U.S.A. v Gregory Caplinger, trial transcript, volume 2

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UNITED STATES DISTRICoO p '{ FOR THE WESTERN DISTRICT OF NORTH CAROLINA

STATESVILLE DIVISION

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UNITED STATES OF AMERICA ) ) )

) ) ) )

DOCKET NO. 5:99-cr-39

vs.

GREGORY E. CAPLINGER,

Defendant.

VOLUME II FILED

CHARLOTTE, N.C.

AUG 2 8 2000J

______________) U.S. DISTRICT COURT

W. DIST. OF N.C.TRANSCRIPT OF TRIAL PROCEEDINGS

BEFORE THE HONORABLE THOMAS WISEMAN UNITED STATES DISTRICT COURT JUDGE

JULY 17 THROUGH JULY 25, 2000

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13 APPEARANCES: '"

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On Behalf of the Government:

BRIAN L. WHISLER Assistant United States Attorney 227 West Trade Street, Suite 1700 Charlotte, North Carolina

On Behalf of the Defendant:

HAROLD J. BENDER R. DEKE FALLSAttorneys at Law200 North McDowell StreetCharlotte, North Carolina

Cheryl A. Nuccio, RMR-CRR Official Court Reporter

United States District Court Charlotte, North Carolina

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1 WEDNESDAY MORNING, JULY 19, 2000

2 (Jury not present.)

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THE COURT: Anything out of the presence of the

jury?

MR. WHISLER: Except one pending matter. I think it

was Government's SA which I think is with Your Honor. We

needed to make a decision on admissibility of that.

THE COURT: Here it is. Yes, sir.

MR. FALLS: We're trying to find it, Judge.

THE COURT: Yeah, here it is. You wanted an

opportunity to look it up last night. Want to be heard a�y

further on it?

MR. FALLS: No, I've already made my argument, Your

Honor.

. THE COURT: All right, then. Let it be admitted.

Your objection is noted. Here's your copy of it. Do you need

it back?

court.

All right. Bring the jury in, please.

(Jury entered the courtroom.}

THE COURT: All right, you may continue.

MR. WHISLER: Thank you, sir. May it please the

HARRY KAMPETIS

DIRECT EXAMINATION (Cont'd.)

BY MR. WHISLER:

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1 Q. Mr. Kampetis, remind you you're still under oath from

2 yesterday, sir.

3 A. I understand.

4 MR. WHISLER: May I approach this witness, Your

5 Honor?

6 THE COURT: Yes, sir.

7 Q. Mr. Kampetis, at the conclusion of your testimony

8 yesterday, we were talking about Government's BA which -- if

9 you would, just get us back on track. Tell us what that is.

10 A. This was a summary of an interview done by a newspaper

11 reporter from a newspaper called La Hoy.

12 Q.

13 A.

Whose handwriting is that?

This is Greg �plinger's handwriting.

And why is he sending that to you?

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14 .Q.

15• A. It was an indication that they were interviewing him for

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his discovery. They were giving him some recognition as an

English doctor in the Dominican Republic.

Q. Okay. For what purpose, if any, did you use that

information?

A. An indication that there was an acknowledgment in the

Latin American press and it was getting out all across the

world.

Q. Did he tell you that that was going to be used in the

press?

25 A. Yes.

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1 Q. Did you ever see evidence that that same information that

2 he provided you was later used in a press article?

No, I did not.

Okay.

3 A.

4 Q.

5 MR. WHISLER: Move admission of Government's SA at

6 this time.

7 THE COURT: Received.

8 (Government's Exhibit Number SA was received into

9 evidence.)

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THE COURT: Do you want to publish it now?

MR. WHISLER: Reserve publication.

THE COURT: . Ladies and gentlemen, when he says �

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reserve publication, that means he's going to give it to you

14 later. You're going to get to see it, but he's going to put

15 it in at a different time. But it's now been received into

16 evidence.

17 Q. Let's step back for a minute, Mr. Kampetis. I'd like for

18 you, please, to outline kind of in a chronological way your

19 involvement in this case in terms of a timeline, when you got

20 involved with David Weekley first and then moving forward when

21 you got involved with the defendant, Gregory Caplinger .

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A. Late in '93 I met David Weekley; and then during the

course of '94, I had an involvement with David Weekley.

24 it wasn't until early '95, in April of '95 that I first

25 communicated with Dr. Caplinger.

But

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1 Q. Okay. Now, when you got involved with David Weekley,

2 what was the purpose? What was the reason for your business

3 relationship?

4 A. My involvement was to help direct and help David with

5 identifying investments for his -- he had accumulated

6 investors and he was managing their money and I was searching

7 for different investments for him to put the money into.

8 Q. Okay. What was the name of the group of investors that

9 you and he were working with? Was there a name?

10 A. There was an incorporation in the state of North Carolina

11 by the name of Diamond Group.

12 Q. And was there a particular type of investment, a vehlcle �

13 or strategy that you and David Weekley were involved with ..

14 initially?

15 A. There was a variety of secure safe investments that a

16 document that had been given to the investors had identified

17 different types of securities.

18 Q. Okay. Was there one particular type of investment,

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though, that the two of you were working on or working

toward?

A. We were trying to get involved in bank related securities

and government related securities.

Q. Okay. What is a prime bank note?

24 A. A prime bank note is a large investment by a private

25 individual to a bank and it would tend to give a better return

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1 because of the size of the investment.

2 Q. And was that one of the vehicles that you used with the

3 Diamond Group?

4 A.

5 Q.

It was one of the vehicles we were searching for, yes.

Okay. And what efforts, if any, did you make toward

6 bringing that investment to fruition?

7 A. I had introduced David to a number of parties that

8 indicated that they had those types of investments available.

9 Q. Okay. And you and David pursued that together; is that

10 right?

11 A. Yes.

12 Q. Okay. Did that ·prime bank note program ever come to

13 fruition?

14 A. No.

15 Q. Okay. What did you do with the investors• money in the

16 meantime?

17 A. In the meantime, the investors' money was put into

18 certificates of deposit in a local North Carolina bank.

19 Q.

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23 Q.

Did you pursue other investment opportunities?

Yes.

Did you tell the investors about that?

I had -- I had no communication with the investors.

Okay. But did you know whether or not the investors were

24 being told?

25 A. I had no knowledge of how many investors or what

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2 Q.

3 A.

Now, you've pleaded guilty in this case, have you not?

Yes, I have.

And what did you plead guilty to?

Mail fraud.

Why did you plead guilty to that?

4 Q.

5 A.

6 Q.

7 A. Because I put out hundreds of documents to many different

8 organizations and later felt that those documents were not

9 correct and I continued to put them out because of the fact

10 that I wasn't really -- I had only recopied those documents.

11 But I really felt that as a banker, that the evidence that I

12 was seeing showed that most of those documents could not be

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14 Q. Okay. Now, you've got to be clear for us. You're not

15 talking about spelling errors are you?

16 A. No.

17 Q. All right. What are you talking about?

18 A. I'm talking about the amount of dollars that were being

19 generated primarily at the clinic and the value of the

20 assets.

21 Q. Okay .. Now, let me step back for a minute. What, if

22 anything, involving the prime bank note did you plead guilty

23 to?

24 A. Nothing.

25 Q. Nothing?

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1 A. (Negative nod.)

2 Q. Now, you were in a conspiracy with David Weekley,

3 correct?

4 A. Yes.

5 Q. All right. Were the investors told everything they were

6 supposed to be told in connection with that conspiracy?

7 A. I have no idea. Some of the investors were relatives of

8 David and they seemed to know what was going on, but I

9 basically had very little communication, if any, with any of

10 the investors.

11 Q.

12 A.

Okay. What is a Ponzi scheme?

A Ponzi scheme i� where an investment advisor will take

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dollars from investors and then repay interest or the returns

from the same funds that were collected if no dollars were

being earned.

Q. Were you involved with a Ponzi scheme?

A. Yes.

Q. Okay. How so?

A. Well, I knew that there was very little if any returns

being generated by the funds, but the investors were being

paid in full according to what they were guaranteed and I knew

that some of their own money was being used or more money was

being raised to pay the investors the return they were

guaranteed.

Q. Okay. What is Binatone?

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1 A. Binatone was a vitamin product that was imported from a

2 European manufacturer to sell in the United States. One of

3 the investments was a plan to distribute Binatone in the

4 United States and it was directed towards -- initially towards

5 horses, race horses because it wasn't approved for

6 distribution to -- for human consumption. So monies were

7 invested in Binatone and the concept was to create a public

8 company out of that Binatone product.

9 Q. Were the investors informed that their

10 to Bina tone?

11 A. I have no idea.

12 Q. You don't have a�y way of knowing that.

13 A. No.

monies were

14 Q. All right. Now, when did you get involved with the

15 defendant, Gregory Caplinger?

going

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16 A. It was early in 1995 when a Florida representative of

17 Greg's called me, Walter Schumacher, and had identified that a

18 doctor had found a very, very good medicine for cancer and I

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had a pretty serious interest in trying to pursue it.

Q. Okay. And when you say pursue it, what do you mean?

A. I had been trying to see the -- pursue it meaning trying

22 to invest in it. Trying to make the project succeed by

23 applying investor dollars to it.

24 Q. Okay. And you testified about a number of documents

25 yesterday. Where did you get those documents?

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1 A. Those documents were given to me and delivered to me by

2 either Walter Schumacher or corning direct from the Dominican

3 Republic from Greg Caplinger.

4 Q. Okay. And who prepared those documents as far as you

5 know?

6 A. There was very little -- I had no idea where they were

7 corning from, but they were prepared by Greg or his staff.

8 Q. Okay. So did you give the defendant any money before you

9 received these documents?

10 A. No, the initial monies were sent after receiving a

11 business plan promoting the medicine and the identification of

12 a patent that was registered in the United States and in the

13 Dominican Republic. ..

14 Q. Show you what's already in evidence as Government's 2C.

15 What is that?

16 A. That is a Nonprofit Operation Basic Assets that were

17 showing -- a personal financial statement.

18 Q. Of whom?

19 A. Of Gregory Caplinger.

20 Q. And is that one of the documents you got initially from

21 him?

22 A. Yes.

23 Q.

24 A.

25 Q.

Okay. Did he prepare that document?

I don't know.

But you didn't prepare that; is that right?

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1 A.

2 Q.

No, I did not prepare this.

Okay. And it describes -- you said it describes his

3 financial profile, correct?

4 A. Yes.

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Q. Did you ever talk to him about his financial profile?

A. Yes.

Q. About some of these figures?

A. Yes.

Q. Did he confirm or deny these figures in 2C?

A. Confirmed.

Q. Okay. Now, the information that he provided you, then,

what did you do with it?

A.

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I reviewed it, analyzed it, saw that there was a

significant value, and I distributed it to a number of

different parties to try to enhance the chances of investors

and lenders to take the project to another level, to

distribute the medicine worldwide.

Q. Okay. Now, in the course of your dealings with the

defendant, did there come a time when you formed a U.S.

corporation to further this project?

A. Yeah. I found that it was probably much better that it

was a U.S. corporation rather than a Dominican corporation so

that any -- anybody that wanted to put a security interest or

put a mortgage on the property, the assets would be here in

the United States or owned in the United States.

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1 Q. And in simple terms, what benefit would that accrue by

2 incorporating in the U.S. in lieu of the Dominican?

3 A. It brought it more credibility that the assets were being

4 audited and being recorded in the United States and that tax

5 returns were being filed in the United States.

6 Q.

7 A.

8 Q.

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Did you discuss the incorporation with the defendant?

Oh, yes.

What did he say?

He agreed to the process.

10 Q. Okay. Now, in connection with that incorporation, was

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there a transfer of assets?

A. Yes.-�

Q. Tell me about that. ....

A. By board resolution and by agreement, the patent was

given to the U.S. corporation identified as Immune

Pharmaceuticals. The equipment was given to the corporation

as assets of ·that corporation. And the purchase orders were

assigned to that U.S. corporation.

Q. Okay. Mr. Kampetis, I want to show you what's marked as

Government's 47 and Government's 13. Ask you to take a look

at 47 first. Tell me if you recognize that document.

A. Yes, I do.

Q. What is it?

A. It is a document that was prepared by the State of

Pennsylvania, the first document, which was a standard

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1 incorporation, articles of incorporation registering the

2 company as a Pennsylvania corporation. It was done by a law

3 firm that I had an association with.

4 Q.

5 A.

Take a look at Government's 13.

The second document is a bill of sale which sold the

6 assets of Greg and his company, World Medical Services, to the

7 U.S. corporation.

8 Q.

9 A.

10 Q.

11 A.

12 Q.

13 A.

14 Q.

15 A.

16 Q.

17 A.

18 Q.

19 13?

20 A.

21 Q.

You said it sold the assets. Is that true?

Yes.

In

It was sold in exchange for stock in that corporation.

Okay. -�

. � . � A majority interest of that stock in that corporation.

Who would get a majority interest?

Dr. Caplinger.

Do you remember the percentage of the interest?

Yes, it was approximately 35 to 40 percent.

Whose signature does that document reflect, Government's

Greg E. Caplinger, president of World Medical Services.

All right, sir.

22 MR. WHISLER: Your Honor, Government's 13 is already

23 in evidence. I'd move Government's 47. Reserve publication.

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THE COURT: 47 will be received.

(Government's Exhibit Number 47 was received into

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1 evidence. )

What is Immuno Pharmaceuticals? 2 Q.

3 A.

4 Q.

5 A.

Immuno Pharmaceuticals was a corporation in Pennsylvania.

Is that the name of the corporation?

Yes, Immuno Pharmaceuticals, Incorporated.

6 Q. The incorporation document that you just talked about

7 pertains to Immuno Pharmaceuticals?

8 A.

9 Q.

Yes, it does.

Now, did you -- did there come a time when you turned to

10 other sources apart from Immuno Pharmaceuticals for funding?

11 A. Well, there was ability in Pennsylvania to privately. sell

12 ten additional invest:Qrs beyond the founders of the company, . '

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13 so we reserved some of the stock to sell to private

14 investors.

15 Q.

16 A.

Okay. Do you remember any of the investors' names?

No. All I knew is that they were in both North and South

17 Carolina.

18 Q. Okay. Now, apart from those stockholders, then, did you

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personally look for any other investment sources?

A. Yes.

Q. Tell me about those.

22 A. I pursued several, you know, private drug companies,

23 nonprofit organizations, religious organizations, government

24 organizations, internationally, a lot of people that were, you

25 know, in the medical profession that could give me some

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1 support, as well as my own dollars.

2 Q. Mr. Kampetis, I want to show you what I've marked as

3 Government's 48 and 49. Ask you to take a look at those,

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4 sir. Tell me if you recognize Government's 48. Tell me what

5 it is.

6 A. This is a document which I prepared and probably a

7 hundred of them that was an accumulation of all of the

8 financial and medical information and affidavits from

9 patients, the articles, the financials, the purchase orders,

10 to give a bit of a prospectus of the entire request for

11 financing.

12 Q....,

Now, this partic�lar one, Government's 48, is directed ..

13 or prepared for what entity?

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A. For Duke Management. There was a request by a local

Duke University had a management company and it was sent

directly to them.

Q. Okay. And you said you used all the financial documents

that you've talked about here previously; is that right?

A. Yes.

Q. Take a look at Government's 49 for me and tell me what

that is, if you recognize that document.

A. This is a document that I wrote which was a letter to a

particular investor signed by me as the CFO of Immune

24 Pharmaceuticals, prepared by me, including the list of assets,

25 the bill of sale of the assets to the corporation, the patent,

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1 a registered government document showing that there was

2 recorded in the Dominican government a value of over $22

3 million worth of assets, laboratory reports showing the

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4 manufacturing of the medicine, the equipment lists, affidavits

5 identifying the assets again by the minister of health of the

6 Dominican Republic identifying that they did not restrict the

7 licensing of the export of the medicine.

8 Q. Again, the same documents that are used in this type of

9 brochure as well.

10 A. Yes.

11 Q. Now, take a look�t the date on Government's 48 there.

12 Tell me what that is.·�

13 A.

14 Q.

15 A.

16 Q.

It says December 29th, 1995.

Okay.

Addressed to our lenders.

Now, at that time did you have any reason to doubt the

17 veracity of the information that was contained in that

18 document?

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A. No.

Q. Okay. Take a look at this document, 49.

the date is on that.

22 A. August 1st of 1996.

Tell me what

23 Q. At that time did you have any reason to doubt the

24 veracity of the information that you attached to that

25 document?

1 A.

2 Q.

3 A.

4 Q.

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I was skeptical as to the values.

In 1996?

Yeah. By the middle of '96 -

Hold that thought.

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MR. WHISLER: Move admission of Government's 48 and

6 49, Your Honor.

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THE COURT: Received.

MR. WHISLER: I'll reserve publication.

9 (Government's Exhibits Number 48 and Number 49 were

10 received into evidence.)

11 Q.

12 1996?

13 A.

Why were you skeptical, Mr. Kampetis, at that time in

Because the clinic was not generating the revenues that

14 were represented and basically we were funding all parts of

15 the operation.

16 Q. All right. You said the clinic was not generating

17 revenues being represented, represented by whom?

18 A. By Greg and his staff.

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Q. All right, sir. Did the defendant ever provide you with

any potential funding sources of his own?

A. There was some evidence that we could send packages to

certain people that he had identified that had an interest.

Q. Okay. List some of those people he told you.

A. Oscar de la Renta who was a Dominican citizen, some

celebrities here in the United States.

1 Q.

2 A.

Did he give you any names?

A few. I don't recall some -- one was a singer

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3 can't recall his name -- who was a supporter of an AIDS

4 program here in the states.

5 Q.

6 A.

Any other individuals?

Some world health organizations that we sent some

7 material to.

8 Q.

9 A.

10 Q.

11 A.

12 Q.

13 A.

14 Q.

15 A.

16 Q.

Did you send these materials to these individuals?

Yes.

Okay. Did you ever hear back from Oscar de la Renta?

No.

Did you ever try.�to contact him yourself personally?

No.

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Did you ever meet him?

No.

Now, along with this information that you sent to -- this

17 documentation you sent to all these different individuals and

18 entities, did you ever send a video?

19 A.

20 Q.

21 A.

22 Q.

23 A.

24 Q.

25 A.

Yes.

Okay. Was the defendant in the video?

Yes.

Okay. Was he speaking?

Yes.

And you've seen that video?

Yes.

1 Q.

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Show you Government's 49A, I believe. Look at that and

2 tell me if you recognize that.

3 A. This was a video that was professionally prepared by an

4 advertising agency which was identifying the clinic and giving

5 basic information about the medicine.

6 Q. Okay.

7 MR. WHISLER: Your Honor please, at this time I'd

8 move admission of 49A. Ask if I can play the tape for the

9 jury.

it.

THE COURT: It will be received and you may play

(Government's Exhibit Number 49A was received into .....

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13 evidence .and played to the jury.)

14 Q. Mr. Kampetis, where is the location of that lecture

15 occurring, if you know?

16 A. I have no idea. It was represented as being down in the

17 Dominican Republic.

18 Q.

19 A.

20 Q.

21 A.

Okay. And do you know who the audience is?

No.

Do you know if there was an audience?

No.

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Q. Now, there was a mention of a microscope in that video.

Did you hear that?

24 A.

25 Q.

Yes.

Do·you know the funding source of that microscope?

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1 A. We bought that microscope.

Who is "we"?

The Diamond Group paid for that microscope.

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2 Q.

3 A.

4 Q. Okay. Now, as far as the beginning of that tape, there

5 was discussion about the discovery of this treatment protocol

6 and there was mention of an individual named Mark. Do you

7 know who Mark is?

8 A.

9 Q.

10 A.

No.

Did you ever talk to the defendant about Mark?

No, qnly identified as a medical student.

Did you ever get -a last name?

No.

11 Q.

12 A.

13 Q. Now, let me turn your attention to a fella named Bob

14 Zelle. Do you know who Bob Zelle is?

15 A. Yes.

16 Q.

17 A.

Who is that?

Mr. Zelle was a retired multi-millionaire that lived in

18 Tennessee who had invested some dollars into the clinic.

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Q. Do you know how much?

A. It was over a hundred thousand dollars, between a hundred

and three hundred thousand.

Q. Did you correspond with him during the course of your

dealings with the defendant?

24 A.

25 Q.

Several times.

Let me show you, Mr. Kampetis, what I've marked as

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l Government's 51 and 52. Take a look at those, please. Tell

2 me if you recognize those documents.

3 A. Yes, both of these documents were prepared by me asking

4 for financial support from Mr. Zelle, and a general document

5 that we had, again, prepared by me, which was directed to

6 several funding sources.

7 Q. Okay. Let me turn your attention to Government's 52.

8 The last paragraph there mentions a wealthy Dominican

9 businessman and a commitment that•s being made. Can you tell

10 .me about that.

ll A.

12 had

13 Q.

14 A.

15 Q.

16 A.

17 Q.

This was identified as Oscar de la Renta•s investment who

supported the proiect.

And what type of dollar figure are you talking about?

$1.5 million.

Did he give $1.5 million to you folks for your project?

No.

Now, it says there that there is a commitment; is that

18 right?

19 A.

20 Q.

21 A.

22 Q.

23 A.

24 Q.

25 A.

Yes.

Why does it say that?

I was told

By whom?

that there was -

Told by whom?

By Greg that there was a commitment of 1.5 million and he

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wanted to have matching funds from our sources to double that

figure.

Q. All right, sir. Did that ever come to pass?

A. No.

Q. Why not, do you know?

A. No idea. It was identified that he had been involved in

other medical projects and couldn't get involved because of

conflicts.

MR. WHISLER: Move admission of Government's 51 and

52. Reserve publication.

THE COURT: .They will be received.

(Government�s Exhibits Number 51 and Number 52 were . � �

received into evidence.)

Q. Who is Vincent Khau?

A. Vincent Khau was a gentleman, a Chinese gentleman from

Arizona who had represented that he was interested in the

project and was interested in developing a market in the

Pacific rim in various countries over there where AIDS and

cancer was growing at astonishing rates and had given us a

commitment to go forward and signed a contrac.t with us in the

Dominican Republic to fund several million dollars.

Q. Did you meet him in the Dominican?

A. Yes.

24 Q.

25 A.

Did you sign the contract there?

Yes.

1 Q.

2 A.

3 Q.

4 A.

5 Q.

6 A.

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And what was the dollar figure?

I can't recall. Three million. I can't recall.

Did he go forward with that commitment?

He did not.

Why not?

He had indicated that he had done -

MR. FALLS: Objection.

THE COURT: You're asking what Khau said? Is

9 that --

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10 MR. WHISLER: Well, I asked if he went forward with

11 -- if Mr. Khau went forward with his investment. Witnesa

12 said no. I said why -�ot?

13 THE COURT: Don't say what he said.

14 Q. Did you have a conversation with him at some point about

15 the defendant?

16 A. No, David had conversations with him about the

17 defendant.

18 Q. Okay. And based upon those conversations, did you

19 correspond with -- subsequently did you correspond with Mr.

20 Khau?

21 A.

22 Q.

23 A.

Yes.

And for what purpose did you correspond with Mr. Khau?

To try to persuade him into going forward with his

24 commitment.

25 Q. Okay. Did you write him a letter?

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1 A. Several.

2 Q. Show you what I've marked as Government's 53. Take a

3 look at that, please.

4 A.

5 Q.

6 A.

7 Q.

8 A.

9 Q.

Yes, this is a letter written by me.

To whom?

To Vincent Khau.

And for what purpose did you write that letter?

To ask him to consider the funding of the program.

Okay. And were you assessing the defendant at all in

10 that article -- or in that letter?

11 A.

12 Q.

13 A.

14 Q.

15 A.

Identifying Greg1

Yes ..

Yes.

''lo,

...

For what purpose?

To promote the ability oh, this -- Vincent Khau had

16 identified an article

17

18 A.


that had been written --

19

20

Q. Wait a minute.

identified.

Don't talk about what Vincent Khau

21 A . Okay.

22

23

Q. Just tell us what you're doing in this letter, okay.

Read the letter so you can refresh your recollection. Tell us

24 what you're doing in that letter.

25 A. Again, trying to persuade him to change his mind to fund

*

349

1 the project.

2 Q. Are you making any claims about the defendant in that

3 letter?

4

5

MR. FALLS: Object to the leading.

THE COURT: Overruled.

6 A. Yes, I was promoting him.

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Q. All right. Very well.

MR. WHISLER: Move admission of Government's 53.


Overruled.

THE COURT: Received. Objection is noted.

(Government's Exhibit Number 53 was received into . ...

evidence.)

Q. What is FINCOM, Mr. Kampetis?

...

A. It was identified as a financial lending institution in

the Dominican Republic.

Q. Okay. And what was your involvement with FINCOM?

A. FINCOM had agreed to fund a project, but I had no direct

communication with FINCOM. That was totally done by Greg.

Q. I'm sorry, could you repeat that.

A. I said FINCOM was an entity in the Dominican Republic. I

had no communication with them. And I had no direct ability

to say yes or no to any kind of loans being taken from

FINCOM. They were taken by Greg.

Q. Okay. Now, did you have occasion to -- let me ask you

,

*

350

1 this. Did the defendant request that you send funds to him?

2 A. Several occasions.

3 Q.

4 A.

Okay. How many occasions approximately?

Every day.

5 Q.

6 A.

Okay. Did you send him monies?

Yes.

7 Q.

8 A.

And how did you send him monies, by what form?

By form of Western Union, by form of bank wire transfers

9 and by form of delivery of cash myself in small amounts.

10 Q. Now, when you say "every day," .how many years did you

11 deal with him?

12 A. Two.

13

14

15

16

17

18

19

20

21

22

23

Q. Are you being literal when you say every day or can you

narrow it down for us?

A. Each time we communicated there was always a request to

continue to fund the project and we did everything we could to

satisfy those needs.

Q. All right, sir. Mr. Kampetis, I'm going to show you

first of all what I've marked Government's SSA through let

me take a look at that -- A through D. Tell me if. you

recognize those documents.

A. Yes. These are Western Union receipts of funds that I

sent from Pittsburgh to the· Dominican Republic.

24 Q.

25 A.

Okay. Directed to whom?

To either Dr. Caplinger or one of his staff.

0 "' II.

351

1 Q. And take a look at Government's 16, 17 and 28 which are

2 already in evidence and tell me if you recognize those

3 documents.

4 A. Yes. The first document is a document again addressed to

5 David and myself identifying that there was some foreclosure

6 that may happen and Greg could be arrested if we didn't send

7 more money.

8 Q.

9 A.

10 Q.

11 more

12 A.

13 Q.

14 A.

15

Do you know -- first of all, what exhibit is that?

That exhibit is 16.

Do you know if he was ever arrested because he didn't

money?

No. ''lll,

. "

You don't know or ...

No, I don't think he was, no.

The ·second document was from Greg's accountant

get

16 identifying specific items that needed paid for: 12,000 for

17 telephone; 5,000 for rent; salaries of 3,000; and research

18 proceeds of about 15,000.

19

20

21

Q. Did you attempt to assemble monies to send down for that

purpose?

A. Yes.

22 Q.

23 A.

And what's the next-exhibit number?

The next exhibit number is Exhibit 28. It identified the

24 reference of ·the funds that were required showing a budget

25 to fund the entire project showing a budget of $2,170,000.

1 Q.

2 A.

3 Q.

4

Signed by whom?

By Gregory.

Okay.

MR. WHISLER: 16, 17 and 28 are already in.

352

S Government would move admission of Government's SSA through

6 D.

7 THE COURT: Received.

8 (Government's Exhibits Number SSA, Number SSB,

9 Number SSC and Number SSD were received into evidence.)

10 Q.

11 A.

Did you ever go to the defendant's house?

There was a premises in the Dominican Republic in the

12 center of the city t~t was -- yes, it was his house.

13 Q •.

14 A.

15 Q.

. ~ ~

So you did go to his house.

Yes, I did.

Tell me about that house. What did it look like? What

16 did you see?

17 A. It was a very nice estate. Completely surrounded by a

18 very large, twelve foot cement wall. There were -- it was a

19 nice

20 Q. Did you go inside?

21 A. Yes.

22 Q. What did you see inside?

23 A. I saw, you know, limited amounts of furniture, but very

24 well -- you know, it was a very nice house.

25 Q. Who was living there?

•

353

1 A. Gregory was living there.

2 Q. Was anybody else living there?

3 A. At the time, yes. His wife.

4 Q. What was her name?

5 A. I can't recall. Claudia -- I can't recall.

6 Q. If you can't remember, that's fine. Was anybody working

7 there in the house?

8 A. Yeah, there were a couple of guards that were identified

9 as government employees.

10 Q.

11 A.

12 Q.

Who identified them as government employees?

Greg.

Why were the gov~rnment employees there at the house, do . '- ..

13 you know? Did he tell you?

14 A. No, just as servants. They were given to him by the

15 government.

16 Q.

17 A.

18 Q.

Okay.

Because of his military status.

Okay. Show you what's already in evidence as

19

20

21

22

23

Government's 21. Ask you to take a look at that. Tell me if

you recognize that.

A. This could be the house. There's a limited shot of it,

but it does look like the house.

Q. Fairly and accurately depict

24 A. Yes.

25 Q. -- your testimony about the house?

•

354

1 A. Yes.

2 Q. Do you have an estimation based on your observation how

3 big the house was?

4 A. I imagine about, about four or five thousand squares,

5 square feet.

6 Q. Did the defendant have any other residences that you

7 saw?

8 A. No.

9 Q. Okay. Did you ever go to any other places with him, any

10 other residence with him?

11 A. No, not a residence, no.

12 Q. Now, how much mo~ey do you -- do you have an estima~ of

13 how much money you spent during the course of your dealings

14 with the defendant on business expenses?

15 A. All of my savings. Approximately maybe a hundred

16- thousand dollars.

17 Q.

18 A.

What did that go for?

Various items. Express mail, postage, computers, the

19

20

21

22

23

microscope, wire transfers, software for the computers.

Q. Okay. You talked about the purchase orders earlier.

you ever receive any instructions from the defendant

forbidding you to use those purchase orders?

A. No.

Did

24 Q. Show you what's marked as Government's 22 ·and 22A. Ask

25 if you can take a look at those documents. Tell me if you've

355

1 ever received either of those documents.

2 A. No.

3 Q. Okay. Thank you. Now, as time progressed how did your

4 relationship with the defendant come to a close?

5 A. It somewhat decayed when I wasn't able to continue to

6 fund the project.

7 Q.

8 A.

I'm sorry, repeat that, please.

The relationship decayed and ended early in '97 when I

9 couldn't continue to produce funds for the project.

10 Q. Now, did you ever receive any correspondence from the

11 defendant at the conclusion of your relationship?

12 A.

13 Q.

14 A.

After the conclu§ion of my --

At the conclusion of your relationship.

There was some correspondence every couple of months but

15 nothing material. I mean, there was some requests for an

16 affirmation of the relationship.

17 Q. Show you what I've marked as Government's 57. Take a

18 look at that document. Tell me if you recognize that

19 document.

20 A. August of 1997 I received this document. It was sent

21 from the Dominican Republic to my facsimile in Pittsburgh.

22 Q. Whose handwriting?

23 A. Greg's handwriting.

24 Q. And what's the import of that document?

25 A. Well, he asked for·an affidavit to identify with my name,

!!l "' '!I g

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• Q cu ... :f

~

356

1 age, social security number, telephone number to indicate that

2 I acted independently on all activities related to the monies

3 and that I directed the funds; that he and I did not have any

4 knowledge of investors or any kind of other knowledge related

5 to David and the Diamond Group's involvement.

6 Q. Did you furnish him with the affidavit that he

7 requested?

8 A.

9 Q.

10 A.

No, I refused.

Why did you not give that to him?

Because that wasn't the case. We had assigned the assets

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

of ImmuStim to the Diamond investors, the Diamond Group that

had provided the fund~.

Q. All right, sir.

MR. WHISLER: Move admission of Government's 57, if

Your Honor please.



evidence.)

THE COURT: Want to pass it now?

MR. WHISLER: I'm going to ·pass it in just a second,

Your Honor. I'm just about done. Last question.

Q. Now, the documents you had reflected Flavia Berroa.

A. Yes.

Q. And what was the defendant's relationship·with Flavia

Berroa?

m ~ ~

~ 5! Cl z IU D.

• 0 ~ :I! :!i I&.

357

1 A. There was a personal relationship and she was identified

2 as the accountant for the corporation in the Dominican

3 Republic.

4

5

6

7

8

Q.

A.

Q.

A.

Q.

Do you

Yes, I

Where

In the

Okay.

9 defendant?

Yes.

see her in the courtroom today?

do.

is she sitting?

seat behind the defense counsel.

Had you met her in your dealings with the

10 A.

11 Q. During the -- at the conclusion of your relationship, had -12 there been any commercialization or marketing of the product?

-~ ~ ~

13 A. The product was manufactured. The licensing was

14 approved, but there were no commercial sales.

15 Q. Okay. Did you have any discussions with the defendant

16 about personal monies he was going to invest at any time?

17 A. There was a lot of conversation about money that had been

18 invested.

19 Q. How much?

20 A. Millions·of dollars.

21 Q. Of whose?

22 A. Of Greg's invested in the project.

23 Q. Did he tell you that?

24 A. Uh-huh.

25 Q. Okay. Well, when you were unable to furnish any further

358

1 funds for the project, did or did not the defendant provide

2 any personal monies toward the project?

3 A.

4

I have no knowledge of that.

MR. WHISLER: That's all the questions I have, Your

5 Honor. I move to publish the new exhibits.

6

7

8

THE COURT: All right.

(Government's exhibits were published to the jury.)

THE COURT: You may cross-examine. We'll have to

9 interrupt your cross-examination for the morning recess, but

10 get a little of it in, if you will, please, Mr. Falls.

11 Mr. Falls, why don't you just wait about starti~g

12 your cross-examinati~. Let them look at these exhibits and .. 13 then we'll take our morning recess.

14 (Pause.)

15 THE COURT: Let's take our comfort recess at this

16 time. You can take the exhibits with you if you like back in

17 the jury room and continue to look at them during the recess.

18 We'll be in recess for twenty minutes.

19

20

21

22

(Short recess at 10:20 a.m.)

THE COURT: All right. You may cross-examine, sir.

HARRY KAMPETIS

CROSS-EXAMINATION

23 BY MR. FALLS:

24 Q.

25 A.

Good morning, Mr. Kampetis.

Good morning.

~ f$ g

' ~ C, z w CL

• 0 w ... 2 cc 12.

359

1 Q. I want to go over a little bit of your testimony first

2 from yesterday. Yesterday do you remember being asked about a

3 Dr. Winters, Dr. Thomas Winters?

4 A.

5 Q.

Yes.

Do you remember testifying that you never talked to Greg

6 about Dr. Winters?

7 A. Yes.

8 Q. Okay. And you were also asked about the location of

9 Sussex College of Technology. Do you remember that?

10 A. Yes.

11 Q. Do you remember testifying that you never asked Dr.

12 Caplinger about that either?

13 A. Yes.

14 Q. Now, yesterday you also testified about certain

15 publications that you had seen from Dr. Caplinger; is that

16 right?

17 A. Yes, I did.

18

19

20

21

22

23

24

25

Q. And you actually saw those publications, did you not?

A. Yes, I did.

Q. And so did you also see the book written by Dr.

Caplinger?

A. No, I did not.

Q. You've not seen this book?

A. No.

Q. But you did see at least one publication, the Salud

1 Integral.

2 A. Yes, I did.

3 Q. You saw other publications as well, correct?

4 A. . One other.

5 Q. So he did publish.

6 A. Yes.

360

'7 Q. Now, you also testified that in August of 1996 you were

8 skeptical of the value of World Medical Services; is that

9 right?

10 A. Yes.

11 Q. But you still pu~ money into the ImmuStim project after

12 that, correct?

13 A. Yes.

14 Q. Now, did there come a time -- now, you were affiliated

15 with the Diamond Group, with David Weekley, right?

16 A.

17 Q.

Yes, I was.

Did there come a time when the Diamond Group sent a wire

18 transfer down to the Dominican Republic in the amount of

19

20

21

$825,000?

A. Yes.

Q. And prior to sending that wire transfer down there, you

22 had instructed Dr. Caplinger to go ahead and take control of

23 about 1 or $2 million worth of the ImmuStim medicine, right?

24 A.

25 Q.

He already had control of that medicine.

Okay. But this $825,000 that was sent down there, that

0, 0)

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e

361

1 was to be used to pay for the medicine that had already been

2 brought over, right?

3 A.

4 Q.

As I understood, yes.

So that $825,000 was to be used to pay a debt that had

5 already been incurred.

6 A.

7 Q.

Yes.

Now, you testified about an audit that was provided to

8 you by Dr. Caplinger and this audit was one of the things that

9 provided the basis for you deciding to fund this project; is

10 that correct?

11 A. One of several.

12

13

14

15

16

17

18

19

20

. 21

22

23

24

Q. Okay. And you've already identified the audit, so if I -~ ... . "

handed you a copy of it, would you recognize it again?

A. Probably.

Q. I'm going to hand you what's been marked and entered as

Government's Exhibit 3.

MR. FALLS: May I approach, Your Honor?

THE COURT: Yes, sir.

Q. Now, looking on this page here, this audit is for the

years 1985 up and through -- to 1994; i~ that correct?

A. It's identified as such, yes .

Q. Okay. And the total receipts of World Medical Services

is about $12,575,000 during that fiscal ten year period; is

that right?

25 A. Yes.

1 Q.

2 A.

3 Q.

362

Okay.

As represented here.

And total disbursements is approximately $12,443,000; is

4 that what that shows?

5 A.

6 Q.

That's what this shows.

So if you'll hand me that, sir. So what that shows is

7 that over a fiscal ten year period, this company made about

8 $132,000 as shown in this audit; is that right?

9 A.

10 Q.

11 year.

12 A.

13 Q.

Yes.

So that comes out to an average profit of about $13,000 a

It was a nonprofit company. ., .. ~ ~

Okay. But that's what's showing the amount -- the

14 receipts over disbursements, correct?

15 A.

16 Q.

Yes.

So it's not a company that's making millions and millions

17 of dollars in profit as might be represented.

18 A. Yes.

19

20

21

Q. According to the information Dr. Caplinger provided to

you, this World Medical Services, it took ten years to make

$132,000; is that right?

22 A.

23 Q.

As represented, yes.

Okay. Now, you've also testified about purchase orders;

24 is that correct?

25 A. Yes, I have.

e

363

1 Q. Would you recognize those same purchase orders if you saw

2 them?

3 A.

4 Q.

5 A.

Yes.

That you've already identified?

Yes, I would.

6 Q. Okay. Now, these purchase orders, they weren't exactly

7 firm purchase orders, were they?

8 A. Well, the one company was a distributor. They were to

9 distribute to other companies. They were a distributor of

10 other products and services. The firmness of the purchase

11 orders weren't that we were to receive a check for that amount -12 of money, only that there was a sincere interest in purchasing

13 the medicine.

14 Q.

15

Okay ..

MR. FALLS: May I approach

THE COURT: Yes, sir. 16

17 MR. FALLS: -- with Government's Exhibit 6, 7 and

18 7A.

19

20

21

22

23

Q. Sir, I'd ask you to take a look at those documents

again. Are those purchase orders?

A. Yes.

Q. Now, what does it say right there at the bottom of that

purchase order right beside the three stars?

24 A. "All is based upon production and to be purchased over a

25 reasonable period of time."

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364

1 Q. All right. So they were not going to give you the money

2 until you could actually give them the product.

3 A.

4 Q.

Correct.

All right. So they were contingent purchase orders. You

5 had to give them the product before they were going to give

6 you the money.

7 A. The purchase orders were for the product so naturally

8 there would have to be product delivery.

9 Q. And Laboratories Ameripharma had the same sort of

10 agreement.in their purchase order down there at the bottom,

11 didn't they?

