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From: martinottmann@yahoo.com (Martin Ottmann)
Newsgroups: alt.religion.scientology
Subject: Federal Complaint II - Violations (f)
Date: 1 Jan 2003 15:06:27 -0800
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May 23rd, 2002 - On this day John Merrett, the former counsel of the
LMT, testified about his dealings with Minton, Dandar and the LMT
(Merrett had represented the LMT from early 2000 until the beginning
of the year 2001). During testimony he explained how he had acted as a
go-between Minton and the "fat man" in the $ 300,000 transfer from
"Operation Clambake" to the LMT [Exh. No. 133]:

[ … ] Mr. Moxon: "Let me talk to you about this person you were
dealing with who you called the "Fat Man," someone by the name of the
"Fat Man," is that correct?

Merrett: "Yes."

Q: "Did you have some kind of direct communication with this person?

A: "Yes."

Q: "This is communication by telephone?"

A: "Yes."

Q: "How did you get the number?"

A: "I didn't."

Q: "Did he call you?"

A: "Yes."

Q: "How long did you talk to him?"

A: "Five, ten minutes.

Q: "How did you know how to contact him?"

A: "I contacted him via Internet, requesting somebody that would
handle a confidential transaction." [ … ]

Q: "Well, how did you find him? You just went on a chat channel and
said, ‘is there anybody here who can help me? We need some money …'" [
… ]

A: "I said on a chat channel that I needed someone to assist me with
some confidential transfers of money and communication."

Q: "How did you know that this money needed to be transferred?"

A: "Because I had been advised by Mr. Minton - and I don't know
whether Ms. Brooks, as well - but that there were people in Europe who
wished to contribute money but who wished to be insulated from LMT in
order to protect them from reprisals from Scientology." [ … ]

Q: "How did he know how to contact you?"

A: "I gave him the telephone number of a pay phone."

Q: "Okay. Then he called you at a pay phone at some prescribed time?"

A: "Yes." [ … ]

Q: "What year was it?"

A: "I believe it was 2001. But I'm not certain." [ … ]

Q: "Is that the only telephone conversation you had with this person?"

A: "Yes." [ … ]

Q: "Did you make some arrangement with him?"

A: "What do you mean?"

Q: "Well, did you - tell me the entirety of the conversation."

A: "I told him that I needed him to contact Andreas Heldal-Lund at a
given number and tell him he was calling on behalf of people in Europe
who wished to transfer money to the Lisa McPherson Trust but wished to
remain anonymous and we are, therefore, dealing with him, who was
unknown to either Mr. Heldal-Lund or the LMT. I instructed him that if
Mr. Heldal-Lund agreed to handle the transaction, that he should tell
Mr. Heldal-Lund to wait whatever period of time seemed appropriate to
him, but some specified time, thirty minutes, or an hour or two hours,
or a week or whatever, and that Mr. Lund should then telephone the LMT
and provide them - or obtain from them whatever information would be
necessary to transfer the funds. I instructed him to then call the LMT
and tell the LMT - tell Ms. Brooks or whoever he spoke to at the LMT
that he was representing people in Europe who wanted to transfer money
without being connected to the LMT, and that she should be expecting a
call - they should be expecting a call at whatever the specified time
was from Mr. Heldal-Lund to do the rest of the arrangements and get
the rest of the information necessary for the transfer."

Q: "And you had no idea who this person was you had this call with?"

A: "Correct." [ … ]

Q: "So you instructed the anonymous guy to tell Heldal-Lund to contact
LMT to – to receive the money?"

A: "No …"

Q: "Well, correct me."

A: "I instructed the individual to ask Mr. Heldal-Lund if he would be
willing to accept a transfer of funds to be forwarded to the LMT, and
if Mr. Heldal-Lund was agreeable, the individual was to contact the
LMT and tell them that Mr. Lund would be handling a transfer of funds
from people in Europe to the LMT, and that - and I don't remember
which side was supposed to initiate direct communication, but that
they were to get in communication with one another and exchange
whatever details were necessary."

