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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Criminal Action No. 09-cr-00266-CMA UNITED STATES OF AMERICA, Plaintiff, v. 1. 2. 3. 4. 5. 6. DAVID A. BANKS; DEMETRIUS K. HARPER, a/k/a KEN HARPER; GARY L. WALKER; CLINTON A. STEWART, a/k/a C. ALFRED STEWART; DAVID A. ZIRPOLO; and KENDRICK BARNES,

Defendants. __________________________________________________________ REPORTER'S TRANSCRIPT (Jury Trial Day 13) __________________________________________________________ Proceedings before the HONORABLE CHRISTINE M. ARGUELLO, Judge, United States District Court, for the District of Colorado, commencing at 8:48 a.m. on the 13th day of October 2011, Alfred A. Arraj United States Courthouse, Denver, Colorado. A P P E A R A N C E S FOR THE PLAINTIFF: MATTHEW T. KIRSCH and SUNEETA HAZRA, U.S. Attorney's Office - Denver, 1225 17th St., Suite 700, Denver, CO 80202 FOR THE DEFENDANTS: Pro Se

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I N D E X WITNESSES: SAMUEL THURMAN DIRECT EXAMINATION (Cont'd) BY MR. WALKER DIRECT EXAMINATION BY MR. BANKS DIRECT EXAMINATION BY MR. ZIRPOLO CROSS-EXAMINATION BY MR. KIRSCH REDIRECT EXAMINATION BY MR. BANKS GARY HILLBERRY DIRECT EXAMINATION BY MR. BANKS DIRECT EXAMINATION BY MR. WALKER CROSS-EXAMINATION BY MR. KIRSCH REDIRECT EXAMINATION BY MR. BANKS REDIRECT EXAMINATION BY MR. WALKER SPECIAL AGENT JOHN SMITH DIRECT EXAMINATION BY MR. BANKS DIRECT EXAMINATION BY MR. WALKER DIRECT EXAMINATION BY MR. BARNES DIRECT EXAMINATION BY MR. ZIRPOLO CROSS-EXAMINATION BY MS. HAZRA REDIRECT EXAMINATION BY MR. BANKS E X H I B I T S NO. ......................................... No. ......................................... REFUSED ADMITTED PAGE 1812 1840 1847 1849 1871 1879 1892 1894 1897 1899 1904 1926 1932 1936 1940 1943

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SEPTEMBER 13, 2011 (Proceedings commence at 8:48 a.m.) (The following is had in open court, outside the hearing and presence of the jury.) THE COURT: All right. You may be seated. I understand we do have some issues we

need to discuss before we bring in the jury. MR. WALKER: Your Honor, I wanted to provide first We will be Mr. Gary

a status for witnesses appearing today. completing the testimony of Sam Thurman.

Hillberry who is retained by IRP Solutions as a subject matter expert is also here. John Smith today, as well. We would be calling Agent And that is the extent of

people we have to appear today. We expect that to take through at least the morning, and potentially later. We have several other He is If we He

people who -- Don Vilfer has agreed to testify. available -- today is Thursday -- Friday morning.

could get permission for him to appear telephonically. is wrapping up business with another client late into Thursday, and would not be able to get in until Friday afternoon.

So he would be able to appear telephonically at 9 a.m. tomorrow. THE COURT: All right. What about the other four?

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MR. WALKER:

The other four, we are still awaiting

-- well, we do have a status on Steven Cooper and Bill Witherspoon. The appropriate counsel for those federal And they did return In

agencies have received the subpoenas.

those saying they wanted additional information.

giving the turn around time, it is likely we would not be able to get them successfully served until early next week. And we do have subpoenas for Mr. Vince Rosales and Mikel Nelson. The person who is coordinating that effort

for us is going to give me an update here momentarily via e-mail, but I don't have that right now. My anticipation

is that they would be able to also testify tomorrow morning. THE COURT: MR. WALKER: That would be who? That would be Vince Rosales and Mikel

And also potentially Paul Beebe and Richard I haven't gotten an

Powers, but those are very tentative.

update as to the status of those services and when they would appear. THE COURT: All right. Who are the people you

indicated you have not served? MR. WALKER: Your Honor, the people who are

traveling would be Tiffany Zellenbaba, Lorne Cramer, and two others. I don't have them handy right now.
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But one

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is out of the country, and the other three are on vacation. We have left messages with them. One has

returned our message saying they would not be able to get back until Friday. And, as I said, we haven't gotten

messages from the other two. THE COURT: These are people you did not subpoena

and you don't intend to subpoena; is that correct? MR. WALKER: No, Your Honor, we would be

subpoenaing -- certainly Dwayne Fuselier, who has been subpoenaed. THE COURT: subpoenaed. MR. WALKER: THE COURT: confused. MR. WALKER: THE COURT: MR. WALKER: Steven W. Cooper. When is Mr. Cooper scheduled to appear? He was originally scheduled to appear All of the people I just mentioned. Go over them again, because I am Tell me who you have already

tomorrow, but he's one of the gentlemen who works for the federal government, and the subpoena was returned saying send it to counsel and add additional information. THE COURT: served? MR. WALKER: THE COURT: He was served last week. If you have returns of service on any
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

All right.

So when was he supposedly

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of these people -MR. WALKER: have them sent. THE COURT: They need to be docketed. Those I don't have them with me, but I can

returns of service need to be docketed if you intend to enforce them. So you did not properly serve Mr. Cooper? According to DHS counsel. When was that subpoena served? I believe that was served last week.

MR. WALKER: THE COURT: MR. WALKER:

I don't have the exact date. MR. KIRSCH: Your Honor, I can add a little bit of

information about the two DHS witnesses based on my conversation with counsel for DHS last night. Mr. Witherspoon was served, I believe, while he was here. He was personally served. However, the date on his -- the

appearance date on his original subpoena was November 2nd. Both counsel accepted or was at least served. Counsel for DHS was served yesterday with copies of subpoenas for Mr. Cooper and Mr. Witherspoon, and those subpoenas demanded the appearance of Mr. Witherspoon and Mr. Cooper to testify today. And those initial requests Counsel for DHS

did not comply with the Touhy Regulation.

informed the defendants' representative of that fact, and counsel for DHS is attempting to see whether or not those people can be made available sooner than that.
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It is my understanding both of them have made pre-existing arrangements and are not available -- are not available given those arrangements this week. THE COURT: MR. KIRSCH: All right. And Mr. Cooper -- I am sorry, Your According to the

Honor, Mr. Cooper is the last thing.

information I got from DHS counsel, Mr. Cooper has never been personally served. THE COURT: MR. WALKER: All right. Your Honor, I would agree with that. There were

Mr. Cooper has not been personally served. attempts to serve him. that. served.

We were unsuccessful in doing

As Mr. Kirsch indicated, the counsel for DHS was I have not spoken directly with either of them.

But according to our representative, Mr. Witherspoon has indicated he will not appear. And that's the latest

status I have received on his appearance. THE COURT: And, Mr. Kirsch, you indicated that

they will appear, but they can't appear this week; is that correct? MR. KIRSCH: Your Honor, I know that counsel for

DHS is attempting to make them available, assuming that the requirements are -- that the legal -- the defendants comply with the legal requirements. I certainly didn't

understand that Mr. Witherspoon is going to absolutely


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refuse to appear.

But I think the scheduling -- my

understanding is the scheduling is potentially problematic for him, and it is even more problematic for Mr. Cooper. THE COURT: So other than Mr. Cooper and

Mr. Witherspoon, who else has been served with a subpoena. MR. WALKER: Your Honor, we have -- Mr. Mikel

Nelson has been served. THE COURT: MR. WALKER: Your Honor. When was he served? I believe he was served yesterday,

And to the best of my understanding, he has

agreed to appear tomorrow morning. THE COURT: MR. WALKER: THE COURT: MR. WALKER: subpoenaed. All right. Who else?

Mr. Don Vilfer, the expert witness. He was served with a subpoena? Yes, Your Honor. He has been

And, as I stated earlier, he has agreed to

appear telephonically if that meets the Court's approval. THE COURT: Mr. Kirsch, what is the Government's

position on that since he is an expert? MR. KIRSCH: Your Honor, we have to think about

that some more, but my initial response is we would oppose him appearing telephonically. right just as defendants do. MR. WALKER: If that is the case, the earliest he We have a confrontation

could testify would be Monday morning.


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THE COURT: MR. WALKER:

All right. Also, Mr. Vince Rosales was served

yesterday, and to the best of my knowledge, he would be available tomorrow. But, as I said, I am awaiting

definite status on that. THE COURT: MR. WALKER: All right. Who else?

Your Honor, also Mr. Dwayne Fuselier. Apparently there

From what I have been told, he is away.

was no one at his home all week, and it appears they may be on vacation. So he has not been served. But we will

certainly look to get his testimony. THE COURT: When did you attempt -- when did you

begin to make attempts to serve him? MR. WALKER: Attempts began late last week, Your

Honor, and have been ongoing every day since, I believe, Thursday of last week. THE COURT: Mr. Fuselier is listed as somebody -What is his role?

as a CILC subject matter expertise. MR. WALKER:

Your Honor, he was one of the former,

I believe, federal agents retained by IRP Solutions to provide subject matter expertise. THE COURT: MR. WALKER: THE COURT: MR. WALKER: Similar to Mr. Epke? Yes, Your Honor. And Mr. Hillberry? Mr. Hillberry is here.
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THE COURT: MR. WALKER: THE COURT:

And you subpoenaed him? Yes, Your Honor. He was subpoenaed.

What will Mr. Fuselier add that

Mr. Epke and Hillberry will not? MR. BANKS: Only thing he is going to testify to is

the type of the independent contractor agreement that was actually signed, in the same capacity that Mr. Epke attested to. Mr. Hillberry has different testimony as

relates to that regarding information he provided to the Government through requests for materials related to this case. So we want to question Mr. Hillberry about those

types of things. But I would say that Mr. Fuselier is not going to provide much more than Mr. Epke. THE COURT: All right. So, therefore, his

testimony would be cumulative of what Mr. Epke would provide -- has provided, rather. MR. BANKS: That's correct. But we would like, if

he does not -- if Mr. Fuselier did not come to testify, we would like the documents associated, as far as independent contracts, to be entered into evidence for the jury. THE COURT: You can't do that unless you can lay

foundation for them. MR. BANKS: THE COURT: Then we need him to testify. Well, then you should have had him
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served. MR. BANKS: THE COURT: MR. WALKER: THE COURT: That is where we are. Who else? That's all. Let's go through the people you haven't

subpoenaed that you indicate you need to have testify. Let's begin with Tiffany Zellenbaba. MR. WALKER: Tiffany Zellenbaba is -- she left a She is in Rome.

message on our answering machine. THE COURT:

What is the -- what is the testimony

that she would be providing? MR. BANKS: for Robert Half. Your Honor, Tiffany Zellenbaba worked And there is significant testimony with

regards to the way the contract was actually set up, actually involving, I believe, four different staffing entities; one outside of IRP and DKH or Leading Team -Leading Team and DKH at the time. additionally, Ms. Zellenbaba -THE COURT: What is the relevance of her testimony So as far as --

to the issues in this case? MR. BANKS: First off, they're internal

communications that Ms. Zellenbaba had internally regarding the engagement of -THE COURT: MR. BANKS: Internal communications with whom? Well, her internal communications with
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her boss that she is going to be able to testify to that is actually in discovery. We have e-mails regarding that.

We would like to question her on those e-mail communications. THE COURT: And what is the relevance of those to

the issues in this case? MR. BANKS: It is directly related to her staffing

people at Leading Team and DKH, I believe. THE COURT: And what I'm trying to understand is --

what I'm getting from you is that she has not been served, she is in Rome. back. We don't know when she is going to be

I assume you are going to be asking for some sort In order to get that, you have to show me

of continuance.

who the witnesses are, what their testimony will be, how that testimony is competent and relevant, and that you used due diligence to obtain their attendance. So what I am trying to determine is what is the relevance of her testimony? generalities. You are giving me

I need to know specifically how she will

add to your defense. MR. BANKS: Your Honor, I guess my hesitation is, I

guess, because the Government sits here, and he gets some sort of notice -THE COURT: continuance. Well, you haven't asked for a

If you are going to have to ask for a


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continuance, you are going to have to discuss these things. If you don't want to ask a for a continuance at

this point, fine, we can move on. MR. BANKS: We will go ahead and discuss it.

Ms. Zellenbaba had direct communications about whether or not -- with her supervisors and her managers on whether -how and why she should engage with IRP. She was also

admonished by -- to some extent, at least put on notice by the credit department that this was a risky business proposition, and her motivations to move and to continue engaging with Leading Team is actually annotated in those e-mail communications. THE COURT: Half's testify? MR. BANKS: I don't think the Government called And didn't we have someone from Robert

anybody from Robert Half. MR. KIRSCH: We have not had anybody from Robert

Half, and we don't have those e-mails in evidence, Your Honor, in large part because they would all be hearsay. MR. BANKS: Your Honor, those e-mails were sent to

the Government in the form of -- and Bates numbers were actually mentioned in the form of our proffer. As part of

the representations made, we'll pull those Bates numbers and provide them to the Government. MR. KIRSCH: Your Honor, I am not suggesting we
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don't have them.

What I am suggesting is that they would

be inadmissible in the course of this trial because they constitute hearsay. THE COURT: We do have them. All right. So when did you begin your

efforts to subpoena Ms. Zellenbaba? MR. WALKER: Your Honor, I am not certain of that. I am not certain of a date.

I believe that was last week. THE COURT: MR. BANKS: Who else?

Your Honor, I would like to just

comment on Mr. Kirsch saying these e-mails are hearsay. These e-mails are actually Tiffany Zellenbaba's e-mail. THE COURT: They are still out-of-court statements,

and if you're submitting them to prove the truth of the matter asserted, they would be hearsay, unless there is some exception to them. MR. BANKS: THE COURT: Right. That is all Mr. Kirsch is saying, is he So

is going to object to them on the basis of hearsay.

unless you have an exception to that, they may be excluded as hearsay. MR. BANKS: THE COURT: Okay. So, you mentioned that you did serve He is with Idea

Mr. Rosales, who had not been subpoenaed. Integrations.

He is going to appear tomorrow? Yes, Your Honor. The date and time

MR. WALKER:

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for all of these subpoenas is 9:00 a.m. tomorrow. THE COURT: him? MR. WALKER: with Mr. Beltran. Your Honor, I'm not certain the status Let me check my file. Your Honor, I And, Mr. Beltran, what happened with

don't have the status of Mr. Beltran.

But, to the best of

my understanding, he has been served, and I'll request definitely a status on his subpoena. THE COURT: MR. WALKER: check. THE COURT: Now, you also had -- you said What about Krishnan, Yesterday you told me he was. I believe he has been. I need to

Witherspoon you had served. Francesconi and Hickes? MR. WALKER: not going to call. THE COURT: P-I-S-C-I-O-T-T-A? MR. WALKER:

Your Honor, those individuals we are

What about Mr. Pisciotta,

Your Honor, there was an attempt to

serve him, and that subpoena was returned without service. THE COURT: MR. WALKER: When was the attempt made? That was Friday before last, Your

Honor, or Thursday before last, Your Honor. THE COURT: Thursday the 6th?
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Thursday before last, meaning last

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MR. WALKER:

I believe so.

I need to find a file

that has that date on it. of that week. THE COURT:

But it would have been the end

MaryAnn McLaughlin.

You said she had

not been subpoenaed. MR. WALKER:

What is the status of her? That's correct, Your Honor. Your

Honor, we are still attempting to serve her. THE COURT: Ms. McLaughlin? MR. WALKER: week before last. THE COURT: MR. WALKER: THE COURT: MR. WALKER: THE COURT: status of that? MR. WALKER: been served. The last status I have is she has not Meaning? On the -October 6th or 7th? It would have been the 6th. All right. And you don't know the That was made -- that was also the When was the first attempt made with

She is not at the address we have for her. Mr. Lam Ha? Mr. Lam Ha just returned from a trip.

THE COURT: MR. WALKER:

He has been served, but we have determined his testimony would be cumulative. THE COURT: MR. WALKER: You are not going to call him? That's correct, Your Honor.
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THE COURT: MR. WALKER:

Mr. Nelson? Mikel Nelson, he has also been served, We will not

but his testimony would also be cumulative. call him. THE COURT: MR. WALKER: Okay.

Let me double check that one, Your

Let me double check that status. I am sorry, Mikel Nelson has been served for

appearance tomorrow morning. THE COURT: MR. WALKER: Ms. Harris. THE COURT: You said Mr. Vilfer can appear on All right. Ms. Harris?

Your Honor, we will not be calling

Monday or by phone tomorrow? MR. WALKER: THE COURT: Yes, Your Honor. You said Mr. Rosales was served, and he

will be here tomorrow. MR. WALKER: Yes, Your Honor. Your Honor, we are

double checking that.

He was served for an appearance for

tomorrow morning, and we are going to get a status on his availability. MR. BANKS: Your Honor, I did notify the people, as

far as the service -- return of the service on those subpoenas, and all of them will be docketed probably later on this morning.
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THE COURT:

All right.

Mr. Belrose of the New York

PD and Mr. Gianelli of New York PD. MR. WALKER: Your Honor, we received a call from

counsel at the NYPD, who had conversed with Mr. Gianelli. And in that conversation, he related that he does not have good recollection of the matters. We will be calling him

during the lunch time break today to personally interview him. THE COURT: MR. WALKER: THE COURT: MR. WALKER: THE COURT: call him yet? MR. WALKER: THE COURT: MR. WALKER: been served. That's correct. What about Mr. Belrose? Mr. Belrose, Your Honor, he has not Mr. Gianelli? Mr. Gianelli. Has he been subpoenaed? Yes, Your Honor, he has been. So you don't know if you are going to

And we will not be calling Mr. Belrose. All right. Ms. Broerman?

THE COURT: MR. WALKER: been served. THE COURT:

Your Honor, Ms. Broerman has not yet

What is the relevance of her testimony

from Senator Allard's office -- former Senator Allard's office? MR. WALKER: Your Honor, Senator Allard was
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instrumental in us contacting different federal agencies about the CILC application, and also he assisted us in making contacts in Washington, D.C. extent of the involvement there. THE COURT: know about that? MR. WALKER: MR. BANKS: Your Honor, I believe that -She also was, I believe, Your Honor -All right. So what does Ms. Broerman That would be the

she interacted with the Colorado Bureau of Investigations at the time that we were involved with CBI regarding the software. THE COURT: officers couldn't? MR. BANKS: Your Honor. THE COURT: MR. BANKS: So she would be cumulative? Honestly, Your Honor, we were using I don't think she adds anything extra, So what does she add that the other CBI

that witness, as far as just overall company legitimacy. I don't think she will be necessarily relevant. THE COURT: subpoenaed? MR. WALKER: THE COURT: MR. WALKER: That's correct. Have you spoken to her at all? No, Your Honor. She has apparently All right. She has not been

moved on from her job, and we haven't been able to find


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her. THE COURT: MR. WALKER: at this time. THE COURT: MR. BANKS: What is his role or testimony to be? Your Honor, he was one of the companies Okay. Mr. Perry?