12 A.

13 Q.

Yes. I met wit~the gentleman who signed this document. ~ ~

Okay. Let's speak about that. Mr. Jaime -- how do you

14 say that?

15 A. Aristy.

16

17

18

19

20

21

22

23

Q. Jaime Aristy. He is from Ameripharma. You met him,

right?

A. Yes, I did.

Q. You spoke with him, correct?

A. Yes.

Q. Now, were you representing to investors that these

purchase orders were firm; that this money had already been

committed?

24 A.

25 Q.

No.

Now, you testified yesterday that you went down to the

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365

1 Dominican Republic and you saw approximately 500 bottles of

2 ImmuStim product. Do you remember that?

3 A. Yes.

4 Q.

5 A.

Okay. Where did you see it?

In Dr. Caplinger's office.

6 Q. Let's go to Government's Exhibit 8. Do you remember

7 talking about the news release?

8 A. Yes.

9 Q. The foreign angel thing?

10 MR. FALLS: May I approach, Your Honor?


12 Q. Now, tell me SOtn'ithing. What's the letterhead that that ... • 13 news release is on?

14 A. Immune Pharmaceuticals.

15 Q. And at that time what was the status of Immune

16 Pharmaceuticals?

17 A. Immune Pharmaceuticals was a Dominican corporation for

18 profit and World Medical Services was a Dominican corporation

19

20

21

not for profit.

Q. Okay. Now, what does this say about where this document

was sent from and who it was sent to?

22 A. From myself to David Weekley.

23 Q. Okay. And this news release, it was never actually

24 released, was it?

25 A. I have no idea.

.-. ;~

• 0 w I&.

2

~

1 Q.

2 A~

You wrote this news release, didn•t you?

No, it was a translation I retranscribed from a

3 handwritten document that I had received.

4 Q.

5 A.

A handwritten document in Spanish.

No, it was translated.

366

6 Q. Okay. So you didn't write this news release; is that

7 what you're saying?

8 A. No, I copied -- anything that is in the package was never

9 produced by me. It was only a recopy and put in better form

10 to be distributed.

11 Q. · Okay. Well, y~u_wrote a lot of things for Immuno

12 Pharmaceuticals and ~e Diamond Group, didn't you?

13 A.

14 Q.

. ._ ... Yes, I did.

Do you remember calling and telling David Weekley when

15 you write things, people want to write you checks?

16

17

18

19

20

21

22

23

A. At times, yes. I mean --

Q. You're pretty good at that, aren't you?

A. At what?

Q. At writing.

A. Yes.

Q. You're pretty good at manipulating people into giving you

money, aren't you?

A. In circumstances, yes. Loans. I had done that all my

24 career.

25 Q. Now, Government's Exhibit BA, this is something that you

•

367

1 testified that Dr. Caplinger sent you in September of 1995.

2 Government's Exhibit SA, have you hold that. Is that what he

3 sent you, the summary of ImmuStim or sort of a summary of it?

4 Is that what that is?

5 A. Yes.

6 Q. Okay. What does the first line say, the very first

7 line?

8 A. "ImmuStim is an alternative, it's not a panacea, it's not

9 a cure, it's not a miracle. It's just another possibility."

10 Q.

11 A.

12 Q.

13 A.·

14 Q.

15 cure.

16 A.

17 Q.

Just another possibility.

Possibility.

As stated by Dr.~Caplinger, right?

Correct.

So Dr. Caplinger is not holding this thing out as a

No.

Eventually you were holding it out as a cure to potential

18 investors, weren't you?

19

20

21

22

23

A. No.

Q. We'll get to.that later. Let's go to Government's

Exhibit 9, the curriculum vitae of Dr. Caplinger. Do·you

remember identifying that yesterday?

A. Yes.

24 Q. Do you remember the documents that you said were

25 submitted to you by Dr. Caplinger?

ii ~ ~

' i i w Q.

e 0 U,I I&.

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2

368

1 A. Yes.

2 Q. This is one of the documents that's in that exhibit and

3 this is a document from Metropolitan Collegiate Institute,

4 correct?

5 A. I don't recall this document specifically, but, yes,

6 that's where it is identified from.

7 Q. And that was one of the places Dr. Caplinger told you he

8 had gotten his degree.

9 A. I really didn't look into anything of his degree, just

10 that there was a license on the wall.

11 Q. You didn't look at anything about his degree. -12 A. Only that -- no. No, I did not look into his degree. He ,-.

" ~ 13 was practicing medicine.

14 Q.

15 say?

16 A.

What does it say there about the "P.S. 11? What does that

17

18

19

20

21

22

23

24

25

"Our institute due to the 'Educational Reform Act of

1988' has ceased to function. However, archives are

maintained at: Medical College, 7-11 Kensington High Street,

London, England."

Q. Thank you. So Dr. Caplinger furnished you with

information showing that the place he had gotten his medical

degree, due to the Educational Reform Act, didn't even exist

anymore. He gave you that information right here in the

packet, right?

A. Okay, yes.

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!

369

1 Q. Now, we just looked at a video a minute ago. Do you

2 remember playing that video up here?

Yes. 3 A.

4 Q. Can you tell me where in that video Dr. Caplinger says

5 anything about his credentials?

6 A. No where.

7 Q. Can you tell me where in that video you heard anything

8 about Dr. Caplinger bragging about himself?

9 A.

10 Q.

No.

Can you tell me where in that video you heard anything

11 about Dr. Caplinger making money?

12 A. No.

13 Q.

14 A.

15 Q.

16 A.

17 Q.

. .... " No, he's just talking about ImmuStim.

Correct.

The focus of this whole thing is ImmuStim, is it not?

Yes.

You're marketing -- this whole -- your whole decision to

18 fund this project is to market ImmuStim.

19

20

21

22

23

A. Correct.

Q. You're not going to cut Dr. Caplinger up into a thousand

pieces and sell him across the world. You want to sell

ImmuStim, right?

A. Yes.

24 Q.

25 A.

Your focus is the product.

Yes.

{i

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370

1 Q.

2 A.

Your focus is the profits to be made from the product.

And the benefit that the product would bring.

3 Q. Now, let me just back up. I wasn't sure I got this.

4 Yesterday you testified at the time you met Dr. Caplinger,

5 you'd been laid off from your job, right?

6 A. Yes.

7 Q. Now, you also testified about a lady named Susan Brana,

8 right?

9 A. Yes.

10 Q. All right. And she ripped you off, you and David off for

11 about $2 million.

12 A. Yes.

13 Q. But about

·-~ ..

out of that $2 million, she. sent back about

14 570,000, right?

15 A. No, she paid interest.

16 Q. Well, 570,000 was sent back to you and essentially

17 transmitted to the Diamond Group, right?

18 A.

19 Q.

20 A.

21 Q.

22 A.

23 Q.

That was her interest payments.

Okay. Except for the 180,000 you kept for yourself.

Didn't keep any money.

Okay. You pled guilty, didn't you?

Yes, I did.

All right. Are you saying when you pled guilty, you

24 didn't know what you were doing?

25 A. Knew precisely what I was doing.

•

371

1 Q. You knew precisely what you were doing. Let's go over

2 your indictment.

3 MR. FALLS: Your Honor, if I may approach the

4 witness

5

6

7

8 Q.

9 A.

10 Q.

THE COURT: Yes, sir, you may.

MR. FALLS: -- with Defendant's Exhibit Number 9?

THE COURT: Yes, you may.

Now, you pled guilty to sixteen counts of fraud, right?

Yes.

Paragraph 10 of the indictment -- you recall going

11 through this indictment? I'm sure you did.

12 A.

13 Q.

Yes.

Okay. You recall that between March -- or February '94

14 and March of '95, Kampetis received approximately $570,000 in

15 original ,Diamond Group funds of which you returned 390,000 to

16 Weekley and kept $180,000 for yourself.

17 A. I have receipts to show more than $200,000 worth of

18 expenditures.

19 Q.

20 A.

21 Q •

22 A.

23 Q.

That's not what I'm asking you.

Yes.

You kept $180,000 for yourself.

No, I kept it for the expenses of the project.

So when you pled guilty to this indictment, you weren't

24 pleading guilty to what they charged you with. They got it

25 wrong; is that right?

1 A.

2 Q.

372

No, they got it right.

Okay. Now, by the time you all met up with Dr. Caplinger

3 or actually, you say you met up with Dr. Caplinger for the

4 first time in 1995, right?

5 A.

6 Q.

Uh-huh.

So if you sent letters out to investors saying you knew

7 Dr. Caplinger in '93 and '94, you'd be lying, wouldn't you?

8 A. Yes.

9 Q.

10 A.

Okay. Did you do that?

Well, there was communication of Dr. Caplinger's

11 existence. Walter Schumacher communicated with me earlier. -

12 Q. But you never wrote -- you never sent out any letters ·,--.,

13 about you being invol;ed since '93 or '94 or anything lik~

14 that.

15 A.

16 Q.

This many years, I don't recall.

Okay. Well, by the time you all got up with Dr.

17 Caplinger, y'all were running out of money, the Diamond Group,

18 you and David Weekley, right?

19

20

21

22

23

A. The Diamond Group, not I. I mean, I wasn't the Diamond

Group.

Q. Now, when y'all first got up with Dr. Caplinger, we've

heard testimony that the interest was just providing him with

a loan. Is that accurate?

24 A. Correct.

25 Q. The interest wasn't more than just providing him with a

0, co ; ~ ~ ~ C, z w Q.

• Q w ... ::i a: 12

373

1 loan?

2 A. The interest or the funds?

3 Q. Your interest in terms of what you wanted to do. Did

4 just want to give the man a loan or did you want to get a

5 piece of the pie?

6 A.

7 Q.

8 A.

9 Q.

Oh, I wanted to get a piece of the company.

Okay. You and Weekley both.

Yes.

Now, while this is going on and your contacts with Dr.

you

10 Caplinger, sort of fleshing that out, you're still in contact

11 with Susan Brana, right?

12 A.

13 Q.

14

She had ceased cQmmunicating. . ..

She had ceased communicating, all right.

MR. FALLS: Your Honor, may I approach with

15 Defendant's Exhibit 10?


17 Q. Now, you got up with Dr. Caplinger in March and April of

18 1995; is that correct?

19 A. Yes.

20 Q. What's the date of the fax on that letter?

21 A. April 16th of 1 95.

22 Q. All right. Who's it to?

23 A. To myself.

24 Q. Who's it from?

25 A. Sue Brana.

374

1 Q. All right. Now, in this letter y'all are talking about

2 note deals, gold deals and truck stop deals. Do you see

3 that?

4 A. Yes.

5 Q. Okay. So you are still in contact with Susan Brana.

6 A. Yes.

7 Q. All right. And these Diamond Group investors, do they

8 know what's going on with these gold deals and truck stop

9 deals?

10 A.

11 Q.

I have no idea.

Okay. Now, when you got up with Dr. Caplinger, you and

12 Weekley started fleshing things out with Dr. Caplinger. Did ~ .

13 y'all tell him about che financial situation that the Diamond

14 Group was in?

15 A. Yes.

16 Q. You did. So Dr. Caplinger was always informed about what

17 was going on with the Diamond Group or the funds, ·the state of

18 the funds.

19

20

21

22

23

24

25

A. He knew that we were trying to collect funds from Ms.

Brana.

Q. If you heard a conversation going on between yourself and

Mr. Weekley, would you recognize your voice?

A. Most probably.

Q. Would you recognize Mr. Weekley's voice?

A. Most probably.

•

375

1 MR. FALLS: Your Honor, at this time I would ask

2 permission to play Defendant's Exhibit 11.

3 THE COURT: Yes, sir, you may.

4 (Defendant's Exhibit Number 11 was played to the

5 jury.)

6 Q. What do you mean by telling Greg that you're giving him

7 such a false sense of security, it's ridiculous?

8 A. I don't know what that's referencing. I didn't hear

9 enough of the conversation.

10 Q. So you have no idea what that's talking about, a false

11 sense of security.

12 A.

13 Q.

No. ~ .

Now, were y'all doing other things down in the Dominican

14 Republic without Dr. Caplinger knowing about it?

15 A.

16 Q.

17 A.

No.

What's WMS Banking Group?

Dr. Caplinger had introduced contact to the bank

18 administration in the Dominican Republic and we felt that it

19

20

21

would be best to start our own bank.

Q. "We" meaning who?

A. David, myself and Greg.

22 Q.

23 A.

24 Q.

25

Okay. And Greg.

Yes.

All right.

MR. FALLS: Your Honor, I'd like to approach the

•

376

1 defendant.

THE COURT: Approach the witness? 2

3 MR. FALLS: Approach the witness with Defendant's

4 Exhibit Number 11.

5

6

7

THE COURT: Yes, sir, you may.

THE CLERK: Judge, 11 is the tape.

THE COURT: You got your exhibit numbers wrong.

8 Check with the clerk.

9

10

11

12 Q.

MR. FALLS: What number?

THE CLERK: Exhibit Number 11 was the tape.

MR. FALLS: .Okay. 12, I 'm sorry.

Sir, I'd ask you~to take a look at this and see if you . ' ...

13 can identify that document.

14 A.

15 Q.

I prepared this document.

You prepared that document. That relates to WMS Banking

16 Group; is that right?

17 A.

18 Q.

19

20 Q.

21 A .

That is correct.

Would you flip up to the next page.

(Witness complied. )

Whose names appear on that document?

Mine and David's.

22

23

Q. All right.

document?

Where's Dr. Caplinger's name on that banking

24 A.

25 Q.

Dr. Caplinger provided the contacts.

That's not what I'm asking you.

•

1 A.

2 Q.

377

His name is not on this document.

And where anywhere throughout this entire brochure is the

3 name Dr. Gregory Caplinger even mentioned?

4 A.

5 Q.

6 A.

Not at all.

Not at all. This was you and David's baby, wasn't it?

No, it was not. I had no contact with any of the

7 Dominican bank officials. I didn't know any of them. They

8 were introduced to us by Greg. I didn't know any of them.

9 Q. I'm not asking about introducing; I'm asking about who's

10 trying to form this bank. Whose name appears on it?

11 A.

12 Q.

13 A.

14 Q.

15 A.

16 Q.

17 A.

18 Q.

My name appears ~nit.

And David Weekley. . .... . '\

And David Weekley's.

And not Dr. Caplinger.

No.

Thank you.

Do you want this back?

No. If you will flip up to page 5 of that document,

....

19

20

21

please, sir. If you'll go down to where it says, "Uniqueness

of the Professional Service."

A. Yes.

22 Q.

23 A.

24 Q.

Do you see that first paragraph there?

Uh-huh.

Does it show -- do you see there where it says, "The

25 banks's management is well represented by the latters'

378

1 financial commitment of $25 million of capitalization and U.S.

2 currency cash deposits." Do you see that?

3 A.

4 Q.

5 A.

Yes.

That's a total lie, isn't it?

No. At the time we were searching out for those kind of

6 funds.

7 Q. I'm not asking you what you were searching for. You said

8 you had a commitment of $25 million.

9 A. That's what it says, yes.

10 Q. Now, a moment ago you testified that your first contact

11 with Dr. Caplinger was in March or April of 1995; is that~

12 right?

13 A.

14 Q.

15

It's been a lot of years. Yes, that's what I recall.

Okay.

MR. FALLS: Your Honor, may I approach with



18 Q. Sir, I'm showing you Defendant's Exhibit 13 and I'd ask

19

20

21

you if you can identify that?

A. This is from me. A facsimile to a gentleman from David

and myself.

22 Q. Okay. And in this document you indicate that "David

23 Weekley and I have worked on Dr. Caplinger's ImmuStim V since

24 October of 1994."

25 A. As I said, we did start working with Dr. Caplinger

379

1 earlier, but we didn't send any funds until May of '95.

2 Q. I thought that you testified that David Weekley didn't

3 even learn about Dr. Caplinger until March or April of 1995.

4 A. Well, he didn't have direct -- he knew everything I was

5 working on. David knew everything I was working on, but he

6 didn't have any direct material or any kind of correspondence

7 at all with Dr. Caplinger.

8 Q. Let's nail it down. When is the first time you even

9 caught wind of Dr. Caplinger?

10 A. When I first was contacted by Bernard Veloit, then later

11 Walter Schumacher. My correspondence shows that on April_ 17th

12 of 1995 was the o~~ of the first direct correspondence with ~ ~

13 Dr. Caplinger.

14 Q.

15 A.

Okay.

Could have been earlier. There was several projects I

16 had been trying to promote.

17 Q. Okay. Let me see this again. And you also state to this

18 gentleman that it has always been a humanitarian effort; is

19

20

21

22

23

that right?

A. Yes.

Q. That's not exactly true either, is it?

A. Well, every humanitarian effort requires huge amounts of

capitalization.

24 Q. Let's cut to the chase. You're trying to·make a bunch of

25 money off this project; is that right?

~ ~ i;i

~ i Cl z w 0.

•

380

1 A. As well as other things, yes.

2 Q. Now, sometime in May of 1996, did things start to get

3 real bad for the Diamond Group?

4 A. They weren't too good through the whole process, but May

5 '96, yes, I would imagine they were pretty bad.

6 Q. All right. Do you recall getting a fax from David

7 We~kley stating to you how in the world are we going to

8 control all these problems we got?

9 A.

10 Q.

Yes.

And do you recall in that fax Mr. Weekley telling you

11 that he can't talk to-Greg about it?

12 A.

13

I don't recall ~at specifically.

MR. FALLS: Your Honor, permission to appr_oach with

14 Defendant's Exhibit 14.


16 Q. I'm showing you what's been marked Defendant's Exhibit 14

17 and ask if you .can identify that document?

18 A. It was to me from David.

19

20

21

22

23

24

25

Q. Okay. At the top what's the date on that document?

A. 5/30 of 1 96, but that date should not be considered exact

because David's fax machine never had the right date on it.

Q. So it could have been a day before, day later, week

before, week later.

A. Could have been -- this is May of '96.

Q. Okay.

381

1 A. Yes, it could have been in that range.

2 Q. Ask you to look at this first two lines and if you will,

3 please, read that.

4 A. "I believe in miracles in prayer. I'm not trying just to

5 be negative to bring you down or to cause you to want to avoid

6 contact. I can't talk to Teresa about it," which was David's

7 wife. "I can't talk to Greg about it."

8 Q. Okay.

9 A. "I don't have anyone down here to confide in because of

10 the embarrassment, the potential financial losses to my

11 father, my clients, the rumors that will start."

12 Q. And it further ~es on in the next sentence to state that ~ ~

13 he doesn't trust anybody with the information.

14 A. "I don't trust anyone with the information. I hate I am

15 having to even share this kind of stuff with you but I really

16 do not know what to do."

17 Q. Okay. And does he talk in there, in paragraph 9, does he

18 talk about breaking rules when the goal is within reach?

19 A.

20 Q.

21 A.

Where?

Number 9.

"Breaking the rules only when your goal is within reach.

22 Rules broken out of compliance previously were sustainable

23 with new cash infusion to carry us. Punitively the effect has

24 now proven disastrous."

25 Q. Okay. Thank you, sir. Now, in late July or August of

382

1 1996, you and David Weekley learned that Dr. Caplinger had

2 been convicted of practicing medicine without a license in

3 North Carolina. Do you remember that?

4 A.

5 Q.

6 A.

That was the second -- yes. Yes.

Do you remember that happening?

I didn't know there was any kind of conviction. All I

7 knew there was an article written on Dr. Caplinger from Boone,

8 North Carolina.

9 Q. And after that you continued to send money to the

10 ImmuStim project, didn't you?

11 A. Yes.

12 Q. Now, let me ask -you this. Did you and David Weekley . ~ ~

13 immediately get on the horn with all your investors and tell

14 them about this thing that had happened with Dr. Caplinger?

15 A. They weren't my investors. I didn't communicate with

16 investors.

17 Q. Okay. So far as you know, nobody told the investors

18 about that.

19 A.

20 Q.

21 A.

Well, I knew David's father knew about it.

Okay.

Because he had communicated. I didn't know about any of

22 the other investors.

23 Q. So is it your testimony that David Weekley was the point

24 man with the investors?

25 A. He had always been -- I had no investors. He had the

~-

I w a.

•

383

1 money before I even met him.

2 Q. So the communications that were given over to investors,

3 those were made by David Weekley.

4 A. Correct. Except for the stock .investors in Immune

5 Pharmaceuticals which did communicate with David and Greg.

6 Q. I want to move forward a little bit now. Now, again,

7 I've gone. over this before. Do you remember telling people in

8 1996 that you'd been involved with the ImmuStim project since

9 1993 this time?

10 A. Not so much the ImmuStim project but in the search for

11 cancer medicines. I don't recall if that's specifically what

12 I had said about Dr. ~aplinger. ' ....

13 MR. FALLS: May I approach the witness with


15 · THE COURT: Yes, sir.

16 Q. Showing you what's been marked Defendant's ~xhibit 15.

17 Ask you if you can identify that?

18 A. Yes. This was a board member of one of the major drug

19 companies in the United States.

20 Q. And you sent him that letter on October 1st, 1996?

21 A. Y~s.

22 Q. Or this is a letter that you sent?

23 A. Yes, it is.

24 Q. Okay. I· want you to look at the last paragraph.

25 A. "It is truly a revelation in immune system therapy. I

384

1 have tracked the progress for thirty months."

2 Q. Okay. Thirty months, that's two and a half years. That

3 would knock it back to sometime around 1993 that you're

4 representing that you've been tracking the progress of

5 ImmuStim.

6 A. This may have been a misprint or an exaggeration on my

7 part, but it was never intended to indicate the exact date.

8 Tracked the progress for thirty months because of the fact

9 that we had evidence of the information of what had transpired

10 prior to the work, the testing that had been done for many

11 years even prior to thirty months. But we tracked the

12 progress because of the fact that we saw the evidence of the --~ .

13 animal testing and the patient studies. So that tracking was

14 part of some of the representation that was given to us.

15 Q. Okay. And you also state in this letter that ImmuStim is

16 ready for world distribution and that many scientists and

17 doctors feel the same way.

18 A. Yes.

19 Q. Okay. David Weekley know you were sending out all these

20 letters to people?

21 A. Yes.

22 Q. He did?

23 A. He knew I was marketing, yes. He· knew I was sending as

24 many as I possibly could.

25 Q. Okay. Were you sending out packets of information

"' '° "' ~

~

! ~ 0 z w Q.

• 0 w II.

::E

ls II.

I 385

1 without Dr. Caplinger's knowledge?

2 A. He knew we were sending material. He never asked for any

3 kind of confirmation of where we were trying to raise funds.

4 Q.

5 A.

That's not what I asked you.

Yes.

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Q. Were you sending out stuff without his knowledge?

A. No, he had knowledge of he didn't know specifically

who I was sending it to, but he knew what I was sending.

MR. FALLS: Your Honor, I have Defendant's Exhibit

16 which is a tape provided in discovery by the government.

May I play it at this time?

THE COURT: . .,Ye-s, sir, you may. •

{Government's Exhibit Number 16 was played to the

jury.)

Q. · Can you explain that?

A. I was disclosing the information that -- what I was

engaged to do.

Q. You were disclosing it after the fact.

A. They knew I was sending them out.

Q. Now, your goal this whole time is to raise money to get

the project off the ground so eventually you can make money;

is that right?

A. Yes.

Q. And you're making these solicitations in these letters

after Dr~ Caplinger has sent you information about his medical

i g

' ~ 0 z w Cl.

e

1

2

3

4

386

school not even existing anymore, and you're sending these

solicitations out after you know about Dr. Caplinger being in

trouble for practicing medicine without a license in North

Carolina, correct?

5 A. The project -- the information was not about Dr.

6 Caplinger. It was about ImmuStim.

7 Q. That's right, the focus was not on Dr. Caplinger, was

a. it? It was on ImmuStim; is that right?

9 A. Correct, yes.

10 Q. You weren't trying to market the doctor; you were trying

11 to market the product.-

12 A.

13 Q.

Correct. -~ . "'

So if you could get the product to market and you could

14 sell it and you could make millions and millions of dollars,

15 the fact that Dr. Caplinger had been practicing medicine

16 without a license in North Carolina, that wouldn't really

17 matter, would it?

18 A. No.

19

20

21

22

23

24

25

Q. No, it wouldn't. And the fact that again, if you were

making millions and millions of dollars, the fact that he had

gotten a medical degree from a school that didn't even exist

anymore, that wouldn't matter either as long as you're making

the money.

A. It wasn't about the money because I didn't take a salary

through this process.

1 Q.

2 A.

387

It wasn't about the money. Why were you in this?

I had tried to do the right thing for -- you know, to

3 produce this medicine. Again, one of the outcomes would be to

4 earn a living, to make a lot of money. But I had done this

5 for many years prior to Dr. Caplinger.

6 Q. Are you saying your primary goal was to save lives; your

7 primary goal wasn't to make money?

8 A. I think it was both.

9 Q. Do you recall soliciting Pat Robertson of the Christian

10 Broadcast Network in October of 1996?

11 A.

12 Q.

Yes.

Do you recall asking Mr. Robertson, you wanted him to be ·~

13 God's megaphone to all the people?

14 A.

15 Q.

I suppose, yes.

And if he could give you some money, you would share the

16 blessing that you'd been gifted with.

17 A.

18 Q.

19 A.

20 Q.

21 A.

We would, yes.

You're stretching it, aren't you -

Well --

-- with these kind of solicitations. Come on.·

I was a salesman.

22

23

Q. Now, did there come a time when you started making

representations about the product that absolutely were 100

24 percent false?

25 A. Anything I might have represented was told to me before I

•

388

1 ever represented it.

2 MR. FALLS: Your Honor, may I approach with



5 Q. Sir, I'm going to ask you to look at Defendant's Exhibit

6 18 and ask you if you recognize that?

7 A.

8 Q.

9 A.

10 Q.

A letter written by me.

What's the date?

October 30th, 1996.

I want you to look down on the fourth line and see where

11 it says 100 patients out of 100 patients are now showing an

12 HIV negative status ~at have been given the vaccine. Do you . ' ~

13 see that?

I was told that, yes. 14 A.

15 Q. You .were told that. Where does Dr. Caplinger's name

16 appear anywhere on this document?

17 A. He was also a shareholder in the company. It does not

18 appear anywhere on this document.

19 Q.

20 A.

21 Q •

Who wrote the document?

I did.

Who signed it?

22

23

A. I did.

patients.

But I wasn't a doctor. I wasn't treating

24 Q. How about this? How about this? Look down here at this

25 last paragraph here. What does that say? "Billions of

• 0 w I&.

!

389

1 dollars are in the balance."

Yes. 2 A.

3 Q. Are you saying Dr. Caplinger's now telling you he had

4 billions of dollars?

5 A.

6 Q.

No, the market --

You're making this stuff up as you go along with each

7 letter, aren't you, Mr. Kampetis?

8 A. No.

9 Q. No. Do you recall writing a letter in November of '96,

10 again, after you knew everything about Dr. Caplinger, writing

11 a letter in '96 saying that it was ready for general

12 publication since it.~as been scientifically confirmed u~er

13 the strictest international standards that have been met.

14 What in the world are you talking about?

15 A. I was told that the tests that were done on the patients

16 were under the strictest scientific controls at a military

17 laboratory.

18 Q. "We're in the process of taking it to the United

19

20

Nations."

A. Which I did.

21 Q • Do you recall November of 1996 talking about projects

22

23

with $500 million of Brazilian granite to make money?

A. Yes.

24 Q.

25 A.

How about the Mexican trust in gold mines?

Yes.

•

390

1 Q.

2 A.

How about the anonymous man from Zimbabwe?

He was a health minister.

3 Q. Now, all these investors, all these letters that you're

4 sending out to investors, are you telling any of these

5 investors in this correspondence, Dr. Caplinger got in trouble

6 for practicing medicine without a license in North Carolina?

7 A. Dr. Caplinger refuted all of that information.

8 Q. Well, you got the newspaper article.

9 A. It was a - -10 Q. David Weekley knew he had been convicted.

11 A. I didn't know he was convicted. I just said there was an

12 article against him .. ·~r had no idea of the conviction until ... 13 later.

14 Q. Did David Weekley know about the gold trust, Brazilian

15 graninte and the investor from Zimbabwe?

16 A. Well, the granite, Mr. Zelle was in the granite busin~ss

17 so I was trying to enroll his efforts and knowledge in the

18 granite industry because he had a granite mine, so, yes, David

19 knew some of these projects.

20 Q. Okay. Did he pass those on to the Diamond Group

21 investors?

22 A. I don't know.

23 Q. How many clients have you stolen from in the past?

24 A. Beg your pardon?

25 Q. How many clients have you stolen from in the past, stolen

m ;

; i c:, z w n.

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2 !§ IL

391

1 their money?

2 A. There is no stealing. I didn't steal any money.

3 MR. FALLS: Your Honor, I'd like to play Defendant's

4 Exhibit 19, a tape turned over by the government during

5 discovery.

6 THE COURT: You may.

7 (Defendant's Exhibit Number 19 was pl~yed to the

8 jury.)

9 Q. Why don't you explain what you mean in that tape about

10 being a mercenary, ste_aling money, people wanting to knock you

11 off.

12 A. Yes. I was a bank officer when I was describing those. ~

13

14

15

16

17

18

19

20

21

22

23

24

25

~ ~

I was a liquidator for a bank. I was a mercenary for the bank

to collect their funds. I -- that was totally as an officer

of a major bank. Those audits that I referred to were audits

of bank clients. Specifically bank clients. I was engaged to

go collect the bank's money any way possible.

Q. What about the stealing from -- stealing, what's that

about?

A. We would steal their inventory. We would steal their

receivables. We would --

Q. What bank?

A. Bank of America.

Q. Bank of America is out there stealing money from people?

A. When they're -- when they find the borrowers in default,

1 yes.

They go steal their money?

Yes.

392

2 Q.

3 A.

4 Q. Okay. Now, the money that was used to take out a loan on

5 the ImmuStim product, or that had been bought, y'all actually

6 had to refinance that loan through a company called FINCOM,

7 right?

8 A. I have no idea. That was not my -- I was not in control

9 of FINCOM. I didn't know FINCOM. I was told what was

10 happening with FINCOM.

11 Q.

12 A.

13 Q.

Okay. You didn't know anything about FINCOM at all?

After the fact.-~ .. I mean, didn't you have a conference call with those guys

14 when you were on the phone with them and you were talking to

15 them?

16 A. I was asked to be put on the conference call with them.

17 At that time Greg had indicated that he was going to use his

18 house, his plane and all the assets to get the loan from

19 FINCOM.

20

21

Q. So Dr. Caplinger put up everything he had; is that

right?

22 A.

23 Q.

24 A.

25 Q.

As did I, yes.

And he lost everything.he had.

I can't confirm that.

Do you recall sending a letter on February 16th of 1997

•

1 to Fundacion Manos de Esperanza? Those were the FINCOM

2 people, right?

I have no idea.

You don't know what I'm talking about?

393

3 A.

4 Q.

5 A. No, I don't know who they were. I was just told that Los

6 Manos was a nonprofit humanitarian group in the Dominican

7 Republic.

8 Q. Well, do you remember having a conference call with them

9 stating that this call was held from Dr. Caplinger's office

10 and the members of your organization attending were this fella

11 and.Maria Laura, the treasurer?

12 A.

13 Q.

I couldn't identify who those people were. -~ .

Now, as late as February of 1997, were you still keeping

14 Dr. Caplinger in the dark about what was going on?

15 A. No.

16 MR. FALLS: Your Honor, permission to approach with


18

19

20

21

THE COURT: You may.

Q. Sir, I'd ask you to take a look at what's been marked as

Defendant's Exhibit 20 and ask you to identify that document,

who it's addressed to.

22 A. It's addressed to me. International Profit Associates, a

23 management consulting firm in Illinois that came to my home in

24 Pittsburgh and had indicated that they would do the project,

25 would try to find money for the project without any -- without

•

394

1 any money. And then later they asked -- they wanted to hold a

2 check in their possession for future ability to collect on

3 their services, and then told me that they were going to

4 submit the check to the district attorney's office for

5 collection as being a bad check being written.

6 Q.

7 A.

8 Q.

Bad check, right?

Yes. I told them ahead of time that there was no funds.

They also told you that not only will Dr. Caplinger know

9 what you're doing to his name and his work, but the D.A.'s

10 going to know and come to your residence. See where it says

11 that?

12 A. Yes. I went th~ after this document and went to th~

13 D.A. 's office myself.

14 Q. Okay. And do you see at the very first line of the

15 document that it's apparent that your conduct should be

16 reported not only to Dr. Caplinger in the Dominican Republic,

17 but also to the prosecutor and district attorney of Allegheny

18 County?

19

20

21

22

23

A. Yes. This is the attorney for this operation that I

thought at first was going to do it for free.

Q. So these people were threatening to have you prosecuted,

right?

A. Yes.

24 Q. They were also threatening to tell Dr. Caplinger about

25 what you were doing, right?

•

395

1 A. But this had been no other different process than I had

2 been doing all along.

3 Q." Let's talk about some other deals that you engaged in.

4 What's the black money deal?

5 A. The black -- a group of gentleman indicated that there

6 was funds that were received by a group of Chinese generals

7 for the sale of weapons and they wanted to -- it was coated

8 with some kind of black chemical and they wanted to spend

9 them.

Okay. 10 Q.

11 A. I never got any information. That was just a, you know,

12 a verbal from another~broker.

13 Q. Okay. How about this? You were going to take -- for $5

14 million, you were going to send in a mercenary troop of ex-

15 marines who had done a job about a week ago, right? Do you

16 recall this?

That's what I was told. 17 A.

18 Q. Okay. And the marines had been doing this for over

19

20

21

22

23

twenty-six years; is that right?

A. That's what I was told.

Q. And you said, "We can handle this job.

last night and they're willing to proceed."

A. As they did.

Who's we?

We talked to them

24 Q.

25 A. There was a gentleman in Florida who was trying to help

,

• C w u. :I

~

396

1 me raise funds for the ImmuStim project.

2 Q. So you put -- this letter that you're sending about this

3 is on Immurio Pharmaceuticals, Incorporated letterhead.

4 A.

5 Q.

6 A.

Yes.

Dr. Caplinger know about this black money deal?

No. It's called black money, but it was only chemically

7 treated.

8 Q. And the formula for treating it is better protected than

9 Coca-Cola's; is that right?

10 A. That's what was described to me.

11 Q. And for $80,000 for a half gallon of the formula, yo~ can

12 create $100 million in U.S. currency; is that right? -~ .. ~

13 A. That's what I was told.

14 Q. Okay. And you also told the investor, for doing this,

15 you'd also want a 5 percent commission for the ImmuStim

16 project, please.

17 A. Yes.

18 Q. How would this money be made? I mean, what's going on?

19

20

21

A. They were unable to move the money as it was represented

so they wanted somebody to chemically treat it and to

distribute it. They owned it.

22 Q.

23 A.

You represented to them that you'd done it before.

I represented that they had done it before, what was

24 represented to me.

25 Q. Why are you saying we have done this before?

,

397

1 A. At the time I was selling the project and hopefully not

2 allowing them to go to those people directly.

3 Q.

4 A.

5 Q.

You're a scam artist, aren't you?

No.

Now, you testified earlier that it was always Dr.

6 Caplinger. Every day he was asking you for money, trying to

7 get money out of you; is that right?

8 A. It was also me asking for money to keep operations going

9 because I had no job.

10 Q.

11 A.

David Weekley went to the FBI in May of 1997, right?

Yes.

12 Q. You recall as late as May of 1998, after he sent you the -~

. ·, ~

13 information about his college, where he got his degree, after

14 you know about the North Carolina episode, after David Weekley

15 has gone to the FBI, you are still writing letters to Dr.

16 Caplinger trying to get him going on the ImmuStim project.

17 A. I had introduced -- yes, yes, I did continue.

18 Q. Nothing would deter you in your quest for making money,

19

20

21.

22

23

would it?

A. Nothing was confirmed to me to such a degree that it

affected the project if there were people to buy the

medicine.

Q. I have just a couple more questions for you. What do you

24 think is going to happen to you after this is over with?

25 A. My life has changed dramatically.

1 !

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18 ! ~ 19 ~

' 20 ~ <' z 21 w a.

• Iii 22 II.

:I 0:

I? 23

24

25

398

Q. You going to go to jail?

A. I hope not.

Q. In fact, you're banking on getting probation, aren't

you?

A. I hope so.

Q. In fact, this prosecutor has agreed that once you assist

the government, he's going to stand up and recommend that you

get probation.

A. No, I understand there's no guarantees.

Q. I didn't ask you about a guarantee. I asked that's what

he's going to do.

A. No, I go to a s~tencing hearing in six months. .. Q. Do you remember pleading guilty?

A. Yes, I do.

Q. Do you remember being there at that hearing with your

lawyer?

A. Yes, I do.

Q. And were you listening to what was going on?

A. Yes.

defendant?

MR. FALLS: Your Honor, may I approach the


MR. FALLS: The witness, I'm sorry.

THE·COURT: Yes, sir.

MR. FALLS: The witness. Exhibit Number 21.

•

399

1 Q. Now, sir, I'm approaching you with a transcript of your

2 plea hearing wherein you pled guilty. I want you to read

3 starting with this -- just this paragraph here.

4 A.

5 Q.

Okay.

I want you to read that paragraph and you tell me if that

6 refreshes your recollection about what the prosecutor is going

7 to do when you assist the government.

8 A. "The United States informs the court that if the

9 defendant's assistance rises to the level of substantial

10 assistance, that the United States will recommend a sentence

11 within zone A, a nonincarceration sentence, for this

12 defendant. Again, however, such recommendation is only a -~ . ' ~

13 recommendation and the defendant acknowledges that the final

14 decision remains within the discretion of the court."

15 Q. Okay. The prosecutor is going to stand up and recommend

16 nonincarceration. Do you know what nonincarceration means?

17 A.

18 Q.

19 A.

20 Q.

21 A .

22 Q.

23 A.

Doesn't change the yes.

Means you don't go to jail.

No jail, but I --

Now, who went to the FBI first, you or David Weekley?

David David probably did, yes.

David went to the FBI way before you did.

No -- well, I was subpoenaed for records a year or so

24 before David went to the FBI.

25 Q. But he started cooperating with the FBI way before you

400

1 did, right?

2 A. I wasn't asked to.

3 Q. And you've been offered probation. Do you have any idea

4 what David is going to be getting out of this?

5 A.

6 Q.

7 A.

8 Q.

No idea.

You guys hadn't talked about it at all?

We don't communicate.

Your pleading guilty wasn't conditioned on you getting

9 the same deal that Mr. Weekley gets?

10 A.

11 deal.

12 Q.

13 A.

I don't know what Mr. Weekley's deal is or if it's a

Last question. How are you currently employed? ~

. \

As a mortgage broker in the state of Pennsylvania

14 building homes and doing development transactions and --

15 Q.

16 A.

17

18 A.

19

20

21

You're still handling people's money.

No, I'm a broker.

MR. FALLS: No further questions.

I just pass that on to banks.

THE COURT: Redirect examination.

MR. WHISLER: Yes, sir. Thank you.

REDIRECT EXAMINATION

22 BY MR. WHISLER:

23 Q. The paragraph that Mr. Falls just went over with you had

24 the word recommend and it was contingent upon your assistance

25 being substantial, correct?

•

401

1 A. Yes.

2 Q. Apart from that, have you received any oral promises or

3 guarantees from the government about your sentence?

4 A.

5 Q.

No.

And who has the ultimate sentencing decision that

6 pertains to you?

7 A. The court. The judge. But my sentence is, you know, a

8 lifetime of, you know, not being able to· be a banker.

9 Q.

10

11

12 Q.

Show you

MR. WHISLER: Approach this witness, Your Honor?

THE COURT: .Yes, sir.

Government's 58 ,.~Mr. Falls talked to you about. Do you ~ ~

13 remember that?

