CONNI E C. ARMSTRONG, JR.

8309 LAUGHING WATERS TRAIL
MCKINNEY, TEXAS 75070
TELEPHONE: 469-212-2316
E-MAIL: CHIP.ARMSTRONG@YAHOO.COM

ELECTRONIC COPY

September 26, 2011

United States District Clerk
United States District Court
1301 Clay Street, Suite 400 S
Oakland, CA 94612-5212

Re. United States v. Armstrong, Cause No. 94-cr-00276-PJH-1

Dear Clerk:

Please file the enclosed documents among the records for this cause. This case is designated
for ECF but the enclosed documents are filed by a pro se party not authorized to file electronically.
The documents include:

1. Armstrong’s Reply to the Government’s Response to his
Brief Ordered By Court In Support Of 28 U.S.C. § 2255
Motion;
2. Appendix Containing Supplemental Exhibits to Brief
Ordered By Court In Support Of 28 U.S.C. § 2255 Motion
3. Declaration Regarding Armstrong’s Reply to the
Government’s Response to his Brief Ordered By Court In
Support Of 28 U.S.C. § 2255 Motion; and
4. Certificate of Service.

An electronic copy of this transmittal letter and the above-listed four documents has been
emailed to PJHpdf@cand.uscourts.gov in PDF format as required by Rule V.B. of General Order 45.

Chamber copies of this letter and all documents are sealed within the included envelope.

As always, thank you for your assistance. Please contact me if you need any additional
information.

Kindest regards,



Connie C. Armstrong, Jr.

Enclosures

cc Melinda Haag
Miranda Kane
Adam A. Reeves
United States Attorney’s Office
450 Golden Gate Ave., Box 36055
San Francisco, California 94102


ARMSTRONG’S REPLY TO THE GOVERNMENT’S RESPONSE
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ELECTRONIC COPY
CONNIE C. ARMSTRONG, JR.

8309 Laughing Waters Trail
McKinney Texas, 75070
Telephone: 469-212-2316
e-mail: chip.armstrong@yahoo.com

Petitioner Pro Se


UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

UNITED STATES OF AMERICA

Plaintiff

v.

CONNIE C. ARMSTRONG, JR.

Defendant
No. CR 94 276 PJH

ARMSTRONG’S REPLY TO THE
GOVERNMENT’S RESPONSE TO HIS
BRIEF ORDERED BY COURT IN
SUPPORT OF
28 U.S.C. § 2255 MOTION

Armstrong submits this Reply to the Government’s Response to his Brief Ordered by
Court in support of his pending motion under 28 U.S.C. § 2255.
DATED: September 26, 2011

_____________________________
CONNIE C. ARMSTRONG, JR.
Petitioner Pro Se



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TABLE OF CONTENTS
Table of Contents .................................................................................................................... i
Index of Authorities .................................................................................................................. iii
Introduction ................................................................................................................... 1
Uncontested Issues ................................................................................................................... 1
Prejudice ................................................................................................................... 1
Standard of Review ................................................................................................................... 2
Argument ................................................................................................................... 3
A. ISSUE No. 1. The failure of the government to disclose a prior,
Exculpatory investigation, along with the involvement of senior
political figures in the days before Armstrong’s indictment, constitutes
improper suppression of material evidence and warrants 2255 relief. ................. 3


B. ISSUE No. 2. Knowing misrepresentations made by the prosecution to
this Court tainted the entire trial, undermines confidence in the verdict,
and compels 2255 relief. ....................................................................................... 6

C. ISSUE No. 3. Armstrong is entitled to relief under § 2255 because the
failure of the government to disclosure its participation in a collateral
proceeding deprived Armstrong of his ability to raise a collateral estoppel
bar to the government’s argument of a contrary legal theory in this case. ........... 8


Conclusion ................................................................................................................. 12



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INDEX OF AUTHORITIES

CASES

Barker v. Fleming,
423 F.3d 1085 (9th Cir. 2005). ......................................................................................... 2

Bauman v. Emerald Elec., Inc. (In re Pay + Plus Payroll Adm'rs, Inc.),
389 B.R. 796 (Bankr. M.D. Fla. 2008) ........................................................................... 10

Dixon v. Comm’r,
316 F.3d 1041 (9th Cir. 2003). .................................................................................... 6, 7

Keys v. Dunbar,
405 F.2d 955 (9th Cir. 1969). ........................................................................................... 6

Mindys Cosmetics, Inc. v. Dakar,
611 F.3d 590 (9th Cir. 2010). ......................................................................................... 11

Montana v. United States,
440 U.S. 147 (1979). ..................................................................................................... 12

Preferred Option Leasing, Inc. v. Huntington Nat'l Bank (In re Team Am., Inc.),
Cause No. 03-64789, 2007 Bankr. LEXIS 4664 (Bankr. S.D. Ohio Dec. 31, 2007) .... 10

