Full opinion text
AMENDED FINAL ORDER WITH FINDINGS OF FACT AND CONCLUSIONS OF LAW ROETTGER, Chief Judge. An essence of money laundering is deceit and cover-up. This case abounds with examples of “dragging dead fish across the trail" to throw bloodhounds off the scent or “dragging branches behind a horse to destroy the tracks on the trail.” Anyone who sat through the three month long criminal RICO trial had no doubt it was a clear case of money laundering of drug smuggling profits and it was demonstrated and proved not only to the satisfaction of the jury, but, the court believes, to the satisfaction of anyone at the trial. The evidence in the two-plus month long ancillary hearing under 18 U.S.C. § 1963, corroborates the illegal money laundering activity even more. The case is “document-intensive” with approximately 1,200 exhibits. STATUS OF THE CASE Following the jury verdict of guilty on the RICO counts as to all four defendants, (Sam Gilbert had also been indicted originally but died shortly thereafter) a preliminary hearing was held and an order entered freezing the assets of the Bicycle Club, based on the jury verdict forfeiting the interests of Ben Kramer, Jack Kramer and Michael Gilbert in the Bicycle Club. Only the interests of these three convicted defendants in the Bicycle Club were forfeited. The jury determined that Mel Kessler had no interest in the Bicycle Club and declined, therefore, to enter a verdict of forfeiture as to Defendant Mel Kessler. Immediately a number of claimants filed their petitions under 18 U.S.C. § 1963(1)(2). This was no surprise: Attorneys for a corps of claimants were present throughout nearly all the criminal proceedings. Basically, those claimants fall into two groups. One group had persons with an interest in Park Place Associates while the second group comprised those persons with a claim by virtue of a California general partnership known as LCP. This order will basically ignore the Park Place Associates group because the government quickly relinquished any opposition to its claim because of its non-involvement in money laundering. LCP stands for Lyon, Coyne and Pierson. Claimants are as follows: Dale Lyon, Maureen Lyon, his wife, and the Lyon Family Trust; Julieann Coyne, now married and known as Julieann Coyne Wasson, and her husband, Christopher Wasson; David Pier-son and Lois Pierson, his estranged or divorced wife; Karen Gilbert, Michael Gilbert’s wife, and the Michael Gilbert Family Trust; Robert Gilbert and Margaret Gilbert, siblings of Michael Gilbert, and the Robert Gilbert Family Trust. Although § 1963 is silent as to depositions, the court permitted the parties to take depositions during the summer before the hearing. The ancillary hearing began the second Monday in September and throughout the proceedings in September the parties requested recesses and wanted time so they could pursue settlement negotiations. Although different degrees of optimism were expressed from hour-to-hour and from day-to-day, it still seemed like a hopeful possibility. Finally, towards the end of September, the parties requested that the court recess the case to permit lengthy and intensive settlement negotiations; the parties were to advise the court on November 30, 1990 whether they had settled their claims, with all parties understanding that if they had not settled, the ancillary hearing would resume on Monday, December 10, 1990. All of the claimants settled except Dale Lyon, the Lyon Family Trust, Karen Gilbert, and the Michael Gilbert Family Trust. The other claimants are not involved in these proceedings. The claimants requested at the beginning of the ancillary hearing, on December 10, 1990, that the court not be advised of the details of the settlement negotiations for fear it might cause some influence, even subconsciously, on the court’s evaluation of the evidence. Consequently, by stipulation of the parties, the settlement agreements for the claimants who had settled and the government were dictated into the record outside the court’s presence; the court is still not aware of the details of the various settlements. EVIDENCE OF MONEY LAUNDERING OF DRUG SMUGGLING MONEY It is difficult to compress three months of trial evidence without omitting important details. Ben Kramer, when released from his prison term for smuggling marijuana in the late 1970s, resumed smuggling but began the smuggling operations on a grand scale. Ben had partners: Randy Lanier and Tommy, known as George Brock, and Gene Fisher. Gene Fisher and Tom were paired together in their interests in this operation and the pair’s total interest was equal to the individual interests of Ben and Randy. Ben’s modus operandi was to think big and not import marijuana in Lockheed Lodestars or shrimp boats or sailboats as had been the general practice in this area. Ben Kramer’s modus operan-di was to use barges or freighters and even to containerize the marijuana, so that it could be quickly offloaded at the port of entry and warehoused and then distributed. The audacity of this operation was quite successful: He imported a barge full of marijuana into the old Brooklyn Navy Yard, San Francisco, and into New Orleans. An insight into how successful the operation was can be illustrated simply by looking at the single New Orleans operation. The combine netted $41,000,000. and Ben’s one-third share was $13,000,000. The small fry apparently divided up the remaining $2,000,000. Ben Kramer is colorful with his share of audacity and boldness; he was the National Offshore Powerboat Racing Champion in 1986 and raced in many races, including a $50,000. ante, winner-take-all offshore powerboat race from Miami to New York. He was building a boat for a race from New York City to London. Ben was injured seriously prior to the criminal trial when he tried to escape via a helicopter from Metropolitan Correctional Center (M.C.C.) near Miami. Like a movie scene, Ben grabbed a rope ladder dangling from the helicopter as it hovered over the prison courtyard. Unfortunately for Ben, the helicopter began moving forward before it gained sufficient altitude for Ben to clear M.C.C.’s perimeter fence. Another illustration of the type of operation it was came before the jury in the testimony given by Podesta, whose job was to bring the cash gathered by the marijuana distributors to Ben Kramer. Members of the jury had stunned looks on their faces when Podesta testified about showing up somewhat unexpectedly at Ben Kramer’s house with $7,000,000 in cash and Ben told him he was not ready to receive that much; Ben asked Podesta to take it back to the house where Podesta was staying and to bring it back in “small amounts.” Podesta testified he took it back and kept it in the garage overnight; then he began, in his description, to deliver it to Ben “in small amounts — such as $2,000,000, $3,000,000” and so forth. The volume of cash generated a problem in the Kramer combine. It was too much money in cash and they needed to find a way to launder it. Along the line Ben’s father, Jack Kramer, had met Sam Gilbert in 1978 when Ben had a spare $80,000. and was looking for a good investment. Mr. Zuckerman in Los Angeles, who is not involved in this matter, introduced Jack Kramer to Sam Gilbert. The $80,000. was in cash, or had been deposited as cash. So Jack Kramer’s contact with Sam Gilbert was re-established with an idea of finding a way to launder Ben’s money. Meanwhile, out on the West Coast in the beginning