14 A.

15 Q.

16 A.

Yes.

What is it?

That was the peer review publication Salud Integral which

17 identified the treatment of HIV/AIDS, and it is in Spanish.

18 Q.

19 A.

20 Q.

21 A .

22 Q.

Did you ever see a translation of that?

Yes.

And is the defendant the author of that article?

Yes. And Dr. Claudio Pena.

And you didn't have anything to do with writing that

23 article, did you?

24 A.

25 Q.

I'm not a scientist.

Defendant give you that?

402

Yes. 1 A.

2 Q. What's the volume number on this peer review journal that

3 he gave you?

4 A.

5 Q.

Volume 1, Number 1, Mayo-Augusto 1995.

Volume 1, Number 1. All right, sir.

6 Show you Government's 8 that's already in that you talked

7 about with Mr. Falls.

8 A.

9 Q.

Mr. Who?

Defense attorney that spent some time with you this

10 morning.

11 A.

12 Q.

13 A.

14 Q.

15 A.

Oh, yes.

Do you remember -that?

News release September 19th, 1995, yes.

Whose address is that right there?

Centros de Otorrinolarengologia y Especialidades. That

16 is the clinic address in the Dominican Republic as well as

17 identifying the Pittsburgh address of Immuno Pharmaceuticals.

18 Q. So to be clear, who provided you with the information

19 about the defendant's award of the foreign angel?

20 A.

21 Q.

22 A.

23 Q.

24 A.

The defendant. Greg provided it.

Did you talk to him about it?

Yes. I was happy for him.

What did he tell you about it?

Said it was a great honor. That

25 for foreigners.

I --

monuments weren't built

•

403

1 Q.

2 A.

He authorize you to disclose that information to others?

Yes. It was getting into -- he didn't have to. It was

3 presumably on the UP American press. It was published in the

4 Latin American press.

5 Q.

6 A.

7 Q.

8 A.

9 Q.

10 you

11 A.

12 Q.

Did you see it in the press?

Just - - it was referenced that it was in the press.

Did he tell you that?

Yes.

Let me show you Government's 48 that's already in.

remember this document?

Yes, sir. I made hundreds of them.

Okay. And this. -~s l;i prospectus you sent to Duke

13 Management Foundation.

Yes.

What·does this first sentence say here?

Do

14 A.

15 Q.

16 A. "Item 8, Reliance on the Representatives of the Company.

17 The company's success with respect to this loan depends on, to

18 a great extent, the skills and experience of Dr. Caplinger and

19

20

21

the U.S. domestic professional corporation."

Q. Okay .. Was that a true statement?·

A. Yes.

22 Q. Would you have dealt with Gregory Caplinger if he wasn't

23 who he said he was?

24

25

MR. "FALLS: Objection to leading.

THE COURT: Overruled. Go ahead.

0 w ... :Ii

~

404

1 A. No.

2 Q. You said a minute ago to Mr. Falls that the defendant

3 refuted the information about his North Carolina conviction.

4 What specifically did he say to refute that?

5 A. He said that his practice was a huge success and that the

6 medical community in North Carolina were jealous. He was

7 taking away business from them and they were out to stop him

8 any way they could and it was false statements.

9 Q.

10 A.

11 Q.

12 A.

13 Q.

14 A.

15 Q.

16 A.

17 Q.

Okay. Did you believe that?

Yes.

Did you convey

At the time --

I'm sorry, go ahead.

At the time I did believe it, yes.

Did you convey that information to other people?

Several occasions. That the article had no merit.

Let me show you Government's 53. It's already in

..

18 evidence.

19

20

21 Q.

MR. FALLS: Objection, outside the scope of cross.


Do you remember that article -- or that letter?

22

23

A. Letter written by me August 5th, 1996, to Mr. Vincent

Khau, SCMV, Ltd.

24 Q. Did you convey that information to him regarding the

25 defendant's explanation?

•

405

1 A. Yes. "I'm asking you to consider the medical profession

2 in the United States, especially doctors. Eight years ago an

3 article, one article, was written on our friend. This was

4 many years ago. Greg grew very sick of the persecution of

5 naturopathic practices in the United States. We must

6 immediately talk together."

7 This was after Mr. Khau had indicated he was not going

8 forward with his commitment.

9 Q. Now, Government's Exhibit 9, Mr. Falls spent some time

10 with you. Do you remember that?

11 A. Yes.

Okay. What is i$ just for the record? ~

12 Q.

13 A. This was the curriculum vitae or resume and experience of

14 Dr. Caplinger.

15 Q. ·okay. And who provided you with all the information in

16 that CV?

Dr. Caplinger. 17 A.

18 Q. Okay. And the -- did he tell you he went to Metropolitan

19

20

21

22

23

Collegiate?

A. I didn't know about the Metropolitan Collegiate, just

that there was Harvard Medical School as well as other

institutions. I wasn't a doctor so it had no I had no, you

know, I didn't think one way or another. I was more

24 interested in selling the medicine and getting·it

25 distributed.

• 0 w IL

:I

~

1 Q.

2 A.

3 Q.

4 A.

Okay. But you read through the CV, right?

Yes.

Does it reflect a medical degree?

Yes.

What's that institution?

406

5 Q.

6 A. MCBC Institute, Great Britain, British West Indies Health

7 Medical College, Universidad Autonoma de Santo Domingo, all

8 receiving an M.D.

9 Q. Okay. And this letter that Mr. Falls went over with you

10 a minute ago referenced the Education Reform Act of 1988. Do

11 you remember him talking to you about that?

12 A. Yes. ·~

13 Q. Okay. Do you kndw what the Education Reform Act of !988

14 is or was? Do you have any idea?

15 A.

16 Q.

17 A.

18 Q.

No idea whatsoever.

Okay.

Again, I have no science background.

Do you have any idea why reference to that 1988 act

19

20

21

appears in a 1984 letter?

A. No. How could it have been?

Q. And do you see any other references to any other acts

22 talking about any other degrees of the defendant in this

23 document?

24 A. Again

25 Q. Do you recall any?

•

407

1 A. No, I didn't scrutinize this document that closely. But

2 I do recognize the fact that a Sussex license is on the wall

3 in the office in the Dominican Republic.

4 Q.

5 A.

6

He went to Sussex and got a degree there as well.

There was a medical license on the wall.

MR. WHISLER: That's all the questions I have.

7 Thank you, Your Honor.

8 THE COURT: All right, sir. You may come down. You

9 may be excused.

10 (Witness was excused.)

11 THE COURT: -Let 's take our 1 unch hour at this time,

12 ladies and gentlemen.-~ Come back at 1: 15. We' 11 be in . ... ...

13 recess.

14 (Lunch recess at 12 o'clock p.m.)

15 WEDNESDAY AFTERNOON, JULY 19, 2000

-16 (Jury not present.)

17 THE COURT: Anything out of the presence of the

18 jury?

19 MR. BENDER: Yes, Your Honor. I believe the

20 Government's next witness is a witness that we talked about on

21 Monday that was -- we needed a short voir dire on .

22

23

24 Honor.

25

THE COURT: All right. Bring him around.

MR. WHISLER: That would be LaGena Greene, Your


408

1 LaGENA LOOKABILL GREENE,

2 being first duly sworn, was examined and testified as follows:

3 THE COURT: All right, sir. You may conduct your

4 voir dire. Ask her anything you want to.

5 MR. BENDER: Thank you.

6 VOIR DIRE EXAMINATION

7 BY MR. BENDER:

8 Q. Ms. Greene, my name is Harold Bender.

9 You traveled to Santo Domingo for treatment by Dr.

10 Caplinger, did you not?

11 A. Yes.

12 Q. And how many ti~s? . '1,

13 A. Twice.

14 Q. And that was at the insistence or suggestion of David

15 Weekley?

16 A. I'm confused about the word insistence.

Okay. 17 Q.

18 A. Or suggestion.

19

20

21

22

23

Q. All right. Did you go down there because David Weekley

asked you to or

THE COURT: Just tell us how it came about in your

own language.

A. I went down there as a result of a conversation that I

24 had via conference call with David Weekley and-Mr. Caplinger.

25 Q. Dr. Caplinger.

-,

409

1 A. Dr. Caplinger.

2 Q. And when you went down there, what representations, if

3 any, were made to you by Dr. Caplinger as to his background?

4 A. I was told that he had a Ph.D from a university in Great

5 Britain, his undergraduate work was done in a university in

6 Indiana, and he had continuing graduation continuing

7 education work at Harvard. And there were a number of

8 certificates hanging on his wall when I got there.

9 Q.

10 A.

And were there any other representations made to you?

Yes. There were representations made in a brochure that

11 I received regarding this treatment. There were several pages

12 of resumes on the par.� of Dr. Caplinger.

13 Q. And was David Weekley and Harry Kampetis there at the

14 same time you were there the first time?

Yes. 15 A.

16 Q. And describe your opinion of Harry Kampetis and the way

17 he acted.

18 THE COURT: How is that relevant? How is that

19 relevant, Mr. Bender?

20 MR. BENDER: I think it goes to Harry Kampetis and

21 his desire --

22 THE COURT: What's the purpose of this voir dire?

23 MR. BENDER: To find out if all they're going to ask

24 is similar to the questions I have asked and not go into

25 treatment protocol or anything like that or any other--

•

410

1 MR. WHISLER: Stipulate that, Judge. I said that in

2 the beginning. We're not going into treatment. I mean -- if

3 I would have known that, I could have saved some

4

5

6

7

MR. BENDER: If that's it, Judge, I got no problem.


MR. BENDER: Okay.

THE COURT: All right. Bring the jury in, please.

8 We'll have to swear you again in the presence of the

9 jury.

10

11

THE WITNESS: Okay. Should I leave?

THE COURT: No, you don't have to leave. Just come

12 around here so the jury can see you sworn. That's all. ·~ ~ ~

13 (Jury entered the courtroom.)

14 THE COURT: All right. Swear the witness in the

15 presence of the jury.

16 LaGENA LOOKABILL GREENE,


18 DIRECT EXAMINATION

19

20

21

BY MR. WHISLER:

Q. Good afternoon, ma'am.

A. Hi.

22 Q.

23 A.

24 Q.

25 A.

Please state your name for the record.

My name is LaGena Lookabill Greene.

And where do you live?

In Indian Trail, North Carolina.

I 0,

'9

~

~ i 0 z w Q.

• 0 w .... :::E a: ~

411

1 Q. All right. And.have you had occasion to meet an

2 individual named David Weekley?

Yes.

And what occasioned that?

3 A.

4 Q.

5 A. On May 7th, 1995, I was giving my testimony at the church

6 that I belong to, Forest Hill Church, and I was approached by

7 David Weekley, who I didn't know who he was at the time. He

8. was in a group that was surrounding me after I was giving my

9 testimony at church about living with AIDS and how the Lord

10 had helpe~ sustain me. And he reached through the crowd and

11 in a very dramatic tone handed me what appeared to be a script

12 and said, "Don't take,....this unless you intend to read it." And . " ..

13 I took it not wanting to hurt his feelings and not knowing who

14 he was and took that home and put it away and didn't do

15 anything with it.

16 Q. Did there come a time when you read the script, as you

17 called it?

18 A. Yes.

19 Q. And what was it? What did it contain?

20 A. Well, I actually thought that it was going to be a movie

21 of the week script because that's what it looked like, but it

22 turns out it was a medical treatment.

23 Q. Okay. For your illness?

24 A. For AIDS and --

25 Q. Okay.

'~ J( 1

1 A.

2 Q.

412

-- cancer, but ...

All right. Did you ever meet an individual named Harry

3 Kampetis?

4 A. Yes, I did.

5 Q. And where did you meet him?

6 A. I met him in the Dominican Republic.

7 Q. Do you remember when?

8 A. Yes. I met Harry Kampetis and David -- well, I met Harry

9 Kampetis for the first time on my first trip to the Dominican

10 Republic for treatment.

11 Q.

12 A.

13 Q.

14 A.

15 Q.

16 A.

17 Q.

18 A.

Do you know when that was?

Yes. That was August of 1995. -~ \ ~

And did you meet an individual named Gregory Caplinger

Yes, I did.

-- in that first trip?

Yes.

Do you see him in the courtroom here today?

Yes.

19

20

21

Q. Okay. For the record, if you would point him out and

just tell us what he's wearing.

A. He has dark hair and a mustache and is wearing a dark

22 gray suit and a dark tie and a white shirt.

23 MR. WHISLER: Your Honor please, I'd ask the record

24 reflect the witness has identified the defendant.

25 THE COURT: The record will so reflect.

,

Now, for what purpose did you go to Santo Domingo?

Pardon me?

For what purpose did you travel to Santo Domingo?

413

1 Q.

2 A.

3 Q.

4 A. I traveled with the purpose of receiving an alternative

5 treatment for AIDS that was supposed to either eliminate the

6 disease or help my health considerably.

7 Q.

8 A.

9 Q.

10 A.

Okay. Did you pay for your way?

No, I did not.

Okay.· Who paid for your way?

I'm not really sure except that David Weekley took care

11 of the arrangements.

12 Q. Okay. And apart~from the script that you've describtd,

13 did you receive other literature pertaining --

14 A.

15 Q.

16 A.

Yes.

-- to Gregory Caplinger?

I received some other brochures and a videotape on

17 ImmuStim and photographs showing the clinic where he worked,

18 or hospital, whatever the medical facility was.

19

20

21

22

23

Q. Okay. And were there descriptions of the defendant,

Gregory Caplinger, in those brochures?·

A. There were photographs and there were resume type

material.

Q. Okay. Do you recall anything about his resume in

24 connection with that?

25 A. I was very impressed that his background was supposedly

414

1 in oncology, study of cancer, and immunology which would be

2 the study of the immune system, which AIDS is a disease of the

3 immune system.

4 Q. Okay. Did you ever talk to him in person -- or did you

5 ever talk to him about his credentials at any time in person

6 or otherwise?

7 A. Yes, the very first time we spoke via conference call

8 with David Weekley making that call, we spent at least an hour

9 on the telephone with him answering every question that I had

10 regarding he had credentials as well as any questions that I

11 had regarding this very thick brochure that I read about the

12 proposed treatment. ·-....'

13 Q •. Okay. What did he tell you about his credentials?

....

14

15

16

A. That he had done his undergraduate work in the United

States at a university in Indiana and that he had received

his Ph.D from a university in Great Britain and that he had

done 17 continuing education work at Harvard, among other things.

18 Q. Did he tell you where he got his medical degree?

19

20

21

A. He did, but I don't recall.

Q. Okay. Do you remember if that information was in any of

the documents you received?

22 A.

23

Yes, it's in the brochure.

MR. WHISLER: May I approach this witness, Your

24 Honor?


415

1 Q. Ms. Greene, I'm going to show you first of all what's

2 marked as Government's 12A through D. Ask you to take a look

3 at those. They're already in evidence. Tell me if you

4 recognize those documents.

5 A. Yes, I recognize the biographical sketch.

6 Q.. Okay.

7 A.

8 Q.

9 A.

10 Q.

I recognize this. And I do recognize ImmuStim.

All right.

I recognize all of these.

Okay. Let me turn your attention to 12A. You said

11 biographical sketch. Did you read over that when you got_ it

12 at some point in timei ~ .

13 A. Yes, I did.

14 Q. And does it describe the defendant's training as a

15 physician?

16 A.

17 Q.

18 A.

19 Q.

20 A.

21 Q.

22 A.

Yes, it does.

Okay. Do you recall that?

Yes.

Reading that information?

Yes.

Okay. What's it say?

He i's a British and U.S. trained physician with his

23 medical residency in internal medicine and further

24 subspecialties of clinical oncology/immunology.·

25 Q. Okay. Did you talk to him about that or did he --

1 A.

2 Q.

3 A.

4 Q.

Yes.

-- in that phone call?

Yes.

All right. And take a look at Government's -- well,

416

5 let's look at 58 first. Tell me what that is. Do you

6 recognize that?

7 A.

8. Q.

9 A.

10 Q.

11 A.

12 Q.

13 A.

Yes, I do.

What is it?

This is well, I recognize the cover.

Okay~ Let me see if I can save you some time.

Okay.

Do you recognize~that? . ' ..

This, I believe, is an article that he wrote and this is

14 also included in other materials that I've seen.

15 Q. All right. And did this impress you to receive

16 treatment?

17 A. Well, yes, because any time a researcher or doctor has

18 published articles, it seems impressive.

19 Q.

20 A.

21 1.

22 Q.

Did you notice the volume number associated with that?

No, not until you just pointed it out. Volume 1, Number

Okay. Now, how about Government's 46, are you familiar

23 with it?

24 A.

25 Q.

This is -- this is what I was handed by David Weekley.

What you called the script?

1 A.

2 Q.

3 A.

What I called the script.

Okay. And it contained what type of information?

Well, it contained detailed information about the

417

4 treatment, things such as interleukin 2 and interferon 2 being

5 included in the treatment. It described that it would be

6 through intravenous infusion, and then it gave his resume and

7 copies of certificates of~-

8 Q.

9 to

10 A.

11 Q.

Did you read over that information before you traveled

Yes.

- - receive your t.reatment?

12 Now, what, if a~~' agreement was there between you a~d

13 David Weekley and Harry Kampetis and Greg Caplinger in

14 connection with your receiving this treatment?

15 A. Well, I was approached with David -- by David Weekley

16 initially with him telling me how much the treatment cost in

17 hopes that I apparently would pay for this treatment. And

18 when I was told that it would -- the first two weeks would be

19 $15,000 and the second week would be· 10,000 and 10,000 more

20 per each week, I told him there was absolutely no way I could

21 ever afford that type of treatment.

22 Q.

23 A.

24 Q.

25 A.

Okay.

And

I'm sorry, go ahead.

Okay. And at some time later, apparently he talked with

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418

1 Dr. Caplinger and got back to me and asked would I be willing

2 to -- in trade for the free medical treatment, would I be in

3 turn a spokesperson for this treatment. And I said

4 specifically that I would not be a spokesperson for any

5 treatment until I had received it for at least six months and

6 I knew that it in fact proved to lower my viral load and raise

7 my T cell count which are the only two legitimate tests done.

8 Q. Let me ask you this. Did you ultimately ever become a

9 spokesperson?

10 A. No.

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Q. Okay. Was there --- did you ever receive any pressur~

from any of those three? '

A. I received enormous pressure from both David Weekley and

Harry Kampetis. In fact, probably about the fourth or fifth

day that ·I was down there for my very first treatment, David

Weekley and Harry Kampetis flew in and immediately began

telling me about how they were so excited. That they wanted

me to travel to conferences around the world and tell people

about this treatment. And I told them -- I repeated what I

told them from the beginning, that there is no way I will say

anything positive about this treatment until I know for a fact

that it has proven to help me and so they may as well just

drop it, but they continued.

Q. How about the defendant, did you ever receive any

pressure from him in any form?

•

419

1 A. The pressure that I felt possibly came later when I had

2 already had two treatments in the Dominican Republic. I was

3 told that

4

5 Q.

6

7

8

9 Q.

10 A.

11 Q.

12 A.

13

14

15 Q.

MR. BENDER: Objection, Your Honor.

Who told you?

MR. BENDER: Nonresponsive.

THE COURT: Who told you?

THE WITNESS: Who told me?

You said "I was told." Who's telling you -

Okay. I was told by David Weekley --

Okay.

that


THE COURT: Sustained.

Okay. Only talk about what the defendant told you or

16 what he did or what you observed about the defendant.

17 Did the defendant make any statements to you about your

18 treatment, what you should or shouldn't do?

19

20

21

A. I was told that my first treatment -- after my first

treatment ended, I should be back in a month for the second

treatment, and I accepted that. I went down for my second

22 treatment and I was told that I wouldn't need to come back for

23 at least two months. But then David Weekley called and told

24 me

25 MR. BENDER: Objection.

•

1 Q.

2 A.

3 Q.

Don't worry about what David Weekley said.

All right.

420

Now, in your time down in Santo Domingo, were you in the

4 presence of the defendant as well as David Weekley and Harry

5 Kampetis?

6 A. Yes.

7 Q. And were these discussions that you've described

8 occurring in all three of their presence?

9 A. No.

10 Q.

11 A.

Okay. Were different people present at different times?

Yes. It was most1y Harry and -- Harry Kampetis and David

12 Weekley. ~ ...

13 Q. All right. But you ultimately, of course, met with the

14 defendant; is that right?

15 A.

16 Q.

17 A.

18 Q.

Oh, yes.

And how many times did you go down for treatment?

Twice.

Okay. And how much time did you spend with the defendant

19

20

21

22

23

when you were down there?

A. Well, I was down there for two weeks the first trip and

one week the second trip, so I saw him every day.

Q. Saw him every day. Now, these credentials that you

talked about, did you see anything in the office on the walls

24 depicting defendant's degrees?

25 A. Yes, there were at least two walls full of degrees and

•

1 certificates.

2 Q.

3 A.

4

What impression did that make on you?

Well, it made me think he was legitimate.

MR. WHISLER: Thank you, ma'am. That's all the

5 questions I have.

6 THE COURT: Cross-examine.

7 CROSS-EXAMINATION

8 BY MR. BENDER:

421

9 Q. Did you believe· that Dr. Caplinger was very serious about

10 his treatm~nt protocol?

11 A.

12 Q.

Yes, I did.

Okay. And did h~ treat you kindly and was he very ' ~

13 patient with you?

14 A. Yes, he was.

15 MR. BENDER: Thank you. That's all.

16 THE COURT: Any redirect?

17 MR. WHISLER: No redirect. Thank you.

18 THE COURT: Thank you, ma'am. You may come down.

19 You may be excused, Ms. Greene.


21 THE COURT: Call your next witness .

22

23

24

25

MR. WHISLER: United States calls John Bear.

MR. FALLS: Your Honor, may we be heard?

THE COURT: Yes. Come up here.

(Side-bar conference as follows:)

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THE COURT: Okay. Who is this?

MR. WHISLER: This is an expert witness, Your

422

3 Honor. We filed a notice on this expert, expert in

nontraditional degrees. 4

5

6

7

8

9

10

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12

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15

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18

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22

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25

MR. FALLS: We filed a motion.

THE COURT: Okay. I'll have to give him a 104

hearing on this.

MR. WHISLER: Okay.

(End of side-bar conference.)

THE COURT: Ladies and gentlemen, step back to your

jury room, please.

(Jury exite~ the courtroom.)

THE COURT: Come around, please, Mr. Bear.

JOHN BEAR,

being first duly sworn, was examined and testified as follows:

THE COURT: All right. You may have voir dire, Mr.

Bender.

MR. FALLS: Thank you, Your Honor. I'll be handling

the voir dire.

VOIR DIRE EXAMINATION

BY MR. FALLS:

Q. Good afternoon, Dr. Bear.

A. Yes.

Q. Dr. Bear, what is your education in? Your degrees,

formal education.

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423

1 A. Bachelor of arts in psychology, University of California,

2 Berkeley; a master of journalism, University of California,

3 Berkeley; and a Ph.Din communication, Michigan State

4 University.

5 Q. Do you have any formal education in the areas of

6 education itself?

7 A. I do. As part of my master's work, I took a number of

8 actual teacher training courses since I had thought that might

9 be a field I would go into. And my doctoral work in

10 communication is defined at Michigan State as a very broad

11 area encompassing edu~~tion, psychology and other social

12 sciences. ·~

. ' .. 13 Q. And let me just ask you, you've been qualified as an

14 expert in other places, right?

15 A.

16 Q.

17 A.

18 Q.

Yes.

Other trials.

Yes.

And your opinion, do you consider your opinion to be an

19

20

21

22

23

objective opinion based on your research and expertise?

A. Yes, I do.

Q. Okay. Now, have you - - is this your book, Bears' Guide

to Earning Degrees Nontraditionally?

A. You've got an old edition, but that is a book my daughter

24 and I wrote, yes.

25 Q. Well, in the thing it says about the author --

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424

1 MR. FALLS: Your Honor, should I -- I'll just

2 approach the witness.

3 THE COURT: You may.

4 Q. On page 5 when it talks about the author, the author is

5 you and your daughter; is that correct, sir?

6 A. Yes.

7 Q. I'll just show this to you. If you need to get your

8 glasses, that's fine.

9 Now, where it t'alks about biases, it says, 11As you read

10

11

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13

14

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17

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23

24

25

this book, you will note that it is biased. The authors have

strong opinions about which schools and programs are good:and

which are not and do mot hesitate to say so. Bear has been ~ .

sued three times for millions of dollars by people who operate

what he calls illegal diploma mills. None has ever won a

cent. While the research and experience are largely John's,

the opinions are shared by both authors. 11

Now, how do you say exactly that you have an objective

opinion when in the works that you published you say I'm

biased?

A. The objectivity is in the way I do the research and I

always start with an open mind. If I am checking out a

school, I go in objectively, open-mindedly. Then when I form

an opinion on it, this is a good school, this is a bad school,

then I am clear in stating my views always with the facts that

back up the views. So I am biased in the sense that I, unlike

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425

1 almost every other reference book out there, I offer strong

2 opinions about how I feel about schools.

3 Q. Certainly. Now, when you say, "The research and

4 experiences are largely John's," your views are not derived

5 from what your peers have investigated about these. According

6 to your book, your opinions come from your experiences alone.

7 A. It says the opinions are mine; but as with any research,

8 it is based on my own investigations and those of others. If • 9 I read an FBI report' on the raid of a school in Oklahoma, you

10 know, I don't need to go and see where that school once

11 operated. I accept that kind of opinion from respectable

12 investigators.

13 Q. ·-...

Do you know if there are a lot of experts in the are~ of

14 nontraditional education?

15 A. Expert, of course, is a word that you can get a lot of

16 argument on how to define.

17 Q.

18 A.

Sure.

I know that when other people who have invited me to be

19

20

21

22

23

24

25

an expert witness have done so, it has been a relatively short

list of people that they considered. But whether that means

tens or hundreds, I truly can't say.

Q. So would you say, though, that there's not a whole lot of

people to test your opinions against?

A. Oh, goodness, no. There are a great many because in

you say nontraditional higher education--·

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~

1 Q.

2 A.

3 Q.

4 A.

How about experts.

Yes.

Qualified experts who have testified in court.

426

Well, I can't -- I don't know the testimony history of

5 people. I know that when I search the Amazon database for

6 nontraditional higher education and distance learning, I find

7 more than two hundred books out there.

8 Q.

9 A.

Okay.

Writing a book doesn't necessarily make one an expert,

10 but it certainly gives one a higher level of knowledge than

11 the professor on the street.

12 Q. Are you familiar with the Autonomous University of Santo ~

' 13 Domingo? ... 14 A. By reputation I am, yes.

15 Q. Okay, by reputation. What have you heard about that

16 school?

17 A. I don't spend much time looking into schools that meet

18

19

20

21

22

23

24

25

what I consider the standard accepted accreditation

principles. When a school such as Santo Domingo does by their

listing in the International Handbook of Universities and

several other sources and they don't do, to my knowledge,

nontraditional things, distance learning, on-line courses,

that's typically the end of my interest in them.

Q. Are you an expert on the admissions process at the

university -- Autonomous University of Santo Domingo?

1 A.

2 Q.

No, I am not.

So you could -- your testimony as to whether Dr.

427

3 Caplinger was validly admitted into that university, you have

4 no expert opinion in that area.

5 A. I have an opinion on medical schools in general which is

6 an area that I have spent a fair amount of time in because of

7 the number of Caribbean, Filipino, Romanian and other medical

8 schools with admissions policies very different from the U.S.

9 So, no, I cannot comment on Santo Domingo specifically. Yes,

10 I am familiar with the means by which virtually everyone in my

11 experience is admitted to a medical school.

12 Q. Now, in your boo~ do you recall referring to "what Ol;l.e

13 man considers a diploma mill is another man's alternative

14 education"?

15 A.

16 Q.

Yes, I use that line.

And the term "diploma mill" itself is very, very hard to

17 define beqause of all the subjectivity that goes into trying

18 to make that definition.

19

20

21

22

23

A. My argument is that there is a continuum here and it is

in the middle of that continuum.that there is some controversy

and differing views. But at one end of it, when a school

sells a degree for a hundred dollars, no questions asked, I

see no controversy or room for discussion. When a school

24 requires a certain amount of work, courses, a week of

25 seminars, whatever, that's when you get into the argument of

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428

1 this one is real and that one is not.

2 Q. So are you saying that it's hard in some cases there

3 would be some people who would say this is a diploma mill and

4 other people would say -- you might say it's not or you might

5 say it is and other people might say it's not?

6 A. There are schools about which I say it is and others

7 don't and vice versa, yes.

8 Q. Your theories or your opinions, is there any way to test

9 those theories or opinions?

10 A. By doing one's own research which in many cases is no

11 more than going to co~rt records. When a grand jury and

12

13

14

15

16

17

18

19

20

21

22

23

24

25

another jury agrees t~at a certain school -- the last time I . ' ..

sat in this room thirteen years ago, or the comparable room

upstairs, you know, it was a place that some people would have

called a ~iploma mill. I did. Others defended their degrees

as something they worked for. You know, I need to go no

further than a jury found those five defendants guilty and

they went off to federal prison. I have no -- you know,

obviously no qualms calling such a place a diploma mill after

that happens.

Q. Now, a place like Sussex College of Technology, if they

change their policies -- while that university was in

existence, if they change their policies at some time to where

at times they_require dissertations, other times they don't,

have you kept abreast of every single one of the changes in

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429

1 policy and procedure, I mean, up to date throughout the years

2 on Sussex College?

3 A. Up to date, including the death of its one and only dean,

4 administrator, faculty and founder roughly a year ago, yes, I

5 would say that I have both through my own research, through

6 the clipping service I subscribe to. They appear not

7 infrequently in the London Times and other papers.

8 Q.

9 A.

Okay.

I only visited their facility one time, but it was the

10 same address for many years until the end.

11 MR. FALLS: That's all the questions I have, Your

12 Honor.

13

14

15

16

17

18

19

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21

22

23

24

25


MR. FALLS: Can I make an argument?

THE COURT: No, I read your papers that you filed in

limine on this witness and you'll have ample opportunity to

cross-examine him. It goes to the weight rather than

admissibility. So let your objection be noted.

Now, then, you may bring the jury back in, please.

MR. WHISLER: Your Honor, can I just make an

inquiry? In the interest of saving time, we would be able to

tender him, then, or do we need to go through the

THE COURT: You need -- for the benefit of the jury,

you need to prove his qualifications.

MR. WHISLER: Yes, sir.

430

1 THE COURT: His qualifications are going to be

2 attacked.

MR. WHISLER: Yes, sir, I understand. 3

4

5

6

THE COURT: You put him on just like you would -

MR. WHISLER: Any other expert.

THE COURT: -- any other expert. And he'll be

7 cross-examined like he would any other expert.

8 MR. FALLS: Your Honor, I would like to limit him

9 from using the word diploma mill.

10 THE COURT: Diploma mill, no, sir. If that's his

11 opinion, that's his opinion. Now, you cross-examined him_as

12 being in the eye of t~e beholder, or however you got to him on . ' ...

13 that. That's a common usage word. Bring them in.

14 Dr. Bear, I want you to be sworn in the presence of

15 the jury, please, sir. So come back down and take the oath.

16 (Jury entered the courtroom.)

17 JOHN BEAR,


19 THE COURT: All right. You may conduct your

20 examination.

21 MR. WHISLER: Thank you, Your Honor.


23 BY MR. WHISLER:

24 Q. Good afternoon, sir. Please state your name for the

25 record.

•

1 A.

2 Q.

3 A.

4 Q.

5 A.

6 Q.

My name is John Bear, B-e-a-r.

And where do you live, sir?

El Cerrito, California.

All right,. sir. And how are you employed?

I am self-employed as a writer of books.

All right, sir. Tell us about your education, sir.

431

7 A. My bachelor's degree in psychology is from the University

8 of California, Berkeley. My master's in journalism is also

9 from University of c·alifornia, Berkeley. My Ph.D is in

10 communication from Michigan State University, 1966.

11 Q.

12 A.

All right. Have you authored any publications?

I have had twentt-three books published by major

13 publishers.

14 Q.

15 A.

Okay. And what types of books are they?

The majority of them have been in the area of education.

16 There have been others on computers and travel and U.S.

17 history and so forth, but the primary way I've earned my

18 living is by books on education.

19

20

21

Q. Okay. Is there one particular book that has been -- had

the most editions or versions over the years?

A. Yes~ this is the 25th year that I have been doing what is

22 called Bears', s' because there's two of us now, Bears' Guide

23 to Earning Degrees Nontraditionally. It's currently in its

24 13th edition. This year we will probably reach 500,000

25 copies. It's well over 400,000 that are in print.

1 Q.

2 A.

432

What's the essence of that publication?

The bulk of it is a book on all of the traditional or

3 well accepted legal ways to earn degrees through home study,

4 by distance learning, by on-line means, by getting credit for

5 life experience and so on. But because of the way the book is

6 used both by students, by human resource people, by law

7 enforcement, by reporters, I have included a fair amount of

8 information on the unaccredited, the unrecognized, and, I have

9 no hesitation to calt it in the book, the diploma mills, the

10 fake schools.

11 Q. All right. Now, in connection with that type of work,

12 have you had occasion~to testify in court or other judicatory . ~ ..

13 bodies?

14

15

16

17 Q.

MR. FALLS: Stipulate he's an expert.

THE COURT: You may continue.

MR. WHISLER: Thank you.

Have you had occasion to testify in court and other

18 judicatory bodies about your work?

19 A.

20 Q.

21 A.

Yes, I have.

Okay. What occasioned that testimony?

During the years that the FBI was largely concerned with

22 what they called diploma mills, the Dip Scam Project, I was a

23 -- their term is informant~- consultant to them providing

24 informal information. And the last time was indeed upstairs

25 in this building. I provided as an expert witness in a case

433

1 involving five men who were running what the jury agreed was a

2 fake school.

3 Q.

4 A.

Okay. So have you been qualified as an expert

I have federally, state and places such as the Florida

5 Board of Professional

6 Q. And what type of expert were you qualified as?

7 A. In every case it has been to explain the nature of a

8 given school or set of schools or degree. On both sides. I

9 have represented people who have unaccredited but, in my

10 opinion, legitimate, honest, well-earned degrees that were

11 being -- failing to g~t salary increases or jobs because of

12 it. Although the majority has been on the other side, ~

' ~ 13 discussing schools that I believed were operating

14 fraudulently.

15 Q. All +ight, sir. And you said you've been qualified as an

16 expert upstairs. Were you qualified as an expert in a court

17 case?

18 A. Yes, this was a federal case.

19

20

21

22

23

Q. How about other instances of qualifications, can you

remember them?

A. Well, I remember the one last month which was a superior

court in California. Again, in the case of -- this was an

expert witness for the other side who had what I believed were

24 fraudulent cr~dentials, so I was there to you know, it is

25 that kind of thing primarily in state courts and before boards

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434

1 of professional hearings. A state psychologist who had a

2 doctorate that he had not truly earned I believed. That kind

3 of thing.

4 MR. WHISLER: Your Honor please, pursuant to Federal

5 Rule 702, I would move admission as an expert in

6 nontraditional degrees.

7

8

THE COURT: He may testify.

MR. WHISLER: Do we need an instruction, Your

9 Honor?

10

11

THE COURT: No, sir.

MR. WHISLER:_ Okay.

12 Q. Now, in connecti~n with your involvement in this case, \ .

13 have you reviewed a curriculum vitae of the defendant that's

14 in evidence as Government's 9?

15 A.

16

Yes, I have.

MR. WHISLER: May I approach this witness, Your

17 Honor?

18

19

20

21

22

23

24

25

THE COURT: Yes.

Ladies and gentlemen, this witness is going to

express opinions. Experts differ from the ordinary witness in

that they are permitted to express opinions. They're also

permitted to testify as to facts if they're asked questions

about that. But they are permitted to express opinions. You

should not accept an opinion as fact, but you should examine

the basis upon which the opinion is made, the facts that --

•

435

1 and circumstances and research, and whatever, that the

2 so-called expert has gone into in arriving at his opinion and

3 give it such weight as you think it deserves after considering

4 all of these things.

5 Now you may proceed.

6

7

8 Q.

MR. WHISLER: Thank you, Your Honor.

Approach this witness with Government's 9.

Take a look at that. Does that look familiar to you?

9 A. Yes, this is the one I've seen.

10 Q. I'll leave that there for you to refer to if you need

11 to. Have you read thr_ough the entirety of that document?

12 A. I have read all of the parts pertaining to degrees and -~ ~ ...

13 credentials.

14 Q. Pertaining to -- pertaining to degrees, all right. Now

15 within the scope of your duties here, what, if anything,

16 pressed your attention about that?

17 A. Well, the first thing I noticed was the claim of seven

18 doctorate degrees which is an unusual number for one person to

19 claim. All of the schools named are ones I am familiar with.

20 I also noted to my surprise that the one degree that appears

21 throughout a number of the other documents, the Ph.D, is not

22 listed on the curriculum vitae. So there are M.D.'s and

23 doctor of science and doctor of law and so on, but not the

24 Ph.D which is later listed.

25 Q. All right, sir. Let's walk through that. What

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1 institution were y~u first familiar with in this curriculum

2 vitae?

3 A. The first doctoral degree listed, it's not -- it is

4 listed as MCBC Institute. I am assuming from what I read

5 later in this that this refers to the Metropolitan Collegiate

6 Institute in Great Britain.

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Q. Okay. Do you know anything about that?

A. Yes. I visited their - -

MR. FALLS: Objection, calls for speculation.


A. I visited their 1-ocation on two occasions. I have quite

a large file of their.~literature, their catalog, their ~ .

prospectus, correspondence. My book is very interactive and

people regularly send me copies of their diplomas, of letters

they've gotten and so on.

So I have read their materials as they were presenting

themselves in -- from between 1974 and 1980, and I have twice

been to an address which was the address they were using at

that time.

Q. All right. Do you know what address that is? Is it

referenced in the CV?

A. The first one is not. It was 13 Baker Street in London.

I went there in 1974 and found it to be a mailbox rental

service, mail forwarding service. When I went there on

another trip in 1978, they were no longer there. At that time

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they were using a post office box from a company that I -

there's one company in England that has a very distinctive, in

effect, the zip code. They're the only ones who can use an

XX, and I went to the British Monomark address and learned, as

indeed I had known, that this was another mail forwarding

service.

Q. Let me stop you there, sir. Let me show you what I've

marked as Government's 66A and B. Ask you to take a look at

those, please, sir, and tell me if you recognize those.

MR. WHISLER: Excuse me a minute. I don't need a

reporter on this. I need to have a side-bar with the judge.

Excuse me a minute. Your Honor, could we have a side-bar-very

briefly?



(Bench conference.)

THE COURT: Continue.

BY MR. WHISLER:

Q. Tell us what those documents represent.

A. This is a photograph of the entrance, distance.and

close-up to the.mailbox rental service that I visited which

was the only address at that time, to the best of my

knowledge, used by Metropolitan Collegiate.

Q. You recognize that as fairly and accurately depicting

your testimony?

•

1 A.

2 Q.

Yes.

And your observations?

438

3 ·A. Yes.

4 Q.

5

Okay.

MR. WHISLER: Your Honor please, I'd move admission

6 of Government's 66A and Band publish.

7 THE COURT: They'll be received. May be passed.

8 (Government's Exhibits Number 66A and Number 66B

9 were received into evidence and published to the jury.)

10 Q. Anything else about Metropolitan Collegiate Institute

11 that you're aware of, familiar with from your expertise?.

12 A. I have read thei~ 1974 and 1979 catalogs which are almost ~ ~

13 identical apart from a different address and a slight price

14 increase. The catalogs make unusually clear, that is there's

15 no pretense that the business of Metropolitan Collegiate is to

16 sell bachelor's, master's, doctorate and medical degrees for

17 prices, even at the time, very low. A hundred dollars was

18 their asking price for a medical degree.