May 24th, 2002 - The following day the examination of Robert Minton
was continued. The hearing began with a submission of evidence by
Minton's lawyer Bruce Howie [Exh. No. 134]:

[ … ] Mr. Howie: "Well, your Honor - your Honor, as long as I'm on my
feet, I would like to address Mr. Dandar's request to produce for Mr.
Minton."

The Court: "All right. I don't have it, so I don't know what it is."

Mr. Howie: "Well, I'm about to provide that to you. If you recall,
three days ago – and I'm providing right now the Court with the
original of a letter from Jean Pierre, Jacque Moude, J-a-c-q-u-e
M-o-u-d-e of Geneva, Switzerland, dated - or, executed in Geneva May
22nd, 2002, and purportedly signed by him in reference to three checks
issued by the UBS. Now, I realize this was not an entirely adequate
response for the purposes of request to produce, but the Court has
directed us within 48 hours, which ran as of about 5 o'clock
yesterday, to advise the Court on what efforts and diligence Mr.
Minton has made in order to secure these documents.

"This is what we were able to do - I should say what Mr. Minton was
able to do in that short period of time. Of course, Mr. Minton will –
will accept inquiry into his efforts on this point. But the point is
that on Monday - which is not a holiday in Europe, obviously - Mr.
Minton will make efforts to actually secure from the bank itself the
documentation that shows that the source of these funds in these three
checks were his. To identify the three checks in order, the 992 check,
the first one numbered there, is the half million dollar check, which
is in evidence, the check to Ken Dandar in the amount of half million
dollars; the second check, the 242 check, is the check for a quarter
million dollars, again to Mr. Dandar; the third check, 493, is, if I
understand correctly, a UBS check in the amount of $ 300,000,
approximately, to I believe the Lisa McPherson Trust, if I'm not
mistaken, although I may stand corrected on that point."

The Court: "Okay. Was there not another $ 500,000 check?"

Mr. Howie: "Yes, your Honor, there is, and Mr. Minton is able to
respond to that."
Mr. Minton: "Can I tell him something?"

The Court: "Sure." (Mr. Minton spoke to Mr. Howie off the record.)

Mr. Howie: "Your Honor, the $ 500,000 check that you're referring to
was in fact not a check but a wire transfer, and so we need to obtain
documentation concerning the wire transfer." [ … ]

At this point the $ 500,000 wire transfer had been documented through
the LMT bank records of the Bank of America, which had been submitted
to the court [Exh. No. 135]. An "Account Reference Information" of the
LMT's bank account for the March of 2001 stated that a transfer in the
amount of $ 499,988 had taken place on March 19th. The bank from where
the transfer had been made was listed as a Swiss branch of the
Dresdner Bank. This transfer was later also the subject of Minton's
cross-examination:

[ … ] Dandar: "All right. Did the Dresdner bank have anything to do
with the $ 500,000 wire transfer to the LMT?"

Minton: "It came from the Dresdner bank. It's on the statements. It's
transferred by Dresdner bank, New York, by order of Dresdner bank,
Switzerland." [ … ]

The statements also listed the so-called "loan repayments" from the
LMT towards Minton in the amount of $ 650,000, which had been
mentioned during Stacy Brook's deposition on August 15th, 2001. The
records from March 2001 [Exh. No. 135] showed debits from two checks
of the amounts of $ 150,000 (March 19th) and $ 200,000 (March 20th),
which had been made out for Minton.

The balance for April 2001 [Exh. No. 136] showed a withdrawal of $
300,000 on April 11th, which represented the third "loan repayment" by
the LMT to Minton. That "re-payment" was nevertheless based on the
check of $ 300,000 that Minton had forwarded to Andreas Heldal-Lund
who then had transferred it to the LMT.

During the later examination of Minton, the court inquired how the
transfer of $ 300,000 had been arranged and how Minton's version of
the course of events differed from what Merrett had testified on the
previous day. Minton explained that the money did not originally come
from an account at UBS but was deposed there as a check on behalf of
another bank. When he was asked to identify this financial
institution, Minton refused to answer and invoked his Fifth Amendment
privilege:

[ … ] The Court: "The $ 300,000 check …"

The Witness: "Yes."

