Cross-examining the Cooperating Witness (Part 1)

December 19, 2011 Cooperating Witness

As some of you know, I like to have concrete examples to use in illustrating and discussing the arts of trial advocacy. I don’t think anyone can learn them from abstract lectures. So when I come across a good example, it gets me motivated. A beautiful set of examples of cross-examining the cooperating witness comes from the New York State trial of James W. Marguilies, an Ohio lawyer indicted for a pump and dump scheme.

The trial was last summer, but I learned of it last week through an old post on the NACDL Listserv which direct me to Jeralyn Merritt’s great site, TalkLeft, which sent me to the original article by Henry Blodget. Fortunately Blodget was in the courtroom and took notes of the cross-examination by Ira London. All the Q&A’s are his.

The witness under examination was John D. Mazzuto, the former CEO of a Pittsburgh-based company called IEAM. Mazzuto, after sitting in jail for 7 months, unable to post bail, and finding God in his cell, entered into a cooperation agreement and pleaded guilty to his role in the $60 million stock fraud. Mazzuto used his fraudulently obtained money to fund mansions in the Hamptons and Palm Beach and a raft of fancy cars. He also gifted his alma-mater, Yale, a $1.7 million gift to build a baseball stadium christened “John and Theresa Mazzuto Field.” Mazzuto had played shortstop for Yale. Theresa is (or was) his fifth or sixth wife.

1. London carefully established his background, proving how smart and clever he is, certainly more than the poor schmucks he stole from. I think the word arrogance comes to mind.

Q Good morning, Mr. Mazzuto
A Good morning.
Q I don’t believe you and I have ever spoken, have we?
A Not that I can recall.
Q Would you agree with me that you need to be very smart to get accepted by Harvard or Yale University?
A Yes.
Q Would you agree that you have to be very smart and hard-working to graduate from Yale?
A Yes…
Q [After graduation you] went to work for Chemical Bank in New York?
A Yes
Q After 18 years, you had reached the position vice president and managing director?
A Yes…
Q In 1990 you turned to investing your own money?
A No.
Q Investing other people’s money?
A …Yes.
Q Did you invest any of your own money?
A No.

2. Next London exposed his state of mind, his lack of character, and how easily he deceives everyone. Classic questions for a fraudster. Once a guy like this pleads guilty and confesses to the fraudulent scheme, it is open season. They weave a web of lies to sell their scheme and all the lies have to be exposed.

Q Sometime later, after 1990, you made a conscious decision to become a crook, isn’t that right?
A Yes.
MR. LYNCH: I will object, your Honor.
THE COURT: Overruled.
Q You made a conscious decision to become a fraud?
A Yes.
Q And you made a conscious decision to become a criminal?
A Yes.
Q In doing so, you made a decision that you needed to lie to people, isn’t that right?
A Yes.
Q And you became very good at lying to people, didn’t you?
A Yes.
Q And you made a decision that you had to scramble from time to time?
A Yes.
Q And I think the use of the word scramble for you means ways to perpetuate the fraud?
A Yeah…
Q And you needed programs for your fraud schemes?
A Yes.
Q And what did you mean when you used the word programs?
A Lloyd Dohner and the support of the stock.
Q Programs meant illegal schemes, didn’t it?
A … Yes.
Q You had to sell the story that you were telling?
A Yes.
Q The story being a pack of lies?
A Yes.
Q And you had to deceive investors?
A Yes.
Q And others?
A Yes.
Q And all of this was to fund the luxury lifestyle you hadn’t really earned?
A Yes.

3. Now a critical component – he is a good liar. Honestly is not his best policy. This is basic not only to the examination but for the theory of the case. The jury must believe he is a world-class liar or the client will be convicted. This is the time to dwell lovingly on every intimate detail of the scheme using your imagination as far as it will take you.

Q You decided to lie to avoid responsibility for your actions?
A Yes.
Q You decided to lie to avoid problems?
A Yes.
Q You decided to lie to keep the fraud going?
A Yes.
Q You decided to lie to get what you wanted for yourself?
A Yes.
Q Regardless of the consequences to others?
A Yes…
Q Have you lied under oath at any time, Mr. Mazzuto?
A Yes.
Q So you made a decision to lie under oath?
A At that time in the past, yes.
Q Do you know what it means to lie under oath?
A Yes.
Q It means that you’re committing an act of perjury, doesn’t it?
A Yes.
Q You decided to lie to avoid the risk of discovery?
A Yes.
Q You decided to lie to avoid responsibility for your fraudulent conduct?
A Yes.
Q How many people did you deceive in the activities you’ve talked about?
A I —
Q Just give us an estimate. How many people do you think you’ve deceived?
A Hundreds.
Q And this was face to face on occasion, wasn’t it?
A Yes.
Q And on other occasions it was on the telephone?
A Yes.
Q And on other occasions it was in writing?
A Yes…

Unfortunately that is the extent of the actual questions and answers taken by Blodget. But he summarizes the wealth of additional impeachment of Mazzuto. Apparently lawyers in the New York courts are unhindered by FRE 608(b). The following additional material about Mazzuto was communicated to the jury:

· Sometime after 1990 he made a conscious decision to become a crook.