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Q. In the course of your work, have you ever encountered any

effort or labor that is required in exchange for receiving a

degree from Metropolitan Collegiate Institute?

A. Their literature -- I have not and their literature makes

it, to my interpretation, very clear that no work is

24 required.

25 Q. All right, sir. Anything else about Metropolitan

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1 Collegiate Institute that you have encountered in your years

2 of work?

3 A. Only that the degree appears from time to time in news

4 stories of people who have used it and -- but not -- no

5 personal knowledge. I was reliably informed that they moved

6 from their first mail forwarding service to a second and

7 subsequently to a third, but I have not had any personal

8 knowledge after that.

9 Q. All right, sir. Let me turn your attention to Sussex

10 College of Technology. Are you familiar with that entity?

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A. Yes, I am.

Q. Tell me about th_at. ~

' 0---A. To my knowledge - - and this again is one personal visit

and a stack of newspaper clippings half an inch high from the

London Times Higher Education Supplement and other British

papers. It was, until it apparently closed last year, a one

man operation run from the private home of its one and only

administrator, a man named Bruce Copen, who did it from his

home in several locations, although for the last approximately

twenty years from a single location, his home, in a suburb

south of London ..

Q. All right, sir. And did you ever meet Bruce Copen?

A. We had a guarded conversation through a gate. He did not

invite me in.

Q. And where was this?

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1 A. At his private home which was the campus of Sussex

2 College of Technology, Brantridge University, Brantridge

3 Forest School, University of the Science of Man, and several

4 others.

5 Q. Dr. Bear, I'm going to approach and show you what I've

6 marked as Government's 68. Have you take a look at that for

7 me, sir, and see if you're able to recognize that.

& A. This is the home I visited. We stood on opposite sides

9 of this gate for about twenty minutes.

10 Q. And does that address pertain to Sussex College of

11 Technology?

12 A. This is the hous~ at Highfield, Dane Hill, Haywards .-

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Heath. That was the address. British houses don't have

necessarily simple street addresses, but this was the address

to which all the Sussex and those various other schools' mail

went to.

MR. WHISLER: Move admission of Government's 68,

Your Honor please.

THE COURT: 68 will be received. It may be passed

to the jury.


evidence and published to the jury.)

Q. Now, have you kept abreast of the operations of the

Sussex College of Technology over the years?

25 .A. Yes. Again, I have many of their catalogs published

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1 between the late '70s and the late '90s.

2 Q. All right. And what can you tell us about degrees that

3 are awarded from that institutiop?

4 A. As best I can determine, everything -- it always was a

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one-man operation awarding degrees at all levels in every

possible field. This is one of the things I look for. If the

same man is reading work in political science and physics and

Chinese history and homeopathic me4icine, whatever, this

raises serious questlons in my mind about doing it.

To me, the key element in evaluating the Sussex College

of Technology is that _in their literature, they make it c~ear,

unlike Metropolitan Cqllegiate which says simply send us the ~ ...

money and we'll send you the degree, the diploma, Sussex

offered an option for actually doing some work, but they also

made it very clear that you didn't have to. So that for the

same fee, if you wanted to do work, your choice as a student,

they would not object. But on the other hand, their, what

they call external or extension degrees, same diploma, same

degree, no work.

Q. And when you were over there on your visit and you had

that meeting with Mr. Copen, did you observe any student

activity or anything of that sort associated with the campus?

A. No, this was clearly his private home. There was wash on

the line.

Q. In your dealings with Mr. Copen, do you know if he had a

•

1 Ph.D himself?

2 A.

3

I know that he claimed one.

MR. FALLS: Objection, relevance.

442

4 A. But to the best of my knowledge, it was to his own

5 school.

6 THE COURT: Overruled. You need to speak a little

7 bit louder, please, Mr. Falls.

8 MR. FALLS: I was objecting to the relevance, Your

9 Honor.

10 THE COURT: Yes, overruled.

You may answer. 11 Q.

12 A. One of the first""~things I always ask people who run ~

13 schools is where did you get your own degree. Mr. Copen never

14 answered, but there were articles in the Times Higher

15 Education Supplement, the British National Education Weekly

16 that stated that they had learned that his degrees were self-

17 awarded.

18 Q. Do you know an individual named Thomas Winters in

19 association with Sussex?

20 A. No.

21 Q. Did you ever hear of that name?

22 A. I don't recall it, no.

23 Q. All right, sir.

24 Q. Now, turning your attention to - - or moving on in the

25 CV. Were there any other institutions that you had

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1 familiarity with?

2 A. Yes, there are.

3 Q.

4 A.

Okay. Tell me about that.

Well, going down the list, the next one is the British

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West Indies Medical College. I normally do not delve deeply

into medical schools because they are rarely nontraditional.

There is no way to earn a medical degree, a usable medical

degree by distance learning.

What I look at,· however, because I do get inquiries and

do have a short section on medical schools in my book, are the

legitimate ways of ea~ning a useful, emphasis on useful,

medical degree, one that will allow one to be licensed in ~

. ' .. one's own country.

So I looked at British West Indies only to the point of

-- I have -- there is certain criteria that I have that I

share with, I would say; any registrar or admissions officer.

If a school meets certain criteria, then it is generally

accepted in the academic and other worlds.

Q. What are those criteria?

A. The criteria are called, in registrar talk it's G.A.A.P.,

the same term that accountants use to refer to generally

accepted accounting principles. In this case it's generally

accepted accreditation principles. For most schools there are

six of them. For medical schools there's one more. They are

the things one might normally predict. That it's accredited

444

1 by a recognized -- that is U.S. government recognized

2 accrediting agency. That it appears -- the most important one

3 is the, in my opinion, is the International Handbook of

4 Universities. It's a United Nations publication that lists

5 nine thousand schools worldwide. There's a comparable listing

6 in Australia that's widely accepted. There's an international

7 organization called Peer Projects in International Education

8 Research. They send people out to evaluate schools all over

9 the world and they publish directories. It's listing in any

10 of these. And then for medical schools, the important seventh

11 one is a listing in the directory of W.H.O., the World Health

12 Organization, which i~ the United Nations agency. If a .... 13 medical school is in there, then for all intents and purposes,

14 this is a usable degree in which you can take licensing exams

15 in various countries. And if it is not in there, to the best

16 of my knowledge, this means this is not a usable degree.

17 Q. Applying those criteria, did you make any determination

18 about the British West Indies Medical School?

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A. From my research it met zero of those -- of the seven

qualifications, and after that I did not look at it any

further because it was clear to me that this was not a usable

medical degree, was not one I could recommend to my readers.

Q. All right, sir. Continuing on, were there ·other entities

24 that were listed that you had familiarity with based upon your

25 work?

-· --

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1 A. Well, if we just go down the page, the next one is

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2 Universidad Autonoma de Santo Domingo. Just as when I see a

3 degree that doesn't meet my criteria, I don't look any further

4 or, rather, a school that does not meet my criteria and I

5 would say those of any college admissions officer registrar,

6 when I see one that does, I rarely look further as well unless

7 they are doing distance degrees, on-line degrees, and so on.

8 Universidad Autonoma is, to my knowledge, a school that

9 is in that World Hea°Ith Organization directory, that does meet

. 10 the other G.A.A.P. requirements; and because of that, I did

11 not look at it any further.

12 Q.

13 A.

Okay. Continue ~n, please. . ' ..

Okay. There is a law degree anticipated, '94. Do we

14 mention that one?

15 Q.

16 A.

If you're familiar with it.

It's a school I am familiar with. California is the only

17 state in the United States that still allows distance learning

18 study of law and usable law degrees in which one can actually

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take a bar exam, and Northwestern California University is

such a school in California.

Q. Okay.

22 A.

23 Q.

24 A.

Does not say degree awarded; it says anticipated.

Right.

The next one is Anglo American Institute of Drugless

25 Therapy, Doctor of Naturopathic Medicine. When I first

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started my research for my first edition twenty-six years ago,

they were one of the ones that came to my attention simply

because my media search discovered that they had, in fact,

started in Indiana, USA, had been, according to the newspaper

clippings of the time, closed down by authorities there and

then reopened in England, were closed down by authorities

there, and finally ended up in Scotland awarding degrees,

according to their literature again, by distance learning. My

personal belief is that a medical degree of any kind, a usable

medical degree can not be done by distance learning.

I believe that this Anglo American Institute operates

again like Sussex. If a person wants to do some work, they ~

will send them some work. And if they simply want a resuffie

evaluated for a degree to be awarded, this will be done

without further investigation or examination by the

institute. I have never been there.

Q. So with regard to the Anglo American Institute of

Drugless Therapy, do you have any knowledge, based on your

research, whether there was any work necessary to receive a

degree from that entity?

A. Like Sussex, their literature, as I read it, suggests it

is the option of the student whether the student wishes to do

any work or not, but the in~titute does not require it if the

resume suggests that they can award the degree without further

work. But they also, to my knowledge, they don't evaluate the

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1 resumes. They take it all at face value.

2 Q. And do you know if there's any campus associated with

3 that entity in Scotland?

4 A. No, I don't know that.

Okay. Continue on, please. 5 Q.

6 A. The other -- the seventh doctorate listed is from John F.

7 Kennedy College in Colorado Springs, Colorado. It is not

8 unusual for schools to use the names of other schools, whether

9 well intentioned or to confuse, I don't know. What ·I need to

10 say here is that the only John F. Kennedy College Alternative

11 University in ColoradQ that I know about, all I had -- all I

12 ever received was a o~e-page announcement from them offering . ~ f>-

13 to sell any degree a person might want including medical

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degrees. The address was a post office box. The post office

box normally one can get from the post office, the address at

which a post office box is linked. This one they could not

supply which led me to deduce, but not with certainty, that it

was a private home. I did no further investigation there

because I reached a dead end.

Q. Were there other -- go ahead.

A. But certainly such a school does not meet any of these

G.A.A.P. criteria. That much I can say with certainty because

I have checked those six sources.

The only.other school

Q. Before you move on to that, let me just ask you a

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1 question. Are you familiar with a degree of doctor of

2 nutritional medicine?

3 A. I am aware that that degree is awarded. In the world of

4 the validity of degrees, one relies, I rely, most people rely

5 on accreditation, but you have to go that step further and ask

6 is the accrediting agency a real one, a legitimate one because

7 there are -- well, on one hand, there are approximately 60

8 recognized accrediting agencies recognized by the Department

9 of Education, by the· Council on Higher Education and

10 Accreditation in Washington. There are also more than that

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that are unrecognized. So because a school says we are

accredited, that means nothing until you find out who has

accredited them.

So when someone has a degree of nutri-medicine, whatever

the wording might be, it varies, for the usefulness of it I

look to the only recognized accrediting agency in the field of

naturopathic medicine in Eugene, Oregon, and this school was

not listed. So at best, it is a real place with an

unrecognized degree, but I have no evidence of that.

Q. All right, sir. Any other entities you are familiar

with?

A. The only other one that comes to mind in this CV is not

where a degree was claimed but where a faculty position,

professorship was listed for what is listed in here as Notre

Dame or Notre Dame through Lafayette University indicating, I

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1 believe it was 1992 through current, in Colorado, and this is

2 one I am quite familiar with.

3 Q.

4 A.

What do you know about that institution?

Each of our fifty states has its own rules and

5 regulations for schools. Some are really tough. Some are

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6 very easy. Some all you do is file corporate company papers

and you are a university. Colorado has been one of the states

where it was relatively easy to do things, but they started

cracking down in the· mid 1990s. So what was, in fact, from

the corporate charter I read, incorporated as a religious

school, a Bible schoor, which also happened to be doing

degrees in the areas.~f health and medicine, they were-- ...

there was an injunction and finally they were closed by the

State of Colorado, I believe it was -- it was either '96 or

'97. They had changed their name in the process from

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Lafayette University to Notre Dame de Lafayette, whether to

give it -- my belief was to give it more of a religious school

sound. There was nothing legitimate there that I could find ..

The address -- I went to an address when I happened to be

in Denver for other reasons and made the trip. They weren't

there at the time, and I subsequently soon after learned that

they had -- after they were closed down and suffered what they

described as a major robbery where all their computers and

desks and filing cabinets were stolen and so there was simply

nothing there.

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MR. FALLS: Objection based on hearsay.

THE COURT: Overruled. An expert may take hearsay

into account.

A. This was big news in the Rocky Mountain News and other

Denver papers at the time. Subsequently an article in the

Minneapolis, I believe it was the Star Tribune newspaper --

MR. FALLS: Objection. Doesn't go to the basis of

his opinion at all.

THE COURT: What did you say last? I didn't hear

you.

THE WITNESS: I was about to explain how I formed an

opinion on what happened after this Lafayette school moved to -~ ' ~

Minnesota based on an article in the Minneapolis newspapers.

THE COURT: Overruled. Continue.

A. The Minneapolis article said that a school with an

entirely different name, it was the International University

for Better Physical something or other, run by the same people

with the same name as the ones that were running Lafayette,

that they were operating in a Minnesota town. And the article

reported all of the stolen desks, computers and files that had

been stolen in Colorado, or reported stolen, were, in fact, in

the office in Minnesota. Minnesota is another state which

does not regulate the operation of religious schools. And so

they continue there.

Q. All right, sir. Now, were there any other entities in

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1 the CV that you're familiar with?

2 A.

3 Q.

I think that's covered it.

That's it, okay. Now, the what do you know, if

4 anything, about the 1988 Education Reform Act of England?

5 A. There was a lot of unhappiness in the British educational

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6 world over the fairly large number of what they -- what I and

7 most others would have called the fraudulent schools operating

in Britain, more than twenty were identified. And so what

appeared to be an effort to legislate them out of existence

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MR. FALLS: Object to the hearsay.


A. the British gqvernment passed a law, the Higher ... Education Reform Act of 1988, which it was a fairly long act

but it really, in my opinion, said only one important thing

which was that the word "university" could no longer be used.

And they also put a deadline on it. It could not be used

after April 30th, I'm almost certain it was, 1988. That no

one could call themself a university unless they had the act

of parliament, the charter, the things that make a school

legal in Britain.

The result of this twelve years later is that it's had

almost no effect because many of the schools that I regard as

diploma mills were not calling themselves university at the

time. They were institute, school, academy, college,

whatever, and they were not prevented from operating. So --

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1 and the ones that were calling themselves universities simply

2 took out a charter, typically in the Caribbean, formed a

3 company in Barbados, St. Kits, Turks, other British islands.

4 And again, the British government felt its hands were tied and

5 so there are as many fakes now as there were then. They just

6 don't call themselves university.

7 Q. You used a moment ago the term "diploma mill." Can you

a define that for us, please.

9 A. My definition is an entity -- I hesitate to call it a

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school -- that will give its diploma, its -- that -- the

ter~inology is the degree, is the title you get. You have a

degree that says you're an MBA or a Ph.D, or whatever. And ·~

the diploma is the a~tual piece of paper that you hang on~the

wall that says so and so has been awarded such and such a

degree. ~ regard a diploma mill as anyplace that will

provide, usually sell, a diploma without requiring work and

without evaluating the credentials of the person wh9 was

asking for it.

Q. All right, sir. Based upon your expert opinion, your

resea~ch and work over the years, do any of these entities

that you've testified today about qualify as diploma mills?

A. I say yes with the added note that unlike the three times

that I that my book says I've been sued, it's up to seven

now and I really do need to be very careful before I call a

school a diploma mill. Nobody has ever won anything from me

453

1 but schools have sued because they didn't like when I called

2 them a diploma mill, so I have to have no hesitation when I do

3 that. Otherwise, I use other words like nonwonderful, less

4 than wonderful, dubious, whatever.

5 But in my book and for more than twenty years I have

6 called both Metropolitan Collegiate and Sussex diploma mills

7 without hesitation.

8 MR. WHISLER: Thank you very much. No further

9 questions.

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THE COURT: You may cross-examine.

MR. FALLS: ~hank you, Your Honor.

CROSS-EXAMINATION

13 BY MR. FALLS:

14 Q.

15 A.

16 Q.

Good afternoon, Dr. Bear.

Good afternoon.

Do you still have a copy of that CV?

Yes, I do.

..

17 A.

18 Q. Okay. The first school that is listed on his education

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for his undergraduate studies is Indiana University.

see that?

A. Uh-huh.

Do you

Q. Indiana University is, no question, an accredited, great

school here in the United States, correct?

24 A. As long as we don't have to debate basketball, yes.

Not talking about basketball. 25 Q.

1 A.

2 yes.

3 Q.

454

It is a fine and traditionally accredited university,

And Indiana is a perfectly accredited school in the

4 United States in your opinion; is that right?

5 A.

6 Q.

Yes.

And that's where he -- the curriculum or the CV indicates

7 he did his undergraduate work; is that right?

8 A.

9 Q.

Correct.

Did the government provide you any evidence to the

10 contrary that he did not attend and get his degree from

11 Indiana?

12 A.

13 Q.

No, they did not·t .-

And if you'll move on down the CV. It indicates that he

14 did some graduate -- graduate work at Ball State University;

15 is that right?

16 A. Yes.

17 Q. Okay. Ball State, same thing. Recognized, accredited

18 university here in the United States; is that right?

19 A.

20 Q.

Yes.

And did the government provide you any information or

21 evidence that he did not attend graduate studies at Ball State

22 University?

23 A.

24 Q.

No, they did not.

So you would agree that his undergraduate education is

25 perfectly valid.

455

Yes. 1 A.

2 Q. Your opinions or your opinions about his other education

3 focuses primarily on the medical degrees; is that right?

4 A.

5 Q.

6 A.

7 Q.

Medical and -

Well, the diplomas.

-- naturopathic, and so on, yes.

Okay. Now, the schools that are listed there, Sussex and

a. MCBC, and I believe some of the other schools that you listed,

9 there's literature available about those schools, isn't

10 there?

11 A. Yes.

12 Q. I mean, there's \iterature, and your book has sold, ihat,

13 400,000 copies or something like that?

14 A.

15 Q.

16 A.

17 Q.

Uh-huh.

And those schools are listed in your book as well.

In the diploma mill chapter.

Dr. Caplinger didn't put down on his CV·that he had

18 gotten his medical degree from Duke University or Johns

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Hopkins or anything like that, did he?

A. No.

Q. He didn't try to hide it. Put it right there on the CV

exactly where he had gotten his degrees from.

A. To the extent people know what MCBC Institute means, yes.

24 Q. But again, there's literature available on those

25 entities. If you want to check it out, you can.

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1 A. Uh-huh.

2 Q. Now, we've heard testimony about his attending classes at

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a continuing education program. Being an expert in the area

of education, are you aware that some people go to continuing

education courses, professionals like lawyers, doctors, maybe

accountants, engineers. They may have to go to continuing

education courses after they get their initial degree and

license. Are you aware of that?

A. Yes, I am.

Q. Okay. And it does not in any way mean that you are a

student at the place where you go to the continuing education

courses, does it?

A. Not necessarily.

Q. In other words, if a lawyer who got his law degree from

California was to move to North Carolina and was required to

do continuing education courses in order to keep his license,

he wouldn't have to fly home to California and do his

continuing education; he could do it here in North Carolina,

his CLE, continuing legal education courses.

A. Yes.

Q. Same thing for a doctor, you can go just about anywhere

and do continuing legal education courses. It does not mean

you're a student at that university where it's being held; is

that right?

A. Continuing medical education, yes.

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1 Q. Okay. Now, in the field of education, it's common for

2 people to transfer from one school in college to another

3 school, right?

4 A. It's common at the undergraduate level. It's much less

5 common at ~he graduate and professional level, but it's done.

6 Q.

7 A.

It's done at the undergraduate level.

Yes.

8 Q. For example, on your resume you got that you got your

9 undergraduate degree· from Berkeley University -- or University

10 of California, Berkeley, right?

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A. Correct.

Q. But how many yea~s did you actually go to Berkeley? ... ..

A. Undergraduate a year and a half.

Q. Okay.

A. I transferred from another school, yes.

Q. And when you transfer -- when you transferred to

Berkeley, they didn't make you take all your classes over

again. They accepted some credits from.the other school, I

assume, right?

A. Yes.

Q. And that's the ordinary procedure when you transfer from

one school to another, they'll accept some credits. They may

deny other credits, but they'll review what you give them and

decide what they're going to give you credit for when you

transfer.

•

1 A.

2 Q.

458

At the undergraduate level this is commonly done.

Now, you've testified -- you've used the word several

3 times, you said usable degrees.

4 A. Uh-huh.

5 Q. Now, what exactly do you mean by usable degree?

6 A. It's a definition I have evolved over the years based on

7 mostly feedback from my readers. And the most common question

8 I get is, Will this degree I am thinking about doing be useful

9 to me? And my response has to be, What do you want to use it

10 for? Is it to get a job? Is it to get licensed? Is it to

11 get a salary increase that comes with a higher degree? I~ it

12 to go on to another s·~hool? Is it just for my own self- .,.

13 satisfaction, or any combination of those? So there is no

14 single answer. I have to say to somebody who asks me, What do

15 you want to use it for? And on that basis I can generally

16 comment on whether I think a given degree will be useful by

17 their definition.

18 Q. So usable varies in the context of what you're looking

19

20

21

22

23

at.

A. There is a continuum from the Indiana University usable

beyond question.. Things at the other end, in my opinion, not

usable beyond question.

Q. Okay. In the United States, here in the United States,

24 are you aware that things you might need to get a medical

25 license could vary from state to state, the requirements or

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1 the things that you would need, like the years of residency,

2 the years of rotation? Licensing boards differ in every state

3 just about, don't they? Or they can.

4 A. They can differ, although my understanding is they all

5 have the foundation of the standard examination for foreign

6 medical school graduates.

7 Q. I'm just talking about period. I'm not talking about

8 medical schools. I'm talking about there can be different

9 qualifications among· the states; is that right?

10 A.

11 Q.

Yes, there can.

And that can hol~ true for between countries. In other

12 words, one country max only require two years of medical ~ ~

13 school to let you practice medicine as a doctor; whereas, the

14 United States, we would require much more medical school in

15 order to let you practice as a doctor here. That's possible.

16 A. There is a range even within countries, yes, I agree.

And you are not an expert on the requirements of every 17 Q.

18 country.

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20

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A. No, I am not .

Q. Okay. So for example, the level of training or education

that may qualify a person to be a doctor in one country would

not qualify you to be a doctor in the United States; is that

right?

24 A.

25 Q.

I believe that is correct, yes.

Now, in this case you're aware that Dr. Caplinger was

460

1 practicing medicine in the Dominican Republic. Are you aware

2 of that?

3 A. I have read his CV, yes.

4 Q. Okay. Well, the Dominican Republic is its own country.

5 It's a sovereign country, is it not?

6 A.

7 Q.

Yes.

The rules of the United States do not apply to the

8 Dominican Republic, do they?

9 A. Only to the ext'ent that someone with a Dominican

10 credential wishes to use it in the United States.

11 Q. Exactly. If a pe~son has a Dominican credential and they

12

13

wish to use it in the. United States, then the rules of the ~

" United States, how you become a doctor here, would apply.~

14 A. Yes.

15 Q. Now, recently, even here in the United States, there's

16 been some highly publicized cases that schools have the

17 absolute power to award degrees and take away degrees. One

18 involves MIT, Massachusetts Institute of Technology,

19

20

21

22

23

withholding a degree because a student caused the death of

another student. Do you recall --

A. Yes, I'm familiar with that case.

Q. Okay. And Johns Hopkins, very well respected school,

revoked a degree of a student because he had been convicted of

24 a crime. Are you aware of that?

25 A. Yes.

•

461

1 Q. Okay. Now, you're aware from what you've been provided

2 in this case that Dr. Caplinger has a medical degree from the

3 Autonomous University in Santo Domingo in the Dominican

4 Republic. Are you aware of that?

5 A. Yes.

6 Q. That's a valid school, isn't it?

7 A. Yes, it is.

8 Q. Accredited by the World Health Organization, is it not?

9 A. It is.

10 Q. And you would recognize that as a valid school?

11 A. Yes, I would.

12 Q. A degree from there ~

is a usable degree. ·- ~

13 A. In my opinion it is.

14 Q. So under the answers to the questions that I've given

15 you, if the Autonomous· University of Santo Domingo says we'll

16 accept this degree from Sussex College of Technology, we'll

17 accept this degree from Metropolitan Collegiate Institute, if

18 ~hey want to do that, they can do that, can they not?

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A. In my thinking it would be as if the Hornets had drafted

somebody who was three feet tall. They have every.right to do

it. I would trµly marvel at why they did it, but that's not

22 my business. So the answer is yes.

23 Q. They can do that. So if Dr. Caplinger provides them with

24 these schools, where he got his degree, and they say that's

25 good enough for us, that's good enough, isn't it?

462

1 A. If it is good enough for them and they award what I would

2 have to assume is a usable degree, then I am not the one to

3 offer an opinion on it. They didn't ask me.

4 Q. And certainly the United States government does not have

5 the authority to go into another country and say to the

6 Dominican Republic you folks cannot award this degree. The ·

7 U.S. government can't do that.

8 A.

9 Q.

That's my understanding.

And they can't go in and tell the people in the Dominican

10 Republic you cannot give this doctor a license to practice

11 medicine. They can't .~o that either.

12 A.

13 Q.

That's my understanding, yes. . ~

So if the Dominican licensing authorities, if Dr.

14 Caplinger comes to their country and he hands them, provides

15 them the degrees that he got from Sussex, that he got from

16 MCBC, that he got from these other places, and they say you

17 can practice medicine here, they have the full authority to do

18 that; isn't that true?

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A. My understanding is that they do, yes.

Q. So essentially, your testimony or your opinion is about

the value·-- in your opinion, the value of Dr. Caplinger's

22 education, not whether he has a valid license and not whether

23 he has a valid medical degree in the Dominican Republic.

24 A. I have e~pressed my surprise at the fact they did it, but

25 that's -- but I -- certainly -- if someone came to me and said

t ;

1 total stranger has a degree from Santo Domingo, medical

2 degree, he's about to do the brain surgery on your eldest

3 child --

That's not what I'm asking you, sir.

463

4 Q.

5 A. I understand that, but you should let me answer because

6 it

7 Q.

8 A.

Go ahead.

I would say this is a W.H.O. school. It is a medical

9 school that -- whose· degrees are accepted. Therefore, it is

10 not my place or that of anyone other than a medical licensing

11 board to challenge thi_s.

12 Q. Now, one of the ~laces that you talked about Dr. ... ...

13 Caplinger expecting a degree was in law from Northwestern

14 California University; is that right?

15 A.

16 Q.

Correct.

And in California I think you said it's the only state

17 left -- you don't ever have to go there. You can do it

18 entirely by correspondence to get your degree.

19 A. Well, you can do only the first year entirely by

20 correspondence. Then you must go to California and take what

21 they call the baby bar, the first year bar exam. If you pass

22 that, then you can do the remaining three years by

23 correspondence.

24 Q. Okay.

25 A. So there is the one --

464

1 Q. But Dr. Caplinger didn't indicate that he had his

2 degree.

3 A. Well, he said anticipated -- I don't know when this --

4 these words were typed. He says anticipated summer of '94.

5 If that were said any time after '91, then presumably he had

6 already passed the first year bar and could make that

7 statement. If it was said after that, then that would be an

8 inaccurate representation.

9 Q. Did the government ever provide you any evidence that Dr.

10 Caplinger said he had finished his degree?

11 A.

12 Q.

No, only his own _statement that it was anticipated.

All right. Now,. this -- you're an expert in ~

' 13 nontraditional education; is that right?

14 A. Yes.

15 Q. Okay. And you can do some very interesting things in

16 nontraditional education. There's a gentleman with a Ph.Din

17 your book who got his bachelor's, his master's and his

18 doctorate while he was in prison.

19 A.

20 Q.

21 A.

22 Q.

23 A.

24 it.

25 Q.

That's correct.

He's a doctor.

He is a Ph.D. in psychology.

Ph.Din psychology, and he never left the prison walls.

And he worked full-t~me for more than ten years to do

Now, what is the Harriett

1 A.

2 Q.

3 A.

Harriett Watt University.

Okay. What is that?

465

It is a very large, old, traditional, royal chartered

4 Scottish university with a three hundred acre campus and more

s than ten thousand students established in 1820.

6 Q. Well, in the back of your book it states that the

7 following programs require little or no on-campus residency,

8 and you can get with little or no on-campus residency a degree

9 in acoustics.

10 A.

11 Q.

12 A.

13 Q.

14 A.

15 Q.

16 A.

Uh-huh.

From Harriett Watt University.

Indeed.

Is that a degree in sound?

Yes, right, acoustical engineering and science.

You're an agent in that school; is that right?

For seven years I was involved in marketing their MBA

17 program in the U.S. only. I never worked for the school but

18 only for the publisher of their textbooks.

19 Q. Now, I want to ask you, I want to switch gears a little

20 bit. It's your sincere belief that whether a person has a

21 degree quite often has absolutely nothing to do with that

22

23

person's ability; is that right?

A. I have said that many times, yes.

24 Q. I think in one of your books you talk about Abraham

25 Lincoln, how he never went to law school. He studied law at

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466

1 home. And he's recognized as one of the most brilliant legal

2 minds in American history.

3 A. He did pass the bar, yes.

4 Q. Now, Albert Einstein, we know who that is. One of the

5 most famous scientists --

6 A.

7 Q.

8 A.

The name rings a bell. We share a birthday.

Never passed his English classes.

But he has a very respectable Ph.Din physics.

9 Q. Bill Gates, richest man in the world, college dropout.

10 So degrees and ability are totally two different things.

11 A. In many fields I would agree with that.

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Q. So you have -- i~ that line you have no expert opinion ' ~

about Dr. Caplinger's ability as a physician, do you?

A. I have no personal knowledge. I am not aware of anyone

who has achieved the same level of skill from four years of

medical school as the nontraditional approach, but I have no

personal knowledge of that.

Q. ~o Dr. Caplinger could be a very talented, extremely

talented physician, but that's not your area of expertise.

A. That's correct.

Q. Okay. And along those lines, you cannot testify about

the value or quality of his research and to the ImmuStim.

A. I can not today. It is• a field I could have -- research,

design and interpretation was a major part of my doctoral

program; however, I have not reviewed his research so I cannot

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467

1 do that now.

2 Q. So as far as you know, ImmuStim can be a highly effective

3 treatment for cancer and AIDS.

4 A. I have read a lot of the published literature on it. I

5 have no personal knowledge or opinion.

6

7

8

MR. FALLS: I have no further questions.

THE COURT: Redirect.

MR. WHISLER: Very briefly, Your Honor.

9 REDIRECT EXAMINATION

10 BY MR. WHISLER:

11 Q. ·Dr.Bear, are you acquainted with the process the

12 defendant went throu~ to obtain his M.D. from the Universidad ' '1li ...

13 de Autonoma?

14 A.

15 Q.

16 A.

17 Q.

I have read some of that information, yes.

Okay·.

Yes.

Now, do you know when the defendant was awarded his

18 degree from that medical school?

19 A. The information that I was given by someone on Dr.

20 Caplinger's team seemed to show 1997.

21 Q. Now, taking a look at that CV do you still have that

22 Government's Exhibit 9 up there?

23 A. Yes.

24 Q. Do you see the dates associated with all the degrees?

25 A. Yes.

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468

Q. Okay. Now, there seems to be one degree, though, that

does not have·a date.

A. That's correct.

Q. And which one is that?

A. The Universidad de Autonoma de Santo Domingo.

Q. That's the only one?

A. Yes, all of the others show the dates that -- have dates

associated with them.

Q. One last question. Based on your education and

knowledge, did Abraham Lincoln ever claim to have attended a

law school?

A. No. There were tive presidents who did it his way and . " ..

not1,e ever did.

MR. WHISLER: Thank you, sir. No further

questions.

THE COURT: Thank you, sir. You may come down. You

may be excused.

(Witness was excused.)

THE COURT: All right, ladies and gentlemen, let's

take a comfort recess of about ten minutes.

(Brief recess at 2:50 p.m.)

(Jury not present.)

MR. WHISLER: Your Honor, we had two matters for the

court before the jury comes in.

THE COURT: All right, sir.

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469

MR. WHISLER: First one is I'd just like to put on

the record a stipulation that I'll reduce to writing before my

case in chief is over, but it's going to save a couple

witnesses. The parties have agreed to stipulate that all the

First Union National Bank records and Western Union transfer

records are kept in the ordinary course of business, relieving

the obligation for custodian witnesses.

MR. BENDER: We so stipulate, Your Honor.

THE COURT:· Very good, thank you.

MR. WHISLER: At the same time the government will

stipulate to two defe~se exhibits that they were unable to, I

guess, produce at the. time of the examination. We'll ~ ·, ~

stipulate· to their admissibility. We have no problem with

that.

THE COURT: All right sir.

MR. BENDER: Of course, I can't introduce them at

this time.

THE COURT: When you're ready.

MR. BENDER: We'll deal with that later.


MR. WHISLER: I'll reduce that to writing before my

case is over.

THE COURT: All right. Now, anything else out of

the presence of the jury?

MR. FALLS: Yes, Your Honor.

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470


MR. FALLS: I've asked Mr. Whisler who his next

witness is going to pe and he's indicated it's going to be

Jane Henderson .. The Government's Exhibit 61 which -- have you

got a copy, Your Honor, up there?

THE COURT: Just a minute, let me see if I can find

it. 61?

MR. FALLS: Yes, sir.

THE COURT: All right, I have it.

.MR. FALLS: We would find objection to her

testifying to this document or about this document or any~way

consistent with this qocument because almost the entire t~ing

is based on statements that David Weekley made to her. If

you'll look at the second paragraph --

THE COURT: Who prepared this document, first of

all? Tell me what it is.

MR. FALLS: I don't know who prepared it.

MR. WHISLER: The witness prepared it, Your Honor.

Jane Henderson.

THE COURT: "We recently reviewed information about

treatment for AIDS and cancer," is the way it begins. Now,

who is the witness?

MR. WHISLER: Jane Henderson, Your Honor. She's a

non-Diamond Group investor who got stock certificates in

Immuno Pharmaceuticals. And she prepared this document after

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471

she received the literature.

THE COURT: To do what with it?

MR. WHISLER: She was passing the investment

opportunity on to her friends, the opportunity to invest in

stock in IPI and Dr. Caplinger. She --

THE COURT: Tell me what your objection to that is,

Mr. Falls.

MR. FALLS: First of all, Your Honor, there's no

reference that she got this information from literature.

THE COURT: Well, she'll have to qualify it. She'll

have to lay appropriate foundation, Mr. Falls.

MR. FALLS: I mean, actually, in here it says, ~

. ' ... "While we don't have factual information to back up the

following information, t~ese are some of the things we

remember from conversations with our broker." I mean, that's,

you know, that's the middle of the page. "Clients show

increased energy, cancer remission." These are things we

remember from conversations with our broker.

Down at the bottom, "If you are extremely interested

and want details, we can put you in touch with our ·broker and

he would even be happy to arrange a conversation with Dr.

Caplinger." That's testifying about Mr. Weekley's state of

mind.

And this document, it talks about if results prove

beneficial, the FDA approval could come not long after that.

472

1 That's information she had got orally from David Weekley. And

2 •She --

3 THE COURT: Mr. Falls, this -- of course, you're

4 going to have ample opportunity to cross-examine; but as I

5 understand the thrust of this case, and they're going to have

6 an opportunity to prove it this way, is that Dr. Caplinger

7 made representations to Mr. Weekley and his friend who in turn

8 made representations to people that they wanted to get money

9 from based upon those representations that Dr. Caplinger

10 made. And this appears to me to qualify under that

11 definition. So your objection is noted but it will be

12 admitted.

13

14

MR. FALLS: Your Honor, can I make one --

THE COURT: She'll have to lay a foundation, of

...

15 course. She'll have to make an appropriate foundation and

16 I'll listen carefully to the foundation.

17 MR. FALLS: Your Honor, if I may say -- well, I'll

18 just -- I'll wait.

19 THE COURT: You can do it now if you want to. Go

20 ahead.

21

22

23

MR. FALLS: Well, Your Honor, it just seems to me

that the government's gone about it in a backwards way.

They're coming in -- they're trying what they should have

24 done to lay a·foundation for this is ask David Weekley what

25 representations did you make to Jane Henderson instead of

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473

1 bringing in Jane Henderson saying David Weekley told her

2 this. This is not corroborating the specific tes~imony of

3 David Weekley.

4 THE COURT: Well, it's also -- it's also based on

5 information that she received about ImmuStim and I don't know

6 where that came from, but --

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MR. FALLS: We don't have the ability to

cross-examine David Weekley about what he told Jane Henderson.

MR. WHISLER: Your Honor, there was testimony about

that. We asked him what did you do with this literature, who

did you give it to and we listed out the categories of pe9ple,

and this was one of t~em and her name was on the list of~

stockholders, non-Diamond Group folks, and he said that. And

so, you know, we're covering both angles here. And she got

literature from David Weekley and Harry Kampetis.

THE COURT: It is beginning to get attenuated but it

is not so attenuated yet that it does not lead back to Dr.

Caplinger and the representations or misrepresentations that

he made with regard to ImrnuStim. I'm going to allow it and

your objection is noted.

MR. FALLS: Thank you, Judge.

THE COURT: Now, bring the jury in.

(Jury entered the courtroom.)

THE COURT: All right . . Call your next witness.

MR. WHISLER: Your Honor please, we call Jane

•

474

1 Henderson to the stand.

2 JANE HENDERSON,



5 BY MR. WHISLER:

6 Q.

7 A.

8 Q.

9 A.

10 Q.

11 A.

Good afternoon, ma'am. Please state your name.

Jane Henderson.

Where do you live, Ms. Henderson?

Belvedere Avenu·e in Charlotte.

Okay. What do you do for a living?

Whatever the day ·calls for. I'm a mother of three

12 children. Drywall fi~ishing, you know ...

13 Q.

14 A.

15 Q.

Can we call that domestic engineer?

Yes, that's fine.

Did you ever have a relationship or have acquaintance

16 with an individual named David Weekley?

17 A.

18 Q.

Yes.

How did you meet him?

19

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21

A. My husband met him through someone at work and invested

some money with him for his IRA and stocks, and so that's how

I met David.

22 Q.

23 A.

And how about Harry Kampetis?

Yes, we spoke with him by telephone. David had told us

24 about him and we spoke with him on the phone once, at least

25 once, and I think wrote to him also.

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1 Q. Do you know an individual named Gregory Caplinger?

2 A. Well, yes, I've spoken with him once also.

3 Q. Okay. In person or on the telephone?

4 A. On the telephone.

5 Q. Okay. And for what purpose were you associated with

6 these three individuals?

7 A. We -- David told us about a potential investment in some

8. stock in a company called Immune Pharmaceuticals and so --

9 well, and so these three people were connected with that

10 company, t_hat business.

11 Q.

12 A.

13 Q.

Okay. Mr. Weekley, Mr. Kampetis and Mr. Caplinger?

Yes.

Okay. Now, what do you know -- what did you know about

14 Immune Pharmaceuticals? Did you receive some literature about

15 it?

16 A. Yes. The first phone call was a phone call to my husband

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and he shared some information with me about it. And then we

both had a--· we had a three-way phone call with David after

that, and he sent us there was several bits of information

that we got in writing. One was a brochure that actually came

a little later on. Another was an article that was written in

Spanish that Dr. Caplinger had written that I think Harry

brought home briefly but we didn't keep. Since it was written

in Spanish and I don't read Spanish, I glanced at it and, you

know, gave it back. And there were always promises of a video

476

1 and more information, but we -- those things never happened.

2 Q. Okay.

3 A. As far as I know.

4 Q. What did you understand your -- did you ultimately invest

5 in some stock?

6 A. Yes, we did.

7 Q.

8 A.

What did you understand your investment to be about?