of 1978, there had been a discussion even then between Jack Kramer and Sam about a card club called the Commerce Club. Jack Kramer’s description of it was a “red herring.” Card clubs or casino card clubs were in existence in the Los Angeles area, although some had less than phenomenal success and one was in receivership. George Har-die in 1982 got a license for the Bell Gardens Bicycle Club from the City of Bell Gardens. Finding a site was a problem. The site finally selected had 70 houses on it. A development grant was obtained as part of the funding of the City. Relocation of all the occupants of the land took awhile. Meanwhile, in August of 1983, Sam Gilbert and David Pierson’s discussions about a casino card club had proceeded to the point where they needed money to build the card club, and they had been talking with George Hardie, as well. Hardie had raised some money (roughly $400,000) in a limited partnership known as Park Place Associates. They had been unable to come up with the money needed to buy the land, build the building and get started. CONVERSION OF CASH TO CASHIER’S CHECK The money laundering, that is the conversion of cash into cashiers checks, was accomplished in California by various methods. The cash was taken to California in several ways by couriers. One colorful example involved carrying cash in the biggest Igloo ice chest sold in a private jet to a private airport, then carrying it to the Beverly Hills Hotel and up to a private suite. If someone asked, the ruse was to claim the ice chest carried the remains of a faithful dog — on ice, to be sure. The main method seemed to be conversion of cash into gold coins, at that point in time mostly krugerrands, and then sold back to coin dealers (numismatics dealers) for checks to be converted into cashiers checks. Laundering money is not cheap and the cost of laundering this money through the coin dealers and other operations cost nearly $980,000. The checks from the proceeds of the sale of the coins back to the dealers were then converted into cashiers checks and sent to the Liechtenstein trust formed for this money laundering venture. The matters were proceeding on two tracks: an East Coast track and a West Coast track. In September of 1983, Ben and Jack Kramer met with George Brock (Tom), at the Hotel Pierre in New York City, where they discussed the money laundering operation. In October, 1983, Lyon and Coyne are brought into LCP by Sam Gilbert. Ostensibly, Sam Gilbert released his 60% of LCP to them for little or no consideration— at least that’s the way it appears from the evidence albeit most strangely out of character for Sam, considering every description that came out about Sam Gilbert in the five-plus months of trial and ancillary hearing. Coyne testified her 30% cost $1,000., but did not indicate to whom it was paid. Pierson was told by Sam that all he wanted was to build the building with his construction company and to get the operation going and they would need someone with the banking and business experience of Dale Lyon and the personnel background of Julieann Coyne. Whether the fact that Sam Gilbert and Julie Coyne had a romantic relationship for several years had anything to do with it is, of course, speculative. In any event, that relationship had broken off about a year earlier and, presumably, it had nothing to do with it as that was the month she became married. On October 21, 1983, the court finds there was another meeting at the Pierre. At that meeting were Dale Lyon, Mel Kes-sler, Ben Kramer and Sam Gilbert. There was a discussion about the Bell Gardens Bicycle Club. In October, 1983, CGL was a holding corporation in California whose principals were Julie Coyne, Sam Gilbert and Dale Lyon. Dale Lyon was the President. Julie Coyne was the Chief Financial Officer, but Sam Gilbert ran the show even though he had only 20% of the stock. The remainder was split between Coyne and Lyon. Coyne paid $3,000 for her interest. There was a meeting at L’Ermitage Hotel in Beverly Hills on November 17, 1983. Jack Kramer met with Sam Gilbert about the laundering scheme. Government agents there had the building under surveillance, but not apparently as to this venture. In any event, on a piece of yellow tablet paper Sam Gilbert scrawled a number of things. (Govt. Exhibit 183); the exhibit was recovered by the agents from the trash. On the upper left-hand corner it says Capital L period, account abbreviated. Underneath it Liechtenstein, spelled incorrectly as Lichtenstein. To the right of that in the upper right-hand corner it says NV Corp. Under that Tortola. Then a line from Tortola to a line that says Investment Trust. The next line says Employee: Dale Lyon. A line is skipped and then there is another sub-topic for Owner Group. Listed under the owners group, Hardie, misspelled, Dale Lyon, underlined, also misspelled as Lyons rather than Lyon; David Pierson and lastly, Julie. Those are the four principals in LCP and Park Place Associates; at that time they were the general partners in the two groups, but not overlapping general partners. The meeting was fairly short on the evening of the 17th. Jack Kramer revealed the contents of the conversation to be a discussion between him and Sam as to the money flow, which is reflected on Government’s Exhibit 182. The next morning Sam prepared the chart (Govt. Ex. 183) and, referring to Hardie, Lyon, Pierson and Coyne, said: “these are your straw people. These are lily-white people who will be approved by the Gambling Commission.” These are “the names.” Then Sam Gilbert and Jack Kramer went to breakfast at the Bel Air Hotel or motel. Sam made it explicit to Dale Lyon that payments were to be made to CGL even before the light bill was paid. Jack Kramer noticed that Dale Lyon never questioned why he, Lyon, was there or why Jack Kramer was there. That is the first time Jack Kramer met Dale Lyon. Jack Kramer noticed that Dale Lyon’s cuffs were frayed. Then Jack Kramer and Sam Gilbert flew to Liechtenstein for a meeting with Dr. Biedermann. That is when the BTR Trust was created for Ben, Tom, and Randy Lanier and the intervening trust known as Cor-trust. The first Trident Center meeting in Los Angeles of the group occurred in November of 1983. That meeting had Mel Kes-sler present with Jack Kramer; also there were Sam Gilbert, Michael Gilbert, Dale Lyon and, briefly, David Pierson wearing a white suit. Mel Kessler’s memory of that attire, so obvious to anyone watching him testify, was too strong to doubt its credibility. David Pierson testified he had not bought a white suit in ten years, but that’s not a denial of having worn it. The court finds Pierson was there, arrived with Ben and left with Ben. On November 29, 1983, Dale Lyon flew to Florida for a meeting with the Kramers and he stayed at a Holiday Inn. Documentary evidence of this and the October trip to New York is Government’s exhibit F-31. That was the last time in his many trips to Florida that Lyon stayed in a Holiday Inn; thereafter, he stayed at far more prestigious Turnberry Isle. On December 5, 1983, all documents are executed. Clearly, Fainsbert was a busy lawyer between the first Trident meeting and the execution of all documents on December 5, 1983 for the LCP partnership and joint venture agreement as well as the CGL loan agreements. Those documents, at least, were executed on December 5th. Some of the prior findings, especially as to the meetings came out in testimony of the