2d at 11-13, 239 N.W.2d 528. The court summarized similar cases where a daughter was competent to testify in support of her mother’s claim against an estate and a mother was allowed to testify in. a proceeding to determine her children’s status as heirs of a decedent, because the “interests” were too speculative for purposes of the statute. According to the court the reception of property by the wife could have no effect on what the witness inherited or received down the road, even assuming that he survived and remained married to her. See id. at 12-13, 239 N.W.2d 528. Like the situations discussed in Christen, here a judgment against Gerald would not directly and automatically result in reduced liability for Schwarzmann; such a judgment will only directly favor plaintiffs. Any benefit for Schwarzmann would occur only remotely or contingently down the line. In order for Schwarzmann to get any benefit from a judgment by plaintiffs against Gerald, Gerald first would have to pay completely, then Schwarzmann would have to apply for relief from the judgment against him, and Schwarzmann would have to obtain a court finding that any payments by Gerald should be credited to the judgment against him. At issue will be whether and to what extent any damages between the two cases overlap. Plaintiffs’ case against Schwarzmann involved Schwarzmann’s actions commencing in 1987, long before any alleged conspiracy involving Reiser. And in the current case, plaintiffs have alleged a violation of the Wisconsin Organized Crime Control Act (WOCCA), Wis.Stat. §§ 946.80 - 946.88, which can trigger double damages and punitive damages. The case cited by Gerald, Tuchalski v. Moczynski, 152 Wig.2d 517, 449 N.W.2d 292 (Ct.App.1989), for the proposition that “the law of judgments requires satisfaction of both judgments if one is paid,” id. at 520, 449 N.W.2d 292, clearly involved one same loss. That is not the case here, where it is. possible that the damages adjudged against Schwarzmann may indeed differ from those possibly to be adjudged against Gerald. Because current Wisconsin law expresses disdain for the dead man’s statute, I am obliged to construe it narrowly and limit is application wherever possible. Interpreting the ' dead man’s rule narrowly, I cannot deem Schwarzmann incompetent to testify based on this one-satisfaction-of-judgment argument proffered by Gerald. In addition, however, says Gerald, Schwarzmann has an interest in whether Gerald is liable for intentional as opposed to negligent misrepresentations by Reiser. According to Gerald, if it is found vicariously liable for negligent misrepresentations by Reiser, Gerald will have a claim against Schwarzmann for contribution or indemnity. On the other hand, if Gerald is found vicariously liable for intentional misrepresentations or fraud by Reiser, it will not have such a claim, as there is no right to contribution or indemnity between intentional tortfeasors. See Fleming v. Threshennen’s Mut. Ins. Co., 131 Wis.2d 123, 129, 388 N.W.2d 908 (1986); Jacobs v. General Accident Fire & Life Assurance Corp., 14 Wis.2d 1, 5, 109 N.W.2d 462 (1961). Schwarzmann, says Gerald, thus has a strong interest in making it look like Reiser acted intentionally. Further, Gerald asserts, the record in this case will be used in any lawsuit brought by Gerald against Schwarzmann for contribution — either by Gerald to establish that Schwarzmann and Reiser were joint tortfeasors, or by Schwarzmann to establish that Gerald is collaterally estopped from relitigating the issue of Reiser’s intent. In Fonk’s, several persons were found competent to testify even though a judgment for the plaintiff state would require Fonk’s to make restitution to all Wisconsin residents who suffered pecuniary loss due to Fonk’s actions, possibly including the witnesses at issue. [S]uch restitution can only be obtained if a witness or other affected person makes a claim to a special master or magistrate, who will “determine if a violation occurred as to that tenant and, if so, the pecuniary loss which accrued from said violation.” These are facts not determined by the trial court here. The trial court’s findings of fact and conclusions of law contained no express findings that any or each of the individual transactions between Fonk, Sr. and individual witnesses constituted violations in themselves, nor were specific damages found. The trial court’s decision does not preclude a finding by a special master or magistrate that as to any individual witness here no violation occurred or no pecuniary loss resulted. It is for each tenant to satisfy the fact finder that as to him or her a violation actually occurred. The restitution interest of these witnesses is at best contingent. Neither will the record in this case “be legal evidence” for these witnesses in the restitution proceedings or any private action brought against Fonk’s by any of these witnesses. The witnesses are just that; they are not parties to this action. Although the traditional rule requiring mutuality of parties for