· He admitted to lying under oath in the past and told a doctor he has a “’historical pattern of lying.”
· While in custody at Riker’s, where he eventually “surrendered to God,” he manipulated his medication to cause his blood pressure to swing wildly in attempt to get out of jail. (He hid pills in his socks and bed, going several days without taking his meds and then taking several pills at once.)
· He’s a severe alcoholic and suffers from memory loss as a result.
· He has attempted suicide by cutting his wrists.
· Mazzuto lied about being wounded by a bomb in Vietnam and spending three months in the hospital recovering.
· He failed to pay child support and avoided coming to NJ to visit his kids so not to be arrested for this.
· Jail and the prospect of 8 1/3 to 25 years in state prison caused him to approach the DA about a deal after 7 months in Riker’s. A deal was struck where the DA would recommend no more than 2 1/3 – 7 years if Mazzuto testified truthfully, paid $1 million in restitution, and stayed out of trouble.
· Of course, he didn’t stay out of trouble. After being released from Riker’s under the plea agreement on 1/14/11, Mazzuto was busted for DWI in Florida two weeks later on 1/28/11 (he was unable to stand and blew twice the legal limit). He went before the judge on 2/15 and was read the riot act. Six days later, 2/21, Mazzuto gets busted again in FL for DWI. (He crashed into another car and could hardly speak.)
· As a result of the two DWIs within one month of his release, the DA is no longer bound to recommend any reduced sentence.
· He also has two earlier DWIs.
· The defense accused Mazzuto of lying to the DA certain regarding certain aspects of the crime.
· Mazzuto has been married six times and he is currently getting divorced from wife number 6.
1. He lived with a girlfriend, Ilene Engleberg, from 2003-2007. To Engleberg’s surprise, he married his sixth wife, Theresa, the day he moved out of Engleberg’s apartment.
2. Throughout his relationship with Engleberg, he scammed her by using her credit card with the excuse that one of his ex-wives maxed out his credit cards.
3. He used Ilene Engleberg’s credit card to buy Theresa a Cartier watch. Of course, he tried to hide this from Engleberg.
· Marriages:
1. Liz – 1970-71
2. Joan – six weeks in 1975
3. Martha – 1978-1994; had his four children with her
4. Cindy -1994-1997
5. Elizabeth – 1997-2003
6. Theresa – 2007 (divorce pending); spent $300K on jewelry for her with fund stolen from IEAM
· He has multiple arrests for domestic abuse.
1. 7/18/97 in Manhattan he punched then-wife, Elizabeth, in the face and body and hit her over the head with a telephone. He pleaded guilty.
2. 12/7/97 in Manhattan he violated his order of protection related to this case and pushed, shoved, and kicked Elizabeth. He pleaded guilty to violating the order of protection.
3. 2/17/03 in Florida he beat his wife, Elizabeth. He caused a laceration to his wife’s head two inches long, a swollen nose, and swollen cheekbones. He lied to the cops and said she fell down. He pleaded guilty.
· Other scams:
1. 2001: scammed Essex House of $13,700
2. 2001: scammed wife of one of the Essex House managers out of $12,500
· He filed personal bankruptcy in 2002 claiming $4,000 in assets and $13.6m in liabilities. The bankruptcy wasn’t discharged until 2009. He failed to disclose his personal bankruptcy in SEC filings as required by law. Also during that time he bought properties in Southampton, Florida, and Texas (his real estate purchases were >$ 6 million) – all with funds stolen from IEAM.
o He owed AMEX $103K and various debts to other credit cards.
o He owed General Aviation, a private jet company, $90K – a bill he ran up in 90 days.
o He owed the Waldorf-Astoria $66K.
o He owed Essex House.
o He owed Paris Limousine $30K.

Ira London conducted a classic cross-examination of a cooperator, especially a fraudster cooperator. I love the way he used his impeachment materials to expose who Mazzuto was. Unfortunately for the client, he was convicted anyway and was sentenced to 7 to 21 years in prison. Margulies could not surmount his own credibility problems. He lived a lavish life that included traveling on private jets, buying a $350,000 diamond ring for his wife, and getting a significant share of the money. This type of evidence appeals to class envy and hatred which highly motivates jurors who are barely scraping by in life.

FRE 608(b), which would apply in a federal trial, limits the use of specific instances of a witnesses conduct. It can not be proved by extrinsic evidence, but if probative of credibility,
can be inquired into on cross.  I think London pushed the edge of the envelope on some of the areas summarized by Blodget.

Here are some similar questions some of which come from a seminar presentation, others I am making up while typing this:

Are you an honest man?
Are you under pressure to satisfy the prosecutors?
Tell us the date you decided to become an honest man.
For how long were you dishonest.
Did you change when you met these prosecutors?
When they offered you a deal?
How valuable is your freedom to you?
How will a prison sentence affect your wife? Your children? Your business?
If you have to choose between your family and the defendant, who are you going to choose?
You had to give the prosecutors something for your deal.
You had to convince them you could supply the goods.
You had to convince them you could give them what they wanted.
You had to audition for them.
You had to impress them.
You are a good liar.
You can make people think you are telling the truth.

It is fun just thinking up lines of impeachment. It reminds me of a timeless observation by Lily Tomlin: “No matter how cynical I get, I just can’t keep up.”

A note on my biases: Ira London is not only an excellent lawyer but a friend of mine, and Jeri Merritt who has one of the best blogs on the net is also a good friend.