co-defendants, Jack Kramer and Mel Kessler at the end of the ancillary hearing. Further findings on this evidence and other meetings are contained subsequently. Let us venture down to Tortola. Tortola is part of the British Virgin Islands, whose capítol is Roadtown. There Shaun Murphy was busy as an accountant operating as a trustee of various offshore trusts. He had a number of shell corporations. In other words, corporations that had been formed, but they were mere shells that really did not do anything. Nevertheless, they had the benefit of having some age on them with nothing that they had done wrong. He utilized Troon, and Troon BV, one Dutch and one a Netherlands Antilles Corp. and the benefit of working through Troon is that there are only two countries in the world that have a treaty that avoids a 20% withholding tax for American citizens who are recipients of money. Tortola is one of them. Mel Kessler knew all about that from practicing criminal law in South Florida, plus Mel kept a boat docked at Tortola; So Mel, being well aware of the need for the money laundering and the offshore entity to accomplish it, arranged for Shaun Murphy to use Troon to carry out the purposes of the money laundering operation. The money flowed for the first time from Liechtenstein to Troon on January 29,1984. The construction on the Bell Gardens Bicycle Club began in January of 1984. The construction was to be performed by the Sam Gilbert Construction Company on a 10% profit basis. Included among the December 5th documents in evidence was also the guarantee from Sam Gilbert to the re-development agency of the City of Bell Gardens in the amount of $1,000,000. Other documents include the remaining unpaid purchase price for the site (1A) following payment of the $1,000,000. deposit and signed by Sam Gilbert. There also was a site agreement (39B) between Troon Mortgage and CGL Investment Company and a loan agreement of Troon and CGL where Troon agreed to lend up to $15,000,000. Of course, there is another loan agreement between Troon and CGL where Troon agreed to lend up to $20,000,000. A note (Ex. 538)) was signed by Park Place Associates and LCP Associates through their general partners in the amount of $15,000,000. Also, there was a loan agreement referring to a memorandum of loan agreement on November 22, 1983 wherein CGL received xk of 1% of all payments made to Troon as a management fee; additionally, Dale Lyon and Sam Gilbert personally guaranteed the payment of the loan made by Troon to CGL. For purposes of the record the memorandum of loan agreement was Government’s Exhibit # 535 between Troon Mortgage Investments and CGL Investments executed by Shaun Murphy and Dale Lyon bearing date of November 22, 1983 although the court doubts it was signed by both of them on November 22, 1983. On the 6th of December, 1983, Dale Lyon signed two form notes marked “note-straight.” The first note, government exhibit 544, was executed by the Bicycle Club to CGL Investments for $1,663,000. at the rate of 15% per annum payable March 6, 1984 and monthly thereafter. The second note, government exhibit 543, was executed by CGL to Troon Mortgage Investments, N.V. and contained the same amount, terms and conditions as the first note. TESTIMONY OF LCP PARTNERS MICHAEL GILBERT Beginning first with the testimony of Michael Gilbert, he testified that Dale Lyon was an active, not a passive, general partner of LCP, while both Michael Gilbert and his brother, Robert Gilbert were working for the Sam Gilbert Construction Company, SGA Associates, the contractors who were building the Bicycle Club. He testified that the Club’s profit level was improved by court cases, which permitted a larger scope of games to be played, thereby broadening the customer base. The construction costs necessary to finish the Bell Gardens Bicycle Club far exceeded anyone’s estimations. In fact, it was a cost overrun of almost 100%. The Bell Garden Bicycle Club received the amount of $12.6 million from Troon, but because of the cost overrun it actually cost $22 million to build; therefore, before the group could begin operation, the group had to obtain funds from a number of other financial sources. In November of 1984, Sam Gilbert told Michael Gilbert a 20% portion of LCP was available for purchase for $200,000. Michael discussed it with his siblings and they decided to borrow $200,000. from Olympic National Bank. Michael called the loan officer and got the bank’s approval, the bank indicating there was no problem. Michael Gilbert, Margaret Gilbert and Robert issued checks to LCP and the loan proceeds were distributed to them. Robert Gilbert received 10%, of which he designated one-third for the Robert Gilbert Family Trust; Margaret Gilbert received only .8325% with the balance of the remaining 10% allocated to Michael Gilbert. He allocated 2.497% to the Michael Gilbert Family Trust. Michael Gilbert’s check to LCP covered also the Michael Gilbert Family Trust, according to Michael’s testimony. Robert did the same covering the Robert Gilbert Family Trust. However, Michael Gilbert wrote one check for $66,666.67 and Fainsbert as co-trustee of the Michael Gilbert Family Trust wrote another one on the following day. LCP was to pay the loan and the interest until LCP was profitable and then pay it out of the Gilberts’ distribution. Once, Michael Gilbert apparently forgot and made an interest payment to Olympic National Bank which sent the check back to him. The letter of transmittal to Michael Gilbert (Government’s exhibit # 18) indicated that the money had already been credited to the loan and the bank returned his check. The check was dated July 9, 1985. The parties in this case did not object to the testimony of Sam Gilbert coming into evidence and all sides utilized that opportunity freely. As to the Olympic Bank loan to the Gil-berts, it is interesting that, after a year and-a-half of little repayment of principal, the $147,500 balance of the loan or nearly 75% of the total Gilbert siblings’ loan was paid off in the next payment following the arrest of Shaun Murphy in Tortola in April of 1986. DAVID PIERSON David Pierson had worked with both Julie Coyne and Dale Lyon. Pierson started the Olympic National Bank. Coyne and Lyon had worked together in Imperial Bank where Coyne was the Personnel Director with 700 or 800 employees. Lyon had been the Administrative Vice President at Imperial. On the joint club venture, 70% was to be LCP’s share and 30% to PPA until the CGL loan was paid off, then the figures were to be 60% to LCP and 40% to PPA; there was a further provision that at any time the profits reached six million dollars, then the split was to be 65/35. That limit was hit and it has been 65%/35% for some years. Pierson claimed that what was in the Bicycle Club for Sam Gilbert was that Sam kept his crew busy. Sam had a 10% fixed fee contract. Pierson observed that Sam was active in the construction phase and after the Club was open until the CGL loan was paid and then he no longer came around the Club. On cross-examination, David Pierson denied that the real reason Sam Gilbert stopped coming to the Bicycle Club beginning in January, 1987 was the onset of Sam’s medical problems. The only finding the court can make is that Sam was extremely active in the operation of the Bicycle Club until the CGL loan was paid off. Sam was making sure no one would err by linking the Kramers to the ownership or operation of the Bicycle Club and