an assertion of collateral estoppel has been modified to allow defensive use of collateral estoppel to prevent a party from relitigating, “by merely switching adversaries,” an issue already exclusively resolved against that party, ... offensive use of collateral estoppel has not yet been allowed in Wisconsin. As a result, the record and findings here are not evidence establishing the witnesses’ individual claims against Fonk’s. Fonk’s, 133 Wis.2d at 298-99, 395 N.W.2d 786 (citations omitted, footnote added). Defensive collateral estoppel, or issue preclusion, occurs when a defendant seeks to prevent a plaintiff from asserting a claim that the plaintiff has previously litigated and lost against another party. Michelle T. by Sumpter v. Crozier, 173 Wis.2d 681, 684 n. 1, 495 N.W.2d 327 (1993). The parties agree that if in this case Reiser, and thus Gerald, is found liable based upon Reiser’s intentional misrepresentations, Gerald will have no claim for contribution against Schwarzmann. Gerald essentially will be defensively collaterally estopped from litigating that issue — if it were to bring a claim for contribution against Schwarzmann, as a defense Schwarzmann would be able to assert that Gerald previously fully litigated the issue of negligent misrepresentation versus fraud and lost. In addition, if Reiser, and thus Gerald, is determined to be a joint tortfeasor with Schwarzmann based upon, negligence, the testimony at trial in this case, could be used to support a summary judgment motion regarding a finding for Gerald in any later contribution ease against Schwarzmann. The judgment in this case as to whether Reiser’s actions are determined to have been intentional rather than negligent creates a present and vested, as opposed to remote, interest in this case. Therefore, Schwarzmann too is incompetent to testify about his transactions and communications with Reiser. III. REQUEST TO STRIKE AFFIDAVIT OF MAGIDSON In support of its motion for summary judgment, Gerald provided the affidavit of Michael Magidson. Plaintiffs say I should strike Magidson’s affidavit. Gerald submitted a second affidavit of Magidson with its reply brief, but plaintiffs have not filed any objection to the second affidavit. Plaintiffs request is based on three separate reasons. The first, according to plaintiffs, is unfair surprise and prejudice and failure to follow the Local Rules. Gerald did not list any of its employees in its answers to mandatory interrogatories as having knowledge of. any fact alleged in the complaint, even though it had a continuing obligation to do so under Local Rule 7.07(c). Neither did Gerald list Ma-gidson as one of the forty-seven witnesses listed in its September 1998 responses to plaintiffs’ requests for discovery, nor in any supplementation thereafter. Plaintiffs have, not had an opportunity to depose Magidson and feel that his first presence as a witness at this late date is highly prejudicial. While it is a close call, I decline to strike the affidavit based upon unfair surprise and failure to strictly follow the rules and name Magidson in responses to mandatory or. other discovery. Mthough Magidson may not have personal knowledge regarding the alleged conspiracy itself between Reiser and Schwarzmann, his testimony regarding Gerald’s internal policies and rules is related enough to Gerald’s defense that Reiser was acting outside of the scope of his employment to trigger the duty to disclose Magidson, or a similar witness, in responses to discovery. Nevertheless, I do not believe that plaintiffs could truly be surprised or prejudiced by finding out at this late time that Gerald, operating in the highly-regulated field of securities and commodities, had internal policies aimed at preventing fraud. Because I am admitting Magidson’s affidavit, however, in fairness I will allow plaintiffs to depose Magidson if possible prior to trial. Next, say plaintiffs, Magidson’s affidavit fails to comply with Federal Rule of Civil Procedure 56(e), which requires that the policies and rules discussed therein be attached. According to Magidson’s second affidavit, submitted with Gerald’s reply brief, Gerald cannot produce a copy of the policies because they were burned in a warehouse fire in October 1996. Such a reason, involving no intentional conduct by Gerald to avoid the requirements of Rule 56(e), is sufficient in my opinion to excuse Gerald from the Rule. Gerald cannot be faulted for its inability to produce the written rules based upon such an event. Third, plaintiffs assert, the affidavit is hearsay. It also refers only to the year 1989, not the time period of 1990-1992 during which the alleged conspiracy took place. The date problem is one of interpretation. Magidson’s first affidavit contained the year 1989 in one paragraph but no date references in later paragraphs. Any confusion, however, is corrected by Magidson’s second affidavit, in which he indicates that he was an executive vice-president, secretary, and director of Gerald from 1989 through 1998 and has knowledge