The clinic was -- well, what we understood was the clinic

9 had been for some time, maybe ten years, treating people for

10 cancer and having a good success rate and improving people's

11 symptoms and quality of life and longevity and they had

12 recently begun to work with AIDS as well. And so we ·~

. " .. 13 understood that with a little more investment income, then

14 this product, ImmuStim, could be marketed worldwide. There

15 was -- it was on the verge of being licensed -- or actually,

16 we were told it was licensed in the Dominican Republic, and

17 there was a man in British Columbia who had been a big

18 investor in some post World War II blood substitute that was

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23

also involved and then some people in Russia -

Q. Okay.

A. -- were also -- you know.

Q. How much money did you and your husband invest in the

Immuno stock?

24 A. Okay. We started out with 5,000 out of my IRA and 5,000

25 out of my husband's IRA,· and another 10,000, I think, of just

•

477

1 our personal money, savings. And then later in -- and that

2 was in August, September, I guess.

3 Q. What year, do you remember?

4 A. Of 1 96.

5 Q. '96, okay.

6 A. And then in October, November we - - something happened

7 and there was an opportunity David called us about an

8 opportunity to buy some more at a lower price than what we had

9 invested in original1y, and that was around the time that I

10 think I talked to Dr. Caplinger, also. But -- and so we

11 invested another $10,000 then.

12 Q. You said you talked to Dr. Caplinger. What time period

13 was that? ·~

. '

14 A. Well, it was November of '96 because I remember my

15 grandmother was diagnosed with pancreatic cancer the day after

16 Halloween. So early November. November 1st or so. And so I

17 was talking with David about investing in this other batch of

18 stock. And so during one of those conversations, I mentioned

19 my grandmother and asked if this treatment might be helpful

20 for her. And he said, well, here, I'll just call up Dr.

21 Caplinger and g~t him right on the phone, and so he -- we had

22 a three-way call.

23 Q.

24 A.

Okay. What did you talk about with defendant Caplinger?

We talked about I asked about -- well, I told --

25 explained her situation and asked basically if it might be

•

478

1 helpful for her and he told me just the general procedures for

2 treatment: Come down there and stay for a week. Do this and

3 that. Take some things home with you. You may have to go

4 back and visit later. And the approximate cost.

5 Q.

6 A.

How much was that?

I think it -- I think our -- it was around $8,000

7 estimated for the visit, and I probably have notes that would

8 say what all that included, you know.

9 Q.

10 A.

11 Q.

12 A.

13 Q.

14 A.

15 Q.

Okay.

Because I wrote it out for my grandmother.

For one visit.

For that, right. ~

' And Greg Caplinger told you that?

Yes.

Did he tell you anything else in that conversation about

16 himself, his background or anything like that?

17 A.

18 Q.

Not that I recall.

Did you get any information from the documentation about

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20

21

who this fella was, Caplinger?

A. Well, we had asked David in the beginning and he told us

that he was a, you know, medical doctor. He mentioned

22 Harvard. He mentioned Europe. I'm not sure if it was England

23 or Germany. Somehow those countries stick in my mind because

24 I was interested in homeopathic reme4ies at the time and I

25 knew that those were widely used in Europe and England

479

1 especially. So he seemed, from what we got from David, and,

2 you know, of course, all these initials after his name in the

3 brochure. I'm not sure if Harry asked --

4 Q. Okay. That's fine.


6 Honor?


8 Q. Approach and show you what I've marked as Government's

9 60A and B. Take a look at those for me and tell me if you


11 A. Yes.

12 Q. What are they? .. 13 A. Well, they're the two stock certificates. One was for me

14 for my IRA and one was for my husband for his IRA, 25 shares

15 each of Immuno Pharmaceuticals stock.

16 Q. Okay. Very well. Let me show you what's already been

17 admitted as Government's 12A through D. Take a look at those

18 for me, please. Tell me if you recognize those.

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23

A. Let's see. Yes. It's a -- let's see. Information about

Dr. Caplinger in this brochure. I don't recall seeing these.

Q. Okay. Let's put those aside. But you remember 12A, B --

12A and B.

A. Yeah, I think so.

24 Q. All right. Now, turning to 12A. Did you read over this

25 literature? Do you remember doing that?

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1 A.

2 Q.

3 A.

480

Let's see.

Take your time.

I don't -- I don't know that I remember reading it, but I

4 remember discussing it with Harry.

5 Q.

6 A.

Okay.

So whether this was something that my husband actually

7 read ...

8 Q.

9 A.

Okay. Do you remember taking a look at this?

Maybe so actually. Yeah, I think -- I think -- yeah,

10 because doctor of homeopathic medicine. Okay. Yeah.

11 Q. Okay. And the information you gleaned about the

12 defendant from that document, did you pass that information on -~

13 to others? ~ ~

14 A. Well, I guess in a way. We -- when we got involved in

15 this, I guess -- it sounded to us like a way of helping --

16 helping people and as well as a potential way to make some

17 money, you know. And so we wrote up a little paper and shared

18 it with our family and friends, certain friends offering if

19 they wanted more information, to call us.

20 Q. Show you what's marked as Government's 61. Ask you to

21 take a look at that.

22 A. Yes.

23 Q. Is that what you're referring to?

24 A. Uh-huh.

25 MR. WHISLER: If Your Honor please --

e

481

1 THE COURT: Did any of your family and friends

2 invest?

3

4

5

THE WITNESS: No, they did not, thank goodness.

MR. FALLS: Your Honor, may we approach?

THE COURT: No. It will be marked for

6 identification only. I'm going to reverse myself on that.

7 MR~ WHISLER: Yes, sir. We'd move admission of

8 Government's 60A and Band mark for identification

9 Government's 61.

10

11

12

13

14

15

THE COURT: Let it be done.

(Government's Exhibits Number 60A and Number 60B

were received into evidence and published to the jury.) ·~ ~ ~

MR. WHISLER: No further questions. Thank you, Your

Honor.

THE COURT: All right. You may cross-examine.

16 CROSS-EXAMINATION

17 BY MR. FALLS:

18 Q. Good afternoon, Ms. Henderson.

19

20

21

22

23

A. Hello.

Q. I'm just going to ask you a couple questions.• Was it

David Weekley who contacted you and your husband about

ImmuStim?

A. Yes.

24 Q. Okay. And when you said that you talked to Dr. Caplinger

25 on the phone, the purpose of calling him on the phone was

1 about your grandmother who had cancer; is that right?

2 A.

3 Q.

Right.

He didn't call you for a personal solicitation for

4 investment.

s A. No, he did not.

482

6 Q. And did David Weekley ever tell you about Dr. Caplinger

7 being in trouble in North Carolina?

8 A. No.

9 Q. Eventually did David Weekley quit returning y'all's phone

10 calls?

11 A.

12 Q.

Yes.

Because y'all -- you wanted to know what happened to-your

13 money.

14 A. Yeah, we were waiting for a report on the stock and --

15 right.

16 Q. Okay. Would it be accurate to say that you and your

17 husband relied on David Weekley and his representations?

18 A.

19 Q.

20 A .•

21 Q.

I would say so.

How much money did y'all lose?

$30,000.

Did Harry Kampetis ever call you and- tell you that they

22

23

had just recently got a new infusion of $3 million in cash?

A. I remember being told that. I don't -- I think it was

24 when we had called him perhaps. I don't know that he called

25 us to tell us that.

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483

1 Q. Other than that one time that you talked to Dr. Caplinger

2 about your grandmother-- your grandmother you decided not

3 your grandmother decided against going to get treatment?

4 A. Right. Right.

5 Q. Other than that one time that you talked to Dr.

6 Caplinger, did you ever have any other conversations with

7 him?

8 A.

9 Q.

No.

Are you aware o"f whether your husband had any other

10 conversations with him?

11 A.

12 Q.

I'm not aware that he did. -

Okay. So all of the oral representations about ImmuStim ~

" .. 13 were made either by Harry Kampetis or David Weekley; is that

14 right?

15 A. You mean other than his -- Dr. Caplinger's telling me how

16 the treatment would help my grandmother?

17 Q.

18 A.

Exactly.

Yeah, right. As far as investment in the company or --

19

20

21

well, I'm not sure that I understand your question.

Q. Anybody who got you on the phone or in person and spoke

to you --

22 A.

23 Q.

24 A.

25 Q.

Uh-huh.

-- about this -

Right.

-- it was Weekley and Kampetis; is that right?

i 'II &3

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• ~ 2

~

1 A.

2 Q.

3 A.

4 Q.

5 A.

6

7

8

Except for the conversation about --

That's what I mean, other than that one time.

-- treating my grandmother.

484

Other than the one time you spoke with Dr. Caplinger.

Uh-huh.

MR. FALLS: Okay. I have no further questions.

THE COURT: Redirect.

MR. WHISLER: One question, Your Honor.


10 BY MR. WHISLER:

11 Q. You told Mr. Falls that Harry Kampetis never told you

12 about any trouble that the defendant, Mr. Caplinger, had in

13 North Carolina.

14 A. Right.

15 Q. When you spoke with the defendant in that conversation on

16 the telephone, did he ever tell you about any trouble he had

17 in North Carolina with the law?

18 A. No.

19 MR. WHISLER:· That's all I have.


21 You may be excused.


23 THE COURT: Call your next witness.

24 MR. WHISLER: United States calls Barry Burke.

25 BARRY BURKE,

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485



3 BY MR. WHISLER:


5 record.

6 A.

7 Q.

Barry Burke.

Where do you live, sir?

8. A. In Charlotte on Willow Oak Road.

How are you employed? 9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

Q.

A. I'm a lawyer in my own practice.

Q. Okay. And do you know an individual named David

Weekley?

A. Yes.

·~ ...

Q. How do you know him?

A. I've known David since I was probably in the fifth -- or

ten or twelve years old. His father was a minister in the

church that I grew up in, Providence Baptist Church on

Randolph Road. Gordon Weekley was his name. He baptized me.

Q. Okay. Do you know an individual named Harry Kampetis?

A. I've never met Harry Kampetis. I've talked with him a

few times on the phone.

Q. How about Gregory Caplinger?

A. I never met him or talked to him.

24 Q.

25 A.

Do you know him of him?

Yes, what I've been told anyway.

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486

1 Q. How did you come to be associated with these three

2 individuals?

3 A. I've known David, like I say, for years. And I was the

David was an investment person. He worked at Merrill 4

5 Lynch and Legg Mason. I was the public guardian in

6 Mecklenburg County and had funds that were entrusted to me

7 through the court that belonged to incompetent people, minor

8 children, incompetent adults and disabled veterans, and I

9 invested those monie·s in banks and whatnot.

10 And at some point in time, David and I were talking and

11 he knew that I had these funds and he was an investment -12 advisor, so I -- at some point I took one of the estates that

-~ . -~ ..

13 was a fairly sizeable estate. Most of the estates I had were

14 very small, 20 to $50,000. I had one estate that was $300,000

15 worth and I decided to invest that estate with David. This

16

17

18

19

20

21

22

23

24

25

was several years ago. And that was when he was, I believe,

with either Merrill Lynch or Legg Mason.

And then David talked about going out on his own to form

his own company and he -- and he was talking with a guy named

Harry Kampetis who David held out as·being an expert in the

banking industry with international experience, and that sort

of thing. And so David and I would have lunch once a week or

so or once a month maybe and David would tell me, give me his

progress reports about how things were going in setting up his

company called the Diamond Group and the money that he was

1 i

487

1 spending on lawyers and accountants and all the expert advice

2 and guidance he was receiving.

3 And so over a period of six, eight months, I'd say maybe

4 even a year, David did form his company and we -- the

5 investment that he had with Legg Mason was transferred from

6 Legg Mason over to Diamond Group, and at that time it was just

7 one investment with the -- Resheeta Curry is what -- the Curry

8 account. And then -- and it worked well for a year or so, I'm

9 guessing. David would -- I'd have to -- this money is bonded

10 and I have to report to the court about the money. So if I

11 start off with $300,0~0 and earn 10 percent a year, the 3 --

12 then I'd have to go to the court on an anniversary date and -~ . " ...

13 demonstrate to the court that I still had the $330,000 at this

14 time, the principal plus the accrued interest or dividends,

15 and I'd spow them the statements from the Diamond Group

16 showing that that was the current value. I think he called it

17 a portfolio summary or something like that, a sheet basically

18 showing the value of the account.

19 Q.

20 A.

21 Q.

22 A.

23 Q.

Let me

Go ahead.

sorry to interrupt you.

I'm trying to narrow your testimony a little bit.

Yes, please.

What was your understanding of the Diamond Group? What

24 is that?

25 A. It was a company that I understood that David had started

I i; i3 ! i i ~

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488

1 with the guidance and advice of Harry Kampetis who was this

2 international banker kind of person.

3 Q. What kind of investment vehicle was being held out in

4 connection with the Diamond Group?

5 A. Well, what was -- what I was told and what I did were two

6 different things I'm afraid. David knew that this was not my

7 money. I could not -- the principal could not be at risk.

8 It's

9 Q.

10 A.

11 Q.

12 A.

Okay.

And --

So -- you were a-fiduciary at the time.

Yes.

13 Q •. And you took some of your funds, put them into the

14 Diamond Group.

15 A.

16 Q.

Right.

And what kind of terms were you given that the investment

17 vehicle would bring?

18 A. David told me it was -- talking about this money in the

19

20

21

22

23

24

25

Diamond Group -- the Diamond Group started to make -- to avail

itself of signifiqant -- of handsome returns. These monies

would return--. that I was going to get 20. The first 20

percent on the return of the investment went to me and

whatever is left went to the Diamond Group and that was their

profit and ...

Q. High rate of return, low risk.

489

Yes, I mean ...

What time period are we talking about?

1 A.

2 Q.

3 A. Well, when we first started on -- when the Diamond Group

4 was first created -- you mean time of the investment? It was

5 a one year investment.

6 Q. Okay. And what time were you dealing with David Weekley

7 in the Diamond Group vehicle? What year?

8 A. When we -- the first account I did with Resheeta Curry,

9 I'd have to refresh my recollection on my notes, but I'm

10 guessing '93. Something like that.

ll Q.

12 A.

13 Q.

14 A.

15 Q.

16 A.

17 Q.

Okay.

1993.

All right. Your first

Right.

-- association with the Diamond Group.

Right.

Now, to your knowledge, was the defendant Caplinger

18 involved in any way in the Diamond Group at that time?

19

20

21

22

23

A. Yes. As far -- I mean, he was -- I confuse Caplinger and

Kampetis so please forgive me. Dr. Caplinger, right. David

-- David told me at some point about a doctor down in the

Caribbean named Dr. Caplinger who -- shall I elaborate?

Q. Let me see if I can frame this for you.

24 A.

25 Q.

Tell me where you're headed.

The money you're talking about with the Diamond Group was

• 0 w IL

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490

1 your fiduciary?

2 A.

3 Q.

Right.

Did you later invest some of your own money with David in

4 connection with the defendant?

5 A. Yes.

6 Q.

7 A.

And for what purpose was that?

Throughout our discussions David would tell me about

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

forming the Diamond Group and whatnot. At some point the

conversation would change and David would talk about this

other side deal that he and Harry Kampetis were working on

with a guy named Dr. Caplinger down in the Caribbean who

invented some way to enhance antibiotics that would make them -~ " ..

ten times as effective as normal and cure AIDS and that sort

of thing. And of course, he never talked to me as if the

fiduciary funds that I had would ever be sent down there. But

at some point in time the way David presented it, to get in -

to purchase some stock of this company called Immune

Pharmaceuticals that this Dr. Caplinger was functioning under

would be a wise investment. And my wife and I took $10,000

each of our IRA money and invested with Immune Pharmaceuticals

through David.

Q. Did you receive stock certificates?

A. Yes.

Q. Did you receive any literature, any information or

brochures describing Immune Pharmaceuticals or Dr. Caplinger?

•

491

1 A. One of the -- yeah, I think it was probably the meeting

2 that I had with David and my wife when I had -- when I was

3 trying to convince my wife to invest in this Immuno

4 Pharmaceuticals, that David, as I ~emember, probably came to

5 our house and probably shared some sort of pamphlet that was

6 about the company, was about this enhanced antibiotic process

7 and showed a chart where they had tried these enhanced

8 antibiotics on people who were HIV positive and 80 percent of

9 them came back HIV n·egative, if that's a proper term. But I

10 don't have -- I didn't keep that.

11 Q.

12

Okay.

MR. WHISLER: ''ll,

May I approach this witness, Your

' 13 Honor?


15 Q. Mr. Burke, I'm going to show you what's already in

16 evidence· as Government's 12A, B, C and D and ask if you can

17 take a look at those documents and see if you recognize

18 those.

19

20

21

22

23

A. Does one of these have a chart on it because it's been a

long time and I -- if one of them has got a chart on it, I

might be able to recognize the chart that showed

administration to a hundred folks and 80 percent coming back

cured.

24 Q.

25 A.

Do you recognize seeing any of those?

No.

492

1 Q. If they don't look familiar to you, that's fine. But you

2 got some stock certificates and you got some brochures.

3 A. Yes. As I recall, the brochure that I had was bound with

4 not stapled like that, but, rather, the plastic type

5 binding.

6 Q.

7 A.

8 Q.

9

Okay. Thicker document?

Yes.

Okay.

MR. WHISLE'R: Okay. That's all the questions I

10 have. Thank you, sir.

11

12

THE COURT: ~ou may cross-examine.

MR. BENDER:. Yes. ~

. ' 13 CROSS-EXAMINATION

14 BY MR. BENDER:

15 Q. Good.afternoon, Mr. Burke.

Mr. Bender. 16 A.

17 Q. You're no longer the public guardian in Mecklenburg

18 County, are you?

19

20

21

22

23

A. That's right.

Q. And you're no longer the public g~ardian as a result of

what David Weekley convinced you to invest in.

A. I resigned as public guardian after these investments

were -- became aware that these investments were doubtful or

24 in question.

25 Q. Okay.

1 A.

2 Q.

493

At the request of the clerk of court who appointed me.

About $855,000 of these incompetent orphans, veterans,

3 was given to David Weekley, the Diamond Group, for investment,

4 wasn't it?

5 A. Yes, sir.

6 Q. And your friend, your lifelong friend assured you that

7 there was no risk and there was going to be a 20 percent

8 return, didn't he?

9 A. He -- as far as the assurance of no ·risk of principal,

10 yes, absolutely; but as far as any guaranteed 20 percent, that

11 was it was supposed to generate significant returns. The

12 way it was explained ~o me, that the Diamond Group was to earn .. ~

13 no.money until I got the first 20 percent.

14 Q. And your friend David Weekley got money out of this --

15 out of this thing for his own personal benefit, didn't he?

16 A. I don't know. I'm assuming he did, but I don't have any

17 knowledge about that.

18 Q. You talked to David Weekley about not only the

19 restriction on the funds that you were keeping as fiduciary;

20 but further than that, there's some federal law about

21 veterans' funds and you explained that --

22 A.

23 Q.

24 A.

25 Q.

Yes, I did.

-- to David, didn't you?

Yes.

And some of the funds that you invested were in fact

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494

1 veterans' funds.

2 A.

3 Q.

Yes.

And what is the restriction, according to federal law, on

4 veterans' funds and the way in which they're to be used?

5 A. I'm not familiar with any federal regulations. I'm

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

familiar with the state regulation which basically, in a

nutshell, says that a guardian can invest a veterans' funds in

just a certain number of investments, particularly -- in

particular, I think they center around government -

government backed investments: treasury bills, treasury

security notes, and tqat sort of thing.

Q. You shared that with David Weekley. ·-... ...

A. Yes.

Q. And he said no problem.

A. Yes.

Q. He understood that and was going to take care of that.

A. Yes.

Q. You got a phone call in August of 1995 from an FBI agent,

didn't you?

A. I received a phone call from a guy named Joel Brillhart

from California. When exactly I don't know, yes.

Q. Who identified himself as an FBI agent.

A. Yes.

Q. And he told you about -- well, tell us how he told you he

got your name.

•

495

1 A. There was a -- David assured me this money was going to

2 be in a bank in CD's or in a money market account and that was

3 okay. It was a permissible type investment. It's my

4 understanding that once these monies were pooled together,

5 they were shipped out to a bank in Oregon. The Oregon bank, I

6 think -- when the funds got to Oregon, there was something

7 amiss there and a -- the bank filed a lawsuit about the

8. funds. The bank said, basically, we've got this money but we

9 don't know who it belongs to. There were safekeeping receipts

10 generated.by that bank indicating that there were CD's in my

11 name as guardian for these various individuals called

12 safekeeping receipts.-~ There were also other names on those ~ ~

13 receipts by the name of West Bay and that sort of thing. So

14 apparently, based upon the bank or the FBI on the west coast

15 thought there was something amiss about that, the bank filed

16 an interpleader lawsuit. Based upon that lawsuit, an FBI

17 agent called me from California and asked me about the

18 investment.

19

20

21

22

23

Q. Okay. And during that conversation, the FBI agent told

you that a fella by the name of Lou Sosa who was involved in

this thing somehow was a scam artist, a convicted felon, a

fraudster.

A. Fraudster is what he used, the term he used, yeah.

24 Q.

25 A.

And as a result of that, did you get a little uneasy?

Yes, sir.

496

1 Q. And so being a little uneasy about your investments and

2 what you had done with these folks' money, you called David

3 Weekley.

Yes. 4 A.

5 Q. And among the things David told you was that they had

6 done their due diligence in this matter. There was nothing to

7 worry about. There was no problem. As a matter of fact, they

8 were dealing, that is the Diamond Group and this investment

9 was dealing with the· cream of the crop in Europe. And

10 according to his words, these people were almost like royalty

11 in Europe, right?

12

13

14

15

16

A.

Q.

A.

Q.

A.

That's

Okay.

Some.

Okay.

Yeah.

right. ~

' ... Give you some comfort level?

David is good. David - - I've dealt with this

17 thing for a long time and I called upon David for a source of

18 comfort and he was good at comforting me. He's got his

19 daddy's gift.

20 Q.

21 A.

22 Q.

Kind of soothed you a little bit?

Yes.

Told you everything was fine, no problem. Matter of

23 fact, he even said, Barry, if this guy calls you again, if

24 this FBI agent calls you, if he calls any of my other

25 investors, we're going to sue him for defamation, didn't he?

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497

1 A. Well, he said if he continues on, that he may subject

2 himself to some liability for defamation, yes.

3 Q. Okay. And that soothed you a little bit more.

Sure. 4 A.

5 Q. Okay. So are you completely soothed by this time or are

6 you still a little concerned about these investments you've

7 been making?

8 A. I haven't been comfortable about this really from the

9 first time I got the· interpleader. So, yes, somewhat

10 comforted, but what are my options? The money was tied up for

11 a year: I tried to bail out but was unable to.

12 Q. And then you ---~avid came back to you and said, Bar.:Y, I

13 want you to invest some more of those folks' money, didn't

14 he?

15 A. When· are you talking about? At some point in time, yes.

16

17

18

19

20

21

22

23

24

25

Yes. May I explain?

Q. Sure, go right ahead.

A. There were two of the people -- these monies belonged to

minor children and two of them had turned eighteen and were

entitled t9 their funds. And David and Harry Kampetis are

convincing me that it's just a matter of time. It's another

month, another month. And I'm d~agging these people out and

things started going south. So at some point, yes, I did

invest two other estates, trust estates, in the same

investment at David's suggestion to put some more capital into

I

e

Q

498

1 the Diamond Group to fund these -- to pay these eighteen year

2 olds off and that was -- so, yes, two other estates were

3 invested to pay off the -- two of the eighteen year olds.

4 Q. So what David Weekley told you when you were saying I've

5 got to have money, at least one of these people has to have

6 money -- was it Resheeta Curry or was it

7 A. It was Gus Rainey and Sheila Renae Lindle were the two

8 minors who had turned eighteen.

9 Q.

10 A.

And wasn't any money.

Huh-uh.

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Q. And you were on David. And so David says, well, Barry,

the money is tied up .. .._ But if you' 11 take two of your other

es�ates and give it to me, that will give me enough money to

then pay you for Sheila Lindle and Gus Rainey.

A. Yeah. The way David termed it is it will infuse more

capital into the Diamond Group to pay out these eighteen year

old kids, yes.

Q. You ever heard the phrase Ponzi scheme?

A. Yes, sir. More so after this than ...

Q. And what David described to you is the classic Ponz1

scheme.

A. Uh-huh.

Q. Wasn't it?

A. Yes.

Q. And you fell for it.

•

499

1 A� Yep. Well, my options were limited at the time I

2 thought.

3 Q. And David knew that, didn't he? You had talked to him

4 about that.

5 A. Whether or not he knew about it or not, I don't know. I

6 don't know where, you know, where the culprit is in this whole

7 thing. All along I'm getting the feeling that David -- I

8 mean, of course, I've known David all my life, too, and I

9 trusted him implicitly, as you can tell. But all along I'm

10 thinking that David.is being pulled along in this scheme, too,

11 that he was a victim also, but I don't know.

12 Q. All right. But �ou did what David asked you which w:s

13 participate in a Ponzi scheme.

14 A. Well, he didn't ask me to participate in a Ponzi scheme.

He asked for your money so he could then turn around and15 Q.

16 give it back to you to pay interest or whatever.

17 A. To infuse more capital in the Diamond Group to pay out

18 the investments, yes.

19

20

21

22

23

Q. Now, Mr. Burke, how long had you had this position with

Mecklenburg County?

A. About ten years.

Q. And had you ever done that with any other private

investor?

24 A. No, I'd never invested any money other than CD's and

25 money market accounts at local banks.

•

500

1 Q. How are you compensated with regard to those accounts and

2 estates? Do you get paid on the amount of interest that's

3 generated?

4 A. The law says that a guardian can be compensated up to

5 five percent of receipts and disbursements. So it is a

6 commission of monies received and paid out.

7 Q. So the more interest you receive on behalf of your

8 incompetent estates

9 A. Uh-huh.

10 Q. -- the more funds you're going to get back

11 theoretically.

12 A. Absolutely. "'llo

~ ~

13 Q. Okay. So was that one of the motivating factors for you

14 to get involved in this thing?

15 A.

16 Q.

17 A.

No.

Now, did --

I say that. The commissions are very -- are rather

18 meager in the overall scheme of things. One of the major

19 reasons I did this is because David was a friend of mine. He

20 was going out on his own and I wanted to help him and I

21 trusted him .

22

23

Q. And you didn't do any professional work for David during

this period of time, did you?

24 A. I handled the purchase of a condo that he bought. I did

25 the closing. I don't think I did anything else for him.

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1 Q. Okay. All right. So you handled the purchase - -2 A. A real estate purchase for him.

3 Q. You didn't do anything else for him?

4 A. I don't think so.

5 Q. Okay. Defendant's Exhibit Number 22. I want you to take

6 a look at it, Mr. Burke.

7 A. Okay. I think I remember this.

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Q. Tell this jury what that is.

A. Curry would have been taxes. Resheeta Curry, if you

recall, was the one sizeable estate that I had, about $300,000

worth. Because of the size of the estate, we had to do

quarterly payments orr~taxes. So every quarter, depending.-upon

the rate of return of the investment, we'd have to send money

to the Department of Revenue and the Internal Revenue

Service.· Because the money was -- because Resheeta Curry's

account was all with the Diamond Group, any time I needed

money, I'd have to call David and get him to send me a check.

Redeem shares, or whatever you call it.

So at one I'm.guessing this was for taxes, for a

quarterly _payment of taxes. David talked about a concept

about not -- not discriminating between these accounts, and

I'm not sure I understand this, but it was important that if

you -- according to David, that they could not treat one

investor more favorably than another.

And so when I called for -- I called David and said,

.g 1 I

•

502

1 David, I need some cash on the Curry account to pay the IRS

2 and the Department of Revenue for quarterly taxes.

3 David says, Due to the -- our inability to discriminate

4 from these investors, Barry, if you'll generate an invoice to

5 me to pay you the cash, then so you can pay the IRS, then

6 it will not be treated as a -- as discriminatory. And so

7 that's what this is all about. It's not -- it's not what it

8 appears to be.

9 Q.

10 A.

11 Q.

Basically, it's a false invoice that your friend David -

Yes.

-- had you send (or professional services rendered i~

12 connection with the management of the estate of Resheeta ~

. " . 13 Curry.

14 A.

15 Q.

Yes.

And you were getting paid by taxpayers, Mecklenburg

16 County, you were getting paid to manage those estates, right?

17 A. No, I was not getting paid by Mecklenburg County. The

18 on Resheeta's -- each estate pays. So if an estate earned

19

20

21

22

23

$10,000 in a year, 5 percent of that is, what, $500. So if an

account but it's paid out of the estate, not -- the

government does not pay me.

Q. Okay. But there's nothing on here -- as a matter of

fact, the check itself says, "For professional fees."

24 A. Yeah, this is what David said I had to do in order to get

25 cash out of the estate so I could pay the government the

•

1 quarterly tax deposits.

2 Q.

3 A.

4 Q.

5 A.

6 Q.

7 A.

Are you an attorney?

Yes, Slir.

Do you know what it means to submit false invoices

Well --

-- for the payment of professional fees?

No, I don't. I did what I had to do to pay the

503

8 government their taxes according to what David told -- advised

9 me. He was the advi'sor on the account.

10

11

12

13

14

15

16

17

18 $850,000?

19

20

21

22

THE COURT: You still got a license?

THE WITNESS: Yes, sir.

THE COURT: .~Have you been prosecuted?

THE WITNESS: No, sir.

MR. BENDER: Your Honor, that's all my questions.

THE COURT: Yes, sir. Any redirect?

MR. WHISLER: No redirect, no, sir.

THE COURT: How much did the bonding company pay?

THE WITNESS: About that, yes, sir.

THE COURT: Come down. You're excused.

{Witness was excused.)

MR. WHISLER: We call Allen Ezell to the stand, Your

23 Honor please.

24 ALLEN EZELL,


you ever ave occasion o look into an entity kri6wn as the

23 Sussex College in Great Britain?

24 A.

25 Q.

Yes, sir, I did.

And what prompted you to do that?

1 l

504


2 BY MR. WHISLER:


4 record.

5 A. Otho Allen Ezell, Jr.

6 Q. How do you spell your last name for the court reporter.

7 A. E-z-e-1-1.

8 Q. Where do you live, sir?

9 A. Apollo Beach, Florida. Suburb of Tampa.

10 Q. How are you currently employed?

11 A. I'm an assistant vice president audit investigative

12 officer with Corporat~ Fraud Investigative Services which is

13 part of First Union.

14 Q. And prior to that, were you employed with the

15 government?

16 A.

17 Q.

18 A.

19 Q.

20 A.

21 Q.

Yes, sir, I was.

In what capacity?

I was a special agent with the FBI.

When was that?

Became an agent in 1967. Retired in December of 1991.

And in connection with your duties as an FBI agent, did

22 you ever have occasion to look into an entity known as the

23 Sussex College in Great Britain?

24 A.

25 Q.

Yes, sir, I did.

And what prompted you to do that?

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sos

1 A. I don't know whether I received information from someone

2 concerning it or whether I saw an ad.

3 Q. Okay. And in connection with your investigation into

4 that entity, did you adopt an alias?

S A.

6 Q.

7 A.

8 Q.

Yes, sir, I did.

And what was that?

Robert Snyder.

And how did you use that alias in connection with

9 Sussex?

10 A. The young lady that was assisting me on all of these type

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

investigations, her name was Pamela Snyder. I came up with a

different first name and used her home address in Indian Trail -~

to correspond with the entity in England.

Q. Okay. You did correspond with them?

A. Yes, sir.

Q. And what type of correspondence did you have?

A. My initial communication was a letter asking for

information on the school. I believe I indicated that a

friend or an associate had mentioned their name to me. Please

send me information.

Q. Okay. You requested information. Did you send any money

with that?

A. No, sir.

Q. Okay. Did you receive any information back?

A. Yes, sir, I did.

' I

•

1 Q.

2 A.

What did you receive?

Received some information concerning the school.

3 Probably an application. Different things like that.

4 Q.

5 A.

6 Q.

7 A.

8 Q.

9 A.

10 Q.

11 A.

12 Q.

13 A.

14 Q.

15 A.

16 Q.

Okay. Did you apply for the school?

Yes, sir, · I did.

And what did you apply for? A particular degree?

Master's degree in business administration.

Okay. Had you filled out your application?

Yes, sir, I did.

Send it in?

Yes, sir, I did. -

What did you get~back? . '\

And I sent the money.

Okay.

I received my degree and a transcript.

All right. What did you do to get that -- earn that

17 transcript -- excuse me, earn that degree?

506

18 A. The only thing I did was send them a copy of a paper that

19

20

21

I had used in a speech on the psychology of the embezzler.

Q. Did you attend any classes?

A. None.

22 Q.

23 A.

24 Q.

25 A.

Did you get a degree?

Did I get a degree?

Yes, sir.

Yes.

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2 Honor?


4 Q. Mr. Ezell, I'm going to approach and show you what I've

5 marked as Government's 69 through 74. Ask you to take a look

6 at those for me, please. Tell me if you recognize those

7 documents.

8 A. 69 I recognize. It's a copy of my handwritten envelope

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

and the one-page letter dated June 22nd, 1983, that I sent to

Sussex College of Technology in England requesting

information.

Number 70 is the.~original of the $372 North Carolina .. Federal Savings and Loan check that I used to buy my degree.

71 is a copy of the envelope, my letter to Mr. Bruce

Copen, Dean of Sussex College of Technology, July 11, 1983,

wherein I enclosed the original of Government's Exhibit 70

along with my enrollment form, my order form, copy of my

transcript and the paper that I had done my thesis which was

approximately seven pages. So I recognize 71.

72 is the letter that they sent back to me dated July 20

of '83 advising that they had received my enrollment materials

for the degree of master of business administration. Please

allow 21 days for certification.

73 is a copy of the transcript that I received wherein my

grades were predominantly A's but I do have a few B's.

•

508

1 74 is a copy of the master of business administration

2 degree dated July 21, 1983.

3 So, yes, I recognize these exhibits.

4 Q.

5

All right, sir.

MR. WHISLER: I'd move admission of Government's 69

6 through 74, if Your Honor please.

7 THE COURT: Let it be received. It may be passed.

8 {Government's Exhibits Number 69, Number 70, Number

9 71, Number 72, Numbe·r 73 and Number 74 were received into

10 evidence.)

11 Q. Let me ask you about a couple quick things. Did you._tell

12 us how much the total-~amount of money you expended to obtain

13 your MBA was?

14 A. $372.

15 Q. And when you wrote this letter asking for the available

16 degrees and the requirements of course work, what did they

17 tell you about the required course work, if anything?

18 A. If you'll give me one moment, I'll try and be specific.

19 In order to refresh my memory today, I read -- reread

20 some of the attachments to the 302s that I prepared back in

21 1983. One of tpe documents I read earlier today was the

22 Sussex College of Technology prospectus of study courses.

23 They discussed in general about their school philosophy.

24 Q. Why don't you read it to yourself to refresh your

25 recollection and then put it down and testify about it.

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1 (Witness complied.)

2 Q. Is your recollection refreshed after reading that

3 document?

4 A. Yes.

Okay. Go ahead and respond.

509·

5 Q.

6 A. They did not list any listing of courses that I must take

7 in order to meet the requirements for the degree.

8 Q.

9 A.

Okay.

They talked in general broad brush terms about the

10 philosophy of distance education and teaching that the college

11 used.

12 Q. Okay. -,..._

13 A. .. ...

So they never told me what I had to take and I took

14 nothing.

15 Q. Okay. So did you send this seven page thesis on your own

16 or was that something that was requested?

17 A. I would not have done that unless there had been some

18

19

20

21

22

23

24

25

requirement to submit some paper, but I can't show you where

it says specifically what to send. But generally speaking, at

that point in time we did nothing like that unless it was

required.

Q. That's fine. Now, Government's 71, you said it was

addressed to Dr. Bruce Copen. Did you ever meet with him or

talk with him?

A. No, sir, have not.

510

1 Q. Have you ever visited the address listed on there for the

2 _college?

3 A.

4 Q.

No, sir, have not.

Okay. And this thesis that you wrote, what was that

5 about?

6 A. Why a person embezzles. The psychology of the

7 embezzler.

8 Q. Okay. Was it evaluated in any way by the school? Did

9 you receive any eval'uation of it?

10 A. To the best of my knowledge, no, I didn't.

11 Next thing I received was their letter and then the

12 degree and transcript·~ '\

13 Q. And this transcript, using your alias Robert Snyder, is

14 that a legitimate transcript?

15 A. Yes, sir.

16 Q.

17 A.

18 Q.

I notice you got a few C's in there.

Yes, sir, even had one below that.

All right. Government's 72 acknowledges 21 days for

19

20

21

22

23

certification. What does that mean?

A. I assume it means that's how long it will take to make

the degree. But do I know what certification is from their

standpoint?

Q. Okay.

No, sir, I do not.

And then you've got your transcript from Sussex

24 College of Technology. How many courses are reflected on that

25 transcript?

•

511

1 A. Eighteen.

2 Q. You did better there than you did in your undergraduate

3 work.

4 A. Yes, sir, only had four B's. All the rest were A's.

5 Q. Were you associated with any of those courses that are

6 listed there? Do you have any familiarity with any of those

7 in connection with your dealings with Sussex?

8 A. No.

9 Q. Okay. And Government 74 is your -- what is that? I'll

10 let you tell us.

11 A .. Master of business administration degree from Sussex

12 College of Technology in England. -~

. ' 13 Q. Awarded to whom?

14 A.

15 Q.

16 A.

17 Q.

18 here?

Robert A. Snyder.

Okay. And that was your alias.

Correct.

All right. Do you.know whose signature this degree bears

Can you make out that name?

I can't make it out, but my assumption is that it's Bruce

20 Copen because all of the correspondence was addressed to him.

21 But can I read the second name on there? No, sir, I cannot .

19 A.

22 Q.

23

24

25

That's fine.

MR. WHISLER: All right, sir. Thank you, sir.

THE COURT: Cross-examination.

MR. BENDER: Yes, very briefly.

512

1 CROSS-EXAMINATION

2 BY MR. BENDER:

3 Q. Mr. Ezell, you were an FBI agent here in Charlotte for a

4 number of years.

5 A.

6 Q.

7 A.

8 Q.

Yes, sir, I was.

You and I know each other from many, many years ago.

Yes, sir, we do.

Do you have some familiarity with a -- something called a

9 German bond?

10 A.

11 Q.

Yes, sir, I do.

Okay. And in your opinion as an FBI agent, does a German

12 bond or an investment-~in German bond have any validity ~ ..

13 wqatsoever?

14 MR. WHISLER: Objection. Outside the scope of

15 direct.

16

17 A.

18

19 Q.

20 A.

21 Q.

22 A.

23 Q.

24 A.

25 Q.


Does it have any validity?

THE COURT: What kind of German bond?

As a financial instrument.

As a financial instrument, no, sir.

Okay. Do you have any of them on your wall?

No, sir, I do not.

Okay. All right. Do you know whether I do or not?

Yes, sir, you do, I believe.

They make nice wall hangings, don't they?

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513

1 A. Yes, sir, they do.

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

MR. BENDER: Thank you, that's all.

MR. WHISLER: No further questions.

THE COURT: Thank you, sir.

THE WITNESS: Thank you.

THE COURT: You may come down. You may be excused.


MR. WHISLER: May we approach, Your Honor?

THE COURT:· Yes, sir. Don't tell me you've run out

of witnesses.

( Bench conf e_rence . )

THE COURT:. All right, ladies and gentlemen, we're .... ... going to·get to quit a little early. Come back at 9 o'clock

in the morning. Don't talk to anybody about the case. Don't

let anyone talk to you about the case. And we'll be in recess

now until 9 o'clock tomorrow.

(Evening recess at 4:07 p.m.)

THURSDAY MORNING, JULY 20, 2000

jury?

(Jury not present.)

THE COURT: Anything out of the presence of the

MR. WHISLER: Not for the government, Your Honor.