it was this occurrence, not ill health, that caused him to stop his active participation. The Bicycle Club joined with other California clubs in litigation to win authorization of the Asian games and the case was finally won in June of 1987. Pierson described the Bicycle Club in this way: that the largest card room in Las Vegas has 50 tables and the Bicycle Club has 160 and needs more, with 8 players at a table. The club has 7 acres of parking, which holds 2000 cars which, for comparison, amounts to lh of the number of parking places for Joe Robbie Stadium in Miami. The court takes notice that Joe Robbie Stadium holds 73,000 people. When the Gilberts wanted to obtain 20%, there was a discussion among the partners of LCP. Pierson gave up 10% to admit the Gilberts and eventually Coyne did likewise on the basis that the club needed more money and needed to guarantee the Sanwa loan. Pierson felt that $200,000 was a fair price inasmuch as one of the conditions of letting the Gilberts in was a guarantee of the Sanwa loan by the Gilbert interests. Sanwa Bank got the guarantee of Michael, Robert and Margaret Gilbert rather than Sam’s guarantee. Julie Coyne observed that she would rather have 20% of a club that was open than 30% of a club that could not open. Pierson said he was not at Michael Gilbert’s for a meeting between May and December of 1983, but was at a meeting with the Kramers, Ben and Jack, the Gilberts, Sam and Michael, and Mel Kessler in December of 1983 and that Karen Gilbert came in and out of the meeting. Pierson, after first lauding Lyon’s work at the Bicycle Club, said it was Hardie’s idea to put a dealer at every table; when the club first had an outside audit, there were substantial adjustments to be made and that was Lyon’s realm of responsibility- In April of 1986, not coincidentally the court finds, with the arrest of Shaun Murphy in Tortola by Scotland Yard, Sam wanted Pierson to make a “loan” from LCP to Jack Kramer of $500,000. and Sam assured Pierson that Julie and Dale had agreed to it so Pierson made the “loan” to Jack Kramer without checking with anybody else; the “note” was also unsecured. Later it turned out Dale Lyon didn’t know, nor had Julie Coyne and Dale Lyon approved. The court makes this specific finding: the reason Lyon did not approve was not that he was worried about the $500,000., but he didn’t want any links emerging between Jack Kramer and the Bicycle Club — particularly since Shaun Murphy had been arrested and Dale Lyon knew that. The $500,000. “loan” did not go into default until May of 1987; not surprisingly, no legal action has been taken to try to recover that from Jack Kramer. In June of 1986, although there is some question about whether it is a time deposit, a certificate of deposit, or a money market account, $200,000. belonging to the Bell Gardens Bicycle Club was pledged to the Safra Bank for a “loan” to Jack Kramer. Pierson said he was at Sam’s office a block or so away from Olympic National Bank and Sam asked him to do that. Pierson did not know of the existence of this $200,000. time deposit or MMA until Sam asked him to deposit a $200,000. time deposit in Safra Bank in California for a loan to Jack Kramer by a Safra branch in Miami. Two weeks later, Pierson called Dale Lyon to tell him about it because Pierson was troubled by it; Pierson felt he had strained the interpretation of the agreement to give himself the authority. He never called Julie Coyne or George Hardie. Pierson testified that the first payment on the $500,000. was due in May of 1987, but that before then, Agent Edwards and Agent Borah had come to see him in November, 1986 asking about Jack Kramer and the Gilberts and the Bicycle Club; he testified he did not talk with Sam about the $500,000. loan after the agents left. As a result of the conversation with Dale in July or August of 1986, Pierson knew that there were problems with Jack Kramer. He also said that Dale was upset when he heard about the $200,000. time deposit so Pierson did not call Sam. Again, it’s not surprising that Dale was upset: he knew of the details of the Kramers’ involvement. Pierson testified he felt he was making the $500,000. more available to Sam. Pier-son tried to explain that he had 30% of the money and, if his action was improper, he could afford to risk $150,000. He did not explain about the fact he was risking $150,-000. of Lyon’s money or $100,000. of both the Gilberts’ interests and Julie Coyne’s money. Part of this may be because Pier-son felt beholden to Sam. Pierson had borrowed $500,000. from Sam in 1984, giving a mortgage on his house and then borrowed $350,000. from Sam in 1985, giving a UCC Lien on his interest in the Bicycle Club; therefore, a year later when Sam asked for $500,000. for Kramer, Pierson said he didn’t think it was appropriate to ask for collateral. As to why Sam gave up his 60% interest and did not want any title or ownership in the Bicycle Club, Sam asserted to Pierson he did not want any of the risks. It’s hard to square that with the guarantee Sam signed on December 5, 1983. Sam had told him “I am out of it, I don’t want the risks” and Sam told Pierson it would be unprofitable; Julie Coyne similarly testified that Sam did not want to be a partner in LCP for many reasons, among which was because he felt the business was risky although they would make money. Sam further indicated to her that the business was not compatible with his reputation in the LA area and that he did not want to be any partner except a general partner. JULIE COYNE Julianne Coyne is a bright, talented, tough, very attractive lady. Her timing was pretty good. She started off with the Bank of America, then the Crocker Bank and in September of 1976, she interviewed with Imperial Bank as Director of Personnel and Dale Lyon was there as Administrative or Executive Vice President. The bank had only 200 employees but had grown to 800 employees when she left in February of 1980 and she had done various things, including affirmative action plans and so forth. She described Lyon as the third or fourth most responsible person in the bank. She became a personnel consultant for smaller banks for headhunting and to work on affirmative action programs, compensation programs, personnel programs and with their training programs, etc., and was grossing $250,000. to $400,-000. a year. She met Sam Gilbert in 1977 and from April, 1978 to mid-1982 she and Sam Gilbert were lovers. She spent a considerable amount of time with him which translated to five or six days a week with trips to Europe and elsewhere overseas. She described him in various ways during her testimony: e.g., one strong personality, that he was inventive because they had a business together (Fivel) developing shock absorbing athletic shoes, and he dabbled with ideas for magnetic door closers, curtain rods, etc. When she was in Fivel Corporation jointly with Sam, she put no money into it. It all came from Sam. Sam never told her he was a money launderer. After the relationship was over, she and Sam remained friends but mostly it was a business relationship. She hired Pierson’s law firm to represent Imperial Bank in affirmative action matters. She knew Pierson in the early 80s because she hired their key executives. She first became aware of the Bicycle Club venture in a call from Pierson to get prospects. She took the idea to Sam on the basis he might want to build a casino and invest in it, and Sam’s response was that