of Gerald’s activities during that period. In regard to the hearsay objection, not all of the affidavit can possibly be hearsay. For instance, Magidson’s statement for purposes of summary judgment that “Edward Keiser was employed as a broker for Gerald in 1989 when Schwarzmann opened his account,” (First Magidson Aff. ¶ 6), is not a statement other than one presently made by the declarant, thus it is not hearsay at all. Some statements do sound like hearsay (for example, those indicating what the National Futures Association Compliance Rules state), but plaintiffs have not attacked all of the suspect sentences. They point specifically only to Ma-gidson’s statements regarding the provisions of Gerald’s internal policies. I am unconvinced that Magidson’s statements about Gerald’s internal policies are hearsay. Magidson does not say that “Gerald had certain written policies in a handbook, which read or stated as follows .... ” Instead, he says what Gerald’s policies actually were. I am presently unconvinced that an existing policy is itself any type of statement. In general, a policy is what it is, whether it is put into a written document for all employees to read or not. While more developed argument on the point may be made in the future, at this time I am unconvinced that Magidson’s recitation of Gerald’s internal policies is hearsay and therefore I am going to deny without prejudice the request to strike these particular statements pursuant to the hearsay rules. In regard to any other statements in the affidavit that are possible hearsay, although specific objections may be made at trial, T am not going to parse the affidavit today and the request will be denied without prejudice as well in regard to hearsay objections. Finally, contend plaintiffs, the affidavit contains conclusory and speculative testimony as to what Gerald would have done under certain circumstances and legal opinions regarding fines that could have been imposed upon Gerald for Reiser’s alleged activities. In this regard I agree with plaintiffs. The object of Rule 56(e) is not to replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit. Lujan v. National Wildlife Fed’n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); Weeks v. Samsung Heavy Indus. Co., 126 F.3d 926, 934 (7th Cir.1997). “Self-serving assertions -without factual support in the record will not defeat a motion for summary judgment.” Jones v. Merchants Nat’l Bank & Trust Co., 42 F.3d 1054, 1058 (7th Cir.1994). Without any factual support regarding what level of oversight the National Futures Association had over Gerald and what types of internal policing and disciplinary procedures existed at Gerald itself, Magidson’s predictions of certain fines and personnel actions that could or would have occurred are indeed conclusory speculation, on which I will not rely in making my decision regarding summary judgment. IV. FACTUAL BACKGROUND Proceeding to the summary judgment motions themselves, the following facts are undisputed unless otherwise noted or else are taken in the light most favorable to plaintiffs. Plaintiffs Nick, Helen Schimpf (“Helen”), Frank Schimpf and Bonnie Schimpf (“Bonnie”) are relatives who all live in Wisconsin. No one disputes that they are Wisconsin citizens as well (for purposes of 28 U.S.C. § 1332). Plaintiff S & R Egg Farms, Inc., of which Nick is the majority shareholder and president, is a Wisconsin corporation, with its principal place of business in Wisconsin as well. At all relevant times, defendant Gerald, Inc. was a New York corporation, with its principal place of business in New York. Until the close of business on January 15, 1993, Gerald had an office in Chicago, Illinois, which engaged in the business of buying and selling commodities futures for customers on commodity exchanges, including the Chicago Board of Trade. Gerald formerly employed Edward Keiser as a vice president of accounts at its Chicago office. Keiser was a resident of Illinois (no one disputes that he was a citizen of Illinois as well). Keiser died on July 18, 1997. (Defendant Estate of Edward Keiser has since been substituted for Keiser.) In 1985 Schwarzmann, who is Nick and Helen’s nephew and Frank Schimpf s cousin, persuaded his parents, Frank Schwarz-mann and Eve Schwarzmann (“Eve”), to give him money to invest in the stock and commodities market. Schwarzmann told his parents that he could earn good returns on their money. Relying on Schwarzmann’s representations, , Frank Schwarzmann and Eve gave their son over $14,000 to invest in 1985. Schwarzmann invested his parents’ money through a brokerage account at either Ira Epstein or Charles Schwab & Co. Schwarzmann initially had some success when he invested his parents’ money and each month he returned the profit on his trades to his parents. After a while, however, Schwarzmann lost his parents’ entire investment when he gambled and invested their money in one bad trade. Afraid to tell the truth, Schwarzmann did not tell his parents that he lost their money. Instead, he assured