No, Your Honor, he has not been served

that we engaged in, obviously, and determined that based on creditworthiness and communication with his business partners, that we were not creditworthy to move forward with. In addition, he could provide testimony that no

mention of a contract in interactions with myself were ever mentioned to him with regards to DHS and NYPD. THE COURT: But he did not -- as I understand,

then, he is going to be similar to the testimony you have already submitted by one or two witnesses that they did not enter into any sort of contract arrangements with IRP or any of the other companies? MR. BANKS: And we think it is important, Your

Honor, that given the fact that the Government -- the Indictment has said we continued to communicate that we had current or impending contracts, this was not communicated to Mr. Perry. And it was our position that

any staffing companies that can testify that we did not provide those type of communications are very relevant, as far as we're concerned, as far as our representations are
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concerned. THE COURT: All right. What efforts -- when did

you begin your efforts to subpoena Mr. Perry? MR. WALKER: Your Honor, that would have been the

same week; on or about October 5th, 6th or 7th. THE COURT: MR. WALKER: THE COURT: So not until late last week, as well? Yes, Your Honor. And what efforts have been made -- you What efforts have been made

said he is not subpoenaed.

other than going out once to try to subpoena him? MR. WALKER: There have been efforts made to find I believe that has been determined.

his current employer.

I would need to get more details on the exact efforts that have been made. been located. But I believe his current employer has But for some reason they haven't been able They don't have a home address for

to serve him there. him. THE COURT:

So with respect to Ms. Broerman and

Mr. Perry, you haven't even pursued their location up until last week? MR. WALKER: earlier. THE COURT: Why are we just now finding out where Yes, Your Honor, that was pursued

he lives or where he can be served? MR. WALKER: Your Honor, I am not certain of what
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means were used to try to locate him. trying to locate him for -THE COURT: MR. WALKER: Who has?

But they have been

The support people who are helping us.

I mentioned yesterday Lisa, and people who are assisting her. THE COURT: MR. WALKER: THE COURT: made? MR. WALKER: THE COURT: has made? MR. WALKER: I talked with her, and she told me she Am I aware? How are you aware of what efforts she Lisa who? Lisa Stewart. How are you aware of what efforts she's

used several sources. THE COURT: When did she first start her efforts to

try to locate these witnesses? MR. WALKER: She has been working on locating The results --

people for at least a month, Your Honor.

some of these people who have appeared have been found through those efforts. THE COURT: status with him? MR. WALKER: Mr. Beebe was out of town. And I But let All right. And Mr. Beebe, what is the

believe that he is coming back in town tomorrow.


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me check to see if I have a status on his service. Mr. Beebe has not been served. THE COURT: All right.

No

Now, you have four, five

witnesses from Philadelphia; Amy Kurland, Dan Heitzer, H-E-I-T-Z-E-R, Everett Gillison, Lorelei Larson, Shonique McCall, M-C-C-A-L-L. MR. BANKS: What is the status of those?

Again, Your Honor, we honestly -- we

chose not to pursue them given the Court's previous position to post-2005 interactions with the Philadelphia Police Department. THE COURT: communications? MR. BANKS: THE COURT: Correct. All right. Lorne Cramer, is that one So they are all post-2005

you said would appear today -MR. WALKER: THE COURT: MR. WALKER: Your Honor --- or tomorrow? Your Honor, Mr. Cramer would not be

available until next week, as well. THE COURT: MR. WALKER: handy. THE COURT: MR. WALKER: THE COURT: Why is he not available this week? Your Honor, he was also traveling. How was he served?
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When was he subpoenaed? I don't have the status on Mr. Cramer

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MR. WALKER: THE COURT: MR. WALKER:

I am not certain, Your Honor. Was he served? Yes, Your Honor. Yes, he was served. I remember there

I'm sorry, let me double check on that. was an attempt to serve him. THE COURT:

Yesterday you told me he had been

served and he would be here today. MR. WALKER: I am pretty sure he has been served. Yes, Your Honor.

There are a lot of names in play here.

He has been served, and we anticipate his appearance on Monday. THE COURT: You told me yesterday he would be here

MR. WALKER:

I have an update that it will be

THE COURT: subpoenaed him? MR. WALKER: THE COURT: MR. WALKER:

Why is he not here today if you

Because he asserted his -When was he served? I believe he was served earlier this

THE COURT: be here tomorrow. MR. WALKER:

All right.

And so 48 hours, he could

I need to check on the status for I

exactly why he said he would not be able to make it.


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believe there was some kind of conflict. THE COURT: If he's under subpoena, and it is an If he's

appropriate subpoena, then you need to proceed.

under valid subpoena, we'll not delay this case because of the convenience of the witnesses that have been properly served. MR. WALKER: I understand. I need to get a

definite status on Mr. Cramer. THE COURT: Mr. Brown, Southeast Missouri State. What is the

As of yesterday, he was not subpoenaed. status today? MR. WALKER: subpoenaed. THE COURT: MR. WALKER: Mr. Brown. THE COURT: MR. WALKER: What efforts?

Your Honor, he has still not been

What efforts have been made? Continuing to try to contact

Your Honor, to the best of my

knowledge, they are using several services to locate him. THE COURT: When did you begin the efforts to try

to serve Mr. Brown the subpoena? MR. WALKER: Your Honor, I am not certain when they

started to try to locate Mr. Brown. THE COURT: MR. WALKER: Was it late last week, as well? Your Honor, that one -- he would have
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been earlier, because he was with a law enforcement agency, and those people were given higher priority. it would have been before that time. THE COURT: All right. Rick Gonzales of the Rio So

Grande Sheriff's Department? MR. WALKER: will call him. THE COURT: MR. WALKER: He hasn't been subpoenaed yet? I'm not certain. I need to get a Your Honor, I'm not certain that we

status on his -- an update on his status. THE COURT: All right. Mr. Moen, he was not

subpoenaed as of yesterday. MR. WALKER: defense. THE COURT: MR. WALKER: served. yet. Mr. Powers? Your Honor, Mr. Powers has not been Agent Moen will not be called by the

He has been located, but has not been served as

He was just located yesterday. THE COURT: When were the first attempts to serve

him with a subpoena? MR. WALKER: weeks ago. THE COURT: to 4 weeks ago? MR. WALKER: To the best of my knowledge, he had
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

Your Honor, I believe that was 3 or 4

And why was he not able to be located 3

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changed locations -- work locations, and was not at the location that we had listed for him. THE COURT: MR. WALKER: And Mr. Gene Anderson? Gene Anderson. There is some The correct identity

confusion as far as Gene Anderson.

for Gene Anderson, the original person located -- named Gene Anderson was deceased. It was determined that was So the support team They believe

not the correct Gene Anderson.

started a new effort to find Gene Anderson.

they have the right Gene Anderson at this point, but that has not been verified yet. THE COURT: MR. WALKER: THE COURT: He has not been served? Gene Anderson has not been served. What is the relevance of Mr. Powers'

and Mr. Anderson's testimony. MR. BANKS: Very relevant. Mr. Powers, at one time

was a Special Agent in Charge in Denver, and he is a highly decorated FBI person that actually wrote a letter to a staffing company, I believe it was Sunny Side Temps, regarding that this was a civil matter, not a criminal matter. THE COURT: MR. BANKS: opinion. the time.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

His opinion? Well, I don't know if it is his

He was the Special Agent in Charge in Denver at

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THE COURT:

All right.

And what is the relevance

of that to these charges? MR. BANKS: Well, the Government has asserted that We have always asserted

we engaged in criminal activity. that this was a civil matter.

And an FBI agent who

actually runs the Denver office is making those same assertions in response to a staffing company we feel is extremely relevant. THE COURT: MR. KIRSCH: Mr. Kirsch? Your Honor, if I could just add a Mr. Powers didn't

little bit of context about the letter. write the letter.

The letter was sent out under

Mr. Powers' signature, in the same way that attorneys in my office send out letters underneath the name of the U.S. Attorney, John Walsh, and then sign them ourselves. The letter to which Mr. Banks refers was sent out under Mr. Powers' name. It was signed by a Gene Anderson, We would

who was a Supervisory Special Agent at the time.

expect that Mr. Powers would have no knowledge, and probably didn't even see the letter. And that

Ms. Anderson, we expect, would testify got this packet of information from the staffing company that was sent to the wrong office. It was sent to the Denver office rather

than the Colorado Springs office. And the package didn't come with the FBI tracking
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number that would have allowed the Denver office to recognize that the materials were being provided in response to an ongoing investigation. That is the

testimony that the Government expects that both of those witnesses would provide if they were called. THE COURT: have located her. MR. WALKER: THE COURT: MR. BANKS: Yes, Your Honor. All right. Obviously, we obviously disagree with You haven't yet served her, but you

the Government's position until we have had a chance to speak with her. THE COURT: I did understand correctly, you are not

going to call any of the may-call witnesses other than you're still reserving the rights to call yourself? MR. WALKER: THE COURT: That's correct, Your Honor. All right. Mr. Kirsch, is there

anything further that you have to raise? MR. KIRSCH: Your Honor, there were a couple of

other people that, at least the other day the defendants indicated that they were still planning to call; Shaun Haughton. I believe that's the only other person the

other day they indicated they were planning to call that we didn't discuss today. That is a person that, at least it is our belief,
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would appear without a subpoena.

We would expect him to

be a witness friendly to the defense, and would assume that he would be available this week if the defendants did, in fact, intend to call him. THE COURT: MR. WALKER: call Mr. Haughton. THE COURT: Okay. So, with that being said, then, Mr. Walker? Your Honor, our intention is not to

I assume we probably have enough witnesses for today, with Agent Smith. I don't know. To the extent that you can

get any of these other witnesses in here today, you probably need to do that. point? MR. WALKER: location. Your Honor, I'm not sure of his He Where is Mr. Vilfer at this

His office is based out of California.

indicated that he was out of town on another case that would be wrapping up this evening. THE COURT: MR. WALKER: Why can't he be here tomorrow? Your Honor, he has had no preparation He was

time, and he would -- I was on the phone with him. checking airline flights.

And he indicated to me that the

earliest he could get here is tomorrow -- I am not sure for what reasons -- would be around 3:00 p.m. so not knowing his location -THE COURT: But you indicated he was willing to
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appear by telephone tomorrow. MR. WALKER: THE COURT: Yes, Your Honor. If he doesn't have preparation time,

then how could he appear by telephone tomorrow? MR. WALKER: Well, he would be able to prep

sufficiently for tomorrow morning. THE COURT: fly in tomorrow. MR. WALKER: I would believe it a travel issue. If he is able to fly in, then he should

Not knowing his location, we need to check. THE COURT: I think, in this day and age, you can If he's available --

get anywhere within hours' notice.

home tomorrow, he is available to fly to Colorado tomorrow. MR. WALKER: Your Honor, he didn't state he would

be flying home in the morning, he indicated he would be calling in in the morning. THE COURT: Somebody better get ahold of him to see If he can appear by phone, In addition, he is an

if he can get here tomorrow.

he can certainly appear in person. expert.

And so, therefore, I believe it is necessary to

have him appear in person. MR. WALKER: THE COURT: Yes, Your Honor. All right. I have a note from my He

judicial assistant that one of the jurors called in.


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has either food poisoning or the flu.

He has been up all

night, has a great deal of stomach pain and nausea, and he can't come in. So, Ms. Seeman, could you go do a head count to see if all of the other jurors are here. COURTROOM DEPUTY: THE COURT: four alternates. Yes, Your Honor. We do have 14.

All right.

So that is why I picked

My inclination is to go ahead and

proceed with trial, and we will just excuse Mr. Austin from being a juror in this case. MR. KIRSCH: Honor? MR. HARPER: did you mention? THE COURT: It doesn't really matter. It will be a Your Honor, for the record, whose name May I have just a moment, please, Your

juror I will excuse. MR. HARPER: MR. KIRSCH: Okay. Your Honor, our understanding is that

at least as of now, that there is not a continuance being requested, and that there is not a continuance that is contemplated -- at least from what we heard, the maximum continuance that would be contemplated would be until Monday of next week. If that understanding is correct,

then the Government has no objection to proceeding with and remaining with the two alternate.
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If there was -- if there was going to be some possibility of a continuance much longer than that that would be contemplated, we would have a different position. THE COURT: All right. Mr. Banks, Mr. Walker,

based on what you told me about your witnesses, I am assuming that if you can get them served, we could have everybody report at the latest by Monday? MR. WALKER: THE COURT: Yes, Your Honor. That would probably be the longest I

would extend any continuances on witnesses. MR. WALKER: Your Honor, that is a continuance we

were planning to request. THE COURT: That, to me, would not be unreasonable.

I don't want to delay the jury any longer, but if it is just the weekend -- intervening weekend. But I would

expect to go forward with all of the witnesses we could today and tomorrow. MR. WALKER: MR. BANKS: possible, too. Yes, Your Honor, that is our plan. Your Honor, we want to go as quickly as We We just

We want to put that on the record.

want to get through this as quickly as possible.

want to make sure that everybody that we need to testify on our behalf for our defense is available to do so. THE COURT: All right. So I will expect that you

all will, with all due conscientiousness, get those you


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have not served, served, make sure that they know that they need to appear here no later than Monday. In the

meantime, we are going to move forward with what witnesses we have. If Mr. Vilfer can get here tomorrow, I want him tomorrow. If not, Monday. With that being said, do you

have any objection to my essentially proceeding with the jury trial this morning and excusing the one juror? MR. WALKER: THE COURT: MR. WALKER: plan. May I have a moment, Your Honor? You may. Yes, Your Honor. We agree with that

I want to reiterate what I said earlier this

morning, is that we anticipate the current testimony of Sam Thurman to take up probably an hour, around that time frame, maybe a little bit more. testify. Mr. Hillberry is here to And those would be So we wanted to

We would call John Smith.

our only witnesses we would call today.

just state that again so you can plan properly. THE COURT: Now, there are no other witnesses you

can get here today if we finish with Mr. Smith early? MR. WALKER: THE COURT: tomorrow? MR. WALKER: Your Honor, the people I mentioned No, Your Honor. What about tomorrow? Who will appear

earlier who have been served with an appearance time of


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9:00 a.m. tomorrow. THE COURT: take? How long do you think they're going to

What I don't want to do is irritate the jury by

bringing them back for an hour's worth of testimony and saying you can go home. MR. WALKER: That doesn't do anybody any good.

Well, Your Honor, of the people lined

up for tomorrow, there is no long testimony in that group. Mr. Vilfer would be the longest testimony we would anticipate, if he were to be able to testify tomorrow. THE COURT: So I guess my inclination would be if

there is no objection, to make sure we have enough witnesses to keep the jury going all day, is to go ahead and not have them come in tomorrow; essentially cancel tomorrow as a trial day. I don't want to bring them in That will irritate them.

for an hour, hour and a half.

We start fresh on Monday, with the expectation -- I will hold you to this -- that you are going to subpoena the witnesses you need, and they will appear early next week, starting Monday, and we will just wrap this up. MR. WALKER: THE COURT: MR. WALKER: Could I have one moment, Your Honor? You may. Your Honor, the only exception there,

and witnesses we believe are critical, will certainly be Steven Cooper and also Bill Witherspoon of DHS. THE COURT: Both of those you indicated have been
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served. MR. WALKER: THE COURT: MR. WALKER: Your Honor -Their counsel has been served. Their counsel has been served. I did

get a notice last night saying they were not properly served, and they wanted additional information. THE COURT: You need to take care of that

immediately and make the appropriate arrangements. MR. WALKER: MR. BANKS: That will be taken care of today. Your Honor, I did receive status this Lisa Stewart had

morning with regard to Mr. Witherspoon. a conference with counsel. their testimony.

They discussed the nature of

DHS' counsel doesn't see an issue with Right now, we are only So I should

what they'll be testifying about.

dealing with the logistics of them coming.

have something more -- maybe something more definitive this afternoon. THE COURT: It is possible, since they are more

fact witnesses, and probably will be fairly short, as have the others, that you could try to do them by video conference, if it is the logistics trying to get them from -- are they in D.C.? MR. BANKS: THE COURT: Most likely D.C. Unless there is an objection by the

Government, a good compromise would be -- if the problem


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is logistics, we can hook up -- we have the video conference. So it is not just a telephone. The jury

actually gets to see their face while they are doing it. We can have them sworn in. probably use. That is an alternative we can

If, on the other hand, they make the

arrangement to get them to some place where they can do video conferences -MR. BANKS: Your Honor. THE COURT: now. You don't have to make that decision Your Honor, obviously -one moment,

I am just telling you that is an alternative that is We can

available that I am willing to make available. proceed that way.

When you talk to them, if it is a

problem -- now, if you subpoenaed them and you've properly subpoenaed them, you can insist that they come in person. But that is an alternative that is available if we have a problem for everybody, except for the expert witnesses, because I think expert witnesses need to be here in person. MR. BANKS: closed to that. Your Honor, we are not, obviously,

We will brief that issue with DHS counsel

and get back to you. THE COURT: That is fine. I offered it as an

option in the event that is a problem that could be resolved.


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MR. WALKER: Mr. Vilfer.

Your Honor, I just got an update on

In fact, he is still involved in a case He was going to call in before that

tomorrow morning.

case started, since it is on west coast time, and he would call in at 9 o'clock our time, 8 o'clock west coast time, and then go to the trial, whatever he is doing. THE COURT: So, I think then my resolution would be I would not have

that we do not conduct trial tomorrow.

the jury come in at all, give them the day off, but we will start on Monday morning, and I will expect all of the defense witnesses to proceed accordingly. MR. WALKER: our plan. THE COURT: both sides? MS. HAZRA: Yes, Your Honor. I have one scheduling All right. So is that satisfactory to Yes, Your Honor. That is certainly

request, Your Honor.

I had alerted the Court I had a I filed late

hearing in another court tomorrow at 3:00. last night a motion to continue that.

Is there a way I

could let my office know they could call Judge Krieger's chambers and tell them I will be available, and she doesn't need to reschedule the hearing? THE COURT: Ms. Seeman, can you have Ms. Ross call

upstairs to Judge Krieger to let her know the motion filed -- do you know the case number?
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MS. HAZRA:

10-cr-502.

It is set for 3 o'clock

tomorrow, and I now will be available, and I am withdrawing my motion to move it. THE COURT: Tell her she is in trial, but have

Ms. Ross contact her. MS. HAZRA: THE COURT: Thank you, Your Honor. Any objection to proceeding in that

MR. WALKER: THE COURT: bring the jury in.

No, Your Honor. So, then, I'm going to go ahead and We will proceed with the 14 we have.

And the juror who is ill will be excused from any further service. That still leaves us with two alternates. So

hopefully we will get it done before anything happens to any other jurors. Ms. Seeman, you can bring in the jury. Is Mr. Thurman here? MR. WALKER: THE COURT: Yes, Your Honor. Why don't you go ahead and bring him

(The following is had in open court, in the hearing and presence of the jury.) THE COURT: You may be seated. I

Well, good morning, ladies and gentlemen.

apologize for keeping you waiting, but there are always


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matters I have to take care of beforehand. for keeping you waiting.

So I apologize

As you noted, one of your jurors is not here. is ill, so I'm excusing him from the jury. All right. We may proceed. The defense may

He

proceed with their examination of Mr. Thurman. SAMUEL THURMAN having been previously duly sworn, testified as follows: DIRECT EXAMINATION (Cont'd) BY MR. WALKER: Q. A. Q. Good morning, Mr. Thurman. Good morning. Okay. If you recall, we were discussing yesterday Do you recall

the meetings IRP Solutions had with DHS. that testimony? A. Q. Yes, I do.