building it is fine, but he didn’t know about investing in it. He suggested she take it to a banker and get it evaluated. So Julie suggested Lyon and Sam agreed. They had used Lyon before in the shoe business, Fivel. Sam was interested. Subsequently, after discussion about the Bicycle Club early on, she buttonholed Sam and said that Dale and David have a piece of this Bicycle Club business and you have the construction contract. She felt she needed a finder’s fee. Sam responded: “you do, but it’s a start-up business and it can’t afford it. Why not take a percentage?” She didn’t like the risk of it, and was a bit anxious about that, but she agreed to do that. She paid $1,000. for her thirty percent. Because she decided it was time in her life to get married and start a family, Julie broke off the romantic relationship in 1982 and Sam was furious. In 1979 or 1980, she had bought a condo worth $110,000. and Sam had given her $50,000. to put down on it. She made the payments on the remaining balance of $60,000. but when they broke up, Sam insisted on her giving him a quitclaim deed to the condo. She also expressed very strong feelings against Sam. There was an exclamation later on during her testimony: she “would never forgive him for getting her into all this!” She went no further with that nor were there any questions about it. Sam told her he did go to the New York Teachers Credit Union because he had gotten credit from them before. Sam advised her he had arranged financing for the Bicycle Club. She was relieved because that was LCP’s job for Bicycle Club venture. In November, 1983, the name Troon Mortgage came up. Sam said he was unable to get the New York Teachers Credit Union loan, so he arranged it through Troon Mortgage, and that it was an offshore trust. She was not concerned because Sam had guaranteed it and he wouldn’t have done that if he didn’t think it was a good loan and one that could be paid back. She identified the handwriting on Exhibit 183, the note picked up at the L’Ermitage, as definitely being Sam’s on the top half and the numbers on the bottom half appeared to be Sam Gilbert’s. She couldn’t say as to the printing on Exhibit 182, as to money flow. As to CGL, Sam did not want David Pierson in CGL as Pierson was involved in two start-up businesses, Olympic Bank and the Bicycle Club. Sam acted as both president of CGL, Lyon’s title, and its chief financial officer, her title, and she testified she did not know that CGL was a conduit for the Kramers’ drug money. Sam did not have signature authority on the checkbook for CGL although he ran it. She and Dale Lyon had signature authorization so they could sign individually below $10,000. Julie began to be dissatisfied in May or June of 1985 when she realized Sam had lied to her about buying land in Florida. She told him she did not want any part of development of any property outside California. He had gotten her to sign an authorization to negotiate for CGL in Florida, apparently on some other basis. When she caught Sam lying to her about CGL’s involvement with Florida real estate and the development of the marina, she said she wanted more facts before going to certain conflict and a hassle with Sam. She went to Dale Lyon. However, she did not get a satisfactory explanation from Dale Lyon about the marina. She then confronted Sam about it and told him that he had lied to her. Sam became very angry and suggested if she didn’t like it or was uncomfortable, she should resign. Consequently, she did so and her letter of resignation was filed on June 28, 1985; when she resigned, she turned over 3,000 shares of CGL’s stock, that she paid $3,000 for, to CGL as well. Much testimony then ensued about Julie becoming a limited partner. She got married on November 4, 1983 at the beginning of LCP and had a child after “a bad pregnancy”. After several months she wanted to become a limited partner. She stated she stopped attending CGL meetings in June of 1986 because she felt she was less and less needed and she was pregnant with her second child and had lost one a few months previously. Sanwa Bank would not give them the loan they needed in late 1983 unless (1) the CGL loan was subordinated and, (2) it received a personal guarantee by a substantial person, e.g., Sam Gilbert. Sam balked on both. Sam suggested that if LCP could give twenty percent to the Gilbert family, the family would sign the guarantee, he’d subordinate the CGL loan and get a $5 million loan. So she was willing to give up 10% and asked Pierson to give up 10%. The Bicycle Club opened at the end of November, 1984. She further testified that at first the club lost a million dollars, but between January and February 1985 it began to show a profit and thereafter made distributions. The first distribution was $10,000 and then the next one quickly rose to $30,000, to $50,000, then $70,000 monthly, and eventually to $234,000 monthly. She testified she used 100% of the distributions for herself and her family, and none went to Sam Gilbert or the Kramers. She was impressed with Dale Lyon because she had watched Dale go through the debit items from May 1986 (shortly after Shaun Murphy’s arrest) to December, 1987. The court doesn't think Julie realized when she testified that Dale was sweeping the trail clear of evidence. She had seen Jack Kramer in Sam Gilbert’s office two or three times. There was nothing remarkable about the meetings and Sam had introduced Jack Kramer as an electrical contractor who had been doing work in the building. She thought the information about the $200,000. purchase price for the Gilberts’ interest came from an attorney and tax consultant, but that she never got any of the money and Sam said it was paid. Sam wanted CGL to develop projects so he could keep his construction crew occupied. Ms. Coyne testified further she did not participate in CGL’s last Troon loan and did not know of the memorandum of loan agreement of 1983 until her deposition in July of 1990. That was similarly so for the loan agreement. She testified she never ever talked with anyone about Troon. The loan from Troon to CGL does not contain the 15% kicker, but the one from CGL to LCP did and she can’t explain that. She met with and talked with Lyon one or two times between January and July of 1986 and talked with similar frequency to David Pierson. In March of 1989 she wrote an irate letter about George Hardie because he had been elected mayor of a town 100 miles from the club but was still running the day-to-day operation there. She criticized Har-die for a bad extension of credit which added a million dollars to the accounts receivable. A month later after she wrote the poison pen letter to Dale Lyon about George Har-die, Julie was locked out of the locker room in the sense she stopped receiving monthly reports which the agreement entitled her to receive. When Hardie stopped sending her the monthly reports, she asked Dale Lyon for the reports and he declined. Jules Huppert came knocking at her door in 1989 because he had just been indicted for subordination of perjury and needed money. He had been president of Valley State Bank and had been heavily involved in the conversion of cash into cashier’s checks. She did not ask Huppert anything about the charges and made three loans to him that totalled about $36,000. She made a loan to Huppert also because he had used her consulting firm for several years when he was president of Valley State Bank. She further testified