MR. BENDER: No, Your Honor.

THE COURT: All right. Then bring the jury in,

please.

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1

2

3

4


THE COURT: Good morning, ladies and gentlemen.

THE JURY: Good morning.

514'

THE COURT: All right. Mr. Whisler, you may call

5 your next witness.

6 MR. WHISLER: Thank you, Your Honor. May it please

7 the court, the United States would call John Richards to the

8 stand.

9

10

11

MR. FALLS: Your Honor, may we approach?


MR. FALLS: This is the 302 that was provided by the

12 government. Almost his entire testimony is based on hearsay ~

' 13 which was not provided by Dr. Caplinger.

14 MR. WHISLER: I can short-circuit that, Judge. He's

15 just going to talk about pictures that he took and what he saw

16 and that's it. Took pictures of all these places he went to.

17 All the addresses.

18

19

20

21

22

23

24

25

MR. FALLS: He can't even talk about what the

address purported to be, then, because it is based on

hearsay. He took a picture of a building.

THE COURT: He can tell what he saw. Has a sign on

it, whatever.

MR. FALLS: But not what they were purported to be

if it's based on hearsay.

THE COURT: What is this all about, Mr. Whisler?

MR. WHISLER: Judge, I'm just putting in

THE COURT: This guy from London?

515

1

2

3 MR. WHISLER: Yes, sir. He took the pictures, some

4 of which

5

6

MR. FALLS: Hold it down. They can hear you.

MR. WHISLER: He took the pictures, some of which

7 have been admitted into evidence already and some of which

8 have not. And I'll just ask him if he's familiar with these

9 addresses, been there and taken pictures and what did he see.

10 Very short witness.

11

12


(End of sid~-bar conference.) ~

13 JOHN RICHARDS,



16 BY MR. WHISLER:

17 Q.

18 A.

19 Q.

20 A.

21 Q.

Good morning, sir. State your name for the record.

Detective Constable John Richards.


I live in London, England.

And how are you employed there, sir?

22

23

A. I work for the Scotland Yard's Metropolitan Police Fraud

Squad. Within that fraud squad, I'm part of a team called

24 mutual assistance team.

25 Q. And how long have you been so employed, sir?

5! d z w Cl.

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516

1 A. I've been in the police for twenty-six years; in the

2 fraud squad for ten years; and in the field of mutual legal

3 assistance for five years.

4 Q. All right,. sir. In connection with your duties there

5 with Scotland Yard, did you have_ occasion to assist the U.S.

6 government in the matter before us here today?

7 A.

8 Q.

9 A.

Yes, I did, sir.

And what did you do?

I visited a number of addresses in and around London to

10 verify that they existed and what their use was, and then made

11 inquiries within those buildings.

12 Q.

13 A.

Okay. Did you take photographs?

I did indeed. -~ . ~

14 Q. Okay. Is one of those addresses 27-A Old Gloucester

15 Street?

16 A. Yes, it is.

17

18

19

20

21

22

23

24

25

Q. And is that associated with a mailbox?

MR. FALLS: Object to the leading.

THE COURT: Yes, don't lead, Mr. Whisler.

Q. Did you visit that address, sir?

A. Yes, I did_.

Q. Okay. What did you observe there at that address?

A. It is it is a mailbox.

Q. And what particular mailbox?

A. It receives letters from companies and individuals for

•

517

1 forward transmission to clients.

2 MR. FALLS: Object, Your Honor. This is based on

3 hearsay.

4 THE COURT: Overruled.

5 Q. You may finish your answer.

6 A. Okay. It receives mail from its clients and forwards it

7 on to the clients or businesses having their register.

8 Q.

9 A.

Did you take photographs of that?

I did.


11 Honor?

12 THE COURT: -~Yes, sir. . \

13 Q •. Detective Richards, I'm going to show you what's already

14 in evidence as Government's 66A and B. Ask you to take a look

15 at those, sir. Tell me if you recognize those.

16 A. Yes, these are both the photographs that I took of the

17 premises.

18 Q. All right, sir. Now, sir, did you have occasion to go to

19

20

21

22

23

Highfield, Church Lane?

A. Yes, I did.

Q. And where is that located?

A. It's in a small Essex village. Dane Hill is the name of

the village. It has about maybe SO, 60 houses in the

24 village. And it's south of London.

25 Q. How far south?

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518

1 A. About 40 miles.

2 Q. Did you photograph -- make any photographs of that

3 address?

4 A.

5 Q.

6 A.

I did.

And what did you see there at that address?

The actual house itself, Highfield, is a large detached

7 house with a sweeping driveway. I couldn't gain access to it

8 because it had electric gates to it. I made inquiries of

9 neighbors in the lane itself and I found out that --

10

11

12 Q.

13 A.

14 Q.

15 A.

16 Q.


THE COURT: _Sustained. Don't say that.

Did you take a P:llotograph of that address, sir?

I did, sir.

Were you able to get access on to the property?

No, sir.

Okay. Detective Richards, I'm going to show you what's

17 already in evidence as Government's 68. Ask you to take a

18 look at that for me, sir.

19 A. Yes.

20 Q. Do you recognize that?

21 A. I took thif:I photograph.

22 Q. Okay.

23 THE COURT: What number is it?

24 MR. WHISLER: 68, if Your Honor please.

25 THE COURT: Has it been previously admitted?

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1

2

3 Q.



Did you have occasion to visit 7-11 Kensington High

4 Street?

Yes, I did, sir.

And what is located there? What did you observe?

519

5 A.

6 Q.

7 A. This property is an executive business center. Again, a

8 center that receives mail on behalf of clients.

9 Q.

10 A.

Okay. And did you take photographs there?

I did, sir.

11 Q. Ok~y. Detective -Richards, I'm going to show you wha~

12 I've marked as Goverrnuent's 67A and B. Ask you to take a look . ' ~

13 at those for me, sir, and tell me if you recognize those.

14 A. Yes, I took both these photographs.

7-11 Kensington? 15 Q.

16 A. Yes.

17

18

19

20

21

22

23

24

25

MR. WHISLER: I move to admit Government's 67A and B

and to publish.

THE COURT: They'll be received. They may be

published to the jury.

(Government's Exhibits Number 67A and Number 67B

were received into evidence and published to the jury.)

Q. And Detective Richards, did you have occasion to visit 11

Rosemont Road?

A. Yes, I did, sir.

•

1 Q.

2 A.

Where is that located?

That's in North London.

And what did you observe there, sir?

520

3 Q.

4 A. 11 Rosemont is an answering service. Purely an answering

5 service.

6

7

8 Q.

9 A.



What else did you observe there?

It -- it's a di°lapidated building for sure. It has two

10 rooms, one of which contains two employees and a large

11 switchboard. The othe·r room contains the manager, Mr.

12 Gunston.

13 Q. All right, sir. Did you take a photograph at that

14 address?

15 A.

16 Q.

Yes, I did, sir.

Detective Richards, I'm going to show you what's marked

17 as Government's 75. Ask you to take a look at that for me,

18 sir. Tell me if you recognize that.

19

20

21

A. Yes, I took this photograph at 11 Rosemont Road.

Q. And what's reflected on the front of that address, the

building?

22 A. Has the bold letters under the first floor windows

23 "Answering Limited" and the telephone number.

24 MR. WHISLER: Your Honor please, I'd move admission

25 of Government's 75 and to publish.

521

1 THE COURT: 75 will be received. It may be

2 published.

3 (Government's Exhibit Number 75 was received into

4 evidence and published to the jury.)

5 Q.

6 A.

7 Q.

How long did you say you lived in London, sir?

Twenty-six years.

Have you ever heard of Sussex General Hospital in

a London?

9 A. No, sir.

10 Q. How about Sussex School of Health and Science?

11 A. No, sir.

12 Q. Metropolitan Collegiate Institute, have you heard ......

13 that? . '

14 A. No, sir.

-of p-

·15 Q. How about the British West Indies Health Confederation?

16 A. No, sir.

17

18 Thank you.

19

20

21



MR. FALLS: I have no questions, Your Honor.

THE COURT: Thank you, sir. You may step down. I

22 hope you have time to enjoy your visit.

23 THE WITNESS: Thank you.very much, Your Honor.

24

25


MR. WHISLER: United States calls Dennis Bartlett to

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522

1 the stand.

2 DENNIS BARTLETT,



5 BY MR. WHISLER:

6 Q. Good morning, sir. Please state your name for the

7 record.

8 A.

9 Q.

10 A.

11 Q.

12 A.

Dennis Bartlett.


Davie, Florida.

How are you employed there, sir?

I am senior vice·~resident of Healthcare Insurance

13 Services, an independent insurance agency.

14 Q. During the time period of 1994 to 1997, how were you

15 employed?

..

16 A. Senior vice president for Proctor Homer Warren, another

17

18

19

20

21

22

23

24

25

insurance agency in Hollywood, Florida.

Q. All right, sir. And during that time period did you have

occasion to meet an individual named Gregory Caplinger?

A. I did.

Q. And how did you come to meet him?

A. He was looking for quotes on various types of insurance

allegedly for a new product that he was developing. More

specifically, products liability for a vaccine for HIV which

was a very hot topic back then.

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1 Q.

2 A.

3 Q.

523

All right. Do you see him in the courtroom today, sir?

Yes, he is.

Okay. Could you just point him out and tell us what he's

4 wearing for the record.

5 A. I believe it's this gentleman over here with the

6 mustache.

7 Q. Tell us what he's wearing.

8 A. He's wearing a gray suit and tie.

9 MR. WHISLER: Very well. Your Honor please, I'd ask

10 the record reflect he's identified the defendant.

11

12

THE COURT: -Yes, sir, the record will so reflect.

MR. WHISLE~ Thank you. . ._,

13 Q.

14 A.

15 Q.

And did you have a face-to-face meeting?

Yes, we did.

Okay. And first of all, what did he tell you about

16 himself?

17 A. He indicated that he was a physician in the Dominican

18

19

20

21

22

23

24

25

Republic and that he was -- he had developed -- or he and his

clinic had developed a vaccine that would help cure or

eliminate HIV.

Q. All right.

A. Now, this is going back a few years so I may not be a

hundred percent accurate in what the -- I mean, what this

vaccine was supposed to do.

Q. That's fine.

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524

1 A. That was the general trend.

2 Q. That's fine. Do you know what year this was when you

3 first had your meeting with Gregory Caplinger?

4 A.

5 Q.

I want to say 1995.

Did he tell you anything else about himself, about his

6 background or training or anything of that sort?

7 A. I believe he said he also owned a clinic in the Dominican

8 Republic that was like a free clinic that gave free medical

9 assistance to the ne·edy and poor.

10 Q.

11 A.

Okay ..

In other words, was like a little bit more of a

12 philanthropist.

13 Q. All right, sir. And so he came to you to get some

14 insurance; is that right?

15 A. Yes, sir.

16 Q. Okay. And what else did he talk about at that meeting?

Well, he talked about setting up a U.S. corporation to 17 A.

18

19

20

21

22

23

24

25

market the product here so he would need, you know, a variety

of insurance for products liability, worker's comp, general

liability, property insurance. In our -- and he would also

need directors' and officers' liability because he was looking

for people to get on his board ·of directors.

Q. Okay. Did he mention any other individuals or associates

in the U.S. that were working with him on this?

A. If he did, I'm not familiar. I can't remember.

525

1 Q. Okay. So as a result of that initial meeting, what did

2 you do?

3 A. I had gone to the marketplace and, you know, submitted a

4 temporary -- you know, initial applications and received some

5 initial quotes.

6 Q.

7 A.

8 Q.

9

10

11 Q.

Okay. Did you generate any proposals?

Yes, I did.

All right, sir.



Mr. Bartlett, I'm going to approach and show you what's

12 already in evidence a-~ Government's 2C. Ask if you'd taki- a

13 look at that, sir, and tell me if you recognize that

14 document.

15 A.

16 Q.

17 A.

18 Q.

Yes, I do.

Okay. And

Parts of it.

Right. Tell us what part of it you're looking at.

19

20

21

A. I'm looking at a page that's called -- this is an

equipment schedule for World Me.dical Services which was the

organization that we were trying to come up with competitive

22 you know, a quote for. Some of the stamps on this thing

23 do not look familiar.

24 Q.

25 A.

Okay.

I mean, but it's a basic outline. Some of these other

526

1 documents I've never seen before.

2 Q. Right. Just the insurance documents, if you would look

3 at those.

Correct. 4 A.

5 Q. Okay. Now, it references Proctor Homer Warren on here,

6 correct?

Correct. 7 A.

8 Q. And that was your company. Okay. And did you prepare

9 this equipment schedule?

10 A. Yes, I did.

11 Q. Okay. And do you recall if you prepared this insurable

12 values figure? -~ . ' ~

13 A. Yeah, looks like the typing of our proposal.

14 Q. Okay.

15 A. This information was not on there.

16 Q. All right. Now, what information is that?

17 A. It says, "All medical equipment will be leased to the for

18 profit division at funding." That would not be on any

19

20

21

22

23

document that I prepared.

Q. All right, sir. Now, I want to turn your attention to

this other portion of 2C that's entitled Property Coverage.

What is that?

A. Well, this is a proposal for property insurance and it --

24 the insured location is not anything that I'm familiar with.

25 I'm not familiar with the Centro de -- I can't pronounce the

527

1 word. And it's Santo Domingo. I'm just not familiar with

2 that named insured. Everything that I would have quoted would

3 have had World Medical Services on it. But everything else

4 looks like -- I don't know what that insurance agent stamp

5 is. I have no idea what that is. That is not something that

6 I would do.

7 Q.

8 A.

Okay.

But the left of the document here would obviously be

9 picked up from something and Lloyds of London.

10 Q. All right, sir. So when you talked to Greg Caplinger

11 about World Medical S~rvices, what did he tell you that who

12 was behind that?

13 A.

14 Q.

-~ . '

I believe he was and he was looking for C capital.

All right, sir. Did there ever come a time where you

15 provided any updated insurance coverage information to him

16 after that initial proposal?

17 A. Well, you know, I pitched my file about eight months ago,

18 so I believe I probably would have made an initial proposal

19 and maybe a second proposal, but the -- well, probably not. I

20 think everything was done pretty much at the same time. Just

21 waiting for him to say let's go with it.

22

23

Q. Okay. You submitted your insurance proposal and you were

waiting on a response from the defendant?

24 A. That's correct.

25 Q. I'm going to show you what's already in evidence as

m ~ i

' 5! i w IL

• 0 w IL

:I a: !Z

528

1 Government's 12F. Show you a portion of that. Ask you to

2 take a look at that. Tell me if you recognize that.

3 A. Again, that's the same property insurance proposal, but

4 it -- the named insured is not what is -- in fact, that's not

5 even my typing. The_ typing doesn't even match. So that's --

6 it my initial -- my initial impression is that this is not

7 my this is something that I'm not familiar with.

8 Q. That heading there.

9 A. The heading under the name of the clinic, or whatever it

10 was, in Santo Domingo.

11 Q. All right, sir. __ Now, looking at this premium amount_,

12 does that correspond when you reconcile that with any of the -~ . \ ~

13 information that you gave him?

14 A. Well, I believe the insurable values is about $3 million

15 higher than what I originally quoted.

16 Q.

17 A.

18 Q.

19 A.

20 been

21 Q.

22 that?

23 A.

24 Q.

And how about the premium?

It looks like it's changed.

Okay.

Premium would have been --

altered at all.

it doesn't look like it has

Okay. And. this stamp on here, do you recall seeing

I've never seen that stamp.

Okay. And taking a look at this last portion here,

25 there's an amendment to the -- says, "Amendment to the policy

•

529

1 effective January '96." Does that look familiar to you, sir?

2 A. No, that would not anything from the bottom of that

3 page does not look like it was generated by my computer

4 system.

5 Q. Okay. But this --

6 A. Typing doesn't match and I'm not -- you know, the values

7 don't even tie into the premium.

a. Q.

9 A.

10 Q.

Okay.

It would have been substantially higher.

All right, sir. And this top portion does correspond to

11 your typing.

12 A.

13 Q.

Yes, it does.

Okay. Did you have any subsequent conversations with the

14 defendant about your initial insurance proposal?

15 A. Yeah, I was -- I think we had had one or two follow-up

16 conversations and I think he went back to Santo Domingo, from

17 what I remember. I know I tried to call once to see what the

18 status was and never heard from him again.

19 Q. Where did you try to place the call?

20 A. To a clinic in the Dominican Republic.

21 Q. Okay. Did. you get ahold of anybody down there?


23 THE COURT: Did he what?

24 Q. Did you speak with anybody down there?

25 THE COURT: Overruled, did he speak with somebody.

•

530

1 Now we'll see about what he said. Go ahead.

2 A. Yes, someone answered the phone.

3 Q. Okay. Did you ever ultimately have any contact with the

4 defendant?

5 A. Never.

6 Q. Okay. Did you ever ultimately write a binder or policy

7 of any kind for the defendant?

8 A. No, I did not.

9 MR. WHISLER: Okay. Thank you, sir. I have no

10 further questions.

11

12

13

14

15

16

17 Khau.

THE COURT: Cross-examine.

MR. BENDER: I have no questions. -~

THE COURT: '"!'hank you, sir. Come down.


THE COURT: Call your next.

MR. WHISLER: United States would call Vincent

18 VINCENT KHAU,



21 BY MR. WHISLER: .

22 Q.

23 A.

24 Q.

25 A.

Good morning, sir. Please state your name.

My name is Vincent, my last name is Khau, K-h-a-u.

Mr. Khau, where do you live, sir?

I live in Phoenix, Arizona.

1 Q.

2 you.

3 A.

4 Q.

5 A.

6 Q.

531

Okay. You have to speak up a little bit so we can hear

Okay. I live in Phoenix, Arizona.

How long have you lived there, sir?

I live there since 1992.

All right. How are you employed, sir? What do you do

7 for a living?

8 A.

9 Q.

10 A.

11 Q.

12 A.

13 Q.

14 A.

15 Q.

16 A.

17 Q.

18 A.

I'm selling medical equipment.

Okay. Have you ever met a fella named David Weekley?

Yeah. I meet him at Dominican Republic.

Okay. Do you re~ember when that was?

On the middle of.'li,July 1996. . '

How about a fella named Harry Kampetis?

Same. We meet at the same time.

And .how about an individual named Gregory Caplinger?

Same.

Okay.

Three of them same time.

19

20

21

22

23

Q. All right.

today, sir?

Do you see Gregory Caplinger in the courtroom

A. Yeah.

Q. Okay.

wearing.

Okay.

Could you point him out and tell us what he's

24 A.

25 Q. Where is he located in the courtroom? Can you just point

•

1 him out?

2 A.

3 Q.

4 A.

5

6

In front. In front.

To my right?

Yeah.

MR. BENDER: Objection.

THE COURT: Don't help him.

532

7 Q. All right. Go ahead, sir. Can you point him out and

8 tell us where he is in the courtroom?

9 A.

10 Q.

11 A.

12 Q.

Who?

Gregory Caplinger.

(No response. )

Do you see him i~ the courtroom, sir? . ..

13 A .. Look like really similar.

14 Q. Okay.

15 A. Really similar.

16 Q. Okay.

17 A. Yeah.

18 Q. What's he wearing?

19

20

21

22

23

24

A. Suit and tie.

Q. Okay. There's a few of those in here, sir. Going to

have to be more specific. You can point to him if you

MR. BENDER: Your Honor, can we approach?

THE COURT: No, sir. No, sir.

Do you know Mr. Caplinger? Do you know him when you

25 see him?

533

1 THE WITNESS: Yeah, I can -- yeah, I can -- because

2 I still have some -- something because I talked to him

3 face-to-face so I can point out if I see him.

4

5

6

THE COURT: Well, do it.

THE WITNESS: Even four year.

THE COURT: Well, do it. Do it now. Point him out

7 if you see him. Point him out now.

8

9 there.

10

11

12

13 tie?

14

15

16

17

18

19

20 not?

21

22

23

24

25

THE WITNESS: Okay. It's that gentleman sit over

THE COURT: Where?

THE WITNESS: Over there.

THE COURT:. What's he wearing? What color is his ~

. .... ~

THE WITNESS: Yeah, and tie.

THE COURT: What color?

THE WITNESS: Look like blue.

THE COURT: All right. What color is his hair?

THE WITNESS: Black color.

THE COURT: Does he have any hair on his face or

THE WITNESS: (No response.)

THE COURT: Does he have any hair on his face?

THE WITNESS: Yeah, right here.

THE COURT: What do you call that?

THE WITNESS: Mustache, right?

1

2

THE COURT: All right. Now go ahead.


534

3 BY MR. WHISLER:

4 Q.

5 A.

How did you come to meet these three individuals, sir?

I got introduced from one -- one of the friend in the

6 town, in my town. He said he have some kind of medicine can

7 cure AIDS, cancer. And so I want to introduce this kind of

a. medicine into China.

9 Q. Okay. Why did you go to Santo Domingo?

10 A. Beca~se they told me go to there and they can prove to me

11 the medicine is very good. Yeah.

12 Q. Okay. And what ~ere you going to do in relationship to ~ .

13 these three individuals and the medicine?

14 A. When I been there and they asking me to invest to the

15 company and become a partner and then I can get permission to

16 sell the product into China.

17 Q. All right, sir. And did you go down there and talk to

18 them about that possibility?

19 A.

20 Q.

21 A.

(No response.)

Did you have discussions about your investment?

Yeah.

22

23

Q. Okay. Did you have discussions with the defendant about

your investment?

24 A.

25 Q.

Uh-huh.

Okay. And did you enter into an ag~eement with those

535

1 individuals to do that?

2 A. Yeah, I signed some paper. Actually, they asking me to

3 sign it. Okay. And then they will prove to me a lot of

4 things later.

5

6

7 Q.



Mr. Khau, I'm going to show you what are marked as

8 Government's Exhibits 76 and 77. Ask if you can take a look

9 at those, sir, and t'ell me if you recognize those documents.

10 A.

11 Q.

Yeah. Yeah, I have a copy here, too.

Okay. Let's just use those. How -- what a~e those

12 documents, 76 and 77? What are they?

13 A.

14 Q.

76 which one?

Okay. Let's start with this one here. We'll put this

15 one aside. What is that?

16 A.

17 Q.

18 A.

(No response. )

Did you write that?·

Yeah.

19

20

21

Q. Okay. Can you describe what it is without reading the

whole thing.

A. Oh, this is -- I read some news in the Times and then I

22 write down some note about some kind of medicine they can cure

23 AIDS and then I -- when I been Dominican Republic, I was

24 asking Dr. Caplinger this is what they have -- what the

25 medicine he have is very similar with this kind of medicine

536

1 because I'm not a -- I'm not a doctor so I have to -- I really

2 don't really understand this kind of medicine.

3 Q.

4 A.

5 Q.

6 A.

7 Q.

8 A.

Okay.

So I have to ask him.

All right. And let's take a look at Government's 77.

Uh-huh.

Can you tell me what that is.

Yeah, this -- this is some kind of paper they type and

9 write all the information and before I go to -- before I sign

10 this contract, so they said they have some -- owe some money

11 have to pay very urge~t. If don't pay, they will lose -

12 everything, the drug, the company, the permission, something -~ . ' ...

13 like that. A lot of things. So they want me to send the

14 money very urgent, something like that. And --

15 Q.

16 A.

17 Q.

I t~ll you what.

Uh-huh.

First of all, tell me who are the four signatures on that

18 document?

19 A.

20 Q.

21 A.

22 Q.

23 A.

24 Q.

Caplinger, Harry K~mpetis and David Weekley.

Okay. And who else?

And my nam~, Vincent.

Okay.

Uh-huh.

Those a~e the four signatures. Was that signed in your

25 presence? Did you all sign that together?

537

1 A. Oh, yes, sign it at the same time.

2 Q. And what is the amount of money that is reflected in here

3 that pertains to you?

4 A.

5 Q.

6 A.

He said he owed somebody the money.

Okay. Just read that sentence there.

"That on or about August 5th, 1996, Mr. Vincent will

7 cause to deliver $1.3 million to be wire transferred and

8 received at the company bank account in the Dominican Republic

9 for the retirement a°f corporate debt."

10 Q.

11 A.

Now, read this last sentence here, then.

"That within app~oximately 90 days thereafter, Mr. Khau

12

13

14

15

16

17

18

will cause to deliver an additional $900,000 to be delivered ...... ' ~

to the company account."

Q. All right, sir. And the date on that agreement?

A. July 15th.

Q. Okay. What year?

A. 1996.

Q. All right. Thank you.

19 MR. WHISLER:· If Your Honor please, move admission

20 of Government's 76 and 77.

21 THE COURT: They'll be received.

22

23

MR. WHISLER: And ask to publish.

THE COURT: They may be passed to the jury.


25 received into evidence and published to the jury.)

538

1 Q. Now, Mr. Khau, after that agreement was signed, did you

2 make inquiry about the defendant, Gregory Caplinger, and his

3 background?

4 A. When I go there, because I really face-to-face the three

5 of them and all talk very good for Caplinger and he have -- he

6 will be get the Nobel Prize, you know. So everything make me

7 very believing what they are -- the medicine is to be very

8 good, you know. So I was very interested to introduce this

9 medicine to China. And then I really want to sell this

10 product.

11 After I come back to my home and also I fly to China~

12 talk to the doctor andi my partner over there and they asking -~ ~

13 me have to get some more information about this product and

14 how to prove this product really work, must have some kind of

15 document and hospital research or something like that. So I

16 asking for some more.

17 Q.

18 A.

From the defendant, Mr. Caplinger?

Yeah.

19

20

21

Q. Okay.

A. I asking for some more information. Actually, I didn't

get anything to prove to my partner. And August 2nd -- 2nd of

22 August, 1996, and I got one friend of mine in New Jersey. He

23 have some friend found out some article, so faxed it to me.

24 And after I read the article, I personally find out all kind

25 of things this is fraud.

•

1

2

3 Q.

4 A.



Go ahead.

539

So I stop immediately any further communication or any

5 contact.

6 Q. Mr. Khau, I'm going to show you what are marked as

7 Government's Exhibits 78 and 79. Let's look at each of them

8 separately. Look at 78 first and tell me if you recognize

9 that document.

10 A. Oh, yeah. This document is after I went to China and

11 talked to my partner and many doctor over there and they would

12 come up

13

14 A.

15

.....

MR. BENDER: " Objection.

for this type question.

THE COURT: Wait, wait, wait. Overruled. Go

16 ahead.

17 A. Okay. So I send a fax to David Weekley and asking can I

18 get the answer to all the question I have.

19 Q.

20 A.

21 Q.

22 sir.

23 A.

24 Q.

25 A.

Okay. That's dated -- what's the date on that?

July 30th, 1996.

Okay. Take a look at Government's 79, if you would,

Do you recognize that?

(No response. )

Does that have your name on it?

I don't know why I don't have this in my -- I don't have

•

540

1 this one.

2 Q. What do you mean you don't have it? Did you see it

3 before at one time?

4 A. No. No, I don't know -- I don't know -- I don't have a

5 memory I see this one.

You don't have a memory for that document?

Yeah.

6 Q.

7 A.

8 Q. Okay. Do you want to check your files to refresh your

9 recollection?

10 A. Yeah.

11 Q. Okay.

12 (Pause.) ~

" 13 A. No, I don't have that in here.

14 Q. Okay.

15 A. And I don't have memory I have seen this one.

16 Q. I'm sorry?

17 A. I don't have memory I read this one.

18 Q. Okay.

19 A. Yeah, I don't have memory I read this one before.

20 Q. Okay. Let's put that one aside, then. Going.back

21 Government's 78, what are you asking in that letter?

22 A.

23 Q.

24 A.

I'd have to read it.

Go ahead and take a look at it.

Okay. "Dear David, the following is the list of

25 questions I need the answer to in order to present to my

..

to

m a, '!' s ~ 5! i IU ~

• 0 IU

"' ~

ls "'

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

541

partner.

"What are the doctor's affiliations with others working

on this project? Such as other doctors, hospitals, clinics,

labs, R&D, et cetera?

"What is the country of manufacture of the drug used in

the treatment of this doctor's patients?

"3. What is the country where this drug is currently

being used on patients? Are there any other countries being

considered for testfng or treatment?

"4. Are there any patents pending on this drug in this

or any other country?

"What are the cORtractual agreements between the doctor ' ~

and the company presently manufacturing the drug?

"Are there any other contractual arrangements of any

nature which bind this doctor to any other company, hospital,

clinic, lab, R&D or individual that would. prohibit or impede

him in any way from repayment of the investment?

"7. Is there any information currently published on the

doctor or his procedures? Is there any proof that the

procedure works in stopping the disease?"

Q. Okay. Now, in response to these questions, did you

receive any information back addressing these questions that

you had?

24 A.

25 Q.

Actually·no.

Okay.

I '!I

~

! 5! i w a.

• 0 ~ 2 cc Ii!

542

1 A. No.

2 MR. WHISLER: Move admission of Government's 78, if

3 Your Honor please.

4 THE COURT: Received. It may be passed.



7 Q. Mr. Khau, a few minutes ago you said you received some

8 information and you stopped your correspondence with the

9 defendant, correct? What was that information that you

10 received?

11 A. The article. I got the article sent from Mr. Steven-

12 Barrett and he have ~nd me the letter. This article ·- ..

13 de.scribed the activity


15 Q. Well, Mr. Khau, you don't need to read that letter for

16 us. Just tell us what did you find out, if anything, about

17 the defendant?

18 A. After I read the article, I don't -- I don't -- I don't

19

20

21

22

23

24

25

remember what totally inside here. I have read it, but after

I read it and I know this is -- I cannot go any further do

business with this -- a lot of things is not true.

Q. Okay. What type of things were not true?

A. Because I believe in United States, if the people don't

have the correct information, they don't they cannot write

an article in the public and put in his name here. It's not

~

' g

' i i w ~

e 0 w ~

~ « ~

543

1 -- not -- they have any proof to them. Because write the

2 article, I believe in the United States you will be in a lot

3 of trouble. You will be -- the law will be convict

4 something -- will be -- the court will be find -- they will

5 they can sue this person right away, you know. This person

6 will be in a lot of trouble if they don't have anything to

7 prove it.

8 Q.

9 A.

10

Okay.

They cannot wri~e an article --

THE COURT: That's all right, Mr. Khau. Thank you,

11 sir.

12 Q. Yes, sir. You tnQntioned a minute ago some type of ~ ~

13 fraud. What type of fraud were you talking about?

14

15


THE COURT: Well, sustained.

16 A. You

17

18

19

20

21

22

23

24

25

THE COURT: No, sir, don't answer any more.

Q. No, sir, you can't answer.

THE COURT: Any further questions, Mr. Whisler?

MR. WHISLER: Your Honor, I just have two more

documents.


Q. • Mr. Khau, I'm going to show you what I've marked as

Government's 81 and 82. Ask you to take a look at those,

sir. Let's do them one at a time. Let's take a look at --

544

1 here you go. Let me pull that aside for you. Take a look at

2 Government's 81. Do you recognize that, sir?

3 A.

4 Q.

5 A.

6 Q.

7 A.

8 Q.

9 A.

Yeah.

Okay. What is it?

I think this a letter threaten me have to send money.

Who signed that letter?

Caplinger.

Okay. What kind of threat does it contain?

He will threaten me if I don't send money. I will be

10 defraud for the agreement and he will asking me for the

11 purchase order of mor~ than 5 million here.

12 Q. Okay. Take a lo_ok at Government's 82 if you would, sir. ~ ... ..

13 What is that? Do you recognize that?

14 A.

15 Q.

16 A.

17 who

18 Q.

19 that

20 A.

21 Q.

Yeah.

What is that?

This is the letter

is it to send it

Okay. And what

say?

Judgment.

Okay.

to

is

from -- I don't know -- I don't know

me. Yeah, I seen the letter before.

this here on the front? What does

22 MR. WHISLER: I move admission of Government's 81

23 and 82 and move to publish, if Your Honor please.

24 THE COURT: They're received. They may be

25 published.

•

545


2 received into evidence and published to the jury.)

3 Q.

4 A.

5 Q.

Mr. Khau, did you ever give the defendant $2 million?

No.

Okay. Did you ever go to court or have to go to court

6 about that $2 million?

7 A. No.

8 Q. Okay. Did you ever speak with the defendant, Gregory

9 Caplinger, on the telephone at this time toward the end of

10 your relationship?

11 A.

12 Q.

13 A.

14 Q.

15 A.

After I decide to stop, I received a lot of phone call.

From him?

Yeah.

Okay. What did he say?

He said a lot of thing. Maybe, I don't know, he get

16 drunk or something like this. Talk a lot of thing. Not like

17 the normal people talk.

18 Q.

19 A.

20 Q.

21 A .

22 Q.

23 A.

Okay.

And --

What was he telling you or asking you or ...

Just talk something threaten. Threaten, you know.

About what?

About I can't remember really exactly the word because

24 I didn't -- I didn't record them, the phone, you know.

25 Q. Okay.

i ; 5! c:, z w a.

546

1 A. Many year right now. I cannot remember. I don't want to

2 say anything

3 Q.

4 A.

5 Q.

6

7

8

Sure.

-- that's not correct.

That's fine. We appreciate that.



MR. BENDER: Thank you.

9 CROSS-EXAMINATION

10 BY MR. BENDER:

11 Q.

12 A.

13 Q.

14 A.

15 Q.

Good morning, Mr .. Khau.

Good morning.

How are you?

Very good.

Mr. Khau, you met David Weekley and Harry Kampetis in

16 July of 1996 in the Dominican Republic.

17 A.

18 Q.

19 A.

20 Q.

21 A.

Yeah.

And please, if you don't understand my question -

Uh-huh.

-- please ask me to repeat it, okay.

Okay.

22

23

Q. But you had already talked with David Weekley on the

telephone before you went to the Dominican Republic --

24 A.

25 Q.

Uh-huh.

-- didn't you?

547

1 A. Yeah.

2 Q. And your purpose for going to the Dominican Republic was

3 to find out about this product, this medicine, ImmuStim; is

4 that right?

5 A. Yeah.

6 Q. Okay. And once you got down there, you met Dr.

7 Caplinger, didn't you?

8 A. Yeah.

And you met him at his clinic, didn't you? 9 Q.

10 A. I met him in the office. I don't know this is the clinic

11 or not. Maybe

12 Yeah.

I remember meeting third floor of

13 Q •. Okay. And do you remember meeting patients?

ye~h.

14 A. Meeting the patient other -- not at the building, the

15 same building.

16 Q.

17 A.

At another hospital or clinic?

No, somewhere -- somewhere -- I really don't know where

18 it is.

19 Q.

20 A.

21 Q.

Okay. But you met some patients and talked with them.

I met some people and they talking Spanish.

Right.

22 A. So I don't -- I really don't know what they are talk --

23 only only Caplinger and David and Harry translate, so I

24 don't really understand.

25 Q. Okay. Did you meet some other doctors?

1 A.

2 Q.

3 A.

4 Q.

Other doctors, no.

You didn't?

No.

548

Okay. Did you spend most of your time with Harry and

5 David or did you spend most of your time with Dr. Caplinger?

6 A. I spend the time with three of them.

7 Q. All three of them.

8 A. At the Dominican Republic, yeah.

9 Q. And the agreement you signed on July the 15th for the

10 payment of this $1.3 million, you signed that before the

11 questions that you had had been answered; isn't that right?

12 A.

13 Q.

14 A.

Yeah. The questions, yeah, right here. -~

. ' Okay".

The question July 30.

...

15 Q. And you signed the agreement on July the 15th before you

16 left Santo Domingo; is that right?

17 A. Yeah, I signed this paper July 15th, right.

18 Q. Okay. Did you understand that to be a contract, an

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agreement that you would provide funding for them?

A. They told me -- asking me to help -- help them. They

said this is a debt they have to pay and if not paid on August

5th, they will lose the medicine, you know, lose the medicine,

so asking me for help.

24 Q. Okay. And they explained to you they had a debt on the

25 medicine itself.

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1 A. I don't know what kind of debt really because very

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confusing.

Q. Okay.

partner in

A. Yeah.

Q. Okay.

questions?

A. Yeah,

And then when you got back and you talked to your

China, you needed answers to some questions.

And you don't remember getting answers to those

I don't remember I get the answer of this

9 question.

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11

12

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Q.

A.

Q.

A.

And you

Uh-huh.

And not

Yeah, I

sent that letter to David Weekley?

to Dr. Caplinger? ~

. " sent it because because David Weekley,

~

they

14 are partner of Caplinger.

15 Q. Mr. Khau, you took a vial of ImmuStim with you when you

16 left Santo Domingo, did you not?

17 A. Yeah. Give me some sample and I took the sample to prove

18 to my partner what kind it is, you know.

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Q. And the letter that you received from Dr. Caplinger was

about the return of that medicine --

A . Uh-huh.

Q. -- wasn't it?

A. Yeah. I sent back right away because I don't need to

keep it if I don't want to do anything. So I don't need to

keep the - - anything so I sent back right away.

1 Q.

2 A.

Okay.

Uh-huh.

550

3 Q. After you got the letter that says you have our medicine,

4 please return it or you owe $5.7 million, you sent it back?

5 A.

6 Q.

Excuse me?

The letter that you have up there is asking for the

7 return of the medicine, the ImmuStim C, I think.

8 A.

9 Q.

10 A.

Yeah, I return right away. I sent back right away.

Okay. After you got this letter on August 8th.

Actually, they call me to Harry and David call me to

11 return -- return right. away and I sent it back right away~

12 Q. Okay. And after.~that you had further conversations with . ' ..

13 David Weekley, didn't you?

14 A. Yeah, because they try to convince me, but I -- my

15 decision is not to do anything more because I don't think it's

16 good.

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18

MR. BENDER: Okay. Thank you, Mr. Khau.


19 MR. WHISLER: No further questions. Thank you.

20 THE COURT: Thank you, Mr. Khau. You may come

21 down. You may be excused, sir.

22

23

24 the stand.


MR. WHISLER: United States would call Bob Zelle to

25 ROBERT K. ZELLE,

551



3 BY MR. WHISLER:

4 Q.

5 A.

6 Q.

7 A.

8 Q.

9 A.

10 Q.

11 A.

12 Q.

13 A.

14 Q.

15 A.

16 Q.

17 A.

18 Q.

19 A.

20

21 Q.

22 A.

23 Q.

24 A.

25

Good morning, sir.

Good morning.

Please state your name for the record.

Robert K. Zelle.

Where do you live, sir?

Nashville, Tennessee.

And what do you do for a living, sir?

I'm retired.

Prior to your retirement, what did you do for a living? ·~ " Lived off of my own investments.

You were an investor of some type?

You ~ight say a private investor.

Did you know an individual named Gregory Caplinger?

Yes.

Do you see him in the courtroom here today?

Let me get my glasses on.

Looks like him over there.

Can you tell us what he's wearing.

I'm sorry?

Can you tell us what he's wearing, please, sir.

He's wea~ing a dark suit, white shirt and tie.

MR. WHISLER: Ask the record to reflect the witness

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1 has identified the defendant, Your Honor.

2

3 Q.

4 A.

5 Q.

6 A.


Do you know a fella named David Weekley?

Yes.

How about Harry Kampetis?

Yes.

How did you come to meet these three individuals?

552

7 Q.

8 A. A friend of mine took a trip to the Dominican Republic

9 some years ago to vfsit Caplinger and see the country and

10 spend the night and come home. They happened to be there with

11 Dr. Caplinger at that time. -12 Q.

13 A.

And did you ever invest any money with Dr. Caplinger? ''lo,

' . I did, but not through them. I had already done so

14 several years before that.

15 Q.

16 A.

How much was that?

$130,000.

17 Q.

18 A.

Okay. And for what purpose was your investment?

Just because I do a lot of venture capital type of

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investing.