Redmond v. Ellis County Abstract & Title Co. (In re Liberty Livestock Co.),
198 B.R. 365 (Bankr. D. Kan. 1996) .............................................................................. 10

Stop & Shop Cos. v. Federal Ins. Co.,
136 F.3d 71, 73 (1st Cir. 1998) ........................................................................................ 9

Strickler v. Greene,
527 U.S. 263 (U.S. 1999) ............................................................................................. 3, 6

Toscano v. CIR,
441 F.2d 930 (9th Cir. 1971). ........................................................................................... 6

United States v. Bhatia,
545 F.3d 757 (9th Cir. 2008). ....................................................................................... 11

United States v. Cummings,
468 F.2d 274 (9th Cir. 1972) .......................................................................................... 13




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U.S. v. Fernandez,
559 F.3d 303 (5th Cir. 2009) ............................................................................................ 5

United States v. Hernandez,
94 F.3d 606 (10th Cir. 1996) ............................................................................................ 2

United States v. Kohring,
637 F.3d 895 (9th Cir. 2011). ........................................................................................ 13

United States v. Lopez,
577 F.3d 1053 (9th Cir. 2009). ........................................................................................ 8

United States v. Payton,
593 F.3d 881 (9th Cir. 2010). ........................................................................................... 9

United States v. Pepe,
747 F.2d 632 (11th Cir. 1984). ..................................................................................... 13

United States v. Reyes,
577 F.3d 1069 (9th Cir. 2009). ......................................................................................... 7

United States v. Schimmels (In re Schimmels),
127 F.3d 875 (9th Cir. 1997). ........................................................................................ 11

Valero Terrestrial Corp. v. Paige,
211 F.3d 112 (4th Cir. 2000). ......................................................................................... 9







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INTRODUCTION
The Court ordered additional briefing to analyze three claims raised by Armstrong in
his section 2255 motion against the framework of “cause and prejudice” relating to whether this
Court may nonetheless entertain those claims despite a procedural default. The Court ordered a
further showing from Armstrong that evidence tendered in support of motion was admissible.
Armstrong complied with the Court’s orders on August 18, 2011, and on September 16, 2011,
the government tendered its Response to Armstrong’s brief.
1
Armstrong accepts the Court’s
offer to make a Reply to the Government’s Response.

UNCONTESTED ISSUES
In response to various orders from this Court, the parties have substantially narrowed
the issues presented. Questions regarding the timeliness of the 2255 motion itself—and whether
it was mooted by reason of Armstrong’s release from custody—are now resolved. Armstrong’s
authentication of his evidence and his argument for the admissibility thereof were not contested
by the government. For each ground in support of Armstrong’s request for 2255 relief, the
government expressly declined to dispute the “cause” element of the cause and prejudice test.
Thus the remaining issue, across all three grounds, is whether Armstrong has shown prejudice.

PREJUDICE
In its Response, the government elected to make a combined argument as to prejudice
and to the ultimate merits of the motion. This is a reasoned approach, as the gravamen of each

1
The government never served its Response on Armstrong, and this document replies to
the electronic copy made available to the public on PACER.


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complaint rests on Brady, with a materiality test that parallels the prejudice standard. See
United States v. Hernandez, 94 F.3d 606, 610 (10th Cir. 1996) (“There appears to be little or no
difference in the operation of the ‘materiality’ (Brady) and ‘prejudice’(Frady) tests.”). The
government’s approach, however, differs from that mandated for a comprehensive Brady
materiality analysis because it measures each ground of misconduct in isolation and ignores the
cumulative effect, in contravention of Supreme Court requirements. This is a two-step process,
as explained by the Ninth Circuit:
Crucial to this case is the Supreme Court’s requirement that the materiality of
the withheld evidence be analyzed cumulatively: One “aspect of Bagley
materiality to be stressed here is its definition in terms of suppressed evidence
considered collectively, not item by item.” Kyles, 514 U.S. [419, 436 (1995)].
The Court specifically explained that courts should “evaluate the tendency and
force of the undisclosed evidence item by item; there is no other way. We
evaluate its cumulative effect for purposes of materiality separately and at the
end of the discussion.” Id. at 436.

Barker v. Fleming, 423 F.3d 1085, 1094 (9th Cir. 2005).

STANDARD OF REVIEW
Again in reliance on Kyles V. Whitley, the Supreme Court clearly set out the standard
for measuring materiality in a case involving, as in this case, failure to disclose information that
discredits the government’s case. To obtain 2255 relief, a petitioner
. . . must convince us that “there is a reasonable probability” that the result of the
trial would have been different if the suppressed documents had been disclosed
to the defense. As we stressed in Kyles: “The adjective is important. The
question is not whether the defendant would more likely than not have received
a different verdict with the evidence, but whether in its absence he received a
fair trial, understood as a trial resulting in a verdict worthy of confidence.” 514
U.S. at 434.