that she was not aware that LCP was making the interest payments and principal repayment of the Gilbert Family $200,000. loan from Olympic National Bank. DALE LYON Lyon testified he first met Ben Kramer in Washington, D.C. in April or May of 1984, which the court finds is false; further, that he had a brief walk with him and Sam. Lyon added that he had no reason to be in D.C. but went there instead of Miami because Sam Gilbert asked him to go with him, and that they were looking for real estate for the marina. Lyon claims he next met Ben Kramer in September or October of 1984 in Santa Barbara at a boat race; further, that he met Sam at a Burbank airport and flew on a private plane to Miami for another meeting, but that he did not know Ben was going to be on the plane. He said he slept or talked with Sam, but Ben was in the aft part of the plane with an unidentified female. He came back alone from Miami. Then Lyon testified he had a meeting with Sam in LA just before the meeting with Sam and Ben in Sam’s office where he first knew Ben was to be involved as a lessee of the Marina Bay property. Lyon claimed he talked with Mel in 1983 but not about Troon. He flew to Miami to speak with Mel but didn’t speak with him and had to fly back. He - said Sam arranged the trip. That seems to be more of the pastime the court observed throughout the testimony of “pinning the tail” on Sam, a game played by some of the witnesses. Sam is fair game as (1) he’s dead, and (2) Sam Gilbert was involved up to his ears and then some. Without doubt he masterminded most of this entire scheme. Lyon testified he spoke to about four banks early on, apparently in an effort to obtain financing before the Troon matter was arranged; and that he had Sam sign the guarantee and sent it to Mel as agent for Troon. In early 1984 Sam instructed him to make a deposit on land for a marina in North Miami. Before the second parcel of land was purchased, Lyon testified he met Jack Kramer, that is, before August of 1984. It is certainly true that he met him before the second parcel of land was purchased, much before. In June of 1984 he Fed-X’d to Jack Kramer a document about the marina and a check. Sam told him that CGL had to get a fifteen percent interest income participation kicker from the LCP and PPA venture; and that Lyon did not feel Sam’s risk via the guarantee was that great because he had the building construction contract. Lyon, too, said CGL lent $1.6 million to Jack Kramer’s enterprises. Lyon stated that he never got the documentation for $600,000 sent to the Jack Kramer Enterprises. By July of 1985 he questioned Sam and Sam said it was to buy Lamborghini motors. Lyon says he learned the name of Cor-trust by late November 1986 from Sam or Mel. Late November, 1986, was after federal agents had interviewed him around the 19th of November, 1986, and after Dale Lyon signed checks to Cortrust in October and November of 1986, CGL checks which were then issued at Lyon’s instance in the form of cashier’s checks to Cortrust. Lyon went on to testify then that he never heard any of the Gilberts ask to buy the twenty percent, and he, Lyon, did not set the price and doesn’t know who did, but Sam told him what it was. Lyon testified he didn’t recall ever seeing F-68 which is a $200,000 CD purchased as a result of the Gilberts’ interest and it was rolled over more than once, done on a form without a bank name on it which the court finds interesting that banks would have a generic certificate of deposit form without the bank’s name printed on it, but Lyon identified the bank as Olympic Bank. In June of 1986 the joint venture pledged a $200,000 CD at Safra Bank in California to secure a loan by Safra Bank in Miami to Jack and Maxine Kramer. Lyon testified he learned of it in September 1986 and it was a money market account, not a CD. Whichever it was, it compelled a hurry-up trip by Lyon to Miami to try to get the collateral withdrawn — all this, the court finds, because it would be a track on the trail not desirable from Lyon’s point of view. Exhibits F-35 to 57 are 23 checks all made payable to Troon, the last one dated April 23, 1986. The next payment was different; this is the payment after Shaun Murphy was arrested by Scotland Yard in Tortola. This check is by CGL, a cashier’s check issued by Olympic Bank payable to Dr. Biedermann, as agent for Troon Mortgage Investment Company, Inc., for $23,-832.81. Then in June, on the 4th, there is a cashier’s check by CGL from Olympic Bank to Troon Mortgage Investment Company, Inc. in the amount of $223,832 and change. Continuing on with the alleged payments to Troon, there was an account debit of Olympic National Bank on September 11, 1986, with the account number and account name being the Bicycle Club. Cashier’s check number 15070 dated September the 11th is for $161,950.45. On October 3, 1986 there was a check for the same amount drawn on CGL Investment Company, Inc. with the signature of M. Dale Lyon; interestingly enough, it’s made payable to Cortrust. Similarly on November 10, 1986, another check in that same amount, $161,950.45 was drawn on the CGL Investment Company, Inc. checking account, made payable to Cortrust and signed by Mr. Dale Lyon. Dale Lyon, a bank president, chief executive officer at the time at the Bank of Beverly Hills who had previously been the administrative vice president of Imperial Bank and previously an officer of Universal Bank, kept them in his possession rather than mailing them to Troon. That non-transmittal would trigger a default on CGL’s “loan” from Troon. Within a week or ten days of the November 10th check, Agent Edwards had an interview with Dale Lyon in an attorney’s office at which time Dale Lyon did not mention or produce the checks nor did he bring them to the grand jury appearance in Miami in December, 1986, despite the subpoena handed him the day of the interview by Agent Edwards. Dale Lyon’s testimony is he received a call from Mel asking him to make the checks payable to Cortrust. He further testified that he could have asked Mel if only one check was to be payable to Cortrust or whether all of them were, but Lyons really didn’t recall. Lyon further testified that when he went to the Bank of Beverly Hills to get the cashier’s check (he was the interim CEO there), he had been in Australia most of September 1986. All the previous ones had been issued apparently at Olympic Bank. On December 2, 1986, apparently after the interview with Agent Edwards and DEA agents, Lyon wrote Mel a brief letter asking for confirmation from Cortrust that checks be made to Cortrust as successor to Troon and that Mel responded (Lyons’ Exhibit 130B) saying authorization from Troon would be forthcoming. Witness Dale Lyon cannot recall whether he called Mel .again in an effort to locate Biedermann or Troon or Murphy. Lyon testified he knew who Murphy was because he acknowledged they had talked about a missing wire transfer once. Murphy had called him. Lyon claims he did not know Murphy’s number or Troon’s phone number. When asked whether he called anybody, Lyon’s answer was, “I may have called Sam. I may have called Sam.” The court’s thought at that time was the witness was trying not to give any unequivocal answer to avoid the possibility of perjury- Lyon testified that between November 10, 1986 and the 2nd of December 1986, he made no effort to call either Murphy or Biedermann and when he was testifying it was obvious why not. He already