And do you recall a meeting that included a

Mr. Gilbert Trill? A. Q. I do. Could you, just to backtrack just a bit for the Who was the meeting --

jury's memory and refreshment.

what organization and entity was that meeting with where Mr. Gilbert Trill was in attendance? A. That was with the Department of Homeland Security,

who at the time had a working group, which was the


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Consolidated Enforcement Environment Initiative working group. Q. And the working group that that meeting was held

with, did that consist of different investigative offices? A. Q. It did. And do you know some of the investigative units that

were involved there? MR. KIRSCH: answered. THE COURT: Q. Sustained. Mr. Thurman, what groups were Objection, Your Honor, asked and

(BY MR. WALKER)

represented in that meeting? MR. KIRSCH: THE COURT: Same objection, Your Honor. Sustained. We went over this, I

believe, yesterday Mr. Walker. MR. WALKER: Q. (BY MR. WALKER) Yes, Your Honor. Mr. Thurman, in response to the

meetings at DHS, IRP Solutions -- did IRP Solutions make enhancements to CILC? A. Q. Yes. And were those enhancements for use by general

police? A. When you say general police, you mean local and

state? Q. Yes.
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A. Q.

It would be conducive to their environments, as well. And would they also be conducive to DHS and federal

agencies? A. Q. Yes, they would. Were there subsequent communications with DHS

following that working group meeting and presentation? A. Q. Yes, there was. And what did you communicate to DHS following those

meetings? A. One of the things was communicating to DHS that IRP One of the

had put a "federal face" on the solution.

things that Mr. Cooper had requested, and felt that it would help the overall look and feel, was to put a "federal face" on it. Q. A. What does that "federal face" mean? Well, there were certain terms and certain

operational procedures that they needed incorporated into the software. And then one of the other things, too, was And the

CILC started off as a client server solution.

request was made that it be web enabled so that it would be more far reaching to the user community. Q. And in what you term as web enabling, did that change

how DHS would potentially use the product? MR. KIRSCH: THE COURT: Objection, lack of foundation. Overruled.
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THE WITNESS:

Yes, it would.

They wanted to have

capability where folks in the field, at the field offices would be able to use it, and then even if they were out on a mission or what have you. Q. (BY MR. WALKER) And as a result of these changes

that you mentioned, the federal face, did the company pursue additional meetings with DHS? A. Q. A. Q. A. Q. Yes, IRP did pursue it. IRP did? Yes, follow-up meetings. Did DHS grant the request for follow-up meetings? Yes, it did. And what time frame -- were you involved in setting

up subsequent -- a subsequent meeting? A. Q. Yes, I was. And who did you work with to set up a meeting

subsequently at DHS? A. There were three main people; Steven Cooper, Bill

Witherspoon and Paul Tran. Q. And were all three of these gentlemen at DHS involved

in setting up the next meeting with you? A. Q. At one point or another. And at some point did DHS and IRP agree to a meeting

day or a subsequent meeting? A. Yes.


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Q.

Do you recall the time frame of that subsequent

meeting? A. Q. A. Q. A. It was probably mid 2004. And do you recall the location of that meeting? It was in D.C. Washington, D.C.

And where in Washington, D.C.? At the -- I can't say it was DHS headquarters. It

was -- I just remember I Street. I Street. certain. Q. A. Q.

There was a building on I can't be totally

I believe that is where.

Would that be a DHS office, then? DHS did have offices in there, yes. And what was the purpose of this meeting that was

held at that location? A. Again, to do a follow-up on the CILC Federal

solution, and to present it to the working group, and then also just to show the enhancements that had been made to the solution. Q. And you just said "the working group." Is that the

same working group that was in attendance at the previous meeting, to the best of your knowledge? A. There may have been different players. So I can't be

certain as to any specific names of all of the folks who were there. But Mr. Cooper and Mr. Witherspoon, I

believe, were in attendance, along with some of the other


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representatives from some of the other agencies. couple of defense contractor representatives were. Q. A.

Then a

And what activities were undertaken in that meeting? Well, there was a software demonstration. And then

for those who were not aware of IRP, basically, a typical presentation would include doing an overview, if you will, of the company, and what the thought process and methodology that went into developing the software, and then a software demonstration. Q. Do you recall who else, other than yourself, from IRP

Solutions attended that meeting? A. You were there, Gary Walker, David Banks, I believe

Clinton Stewart would have been there, and myself. Q. And subsequent to the meeting, after its completion,

did IRP Solutions have conversations with DHS representatives? A. Q. Yes. Did IRP Solutions have conversations with DHS in the

meeting room after the conclusion of the meeting? A. There were conversations in the meeting room, as well

as via teleconference, e-mail. Q. And were you involved in those e-mail communications

with DHS subsequent to that meeting? A. Q. I was. And what were your -- what were your communications
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to DHS? A. At that time, DHS became particularly interested in a

particular module, what was called confidential informant module. And I don't know exactly, you know, the

application that -- why they were focusing in on that, but that was one of the modules that they wanted. Q. And you said they wanted to start with that. Could

you clarify that a little bit? A. Well, Case Investigative Life Cycle -- Case

Investigative Life Cycle software includes several modules. And the software is designed to take an

investigator from the crime scene through the courtroom, and includes -MR. KIRSCH: non-responsive. THE COURT: Q. Sustained. So let me repeat my question, Your Honor, I object to this answer as

(BY MR. WALKER)

Mr. Thurman. A. Q. Okay. You said that DHS wanted to start with the

confidential informant module? A. Q. Correct. So can you clarify that statement, "start with the

confidential informant module"? A. Well, CILC was larger than just that one module.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

And

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so they indicated they had a need -MR. KIRSCH: THE COURT: Objection, hearsay. Overruled. I think it's not being

offered for the truth of the matter asserted, it is offered for why they did what they did. THE WITNESS: You may proceed.

They had a need for being able to And

maintain their confidential informant information.

they wanted to provide that to, I think, at the time, we were given a number of 30,000 users. And so it would give

them the ability of sharing information and collaborating on the confidential informant information. Q. (BY MR. WALKER) And in that communication, did DHS

request that IRP Solutions deliver the confidential informant software? A. Q. DHS requested a quote for that solution. And did IRP Solutions deliver a quote for the

confidential informant module? A. Q. A. We did. What was the quote delivered to DHS? I believe that quote was in the neighborhood of

somewhere between 7- and $8 million. MR. WALKER: THE COURT: MR. WALKER: Your Honor, may I have a moment? You may. Your Honor, I would like to refresh

Mr. Thurman's memory on the quotation provided to DHS on


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the confidential informant module.

This quotation has I need to

already been entered into evidence by defense. reference the number. THE COURT: What is the number?

So this has

already been introduced into evidence -MR. WALKER: THE COURT: MR. WALKER: MR. KIRSCH: Yes, Your Honor. -- as opposed to marked? It may have just been marked. Your Honor, I believe they are

referring to Government Exhibit 502.03 -THE COURT: MR. KIRSCH: MR. WALKER: THE COURT: Is that correct? -- which is admitted into evidence. That's correct, Your Honor. Then you may.

Ms. Seeman could you get 502.03? MR. BANKS: Honor. THE COURT: MR. BANKS: THE COURT: You may. We'll just use the elmo. Use it on the elmo. Okay. So if you Ask permission to publish that, Your

can turn on the elmo. Q. (BY MR. WALKER) Mr. Thurman, can you see that

document that is being displayed? A. Q. Yes, I can. If you can just take a moment to look at that.
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And

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once you have looked it over, let me know. down for you. A. Q. Okay. If you can scroll down. Okay.

I can scroll

All right.

And after looking at that, to the best of your

knowledge, is that the quotation that was provided to the Department of Homeland Security by IRP Solutions? A. That looks to be correct. The only thing I see

different is -- not saying it is different from what was stated, just from what I stated earlier, I indicated 30,000 users, and this indicates 10,000 users. is -Q. A. Q. Were you involved in producing this quotation? I was. And you said earlier, before seeing this document, And now we see it was But this

you believed it was 30,000 users.

10,000 concurrent users; is that correct? A. Q. That's correct. And for this quotation, did the quotation involve

elements other than just software licenses? A. Q. A. Q. Oh, as you showed there, support. Support? Yes. And how was the support figure arrived at by you and

IRP Solutions? MR. KIRSCH: Objection, relevance.


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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THE COURT:

Sustained. And so you would agree that this

(BY MR. WALKER)

quotation was delivered to the Department of Homeland Security? A. Q. A. Q. A. Q. Yes. And that was delivered at their request? Yes. Is that right? Yes, sir. And subsequent to delivering this quotation to the

Department of Homeland Security, did IRP Solutions receive any communications from the Department of Homeland Security regarding the quotation? A. Q. A. Q. A. Yes, IRP did. Were you a party to that communication? Yes. And who, from DHS, communicated to you? Bill Witherspoon was the main person that was

communicating at that time. Q. And what did you -- what was your conversation with

Mr. Witherspoon? MR. KIRSCH: THE COURT: Objection, hearsay. Sustained. And in response to Mr. Witherspoon's

(BY MR. WALKER)

communications, did you have a reply or information for


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Mr. Witherspoon? A. I required us to -- the status of the quote, and from

a standpoint of, you know, how far along they had gotten, based on feedback that I had gotten from Mr. Witherspoon. Q. And subsequent to the quotation and your

communications with Mr. Witherspoon, were there any additional meetings with the Department of Homeland Security? A. Q. There were. And do you recall the time frame of the next meeting

with the Department of Homeland Security? A. That was probably around the September 2004 time

frame. Q. And what was the nature of this -- I am sorry, did

you say there was a meeting scheduled in the September 2004 time frame? A. Q. It was around that time frame, yes. Were you involved in setting up that meeting in

September of 2004? A. Q. I was. And did you work with someone at DHS to set up the

September 2004 meeting? A. Q. A. Steven Cooper. Steven Cooper? Actually, it started off Steven Cooper.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

He ended up

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getting pulled away on something, and he shifted it to Bill Witherspoon. But between Bill Witherspoon and Steven

Cooper, that is who I coordinated with. Q. And were you aware of the purpose of this meeting in

2004 between DHS and IRP? A. Q. A. Yes. And what was the purpose of this meeting? This was another joint meeting between DHS and They had a requirement -- not a

representatives from DOJ.

requirement, but they were sort of shifting gears, whereby DOJ was working with DHS on a solution that could be used by all agencies together. next step in the process. Q. You referenced DOJ. What does DOJ mean in this I think it was basically the

context? A. Q. A. Q. Department of Justice. Department of Justice? Yes. And that meeting, September of 2004, that you say was

between DOJ and DHS, was that a meeting that included management at DOJ? A. Q. Yes. Do you recall names of the DOJ representatives at

that meeting, or their roles? A. There was a Price Roe from DOJ. And then there

DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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was -THE COURT: THE WITNESS: THE COURT: THE WITNESS: THE COURT: THE WITNESS: escapes me right now. one. Q. A. Q. A. (BY MR. WALKER) Okay. ROWE? P-R-I-C-E. Last name? R-O-E. Okay. And then the CIO of DOJ, whose name I will have to think about that

I am sorry, Van Hitch. Van Hitch. Could you repeat his role at DOJ? I can't be certain, but I

I believe he was the CIO.

believe he was the CIO. Q. And you said there were also DHS representatives

there? A. That one I'm not certain of who from DHS was there.

I can't recall specifically the names. Q. And what was presented by IRP Solutions to these two

Government entities? A. Q. The CILC Federal solution again. And subsequent to this meeting, were you involved in

any communications with attendees of the meeting? A. Q. Yes. And who did you communicate with subsequent to the
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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meeting? A. Well, that would have been Steven Cooper, obviously,

to follow up with him on that meeting, because I don't believe Steven Cooper was in attendance at that particular meeting. Q. Mr. Thurman, beginning yesterday, you recounted

several meetings with DHS. A. Q. Yes. Do you know the number of meetings to this point that

IRP Solutions had with DHS? A. Do you want me to state what the meetings were or

just give a number? Q. A. Q. Just a count would be fine, Mr. Thurman. Okay. I would say there were a minimum of five. And to the best of your

A minimum of five.

recollection, how many of those meetings involved Steven Cooper? A. I would say three of those involved Steven Cooper.

And if I might clarify, when I say a meeting, what constituted a meeting, in my mind, was even a one on one with Steven Cooper or a one on one with Bill Witherspoon via WebEx. Q. Would you classify a phone call with Steven Cooper as

a meeting? A. Pretty much, yes.


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q.

And how many of those meetings involved

demonstrations of IRP Solutions' software? A. Again, it could be either one on one or a group That's just

session; that would still be around five. with DHS. meetings. Q.

There were other agencies that followed those

And of those approximate five meetings, how many of

those involved demonstrations where Bill Witherspoon was involved? A. That would probably be, I would say a minimum of I'm certain there were three.

three. Q.

And, to the best of your knowledge, were you in

attendance at all of the meetings between DHS and IRP Solutions? A. There may have been a meeting that I was not in

attendance at later in 2004. Q. And, Mr. Thurman, you just recounted a meeting that

you say happened about the September 2004 time frame -A. Q. A. Q. Right. -- with DHS and DOJ; is that right? Right. Were there any -- were there any other meetings

between IRP Solutions and DHS subsequent to that meeting? A. Well, DHS was part of a large group that IRP was part

of, a meeting.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q. A.

What group was that? That was the FICMS. Acronym for Federal

Investigative Case Management System. Q. And there was a meeting -- I just want to clarify.

There was a meeting related to the subject of FICMS that included DHS, and IRP attended that meeting? A. Q. A. Q. Yes. Do you recall the time frame of that meeting? That was the September/October 2004 time frame. Would that have been immediately after the meeting

that you believe was September 2004? A. Q. A. Q. A. Q. A. In close proximity. And do you recall where that meeting occurred? It was in Washington, D.C. And who from IRP Solutions attended that meeting? The FICMS'? Yes, the FICMS' meeting? Well, for the FICMS' RFI meeting, a request for

information, that would have been yourself, Gary Walker, David Banks, Clinton Stewart and myself. I can expound on that just a bit. And, however, if

Because of the limited

space, the government would only allow in two representatives from each company into the session, itself. So yourself, Gary Walker and David Banks sat in

on the RFI meeting.


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q.

And although you didn't sit in on the meeting,

itself, were you at the venue where the meeting was held? A. Q. RFI? A. Q. Request for information. At that FICMS' RFI meeting, did you see or meet any Yes, sir. And at the FICMS' RFI meeting -- could you clarify

DOJ -- I am sorry, DHS employees at that meeting? MR. KIRSCH: Objection, Your Honor, he just

testified he wasn't at the meeting. THE COURT: foundation. MR. WALKER: Q. (BY MR. WALKER) Yes, Your Honor. Mr. Thurman, you just stated that Sustained. You need to lay more

myself, Mr. Walker and Mr. Banks actually entered into the meeting room; is that correct? A. Q. That's correct. Were you at the site, the venue where the meeting

occurred? A. Q. Yes, sir. So you were at the building where the FICMS' RFI

meeting occurred? A. Q. At the Aerospace Corporation, that's correct. You were not allowed into the room where the meeting

occurred because of what reason?


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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A. Q.

Limited space. And so while you were at that venue, for the FICMS'

RFI meeting, did you meet or talk to any DHS employees? A. Q. A. Q. I did see Mr. Cooper. Did you speak with Mr. Cooper? Briefly. Subsequent to this meeting that IRP Solutions

attended, were there any other meetings with the Department of Homeland Security? A. Q. Not following that RFI -- the RFI session, no. Subsequent to that meeting, did IRP Solutions have

any, or did you have any communications with DHS? A. Q. A. Q. Yes. And who did you communicate with? Bill Witherspoon. Bill Witherspoon. And do you recall the time frame

of your next communication with Mr. Witherspoon? A. That would have been the November time frame,

November-December 2004 time frame. Q. Would it be correct to say that was approximately

one, or maybe two months following the FICMS' meeting you just mentioned? A. Q. That's correct. Before I move on, I want to go back to your statement

that you did speak with Mr. Cooper at the FICMS' meeting;
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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correct? A. Q. Correct. And in that meeting, what were the results of that

meeting with Mr. Cooper? A. Prior to the FICMS' RFI -- I'm sorry, restate the

question. Q. Okay. I believe you said that you did meet briefly

with Mr. Cooper following the FICMS' RFI meeting. A. Q. A. Q. Right. Was that a face-to-face meeting with Mr. Cooper? There were teleconference calls. Okay. Thank you. We did have calls.

And what was the result of the

teleconference you had with Mr. Cooper? A. The Department of Homeland Security, speaking, you

know, as part of the aside from the FICMS Initiative, wanted to get an additional quote. MR. KIRSCH: THE COURT: Objection, hearsay. I'm going to allow it, because I

believe they are not offering it for the truth of what was said, but offering it to show what IRP did in response. And I don't think that is hearsay. overrule the hearsay. offering it for. MR. WALKER: Honor.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

So I am going to

I assume that is what you are

That is a correct assumption, Your

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THE WITNESS:

DHS wanted to get a separate quote

for its solution in the event that the FICMS Initiative didn't keep a report. Q. (BY MR. WALKER) And did IRP Solutions provide a

quote subsequent to your conversation with Mr. Cooper? A. Q. Yes. And for what software did that -- what software did

that quote incorporate? A. That was for CILC Federal. And, by that time, and

maybe prior to that, it was being called CILC Federal Trusted, because of the security that they wanted built into it; they being DHS. Q. And did IRP Solutions deliver a quote to DHS for that

product? A. Q. A. Yes. And do you recall the amount of that quotation? There were a couple. I believe one was about 87

million, I think.

And then I think, based on other

requests that were made by DHS, there was -- I think there was a separate one that was submitted even after that. But I do recall one around 80-, to 85-, $87 million. Q. And this quotation for what you called CILC Federal

Trusted, is it correct that this was at the request of the Department of Homeland Security? A. Yes, it was.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q.

And you also said there may have been two quotations

delivered -A. Q. A. Q. Correct. -- around that time frame? Correct. And why were there two delivered, when you just

stated there was -- they requested one quotation? MR. KIRSCH: foundation. THE COURT: Q. Sustained. So, Mr. Thurman, were you involved Objection, Your Honor, lack of

(BY MR. WALKER)

in providing a quotation to the Department of Homeland Security? A. yes. Q. And was this quote in response to a request from the I was involved in helping to compile the numbers,

Department of Homeland Security? A. Yes, sir. MR. KIRSCH: quote? THE COURT: quotes. Clarify, because we have had several Objection as to vagueness, which

I assume this is different from the one we saw

previously. MR. WALKER: THE COURT: Yes, Your Honor. All right. Clarify.

DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q.

(BY MR. WALKER)

And this would be -- would this be a

quotation subsequent to the CILC confidential informant quotation that you referenced earlier? A. Q. Yes. So would it be fair to say this would be the second

quotation provided to DHS from IRP Solutions? A. I wouldn't qualify it as the second. But the one

that I made reference to is the 87- or in the mid $80 million range, yes. Q. Okay. You said that you were involved in preparing

the quotation to DHS for the mid $80 million quote; is that correct? A. Q. Yes. Subsequent to delivering the mid $85 million quote,

did DHS request any additional quotations? A. Q. Yes. And were you involved in conversations and the

request from DHS for a subsequent quotation? A. Q. Yes. And this subsequent quotation, was it different in

requirements from the previous quotation requested by DHS? A. Q. Yes, it was. And how did this quotation request differ from the

previous quotation request? A. Well, different requirements. Different number of

DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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views.

Different security requirements. Different support, in general.