Q. Right. But what were you investing in?

A. Well, I thought I was investing in a venture, a company,

a project he was developing or had developed, in the

process of refining a means to perhaps arrest patients with

cancer and HIV.

Q. Okay. Now, what did you know about the defendant, who he

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1 was?

2 A. Very, very little. Well, nothing when I met him. I met

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him through a mutual friend. A lot of my investing is done

through a network of contacts, friends, and I was introduced

to him by a Dana Van Pelt who's a physical therapist in Boca

Raton, and I had known him for a number of years because he

had been working on me as a result of an airplane crash years

ago. And he told me about his becoming very friendly and, I

guess -- no, I.shouldn't say associated with, but he knew Dr.

Caplinger very well as a result of working with him in his

rehabilitation from a car accident. And he said he's got_an

idea or some work that might be interesting to you because he ·~ \ ~

knew that I would I was and am interested in venture

capital situations. So I relied primarily on his friendship,

knowledge, understanding of Dr. Caplinger.

Q. Okay.

A. Gave me the comfort to go along with him.

Q. Okay. When you met him, was Gregory Caplinger introduced

as a doctor?

A. Yes.

Q. Okay. Did. you believe him to be a doctor?

A. I had no reason not to.

Q. Okay. Did you receive some information describing

Gregory Caplinger and his project?

25 A. Very little written. Most of it was in face-to-face

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554

1 discussions because I was -- in the wintertime we lived in

2 Florida and I had the opportunity to meet with Dr. Caplinger

3 and his associate by the name of Walter Schumacher who in

4 effect was handling the business end, as I would call it, of

5 Dr. Caplinger's business.

6 Q.

7 A.

Okay.

And most of it was word of mouth from him. I did receive

8 some documentation, but very sketchy.

9 Q. What did the defendant tell you about himself when you

10 met with him, about himself and his project?

11 A. Well, not so mucn about himself, more about his project,

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but he was working on~this -- he didn't say it was a cure ~ ~

necessarily. Might be just a way of arresting the condition

that patients would have. Cancer primarily, but possibly

HIV.

And that his background -- he was a doctor. He studied

and spent some time in England because part of his protocol

that he was developing for cancer treatment and/or arresting

took place in England and some of the equipment that was used

was also in England and -- because part of the funds that I

invested I thought was helping him bring this equipment,

purchase it and bring it to the Dominican Republic from where

he was operating.

Q. All right, sir. Did you ever see that machine that you

believed your money was going towards?

555

1 A. No.


3 Honor?

4 A.

5 Q.

Yes, sir.

Mr. Zelle, I'm going to show you what I marked as

6 Government's 10 and 12B, already in evidence. Ask if you'd

7 take a look at those, sir. Tell me if those look familiar to

8 you, if you recognize those.

9 A. This one I know I've seen. In fact, I have a copy of it

10 in my file. And this one, it does look very, very familiar to

11 me. -12 Q. .,.., Okay. Now, did there come a time when you got involved

' ~ 13 with -- financially involved with an entity referred to as

14 Immuno Pharmaceuticals?

15 A.

16 Q.

17 A.

18 Q.

I'm sorry, when?

Well, did you, first of all?

Oh, yes.

Okay.

19

20

21

A. I mean, as a conclusion of meeting with him several times

over a period of weeks or a couple months, I'm guessing, I

can't remember the exact year, I'm guessing '92 or 3,

22 somewhere in there, in Florida, then I decided that I would go

23 ahead and put some money int.a it and we did so. I had my

·24 lawyer. He had his lawyer work out the proper forms to be

25 signed and --

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556

1 Q.

2 A.

When you say "he" -- I'm sorry. Go ahead, sir.

And received the stock certificate as my, you know,

3 documentation of what I had.

4 Q.

5 A.

6 Q.

How much stock did you receive, do you remember?

I think -- it represented 3 percent of his company.

Okay. Now, when you said you had lawyers, you said he

7 had his lawyer, are you referring to the defendant, Gregory

8 Caplinger?

9 A. I think it was I can't remember if it was Gregory

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directly or Walter Schumacher.

Q. Okay.

A. But when we deci~ed to do it, they had a lawyer that ' ~

represented them; I think he was in ~--auderdale, and I had my

lawyer in Nashville correspond and saw that I had some

documentation to represent what I had invested in.

THE COURT: You mentioned $137,000, Mr. Zelle.

That's what you put in earlier?

THE WITNESS: Oh, yes.

THE COURT: And how much did you put in at this

time --

THE WITNESS: Oh, nothing.

THE COURT: -- to get the 3 percent?

THE WITNESS: Oh, no, that was the original. The

original money that I put in represented 3 percent, and Greg

even reassured me through Kampetis and Weekley who came along

•

557

1 several years later that no matter how they restructure the

2 financing of the company, that I was to be honored for my 3

3 percent in the entire venture.

4 THE COURT: So $130,000 was your total investment in

5 the company.

6 THE WITNESS: That's correct. It was all done at

7 one time.

8 THE COURT: All right.

9 BY MR. WHISLER:

10 Q. Mr. Zelle, I'm going to show you what I've marked as

11 Government's 49A. As~ you to take a look at that, sir. Tell

12 me if you recognize that. ~

I don't think I've ever seen this. 13 A.

14 Q. Okay. Do you know who the other shareholders with you

15 were in the company?

16 A. Not that I know of.·

17 Q. Okay. But you got some documentation to reflect your 3

18 percent investment in Immune Pharmaceuticals.

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20

.21

22

23

A. Right.

Q. All right, sir. Now, did you observe anything about the

defendant when you were in the Dominican? Did you observe his

behavior?

A. No. Found a fella that was normal. I was surprised when

24 these other two gentlemen were there and wanted to pitch me

25 about putting more money into it. We did go by his office,

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558

1 clinic, or it was in a building there and we saw some small

2 equipment, and the main thing we focused on some bottles of, I

3 guess part of the ingredients of whatever his protocol was

4 that he was developing. And the only other thing -- well,

5 that's all that happened on that visit.

6 Q.

7 A.

Okay.

But I might mention as far as observing what went on, I

8 had a gentleman who I've known for some years, a Dr. David

9 Hankins, who is involved in cancer research --

10 MR. FALLS: Objection.

11 Q.

12 A.

13 Q.

14 A.

Yeah, that's -- that's okay.

Is that not proper? -~

. -That·• s extraneous.

Okay.

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MR. WHISLER: All right. Thank you, sir.

THE COURT: That conclude your examination?


THE COURT: All right. You may cross-examine.

CROSS-EXAMINATION

BY MR. FALLS:

Q. Good morning, Mr. Zelle. I just have a couple

questions. You testified that a friend of yours --

THE COURT: Can you talk a little louder. I'm

having trouble hearing you. Little louder, Mr. Falls.

Q. You testified that a friend of yours met Dr. Caplinger

559

1 through -- they were doing rehabilitation. Dr. Caplinger had

2 been in a car wreck; is that right?

3 A.

4 Q.

(Affirmative nod.)

Okay. And you went when you were in the Dominican

5 Republic, you actually went to the clinic; is that right?

6 A. I don't know if it was the clinic as you would define.

7 We didn't see patients.

8. Q.

9 A.

10 Q.

11 A.

12 Q.

13

14

Okay.

I think it was more like his office.

Okay ..

Where he had some equipment.

Okay.

MR. FALLS: No further questions.

THE COURT: Thank you, Mr. Zelle. You may come

15 down. You may be excused.

16

17

18

19 minute?

20

21



MR. WHISLER: Your Honor, may we approach for a



22 MR. WHISLER: This might be a good time for a

23 morning break. I've got my next witness here. My problem is

24 my translator is having trouble getting here. I'm not sure

25 what's going on out there, but

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THE COURT: Next witness --

MR. WHISLER: My next witness is here and he

requires a translator.

THE COURT: A Spanish --

560

MR. WHISLER: Yes, sir, so we're working on that

right now, if you want to take a morning break.


MR. FALLS: Is that Holguin?

THE COURT: Tell me how you're doing. I have a

feeling we're moving right well.

MR. WHISLER~- Yes.

THE COURT: ·.~But when are you going to finish? . -~

MR. WHISLER: Well, let's see. I've got Mr.

Holguin. Then I've got, I think I've got five or six more

witnesses. And my last witness then after that is my summary

witness, my agent. And on my schedule, I'm predicting to be

done by Monday at noon.

THE COURT: Oh, no, you're going to get through.

before that time.

MR. WHISLER: Okay.

THE COURT: You're going to get through this week.

MR. WHISLER: All right, sir.

THE COURT: And how much proof you going to have?

MR. BENDER: Day and a half at the most.

THE COURT: I've got cases set in Nashville on

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561

1 Wednesday. We're going to finish this case before that time.

2 Now, we'll just prepare to stay late. And I don't want this

3 to happen again.

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THE COURT: Don't you come up not having a witness

or not having a translator, .not having anything or I'll move

on without you.


THE COURT: I'll move on without you.


THE COURT: We'll take our morning recess at this

time, ladies and gentlemen. . ~

(Brief recess at 10:23 a.m.)

(Jury not present.)

.THE COURT: All right. During the recess I

continued the matters I had set in Nashville on Wednesday; but

nevertheless, I was told this case would take five to six

days. I expect you to live by your estimates. So we'll move

along and we may work late.

MR. WHISLER: Your Hon9r, my _apologies to the court

for the delay .. I just wanted to offer that.

THE COURT: All right. We'll need to swear the

interpreter. We'll do that in the presence of the jury, so

bring the jury in.


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562

(interpreter was sworn.)

MR. WHISLER: United States calls Miguel Holguin.

MIGUEL HOLGUIN,

being first duly sworn, was examined and testified as follows:

DIRECT EXAMINATION

BY MR. WHISLER:

Q. Good morning, sir. Please state your name.

A. (The interpreter): Miguel Holguin Maria.

Q. Mr. Holguin, where do you live?

A. (The interpreter): Santo Domingo, Dominican Republic.

Q. And how are you employed there, sir? -A. (The interpreter): The Autonomous University of Santo

~ ... Domingo. I'm in charge of the registry there.

Q. Okay. How long have you been employed at that

university, sir?

A. (The interpreter) : · Twenty-three years.

..

Q. All right, sir. And what are your duties as a registrar

there, sir?

A. (The interpreter): I have everything to do with the

registry, the departure of all of the students and of the

money coming in ..

Q. Is there a medical school associated with your

university?

24 A.

25 Q.

(The interpreter): Yes.

And how long has that been in existence?

563

1 A. (The interpreter): Since 1938. It's the same age as the

2 university.

3 Q. In connection with your duties, have you had an

4 acquaintance with the name Gregory Caplinger?

5 A.

6 Q.

7 A.

8 Q.

9 A.

10 Q.

11 A.


Have you ever met this individual?


When did you meet him?

(The interpretei): In 1995 or 96.

How did you come to meet him?

(The interpreter~: He had been registered with the

12 university and he owed_ the university.

13 Q.

14 A.

15 Q.

16 A.

' I'm sorry, what was the last part?

(The interpreter): He owed the university.

What did he owe the university?

(The interpreter): He owed us to be able to -- he had to

17 assist my department. That was the debt he had. Because he

18 had to register himself with the university.

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20

21

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23

Q. Okay. For what purpose was he registering himself?

A. (The interpreter): He wanted to register himself with

the university so he had to show us some proof so that he

could be able to register himself.

Q. Okay. What kind of proof did he have to show?

24 A. (The interpreter): Okay. He just had to -- I'm sorry.

25 He just had to --

•

564

1 THE INTERPRETER: I'm sorry, somebody came in and I

2 lost what he said so I'm going to have him repeat exactly what

3 he just_ said.

4 MR. WHISLER: That's fine.

5 A. {The interpreter}: Okay. He submitted his transcript so

6 that he could be accepted, but he had to show us some things

7 so that he could be accepted and get his title. And so

8 therefore he had to do it in two different sections. So he

9 had to register hims.elf so that he could be in the normal

10 semester and he would assist with the classes.

11 Q.

12 A.

13 Q.

14 A.

Okay. What type ~f degree was he seeking?

{The interpreter): Doctor of medicine. -~ ....

And how was he going about to obtain that degree?

{The interpreter}: There are four different blocks that

15 he has to do. He had to do two to show that he could have his

16 assignments. He had to prove everything.

17 Q.

18 A.

Okay. Are you familiar with the term revalidation?

{The interpreter}: No, I don't know.

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20

21

22

Q. Okay. When Gregory Caplinger came to the university, did

he already have a degree?

23 A.

24 Q.

25 A.



{The interpreter): Yes.

What was that?

(The interpreter): Doctor of medicine.

•

565

1 Q. And in that status, did he have to do the same amount of

2 work or a different amount of work to obtain another M.D.?

3 A. (The interpreter): Just so he could exercise his rights

4 to be a doctor in Santo Domingo, he had to get his title of

5 doctor in Santo Domingo.

6 Q. Okay. Very well.

7

8

9

10

MR. BENDER: Your Honor, may we approach a moment?



MR. BENDER: These are his personal student records

11 from the university th,at he has never authorized to be

12 released for any purpose. They are personal records, not ·~

13 public documents. ' ~

14 THE COURT: On what theory is that not available?

15 On what theory is that not available in a criminal

16 prosecution?

17 MR. BENDER: Because they are private personal

18 records. They have not been subpoenaed.

19

20 Honor.

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24

MR. WHISLER: They were voluntarily submitted, Your

THE COURT: Your objection is noted and overruled.



THE COURT: Yes.

25 BY MR. WHISLER:

566

1 Q. Mr. Holguin, I'm going to show you what I've marked as

2 Government's Exhibits 116 through 119 -- excuse me, 118, ask

3 if you'd take a look at these, please, and tell me if you


5 A. (The interpreter): Do you want me to tell them one by

6 one or --

7 Q. One by one, yes. Identify them by number at the bottom

8 as you look at them.

9 A. (The interprete.r) : I recognize 118.

10 Q. Okay.

11 A. ( The interpreter}.: I also recognize 116. I don't really

12 well recognize 116A. -~That could be because it's written in ~ .

13 English. Maybe if it was translated into Spanish, I could

14 better understand it.

15 Q.

16 A.

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18

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20

21

22

23 Q.

24

Okay·. Let's set that aside. Go ahead.

(The interpreter): Yes for 116B. We have that.

Yes, we have obtained 116C.

I also have 116D. I know that one.

I also have 116E.

I also have 116F.

I also have 116G.

I also have 117.

Okay.

MR.-WHISLER: Move admission of Government's 116

25 through 118 at this time, Your Honor.

567

1 THE COURT: They will be received. Your objection

2 is noted. They may be published.

3 (Government's Exhibits Number 116, Number 116B,

4 Number 116C, Number 116D, Number 116E, Number 116F, Number

5 116G, Number 117 and Number 118 were received into evidence.)

6 Q. Now, let me ask you --

7 MR. FALLS: Your Honor, the witness didn't recognize

8 116A.

9 MR. WHISLER: Yeah, I'm sorry. With the exception

10 of 116A for the record.

11

12 Q.

13 A.

14 Q.

15 A.

THE COURT: Yeah, 116A is not admitted.

What is the date listed on this document? ~ ~

(The interpreter): September 18th, 1991.

And what's the significance of that date?

(The interpreter): It was the date that he brought in

16 his papers so that he could be recognized by his title.

17 Q.

18 A.

And 116, tell me what that document represents.

(The interpreter): It was the first time it was brought

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in so that it could be recognized -- so that the body can

recognize all of the documents.

Q. Okay. And tell us what 116B represents.

A. (The interpreter): It's his transcript that shows all of

the courses he had taken to become a doctor.

24 Q.

25 A.

Okay. From what institution is that transfer?

(The interpreter): British West Indies Medical.

•

568

1 Q. Okay. And would these courses, then, qualify to transfer

2 in for credit to your institution?

3

4



5 A. (The interpreter): Yes. We use this to see if he can be

6 accepted or not, he can prove that he can do this and all of

7 the courses that he has taken.

8 Q. Take a look at 116C and tell us what that is.

9 A. (The interprete.r) : This is the document that shows that

10 he's a doctor of medicine that he presented to us when he

11 asked to be accepted.

-12

13

MR. BENDER: I'm sorry, I can't hear, Your Honor.

14 A.

·~ ._

THE COURT: I can't either.

(The interpreter): This was the document that was

15 presented to us when he asked to be accepted into the

16 program. And it's also been notarized certifying that it is a

17 valid document. At the end it has that.

18 Q. Let's take a look at Government's 116D .. Tell us what

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21

that is, please.

A. (The interpreter): It's another diploma that he had to

show us so that he could be recognized and also get his

22 diploma here in Santo Domingo. For us it's the same as the

23 preceding.

24 Q. All right, sir. Take a look at 116E, if you would, and

25 tell me what that reflects.

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569

1 A. (The interpreter): It tells us the courses that he took

2 and the basic concepts of all of the courses. And later it

3 shows the grade~ he received for each course.

4 Q. And where were those courses taken, if you know?

5 A. (The interpreter): In the -- in this one he's pointing

6 to British West Indies Medical College in the one that we had

7 previously stated.

8 Q. And that's the information that defendant furnished you

9 about his prior cour·se work?

10 A. (The interpreter): Yes.

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Q. Okay. Take a look at Government's 116F, if you would.

Tell us what that is. -~ ' ~

A. (The interpreter): This is for his internship, the last

year of his studies which was his practical year and it was

for our university.

Q. And where does it reflect that he had his last year of

practical work at the top of that document?

A. (The interpreter): Sussex General Hospital Internal

Medicine Residence.

Q. And does it reflect an association there?

A. (The interpreter): Harvard Medical School Department.

Q. And these were represented to be his course work at that

institution?

A. (The interpreter): Yes. He presented this.

Q. Okay. And take a look at Government's Exhibit 11'6G, if

570

1 you would, sir, and tell me what that is. 2 A. (The interpreter): It's a photocopy of the folder in 3 which.the documents arrived in Santo Domingo.

4 Q. Does it reflect the origin of the mailing?

5 A. (The interpreter): For us, yes.

6 Q. What is it?

7 A. (The interpreter): D.L. Green, London.

8 Q. And mailed to the university?

9 A. (The interprete·r) : Yes, to the university.

10 Q. Take a look at Government's 117. Tell me if you

11 recognize what that i~.

12 A. (The interpreter.l: It's a report of all of the courses ~ ~

13 that he took, again, in support of the papers that he sent us

14 so that he could be recognized by our university.

15 Q. Okay. And again, what is the institution that's

16 reflected there?

17 A. (The interpreter): Remember, I don't know how to speak

18 English. Sussex General Hospital Internal Medicine

Residence.

Q. Okay.

institution?

And the rest of it? The full name of the

19

20

21

22

23

A. (The interpreter): Harvard Medical School, Department of

Continuing Education Rotation.

24 Q. All right, sir. And the origin of the mailing of that

25 item?

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571

1 A. (The interpreter): Sussex General Hospital, Rosemont

2 Road, London, England.

3 MR. WHISLER: These have been received and I move to

4 publish, Your Honor.

5

6

7 Q.

THE COURT: All right. They may be published.

(Government's exhibits were published to the jury.)

Mr. Holguin, what did you do with this information after

8 you received it?

9 A. (The interprete.r) : There's a process for our institution

10 to recognize a diploma or degree from another. We as a

11 regi·stry of the unive~sity are the last ones to review all of

12 the documents to be p~t into -- to be recognized by the . ' ~

13 university.

14 THE INTERPRETER: Just so that you know what I said

15 to the man -- to the witness, he's talking very slowly so -- I

16 had forgotten to bring my paper and pen up for notes and so

17 I'm going to ask him to repeat the exact same thing he just

18 said so that I can write my notes and repeat it back to you,

19 okay?

20 MR. WHISLER: Very well.

21 A. (The interpreter): Our university, we're the last part

22 of the process to recognize and -- as the university and all

23 of the documents that come to us, we process them and send

24 them to all the other departments and we're the last ones to

25 verify all of the papers that come in to all the different

572

1 departments and we send them. And from wherever they come

2 from outside of the university, we process everything and go

3 over it and make sure that it's fine and accept it.

4 When we received these, we had some doubts of the

5 origination of the authenticity of these documents so we asked

6 for some help and we asked for them to be sent again from the

7 other university.

8

9

10

11

12

Q.

A.

Q.

A.

Q.

Which university are you

(The interprete.r) : West

And did you receive that

(The interpreter}.: Yes.

During this process that ~ ...

referring to?

Indies.

information that you requested?

you went through, did someone

13 from the university translate any and all non Hispanic &--

14 documents?

15 A.

16 Q.

17 A.

(The interpreter): I believe so. I'm not sure of this.

What happened after· that?

(The interpreter): His request was proven and we sent

18 him his documents.

19 Q. I'm going to show you what's marked as Government's

20 Exhibit 119. If you could take a look at that, please, for

21 me, sir.

22 A. (The interpreter): Yes, this is a photocopy that

23 corre-sponds to the original.

24 Q.

25 A.

Of what?

(The interpreter): The diploma of doctor of medicine.

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2

1 Q.

2 A.

3

Issued by your university on what day?

(The interpreter): On March 19th, 1997.

573

MR. WHISLER: Move admission of Government's 119, if

4 Your Honor please.

5 THE COURT: Received. It may be passed.



8 Q. Show you what's been admitted as Government's 117 and I

9 wanted to show you a portion of it. Looking at this page,

10 when you received this originally -- well, first of all, what

11 does that reflect that I'm pointing to on that page?

12 A. (The interpreter-}..: It shows the intention of erasing .. p-

13 something.

14 Q. And did you notice that when you first reviewed that

15 document when it was received from the defendant?

16 A.

17

18 Q.

(The interpreter): It's possible. It's possible, but we

my department just saw this as academics.

Okay. Does your university still recognize Gregory

19

20

21

Caplinger's M.D. to this day as a valid degree?

A. (The interpreter): Well, about two or three weeks ago we

received a document that said that we shouldn't get any more

22 -- give any more documents to Senor -- to Mr. Caplinger and

23 that we shouldn't sign anything.

24 MR. WHISLER: I have no further questions. Thank

25 you.

•

1 THE COURT: You may cross-examine.

2 CROSS-EXAMINATION

3 BY MR. BENDER:

4 Q.

5 A.

Mr. Holguin, good morning, sir.

{The interpreter): Good morning.

574

6 Q. Buenos dias. Mr. Holguin, you and I have met and talked

7 before, have we not?

8 A.

9 Q.


And at the time we met and talked, you explained the

10 revalidation process to me, did you not?

11 A. {The interpreter)__: Yes.

12 Q. Okay. And at t~t time you told me that Dr. Caplinger

13 has

14 de

15 A.

16 Q.

._ ..... an authentic, valid degree from the Universidad Autonoma

Santo Domingo, did you not?


And as of this day that degree has not been withdrawn

17 from -- or by the university, has it?

18 A. {The interpreter): No, he hasn't been withdrawn yet.

19

20

21

Q. Now, the Universidad Autonoma de Santo Domingo is the

oldest university in the new world, is it not?

A. {The interpreter): Yes.

22 Q.

23 A.

24 Q.

It was established in 1538 not 1938, was it not?

{The interpreter): 1538.

And the university recognizes foreign students in the

25 revalidation process, do they not?

•

575


2 Q. And the process, the revalidation process for medical

3 school involves the dean of the medical school, does it not?

(The interpreter): Yes. 4 A.

5 Q. And that is one of the steps in the process is a review

6 by the dean of the medical school of the records before

7 admission?

8 A.

9 Q.


And then the te.chnical board of the medical school

10 reviews the documents.

11 A. (The interpreter) : Yes, there is a board that reviews

12 all the documents. -~ . ' ...

13 Q. And then the university advisory board reviews the

14 documents, do they not?

15 A. (The interpreter): Yes, also.

16 Q. And· then does your office review and revalidate the

17 documents or do you just simply maintain the documents?

18 A. (The interpreter): We just revise all of the

administrative documents and then we send the documents. 19

20

21

22

23

Q. After a student is admitted or a _foreign student is

admitted for revalidation, they have to take courses and

competency exams before getting their degree, do they not?

A. (The interpreter): They have to take courses in academic

24 competency.

25 Q. And -- so your university does not simply accept

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576

1 documents and based on the documents award a degree; is that

2 correct?

3 A.

4 Q.

(The interpreter): The documents, yes.

Do you base your if I come to your university with

5 documents and present them to you for revalidation and you

6 find those documents to be in order, do you award me a degree

7 based solely on those documents or do I have to take academic

8 courses?

9 A. (The interpreter): No, in the case of doctors, they have

10 to take four courses and they're oral and written and it's

11 based upon the courses.

12 Q. Okay. They have to take four exams. ·~ .... .. 13 A. (The interpreter): Yes.

14 Q. And those exams are based on the academic courses that

15 are taken at the medical school of the Universidad Autonoma

16 Santo Domingo; is that correct?

17 A. (The interpreter): Yes, the four courses are based on

de

18 the basic academics. They're all based on academic studies at

19

20

21

22

23

the Universidad Autonoma.

Q. And then there is an exam for medical students in four

areas; is that correct?

A. (The interpreter): Yes. They also have to know how to

speak Spanish.

24 Q. And one of those courses and exams is in the area of

25 surgery; another is in the area of pediatrics; another is in

577

1 the area of obstetrics and gynecology; and the fourth is in

2 social medical services; is that correct?

3 A.

4 Q.


And Dr. Caplinger attended that university, took the

5 required courses and took the exams and passed those

6 competency exams before he was ever awarded a degree; is that

7 correct?


9 Q. And Mr. Holguin·, you are here on behalf of that

10 university, are you not?

11 A.

12

13

14

(The interpreter)_: Yes, from that university.

MR. BENDER: . ..., Okay. Thank you. That's all I have. . " ..

THE COURT: Redirect examination.



16 BY MR. WHISLER:

17 Q. Mr. Holguin, do you have recollection or do your records

18 reflect how the -- how Gregory Caplinger did in surgery?

19

20

21

A. (The interpreter): Please excuse me, I don't have

anything in front of my hand-~ in front of me right now to

review. Everything's been closed.

22 Q.

23 A.

Okay.

(The interpreter): There are some things I don't recall

24 so perfectly.

25 Q. Sure, that's fine. You said to Mr. Bender that the

578

1 university had not withdrawn his -- Mr. caplinger's degree

2 yet. What did you mean by yet?

3 A. (The interpreter): We haven't yet eliminated it. It is

4 in the process of being eliminated

5 THE INTERPRETER: I just want to verify that I have

6 the first part correctly. Can I ask it to him?

7 MR. WHISLER: Sure.

8 A. (The interpreter): And we are in doubt that it is true.

9 MR. WHISLE.R: Thank you very much. I have no

10 further questions for this witness.

11 THE COURT: Thank you, sir. You may come down and

12 you may be excused.

13

14

·-.. ~


THE COURT: All right. Ladies and gentlemen, let's

15 go to lunch. Come back in an hour.

16 (Lunch recess at 11:45 a.m.)

17 THURSDAY AFTERNOON, JULY 20, 2000

18 (Jury not present.)

19 MR. WHISLER: Your Honor, I understand that counsel

20 is going to have Mr. Holguin come back for a brief item of

21 some sort, but for the next witness I have some brush we can

22 clear out if I could address that for you now so the jury

23 won't have to go out.

24

25

THE COURT: All right. What is it?

MR. WHISLER: Two things. Let me -- most likely be

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579

1 calling my agent next and it implicates the 404(b) issue to

2 some extent, and what there was some admissions that the

3 defendant made. He came in for a voluntary interview with the

4 agent before he was indicted and made numerous admissions to

5 the agent, two of which were those two offenses from '97 and

6 '93. '93 and '97. The other offense is already in, the

7 Boone conviction. The defendant did not tell Agent Mueller

8 about the conviction, but he did tell her about the two other

9 prosecutions from Fl6rida.

10 And the government's argument and theory would be

11 that's an admission and should come in; but because it may

12

13

14

15

16

17

18

19

20

21

22

23

24

25

implicate 404(b), I wanted to raise it in advance and just put "-lo,

the court on notice of that. I think it's --

THE COURT: And you're offering it to prove what?

MR. WHISLER: Well, it's a misrepresentation to the

agent because he told her about the two offenses that did not

result in a conviction but did not tell her about the

conviction. So I think that the omission is significant.

THE COURT: What are the two matters in Florida?

What are they probative of, Mr. Whisler?

MR. WHISLER: They involved the same type of

misrepresentations in terms of the --

THE COURT: That' .s exactly what 404 is designed to

prevent. You're not supposed to allow it to prove character

and actions in accord with a trait or character. Now, you

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580

tell me

MR. WHISLER: Well, yes, I understand. To follow

that up, my original argument and my notice was that his

failure to disclose any of this information to his investors

was a material misrepresentation, nondisclosure because

regardless of the fact of whether he got convicted or not, the

fact that he was investigated and prosecuted by agencies in

the United States for his practice of medicine is relevant to

their decision whether or not they want to give him money. So

that was my original argument in the case.

THE COURT: Well, are you sticking with that or have

you got something else? .......

. .._ .. MR. WHISLER: Oh, yes. No, clearly, I mean in terms

of -- it goes to his intent, absence of mistake, and it's a

material nondisclosure to the investors.

THE COURT: And tell me what the proof is. Tell me

what happened.

MR. WHISLER: Well, in terms of the underlying

offenses?


MR. WHISLER: The 1997 case arose out of a RICO

charge down in Florida involving it was RICO and grand

theft for -- in connection with his start of a medical

school. Whe~ he got prosecuted, he agreed to pay restitution

to the individuals who applied to the medical school and was

581

1 null pros'd. as a result.

THE COURT: Medical school where? 2

3 MR. WHISLER: Excuse me, Santo Domingo. Getting my

4 jurisdictions mixed up. It was Santo Domingo.

5

6

THE COURT: And the other one?

MR. WHISLER: And the other one is a 1993 for the

7 for involvement with Alzheimer's patients, and that was a

8 diversionary disposition that did not result in a conviction.

9 THE COURT: What was he doing with Alzheimer's

10 patients?

11 MR. WHISLER:_ He was holding himself out as a doctor

12 to treat them at his ~linic. But that was a Florida clinic . ._ ..

13 I'm wrong again. It was a Dominican clinic. So -- but the

14 evidence in our case shows that he did not disclose any of

15 this American conduct to any investors. And as I said

16 earlier, that's part of· our theory of a material

17 misrepresentation or omission.

18 But again, I think it's significant that he told the

19 agent voluntarily about that information. He admitted it to

20 the agent when he came in to try to basically tell the FBI,

21 you know, here's my story, trying to legitimize himself to the

22 FBI before he was indicted. Provided them with documents but

23 just didn't tell them about the North Carolina conviction,

24 so ...

25 THE COURT: Mr. Bender, want to be heard? Mr.

582

1 Falls?

2 MR. FALLS: Yes, Your Honor. Your Honor, I think

3 Judge Voorhees heard the exact same argument and he ruled that

4 it was inadmissible without some additional argument or

5 showing by the government, and I don't think they've changed

6 their argument in any respect. I submit it's the law of the

7 case.

8 THE COURT: No, it's not that. It's not the law of

9 the case. But it's persuasive.

10 MR. FALLS: Well, the other argument, Your Honor, is

11 neither one of these two prior instances resulted in a

12 conviction being ent~ed and neither one of these involved ~ ~

13 solicitation for investors in ImmuStim. I think it is trying

14 to show or it's been offered as a character assassination

15 trying to show if he misrepresented to people about something

16 before, he likely did it again this time. This wasn't a

17 solicitation to invest.

18 Mr. Whisler, if he does bring in this evidence, will

19 be stretching out the case because we will be forced to call

20 Mr. Kampetis to the stand and have him testify on how he and

21 Mr. Weekley --

22 THE COURT: That is not -- that is not a

23 consideration, Mr. Falls. I appreciate your concern for my

24 schedule, but that's not going to -- that's not going to

25 control my decision in this case. I'm here for a month if

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583

1 necessary to try this lawsuit and I don't appreciate you

trying to play on my necessities. Now, go ahead. 2

3

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25

MR. FALLS: Mr. Whisler has indicated that no

investor knew about these Florida episodes. David Weekley and

Harry Kampetis bailed him out of jail. I don't see how in the

world they can say they didn't know about it when the

government's evidence has wire transfers bailing the man out

of jail. That certainly was not a -- and when he got locked

up and the charge happened in Florida, they were the first

people he contacted and they got him out of jail. I don't see

how they can - - I don ' .. t see how in the world they can say_ that

the people who are al-!_egedly defrauded, Weekley and Kampetis, ~ ~

didn't know about it. They got him out of jail. It doesn't

go to misrepresentation because there was no

misrepresentation.

THE COURT: Well, I'm going to rule that it is -

that it is not admissible under 404(b) because it is -- it is

obviously offered for no other reason than to prove that he's

done the same thing twice before or similar acts twice before

and it is simply trying to prove him guilty of this crime by

virtue of the fact that he's committed it twice before.

And furthermore, under Rule 403 it's far more

prejudicial than it is probative.

Now, then, what else, Mr. Whisler?

MR. WHISLER: Your Honor, on that witness, then,

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584

1 would I be able to inquire if -- since this misdemeanor

conviction is already in evidence, would I be able to

inquire

2

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25

THE COURT: Oh, you've got that in.

MR. WHISLER: Yeah.

THE COURT: That came in. You mean -- you talking

about the Boone --


THE COURT: Boone, North Carolina?

MR. WHISLER: Yes, sir, particularly the defendant's

failure to disclose t~at to the agent when he came in for the

interview.

MR. FALLS: Got no beef with that, Your Honor.

MR. BENDER: I do.

THE COURT: No, that doesn't have any -

MR. WHISLER: Okay. That's fine.

THE COURT: That's not an element of the crime.

You're not charging him with lying to an FBI agent.

MR. WHISLER: No, we don't have 1001 in there.

I have one other thing. I have another theory on an

unrelated matter that I think may save a witness for us if

you'll hear me on that.

THE COURT: I'll hear you.

MR. WHISLER: I have a witness that was going to

enter a catalog from Harvard University, and over the break I

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585

took a look at the case law and I would dispense with that

witness and try to seek to admit this catalog under 803(17) as

an exception to the hearsay because it's a commercially

accepted publication, and I've got two cases that I burned off

the --

THE COURT: What does it say?

MR. WHISLER: Basically, I have a fourth circuit - -THE COURT: I mean, what does the

MR. WHISLE.R: I'm sorry.

THE COURT: What's the catalog?

MR. WHISLER: It's a Harvard Medical School catalog

and it contains what we believe is the identical information -~ ~ ~

that the defendant used and slapped on British West Indies

Medical College and then submitted it to Mr. Holguin in a

document.that he had just gone through. And a lay person, you

know, can make the comparisons and make their decision. But

it's a commercial publication and I'd just seek to admit it

through the agent under 803(17).

THE COURT: All right. You may do that.

MR. WHISLER: Okay.

THE COURT: What else now?

MR. BENDER: Your Honor, I want to call Mr. Holguin

because of this. Just bear with me a minute. The translator

who came in did so on an emergency basis. We were waiting for

the court-certified translator who arrived late. The last

e

586

1 question and answer for Mr. Holguin was translated improperly

2 and I'd like to bring him back -- the court-certified --

3

4

THE COURT: What do you say was improper about it?

MR. BENDER: Well, I'll ask Ms. Carico -- she was

5 here in the courtroom.

6

7

8

9

10 late. I

THE COURT: Is she the late interpreter?

MR. BENDER: Yes, sir.

THE COURT: Why were you late?

MS. CARICO: Your Honor, I apologize for being

was told to be here at one, that the witness would be

11 here at 1 o'clock. And as soon as I found out, I made my~elf

12

13

14

15

16

available.

MR.

THE

MR.

THE

.. "

WHISLER: It's not her fault, Your Honor.

COURT: Mr. Whisler.

WHISLER: Yes, sir.

COURT: You line your witnesses up and tell them

17 all to be here at 9 o'clock. If we don't get to them at 9

18 o'clock, they can sit out there and wait until they do come

19 up. Now, Mr. Whisler, I'm not going to put up with this any

20 more.

21 MR. WHISLER: I understand, Your Honor.

22

23

24

25

THE COURT: Do you understand that?

MR .. WHISLER: Yes, sir.

THE COURT: All right. What was wrong?

MS. CARICO: Your Honor, I took notes of what the

587

1 witness was saying in Spanish and it came to my attention that

2 the interpreter had left out part of what he said and had

3 THE COURT: And what is that?

4 MS. CARICO: And had substantially misinterpreted

5 what he said. His final statement was that his university on

6 prior occasions had retired or taken away people's titles

7 after investigations and after verification that the documents

8 presented were not authentic. The interpreter left that part

9 out. Then he went on to say, "And we are" --

10

11

THE COURT: She said that.

MS. CARICO: "And we are currently investigatin~."

12 THE COURT: She said that in the earlier part of the -~ ~ ~

13 testimony. Are you referring to the redirect examination

14 where Mr. Whisler asked the question

15

16

MS. CARICO: Yes, Your Honor.

THE COURT: what did you mean by yet?

MS. CARICO: I believe that was in the redirect,

18 Your Honor.

19 THE COURT: All right. Now --

20 MS. CARICO: At that point the witness in Spanish

21 indicated that they were in the process of an investigation to

22 determine the authenticity of the documents that had been

23 presented to them. But I believe the interpreter said we are

24 in the process of taking away his title.

25 THE COURT: That's not what she said. That's not

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588

what she said.

MR. BENDER: I think she said terminate.

MR. FALLS: She said terminating, Your Honor. She

said we're in the process of terminating his degree.

THE COURT: That's not what she said.

THE COURT: How far back do I got to go?

(The court reporter read back the answer.)

THE COURT: Well, you heard eliminated. They heard

another word.

MR. BENDER: Terminated.

THE COURT: You heard terminated. I thought she

said investigated, but that's -- bring him back. Bring the ..... \ ~

jury in and bring the witness back. Is he still here?

MR. BENDER: He is, Your Honor. And Ms. Carico

needs to be sworn.


MR. BENDER: She is a certified court interpreter.

THE COURT: Well, you know, I don't think -- you

know -- is the other court interpreter still here or is she

gone?

MR. FALLS: She's gone, Your Honor.

THE COURT: All right. Well, come around, then, Ms.

Carico. I thought the woman did a good job and I don't -- I'm

not admitting that she made an erroneous interpretation.

(The jury entered the courtroom.)

•

1

2

589

(The interpreter was sworn.)

THE COURT: Now, then, ladies and gentlemen, we've

3 got an argument about what this witness said right at the

4 end. We're going to let him come back up here and let him say

5 it again.

6

7

Come back around, sir. You're still under oath.

Tell him that in Spanish, please. Tell him he is

8 still under oath.

9 ( Interpret"er complied. )

10 MIGUEL HOLGUIN,

11 having been previously sworn, was examined and testified

12 further as follows: -~

13 ~ ~

THE COURT: Sir, there is some doubt or confusion

14 about the translation of the last questions that were asked of

15 you. I'm going to allow those questions to be re-asked by the

16 court reporter and let you reanswer them through this

17 interpreter.

18 Read the questions back to him, Ms. Cheryl.

19

20

21

(The following question was read by the court

reporter:

Q. You said to Mr. Bender that the university had not

22 withdrawn his

23 mean by yet?)

Mr. Caplinger's degree yet. What did you

24 A. (The interpreter): Because we have opened an

25 investigation process and no conclusion has been reached in

•

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1 that process yet.

2 THE COURT: What was the next question? Was there

3 another question? That was it?

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9 Mueller.

THE COURT REPORTER: (Affirmative nod.)

THE COURT: All right. That's it. Thank you, sir.


THE COURT: Call your next witness.

MR. WHISLER: United States called Agent Julia

10 JULIA MARIE MUELLER,



13 BY MR. WHISLER:

14 Q. Good afternoon, ma'am. Please state your full name for

15 the reco~d.