The Court of Appeals’ negative answer to that question rested on its conclusion
that, without considering [the evidence in question], the record contained ample,


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independent evidence of guilt, as well as evidence sufficient to support the
findings of vileness and future dangerousness that warranted the imposition of
the death penalty. The standard used by that court was incorrect. As we made
clear in Kyles, the materiality inquiry is not just a matter of determining
whether, after discounting the inculpatory evidence in light of the undisclosed
evidence, the remaining evidence is sufficient to support the jury’s conclusions.
Id. at 434-435. Rather, the question is whether “the favorable evidence could
reasonably be taken to put the whole case in such a different light as to
undermine confidence in the verdict.” Id. at 435.

Strickler v. Greene, 527 U.S. 263, 289-290 (U.S. 1999).

ARGUMENT
Standing alone, each category of undisclosed evidence is material under the above-
described tests both to establish prejudice to overcome the procedural default and to provide an
independent basis to support section 2255 relief. Analyzed collectively, as this Court must do,
the great weight of the evidence compels such relief.

A. ISSUE No. 1. The failure of the government to disclose a prior, exculpatory
investigation, along with the involvement of senior political figures in the days before
Armstrong’s indictment, constitutes improper suppression of material evidence and
warrants 2255 relief.

In challenging this ground, the government mischaracterizes the sequence of events and
attempts to describe the prosecution as a single, lengthy investigation that stalled due to lack of
evidence and was then rekindled when new evidence came to light. To the contrary, the
investigation was formally closed by the FBI. As shown in the letter attached as Exhibit A
[Appendix, Docket #607], the prior investigation was closed, not just placed on the back burner
pending discovery of new information.
Indeed, just a mere week passed between the FBI’s stern rebuke to a purported
whistleblower on Friday, March 8, 1991 [Exhibit D, Appendix, Docket #607]—replete with


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warnings about liability for ill-advised and unfounded claims and references to inquiries from
the offices of a U.S. Senator and a U.S. Representative—to the publication on Friday, March
15, of a front-page article in the Wall Street Journal concerning Mr. Armstrong’s company. The
publication had its intended influence on the FBI over the weekend, which published a press
release on Sunday, March 17 announcing its investigation and which prepared an internal
memorandum [Exhibit R]
2
that reopened its file and renamed that file to correspond to the
names used by the Wall Street Journal. The government’s current claim that there was no
political motivation, and the earlier investigation was not closed, just placed on hold, is not
supported by the record.
In the government’s footnote on page 4 of its reply, it addresses prosecutions prompted
by political pressure but relies only on general legal authority concerning the discretion
afforded a prosecutor. There is simply no authority, however, for the government’s implied
position that political pressure is not subject to disclosure under Brady.
Beyond the problems with the failure to disclose the outcome of the earlier exculpatory
investigation, the issue is the broader failure to disclose the evidence and analysis leading to
that outcome. No logical leap is required to draw the conclusion that if a prior investigation
closes without prosecution, then the evidence deduced in that investigation was not inculpatory.
In matters relating to financial fraud, there will be only limited middle ground between
inculpatory and exculpatory evidence. While evidence may be neither inculpatory nor
exculpatory, it strains belief to adopt the government’s current position that an entire

2
Armstrong respectfully requests leave of court to supplement his September 19, 2011
Appendix [Docket No. 607] and expand the record with a limited amount of additional
evidence to fully reply to issues raised by the government for the first time in its response brief.


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investigation, which closed without even an attempt to secure an indictment, was devoid of
exculpatory evidence.
Armstrong briefly notes a recurring theme throughout the government’s response which
suggests, in general, that his evidence is less than sufficient to support the conclusions drawn
from the redacted documents. It is significant that unredacted copies of the subject evidence is
in the possession, custody, or control of the government yet neither these unredacted
documents, the pages withheld from memoranda, nor the other documents referenced within
the evidence, were tendered by the government to rebut the conclusions drawn by Armstrong.
In summary, the government conducted a complete investigation into the complex
financial operation of Armstrong’s company and did not even uncover sufficient evidence of
wrongdoing to allow the U.S. Attorney’s office to secure a search warrant. The FBI terminated
the investigation, apparently finding no need to continue, and closed its file. The fact of that
investigation, and every item of evidence developed during its course, was withheld from
Armstrong and, except for a summary memorandum, remains concealed.
Additionally, the government’s Response misstates the holding of U.S. v. Fernandez,
559 F.3d 303 (5th Cir. 2009)(cert. denied, 130 S. Ct. 139 (U.S. 2009)), as rejecting the Brady
implications of a prior investigation. To the contrary, the Fifth Circuit found no basis to
overturn the conviction because i) the fact of the investigation was actually known by the
defendant during trial, and ii) the report of the investigation was reviewed by the court during
consideration of a motion for new trial, at which time it was determined that the report
contained no exculpatory information. See id. at 319. Fernandez stands in stark contrast to the
facts in this case, were even the existence of the prior investigation was concealed until years


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after the trial concluded and all documentation surrounding that investigation remains
unproduced.
Again, the applicable test is whether a failure to disclose Brady information undermines
confidence in the verdict. See Strickler v. Greene, 527 U.S. at 289–290. Usually, a Brady
inquiry asks only whether isolated pieces of evidence in an investigation should have been
disclosed. Here, the entire investigation, and all associated evidence, was withheld.