The Court: "… that went into your pocket ultimately from LMT.
Apparently it was sent through some outfit called Operation Clambake."

The Witness: "Right."

The Court: "Tell us from beginning to end how this transaction
occurred."

A: "Okay. Well, again, going back to wanting to keep Scientology
guessing as to where money coming into the LMT was coming from and
secondly to keep Stacy Brooks out of the picture in terms of where any
monies were coming from other than what came in from me, John Merrett
and I decided that we would need to use someone disrelated [sic] to
us, and we discussed who we could trust to do this. And, you know,
John - John Merrett was saying that he had lots of people who worked
with him when he was in the state attorney's office, you know, guys
who really owed him favors. You know, they could go set up accounts in
various places, you know, that we could just transfer the money into.
They could - they could then transfer it to us. You know, and I
suggested, look, you know: Why don't I - why don't we use Andreas
Heldal-Lund? He's a seemingly trustworthy guy. It would make a lot
more sense, you know, than somebody who is involved in this whole
crusade would send this money rather than one of your friends. And,
you know, from the friends standpoint, it was discussed that, you
know, maybe these could just be cash donations from his friends so
that there's not a record tracing them back to him. So in any case, we
decided that we would try to do this through Operation Clambake. And
John said that he would go …"

The Court: "'John' is?"

The Witness: "John Merrett, I'm sorry."

A: "John Merrett said he would set something up so that we would keep
Operation Clambake from knowing who was actually behind this. And this
is where this whole thing with the fat man came up. So John created
this fictitious character called the ‘fat man' as a nickname. And
based on what Mr. Merrett told me - I didn't have anything to do with
the fat man side of it. That was something he dealt with. You know,
John told me he was the fat man, and he had communications with
Andreas Heldal-Lund …"

The Court: "So your lawyer told you that he was the fat man?"

The Witness: "That's what he had told me, yes."

The Court: "Which - in other words, this rather unusual episode that
we heard about yesterday, where he went to some pay phone and called
some stranger, that is not what he told you, I take it."

The Witness: "Well, you know, I wasn't here for his testimony."

The Court: "All right."

The Witness: "Ms. Brooks told me about the pay phone. You know, I'm
sure he would have used pay phones to call Andreas Heldal-Lund. I
mean, you know, he probably didn't want to call in a way that could be
traced back to him."

The Court: Well, let me just then - since you don't know exactly what
he said, I'll just ask you this. He told you he was the fat man, and
he made the call to Mr. Lund. Is that right?"

The Witness: "He told me he was the fat man. And he said, ‘The fat man
has called Heldal-Lund.'"

The Court: "Did he indicate to you he would use some stranger in this
process, this unusual, most interesting process?"

The Witness: "He didn't tell me about that. He just said it's secure,
you know. He said all the arrangements, you know, on this side of it
with Heldal-Lund are secure, you know, and Heldal-Lund will never know
who has actually contacted him."

The Court: "Okay. Continue on."

A: "So once this was set up and Operation Clambake was aware that they
were going to get some money, I don't know whether the amount was
discussed between the fat man or whoever the fat man may have used and
Heldal-Lund. But a conversation apparently took place to tell
Heldal-Lund that there would be some money coming. And once that was
set up, you know, I spoke to a financial institution and asked them to
use funds of mine to have a check from UBS in the amount of $ 300,000
issued and have them dispatch that by courier or mail - I think by
courier - to Mr. Heldal-Lund's address in Norway. And Mr. Heldal-Lund
got the check - well, before that, he had communicated to Stacy Brooks
in PGP e-mail that he had been contacted by somebody …" [ … ]

A: "Mr. Lund communicated with Stacy Brooks to say that he had been
contacted by people who wanted to donate money to the LMT and that he
was expecting to get some money soon. This check that was issued by
UBS was issued on January the 30th, 2001, in the amount of $ 300,000
and, you know, dispatched to Norway. Mr. Heldal-Lund was concerned
once he got this check and communicated some of those concerns to
Stacy Brooks, who was sharing this information with me, that he was
concerned that he might be being set up by Scientology, that perhaps
the check was a forged check, and, you know, he would be depositing
this into an account and, you know, somebody would come after him for
forgery or, you know, possession of a stolen check or something like
this.