Different That's kind of

licensing.

what was driving the difference in quotes. Q. Would it have been a quotation of reduced scope or

increased scope? A. Q. Increased scope. Increased scope. Increased scope. Do you recall the price quoted for

this increased scope request? A. I don't remember the exact number. It was in excess

of a hundred million dollars. Q. And do you recall who from the Department of Homeland

Security requested that quotation? A. Q. A. Q. That quote was also sent to Bill Witherspoon. It was sent to Bill Witherspoon? Yes. Was it requested by Bill Witherspoon, to the best of

your knowledge? A. Yes, to the best of my knowledge. MR. WALKER: THE COURT: MR. WALKER: Could I have one moment, Your Honor? You may. Your Honor, I would ask to publish

Government Exhibit 502.03, the quotation to the Department of Homeland Security from IRP Solutions. THE COURT: MR. WALKER: Is that the one we just published? Yes, Your Honor. That is the one we

DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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just published. THE COURT: MR. WALKER: quotation, first. please. Okay. You may.

If you could scroll down to the actual Let's go to the top of the quotation, Okay, thank you. Just

All of the way to the very top.

Let's go back to the company information, please. above this. Q. Okay. Thank you.

(BY MR. WALKER)

Mr. Thurman, is this the quotation

you recall providing to the Department of Homeland Security? A. That would be correct. MR. WALKER: Q. (BY MR. WALKER) And if you could scroll down, please. And you said earlier that this quote

had expanded requirements from the previous quote, which you mentioned was about 85 million -- 85- range? A. Q. A. Q. Correct. And what is the total you see there for the quote? I see 93.5 million. And, Mr. Thurman, were you involved in any meetings

with DHS subsequent to providing this quotation to the Department of Homeland Security? A. Q. Phone calls. And do you recall who you next spoke with at DHS on

the phone? A. Bill Witherspoon.


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q.

And also do you recall in what time frame after

providing this quote to DHS that that telephone call occurred? A. I generally remember an immediate phone call upon

sending the e-mail. Q. And what information did you provide to

Mr. Witherspoon? A. I wanted to confirm that he received the quote, and

that he check on the status. Q. Did Mr. Witherspoon provide any further instruction

to you in that phone call? A. Mr. Witherspoon indicated that the quote was being

reviewed, and that he was -- that they were looking to get it included into the next budget. discussions at that time. Q. Did Mr. Witherspoon indicate who was involved in the They were in budget

budget exercise? A. DHS -MR. KIRSCH: THE COURT: MR. WALKER: THE COURT: Q. Objection, hearsay. Sustained. May I have one moment, Your Honor? You may. Mr. Thurman, who was involved in the

(BY MR. WALKER)

budget exercise? A. Well, Mr. Witherspoon was involved in them, according


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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to his communications. Q. And subsequent to that telephone call you just

related with Mr. Witherspoon, did you have any communications with the Department of Homeland Security employees? A. Q. A. Q. I did. And who would that have been with? Again, Mr. Witherspoon. And what time frame was that communication relative

to the previous communication? A. Q. Late -- December 2004 to January 2005 time frame. And what was your communication to Mr. Witherspoon in

that phone call? MR. KIRSCH: THE COURT: THE WITNESS: Objection, hearsay. Overruled. Again, checking on the status of the

budgeting process for this particular quote. Q. (BY MR. WALKER) And subsequent to this phone call,

did you receive any other status from the Department of Homeland Security? A. The status I got around the January time frame was

that they were tied up with the Presidential Inauguration. So all law enforcement agencies in Washington, D.C. were affiliated with the Presidential Inauguration, and that they would pick it up after that.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q.

Was that your final communication with the Department

of Homeland Security in January of 2005? A. Q. I can't be certain. I may have late January of 2005.

And to the best of your recollection, who would that

communication have been with? A. Q. It would have been with Bill Witherspoon again. Did you have any subsequent communication with the

Department of Homeland Security? A. Q. bit? A. Q. Probably March, April 2005. And what did you communicate with the Department of Not until later in 2005. What time frame? Could you narrow it down a little

Homeland Security? MR. KIRSCH: Objection to the relevance of that

time period, Your Honor. THE COURT: Q. Sustained. And was there any event that was the

(BY MR. WALKER)

termination of your communications with DHS? A. DHS. Q. A. Q. I am sorry? There was an impact to our communication with DHS. What was that impact? MR. KIRSCH: Objection, relevance, Your Honor.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

Yes.

There was an impact to our communication with

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THE COURT:

Sustained. Mr. Thurman, were you still working

(BY MR. WALKER)

at IRP Solutions when the FBI conducted their search warrant on IRP Solutions in February 2005? A. Q. that? MR. KIRSCH: THE COURT: MR. WALKER: THE COURT: Objection, Your Honor, relevance. Sustained. Could I have one moment, Your Honor? You may. Mr. Thurman, why did you stop Yes. Did you have any communication with DHS following

(BY MR. WALKER)

communicating with DHS? MR. KIRSCH: THE COURT: MR. WALKER: Objection, relevance. Sustained. Your Honor, I have no further

questions for the witness. THE COURT: MR. BANKS: THE COURT: Anybody else? Yes, Your Honor. Mr. Banks. DIRECT EXAMINATION BY MR. BANKS: Q. Mr. Thurman, did you ever meet -- have any meetings

outside of the Department of Homeland Security's office? A. Yes.


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q. A.

Where? There was a meeting that we had with Steven Cooper at I think it was at the JW

the -- at one of the hotels. Marriott. Q. A.

What was the nature of that meeting? He wanted to prep us for a meeting with the DOJ,

Department of Justice. Q. And you had mentioned on or about. What time frame You mentioned a

and what meeting were you referring to? September meeting, October meeting.

In which one of those

meetings did this preparatory meeting occur? A. To the best of my recollection, I believe that would

have been around the September time frame. Q. A. And what were the results of that meeting? Well, the following day we had a meeting with the

Department of Justice. Q. Okay. Did -- were there any -- were there any

changes to your agenda as a result of that meeting? MR. KIRSCH: THE COURT: MR. BANKS: Your Honor. THE COURT: Q. (BY MR. BANKS) All right. Thank you. Objection, relevance. Have we not covered all of this? We may have. I will withdraw that,

Now, you had mentioned that you had

numerous communications with Bill Witherspoon; correct?


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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A. Q.

Yes. What meetings or communications were provided to you

by Mr. Witherspoon? A. Q. Telephonically, and then also via e-mail. Any particular -- what e-mail addresses, what

telephone numbers? A. I had both his government e-mail address, as well as

his personal e-mail address, and his government phone number, as well as his cell phone number. Q. Okay. I want to go back to Paul Tran and meetings Was there ever a meeting with --

you had with Paul Tran.

concerning a pilot program? A. Mr. Tran spoke of the pilot program early on in our

discussions. Q. for? A. Q. I believe it was 10- -- I think it was $12 million. Okay. And what were the requirements for What was required to What was needed? Okay. Do you recall how much that pilot program was

participating in that pilot program? participate in that pilot program? A.

The CILC software was the focus of that pilot

program. Q. And what purposes would the CILC software be used in

that pilot program? MR. KIRSCH: Objection, relevance.


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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THE COURT: (BY MR. BANKS)

Sustained. Mr. Thurman, during this time in the

September/October time frame of 2004, what was your expectations with the business at the Department of Homeland Security? MR. KIRSCH: THE COURT: (BY MR. BANKS) Objection, relevance. Sustained. Did you have any plans to deliver

software to Homeland Security? MR. KIRSCH: THE COURT: (BY MR. BANKS) Objection, relevance. Sustained. Did you anticipate gaining a contract

with the Department of Homeland Security? MR. KIRSCH: THE COURT: Objection, relevance. I'm just going to let it go. You may answer.

Overruled, so we can move on. THE WITNESS: (BY MR. BANKS) Yes.

I want to take you back to a

presentation -- this is in a little different area, but it is related to Homeland Security. Do you remember

providing a presentation for both DHS and NYPD to a man by the name of Sammy Thompson? A. Q. A. Yes. Who was Sammy Thompson? He was -- you mean personally, or business wise?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q. A.

Both. He was married to my cousin. And he was a senior --

former senior executive vice president of Motorola. THE COURT: THE WITNESS: I am sorry? A former senior executive vice

president of Motorola. Q. (BY MR. BANKS) And what was -- as related to DHS and

NYPD business, what was Mr. Thompson's role with IRP? MR. KIRSCH: THE COURT: I'll overrule. THE WITNESS: and acquisitions. Mr. Thompson was involved in mergers Objection, relevance. I'm going to allow some leeway here.

And Motorola is a major contractor with And he also was an investment

regards to law enforcement.

advisor to IRP, as far as trying to determine how we can go about getting investments to further the company. Q. (BY MR. BANKS) Okay. I want to go back to meetings

at the NYPD. A. Q. Yes. How many meetings do you recall actually took place

at the NYPD? A. I'm going to say -- again, I'm not certain of an

exact number, but I would say a minimum of three. Q. Okay. Do you recall a meeting at the Millennium

Hilton Hotel?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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A. Q.

I do. Was this meeting regarding IRP delivering software to

the NYPD? A. Yes, it was. MR. KIRSCH: answered. THE COURT: yesterday. Sustained. You covered all of this Objection, Your Honor, asked and

So if there is anything new you want to

inquire about, but we will not repeat or rehash yesterday's testimony. MR. BANKS: THE COURT: I don't recall this being -I recall the Millennium Hotel.

Have you testified to this before, sir? THE WITNESS: THE COURT: THE WITNESS: MR. BANKS: THE COURT: MR. BANKS: Q. (BY MR. BANKS) I testified to the hotel. And about that meeting? Yes, ma'am. I am sorry, Your Honor. That's all right. I forgot if that was there. Do you recall meetings with the New

York State Department of Insurance? THE WITNESS: I was not a part -- I do recall IRP

having meetings with the New York Department of Insurance. Q. (BY MR. BANKS) Do you recall any RFP that was

responded to by IRP?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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A. Q. A. Q.

Yes. Did you participate? I participated in the writing of that RFP response. Okay. Do you recall how IRP was referred to the New

York State Department of Insurance? MR. KIRSCH: THE COURT: THE WITNESS: Objection, relevance. I'll give him some leeway. Overruled.

We had made several contacts with And I don't

several law enforcement agencies in New York.

remember specifically who, but someone within the department gave me this, and was looking out for business opportunities within New York. Q. A. Q. (BY MR. BANKS) NYPD. Okay. THE COURT: Now I am confused, because I think we What department?

were talking about a different department; is that correct? MR. BANKS: I was getting to, Your Honor -- the

NYPD referred us to -THE COURT: MR. BANKS: THE COURT: Q. (BY MR. BANKS) The Department of Insurance. -- the Department of Insurance. All right. You don't recall who at the NYPD

referred; correct?
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A. Q.

No, I don't. Did you attend the meeting with -MR. BANKS: THE COURT: MR. BANKS: May I have a second, Your Honor? You may. Your Honor, I have no further

questions. THE COURT: Mr. Zirpolo? DIRECT EXAMINATION BY MR. ZIRPOLO: Q. A. Q. Good morning, Mr. Thurman. Good morning. I just have a few questions. THE COURT: Q. Could you speak into the microphone. I just have a few questions. You All right. Anybody else?

(BY MR. ZIRPOLO)

said you have a security background? A. Q. Yes, I do. Did you have the opportunity to write a security

procedures document for IRP? A. I did. MR. KIRSCH: THE COURT: MR. ZIRPOLO: Objection, relevance. What is the relevance, Mr. Zirpolo? Mr. Kirsch had a number of witnesses

come up and talk about how it was -- the different ways they got into the building and searches.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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THE COURT: THE WITNESS:

Overruled. Yes, I did. And in that document, what were

(BY MR. ZIRPOLO)

some of the features of that document? A. Entry authorization. Processes for gaining access So, basically,

into the facility.

Also document control.

as far as going in and out, badging. briefcases, purses would be searched.

Going in and out, No documentation We

would leave the facility with regard to software code. had a check in/check out process for document control. So, at the end of the day, developers, testers

would turn their document in to document control, sign it in, lock it up. Then at the beginning of the next day,

sign it out and check it out. Q. And were there exception procedures so that if

somebody wanted to bring something into the office or out of the office? A. Q. You had to have an authorization to do that. Thank you. And did you have the opportunity to

implement those procedures at IRP? A. Q. A. Yes. And why did IRP implement those procedures? Well, although IRP was not a "secured facility," in

government language, the nature of the business was sensitive enough to where we wanted to protect the
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software, proprietary data.

And, then, as looking forward

to engagement with law enforcement agencies, you wanted to ensure that if any of their data was on site, you wanted to protect that, as well. MR. ZIRPOLO: One moment, Your Honor. No further

questions, Your Honor. THE COURT: MR. WALKER: THE COURT: MR. KIRSCH: All right. Anybody else? No.

No, Your Honor. All right. Cross-examination?

Thank you, Your Honor. CROSS-EXAMINATION

BY MR. KIRSCH: Q. A. Q. Good morning, Mr. Thurman. Good morning. You, Mr. Thurman, have been friends with the

defendants for some time; right? A. Q. A. Q. A. Q. A. Q. A. Yes. And your wife did some work at IRP, as well? My wife volunteered at IRP. She volunteered there? Yes. All right. And --

Very infrequently. I am sorry? Very infrequently.


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Q. A. Q.

Very infrequently. I don't recall.

She still had a title, however?

You don't ever recall seeing any documents that

listed a title for your wife there? A. Q. I don't recall what the title was. All right. Didn't have something to do with

marketing and sales, like you were working on? A. Q. I don't recall what the title was. All right. Is that what she did when she volunteered

there? A. She did several things. As with any start-up,

friends, family, help out where ever they can. Q. All right. One of your sons, Samuel K., worked there

for some time; is that correct? A. Q. That's correct. Another one of your sons, Joseph, works for a

staffing company now; right? A. Q. Yes, he does. Now, I want to start off by asking you a little bit

about the chronology of some of the events that you referred to. A. Q. Okay. What I understood you to say was that there was a

request for a quote from the Department of Homeland Security related to the confidential informant module, and
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that that got -- you got that in about September of 2004. Did I hear that right? A. Q. I believe that -- in that time frame. Okay. And that after that was provided, you had

another meeting, or series of meetings with folks from DHS. And after that meeting or series of meetings, you

provided a separate quote for the CILC Federal program? A. Q. A. Q. I didn't phrase it that way. Oh, you didn't? I did not. I thought you said that that quote was provided

sometime after the quote was provided for the confidential informant. A. I am making reference to your comment about "series I didn't state that. I'm not attempting to misstate your

of meetings." Q.

I'm sorry.

testimony.

Let's just focus on the time -- let's just

focus on the timing. A. Q. We can do that. Did I correctly understand your testimony that the

CILC Federal quote was provided sometime after the confidential informant module quote, as you called it, was provided? A. Q. That is correct. All right.
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MR. KIRSCH:

Your Honor, could I please publish

again Government Exhibit 502.03? THE COURT: MR. KIRSCH: exhibit. please. Q. (BY MR. KIRSCH) You remember sending this e-mail, You may. Can we start with page 1 of that

Can you highlight that e-mail on the top,

Mr. Thurman, to Mr. Witherspoon? A. Q. A. It looks correct, yes. And you see that that's dated December 9th of 2004? I see the e-mail. I don't know what these quotations

are that are attached, though. Q. Well, let's look at those. MR. KIRSCH: exhibit? Could we please publish page 3 of this

Can you highlight the top half of that, please.

Could we go down to the subtotal. Q. A. Q. (BY MR. KIRSCH) I do. All right. And this is, in fact, the quote that you Do you see that now, Mr. Thurman?

provided with respect to the confidential informant module; right? A. Q. A. That's correct. Okay. Okay. And the date on the quote is December 7, 2004? So that was several years ago. I was off by a

couple of months.
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Q. A. Q. A.

Okay. But that is the quote? That is the quote? That is the quote that DHS requested. MR. KIRSCH: All right. Could we please go to page And highlight the top half The quote is correct?

6 of that exhibit now, please. again. Q. (BY MR. KIRSCH)

And this is the quote that was

provided -- this is the other quote that was provided in connection with that e-mail for CILC Federal? A. Q. A. Q. Correct. Okay. Okay. Okay. So this quote wasn't provided at a different Same date?

time than the quote for the confidential informant module? A. Again, long time ago. And so I was off on that. But

the quote was requested by DHS, and the quote was submitted. Q. A. Q. I just need you to answer my questions. Okay. All right.

My question is, both of these quotes were provided on

the same date, right? A. Q. A. According to this, yes. Do you disagree with those dates? No. This is a correct quote.
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Q.

Okay.

And you are referring to these -- you used the

term in your testimony "request for information"? A. This has nothing to do with a request for

information. Q. Did you use the term "request for information" in

your previous testimony? A. Q. Not related to this quote. Let me try it again. Did you use the term "request

for information" in your previous testimony? A. Not related to this quote. THE COURT: THE WITNESS: Q. (BY MR. KIRSCH) Sir, answer whether you used it or not. Yes, I did. All right. What did you -- what do

you understand the term "request for information" to mean? A. Just that; a request for information. The government

is requesting information. Q. A. How is that different in your mind from a quote? A quote is asking for dollars or the amount of money

that it is going to take to deliver a product solution or service. A request for information, in my mind, is For

requesting information about a proven concept.

instance, we have this idea, and what is it going to take to deliver this product, service or solution? Q. You don't understand -- in your mind, is a quote --

are you familiar with procedures called a request for


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proposal or a request for a quote? A. Q. A. Q. I do. RFP or RFQ? I am familiar with those terms. You are familiar with those terms. You know those

are terms that the government uses in the course of doing its contracting; right? A. Q. Yes. You know that government contracting starts -- the

process of government contracting starts with the issuance of either a request for a quote or a request for a proposal? A. Q. A. I am not are a contracts officer. So you don't know that? I am not a contracts officer. So to say I know

exactly the contracts procedure; I was following the request of DHS. Q. Okay. But just to make sure, I would like to ask it

again -- my question again. Do you or do you not know that that's what starts the Government contracting process? A. I am familiar with the terms "request for proposal"

and "request for quote." Q. And do you know whether the government contracting

process starts with an RFQ or RFP?


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A. Q.

I do not. Thank you, sir. So you don't -- do you know the difference, for

government contracting purposes, between a request for information and a request for quote. A. Q. I do not. All right. And the fact, then, that those documents

are -- were titled "Quote," is because that's how IRP chose to caption it; right? A. Q. A. Q. We chose that because DHS asked for a quote. They asked you how much the software would cost? No, DHS asked for a quote. Okay. I want to ask you about a couple of other

terms that you used during the testimony. A. Q. A. Q. Okay. You used the term "meeting," didn't you? Yes. And then did I correctly understand you to say that

your definition of the term "meeting" includes telephone calls? A. In this day and age, with technology, a meeting can

be a telephone conference call. Q. Okay. So just to be clear, when you talked about the

five meetings that you had with DHS, that included at least one telephone call?
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A. Q. A.

I said approximately five. Okay. I did not give specifically, because it could have It could have been --

been more. Q.

Did that approximately five number, give or take -Does your

let's assume it could have been more or less. estimate include telephone calls? A. Q. Yes. All right.

And you also, I believe, yesterday,

used -- you said that IRP had retained outside consultants who are retired law enforcement agents. correctly? A. Q. A. I don't think I used the word "retained." You don't think you used the word "retained"? If I did, we did have -- we did have on staff subject Did I hear that

matter experts. Q. A. Q. A. Q. Right. But they weren't paid?

I don't know. You don't know whether they were paid? I don't know. All right. So if you used the word "retained," in

your mind that doesn't necessarily connote they were paid, because you don't know if they were paid? A. Q. Correct. Okay. You also yesterday, I think, indicated at one
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point that you made changes in the software to accommodate the customer. A. Q. A. Q. Do you recall saying that?