B. ISSUE No. 2. Knowing misrepresentations made by the prosecution to this Court
tainted the entire trial, undermines confidence in the verdict, and compels 2255 relief.

In response to Armstrong’s second issue, the government argues i) that a Rule 60(b)(3)
challenge premised upon fraud is an impermissible collateral attack on a criminal conviction, ii)
that even if permissible, there was no fraud, and iii) even if there were fraud, it was not
material.
Although Armstrong does complain of fraud on the court arising from false statements
made to the trial court by the lead prosecutor and the assigned FBI case agent, he does not
make his complaint pursuant to Rule 60(b). Beyond the strictures of that Rule, courts possess
the inherent power to vacate or amend a judgment obtained by fraud on the court. See Toscano
v. CIR, 441 F.2d 930, 933 (9th Cir. 1971). “To justify setting aside a final order on the ground
of fraud, the acts of the adverse party must be such as prevented the losing party from fully and
fairly presenting his case or defense.” Keys v. Dunbar, 405 F.2d 955, 957-958 (9th Cir. 1969).
Of particular relevance to the case at bar, “[p]rejudice is not an element of fraud on the court.”
Dixon v. Comm’r, 316 F.3d 1041, 1046 (9th Cir. 2003). “Fraud on the court occurs when the
misconduct harms the integrity of the judicial process, regardless of whether the opposing party
is prejudiced,” and the government’s current efforts to describe the falsehoods as ones having


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only minimal impact on the trial are not relevant. Id. (“Furthermore, the perpetrator of the
fraud should not be allowed to dispute the effectiveness of the fraud after the fact.”) Armstrong
never raised 60(b) as a ground for relief, and the government’s argument in this regard is not on
point.
Similarly, the government’s argument that it did not actually make any false statements
to the court is contradicted by the record. As early as February 22, 1993, the FBI case agent and
the AUSA handling the prosecution were aware that one of their witnesses was to be a paid
informant and would be recording conversations with Armstrong. [Exhibit K, Docket No. 607].
Yet in the middle of Armstrong’s trial, on January 13, 1997, the prosecution team expressed
great surprise to learn that their witness was an informant who had worn a wire and claimed to
have only learned about this development during a recent prep session for the witness. [Exhibit
S, pages 94-95]. Significantly, the trial judge noted his reliance on the government to be
truthful when he analyzed the significance of the late disclosure. [Exhibit T, pages 100-101].
The government’s third argument, that any fraud was not material, is at odds with Ninth
Circuit precedent in Dixon v. Comm’r that rejects efforts by the government to escape
culpability through a claim that its fraud was not effective. 316 F.3d at 1046. Regardless,
however, the government’s position—that false statements made to the court during a
continuance hearing are not harmful because they did not impact that hearing—misapprehends
the seriousness of the issue. “Deliberate false statements by those privileged to represent the
United States harm the trial process and the integrity of our prosecutorial system.” United
States v. Reyes, 577 F.3d 1069 (9th Cir. 2009). The entire concept of “impeachment” rests not
on whether a particular false statement impacts a proceeding; rather, the inquiry turns on
whether prior false statements apply a taint to all future words. That concept aligns with the


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situation during the trial of this case. The trial judge stated: “I’ve never been misled by the
government.” When a jurist clearly expresses willingness to give the government the benefit of
each doubt, evidence that such trust is misplaced is unquestionably material. [Exhibit T, page
101].

C. ISSUE No. 3. Armstrong is entitled to relief under § 2255 because the failure of
the government to disclose its participation in a collateral proceeding deprived
Armstrong of his ability to raise a collateral estoppel bar to the government’s argument of
a contrary legal theory in this case.