"So, you know, this guy was really skeptical about this. And, you
know, he did - from his perspective, he did the right thing of going
to the Norwegian police. And an - and the Norwegian police started
conducting an investigation. I believe they kept the check for a
while. Eventually, the Norwegian police went to Switzerland, where the
Union Bank of Switzerland is located. They communicated with the Swiss
police authorities. The Swiss police authorities - police authorities
contacted the Swiss bank. You know, I mean, I don't know what was
going on here other than the major steps, you know, whether there were
meetings, phone calls, or whatever between these institutions or not,
I don't know. But in any case, some considerable time passed, more
than two months, before Mr. Heldal-Lund was comfortable that the check
was legitimate, that it wasn't any kind of setup that he could figure
out. In the meantime, he had - since that time in early January, he
had incorporated Operation Clambake into a Norwegian company, and he
deposited that check into an account I believe at his bank in Norway,
into the account of Operation Clambake. He had also checked with the
tax authorities in Norway to make sure that there weren't any tax
implications for him. And, you know, so some considerable time now,
more than two months later, the money was transferred to the LMT."

The Court: "And when was this? What month was this?"

The Witness: "The transfer?"

The Court: "Yes."

The Witness: "I think it was in April."

The Court: "Of 2001?"

The Witness: "Yes." [ … ]

A: "End of March, beginning of April. But I think it was April,
because I remember it was more than two months afterwards."

Q: "Did the police in Norway discover the identity of the bank which
had sent the $ 300,000 to UBS?"

A: "Not to my knowledge."

Q: "Did the bank that you have pled the Fifth Amendment to call you up
and say, ‘Hey, someone's asking questions about the money you sent to
UBS'?"
A: "Well, there were concerns all along the way at UBS and at the
financial institution I had called originally. The normal procedure is
that - that you have people pay money to people that you know and who
expect it. And there was some unhappiness on the part of all the
people along the way that that didn't happen."

The Court: "Boy, am I confused. ‘All the people along the way.' Who
are we talking about?"

The Witness: "I mean UBS and the financial institution I originally
called."

By Mr. Dandar: [ … ] "The financial institution you originally called,
is that in Switzerland?"

A: "I'm going to plead the Fifth Amendment on that."

Q: "Is this the same financial institution that you called to - that
resulted in the May 2000 check to me?"

A: "The 500,000 check?"

Q: "Right."

A: "Yes."

Q: "Do you use more than one financial institution for these types of
transactions?"

A: "I have."

Q: "And will you plead the Fifth Amendment to the identity of the
other ones as well?"

A: "I will." [ … ]

Q: "Did the $ 500,000 to LMT, the anonymous donation that is really
your money, and the $ 300,000 Operation Clambake money, did that all
come from the same financial institution?"

A: "Mmm, no."

Q: "Did it come from the same country?"

A: "Did what come from the same country?"

Q: "Those two payments to the LMT."

A: "Mmm, I believe so." [ … ]

By Mr. Dandar: "Did the money in May of 2000 come from any of the
other two institution as soon as?"

The Court: "Either of the other …"

By Mr. Dandar: "… either of the other …"

A: "Yes." [ … ]

Q: "Okay. The March 2002 UBS check …"

A: "Yes?"

Q: "… that you say is your money, did that come from one, or the
other, of the two institutions that sent the LMT money?"

A: "Yes."

Q: "Okay. The UBS check that went to Courage Productions, did that
come from one, or the other, of the two institutions that sent in the
- that was the source of the LMT money?"

A: "Yes."

Q: "Okay. So all we're dealing with are two institutions from which
the money comes for all of the UBS checks?"

A: "Right."

Q: "Okay. Now, were there more institutions, though, involved in
transferring money from one to another before it went to the UBS
bank?"

A: "No."

Q: "Okay. Are the accounts from these institutions that you have
refused to disclose in your name?"