them that their investments were doing well, hoping they would invest additional money with him so that he could recoup their losses. Meanwhile, to keep up the appearance that his trades were profitable, Schwarzmann continued returning money to his parents each month under the pretext that it was profit. Relying on Schwarzmann’s assurances, Frank Schwarzmann and Eve gave their son I additional money to invest in 1986. Again, Schwarzmann invested the money through a brokerage account at either Ira Epstein or Charles Schwab & Co. Once again, however, Schwarzmann lost his parents’ money by making poor investments. In 1987 Schwarzmann convinced several members of the Schimpf family including Nick, Helen, Bonnie and Frank Schimpf— to invest money with him. Nick, at 1 least at the time of this first investment, trusted Schwarzmann and knew that Schwarz-mann’s parents had given money to •Schwarzmann to invest. Schwarzmann told the Schimpfs that he was running an investment fund and that their money would be invested at Gerald in Chicago. Schwarzmann, though, at that time had no investment fund, let alone any account in Chicago or at Gerald. Instead of investing the Schimpfs’ money, Sehwarzmann used most of it in 1987 to pay for his personal living expenses (as he had no job) and to continue returning money to his parents. What money Schwarz-mann did invest was invested and lost through a brokerage account at either Ira Epstein, Charles Schwab & Co. or Lind-Waldock and Company. Although Sehwarzmann had converted most of the Schimpfs’ money and lost the remainder investing, Sehwarzmann assured the Schimpfs that their investments were doing well. To add some credibility to his assurances, Sehwarzmann provided the Schimpfs with phony account statements purporting to show that their investments were I doubling and tripling. The Schimpf family members gave Sehwarzmann additional money in 1988. Again, Sehwarzmann converted some of the money he received from them in 1988 to pay for his personal living expenses; he also purchased some real estate, which Sehwarzmann hoped to subdivide and develop. What money Sehwarzmann did invest in 1988, he again invested and lost at Ira Epstein, Charles Schwab or Lind-Wal-dock and Company. In 1988 Sehwarzmann began returning money as supposed profit to Nick. At first I Sehwarzmann returned only a few thousand dollars to Nick each month. Then, as months passed, Sehwarzmann returned increasingly larger amounts to make it appear as if Schwarzmann’s trades were successful. By January 1990, Nick was receiving approximately $43,000 from Sehwarzmann each month. Although Nick claims he thought these payments were profit and not partial repayments of his principal, he did not report it as income to the Internal Revenue Service. By returning these “profits” Schwarz-mann hoped to encourage Nick to invest even more. Schwarzmann’s ploy worked, as Nick gave Sehwarzmann $525,500 in 1989. Based on Schwarzmann’s continued representations that their investments were doing well, other Schimpfs also poured more money into Schwarzmann’s so-called fund in 1989. Once again Sehwarzmann used the money he received from the Schimpf family to pay for his personal living expenses; he also developed land that he owned. Sehwarzmann continued returning money to his parents and Nick, although it is disputed I whether it was under the guise of a profit as opposed to an understood return of principal. Nick, as it happens, was not investing money belonging only to himself and Helen. A $200,000 chunk of what he invested belonged to Mathias and Rose Reger, a couple living across the street from Nick’s second house in Florida, who provided investment money based on Nick’s representations about Schwarzmann’s investment skills. In May 1989 Sehwarzmann opened a trading account at Gerald. Sehwarzmann opened the Gerald account in his own name, although it is disputed whether at that time Sehwarzmann told Gerald he was investing others’ money in the account. Plaintiffs, through the affidavit of Michael J. Armitage, say Reiser knew at the time Sehwarzmann opened the account that Sehwarzmann was investing others’ money. Gerald, through Magidson, indicates that its internal policies expressly prohibited the opening of an 1 account in the name of one individual with money belonging to third parties. Schwarzmann never had any relationship with Gerald before opening the account at Gerald in May 1989. At the time Schwarzmann opened his account and thereafter, Keiser was a broker with the title of vice-president, working at Gerald on a commission basis and receiving a certain percentage of the commissions paid to Gerald by customers whose accounts he handled. Gerald received a commission on each trade. Early on in their relationship, Schwarzmann told Keiser that Schwarzmann had control of, or was managing a large commodities fund. Keiser was leery of Schwarzmann, but was interested in the! commissions Schwarzmann could generate. Keiser went out drinking with Schwarz-mann on several occasions. According