In response to the third issue, the government attempts to negate a showing of
materiality through argument that, had Armstrong been able to raise the issue of collateral
estoppel in the trial court, his argument would have failed. As a threshold observation, that is
not the test for determining materiality. “A showing of materiality does not require
demonstration by even a preponderance that disclosure of the suppressed evidence would have
resulted ultimately in the defendant’s acquittal; rather, withheld evidence is material if, in its
absence, the defendant did not receive a fair trial, understood as a trial resulting in a verdict
worthy of confidence).” United States v. Lopez, 577 F.3d 1053, 1064 (9th Cir. 2009). In this
proceeding, Armstrong does not need to prove that a collateral estoppel argument would have
prevailed; rather, he must show that because the government’s concealment of evidence
preventing him from raising the issue, the resulting verdict is not worthy of confidence.
The government’s first attack on collateral estoppel suggests that Supreme Court
precedent did not prohibit the Ninth Circuit from vacating its In re Hamilton Taft opinion,
because the authority relied upon by Armstrong (Bancorp) did not concern appellate vacature
of appellate opinions. To the contrary, Bancorp expressly analyzed the authority of an


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appellate court to vacate its own opinions, as explained in a detailed opinion from the Fourth
Circuit:
That the Court decided only the question of the standards applicable to appellate
vacatur of appellate decisions (and, actually, only Supreme Court vacatur of
appellate decisions) is clear not only from the Court’s explicit statement that it
granted certiorari to decide this issue, but also from the procedural context in
which the case arose. The Court was presented, procedurally, only with the issue
of appellate vacatur of appellate decisions because, after the Court had granted
certiorari and received briefing in the Bancorp case, the parties settled and
Bancorp requested that the Supreme Court itself “exercise [its] power under 28
U.S.C. § 2106 to vacate the judgment of the Court of Appeals.” 513 U.S. at 20.
As the Court noted, 28 U.S.C. § 2106 is “the statute that supplies the power of
vacatur” for, and only for, “the Supreme Court or any other court of appellate
jurisdiction.” 513 U.S. at 21.

Valero Terrestrial Corp. v. Paige, 211 F.3d 112, 116-117 (4th Cir. 2000). “[I] it is clear not
only that the holding of Bancorp extends only to appellate court vacatur, but also that the
appellate power of vacatur derives from a source different from that which confers the vacatur
power upon a district court. The appellate vacatur power derives from 28 U.S.C. § 2106,
whereas the district court power derives from Federal Rule of Civil Procedure 60(b).” Id., at
117.
Closer to home, the Ninth Circuit has expressly disapproved of courts vacting their own
opinins after they have been published. See United States v. Payton, 593 F.3d 881, 884 (9th
Cir. 2010)(Refusing to vacate on the ground of mootness “after an opinion has been handed
down.”) The reason for this is clear, as despite the ineffective attempt at vacatur, In re
Hamilton Taft is repeatedly cited as authority on the very issue central to this case, sometimes
with express acknowledgment of the vacatur:
 Stop & Shop Cos. v. Federal Ins. Co., 136 F.3d 71, 73 (1st Cir. 1998)
(“Litigation proceeded in federal court in California, where the Ninth
Circuit ultimately agreed that the January and March payments were
voidable preferences subject to repayment.”)


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 In re Mainely Payroll, Inc. v. Salem, Inc., 233 B.R. 591, 596 (Bankr. D.
Me. 1999)(“ Quoting In Re Hamilton Taft: “Therefore, under ordinary
principles of trust, [MPI] did not hold the funds in trust. Thus, the funds
were property of the debtor….).

 Morin v. Elmira Water Bd. (In re Aapex Sys.), 273 B.R. 19, 27 (Bankr.
W.D.N.Y. 1999) (“In its decision in Hamilton Taft, which involved a
debtor that had contracted with clients to pay their payroll taxes and
prepare all relevant reports, the Ninth Circuit: (1) determined that after
trust fund taxes were transferred to the debtor, the debtor held the trust
fund taxes free of trust and they were property of the debtor's estate,
because the funds had been transferred to the debtor without requiring it
to segregate those funds and hold them in trust; . . .”)

 Preferred Option Leasing, Inc. v. Huntington Nat'l Bank (In re Team
Am., Inc.), Casue No. 03-64789, 2007 Bankr. LEXIS 4664 (Bankr. S.D.
Ohio Dec. 31, 2007) (“In the instant case the ASA is the document that
governed the relationship between the Debtor and the Plaintiff, and
based upon this Court's review it does not create an expression of intent
to form a trust. Regarding a trust corpus, when tax payments are
involved they must have been transferred with the requirement of
segregation from the funds of others. Frederick S. Wyle v. S & S Credit
Co., (In re Hamilton Taft Taft & Co.), 53 F.3d 285, 288 (9th Cir. 1995),
vacated on other grounds, appeal dismissed 68 F 3d 337 (9th Cir.
1995)”)

 Redmond v. Ellis County Abstract & Title Co. (In re Liberty Livestock
Co.), 198 B.R. 365, 372 (Bankr. D. Kan. 1996)(“ For example, in In re
Hamilton Taft & Co., 53 F.3d 285, 288 (9th Cir. 1995), vacated 68 F.3d
337 (9th Cir. 1995) (vacated and appeal dismissed due to parties'
settlement), the court found that the debtor, a tax preparer, was liable as
an initial transferee of taxes paid by its client to the IRS, because the
debtor had commingled funds of its clients in one account from which
the debtor then paid its clients' tax bills.”)