If you say I did. Well, I am asking if you remember saying that. I don't remember those exact words. Okay. You don't remember saying, in response to

questions about the Department of Homeland Security, that you made changes to accommodate the customer? A. I remember saying that we made changes to the

software to accommodate the Department of Homeland Security's request. Q. A. Q. But you don't remember using the term "customer"? I do. If you had used the term "customer," I take it by

that word you hadn't meant somebody who had actually purchased your software? A. Q. Restate that question. If you used the term "customer," you didn't mean

someone who had actually purchased your software, did you? A. Depends on the context. A customer could mean

prospective customer. context. Q.

You know, it depends on the

Well, Mr. Thurman, I am asking about the context of

your testimony yesterday. A. Okay.


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Q.

For the purposes of this question, I will represent

to you that you said when you were talking about the Department of Homeland Security, that you made changes to accommodate the customer? A. Q. A. Q. Okay. Okay? Okay. In that context, you couldn't have meant customer to

mean someone who had purchased your software; right? A. Q. A. Q. A. Q. A. Q. DHS had not purchased the software at that time. And never did? Correct. Neither did the New York Police Department? Correct. Neither did the New York Department of Insurance? Correct. Neither did any of the various entities about which

you testified there were presentations made? A. Q. A. Q. Incorrect. Which one bought? There was a CILC Basic solution that was purchased. Which entity, that you testified about, purchased

that software? A. I didn't -- I wasn't asked about a purchase

yesterday.
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Q.

I just asked you whether any of the entities that you

named yesterday purchased the software? A. The entities that I mentioned yesterday, as far as

the ones you just mentioned; NYPD, Department of Homeland Security -- and I didn't mention the Department of Insurance yesterday, that was mentioned today. Q. A. I stand corrected. You are correct in the sense, none of those

purchased. Q. A. Who purchased it? Again, there was a CILC Basic solution that was

purchased. Q. A. Q. A. Q. A. Q. A. Q. A. Q. A. Who purchased it, Mr. Thurman? It was Kinnet County Sheriff's Department. How do you spell that, sir? K-I-N-N-E-T. Where is that? In Missouri. In Missouri? Yes. Okay. So I have another one. Please? Southeastern Missouri State University. I am not

sure if it is Southeastern State Missouri or Southeast


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Missouri University. Q. A. Q. A. Who else? There was a university -- or St. George's University. Where is that? Their offices are in New York. And the university is

actually in -- I'm not sure. Grenada, I believe. Q. A. Q. A. Q.

I'm not exactly sure.

Somewhere in the Caribbean? I believe so. And those agencies actually purchased the software? That's correct. They paid money to IRP, as opposed to getting it for

free from IRP? A. Q. A. That's correct. Do you remember how much they paid? That was, again, the CILC Basic solution. And so the

amount of that I cannot recall exactly. small. That was our smallest solution.

The amount was And we did have

several sales promotions going on.

And at that time,

those were the first agencies that got on board, as far as purchasing. Q. paid? A. It was probably in the neighborhood of, I don't know, And then right after that IRP was raided.

So give us a ballpark of how much those agencies

a couple thousand dollars per sale.


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Q. A. Q.

Per sale? Right. That information, as far as you know -- I am sorry,

the proceeds from those sales would have gone into the IRP bank account; right? A. Q. A. Q. I'm not in finance. Would you have expected them to go somewhere else? Where would you expect it -The way this works, Mr. Thurman, is I ask you the

questions. A. Okay. As far as handling of the financial part,

again, I was not in finance. Q. A. You don't know anything about that? No, I don't. MR. KIRSCH: Your Honor, could I please publish

Government Exhibit 502.04? THE COURT: MR. KIRSCH: Agent Smith. Q. (BY MR. KIRSCH) Do you remember getting this e-mail You may. Can you enlarge that message, Special

from Steven Cooper, Mr. Thurman? A. I do. MR. KIRSCH: And if we could just go to the next

page of that, please. Q. (BY MR. KIRSCH) Are you able to see that on the

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screen, or do you need it enlarged? A. Q. A. Q. Enlarge it, please. Did that get big enough for you? That is good. Do you recognize that this was the operations order

that Mr. Cooper attached to that e-mail? A. Q. Yes. Okay. Now, yesterday you testified that Homeland

Security had sent you some scenarios, and this is one of those scenarios. A. Q. A. Q. This was the operation plan. Okay. This is one of the things they sent you?

This was one of the things they sent, yes. And on this e-mail, it doesn't have any directions

about keeping it confidential or anything? A. Q. Not on this one. It was on the other one. Those directions are on

Those are on different ones?

other e-mails? A. Q. A. Correct. All right. And it didn't say "keep it confidential." So, again,

it said not to be released outside of IRP -Q. A. All right. -- or something to that effect. MR. KIRSCH: Thank you, Special Agent Smith.
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I am sorry, Your Honor, I need just one moment, Your Honor, could I publish Government Exhibit

502.01, please? THE COURT: MR. KIRSCH: You may. Special Agent Smith, can you expand

the e-mail on the top there, please. Q. (BY MR. KIRSCH) Are you able to read that e-mail

now, Mr. Thurman? A. Q. A. Q. A. Q. A. Q. Yes. This was an e-mail that you got from Paul Tran? Yes. Right? Yes. In May of 2004? Yes. You testified before that someone from the Department

of Homeland Security, in the fall of 2004, had talked to you about wanting to have the software included in the next round. There is a reference in this e-mail to And

getting IRP included on the list for the next round.

I was wondering if, perhaps, you had been mistaken about the timing of that exchange, as well? A. Again, I could have been. As I have stated So I'm not going to

previously, that was a long time ago. state a specific date.

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Q.

I am not being critical, Mr. Thurman, I am asking if

it was possible. A. You are correct. But the meeting was requested -- or

the outcome of that meeting was stated. Q. A. Q. All right. Yes. Now, your background, I think you said yesterday, is

essentially in two areas; sales and security; is that right? A. Q. That's part of my background. Okay. Those were the two roles that I believe you

said you fulfilled at IRP? A. Q. A. Q. That's correct. Okay. You were not a technical person at IRP?

That's correct. In fact, did you say the other day that particularly

in the presentations, that the technical questions were handled by someone other than you? A. Q. A. Q. A. Q. That's correct. Okay. Now, you know Mr. Barnes as well; right?

Yes, I do. And you know he is a technical person? Yes, he is. He has a pretty extensive technology background; Do you know?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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A. Q.

I do know he is a technical person. Okay. But you don't know the extent of his technical

background? A. I know he is very capable. As far as the extent, no,

I don't know. Q. Okay. MR. KIRSCH: Your Honor, could we please publish

Government Exhibit 608.57? Can you expand that top left for me. Your Honor, I am not sure the jury is able to see that yet. Q. (BY MR. KIRSCH) Can you see that on the screen now,

Mr. Thurman? MR. WALKER: scope. THE COURT: THE WITNESS: Q. (BY MR. KIRSCH) Overruled. Yes. Okay. Do you see your name next to Objection Your Honor, beyond the

the position, "security engineer"? A. Q. A. Q. A. Yes. Was that your position at IRP? I did do security. Was your position at IRP a security engineer? My position was not security engineer. I didn't have

a title security engineer.


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Q.

Okay.

Do you know why your name is next to "security

engineer" on this list? A. Q. I do not. Do you know why Cliff Stewart is also next to the

position "security engineer" under the column "alias"? MR. WALKER: THE COURT: THE WITNESS: Q. A. Q. (BY MR. KIRSCH) No, I don't. You don't know anything about anybody at IRP ever Your Honor, objection. Overruled. I do not. You have no idea about that?

submitting time cards under different names? A. No. MR. KIRSCH: Your Honor, could I please publish

Government Exhibit 609.01, the white board? THE COURT: Q. You may. Mr. Thurman, from previous

(BY MR. KIRSCH)

experience, I know I am going to need you to step out of the witness box and down here so everyone in the courtroom can see this. I want to make sure that you are able to

see the board there. A. Q. A. Q. Okay. Can you do that? Yes. Okay. And do you see the column that says "Headway
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Staffing," right in the middle of the board in red? A. Q. Yes. Do you see that there are a set of initials "DB"

under "Headway Staffing"? A. Q. Yes. And then in parentheses after "DB" there are the

initials "ST"? A. Q. Yes. Do you know whether or not Mr. Darrell Brantley was a

payrolled employee at Headway Staffing? A. Q. A. Q. I do not. You don't know about that? No, I don't. I take it that you never submitted any time that you

worked under Mr. Brantley's name to Headway Staffing? A. Q. A. Q. A. Q. No. I don't recall anything like that.

You don't recall, or you didn't? No, I didn't. You wouldn't have done that, would you? No, I wouldn't. All right. Thank you, sir. That is what I wanted to

ask you about that. MR. KIRSCH: Your Honor, could I please publish

Government Exhibit 158.01. THE COURT: You may.


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Honor. Q.

JUROR: the witness?

Can we move the white board so we can see

MR. KIRSCH: I apologize.

I would be happy to do that, Your

(BY MR. KIRSCH)

Have you had a chance to look at

that now, Mr. Thurman? A. Q. Which part? Well, let's start with the date. October 28, 2003.

Do you see that? A. Q. A. Q. A. Q. A. Okay. Do you see your name in the "To" line? I do. So you would have gotten this e-mail; right? Is that an e-mail? It is. I don't know. I don't recall. It doesn't look

familiar to me, but my name is there. Q. Okay. We have established that you don't remember

everything that occurred over this period of time; right? A. Q. Right. Okay. So you don't remember being told that there --

this was going to be the official start date for other people at the company, including Gary Walker, and that you should act accordingly? A. No, I don't.
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Q. A.

You don't have any idea what that means? No, I don't. MR. KIRSCH: Your Honor, can we please publish

Government Exhibit 608.01? THE COURT: MR. KIRSCH: Q. (BY MR. KIRSCH) You may. Can we expand that, again, please. You see this is another e-mail,

Mr. Thurman? A. Q. A. Q. A. Right. Your name is on the "To" line again? Right. Dated about a month later? Can I see the top of this? MR. KIRSCH: Q. A. (BY MR. KIRSCH) Can you expand that entire page there. Is that what you wanted to see, sir?

It is just the format there does not look like a That is why I ask. But go ahead.

standard e-mail format. Q.

I would agree with you, it doesn't look like a

standard e-mail format. And this message also references to official start dates for Dave Zirpolo and Ken Barnes in November of 2003 and has a direction to "act accordingly." A. Q. A. Okay. Do you remember getting this e-mail? No, I don't.
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Q.

I take it you don't have any explanation for what

"act accordingly" means in this e-mail, either? A. Q. I do not. Why would you have had an official start date for

Dave Zirpolo and Ken Barnes when both of them had been working at the company for a year? A. Q. A. Q. I wasn't in personnel, so -You don't know anything about that, either? No, I don't. All right. MR. KIRSCH: Thank you, Mr. Thurman. Those are all

of my questions, Your Honor. THE COURT: MR. BANKS: THE COURT: MR. BANKS: Honor. THE COURT: We'll proceed, then take a break after. How long will redirect take? I don't know. All right. Maybe shorter. I am not certain, Your I would say 15 minutes.

You may proceed, Mr. Banks. MR. BANKS: Your Honor, permission to republish

Government Exhibit 502.03. THE COURT: You may. REDIRECT EXAMINATION BY MR. BANKS: Q. Mr. Thurman, what does the "Subject" line say on that
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e-mail? A. "Re-transmission case management pricing estimates,

IRP Solutions." Q. A. And down below, after, "Hi, Bill," what does it say? "Per our conversation a few moments ago, this is a We look

re-transmission of what we sent out on Tuesday. forward to speaking with you again soon." Q. Okay.

I want to take you to the FICMS' industry day,

which was the RFI day. A. Q. Okay. How many participants did you estimate participated

in the RFI process industry day? A. Q. Probably a hundred. Okay. Was this e-mail that you just read sent to 100

people? A. Q. No. Was it -MR. KIRSCH: THE COURT: Q. (BY MR. BANKS) Objection, lack of foundation. Sustained. Was this e-mail sent to you directly

from Mr. Witherspoon? A. Q. "This e-mail," you mean from me to Bill Witherspoon. No, I am sorry, let me rephrase. Did Bill

Witherspoon contact you directly and personally about the quote?


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A. Q.

Yes. And what were the conversations leading up to the

quote, if you can recall? A. Well, they. Again, DHS wanted to have a solution in

the event the FICMS Initiative did not continue to move forward. Mr. Witherspoon stated that if the DOJ doesn't

do anything; DHS had to do something. Q. Were you communicated to that that was part of an RFI

process? A. No. They requested a quote because they wanted to They were having budget

put it into their budget. discussions. Q. All right.

Thank you.

Do you know the terms of the

agreement?

We talked about the law enforcement

consultants that worked at IRP; correct? A. Q. Correct. Do you know the terms of the agreement that those law

enforcement consultants signed? A. Q. No, I don't personally. So you would have no idea what they agreed to be

paid; correct? A. Q. Correct. Now -- that the question has been asked. Why do you think DHS didn't purchase the software? MR. KIRSCH: Objection, relevance.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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THE COURT: Sustained. MR. BANKS:

Speculation.

Lay more foundation.

Your Honor, the Government opened the

door and asked him -THE COURT: You have to lay foundation, otherwise

it is pure speculation. MR. BANKS: Okay, Your Honor. I will come back to

(BY MR. BANKS)

You talked about -- I want to go back

a little bit on the term "customer." A. Q. A. Q. Right. You do have a sales background; is that correct? That's correct. And in your -- how do you define the term "customer,"

as relates to business? A. A customer could be an established customer who you

have a standing relationship with or agreement with, or it could be prospects. So when I use that term, it is not

necessarily specific to someone who is actively buying something. Q. If you are actually doing work on behalf of a

company, do you consider them a customer? A. Q. Yes. Thank you. Now, you also talked about the type --

some software of the CILC Basic solution that was


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delivered to some agencies, and you gave a general estimate about the price of those solutions, correct? A. Q. Correct. Was there any other program that was implemented at

IRP that was a part of that delivery? A. Q. A. Yes, there was. And what was that program? We had sort of a bundle product or bundle offering

whereby we would provide a Dell computer to the agency, as well. Q. And did these companies also receive a Dell computer

as a result of that purchase? A. Q. Yes. Now, was that program implemented between a

business-to-business relationship between Dell and IRP? MR. KIRSCH: THE COURT: Q. (BY MR. BANKS) Objection, relevance. Sustained. Now, regarding the white board, did

you create that white board? A. Q. No. And you have no idea what that white board -- who

created that white board? A. Q. That's correct. Do you happen to know Darrell Brantley's educational Are you aware of his educational background?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

background?

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A. Q. A. Q. A.

A little bit.

Not extensive.

What do you know about his background? I think he has a master's degree. In what area? Information technology. MR. BANKS: THE COURT: MR. WALKER: THE COURT: No further questions, Your Honor. Anybody else? No, Your Honor. All right. May this witness be

excused? MR. BANKS: THE COURT: are excused. Yes, Your Honor. Thank you very much, Mr. Thurman. You

We are going to go ahead and take a We

15-minute recess; a little longer than 15 minutes. will reconvene at 11:30. Court will be in recess.

(A break is taken from 11:12 a.m. to 11:30 a.m.) (The following is had in open court, outside the hearing and presence of the jury.) THE COURT: All right. bring in the jury. MR. WALKER: Your Honor, just a matter of We have Mr. Hillberry. You may be seated. Let's go ahead, any matters before we

scheduling, for your information. We are ready to call him now.

We anticipate that would

probably be potentially only 15 minutes, direct for us.


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We're prepared to call John Smith -- Agent Smith, I am sorry. But we would offer we could call him Monday, and

just at your discretion we could recess for the day after Mr. Hillberry. THE COURT: We'll proceed with Mr. Smith today, and

get and as much of that done, since we will be recessing tomorrow. MR. WALKER: Your Honor, we expect that to be

relatively short, as well. THE COURT: I did want to mention, we did receive a

call on behalf of Robert Gianelli, my judicial assistant did, from Jim Conroy, who is counsel, I guess, for the NYPD -- New York City Police Department. He says

Mr. Gianelli is in Florida on business, and is willing to do whatever the Court wishes, and needs some guidance. indicated they had called you, or the last time he spoke with Mr. Walker was Tuesday -- this past Tuesday, and that you have not returned any telephone messages. MR. WALKER: Your Honor, I called Mr. Conroy back. I will call him on He

I have not been able to contact him. break and leave him a message. THE COURT: that.

You just need to call him and discuss

Mr. Vilfer's attorney also called in, and I indicated, through my JA, that I would have you inform him
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that Monday would be sufficient. MR. WALKER: Yes, Your Honor. We have also

received confirmation from the Department of Homeland Security that Mr. Witherspoon and Mr. Cooper will be here on Monday. THE COURT: MR. KIRSCH: All right. Very good.

Your Honor, I don't think that

information is accurate about the Department of Homeland Security. break. It is different than what we got over the

I know that there have been discussions between

someone for the defense and the Department of Homeland Security. But it is, at least not our understanding, that

they will definitely be here -- that both of them will definitely be here on Monday. THE COURT: All right. So you need to make sure

you get that clarified, and make arrangements, however we do it, to get the witnesses here. MR. WALKER: THE COURT: Yes, Your Honor. Nothing further? Let's go ahead and

bring in the jury so we can get the next witness done and let them go off to lunch, and let you go off to lunch. Ms. Seeman. (The following is had in open court, in the hearing and presence of the jury.) THE COURT: You may be seated.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Defense may call their next witness. MR. BANKS: Defense calls Gary Hillberry, Your

COURTROOM DEPUTY:

Your attention, please.

GARY HILLBERRY having been first duly sworn, testified as follows: COURTROOM DEPUTY: Please be seated.

Please state your name, and spell your first and last names for the record. THE WITNESS: H-I-L-L-B-E-R-R-Y. THE COURT: Mr. Banks, you may proceed. DIRECT EXAMINATION BY MR. BANKS: Q. Mr. Hillberry, could you start by giving us a little Gary Lee Hillberry. G-A-R-Y

bit, as far as your background and job description? A. I was with the United States Customs Service for 31 I retired

years as a Criminal Investigator/Special Agent. from that agency in January 2001.

Over the last 10 years,

I have been employed as a consultant working with the Department of Justice, U.S. Department of State, and the United States Treasury Department, as well as various private companies like IRP. Q. A. Now, Mr. Hillberry, you were subpoenaed here today? I was.
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Q.

Did you have any -- did you have any discussions with

the Government regarding your testimony today? A. Q. No. But you did contact the Government related to the

subpoena; correct? A. Yes, I did. MR. KIRSCH: THE COURT: Q. (BY MR. BANKS) Objection, relevance, Your Honor. Overruled. I want to -- after your retirement,

did you have the opportunity to contract with a company called IRP Solutions? A. Q. Yes, I did. And what was the nature of the work you were

contracted to do with IRP? A. I was contracted as an expert on U.S. Border and U.S.

Customs matters, to assist the IRP company in developing a software package on case management for investigative law enforcement agencies. Q. Okay. And what type of work or deliverables -- work

product did you provide during the course of your work for IRP? A. Basically, my knowledge and background as an expert I participated in

in the area of U.S. border activities.

panel discussions in your office, where we reviewed a screen of some program that you had developed.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

And you

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were asking for our input -- my input as to the correct terminology, how the activities of the investigative case agency operate, to assist you in developing this software program. Q. Thank you. Did you work with any other law

enforcement consultants? A. Q. A. Q. A. Epke. Q. Do you recall -- do you recall -MR. BANKS: THE COURT: Q. (BY MR. BANKS) May I have one moment, Your Honor? You may. Do you recall what the purpose was On this project? Yes. Yes, I did. And who were they? Two gentlemen from the FBI; Mr. Fuselier and John

that IRP brought both contractors from the FBI and Customs? A. I assumed for the same reason. I was first contacted

by Mr. Epke, and told about an opportunity to work on this project with you. And I did contact Mr. Banks at IRP. I agreed to the We

had a discussion about the contract.

terms, after speaking again with Mr. Epke, to find out that the terms that I was being offered were similar to the terms being offered to the two other gentlemen.
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Q.