A: "I'm going to plead the Fifth Amendment on that question."

Q: "Are they numbered accounts?"

A: "I'm also pleading the Fifth amendment on that question."

Q: "Does your wife have an interest in the accounts?"

A: "I'm going to plead the Fifth Amendment on that question." [ … ]

At a later point in the hearing the court inquired about Minton's
motives behind the concealment of the May of 2000 check. Dandar then
asked if Minton was evading paying taxes. Minton refused to answer:

[ … ] The Court: "Well, you were trying to hide it, too, weren't you
Mr. Minton? What is fair is fair. I don't know what it was Mr. Dandar
was trying to do, we're going to hear about it but you, sir, certainly
didn't want any more money for anybody else to trace from this
country. Did you?"

The Witness: "Mmm …"

The Court: "You were perfectly happy to hide that $ 500,000 and had it
come over the way it came over. That is a lot of money."

The Witness: "Well, you know, I could have written the check here.
But, you know, I did it - and, you know, at the time, you know, it
didn't dawn on me, really, that I was doing this to avoid any
discovery from Scientology about it. It was that this is the way Mr.
Dandar asked me to do it and I said fine. I mean, this was - this was
$ 500,000 that in Judge Moody's court Ken Dandar, with a trial date
set, said, "This will take me through trial."

The Court: "So your testimony to me is the only money that you cared
about hiding from whatever it is you are taking the Fifth amendment
for was the $ 500,000 that you paid to LMT and the $ 300,000 that you
went through the elaborate scheme for to pay to LMT but that same
motivation did not exist in the $ 500,000 check to Ken Dandar and the
$ 250,000 check to Ken Dandar? That same motive did not exist? Is that
what you're telling me."

A: "Well, it didn't, your Honor, also this is a year earlier, $
500,000 in May of 2000, you know, and I subsequently gave Mr. Dandar a
check for $ 250,000, you know, on my bank account here after that."

The Court: "Well, I understand that but I don't know how much money
you keep in your account. But I do know that is $ 750,000. That is a
lot of money. I don't know how much you keep in your American accounts
and I frankly am not going to ask you because I don't care. But that
is a lot of money. And if you weren't keeping that much money, well,
then that would kind of deplete you."

The Witness: "Yeah."

By Mr. Dandar: "Mr. Minton, since - for the years ‘97, ‘98, ‘99, 2000,
to 2002, have you underreported your income to the Internal Revenue
Service?"

Mr. Howie: "Objection."

The Court: "Overruled. And I'll tell you exactly why. Because there is
an allegation the very reason, the very thing that the Church of
Scientology was using was either extortion or whatever about money
laundering, racketeering or income tax. And, therefore, that becomes a
relevant inquiry. I'm not saying it is true or not true, I am saying
it is a relevant inquiry." [ … ]

A: "I'm going to plead the Fifth Amendment on that question." [ … ]

When confronted with the testimony of his former attorney John
Merrett, Minton accused him of perjury and stated that Merrett had not
only participated in the concealment of Minton's payments but also had
been the beneficiary of another financial scheme of Minton that
involved the French attorney in Minton's Paris libel case:

[ … ] Dandar: "Did Mr. Merrett know that this anonymous donation that
he was setting up was your money?"

Minton: "He most certainly did."

Q: "So when he testified in court yesterday that when the Judge told
him that it was your money and that was the first time he'd heard
that, are you saying that Mr. Merrett is lying under oath before this
Judge?"

A: "I am saying unequivocally that Mr. Merrett lied here under oath
concerning not knowing that was my money."

Q: "And why do you think - if you know; don't guess. Why would Mr.
Merrett have to lie before this Judge?"

A: "To protect his law license."

Q: "From what?"

The Court: "What did he do wrong?"

A: "Well, I mean, he knew about this all along. You know, he's hearing
me answer questions in depositions. He …"

Q: "Does he know you're not reporting this on your income tax? Is that
what you're trying to say?"

A: "No, your Honor."

Q: "What is it - why is he going to lose his license? A client directs
him to have money transferred through a corporation to a corporation.
What, a lawyer can't do that?"