 Bauman v. Emerald Elec., Inc. (In re Pay + Plus Payroll Adm'rs, Inc.),
389 B.R. 796, 799-800 (Bankr. M.D. Fla. 2008)(“ Further, in another
case involving a debtor that had operated a payroll service, the trustee
also filed a preference action to recover payments made by the debtor to
the Internal Revenue Service on behalf of the debtor's clients. In re
Hamilton Taft Taft & Co., 53 F.3d 285 (9th Cir. 1995). In Hamilton Taft,
as in Aapex, the Court found that the funds paid to the Internal Revenue
Service were not held in trust, and that the transfer was avoidable by the
trustee of the debtor's estate under §547(b). In re Hamilton Taft & Co.,
53 F.3d at 290.


ARMSTRONG’S REPLY TO THE GOVERNMENT’S RESPONSE Page 11
TO HIS BRIEF ORDERED BY COURT (No. CR 94 276 PJH)
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Denial of the holding of In re Hamilton Taft is exceptionally pernicious here, where the
contrasting determinations both arose in the same courtroom. The same judge who was bound
by the Ninth Circuit’s determination that the assets in question were the property of Armstrong
for purposes of the civil litigation subsequently rejected that holding to determine the assets
were the property of Armstrong’s clients for purposes of criminal prosecution. In its Response,
the government briefly notes dicta in a footnote from the Ninth Circuit’s unpublished opinion
on Armstrong’s direct appeal, discounting the significance of this issue. To the contrary, a
central theme of the prosecution was that Armstrong converted the money of others to his
personal benefit. It is well established that one cannot convert what one legally owns. See
generally Mindys Cosmetics, Inc. v. Dakar, 611 F.3d 590, 601 (9th Cir. 2010).
The government states on page 9 of its Response that, “[t]he issue in the criminal
trial was whether the funds, whether property of the debtor or not, were also client funds.” This
is not correct, and whether the funds had a “dual character,” or were co-owned, was never
presented to the trial court. The government’s suggestion to the contrary is without support in
the record.
Similarly, the government’s argument that there was insufficient privity between the
government’s involvement in the civil case and this prosecution to invoke the doctrine of
collateral estoppel is undercut by evidence in the record. Privity arises “where the nonparty
had a significant interest and participated in the prior action.” United States v. Schimmels (In re
Schimmels), 127 F.3d 875, 881 (9th Cir. 1997). A 2008 opinion from the Ninth Circuit is
instructive in setting out factors useful in determining whether privity is found. See United
States v. Bhatia, 545 F.3d 757, 760 (9th Cir. 2008). There, the Ninth Circuit considered


ARMSTRONG’S REPLY TO THE GOVERNMENT’S RESPONSE Page 12
TO HIS BRIEF ORDERED BY COURT (No. CR 94 276 PJH)
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Supreme Court precedent where privity was found. See id. (citing Montana v. United States,
440 U.S. 147 (1979). The Bhatia panel distinguished its facts from those in Montana, where
the prior civil litigation had the government reviewing pleadings in the prior action, directing
various litigation steps, filing amicus briefs in the prior action, and “effectuating” abandonment
of an appeal. See id. The facts in this case are much closer to those of Montana than those
reviewed in Bhatia. Here, the FBI received all pleadings in the civil case [Exhibit U, page
102], and meetings were held between the prosecution and the civil attorneys [Exhibit O,
Docket No. 607], including meetings to discuss litigation strategy. [Exhibit Q, Docket No.
607]. Unlike Bhatia, but as in Montana, the government appeared in and filed a brief in the
civil case. [Exhibit V, pages 103-04]. The very same prosecutor handling the criminal matter
was on the brief filed in the civil case. [Same].
In short, privity is well-established under the facts of this case. By contrast, in Bhatia,
the government “did nothing to influence or affect Inderra’s litigation strategy” and “the only
connection that exists between the parties of both cases can be found in periodic discussions
between Inderra officials and Government agents.” United States v. Bhatia, 545 F.3d 757, 761
(9th Cir. 2008). Here, the meetings were not with the parties but with their counsel, litigation
strategy was the topic of those meetings, and the government actually appeared in and filed
briefs in the civil case.

CONCLUSION

When a court determines the cumulative effect of prosecutorial misconduct from
improper suppression of evidence, it is important to consider the relevance of the subject matter
of the evidence. Evidence on a matter only tangentially related to the case is not material. See