Can you expound on what terms you agreed to work

under at IRP? A. I was offered a specific hourly salary that I would

be on a part-time, as-needed basis, to come to the office or work on projects at my home that were devised or developed from our discussions at the office, and that I would subsequently be paid -- I would not be paid until either IRP found a funding source or got their first contract. contract. Q. A. Q. Either or, correct? Either or. Do you recall being contacted by Special Agent John Those were the terms, I believe, of the

Smith as related to this case? A. I don't remember the names. If you are referring to

an FBI agent, yes, I did speak with an FBI agent. Q. A. Q. And did you provide information to the FBI? Yes, I did. Do you recall the nature or what information you

provided to the FBI regarding IRP Solutions? A. Basically, what I have just told you about my

contract responsibility, and the contract agreement for payment. That's about the total involvement that I had

with IRP over a 6-month period. Q. Now, do you recall a time when you had not yet been
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paid by IRP Solutions? A. Q. Yes, I do. Do you recall a meeting that you had with

Mr. Fuselier and Mr. Epke regarding that? A. Since Mr. Fuselier, Epke and I were from the Denver

area, we would drive together to your office per our assigned dates and meeting dates. fact we were not being paid. Q. A. Okay. And we would bring that up with you, Mr. Banks, on a We would discuss the

regular basis after the first few days of work that was being provided. And if you are referring to a specific

meeting, I don't necessarily recall a specific meeting. But I do recall we did speak to you about it on a number of occasions. Q. Do you recall why you continued to work after you

were dissatisfied with regards to your payment? A. Because you would always tell us that you were

honorable men, and that you would make good on the required compensation to us and future work. Q. Did you have any discussions about the viability of

the product as a reason for staying? A. Initially, when I first began working for IRP, I

listened to your presentations, and saw your work product at the time. And if, in fact, it could be developed, I
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thought it could be a viable program for law enforcement agencies. Q. Now, at any time did you have a meeting with Mr. Epke

and Mr. Fuselier that you would agree to stay on because you thought we would gain a contract, or IRP would gain a contract? A. Yeah. You would tell us you were close to a contract I believe even

with the NYPD and other federal agencies. Philadelphia law enforcement agencies.

And that was

incentive to us to continue in the program. Q. Did you have a discussion specifically,

Mr. Hillberry, about your belief that the software was good enough to gain state and federal contracts? A. I don't remember having a specific discussion with That's

them about that, but it's possible that we did.

why I stuck -- stayed, because I thought that, one, I've already invested in this with no income, no payment. I

might as well stay and ride it out and see if I can get paid. Quite frankly, my decision was as soon as I got my

first paycheck, I was going to terminate my contract with IRP. Q. A. Are you aware of the raid that took place on IRP? Not really. Only the fact that there was going to be And that was all

law enforcement action involving IRP.

the extent of what I knew and know to this day.


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Q.

Would you expect IRP to continue to conduct business

under that umbrella? MR. KIRSCH: foundation. THE COURT: MR. BANKS: Sustained. Your Honor, I would like to refresh Objection, relevance. Lack of

Mr. Hillberry's recollection of an Affidavit he signed concerning conversations between him and Mr. Fuselier and Mr. Epke. THE COURT: this point. Well, there is nothing to refresh as of If he

You need to ask him a question.

doesn't remember, then you can refresh. Q. (BY MR. BANKS) Do you recall specifically a meeting

with John Epke and Dwayne Fuselier where it was your position that IRP Solutions had a viable law enforcement product? MR. KIRSCH: Your Honor, object to Mr. Banks

reading from the document. THE COURT: Sustained. Ask him if he recalls a I think he didn't

specific -- I think you already did. know.

But lay some foundation without reading from the

document. MR. BANKS: Q. (BY MR. BANKS) Very well, Your Honor. Do you recall a meeting with Epke and

Fuselier related to the viability of IRP's product and the


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ability, with that product, to gain contracts at the state and federal level? A. I don't recall a specific meeting. However, we did

talk about this on many occasions when we were driving from Denver down to the Springs. When we were in our

office and you were not available or you had something else, we would talk about it. We approached you about

this, about the program, and why we were staying on and when we would be paid. But I may have said something -- you, apparently, are referring to something I may have stated or written. I don't recall a specific date. But we did talk about it

on a number of occasions, and we did think you had a viable product. But I never saw the end product. I never

saw a full presentation of the product. Q. Would you agree that you were there to support the

development of that product at the federal level? A. That was what my contract was, was to provide

information to allow you to get to that point. Q. Did you have any conversations with anybody else

outside of Mr. Epke and Mr. Fuselier related to IRP's product? MR. KIRSCH: THE COURT: THE WITNESS: Objection, relevance and hearsay. Overruled. The FBI, when they interviewed me.
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And I believe there might have been someone several years ago who contacted me as a representative of the court saying they were collecting information to assist in preparation for the trial that IRP was proceeding on. But

I can't recall who that person was, but it was, I believe, a representative of the court at that time. Q. (BY MR. BANKS) So I am going to ask, just for Did you

clarification, I will ask this one more time.

believe IRP had a viable product capable of acquiring contracts at the state and federal level? belief? A. Q. A. When I initially started with IRP, yes. And when did you start with IRP? It was either -- I had no time to refresh myself on But I Was that your

the files I maintained, they are in storage.

believe it was November or December 2003, sometime into the spring of 2004. involved. Q. Do you recall when the date of your Affidavit was I believe that was the period I was

where you may have communicated to the FBI about IRP's product viability? A. The FBI interviewed me months after we were basically

separated from any further involvement with IRP because of the investigation involving IRP. met with them. The FBI contacted me. I

They asked me to write down what I


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believed I was doing there. them. MR. BANKS:

And I did, and provided it to

Your Honor, I would like at this point

to provide greater recollection to Mr. Hillberry regarding his statements. THE COURT: Ask him specific questions. If he

doesn't understand, then you can refresh recollection. MR. BANKS: THE COURT: remember anything. MR. BANKS: Q. (BY MR. BANKS) Okay. Do you remember -- again, I will put Do you remember, again, your He has already. But I haven't heard him say he didn't

a different term in here.

conversation with Dwayne Fuselier and Mr. Epke that IRP and their product had the ability to gain federal and state contracts? A. I don't remember the exact context of that

conversation, but it probably occurred. Q. You don't remember what you said to the FBI in your

Affidavit? A. No, I don't. MR. BANKS: recollection. THE COURT: You may, although I think you asked him But you may have it marked Your Honor, permission to refresh his

and he answered this question.

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for identification. MR. BANKS: MR. KIRSCH: Do you have a copy of this, Mr. Kirsch? I do, thank you, Mr. Banks. I have marked this as

COURTROOM DEPUTY: Defendants' Exhibit D405. THE COURT: Okay.

That has been marked for

identification as D405. Q. (BY MR. BANKS) Mr. Hillberry, if you could go to the

second page, third paragraph, and privately refresh your recollection. A. Q. Yes, sir. Now, would you agree that you stayed on with IRP

Solutions because they had software that was viable enough to acquire state and federal contracts, and that was your reason for continuing, correct? A. Well, I can take from my own comment here, which is

in an Affidavit I signed in January of '05 to the FBI, that we had many private discussions, which I state, and that I believed you had a viable program, and it was moving forward. I agreed to that. But I stayed on, in

addition to thinking you had a product, to get paid, because you kept telling us, as the paragraph preceding that states, that you are an honorable man. going to make good on payment to us. That you are

So that was another

incentive for me to stay, because I had money invested


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that I did not get paid for. Q. Did you not sign a contract to get paid upon the sale

of the software? A. Correct. You kept telling us you had one with the

NYPD imminently, and possibly Philadelphia and other federal agencies. Q. So I believed that.

And were you aware of meetings that we were engaged

in at both Homeland Security and the New York City Police Department? A. Q. A. Only to what you told us, yes. Okay. I had no personal knowledge that there were such

meetings. Q. So you had no reason to doubt at the time that we

were not engaged in significant meetings with those agencies? A. I was starting to lose doubt in that. I took you at Ultimately, I And about at

your word that you were an honorable man.

chose to believe this was not going to work.

the same time is when the FBI apparently conducted a search of your office. Q. You would agree that there is nothing predictable

about business; correct? A. Q. I'm not a businessman, so I really can't say. Predictable about life?
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A. Q.

I agree with that. Now, you stopped -- I have brief question. You

stopped short at moving forward. forward. A. Q. Okay.

It appeared to be moving

What did IRP agree to move forward, in your opinion,

in accordance with your Affidavit? A. When we would meet with you and we would confront you

about not being paid, you would tell us about your final days and final closings with the NYPD, which would result in a contract. Q. Excuse me, Mr. Hillberry I am relating specifically

to your sworn Affidavit to the FBI. A. Yes. I thought I answered that, but -Your Honor, can I move to have this

MR. BANKS:

document deemed admissible? THE COURT: Q. (BY MR. BANKS) THE COURT: No, you may not. So, does your statement read -I should tell you, you may move its

admission, but I deny it. MR. KIRSCH: Your Honor, I object to Mr. Banks

reading from the document, however. MR. BANKS: May I have Mr. Hillberry read the

language from the Affidavit? THE COURT: Ask him a question.


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

If he gives you an

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answer -- no, it is not admitted. document.

You can't read from the

That is why he is here, for you to ask him the

questions you want to ask him, and have him testify today. Q. (BY MR. BANKS) Did you agree, based on your

testimony -- or your Affidavit to the FBI, that IRP was moving forward to acquire state and federal contracts? A. That's in my Affidavit, yes, it is. MR. BANKS: questions. THE COURT: MR. WALKER: THE COURT: All right. Anybody else? Thank you. I have no further

Yes, Your Honor. All right. Mr. Walker.

DIRECT EXAMINATION BY MR. WALKER: Q. Mr. Hillberry, you stated earlier that in the course

of providing your expertise -- your expertise to IRP Solutions, you also viewed the product that was being built by the company; is that correct? A. Q. Yes. Do you recall on how many occasions you viewed the

product, itself? A. Q. Three or four. And in those viewings that you had, did you see

advancement in the product in reference to the recommendations that you were making about the product?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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A.

I did.

But when we reviewed the product, after a

previous meeting and made recommendations, the language from the drop downs that were being discussed would be in there, with some other language that we may not -- at least I did not necessarily agree with, but discussed that to kind of clean that up. But what I sensed out of this is that from meeting to meeting -- and I probably only attended 10 sessions at your office. moving much. that's -Q. Let me stop you there. You would agree that But over those sessions, it really wasn't You were developing a few screens, but

recommendations that you made, you did see in the product; is that right? A. Q. Yes. And you also stated that you believed that IRP

Solutions had a viable product for state, local and federal; is that correct? MR. KIRSCH: answered. THE COURT: Q. Sustained. Did you believe IRP had a viable Objection, Your Honor, asked and

(BY MR. WALKER)

product? MR. KIRSCH: THE COURT: Objection. Sustained. We covered this many times,

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Mr. Walker. Q. (BY MR. WALKER) And given those statements, would

you believe that an FBI investigation would hamper IRP's business prospects? MR. KIRSCH: THE COURT: Sustained. MR. WALKER: Your Honor. THE COURT: MR. BANKS: THE COURT: MR. KIRSCH: Anybody else? No, Your Honor. All right. Cross? No further questions for the witness, Objection, relevance. Speculation, lack of foundation.

Thank you, Your Honor. CROSS-EXAMINATION

BY MR. KIRSCH: Q. Mr. Hillberry, it sounded like you hadn't finished

your answer about the movement that you saw in the software from meeting to meeting. explain what you saw there, please. A. I didn't feel it was moving quickly enough to get to Can you go ahead and

ultimately be presented in the near future to a law enforcement agency. I never did see a full product. We

were working in pieces each time I was there.

And they

would talk with us, and we would try to give them our guidance as to the right language and how many spaces are
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needed for case numbers, and that would occur. see that in the next session. have moved a lot quicker. Q. All right.

We would

But I thought we should

Now, you said, I think, several times, in

fact, that you believed, at least at one point, that IRP had a viable product? A. Q. Early on, yes, sir, I did. Okay. Now, when you say "early on," did that belief

change at some point? A. Q. A. Yes. When was that? When I never saw the product moving forward or seeing I never saw

the full product that was being discussed. that. Q. A. And when is it that you were there?

My best recollection is like November, December of And then I was

2003, through probably March, April, 2004.

notified that the FBI had served a warrant at their office. Q. And so it was -- am I right that it was in the second

half, at least, of your time at IRP, that your belief about the viability of their product changed? A. Q. That's correct. Now, you said, I think, that you were a custom's

agent for over 30 years; is that right?


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A. Q. time? A. Q. A.

Thirty-one. I take it you conducted some interviews during that

Yes, I have. How many interviews do you think you have conducted? Thousands. MR. BANKS: THE COURT: Objection, Your Honor, relevance. Overruled. Was one of the things that you tried

Q.

(BY MR. KIRSCH)

to do over the course of those interviews, in your career, was determine whether or not people were telling you the truth? A. Q. Yes, sir. And when Mr. Banks told you that repeatedly; told you

that they were close to signing a contract with the New York Police Department or the Philadelphia Police Department or a federal agency, did you believe him? A. Q. Initially, yes, I did. Okay. And the basis for your belief initially that

they had a viable product, what was that basis? A. Because of our discussions; what their approach was

to be, to develop a virtual case management product. Having been in management in my agency, I knew that would be something of interest to an agency. move forward.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

But I never saw it

1897

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Q.

So, again, the basis for your belief that it was a

viable product was what Mr. Banks told you? A. That's correct. MR. KIRSCH: THE COURT: MR. BANKS: Thank you, sir. Redirect? Yes, Your Honor. REDIRECT EXAMINATION BY MR. BANKS: Q. You said a minute ago, Mr. Hillberry, you were not

aware of meetings that IRP representatives had with the Department of Homeland Security; is that correct? A. Q. That's correct. So you would not have known what requirements, if

any, the company was doing on behalf of the Department of Homeland Security; is that correct? A. I don't recall ever hearing a discussion about

Homeland Security. Q. You said a moment ago that you were aware of -- that

Mr. Banks told you about meetings they were having with Homeland Security and the NYPD; correct? A. No. If I said Homeland Security, I was mistaken. It

was the NYPD, I believe Philadelphia, and other federal agencies. Q. But I didn't know the name of the agencies.

What purpose were you there if it was not for federal

purposes?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

1898

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A.

I was there to provide expertise and help you devise

the software package that you were developing and to give the right language the law enforcement people speak. And

then with the type of affidavits and the numbers and the actual case names and numbers of things we do in our daily work. Q. A. Q. You were a federal agent; correct? That's correct, as were the other two gentlemen. All right. Thank you. Can you testify conclusively

to what Mr. Banks believed? A. Q. I don't understand the question. You don't know what Mr. Banks believed in his own

mind as it related to closing business with those agencies; correct? A. Q. A. Q. No, I don't. Are you a technology person? No, I'm not. Do you know what it takes to implement software code

for a law enforcement product of this nature? A. Q. No, I don't. Do you know the time element involved in delivering

this type of capability or preparing this type of capability for presentation? A. Q. No, I don't. And, again, you were unaware of what the requirements
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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were that DHS provided to IRP; correct? MR. KIRSCH: THE COURT: Q. Objection, asked and answered. Sustained. Now, you talked about -- you started

(BY MR. KIRSCH)

with IRP sometime in 2004; correct -- Early 2004? A. I believe I said November, December 2003 through

spring, April of 2004. Q. Okay. So if your independent contractor agreement

was January of 2004, you wouldn't have any reason to dispute that, would you? A. No, I don't. Again, as I mentioned, I have not had a

chance to review any files on this prior to arriving today. Q. They are in storage. You would agree that you submitted your

Okay.

Affidavit regarding IRP Solutions on 1/18/05, correct? MR. KIRSCH: THE COURT: MR. BANKS: THE COURT: MR. WALKER: Objection, beyond the scope of cross. Sustained. No further questions, Your Honor. Anybody else? Yes, Your Honor. REDIRECT EXAMINATION BY MR. WALKER: Q. Mr. Hillberry, you said that you had ended your

engagement with IRP Solutions about summer of 2004; is that right?


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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A. Q.

Spring. Spring of 2004. And so given that, you wouldn't have

had any opportunity to view the software past that day, would you? A. Q. That's correct. And you would have no knowledge of any improvements

made on the federal product after that date, would you? A. That's correct. MR. WALKER: THE COURT: excused? MR. BANKS: THE COURT: are excused. Parties please approach. (A bench conference is had, and the following is had outside the hearing of the jury.) THE COURT: You all said your examination of Agent Yes, Your Honor. Thank you very much, Mr. Hillberry, you No further questions, Your Honor. All right. May this witness be

Smith is going to be relatively short? MR. BANKS: THE COURT: Very possible. Because what I don't want to do is send

the jury away, have them come back, then 15 minutes after they are back say you can go home. MR. BANKS: THE COURT: So I just --

It should be brief. Should we keep them here, call him, and


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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I can let them go for the rest of the day? MR. BANKS: them home. Your Honor, it is my suggestion to send

We don't know how involved -I am not sending them home. So we do

THE COURT:

it now or we go through until 1:00, then I let them go home, or, take lunch and come back. MR. WALKER: THE COURT: Can we have a moment, Your Honor? I don't have a problem with recessing We can come

now, but we have to do his testimony today. back. MR. BANKS:

I don't want to do it, either, Your

Honor, at this point. THE COURT: Well, if you think it is going to take

longer than half an hour, I don't want to cut you short, so I think we should recess for lunch. MR. BANKS: THE COURT: Minimum of half hour. Then let's recess for lunch.

(The following is had in the hearing of the jury.) THE COURT: All right. Ladies and gentlemen, we It is

are going to go ahead and recess for lunch now. 12:09. If we can reconvene at 1:15. COURTROOM DEPUTY:

Your Honor, we have a 1 o'clock

telephone status conference. THE COURT: That won't take long, though. Let's

make it 1:30, because I don't want to keep you waiting


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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unnecessarily. long.

But I don't think that will take very

We will reconvene at 1:30 for the next witness. So, remember not to discuss this with anybody else.

Go out, enjoy lunch, and be back ready to go.

Hopefully

we won't keep you waiting, and we will get going at 1:30. Court will be in recess. The jury may leave. The parties remain. I do have

one matter to discuss with you. (The following is had in open court, outside the hearing and presence of the jury.) THE COURT: All right. You may be seated. I

wanted to make sure I know -- I will forget if I wait until later on this afternoon. I suspect we will be With that in mind, I

wrapping this up sometime next week.

need to get the final jury instructions. So, I wanted to let you know, that it is my intention that the preliminary instructions that I gave, with only perhaps minor changes on some of the things, no other substantive changes, but including the instruction on the Indictment, the instruction on jury deliberations and the instruction on communication with the Court, that is what I would give as the final jury instructions right now. You all need to get to me any additional instructions that you think are merited based on what
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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happened here in the trial, I would like to have those, if we could, by noon on Sunday, so that I can review those and we can be ready to go. I can work on those on Sunday

afternoon, and make sure we will have as close to a final version so we can have a charging conference with respect to those as soon as the parties close. MR. WALKER: Yes, Your Honor. Would you like to

specify a specific time as a deadline? THE COURT: didn't -MR. WALKER: THE COURT: afternoon Sunday. I am sorry, I was typing. Noon Sunday. That will give me the Noon. I thought I said noon. If I

If you can submit those the same way. Just send

Those don't need to be submitted in CM-ECF.

them to chambers with a copy to opposing counsel, and then the Government to the parties. But that way we will be

ready to go, and I can get out, hopefully, a set to you of the final instructions, and then we can have a charging conference as soon as the defense rests. All right. I just didn't want to forget it. All right. If I

don't do it now, I will forget about it.