knew Murphy had been arrested, although he may not have known Biedermann’s phone number. At the interview Agent Edwards asked about the Bicycle Club, CGL and Troon, showing him documents to Troon signed by Lyon, and the meeting was at attorney Falk’s office. As he was leaving the meeting, Edwards gave Lyon subpoenas — Agent Olsen óf the DEA showed Lyon a picture of Mel and asked if he knew Mel and Lyon responded yes. The subpoena listed a number of names of individuals and business entities. Lo, like Abou Ben Adhem, Shaun Murphy’s name led all the rest, followed by Benjamin Kramer, Jack Kramer, Maxine Kramer, Robert Saccenti, Mel Kessler, James Mo-lans and Patrick Dimond, Chris Kramer and Chris Reagan (several of these names on the list we didn’t hear from or about at the trial) and a number of corporations including various Apache enterprises, Lamborghini Apache Racing Team, Troon Mortgage, BV, Troon Mortgage, NV, and lots of other business entities. Lyon said he responded to the documents mentioned on the subpoena. Lyon did not turn over the cheeks to the grand jury or to Agent Edwards. Lyon testified he turned over the checks to his attorney in 1987; but they were not turned over to the Government until after he had received immunity in the criminal portion of his trial and had testified. Mr. Lyon explained to the court that he did not pick up his CGL bank checking statement except quarterly. He left it at the bank and he would come by and pick it up quarterly because he stated there was not much check activity so it really wasn’t important that he do so; therefore, he did not have the checks he had written to Contrast in October of 1986 and November of 1986. These two checks are thirteen numbers apart which is hardly a dormant account. The court does not believe his story about why he didn’t mention or produce the checks to Agent Edwards. Lyon indicates the first borrowing as to the marina, the $2.8 million, was to complete the construction and pay off the balance of the land. Marina Bay Associates borrowed another $300,000 from Safra to finish the construction. And then at that time Marina Bay was in total default or virtually so in CGL loans. By a year later it was in total default. However, curiously enough, in August 1989, CGL wrote a one hundred thousand dollar check to Marina Bay Associates, despite the default status of the Marina Bay Associates. Dale Lyon can’t remember why. He says it was for something “significant”. He was the records custodian for Marina Bay Associates as well. Lyon testified he had two conversations with Sam about the marina; that Sam said the deposit made to acquire the land in North Miami and that a second mortgage would be forthcoming, but it never did. There was apparently no concern about the fact that it had not been forthcoming. Dale Lyon wrote a check for $50,000 to Team Apache on September 23, 1985 at the direction of Sam, although he testified Sam had no authority to request him to write a check to Marina Bay Associates. Lyon said the marina was Sam’s pet project. Lyon testified further that a check for $250,000 was, as directed by Sam, paid to the law firm of Latham and Watkins. The check is dated October 19, 1987, and that a fifteen thousand dollar check dated March 24, 1987 went to Richard Kirschner, who is an attorney for Julie Coyne. And again he says Sam told him to do it and that CGL — at that point in time, Sam, Michael Gilbert and Dale Lyon — chose to pay back a partial payment of $9.5 million to Troon despite Troon’s demand that it all be paid back: CGL kept one and a half million dollars claiming it was necessary for withholding taxes. The court notes that one and a half million dollars apparently is still sitting there in a CD, plus there is some money in the LART account in England. No payments have been made to Troon since the nine and a half million dollar payment in January 1987. Lyon does not know who the new 25 percent limited partner in Marina Bay Associates would have been at the end of January 1985. See Government Exhibit 942. The name blank with a percentage of the new limited partners is not filled in but the form is signed by Michael Gilbert and M. Dale Lyon and by Robert D. Gilbert also. The new partner was supposed to be bringing $400,000 to the Marina Bay Associates which was needed and Sam claimed he had an investor but didn’t tell Lyon who the investor was. On the 19th of December 1985, Bell wrote to Lyon the new limited partner was to be a foreign corporation or foreign entity. Consequently Marina Bay Associates finally borrowed $200,000 from Safra in 1986. Dale Lyon does not recall when he prepared F-83 which is the status of disbursements. He recognizes F-15, the statement of disbursements to Kramer, as his handwriting. Lyon testified he thinks he prepared F-15 in November or December 1985 and now says that F-83 had to be prepared after November, 1985. Lyon denies sharing or giving the original of F-83 to Jack Kramer. In F-83, an account of monies going to Jack Kramer, Lyon believes Super Chief North is Emerson Allsworth and that it went to Emerson Allsworth’s trust account to buy land adjacent to the marina. And he thinks the Team USA listed on the exhibit is Don Aranow. [The court would point out Aranow has since been murdered.] But Lyon indicates that he did not disburse $476,000 to Team USA to the best of his knowledge. The court notes that there is under Team USA an insertion listed as land, $600,000, but that entry is unclear and the court makes no finding. There were two checks to Emerson Alls-worth, one for $25,000, one for $80,000; further that on August 28, 1984, there was a Safra Bank’s cash-in ticket for $340,000 presented by SGA Parking, one of the Gil-berts' money laundering entities. Exhibit 757 reflects three cashier’s checks issued by Safra to the Emerson Allsworth trust account. Sources of the application of funds are listed as $2.8 million from Safra, and $504,-000 from Troon went to the marina, although the court can’t make a specific finding about the $504,000 from Troon. At the Edwards/Borah interview Lyon did not tell the agents about the $500,000 distribution or disbursement to Jack Kramer or the $200,000 CD at Safra Bank nor the $1.6 million to Jack Kramer. Lyon testified that without the five million dollar loan from Sanwa Bank in late ’84, the club would not have opened and he risked all of his net worth then by signing a personal guarantee. The policies broke down at the club because the volume was so heavy. The Club had expected to need five hundred to six hundred employees but had eight hundred to nine hundred. The testimony of Lyon continued that one-half billion dollars a year in cash comes into the Bicycle Club. Lyon denies he stopped active involvement in the Bicycle Club in April or May of 1986 because of Murphy’s arrest and claims Sam was trying to kick him out because of Sam’s difficulty working with Lyon. Dale Lyon recalls seeing Barclay’s Bank in Tortola. He was in Tortola with his wife Maureen to use Mel Kessler’s boat which was berthed there. Lyon claimed he did not see Murphy at the time. THE OTHER WITNESSES Mr. Traweek started off in his description of Sam Gilbert that Sam was given credit in Los Angeles for developing the Ventura Boulevard strip. Pierson wanted Traweek to help him found the Olympic National Bank; Traweek and Sam did so and were founding directors. He observed Sam was obviously in charge; when Sam entered a room he “took over” plus