ARMSTRONG’S REPLY TO THE GOVERNMENT’S RESPONSE Page 13
TO HIS BRIEF ORDERED BY COURT (No. CR 94 276 PJH)
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United States v. Pepe, 747 F.2d 632, 658 (11th Cir. 1984). Similarly, withheld evidence is not
material if it is merely cumulative of other evidence. See United States v. Kohring, 637 F.3d
895, 908 (9th Cir. 2011).
Here, the government based its entire prosecution, over the course of a three-month
trial, on a theory that a complex financial company was wrongfully using money belonging to
others. By improperly suppressing evidence, the jury made decisions about this complex
company without being told that, just three years prior, the same company was the subject of a
different investigation that ending without any finding of wrongdoing. The jury never got to
hear that the government had repeatedly refused to start a new investigation, but changed its
mind 48 hours after congressional leaders directed information to the press. When jurors are
confronted with a “the defendant must be guilty, else he would never have been indicted”
situation, evidence of prior exculpatory investigations and pressured investigations are highly
material. United States v. Cummings, 468 F.2d 274, 278 (9th Cir. 1972)(Noting the
impropriety of the “must be guilty” argument.)
Regarding suppression of the government’s involvement in the civil case, the
government has already conceded the materiality of this point. Despite suggestion to the
contrary in the government’s Response, the prosecutor during trial informed the trial court that
the application of the Ninth Circuit’s holding of In re Hamilton Taft would effect a “gutting of
the government’s case.” [Exhibit M, Docket No. 607, page 77].
Each suppressed item, along with a failure to disclose that the prosecution team lied to
the Court, supports relief under section 2255. Analyzed cumulatively, as this Court must, relief
is required. Accordingly, Armstrong requests that this Court grant his petition, vacate his
conviction, and grant him whatever additional relief to which he is entitled.


DECLARATION OF CONNIE C. ARMSTRONG, JR. (No. CR 94 276 PJH) PAGE 1
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CONNIE C. ARMSTRONG, JR.

8309 Laughing Waters Trail
McKinney Texas, 75070
Telephone: 469-212-2316
e-mail: chip.armstrong@yahoo.com

Petitioner Pro Se

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

CONNIE C. ARMSTRONG, JR.

Petitioner

v.

UNITED STATES OF AMERICA

Respondent
No. CR 94 276 PJH
DECLARATION OF CONNIE C.
ARMSTRONG, JR. CONCERNING
ARMSTRONG’S REPLY TO THE
GOVERNMENT’S RESPONSE TO HIS
BRIEF ORDERED BY COURT SUPPORT
OF 28 U.S.C. § 2255 MOTION

1. I am the Petitioner in this cause and the factual averments within my Brief
Ordered by Court are within my personal knowledge and are true and correct.
2. My Brief Ordered by Court is accompanied by 5 exhibits, separately submitted in
an Appendix under tabs R through V.
3. Of these 5 Exhibits, items R, U, and V were delivered to me while I was
incarcerated, and were delivered pursuant to a request I made under the Freedom of Information
Act. I made three such requests to the Department of Justice in Washington, D.C., in the
Northern District of California, and in the Northern District of Texas. I received responsive
documents from the DOJ in Washington. I was notified that there were approximately 2,000
pages of responsive documents, and that the documents would be delivered to me in batches of


DECLARATION OF CONNIE C. ARMSTRONG, JR. (No. CR 94 276 PJH) PAGE 2
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500. I tendered payment for the copies to the Executive Office for United States Attorneys,
Freedom of Information/Privacy Act Unit in Washington, D.C., after which time I received the
first batch of documents. I repeated this process three more times to obtain the remaining 1,500
documents.
4. The documents delivered to me under the Freedom of Information Act were
delivered to me in beginning in 2004. This was several years after the deadline had passed for me
to seek a remedy by way of direct appeal.
5. The documents attached as Exhibits S and T are true and correct copies of
transcripts of proceeding held in this court in January, 1997.
6. I declare under penalty of perjury that the forgoing is within my personal
knowledge and is true and correct.
7. I declare under penalty of perjury that all factual averments within Armstrong’s
Reply to the Government’s Response to his Brief Ordered By Court Support Of 28 U.S.C. §
2255 Motion are within my personal knowledge and are true and correct.
Dated: September 26, 2011.

____________________________
Connie C. Armstrong, Jr.

CERTIFICATE OF SERVICE SOLO PAGE
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ELECTRONIC COPY
CONNIE C. ARMSTRONG, JR.

8309 Laughing Waters Trail
McKinney Texas, 75070
Telephone: 469-212-2316
e-mail: chip.armstrong@yahoo.com

Petitioner Pro Se

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
OAKLAND DIVISION

CONNIE C. ARMSTRONG, JR.

Petitioner

v.

UNITED STATES OF AMERICA

Respondent
No. CR 94 276 PJH
CERTIFICATE OF SERVICE

I certify that I served a copy of the following documents via USPS, CMRRR to the
below-listed counsel of record:
1. Armstrong’s Reply to the Government’s Response to his
Brief Ordered By Court In Support Of 28 U.S.C. § 2255
Motion;
2. Appendix Containing Supplemental Exhibits to Brief
Ordered By Court In Support Of 28 U.S.C. § 2255 Motion
3. Armstrong’s Reply to the Government’s Response to his
Brief Ordered By Court In Support Of 28 U.S.C. § 2255
Motion; and
4. Certificate of Service.