Anything else that needs to be brought to my attention? MR. BANKS: THE COURT: No, Your Honor. All right. See you back at 1:30.

(Lunch break is taken from 12:12 p.m. to 1:36 p.m.)


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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THE COURT:

You may be seated.

Are we ready to bring the jury in? MR. KIRSCH: MR. BANKS: THE COURT: the jury. (The following is had in open court, in the hearing and presence of the jury.) THE COURT: You may be seated. Yes, Your Honor. Yes. All right. Ms. Seeman, please bring in

Defendants may call their next witness. MR. BANKS: Agent John Smith. COURTROOM DEPUTY: Your attention, please. Your Honor, the defendants call Special

SPECIAL AGENT JOHN SMITH having been first duly sworn, testified as follows: COURTROOM DEPUTY: Please be seated.

Please state your name, and spell your first and last names for the record. THE WITNESS: S-M-I-T-H. THE COURT: MR. BANKS: You may proceed. Thank you, Your Honor. DIRECT EXAMINATION BY MR. BANKS: Q. I guess for the Court, can you tell the jury what you
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

It's John Smith.

J-O-H-N.

Last name

1905

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do for a living. A. Q. Yes. I am a Special Agent of the FBI.

And what does your role as a Special Agent -- what

are your job duties as a Special Agent? A. As a Special Agent, I investigate crimes.

Investigate crimes. Q. Did you -- now, during -- a standard part of your job

is to conduct search warrants; execute search warrants? A. Q. Yes, that's part of our job. And around February of 2005, February 9, 2005, did

you execute a search warrant on a company called IRP Solutions? A. Q. A. Yes, we did. And where was that search warrant conducted? The search warrant was in Colorado Springs at the

offices of IRP, Leading Team and DKH Enterprises. Q. And as -- what was your role in the case associated

with IRP? A. At the time of the search warrant, I was the case

agent for that case. Q. case? A. I was the case agent from when I started the case in And how long did you remain the case agent for that

2004, until I moved in July -- I am sorry, end of June of 2007.


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q.

So you were replaced by another case agent, or were

you still considered the case agent for this matter? A. When I moved, there was a new case agent assigned

from Colorado Springs. Q. A. And do you know who that is? I'm not -- I believe -- there were a couple case So, yes, I know the names of those.

agents after me. Q.

And did -- after that, did you continue to provide

some type of support on -- with regards to the IRP case? A. Q. Yes, I did. Now, can you describe a little bit what the process

is to acquire a search warrant? A. The process to acquire a search warrant is you have

to write an affidavit that supports why you would want to search a business. And that affidavit is presented to a I brought it to this

United States Magistrate Judge here.

courthouse, and it is signed by a judge. Q. And what type of information do you typically put in

a search warrant affidavit? MS. HAZRA: I'm going to object on relevance

grounds, Your Honor. THE COURT: Approach.

(A bench conference is had, and the following is had outside the hearing of the jury.) MS. HAZRA: He is asking generally about search
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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warrants.

He is asking generally about search warrants,

and he is not directing it to any particular case in general, either. MR. BANKS: THE COURT: Related to IRP, Your Honor. What is the relevance of this whole

line of questioning? MR. BANKS: We are going into the search warrant

and execution and things that happened on the day of the search warrant. THE COURT: warrant? MR. BANKS: Not challenge the search warrant, but Are you trying to challenge the search

the Government's activities and his creation of the search warrant and information that he will actually provide to the judge. THE COURT: here. But that's not something that gets done

That is something that you do as part of your

challenge to the search, itself. MR. BANKS: Honor. THE COURT: I need to know the relevance of any of We are not challenging the search, Your

that information to the defense. MR. BANKS: He's contacted members of -- not only

Steven Cooper, with regards to conducting the search warrant, but actually Melissa McRae and other people who
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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he contacted, he provided and utilized their testimony with regards to the search warrant. THE COURT: your defense? MR. BANKS: The Government's motivations in this How is that relevant to the issues to

particular case is going to be brought clear as we question Mr. Smith, and the reasons that they actually started investigating this case. MS. HAZRA: Your Honor, it seems to me defendant is

making some sort of Franks argument -- that is what I think -- in challenging the search. motion. That is a pretrial

That is not litigated in front of the jury. THE COURT: Franks is a case. But if you wanted to

challenge the search -- you are saying you don't want to challenge that, but that is something that needs to be done pretrial. In this particular case, I need to find --

I need to understand better what the relevance is of the search warrant and what's in the search warrant to your defense. You admitted, without objection, all of the fruits of that search that were offered by the Government. am trying to understand why this is relevant. MR. BANKS: wrong. Information -- maybe I'm going about it So I

Information Mr. Smith provided as far as the

language he provided in the search warrant is inconsistent


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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with testimony he received from individuals to do that search warrant. THE COURT: MR. BANKS: How do you know that? Because I see the inconsistency. That

is what I'm trying to lay foundation for. THE COURT: I'm not sure -- if you are trying to

say the information contained in the search warrant affidavit -MR. BANKS: I will ask him questions why he did

certain things a certain way, Your Honor. THE COURT: We need to get to that. But whether or

not -- it sounds to me like you are trying to challenge the search warrant. MR. BANKS: THE COURT: Not at all. You need to move on and ask him direct

questions, but not into the validity of the search warrant, itself, because that is something that needed to be raised before trial. MS. HAZRA: Seems they are calling Special Agent

Smith purely to impeach him, which is improper under 608. THE COURT: So ask him substantive questions, then But if the sole question

the Government doesn't object.

is to call him to impeach him, that should have been done on cross-examination. MR. BANKS: This is all new grounds.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

1910

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q.

THE COURT:

Remember, you have to ask him direct

questions, but we will not get into the substance of the search warrant. MR. BANKS: Very well, Your Honor.

(The following is had in the hearing of the jury.) (BY MR. BANKS) Mr. Smith, during your investigation,

did you -- how did you -- did you actually contact staffing companies? A. Q. Yes, I did. And how did you go about contacting those staffing

companies? A. I had received information from the search, and that

staffing companies had lost money to DKH, IRP and Leading Team. So I researched the name of that staffing company

and got their phone number and called them to figure out what the relationship was with those three companies. Q. Okay. And during the course of those -- that

contact, did you request information? A. Q. Yes, I did. And what type of information did you request from the

staffing companies? A. I requested all of the information that they had

related to their relationships with either IRP, DKH or Leading Team, to include things such as invoices, time cards and things about the business relationship.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q.

Also, I want to ask you a question, are you aware of

a newspaper article that was generated from the raid? A. There was a newspaper article in the Colorado Springs

newspaper, yes. Q. A. Q. Did you contribute to that article? No, I did not. Did you at any time use that article in your contact

with staffing companies? A. Q. Yes, I did. For what purpose -- now, let me back up there. You said a minute ago that you wanted to -- you contacted staffing companies in an effort for them to provide you information on their dealings with IRP, DKH, et cetera, as related to the matters in this case; correct? A. Yes. I called them to find out about their

relationship with those three companies. Q. So if you sent the newspaper -- did you send the

newspaper article, then, as part of your transmissions to them to collect information? A. Yeah. I would call the people first and try to

determine if there was a relationship with one of the three companies. And then after I determined -- and we

talked about how I had got their name from the search warrant and had documents related to their company.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

Yes,

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sometimes I would send the newspaper article to them if they asked me. Q. A. If they asked you? Let me rephrase that. I told them a search warrant

had occurred, that is how I got the documents with their names on it. And, then, to follow up with that, I would

send them the newspaper article. Q. And what was the purpose of sending the newspaper

article? A. The purpose was just to -- we had talked about it on

the phone, and I told them I got their documents during a search warrant of those offices, and that I had an article. And they were happy to -- instead of looking it

up on the internet, I had it, and I could send it to them, instead of -- saving them time. Q. You didn't tell them just what you were investigating

about, you sent them a newspaper article; correct? A. Yes. I called them and told them that I had seized

documents related to their company during the search warrant. And we talked a little bit to see if they had a And then to

relationship with DKH, IRP or Leading Team.

follow up on that phone call, sometimes I would send the newspaper article. Q. Did you send the newspaper article to a gentleman by

the name of Greg Goldberg, as well, during the course of


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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your investigation? A. Q. I don't remember sending it to Greg Goldberg. Did you have contact with Mr. Goldberg with regard to

this investigation? A. Q. I don't remember having contact with him. You remember no contact with Greg Goldberg of Holland

& Hart? A. That's correct. MR. BANKS: THE COURT: Q. (BY MR. BANKS) May I have a moment, Your Honor? You may. Would you doubt the fact that you

actually sent -- you doubt that you actually sent the newspaper article to Greg Goldberg; correct? A. I just said, I don't remember contacting Greg

Goldberg at this time. Q. In the entire -- do you recall a letter that was sent

to the Government from Mr. Goldberg as information that related to some of the staffing companies he had been associated with? A. Yes. I remember Greg Goldberg works -- he is a

lawyer at a firm, and his firm -- he wrote a letter and sent it to the Government. Q. A. And you are aware of the contents of that letter? Yes. MR. BANKS: Your Honor, I would like to provide
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Mr. Smith with the FBI fax sheet sent to Greg Goldberg to refresh his recollection. THE COURT: MR. BANKS: With respect to what? Mr. Smith just testified he never sent

anything to Mr. Goldberg. THE COURT: MS. HAZRA: MR. BANKS: MS. HAZRA: Have it marked. May I see it? You can keep that. Okay. Thank you. I have marked this as

COURTROOM DEPUTY: Defendants' Exhibit D406. Q. (BY MR. BANKS)

Let me ask you this.

Did

Mr. Goldberg have some affiliation with some of these staffing companies? A. I remember Mr. Goldberg was an attorney at a firm in And the staffing companies had reached out -- he

Denver.

had accumulated data from staffing companies that had lost money to DKH, IRP and Leading Team. He compiled that

data, and also the statements from the staffing companies that he had received, and sent that to the Government. And that's how this case started, because we became aware that those companies had been contacting staffing companies and not paying their bills. data and sent it to the Government. aware of Mr. Goldberg.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

And he compiled the

That is how I became

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Q.

So what purpose -- if he had knowledge of -- and you

are saying he was not participating in his attorney role, as an agent in this case or a member of the Government's case; correct? A. firm. Q. A. No, that's not correct. He was an attorney, private

He wasn't with the United States Government. So what purpose did you send him the article? I faxed him this newspaper article. He must have

reached out to me about the case at some point, and I can't tell him about ongoing investigations, but I sent him an article that was public in the newspaper. Q. Are you sure you didn't send the article to him and

staffing companies to frame your response from the staffing companies? A. Q. I absolutely did not do that. Wouldn't it have been simpler to say, send me

information regarding your dealings with IRP? A. Q. I told them to send me information, yes. Did you send this article to any businesses that IRP

was doing business with during the course of your investigation? MS. HAZRA: Honor. THE COURT: Q. (BY MR. BANKS) Overbroad. Did you send this article to IBM?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

Object to the relevance of this, Your

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A. Q. A.

I don't remember sending it to IBM. Do you remember sending it to any company? Yes. I sent it to staffing companies that I obtained

data during the search warrant that I thought could have had relationships with DKH, IRP or Leading Team. And the

purpose of sending it to them was to see if they had lost money to those companies and to determine their relationship. Q. What were the contents of that article? MS. HAZRA: THE COURT: MR. BANKS: article to -THE COURT: it. But they didn't issue it. They sent Objection, Your Honor, it's hearsay. Mr. Banks? Your Honor, if the Government issued an

The objection is hearsay. MR. BANKS: Okay. Did you have a chance to read the

Q.

(BY MR. BANKS)

article? A. Q. A. Yes. And what type of information did the article contain? I haven't read the article since it came out in the But it contained

newspaper in February of 2005.

information about the business activities of DKH, IRP and Leading Team. Q. Do you recall the article saying that the companies
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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were doing -- it was found the companies did some development -- software development? A. Q. I haven't read the article since February of 2005. Would you like to read the article now to refresh

your recollection? A. Q. Sure. It should be there in front of you in that defense

exhibit we just gave you. A. Q. Okay. Now, at the bottom of that article, would you agree

it says that "investigators found evidence that there was some software development going on"? A. It's cut off here at the bottom, but it says -- it

says something similar to that, yes. Q. Didn't you already know that the company was

developing software? A. At the time of the search warrant, it was unclear

what the exact business activities of DKH, IRP and Leading Team were. And people we talked to said that they were But

told that those companies made some kind of software.

it was uncertain on the status of the software and how far along it was. So I didn't really know how far along or

what exactly they were doing. Q. Well, prior to executing the raid, didn't you have an

opportunity to speak to members of the Department of


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Homeland Security; specifically Steven Cooper? A. Q. Yes. Did you also have an opportunity to interview an FBI

agent from the CIO office of the Department of Justice by the name of Melissa McRae? A. Q. Yes, I did. And what was Ms. McRae's -- what was the nature -- do

you know when you interviewed her? A. I don't know the exact date. I don't know the exact

date, no. Q. Okay. What was -- what type of information did she

provide you about the company? MS. HAZRA: Your Honor. THE COURT: Q. (BY MR. BANKS) Sustained. What did you report in your FBI What did you report as it I am going to object as to hearsay,

report of February 3, 2005? relates to Melissa McRae? MS. HAZRA: THE COURT:

Objection, Your Honor, hearsay. Mr. Banks, why is that not hearsay? It

is talking about her statement, not a statement he made, correct? MR. BANKS: report. THE COURT: About what she said?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

This is what the FBI annotated in their

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MR. BANKS: THE COURT:

About what she said. You have to ask her what she said, not

(BY MR. BANKS) THE COURT:

What was communicated to you? It's -- unless you have an exception to

hearsay, a statement by someone who is not here in court is hearsay. MR. BANKS: THE COURT: (BY MR. BANKS) May I have a moment, Your Honor? You may. During your drafting of your Search

Warrant Affidavit, did you include information received from Melissa McRae as a part of your Search Warrant Affidavit? MS. HAZRA: THE COURT: (BY MR. BANKS) Objection, Your Honor, relevance. Discuss the relevance of that. During the course of your

investigation, did you speak to Melissa McRae? A. Q. A. Yes, I did. And who is Melissa McRae? She's an FBI agent. At the time she was a

Supervisory Special Agent at FBI headquarters. Q. Are you aware if she attended any software

presentations or demonstrations of IRP? A. Q. Yes, I am. Do you know when she attended that presentation or
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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demonstration? A. Q. A. Q. Sometime in 2004, in the fall. Prior to the raid; correct? Yes, prior to the search warrant. So you said you were unaware that IRP was developing

software; correct? A. That's not what I said. I said I was uncertain on I

the status of the software and how far along it was.

talked to various people, and we didn't know for sure at the time how far along it was or what the status was. Q. A. Q. But Melissa McRae is an FBI agent; correct? Yes, she is. And your testimony is she attended a meeting where

IRP was doing a software demonstration? A. She attended a meeting. I don't know if she actually

saw a software demonstration or some other type of Power Point or something similar to that. Q. What about Steven Cooper? Did you speak to him

concerning IRP? A. Q. A. Yes, I did. And who is Steven Cooper? At the time, he was an executive in charge of One of the executives at the

information technology.

Department of Homeland Security. Q. And were you aware of any interactions or meetings he
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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had with IRP? A. Q. A. Yes, I was. Do you know the nature of those meetings? Those meetings were similar to the meeting that we Mr. Cooper

just talk about with Ms. McRae, I believe. attended that meeting, also. Q.

Would it be safe to say you knew IRP was a software

development company? A. Q. Yes, that's fair. Would it also be safe to say that you in your Search

Warrant Affidavit, you classified them as a "purported software development company"? MS. HAZRA: Leading. THE COURT: Q. (BY MR. BANKS) Sustained. Do you know a gentleman by the name Objection, Your Honor, relevance.

of Richard Powers? A. Q. A. Yes, I do. Who is he? He, at one point, was the Special Agent in Charge of

the Denver division of the FBI. Q. A. What about a Gene Anderson? I know her. I don't know if I have ever met her, but

I know her -- know the name. Q. What does she do?


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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A.

She is still an FBI agent.

Somewhere else in the

Bureau, but at the time I knew her, she was a supervisor in the Denver office. Q. During the course of your investigation -MR. BANKS: THE COURT: Q. (BY MR. BANKS) May I have a moment, Your Honor? You may. During the course of your

investigation, was one of the staffing companies that you had that you interfaced with, was a company called Sunny Side Temps? A. Q. Yes, that's correct. Are you aware of any contact that either Gene

Anderson or Mr. Powers had with Sunny Side Temps? A. Q. them? A. I have seen a letter in my file that was signed -But at Yes, I am. What is your knowledge of their communications with

the letter was actually signed by Gene Anderson.

the bottom it has Mr. Power's name on it, because he is the Supervisory Special Agent in Charge, SAC. But

Ms. Anderson signed the letter because she had the authority to do that, and she sent that letter to Sunny Side Temp. Q. A. Do you know what the nature of that letter was? Yes, I do.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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Q. A.

Can you expound on that for the Court? Yes. I had sent a letter to Sunny Side Temp asking

them to send me documents related to their interactions with IRP, DKH or Leading Team, and to get invoices, payroll records and the like; stuff like that that they had sent, the stuff they were going to send me, they sent it to the wrong address. Denver. They sent it to FBI office in

I work in Colorado Springs. The package of stuff made it into the Denver

office, and somehow got routed to Gene Anderson, because she was the white collar supervisor at that time; in charge of white collar crime. Based on her getting that,

she sent the letter back to the person at Sunny Side Temp. I didn't know anything about it at that time because it came to Denver. Q. A. She sent the letter back to them.

Do you know what the contents of that letter were? Yes. It was just basically -- she wrote back and

said that the FBI was not going to pursue the allegations -- pursue a crime against Sunny Side based on what they received from Sunny Side. Q. I will ask again. You said based on what they

received from Sunny Side? A. Yes. Ms. Anderson got this letter and this package

from Sunny Side, and did not know I had a case in Colorado Springs. She thought it was just a packet from one
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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company, and didn't realize I had an ongoing investigation with multiple companies that had lost money. She didn't So

understand Sunny Side was just one of these companies. she wrote a letter back to the person at Sunny Side

saying, thanks for sending us this stuff, but we are not going to pursue a federal investigation at this time. Q. For what reason? MS. HAZRA: THE COURT: THE WITNESS: Objection, Your Honor, speculation. Overruled. She did not know that I had an So she wrote

investigation in Colorado Springs going.

back and said -- I haven't seen the letter in awhile, but said something to the effect, thanks for sending us the stuff. We will not open an investigation. You should

pursue this civilly. Q. (BY MR. BANKS) So she thought it was a civil matter;

correct? MS. HAZRA: THE COURT: THE WITNESS: Q. A. Q. A. Q. (BY MR. BANKS) Yes. And what is that? Just what I just said a minute ago. That it was a civil matter?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

Your Honor, objection, speculation. If you know what she thought. I don't know what she thought. Do you know what she wrote?