A: "No, your Honor. Look, for sure John Merrett was not acting in the
capacity of a lawyer in this, period. That's just not it."

Q: "Well, what was he acting as?"

A: "Well, but what I'm trying to say, you know, what can John Merrett
be worried about - that's what you asked me …"

Q: "Right."

A: "… you know, John Merrett knew about this from day one. He knew in
terms of the source of the money. He knew about the 500,000 as the
source of the money. He was there in Europe when that was arranged."

Cross-examination (resumed) by Mr. Dandar: "You're talking about $
500,000 to the LMT?"

A: "That's the second thing, yes."

Q: "That's …"

A: "He was there."

Q: "Let's go back …"

A: "John Merrett - John Merrett was there talking about paying $
250,000 to Jean-Michel Pesenti and paying 250,000 to John Merrett
through Jean-Michel Pesenti from my money. John Merrett was involved
in every one of those things, the third one of which you haven't heard
about. John Merrett received sometime in April or May of 2001 from
Jean-Michel Pesenti a $ 250,000 check issued by Banco di Napoli."

Q: "Spell that."

A: "B-a-n-c-o d-i N-a-p-o-l-i. And the four of us sat there at a hotel
room, at the Hotel Lutece in Paris, discussing how this was going to
be done, because Merrett wanted to make sure he got the money in some
way different than the other monies had come."

The Court: "Merrett wanted tax-free monies too? Is that it?"

The Witness: "I don't know what Mr. Merrett wanted."

The Court: "Well, you were there in the room."

The Witness: "He wasn't talking about that, your Honor. He just wanted
it in a different way than the other ways had been. So Mr. Pesenti -
so I caused to be transferred to Mr. Pesenti $ 250,000 at his bank of
Crιdit du Nord in Paris - in Marseilles, I'm sorry, and I caused to be
issued to his account - to be transferred to his account at Banco di
Napoli in Roma - Rome, $ 250,000 which he later transferred to John
Merrett by check."

During this day of questioning Robert Minton also admitted that he had
lied during the deposition on April 8th. When he had been asked on
this day about an alleged loan re-payment of $ 100,000 from Canadian
citizen and ex-Scientologist Gerald Armstrong, Minton had claimed not
to know anything about the origins of this money. On May 24th
nevertheless Minton finally conceded that he had in fact prior given
that money to Armstrong who in turn had given it back to Minton:

[ … ] Mr. Dandar: : "Now, the $ 100,000 that Gerry Armstrong paid you
back, did that come from you?"

A: "It did."

The Court: "I'm sorry? The $ 100,000 that Gerry Armstrong paid you
back came from you?"

The Witness: "Yes, your Honor." [ … ]

The Witness: "I just want to pull out some of these things that I
showed you yesterday …"

The Court: "Okay."

The Witness: "And one that I didn't show you yesterday because I only
read it last night."

The Court: "What is this now?"

The Witness: "This is from the April 8 deposition."

The Court: "Oh, okay, April 8 deposition? Okay. I'm not sure exactly
what you're showing me. I had asked - you made some statement
yesterday about some recollection you had and you were going to show
me where it was in your deposition, - what it was in your deposition
that caused you to remember this so late in this proceeding, and what
you are suggesting is you found something else?"

The Witness: "Well, I read this - you know, this was the last
deposition that I read last night. And there are some things in this
April 8 one, which we had already stated on the record that there were
some corrections that needed to be made to it. One of those involves
Gerry Armstrong."

The Court: "Oh. Where is that?" [ … ]

The Witness: "It's - it's Page 117 on line 24. You know, I'd
previously stated that I didn't know where Gerry Armstrong got his
hands on a hundred grand. And I'm correcting that testimony by saying
that he got it from me."

The Court: "Okay."

By Mr. Dandar: "Well, there is more lies on that page, isn't there,
Mr. Minton?"

A: "Yes, I have got them highlighted in yellow."

Q: "That has to do with Clambake money and the $ 500,000 anonymous
donation to the LMT?"

A: "That's right." [ … ]