his negotiating skills were premiere, but Sam told people only what he thought they should know. Sam came to him about the Bicycle Club and said he thought there was a great deal of weakness in' the group beginning the Bicycle Club — which is interesting because Sam handpicked the players. Sam told Traweek there had been a cost overrun and he, Sam, was on a $3,500,-000 guarantee and that Sam felt he could get 10% participation for Traweek as a fee for arranging the financing. Traweek had a friend at Gibraltar Savings & Loan and was able to get the conventional $3V2 million loan there. In addition, Traweek gave a $250,000. loan of his own to LCP. However, LCP and Sam were not living up to their end of the bargain. Traweek kept asking about it, but Sam said he couldn’t get the 10% from LCP but he could get 5%. When Sam was trying to bargain him down to 5%, Traweek remembered when Sam hoodwinked two law firms on a lease. Sam refused to reveal the names of the Club’s money source and said that David and Dale did not know them. Obviously, Sam was in his coverup mode throughout these proceedings because Dale certainly knew. He had worked both for Sam and the Kramers in this operation. Traweek finally got his 5%, but not before December, 1985, and that 5% came from Dale Lyon. In two years he received over $400,000 in distributions and in May, 1987, he sold the 5% back to Lyon for $1.3 million. The reason Traweek said he sold the 5% was that he needed cash at the time, which was plausible in view of the fact that Traweek had more than 50 loans from Olympic National Bank over the years. The question the court has trouble understanding is why LCP needed $250,000 from Traweek when it was sitting on the $200,-000. it had just gotten the month before from Olympic National Bank on the Gil-berts’ transaction which it put into a CD. The court has no answer for that because either the evidence had been limited, covered up or was not produced for whatever reason. Hardie raised about- $400,000 or $500,-000. for Park Place Associates (PPA) in two or three months in order to obtain the license, entered the site development contract with the City, and brought the idea to the table but PPA needed financing. Har-die described the financial market when he was trying to build the club as he could not get people to invest because (1) some thought the market was saturated; (2) there was a bad aroma over the industry as several municipal officials had been indicted; and (3) the building couldn’t be sold for any other marketable use. Sam Gilbert insisted on building the Bicycle Club according to Hardie and Hardie understood the lending deal was for 15% interest (plus a 15% “kicker”), which was agreeable to PPA because money was tight; so Hardie agreed to it because Har-die wanted to get the club built and in operation. Sam said he would be the one primarily involved in obtaining the financing and the money was coming from an offshore trust and a holding company would be formed under CGL. Hardie and Lyon were the Chief Operation Officers in getting the Bicycle Club going. Card games were limited to panguini, lowball and high draw, although five card stud and seven card stud are now permitted. Five card draw is too slow for casino profitability. At preliminary joint venture meetings Sam Gilbert did not speak. Hardie did not remember Julie Coyne saying anything or even being there at the preliminary meetings. Neither Dale Lyon nor David Pier-son knew anything about Asian games. Sam Gilbert was a “very forceful and difficult person”; further, that people were generally deferential to Sam Gilbert. The Bicycle Club executive meetings were held at the club. Sam attended all of them for a year and one half; it was rare for Sam not to be present. Sam ran the show for LCP at these meetings. Dale Lyon attended almost all the meetings. Julie Coyne and Robert Gilbert attended most. Michael Gilbert attended some of the meetings. Hardie said the books and records were in poor shape which squares with Pierson’s testimony. Hardie intimated Lyon’s performance was not up to a $90,000 salary. Hardie, of course, felt that he himself was underpaid as general manager. After the federal agents interviewed Hardie on November 19, 1986, he asked Sam about the names of Troon, Ben Kramer, Jack Kramer and so forth and Sam told him that it’s nothing. On another occasion, he described Sam as “strong and authoritarian”. Sorrentino had also been in the banking business and in 1984 she worked for the Valley State Bank in Encino. Jules Hup-pert, who was engaged in the money laundering aspect, was President; Ms. Sorrenti-no was surprised that the $1 million loan in January of 1985 to Sam Gilbert was collat-eralized. But she testified that Jules Hup-pert wanted the collateral and she thought it was odd. The court concludes Sam didn’t want anything that looked the least bit suspicious to a banking examiner or to a federal agent if either came looking. Ms. Sorrentino in June, 1986 went from Valley State Bank where she was a commercial loan officer to the Bank of Beverly Hills where Dale Lyon was the Chief Executive at that time. A whole series of exhibits (Lyon 148(A-D)) show the $600,000 unsecured loan from Valley State Bank to CGL in June of 1984 which was rolled over in November, after a phone call from Dale Lyon, for $500,000. It was rolled over again and renewed and renewed again, as well as another note for $100,000 (Exhibit 148). Crasnick found Lyon’s Bicycle Club books and records to be in good shape. That didn’t square with either Hardie or Pierson’s testimony. Crasnick described Sam Gilbert as a very “demanding individual.” An interesting bit of evidence appears on the records: “note receivable B.K/Club in amount of $11,477,005.71. Crasnick says it was a typographical error. It appears not only on page 3, but on page 4. But on page 4, near the bottom was another entry, abbreviated interest income, capital B, capital K slash club. At that point Crasnick adamantly said B-K did not mean Ben Kramer and wanted his workpapers to explain it. Later Crasnick testified B-C means Bicycle Club and he explains the notation about the B-K as that it is simply different bookkeepers. The court doesn’t find that very convincing. He testified that he recognized Dale Lyon’s handwriting. He knows of no other $500,000. payment by LCP in 1986 except the $500,000. to Jack Kramer. He appraised Government Exhibit F-15 made by Dale Lyon as a pretty good summary of the advances to Jack Kramer. Crasnick was told by Sam Gilbert he was to be a co-trustee on Robert Gilbert’s Family Trust and Michael Gilbert Family Trust and claimed the payment of $75,000. during 1990 to Michael Gilbert was not a distribution, but it really was a loan. There were no loan papers made up at the time. The loan was in March of 1990 during the criminal portion of this case. Crasnick further testified that he, Cras-nick, set the rate of the loan at ten percent and the maturity date at one year from that date. A direct conflict exists between this testimony and that of Mr. Sommers, the second co-trustee. Crasnick did not know about the agreement of LCP to pay Michael, Robert, and Margaret Gilbert’s interest on the $200,000 loan to the Olympic National Bank. Crasnick testified that the next day after he became co-trustee of the Michael Gilbert Family Trust, presumably on the 29th of November, 1984, the corpus of $25,000 was all invested in LCP by the co-trustee, Fains-bert