16 A.

17 Q.

18 A.

My name is Julia Marie Mueller.

How are you employed?

I'm a special agent with the FBI based here in

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Charlotte.

Q. And how long have you been employ~d with the FBI?

A. Almost fourteen years.

22 Q.

23 A.

What are your duties with the FBI?

My primary responsibilities involve the investigation of

24 what we call ~hite collar crime, economic type crimes.

25 Q. And in connection with the matter before us, have you

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1 been the lead investigator in this matter?

2 A.

3 Q.

4 A.

Yes, I have.

And can you tell me how the investigation was initiated?

In May of 1997 I was contacted by the defendant -- I'm

5 sorry, I was contacted by David Weekley who indicated through

6 his attorney that he wished to provide the FBI information

7 about the activities that he had been involved in for the last

8 couple of years.

Okay. And did he provide you with information? 9 Q.

10 A. Yes. He was interviewed in May of 1997 and on subsequent

11 occasions thereafter and he provided information and

12 documentation relatin~ to the Diamond Group, Immuno

13 Pharmaceuticals, Harry Kampetis and the defendant.

14 Q. Okay. And _what happened after that in your

15 investigation?

16 A. Having interviewed ·Mr. Weekley, I then set about

..

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reviewing the many documents that he provided. I also

conducted interviews of various individuals, including

investors who had invested with Diamond Group or Immuno

Pharmaceuticals. I also interviewed the defendant and

received and reviewed documents provided by the defendant.

Q. Okay. And when did that interview with the defendant

occur?

24 A.

25 Q.

That was in August of 1997.

How was that interview initiated?

The defendant requested to come in.

Okay. And did you allow him to do that?

Sure.

Okay. Came into your office?

Yes, he did.

Okay. And was that a one-day interview?

592

1 A.

2 Q.

3 A.

4 Q.

5 A.

6 Q.

7 A. Actually, it took place over the course of two days, not

8 two full days, but it took place on August 14th for a couple

9 hours and then Augus·t 15th.

10 Q. What, if anything, did he tell you about his purpose for

11 initiating the interview? -12 A. He indicated that he wanted to establish a dialogue with -~

. ... .. 13 .the FBI and that he wanted to provide information about

14 himself and his relationship with David Weekley and Harry

15 Kampetis.

16 Q. Prior to that time had you contacted the defendant in any

17 way yourself?

18 A. No.

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23

Q. All right. When he came in what did he tell you about

himself?

A. He told me. that he was a United States citizen, also a

Dominican citizen. He had come up from the Dominican Republic

to take part in this interview. He told me that he was at

24 that time a medical doctor licensed to practice medicine in

25 the Dominican Republic, and he provided me with his license

1 number. He indicated that he had never been licensed to

2 practice medicine in the United States.

3 He advised that_with regard to his education and

593

4 training, that he had received a B -- a degree in biology from

5 the University of Indiana in 1975 and had attended Ball State

6 in Indiana for some graduate studies for a couple of years,

7 but that did not culminate in any kind of degree. He

8 indicated that during the period 1979 through 1982, he had

9 attended Metropolitan Collegiate Institute -- I'm sorry,

10 Metropolitan Collegiate Institute in London, England, where he

11 had obtained his M.D. degree. He also told me that during the -12 period ·1992 through 1987 he had attended Sussex College of

-~ ... ~ ~

13 Technology in Sussex, England, where he had gotten his doctor

14 of science degree.

15 He indicated that for a period of time during the mid

16 '80s he had lived in Boone, North Carolina, where he

17 practiced natural medicine.

18 Q. Did he ever mention to you an entity named British West

19

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23

Indies Medical College?

A. No, he didn't.

Q. Did he tell you the types of things he was doing in the

past, the types of activities he was engaging in in the

Dominican Republic?

24 A. Yes. He indicated that he had a clinic in the Dominican

25 Republic where he practiced medicine and he had been

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1 practicing medicine down there for about fifteen years. He

2 indicated that he had that he owned World Medical Services,

3 which he described as a profit -- a nonprofit organization

4 involved in primary healthcare, research and medical

5 education.

6 He also indicated that he was involved with Immuno

7 Pharmaceuticals and Diagnostico Immunoncological (phonetic)

8 which was an entity of World Medical that was involved in

9 cancer treatment, and that he was involved with the

10 International Institute of Medical Science which also provided

11 healthcare services. And that he had done all these for -

12 several years.

13 He also indicated that he was on the staff at Morgan

14 Hospital which was a public hospital in Santo Domingo. And

15 while he earned a salary there, he returned it to the

16 foundation.

17

18

19

20

21

22

23

24

25

Q. Okay. Before you get ahead, let me ask you this. Did he

ever mention to you any affiliations with any governmental

agencies that he had?

A. Yes, he did.

Q. What were those?

A. He indicated that he served as an undercover investigator

for the Dominican Republic Secret Police aiding in drug and

fraud investigations. He also indicated that he had assisted

the FBI on several occasions in the past, the FBI out of

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Puerto Rico.

Q. Did he talk to you about his role in relationship to

Harry Kampetis and David Weekley?

A. Yes.

Q. What did he tell you about that?

595

A. He told me that he met Harry Kampetis in 1995 through

Walter Schumacher and Schumacher at the time was familiar with

Mr. Caplinger's efforts at developing and marketing a medicine

to fight cancer and AIDS. Schumacher was looking for sources

of funding for the project and was introduced to Harry

Kampetis along the way by telephone, who was then ultimately

introduced to Gregory~Caplinger. . ~ ~

He told me that Kampetis told him that Kampetis's

company, called C.A.F.I., at the time had a management team

which raised capital for organizations and took a percentage

of whatever they were able to raise on behalf of that

organization.

He went on to tell me that since about 1980 he had been

working on this formula.and a treatment protocol for medicine

to fight cancer and AIDS and the medicine was called

ImmuStim. It was a special combination of interferon and

interleukin, and he had spent several years testing this

medicine on animals and on humans and was currently treating

patients at tpe Santo Domingo clinic. He said that his

objective at the time that he met Harry Kampetis was to market

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1 the medication and its treatment protocol commercially, so he

2 was looking for somebody to assist him financially in that

endeavor. He said that Kampetis did have a strong interest in

the marketing of ImmuStim and he told me that he furnished

Kampetis with summaries of some of the research he had

performed and as well as other documents.

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Q. Okay. Go ahead.

A. He told me that in May of 1995 he had signed a 90 day

promissory note for ·$50,000 with Kampetis and had received

these funds which were to serve as working capital for World

Medical at the time. _He did not pay this loan back. He

indicated that it was extended indefinitely after a period of -~ ~

time.

He told me that in August of 1995, he entered into a

partnership agreement with Kampetis whereby Kampetis and his

company C.A.F.I. agreed to fund $2 million toward the purchase

of some medicine that Caplinger took into his possession. He

indicated that he obtained this medicine from a company called

C-Systems in Havana, Cuba. And up until this point in time he

had only been able to purchase small quantities; but for the

marketing and the ultimate commercialization of this ImmuStim

to be successful or go through, he needed to get larger

quantities of this -- these components.

With regard to what happened next, he indicated that he

also became familiar with David Weekley who was Kampetis's

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1 partner and had regular contact with him as well.

2 Q.

3 A.

4 Q.

5 A.

Did he tell you how he became familiar with Mr. Weekley?

Through Kampetis.

Okay. Go ahead.

He indicated.that he talked regular on the phone to both·

6 men -- actually more to David Weekley for -- I'm sorry, at

7 different times more to David Weekley and sometimes more to

8 Kampetis.

9 He indicated that in October of 1995 Kampetis

10 incorporated Immune Pharmaceuticals in Pennsylvania.

11 Caplinger told me that he was uncertain or somewhat confused

12 about the rationale for starting up of this corporation, but ~

13 he did be.come a 30 percent owner of it.

14 Q.

15 A.

Did he talk to you about C-Systems?

Yes, he did. He indicated that because he took

16 possession of this large quantity of medicine, he owed

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21

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25

C-Systems a large sum of money. And because Kampetis did not

come through on his promise to fund approximately $2 million

in a rather short period of time, Caplinger was delinquent in

his payments to C-Systems and so he -- C-Systems threatened to

repossess this medicine; and therefore, over the course of a

several month period of time, Weekley and Kampetis did wire

transfer money down to Mr. Caplinger for the purpose of making

payments back to C-Systems. Ultimately they didn't make

enough payments because there were penalties and interest and

598

1 some -- another entity came in and took over this loan.

2 Q. What was the amount of money that was sent down, did he

3 tell you?

4 A.

5 Q.

6 A.

7 Q.

8 A.

Over the entire period of -

No.

-- the relationship?

For the C-Systems payment.

Well, there was one payment which he described as

9 $825,000.

10 Q.

11 then?

12 A.

13 Q.

14 A.

Okay. And was that directed to a particular entity

Yes, it was directed toward EuroMed. -~ ....

Okay. What did he tell you EuroMed was?

EuroMed was a company that was closely associated with

15 World Medical Association -- World Medical Services and it was

16 the company that would -- was responsible for distributing

17 this medicine.

18 Q. Did he tell you --

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21

A. It was Flavia Berroa's company.

Q. I'm sorry, I was going to ask you did he tell you who

owned EuroMed?

22 A.

23 Q.

24 A.

25 Q.

It was Flavia Berroa's company.

All right. And then you mentioned FINCOM.

Yes.

Did he talk to you about FINCOM?

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599

1 A. Yes, he did. He indicated that this group called FINCOM

2 came in and made payments to C-Systems where he was delinquent

3 and a note was signed between himself and FINCOM; and

4 arrangements were made to pay off the loan to FINCOM, but they

5 then became delinquent on those payments as well over a period

6 of time.

7 Q.

8 A.

Did he --

He indicated that FINCOM was at the time of this

9 interview foreclosing on some of his medical equipment for

10 failure to make payments.

11 He indicated tha~ over the course of his relationship

12 with Kampetis and Weekley, he received close to $2 million ~ ~ ~

13 from the men. He indicated that he never knew the specific

14 source of the funds sent to him by Kampetis and Weekley, but

15 he did recall that they had investors.

16 Q. Did he tell you how many investors he could recall? Did

17 that come up?

18 A. I don't recall.

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21

Q. Okay.

A. He indicated that in addition to paying for the medicine,

some of the money that he received from Weekley was used to

22 retire previous debts that he had with certain individuals,

23 including a Rene Hernandez .who was a previous investor with

24 Caplinger. Some of the money was used for other legal bills.

25 Some of the money was used so that he could retrieve property,

•

600

1 including a house, and make repairs on a plane.

2 Q.

3 A.

Okay.

And keep the clinic operating. He indicated that at my

4 request he would produce an accounting of all the expenditures

5 where funds from the Diamond Group were used or from Immune

6 Pharmaceuticals.

7 Q.

8 A.

9 Q.

10 A.

11 Q.

12 A.

13 Q.

14 A.

Did he provide you with that?

Ultimately he provided me with a document.

Okay. Did he p·rovide you with some other documentation?

Yes.

At that time or another time?

Yes.

What kind of documentation?

At that time and at other times he provided me with

15 documentation relating to World Medical Services, including

16 financial statements, insurance statements. He provided me

17 with information regarding his medical credentials and his

18 medical training.

19 Q.

20 A.

21 Q •

He provide you with that?

The defendant did, yes.

Did you ask yourself or any -- or request any particular

22

23

documents from him in addition at that time or a later time?

A. Well, I certainly requested at that time or a later time

24 further verification of his medical degrees. I requested that

25 copies of all of the articles that he had published be

601

1 provided to me. I requested that information be provided to

2 me so that I could follow up on certain aspects of the

3 investigation. When it came to, for instance, the name E.V.

4 Frazier which appeared on many documents, and many of these

5 things were provided to me by the defendant in one form or

6 another.

7

8

9 Q.



Agent Mueller, t•m going to approach and show you what

10 I've marked as Government's 133 through 138. Take a look at

11 those for me, please, _and tell me if you recognize those

12 documents.

13 A.

14 Q.

Yes, I do.

And are those the documents you received from the

15 defendant?

16 A. With one exception,· I believe, yes.

17 Q. Okay. With the exception of this, okay. Tell me about

18 that. Did he explain those to you?

19 A. Yes.

20 Q. Okay. Tell me about those.

21 A. Government's Exhibit 133 is a copy of his diploma from

22 the Universidad Autonoma de Santo Domingo which has a date on

23 it of March --

24 MR. BENDER: Excuse me, Your Honor. We can't find

25 copies that were furnished to us. We only have 137A.

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602

MR. WHISLER: I'll take them.

MR. BENDER: If you have copies, may we have them?

{Counsel conferred.)

MR. WHISLER: May I approach the witness?


6 A. Government's Exhibit 133, as I just stated, is the degree

7 from Universidad Autonoma de Santo Domingo. It's dated March

8 19th, 1997, and actually awarded July 8th, 1997.

9 He indicated to me that this was -- this degree was

10 earned through what was called the revalidation process

11 whereby information was provided to the Universidad Autonoma

12 concerning his prior medical education, and based on that -~

13 education.he was awarded this diploma.

14 He furnished to me as evidence that he had a prior

15 medical education and a prior medical degree Government's

16 Exhibit 134 which is his degree from Metropolitan Collegiate

17 Institute in London, England, along with a transcript for that

18 institution.

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21

22

23

24

25

He also provided me ·with a letter dated August 20th,

1984, from J.T. Stratton, Dean of Metropolitan Collegiate

Inst~tute, which I believe a version of also is in the Exhibit

Number 9 which is the curriculum vitae, which is a

verification that Caplinger was a student at MCI from 1979

through 1982 with completion of the doctor of medicine. That

he was second in a class of 36 and that he comes with the

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603

1 highest recommendation. This is Exhibit 135.

2 There's a postscript to this letter that indicates, "Our

3 institute due to the Educational Reform Act of 1988 has ceased

4 to function."

5 Q. What's the next exhibit number?

6 A. This is Exhibit Number 136 which he explained to me --

7 it's in Spanish. He explained to me that it does contain

8 information about the license to practice medicine that he was

9 awarded in July of 1°997.

10 Q.

11 A.

12 Q.

Okay.

In the Dominican Republic.

Okay. Next exhibit. ·-... ' ~ 13 A. 137A is the accounting that he provided me when I asked

14 for documents to support the various expenditures that were

15 made by him using Diamond Group or IPI funds. It's basically

16 a listing of money amounts and what those monies were

17 purportedly used for with no backup documentation; although,

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21

22

23

24

25

it does indicate that some of the money went toward rent,

marketing, chemicals, telephone, salaries, rent, LaGena

Greene, Rene Hernandez, C-Systems, Rosario -- that's Rosario

Clementina or Clementina Rosario -- FINCOM, and other

entities.

Q. Okay.

A. In the way of receipts, he did provide me with, I

believe, several receipts from c-systems. These are reflected

•

604

1 in Government's Exhibit 137B, 137C and 137D.

2 Q. Is there a date on those?

3 A. Well, 137B indicates that the sum of $825,000 on December

4 21st, 1995, was possibly -- was paid to C-Systems. There's no

5 address or anything else associated with this to confirm that

6 actually went to C-Systems.

7 The second one, 137C, has a date of June 7th, 1996,

8 showing a sum of money from FINCOM going to C-Systems.

9 And the third one, Exhibit 137D, shows a date of August

10 30th, 1995, indicating a payment of $1.8 million was due for

11 C-Systems from Flavia Berroa but apparently was not paid. It

12 says "sin pago, 11 which means not paid to C-Systems . . .,., ~ ~

13 Q. Okay. What's the next exhibit number?

14 A. 137E reflects a -- some financial information on Berroa &

15 Associates, summary data for income relating to 1995 and

16 1996.

17 Q.

18 A.

Have you seen that document before in other evidence?

I don't believ_e this particular document has been shown.

19

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21

There's a very similar document showing data before 1995.

Q. Okay.

A. He also gave me information regarding his medical

22 equipment, and this is reflected in Exhibit 137F. This is

23 Proctor Homer Warren Insurance Company, property coverage,

24 showing insured value of medical equipment at $6,904,500.

25 Attached to that property coverage, which he says is

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1 underwritten by Lloyds of London, is the equipment schedule.

2 It's got Clementina Rosario's stamp on it. This particular

3 version also has the amendment to the policy effective January

4 1996 which shows additional equipment added to the policy.

5 Q. Have you seen that exhibit in other parts -- portions of

6 the government's evidence?

7 A. It's in Exhibit 2C and 12F, I believe. We saw them

8 today.

9 Q.

10 A.

Okay.

During the course of my interview with Greg Caplinger, I

11 ask~d him about the use of purchase orders, and he indicated

12 that Harry Kampetis had asked him to produce some purchase ·~

. ~

13 orders for the medicine inasmuch as these purchase orders~

14 would demonstrate the desirability of the medicine to

15 potential_ investors. And he indicated that he did furnish

16 purchase orders from the British West Indies Health

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25

Confederation and from Ameripharma Labs to Kampetis. He then

went on to say that these purchase orders were -- the purchase

order from British West Indies Health Confederation was

worthless and that he had told Kampetis that there was no

value behind the paper.

When I expressed confusion and asked him to explain that,

he was unable to. I asked him several times why he would

furnish Kampe~is with purchase orders that had no value to

them and he just -- he couldn't explain it.

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2 him

3 Q.

4 A.

5 22A.

6 Q.

7 A.

606

After his interview with me in August, I did receive from

two letters which he indicated had been part of his file.

What are the exhibit numbers on those, please?

The first one is Exhibit 22 and the second one is Exhibit

And what's the import of those letters?

Well, Exhibit 22 is a letter dated March 7th, 1995,

8 addressed to Harry Kampetis. And this letter is stating that

9 the purchase order, while being real, has no value and should

10 not be used and cannot be used to raise funds.

11 In my search of all of the records that David Weekley and

12 Harry Kampetis furnished as part of this investigation, never

13 found this letter.

14 Q.

15 A.

Okay. What about the other one?

The other one, Exhibit 22A, is dated October 2nd, 1995,

16 and it's made -- it's addressed to David Weekley and Harry

17 Kampetis and it's signed from Clementina Rosario. It's a

18 similar letter. It states that no material should be or is

19 authorized to be sent without her approval or signature. And

20 it goes on to say the orders to purchase are not for financial

21 solicitation or guarantee in any manner and should never be

22 represented as this.

23 Again, a search of all the records provided to me in May

24 of 1997 by David Weekley didn't produce this and a search of

25 all the records provided to the government by Harry Kampetis

607

1 didn't produce this letter either.

2 Q.

3 A.

Okay. What's the next --

You know, I should go back and note that this Exhibit 22

4 is dated March 7th, 1995, which is over a month before the

5 relationship between Harry Kampetis and Walter Schumacher even

6 began.

7 Q.

8 Q.

Okay.

What's the next exhibit number that the defendant gave

9 you documentation of?

10 A.

11 Q.

138A, B, C, D, E, F, G and H.

And what were those documents submitted in response to?

12 A. I had made a request for all of the published material ~

' ~ 13 that Gregory Caplinger authored or coauthored since 1990 and

14 these are what I received in response.

15 Q. Is that the totality of the documents received in

16 response?

17 A.

18 Q.

Yes, it is.

And what are they?

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20

21

22

23

A. They are all bound versions of what's called BWI Journal

of Medicine.

Q. Okay. And they all talk about things medical; is that

correct?

A. Yes.

24 Q. Okay.

25 MR. WHISLER: Your Honor please, I'd move to admit

608

1 Government's 133 through 138A through H, as well as 22 and 22A

2 at this time. Move to publish.

3 THE COURT: They'll be received. They may be

4 published.

5 (Government's Exhibits Number 22, Number 22A, Number

6 133, Number 134, Number 135, Number 136, Number 137, Number

7 138A, Number 138B, Number 138C, Number 138D, Number 138E,

8 Number 138F, Number 138G and Number 138H were received into


10 Q.

11 A.

12 Q.

What happened next in your investigation, Agent Mueller?

After I interviewed ---After you received those documents and interviewed the -~

13 defendant. ' ~

14 A. The investigation continued over the course of the next

15 several months.

16 Q.

17 A.

Did you have any further contact with the defendant?

No.

18 Q. Okay. I'm going to approach and show you what's already

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in evidence as Government's 2B. Ask if you can take a look at

that for me, please. Tell me if you recognize that document.

A. Yes, I do.

Q. Okay. Are you familiar with that?

is for the record.

Just tell us what it

24 A. This is the Life Medical Equipment letter dated March

25 1st, 1996, which contains an appraisal of medical equipment

609

1 for insurance purposes, and this was provided to David Weekley

2 and Harry Kampetis by the defendant and passed on to other

3 people when they were soliciting funds.

4 Q. Okay. Now, who is the purported author of that

5 appraisal?

6 A.

7 Q.

It's signed Eduardo Perez, Biomedical Engineer.

Okay. Is there a corresponding address and phone number

8 with that individual?

9 A. Yes. The lettei concludes, "If I can be of further

10 assistance, please call or write at: BWI Island Federation

11 Providenciales, Turks ~nd Caicos, British West Indies," and

12 then there's a teleph~ne number. ' ~

13 Q. Okay. Are you able to recognize that telephone number?

14 A.

15 Q.

16 A.

Yes.

How are you able to recognize it?

It is the same number that Gregory Caplinger gave me as

17 his residential home telephone number when I interviewed him

18 in August of 1997.

19

20

21

Q. Okay. Now, in connection with your duties in this case,

did you review all the bank record evidence and wire transfer

evidence in this matter?

22 A.

23 Q.

Yes, I did.

Okay. Did you prepare ·a summary reflecting the totality

24 of that evidence that's been previously admitted in this

25 case?

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1 A.

2

Yes, I did.

MR. WHISLER: Your Honor, may I have the witness

3 step down to use this summary chart?

4 THE COURT: Yes, sir, she may.

5 Q. Agent Mueller, I'm going to show you what's been marked

6 as Government's Exhibit 139. If you would come down as you go

7 through this.

8 (Witness stepped down.)

9 Q. If you could walk us through this chart that you

10 prepared. Tell us what it reflects.

11 A .. Okay. Well, as the title indicates, these are funds

12 applied for the benefit of Gregory E. Caplinger during the -~ ' ~ 13 years 1995, 1996 and into early 1997, which is the period

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during which he was associated with David Weekley and Harry

Kampetis .. The -- and the date and the amount of the

contribution, which most of these reflect wire transfers

either from First Union National Bank/the Diamond Group

account or First Union National Bank/Immune Pharmaceuticals

account.

The ones -- the entries that are in bold reflect the

charges in this indictment, the wire fraud charges in this

indictment, and there are one, two, three, four, five, six.

They also reflect the money laundering charges as well. As I

stated, these.represent, for the most part, wire transfers

from the Diamond Group and Immune Pharmaceuticals.

611

1 In 1995 the total wire -- or applied to the benefit of

2 Mr. Caplinger was approximately $1.1 million. In 1996 you can

3 see there were quite a few for a total of $788,073. And in

4 '97,'$7,783. For a total of $1,000,896 -- excuse me,

5 $1,896,501.

6 (Witness resumed the witness stand.}


8 of Government's 139 and reserve publication.

9 THE COURT:· All right, sir. It will be received.


11 evidence.}

12 Q. Now, also in connection with your duties, did you take a ..... - . 13 look at all the evidence and compile a chronology of events in

14 conne.ction with the defendant in this case?

15 A. Yes.

16 Q. Okay. And what did you draw from to prepare that

17 chronology?

18 A. The chronology is actually not of the events in this case

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but of places where the defendant purported to be

Q. Okay.

A. -- over certain periods of time. And the information was

22 drawn largely from his own curriculum vitae as well as from

23 other sources, including what he told me, testimony in this

24 case, the Who's Who, and other exhibits that he provided the

25 other defendants in this -- or the co-defendants in this

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1 matter.

2 Q. I'm going to approach and show you what I'm going to mark

3 as Government's 140. If you could step down, Agent Mueller,

4 and walk us through this summary chart, please, Government's

5 140.


7 A. This is done by year and periods of years. According to

8 the defendant's curriculum vitae, he was at MCBC Institute,

9 which is also known as MCI in the United Kingdom, during the

10 period 1979 through 1982.

11 According to the ~ranscript that he provided to

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Universidad Autonoma and which was presented into evidence ...... ~ ~

today, he was also at British West Indies Medical College

earning an M.D. that same period of time.

According to his curriculum vitae, he was at British West

Indies Medical College at a different time, however. It

indicates that he was there during the period 1982 through

1984.

His curriculum vitae indicates he was at Sussex College

of Technology earning his doctor of science degree in

immunology and biochemistry during the period 1981 through

1987.

This is almost the same time, 1982 through 1987,

according to his curriculum vitae, he was doing rotating

residency and fellowship at Sussex College of Technology as

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1 well as MCBC.

2 According to his curriculum vitae, he was also doing an

3 internship during one of those years, during 1982, at MCBC.

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His curriculum vitae indicates that he was also earning a

degree at Anglo American Institute of Drugless Therapy in

Scotland during that period of time.

And it also indicates that he was a clinical oncology

fellow at the Florida Degenerative Disease Center during that

same period of time which is 1982 through 1984.

According to his curriculum vitae, he was also doing a

special fellow in imm~nology at Sussex General Hospital which

was in the United Kin~dom during the period '82 through '88. ' ~

And during the period 1983 through 87, he was doing

intensive two-week rotations every three or four months at the

Caribbean Oncology Center.

According to his Who's Who in contemporary achievements

and contemporary achievements literature that he provided to

Weekley and Kampetis, that indicates that he's been a

physician of the Institute of Medical Sciences in the

Dominican Republic from 1983 through 1990 and farther.

And during -- again, much of this time he was also in

Bo~ne and Blowing Rock, North Carolina, practicing

practicing up there at various clinics.

Q. Okay. Thank you.

(Witness resumed the witness stand.)

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1 MR. WHISLER: Your Honor please, I'll move admission·


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THE CLERK: 140.


6 evidence.)

7 Q. And finally, did you, Agent Mueller, have occasion to

8 prepare a summary chart reflecting various addresses that have

9 been mentioned in this case in government's evidence

10 pertaining to the defendant?

11 A. Yes.

12 Q. Show you what is marked as Government's 141. If you want -~ . " .. 13 to step down and walk us through that as well, please.


15 A. This chart breaks down by address a couple of the

16 addresses, some of the names and entities and documents that

17 have been entered into evidence associated with those

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addresses.

And for instance, 11 Rosemont Road, which is Answering

Limited which Detective Constable John Richards spoke about

t~is morning. At this address the name E.V. Frazier appears

on the purchase orders from the British West Indies Health

Confederation.

Also associated with this address besides the British

West Indies Health Confederation is Sussex General Hospital as

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1 we know from the letters regarding the Nobel Prize nomination

2 that were provided to Kampetis and Weekley by the defendant,

3 and they contain the name T.J. Winters, Chief of Staff. T.J.

4 standing for Thomas J. Winters.

5 The next address, which is the 7-11 Kensington High

6 Street, which is also in London, was supplied on a transcript

7 that was provided to Universidad Autonoma by the defendant,

8 the transcript purporting to show his attendance at British

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9 West Indies Medical College. Well, it's listed as the

permanent address for the defendant. But it also shows as the

address for the archiyes of Metropolitan Collegiate Insti~ute

in a letter that appe~rs in the curriculum vitae that's signed

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by J.T. Stratton which is recommending Caplinger. It also

serves as Sussex General Hospital in a letter identifying

Caplinger.as the chief of immunology-oncology at this

institution in a letter written by J. Wainright.

There's another address, which is 1323 South State Road

Number 7, Suite 436, in North Lauderdale, Florida. There is a

letter of recommendation from T.J. Winters at the Florida

Degenerative Disease Center contained ~n the curriculum

vitae. And in one of the International Institute of Medical

Science brochures that was distributed by Kampetis and Weekley

to some of the investors, or, in this case, LaGena Greene,

there is mention of the BWI Island Federation which was at the

time a U.S. agent for the Institute for Medical Science, and

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1 both of these Gome back to this address.

2 Q.

3

Thank you, Agent Mueller.

(Witness resumed the witness stand.)

616



6 THE COURT: It will be received.


8 evidence.)

9 Q. Finally, in connection with your duties, did you obtain a

10 catalog from Harvard Medical School?

11 A. Yes, I did.

12 Q. As it relates in. this case? ·~ ._ ..

13 A. Yes.

14 Q. I'm going to approach and show you what I marked as

15 Government's 120. Ask you to take a look at that, please.

16 Tell

17 A.

18 Q.

19 A.

me if you recognize· that

Yes, sir.

-- and where you got it.

This was received from the Harvard Medical School. It's

20 a course catalog for their 1996, 1997 school year.

21 Q •

22 A.

23 Q.

24 A.

Did you have occasion to review that catalog?·

Yes.

Okay. For what purpose were you reviewing it?

To compare the course listings contained in this catalog

25 with the course listings contained in some of the information

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that was provided to Universidad Autonoma by the defendant

which had as its heading British West Indies Medical College

Rotations.

Q. And how did it compare?


THE COURT: Overruled. Go ahead.

A. The language is essentially the same. The type set is

the same. The -- it's the same with the exception that the

document that was pu·t into evidence this morning as testified

to by Senor Holguin has certain whiteouts in it.

Q. Okay.

A. Or erasures.


MR. WHISLER: Your Honor please, I'd move admission

of Government's --

THE COURT: Objection overruled. Go ahead. You

need to talk louder.

MR. BENDER: I'm sorry.

MR. WHISLER: I move admission of Government's 120,

if Your Honor please.

THE COURT: It will be received.


evidence and published to the jury.)

Q. With reference to that catalog, Agent Mueller, let me

show you what's already admitted as Government's 117. Ask you

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to take a look at that. Do you recognize that?

A. Yes, I do.

Q. What is that?

A. This is a document that was provided to the Universidad

Autonoma by the defendant. It's called the British West

Indies Medical College Clinical Rotations Core Clinical

Clerkships. And contained therein it contains a listing of

physicians. It's headed Sussex General Hospital Internal

Medicine Residency/Harvard Medical School Department of

Continuing Education Rotation. Contains the names of various

doctors and then it cqntains the core clinical clerkships_

which are, when compared to Exhibit 120, the same with the ,.., ~ ~

exception that there are a few whiteouts here and there and

that this document does say BWIMC Clinical Rotations on it.

Q. Very well. Thank you.


Thank you, Your Honor.


MR. BENDER: Yes.

CROSS-EXAMINATION

BY MR. BENDER:

Q. Ms. Mueller, during the course of your investigation of

this matter, did you receive a vial of ImmuStim?

24 A. Yes.

25 MR. BENDER: Thank you. That's all.

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2 You may be excused.


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THE COURT: Call your next.

MR. WHISLER: Your Honor, if I could just have a

6 minute.

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(Pause.)

MR. WHISLER: Your Honor, at this time the

10 government would move -- I'd like to move in a stipulation

11 into the record between the parties. Do you need me to read

12 it or do you want me tust to --

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.. ... THE COURT: You may read it to the jury.

MR. WHISLER: All right, sir.

THE COURT: Now, ladies and gentlemen, when the

16 parties enter into a stipulation, you accept that as proof.

17 They've agreed that something is true so -- to save time on

18 proving it. Go ahead.

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MR. WHISLER: All right, sir. This is a stipulation

between the United States and the defense. In subs·tance it

reads, "The parties stipulate and agree that all the First

Union National Bank records and all the Western Union records

presented during the government's case in chief are records

that are kept in the ordinary course of business by First

Union National Bank and Western Union respectively. Further,

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1 the parties agree that a records custodian would testify to

2 the same.

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"Secondly, the ~arties stipulate and agree that the

following defense exhibits may be admitted into evidence

without recalling David Weekley to the witness stand, to-wit:

Defense Exhibit 8 and Defense Exhibit SA. 11

Signed and dated by the parties and to be filed with

the court on this date.


MR. WHISLER: And Your Honor, if I can have a minute

before I rest, I'd like to go over my exhibits with the clerk

if I could do that.

THE COURT: All right. Let's take a little bit

early comfort recess and we'll come back in about ten

minutes.

(Brief recess at 2:03 p.m.)

(Jury not present.)

THE COURT: All right. Mr. Whisler, you have an

announcement?

MR. WHISLER: Yes, sir. Your Honor, I need to move

to admit a couple of exhibits, housekeeping matter here. If I

can do that at this time.

THE COURT: All right, sir.

MR .. WHISLER: I neglected to admit Government's 15A

through H, 25B and 58, and I believe that conforms with the

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1 clerk's exhibit list.

2 THE COURT: All right. They will all be received.

3 (Government's Exhibits Number 15A, Number 15B,

4 Number 15C, Number 15D, Number 15E, Number 15F, Number 15G,

5 Number 15H, Number 25B and Number 58 were received into

6 evidence.)

7 MR. WHISLER: And with that the government will

8 rest.

9 THE COURT:· All right. I'll hear your motion, Mr.

10 Bender.

11 MR. BENDER: Mr. Falls will be arguing the motion,

12 Your Honor.

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THE COURT: Mr. Falls.

MR. FALLS: Your Honor, with respect to counts

15 seventeen through twenty-two, we would contend that the

16 government has failed to properly allege and prove wire fraud

17 in this case. My argument is based on looking through the

18 patterned fourth circuit jury instructions from Carl Horn.

19 He's a magistrate here in this courthouse. He lists out three

20 elements. First, the defendant has to devise a scheme to

21 defraud. Second, the defendant used an interstate wire in

22 furtherance of that scheme. And third, that the statements in

23 the wire communications were material as I define that term in

24 a moment.

25 And what that indicates to me is that there must be

622

1 statements in the wire communications, and the government has

2 set out that the actual wire transfer of money constitutes a

3 fraudulent transmission. Money was sent. There is no doubt

4 that money was sent. And

5 THE COURT: Mr. Falls, it's my understanding that

6 the necessary elements of wire fraud is that the wires be used

7 to implement the fraud. I don't think the wire itself has to

8 have -- contain the fraud. Is that not the law?

9 MR. FALLS: Well, Your Honor, I'm looking to Judge

10 Horn's instructions and I looked to the fourth circuit, fourth

11 circuit case in 1995, United States versus Rebrook, 58 F.3d

12 961. And I -- very briefly, in that case Rebrook was in-house ~ .. &-

13 counsel for the West Virginia Lottery Commission. He learned

14 that after the general elections, the state was going to award

15 a video lottery contract to a particular company. He bought

16 stock in that company while representing the Lottery

17 Commission without telling them about his interests. And he

18 learned about this and passed this inside information on to

19 other insiders via the telephone. And the fourth circuit held

20 in that case that the government established its case because

21 he was using the telephones, his communications over the

22 telephones to further a fraud upon the people in West

23 Virginia.

24 And it's my understanding from what I've seen of the

25 fourth circuit instructions and the fourth circuit law that

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has upheld a conviction on that is that what you're dealing

with and what the wire fraud is, in essence, communication, a

fraudulent communication, not the actual transfer of the money

itself.

I think

THE COURT: No, I think you're mistaken, Mr. Falls.

you know, I've had mail fraud cases where the only

use of ~he mail was the mailing of a letter of confirmation or

a check or just anything that. implemented the fraud, and I

think the wire trans.fer of funds through the bank is

sufficient in this case to implement the fraud. And so let

your motion be denied on that basis. -

Now, do you have further motions? ......

" .. MR. FALLS: Yes, Your Honor. With respect to counts

twenty-three and twenty-four -- or actually, I would just -

THE COURT: The money laundering?

MR. FALLS: Money laundering on count twenty-four.

I do not have a motion at this time other than I will make

your standard Rule 29 failure of proof with respect to count

twenty-three.


MR. FALLS: With respect to count twenty-four, the

evidence that the government has introduced shows that the

$825,000 was not used to promote the scheme or not used to

promote the specified unlawful activity. It was used to

retire an antecedent debt. And the fourth circuit case on

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1 that is the Heaps case, United States versus Heaps from the

2 fourth circuit. I was not anticipating arguing Rule 29 today

3 so I don't have a copy of Heaps with me but I can bring it

4 tomorrow.

5 But the fourth circuit -- there's been a circuit

6 split in this area and the fourth circuit, its line of

7 reasoning is that for a promotion allegation of money

8 laundering, it has to be -- to promote, the proceeds have to

9 be pumped back in and that retiring an antecedent debt is not

10 a promotion of specified unlawful activity.

11 Now, what th~ government showed through its

12 witnesses was t~at th.q_t $825,000 -- and that's also the ~ ~

13 exhibit that the government has just stipulated to with David

14 Weekley the release of $825,000 was used to pay for

15 me4ication that had already been bought. There was already a

16 debt incurred for the medication. And that $825,000 was used

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to pay off an antecedent debt and there's no evidence of

promotion with respect to that $825,000. So in the particular

money laundering provision that they've alleged, they have not

proven that or established that in the light most favorable to

the government.

THE COURT: I'll hear you, Mr. Whisler.

MR. WHISLER: Your Honor, I think there's two

important things in response to that and that is if you look

at the dates of the charges, the money laundering charges~-

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or the charge that is being argued by counsel is December of

'95. As you see in the government's wire fraud charges, the

scheme continues into '96 and thereafter. And so our evidence

shows that in fact the scheme did continue. The 825 was held

out as payment for that medicine, but the scheme did continue

and it's our argument that that's the promotion theory of our

case.

Now, the Heaps case that counsel cited was a

hand-to-hand drug tr.ansaction where the fourth circuit said

you're not -- you can't promote when you're merely paying a

drug debt in a person~_to-person drug transaction. That's_ not

a money laundering prgmotion case because there was nothing . " ..

that happened after that drug transaction occurred. Whereas,

in this case the scheme continued on and it's our argument

that the defendant received this 825 out of the total 2

million that he got and some of those monies, of course, came

after this money laundering transaction.

THE COURT: Does your -- I don't have the indictment

here before me, but does.your indictment in these money

laundering counts specify the amount o~ money and what it was

used for?

MR. WHISLER: It just says $825,000 wired from the

Diamond Group First Union account to Caplinger in Santo

Domingo. And.in the -- tracking the language -- it tracks the

language of the statute, "with the intent to promote the

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1 carrying on of the wire fraud."

2 So, you know, we don't believe that it was for

3 payment of medicine. I mean, that's what it was held out as.

4 But we believe the evidence -- you know, we think the evidence

5 shows it just went to the defendant so -- to continue the

6 scheme.

7 THE COURT: I'll look at it again at the conclusion

8 of all the proof, Mr. Falls. At this point I'm going to have

9 to say, viewing the evidence in the light most favorable to

10 the government, ~hat your motion must be denied, but I'll look

11 at it again at the conclusion of all the proof.

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MR. FALLS: Okay. Thank you, Your Honor. -i..

' MR. BENDER: Thank you, Your Honor ..

THE COURT: Now, then, let your motions all be

All right. Bring the jury in.


THE COURT: All right. Ladies and gentlemen, we

19 have not been keeping you sitting back there twiddling your

20 thumbs to no avail. We've made some progress and the

21 government has rested, so they have concluded their proof .

22 And the defense, it's come as a bit of an earlier dispensation

23 than they thought was going to happen, so the defense is not

24 ready to proceed at this time but they're going to start early

25 in the morning and will finish Monday afternoon. So that I

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think -- that's barring any unforeseen circumstances, but

we've had some heart-to-heart talks while you all were out.

And the -- we'll probably get to the arguments and charge on

Tuesday. So -- but that means you're going to get to go home

early today and come back in the morning at 9 o'clock and the

defense will start their proof at that time.

Remember my instructions. Don't talk to anybody

about the case. Don't let anybody talk to you about the

case. Come back in the morning at 9 o'clock.

We will be -- remember also that we will be quitting

tomorrow afternoon about 3:30 so I can catch my 5 o'clock

airplane. ·~ . '

(Evening recess at 2:42 p.m.)

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U.S.A. v Gregory Caplinger, trial transcript, volume 2

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