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A. Q.

Yes.

That they should pursue that civilly, yes.

And you said she was the head of white collar crime

here in Denver; correct? A. She was the supervisor of a white collar squad. I

don't know if there is more than one squad. the supervisors. Q.

She is one of

Does the Colorado Springs office fall under the

purview of the Denver office? A. Yes. The Colorado Springs office is a sub office of But we have different supervisors over

the Denver office. our squads. Q. A. Q.

She wasn't your supervisor, was she? No. Are you aware of whether or not the article was

distributed over the internet? A. Q. Can you be more specific? Are you aware the article -- the specific article you

passed to staffing companies, was also on the internet? A. Q. IRP? A. Q. Absolutely not. So why send an article to staffing companies? MS. HAZRA: asked and answered.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

I believe it was on the newspaper's website. Was that the goal of the Government, was to smear

Your Honor, I am going to object as

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THE COURT: (BY MR. BANKS)

Sustained. Now, did you have -- you testified a

minute ago that you had no interactions with Greg Goldberg. And, specifically, you had not sent him a fax.

Did you have any other communications regarding this case with Greg Goldberg? A. Like I said earlier, we had got a letter in from Greg

Goldberg's firm that started the case about staffing companies that had lost money to DKH, IRP or Leading Team. And then I have this fax that I sent in with the letter that you showed me earlier. And that's all I can remember

about personal interaction with Greg Goldberg. MR. BANKS: questions. THE COURT: MR. WALKER: THE COURT: All right. Anybody else? Your Honor, I have no further

Yes, Your Honor. Mr. Walker? DIRECT EXAMINATION

BY MR. WALKER: Q. Agent Smith, you said earlier that -- I believe you

said that you weren't sure how far along the software was; is that correct? A. Yes. Yes, at the time of the search, I talked to And I'm not a software expert, so I

various people.

didn't know how far along it was.


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Q.

And how was the presence or absence or progress of

the software a factor for the FBI's investigation? A. Honestly, the software -- the case was initiated

because staffing companies had engaged in business with IRP, DKH and Leading Team, and they were not paying those invoices. So that was the focus of my investigation.

Talking to staffing companies before the search warrant, they were told that there was impending or imminent contracts, or they had contracts with NYPD or other agencies. So that is how software became involved,

because they were told there were contracts for software, and that's how the invoices would be paid. But my focus was to gather documents related to staffing companies and their interactions with DKH, Leading Team and IRP. Q. Was the absence or presence of software a factor that

would help the FBI determine whether or not there was a so-called scam? A. Just the same answer to the question I had. The

staffing companies said that there was an imminent sale or there was a sale of the software at NYPD. they did business with those companies. That is why

So there were

representations made to those companies by IRP, DKH and Leading Team. Q. And at some point, would it be true that the FBI
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determined that there was software being developed at IRP Solutions? A. Yes, that's true. You know, after the search, it was

obvious there were some software there. Q. And is it also true that at some point the FBI

determined that IRP Solutions was, in fact, attempting to sell software to the Department of Homeland Security? A. They had meetings with the Department of Homeland

Security about their software. Q. And were those meetings in regard to selling the

software to the Department of Homeland Security? A. My remembering is that Homeland Security was getting

information about software that was available, you know, in all of the different software products that were available, and IRP was one they were looking at to see what was available there. Q. I'll ask the question again, Agent Smith. Were those

meetings with DHS attempts to sell software to DHS as determined by the FBI? MS. HAZRA: Your Honor, I'm going to object, either

asked and answered or speculation. THE COURT: I think you need to lay more foundation

as to what he would know about what DKH and the others were doing. Q. So lay more foundation. Overruled.

(BY MR. WALKER)

Agent Smith, at what time did you --

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at what time did you leave the FBI in Denver? A. I left this division -- I moved from Colorado Springs

in June of 2007. Q. And were you involved in the investigation of IRP

Solutions up to June of 2007? A. Q. Yes. Did you have occasion to interview employees at the

Department of Homeland Security prior to June 2007? A. Q. Yes, I did. And in those interviews, did DHS tell you the nature

of meetings they had with IRP Solutions? A. Q. Yes, they did. And did they relate to you that IRP Solutions was

attempting to sell their product to DHS? A. Yes. They said that IRP was there to present their

software, and they were there to -- DHS was trying to figure out what all of the software products were at the time. Q. A. Q. So that answer is a yes; correct? I don't know if that is a yes or no. Let me stop you. You started your answer with yes,

then you expounded. A. Q. It's a yes. Thank you.

So is that a yes or is that a no?

And in the course of your being with the

FBI here in Denver, and involved in this case up until


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June of 2007, did you have the occasion to interview anyone from the NYPD about IRP Solutions? A. I know there were interviews. I don't know if I

personally did them. Q. Were you, up until June 2007, still the Supervisory

Special Agent? A. Q. A. Q. No. That is incorrect, I was not a supervisor.

Can you just clarify your role up until June of 2007. Yes. I was a Special Agent. And as a Special Agent, through June

Special Agent.

of 2007 on this case, did you have the opportunity to speak with anyone about interactions between IRP Solutions and the NYPD? A. Q. with? A. I remember contacting the FBI in New York City, to go Yes, I did. And who did you discuss IRP's dealings with the NYPD

out and do an interview -- do interviews at the NYPD regarding the IRP case. Q. And in your discussions with the FBI in New York

City, did you determine that IRP Solutions was meeting with the NYPD? MS. HAZRA: I am going to object, Your Honor. This

is now double hearsay. THE COURT: Well, it is did you determine they were
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meeting.

I'll overrule.

I'll allow it.

MR. WALKER: THE WITNESS:

Thank you, Your Honor. Yes. So an FBI agent in New York

City went to the NYPD and conducted an interview with somebody at the NYPD, and determined that IRP had been in contact with NYPD. Q. (BY MR. WALKER) And as a Special Agent involved in

this case, did you follow up on that information provided to you? A. I know -- I wasn't the Case Agent for the whole case,

but I know there were follow-ups about the NYPD. Q. And what is your knowledge about what was determined

in those follow-ups regarding the NYPD with IRP Solutions? A. I know that the NYPD never sold their software to IRP

(sic). Q. Okay. So you know that IRP never sold products to Do you also then know that IRP was attempting

the NYPD.

to sell products to NYPD? A. Again, I knew that IRP -- based on the case, that IRP

had contacted the NYPD and was doing software demonstrations. Q. And how, specifically, do you know that IRP was doing

software demonstrations at the NYPD? A. I know that -- I have read interview reports that

other FBI agents did from people at the NYPD that had met,
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or at least knew about meetings with people from IRP at the NYPD. Q. And so in that knowledge, do you also know that those

meetings weren't philosophical, they were sales meetings? A. Yes, they were meetings about software, yes. MR. WALKER: THE COURT: MR. BARNES: THE COURT: No further questions, Your Honor. Anybody else? Yes, Your Honor. Mr. Barnes. DIRECT EXAMINATION BY MR. BARNES: Q. Agent Smith, did you have any contact with any of --

anybody working at IRP prior to the raid, until you left? A. I can't remember specifically. I know I didn't have

contact with anybody here at this table. Q. Did you have any contact with any of the subject

matter experts; with your former federal agents prior to the raid in 2005? A. I don't know if it was before or after the raid.

But, yes, I contacted those retired federal experts, yes. Q. And did they provide you information about what was

going on inside IRP at the time? A. Q. Yes, they did. Could you explain what information you received

during that -- those interactions with those former FBI


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agents? A. My memory of that is I received information from I got a retired FBI agent name John Epke, a

three people.

retired FBI Agent named Dwayne Fuselier, and a retired Custom's Agent named Gary Hillberry. They relayed to me

that they had been contacted by IRP Solutions to be subject matter experts. They had went to IRP's offices

and performed work that they were never paid for. Q. Did they initiate that contact, or was that contact

initiated by you? A. I can't remember if they called the FBI or somehow I

had seen documents and knew to call them. Q. So if they called the FBI, how would they have known

there was an investigation going on prior to a raid? A. I don't know if they knew there was a raid. They

might have just -- I can just only speculate. know if they called me or I called them. Q.

I don't

But the question is, how would they have known any

sort of legal action, investigation was going on to contact you first? MS. HAZRA: speculation. THE COURT: may answer it. To the extent that you would know, you Objection, Your Honor, calls for

If you are speculating, you may not. I don't know if I called them or if
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

THE WITNESS:

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they called me. Q. (BY MR. BARNES) Was there any other e-mail Was there electronic

communication, besides calling.

communication, face-to-face, any of that happen prior to 2005? A. I don't know. I know the three gentlemen, they lost I don't

money -- they worked at IRP and never got paid. remember the interactions with them. Q.

But you did get information from them about IRP

Solutions; is that correct? A. Yes, I did. But I don't remember how I got the

information. Q. Outside of those three, was there any other contact

you had with any other persons; working contract or volunteer from IRP Solutions related to your investigation, prior to the raid in 2005? A. Like I said, I talked to those three gentlemen at And I don't remember contacting any of you

some point.

gentlemen before the search warrant. Q. So, for lack of a better word, were they like your

spies inside of IRP? A. Absolutely not spies. They were just gentlemen, just

like anybody else, that had lost money -- had worked there and didn't get paid. And they relayed that to me; that

they didn't get paid for services they performed.


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Q.

You didn't see the need to contact anyone at IRP to

maybe question them about their, you know, dealings with staffing agencies; what they were doing prior to the raid in 2005? A. That is an investigative decision, and I chose not to

do that. Q. But you chose to contact the former FBI agents, maybe

get information from them, but not from the people who may actually know what is going on? A. Like I said, I don't know if they called me or I But I know I talked to them.

called them. Q. A.

About IRP Solutions; correct? Yes. About them working at IRP, DKH or Leading Team

and never getting paid. Q. So, again, you testified earlier that after 2007 you

were basically no longer, I guess, the case head of this investigation; is that correct? A. Yes. I moved to another office and was no longer the

primary case agent. Q. So how far -- how far would you say you were involved

with this case after 2007? A. I have always maintained involvement. I have known

the other case agents, and they call me with questions. And I help them on interviews and other things that they needed to help complete the investigation.
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Q.

So were you -- did you help coordinate any

investigation with the Philadelphia Police Department in 2009? A. Q. A. Q. No, I did not. Were you aware that was happening? No, I was not. So you are not aware of any contact with the

Philadelphia Police Department at all during the course of the investigation of IRP Solutions? A. No. I know that there was FBI contact with the But I wasn't involved in

Philadelphia Police Department. any of that. MR. BARNES: THE COURT:

No further questions, Your Honor. Anybody else. Mr. Zirpolo?

DIRECT EXAMINATION BY MR. ZIRPOLO: Q. A. Q. A. Q. A. Good afternoon, Agent Smith. Good afternoon. Do you know what an InfraGard is, I-N-F-R-A-G-A-R-D? Yes, I do. What is that? It's an FBI program that relates to liaison contacts

with members of the information technology field or community. Q. Were members of IRP members of InfraGard?
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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MS. HAZRA: THE COURT: MR. ZIRPOLO:

Objection, Your Honor, relevance. Mr. Zirpolo? Just setting a basis for his contact

with some InfraGard personnel. THE COURT: MR. ZIRPOLO: What is the relevance of that? It shows that InfraGard accepted IRP

employees as members of their group, and that IRP was actually trying to sell their software package to InfraGard. THE COURT: MR. ZIRPOLO: What is the relevance of that? It is going to the integrity -- or

the company, and how they were going forth trying to sell their package. THE COURT: Sustain the objection. Irrelevant.

(BY MR. ZIRPOLO)

Mr. Smith, do you remember

testifying under oath that we wouldn't be here if we had paid the software companies? A. Q. No, I do not. During the James hearing on November 17th, do you

remember testifying to that under oath? A. No, I do not. MR. ZIRPOLO: moment, Your Honor. Q. One moment, Your Honor, please. I'm sorry. So let me be a little bit more One

(BY MR. ZIRPOLO)

specific.

You were asked a question if they?


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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THE COURT:

He doesn't remember.

Do you have

anything to refresh his recollection? MR. ZIRPOLO: I have the James hearing. I don't

have it printed, Your Honor. THE COURT: Show him what you have. Let him read

it, see if that refreshes his recollection. MS. HAZRA: THE COURT: Will you refer me to a page? You can hand that to Ms. Seeman. Just

for the record, this is a transcript of a hearing on what date? MR. ZIRPOLO: THE COURT: MR. ZIRPOLO: THE COURT: MR. ZIRPOLO: THE COURT: THE WITNESS: (BY MR. ZIRPOLO) November 19, I believe it was. Of last year? Yes. This is page? 92. 92. All right.

Okay. So based off of that, if IRP was

successful in selling software, we wouldn't be here today? THE COURT: Ask him your question. Does he now

remember making that statement? Q. that? A. Just to clarify, like, I read the statement here, but What page? It is just (BY MR. ZIRPOLO) Do you now remember testifying to

I can't tell if this is me or not.

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questions. Q.

It doesn't say my name.

If we can scroll up to where he was sworn in. MR. ZIRPOLO: THE COURT: MS. HAZRA: May I approach? Yes, you may. Your Honor, we have a paper copy we are

happy to provide. THE COURT: THE WITNESS: THE COURT: That would probably be more helpful. I read it. It is fine.

Can we mark that for identification so

we have it for the record? MS. HAZRA: Q. Certainly. So, having seen that, that was you

(BY MR. ZIRPOLO)

testifying; correct? A. Q. A. Yes. And so do you remember testifying to that now? The question that is right there was, "Is it fair to

say that if IRP would have paid, you never would have been called?" Q. And I said "Yes, that's probably fair to say."

So if IRP was -- so, in other words, if IRP was

successful in selling their software, we wouldn't be here today? A. If IRP was successful and had sold it and had paid

the staffing companies, of course my belief is they probably wouldn't have called, because you all would have paid them, and they wouldn't be here.
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COURTROOM DEPUTY:

I am sorry to interrupt.

This

transcript is marked as Defendants' Exhibit D407. THE COURT: MR. ZIRPOLO: THE COURT: MR. ZIRPOLO: THE COURT: MR. WALKER: THE COURT: All right. One moment again. You may. No further questions, Your Honor. Anybody else? No, Your Honor. All right. Cross-examination?

CROSS-EXAMINATION BY MS. HAZRA: Q. A. Q. Good afternoon, Special Agent Smith. Good afternoon. You were just asked on direct examination about your

statement that you think it would be fair to say you wouldn't be here, or words to that effect? A. Q. Exactly, correct. But isn't it true, Special Agent, that means,

according to your testimony on direct, that the staffing agencies wouldn't have reported it to the FBI if they had gotten their money? A. Q. Yes. That is what I would assume.

It doesn't mean there wouldn't have been a scheme to

defraud, does it? A. No, it does not.


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Q.

It doesn't mean that the defendants -- that the

defendants didn't necessarily make misrepresentations, does it? A. Q. No, it does not. It means the staffing companies wouldn't have

reported it if they hadn't lost money? A. Q. Right. If they hadn't reported the crime, you wouldn't be

investigating the crime? A. Q. Correct. You can only investigate crimes that are reported or

that you have knowledge of; is that right? A. Q. Yes, that's correct. You were asked a series of questions about an I just wanted to clarify. That is a newspaper

article.

article, isn't it? A. Q. A. Q. Yes, it's a newspaper article. That wasn't written by the FBI? No. It was written by a newspaper person.

I want to talk to you a little bit about the steps

you took before you executed a search warrant at IRP, DKH and Leading Team. A. Q. Okay. In the course of that investigation, you talked to a

couple retired federal law enforcement officers; is that


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right? A. Q. Yes, I did. And in your sort of experience and training, do you

tend to believe that they are reliable witnesses? A. Q. Yes, I do. Did you also talk to some people from the staffing

companies? A. Q. Yes, I did. And, specifically, you talked to some victims of the

defendants' staffing companies? A. Q. Yes, I did. So you talked to a couple -- several different

sources in the course of your investigation? A. Q. Yes, that's correct. And you also talked to, eventually, people in the

federal government agencies; is that right? A. Q. Yes. Just to be clear, you did all of these things prior

to executing the search warrant? A. Q. Yes, I did. So you talked to all those various different sources

before the FBI searched in February of 2005? A. Yes, that's correct. MS. HAZRA: further questions.
DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

One moment, Your Honor?

I have no

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THE COURT: MR. BANKS:

Redirect? Yes, Your Honor. REDIRECT EXAMINATION

BY MR. BANKS: Q. You were just asked by -- in your cross-examination,

whether or not, as regarding your statements, is it fair to say you wouldn't have been contacted if the companies had been paid; correct? A. Q. Yes. And you also said that that doesn't mean that a

scheme to defraud was not under way; correct? A. Q. Yes, I did. Are you aware that intent is a part of a scheme to

defraud? A. I'm not an attorney. I don't know the whole legal

definition of a scheme to defraud, what parts. Q. You know a scheme to defraud, but you don't know any

more about the scheme to defraud as it applies to the law? A. Q. A. I know that -- can you ask me a question, please? Do you know what the intent to defraud is? I mean, I could give you -- I couldn't give you an

absolute legal definition. Q. Just your understanding. THE COURT: the law. That is inappropriate. I instruct on

If he knows what it is, he can give it, but I


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instruct on the law. Q. A. (BY MR. BANKS) Do you know what it is?

I don't know the legal definition. MR. BANKS: THE COURT: MR. WALKER: THE COURT: No further questions, Your Honor. Anybody else? No, Your Honor. May this witness be excused? All right. Thank you.

You may step down.

Ladies and gentlemen, at this time I understand that we don't have any other witnesses for today. am going to give you a break. I also

We are not going to convene

tomorrow, so you don't have to report back until Monday morning at 9:00 a.m. Now, I do want to remind you, you have your jury instructions. In particular, and I tell you this kind of

very briefly every time we break, but I really want to emphasize, because you heard some testimony today about a newspaper article. It would be inappropriate for you to

go try to find that newspaper article on the internet. So I want to point you to the first jury instruction that tells you about you cannot engage in any outside type of research in this matter because your decision is to be based on the evidence that is received here in court. So I know the natural inclination would be

because of curiosity, and I want to warn you against doing


DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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anything like that. So don't talk to anybody about this case. any additional research. Don't do

You can have tomorrow off, and

we will reconvene at 9 o'clock on Monday morning. All right. The jury is excused.

(The following is had in open court, outside the hearing and presence of the jury.) THE COURT: All right. You may be seated. I want

the parties here at 8:30 on Monday morning, just in the event there are matters, so we can start promptly at 9:00. And you can give me an update as to where we stand with our witnesses, okay. MR. WALKER: THE COURT: Yes, Your Honor. Any other matters that need to be

brought to my attention before we recess until Monday. MR. BANKS: MR. KIRSCH: THE COURT: Not from us, Your Honor. No, Your Honor, thank you. Thank you very much, then. We will see

you at 8:30 on Monday morning.

Court is in recess.

(Court is in recess at 2:39 p.m.)

DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

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DARLENE M. MARTINEZ, RMR, CRR United States District Court For the District of Colorado

R E P O R T E R ' S

C E R T I F I C A T E

I, Darlene M. Martinez, Official Certified shorthand Reporter for the United States District Court, District of Colorado, do hereby certify that the foregoing is a true and accurate transcript of the proceedings had as taken stenographically by me at the time and place aforementioned.

Dated this 5th day of December, 2011.

_____________________________ s/Darlene M. Martinez RMR, CRR