to plaintiffs’ proffered evidence, Schwarz-mann had several conversations with Keiser about how to raise or handle money illegally, including laundering money, kidnapping, borrowing money from a bank using bad collateral, and using fraudulent warehouse receipts. Further, Keiser was aware that Schwarzmann was attempting to forge warehouse receipts to obtain money fraudulently. Schwarzmann at some point told Keiser that Schwarzmann had taken money from various individuals and had spent it. By early spring 1990 Schwarzmann ran out of cash. Without cash he no longer could return money to his parents, Nick, or the Regers to maintain the illusion that he was making money on his alleged trades. When Schwarzmann stopped returning money, Frank Schwarzmann and Eve immediately complained to their son, asking why he had stopped sending checks. Schwarzmann told them that he could no longer return money because he was “having financial difficulties.” When Frank Schwarzmann and Eve. asked what the financial difficulties were, Schwarz-mann explained that he had “purchased some land” and that he “was paying other people back.” Schwarzmann warned his parents that they could riot get their money back for a year. As a result, Frank Schwarzmann and Eve became concerned. Nick also called and complained to Schwarzmann when his checks stopped; he also wanted to withdraw some funds to buy a car. In response, at some point Schwarzmann told Nick that Nick’s money was still invested where it was supposed to be but that the money was invested in a fund and he had a problem getting at it. But during a telephone conversation sometime between January and March 1990 Schwarzmann told Nick that he could not' get his money back for seven years because Schwarzmann had done something wrong. When asked, at trial of an action brought by the Regers against Nick and Schwarzmann, when he first' realized Schwarzmann was committing some sort of scam, Nick replied: Well, I realized it, I think in ’90, in January, February, March, somewhere in there, because we didn’t get any checks no more. And I said, Mike, what is going on? Well, he said, I did something wrong, and I got to wait for seven years, otherwise they’re going to throw me in jail. I said, Mike, where is the money? It’s invested at Gerald, Inc. And I asked him, I said, Mike can we see that money? Oh, yes. (Trial Test, of Nick in Reger v. Schwarzman, No. 94-4616-CA-01 (Fla.Cir.Ct. (12th Cir.) Mar. 11, 1996) at 155-56.) When Nick asked what the “problem” was that prevented Schwarzmann from returning Nick’s money for seven years, Schwarzmann said that he was dealing with the Chicago mafia and that Nick could not get his money until Schwarz-mann’s dealings with the mob had concluded. Schwarzmann told Nick to “keep quiet” about the problem and Schwarz-mann’s mob dealings, and Nick agreed to do so. Nick did not ask Schwarzmann why the mafia connection would prevent him from getting his money back for seven years or who the Chicago mafia members were. During this time, Schwarzmann otherwise never told any of his family members that he had lost their money. In the spring of 1990, the Regers also became concerned and asked Nick why Schwarzmann had stopped sending them checks. Nick told the Regers that there was a I problem, but refused to divulge its nature or anything about Schwarzmann’s mob dealings and inability to repay investors for seven years. When the Regers insisted on knowing what the problem was Nick said he could not tell them but that they should not worry; the Regers did not become suspicious, however. Plaintiffs allege that on March 2, 1990, Schwarzmann either met with or spoke to Keiser, although I note that they cite to no competent evidence for that fact. Schwarzmann says that in April of 1990 he began preparing phony Gerald account statements by doctoring up legitimate Gerald statements that he had received or forging account statements using blank forms he had. At some point, apparently in early 1990, Nick’s and S & R’s accountant, Dan Gó-recki, became concerned that the money invested at Gerald was solely in Schwarz-mann’s name; he expressed this concern to Schwarzmann. Schwarzmann told Gó-recki that he was working with attorneys, including a Paula Doyle, to bring the funds into compliance and put the accounts in the name of each investor. Schwarzmann asked Doyle to call Nick and assure him that the investments were going well. Although Doyle says she was never asked to do so, Górecki says Doyle later communicated to him that she was working to make sure the investments were set up properly and that the name change of the fund would be made on August 1, 1990. In a letter dated June 15, 1990, Doyle wrote to Nick as follows: Somewhat more than half the four-month period of April 1 to August 1 has elapsed since we talked in early April, at which time you agreed to leave your funds in your nephew, Michael Schwarz-mann’s, MSI Fund without intervening profit disbursement until the fund is officially dissolved on August 1, 1990. I know th