Melinda Haag
Miranda Kane
Jonathan Schmidt
United States Attorney’s Office
450 Golden Gate Ave., Box 36055
San Francisco, California 94102

Dated: September 26, 2011


____________________________
Connie C. Armstrong, Jr.


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CONNIE C. ARMSTRONG, JR.

8309 Laughing Waters Trail
McKinney Texas, 75070
Telephone: 469-212-2316
e-mail: chip.armstrong@yahoo.com

Petitioner Pro Se


UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

UNITED STATES OF AMERICA

Plaintiff

v.

CONNIE C. ARMSTRONG, JR.

Defendant
No. CR 94 276 PJH

APPENDIX CONTAINING
SUPPLEMENTAL EXHIBITS TO BRIEF
ORDERED BY COURT IN SUPPORT OF
28 U.S.C. § 2255 MOTION

Armstrong submits this Appendix Containing Supplemental Exhibits to his Brief Ordered
by Court in support of his pending motion under 28 U.S.C. § 2255.
DATED: September 26, 2011

_____________________________
CONNIE C. ARMSTRONG, JR.
Petitioner Pro Se

Electronic Copy


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TABLE OF CONTENTS
EXHIBIT R

FBI Memo of March 17, 1991 opening investigation ................................................................. 89

EXHIBIT S

Hearing Transcript Excerpt, January 13, 1997 ........................................................................... 91

EXHIBIT T

Hearing Transcript Excerpt, January 27, 1997 ........................................................................... 96

EXHIBIT U

FBI copying order for contents of bankruptcy case file ........................................................... 102

EXHIBIT V

Government’s amicus brief filed in civil case (first and last pages) ......................................... 103

EXHIBIT R

Memorandum
TD
Prom

SAC, SAN FRANCISCO (196A-SF-932SS) (Po/e 3/17/91
b7C
(CHANGED)
CONNIE C. ARMSTRONG JR. AKA,
CHIP ARMSTRONG, DBA
HAMILTON TAFT AND COMPANY
MARKET PLAZA, SUITE 3200
SPEAR STREET TOWER
SAN FRANCISCO, CA. 94105
MAIL FRAUD, FBW (A)/ TAX FRAUD
00: SAN FRANCISCO
Title marked changed to note the true name of captioned
subject Armstrong.
The purpose of this memorandum is to request authority
to create a series of sub files for this case. This memorandum is
to be maintained on the inside cover of each of the following sub
files as well as the top serial of the main file.
Sub c:
Sub D:
sub E:
All FD-3 02 is
Subpoenas and all correspondence regarding same,
All correspondence and or documents received
from victim corporations. A new subfile should
be created when documents are received from each
separate company. These may be designated E-l,
E-2, etc.
Sub F: All information on captioned subject Armstrong.
Sub G: All Record checks I DMV, Criminal checks, photos,
etc.

: All correspondence with the United States
- Attorney's office.
Sub I: All information received or sent to the IRS.
: All Prentice Hall, Information America and or
Dataquick inquiries.
Sub K: All computerized analysis of documents and or
account information.
SUB L: All media coverage of thO
SYB M: All inform
jIj;",'NF,le SU:'J r rAJ
1-196A-SF-93255 SUB-C:
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 89
196A-SF-93255
SUB N: All correspondence and/or documents received
about corporations which material amounts of
money and/or property was transferred into from
Hamilton Tafti And/or any other corporations
that one of Hamilton Taft's officers has
monetary interest. A new subfile should be
created when documents are received from each
separate company. These may be designated N-l,
N-2, etc ••
SUB 0: Any correspondence received from
the trustee appointed to handle the Hamilton Taft
bankruptcy
2
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 90
EXHIBIT S

UNI STATES
NORTHERN DISTRICT OF FORNIA
BEFORE THE HONORABLE CHARLES A. LEGGE, JUDGE
UNITED STATES OF AMERICA,
PLAINTIFF,
VS.
CONNIE C. ARMSTRONG, JR' I
AND RICHARD A. FOWLES,
DEFENDANTS.
FOR PLAINTIFF:
FOR
ARMSTRONG:
450
SAN
NO. CR 94-0276 CAL
SAN ISCO, CALIFORNIA
MONDAY, JANUARY 13, 1997
VOLUME 15, PAGES 2868 - 3048
I CALIFORNIA 94102
BY: GEORGE D. HARDY,
RONALD D. SMETANA,
ASSISTANT
CHESTER L. BROWN, ESQ.
2450 BROADWAY, SUITE 550
SANTA MONI CALIFORNIA 90404
SOLOMON WOLLACK,
388 MARKET STREET, SUITE 1080
SAN FRANCISCO, CALI 94111
CONTINUED ON NEXT :)
REPORTED BY: JAMES J. YEOMANS, CSR
OFFICIAL COURT REPORTER} USDC
COMPUTERIZED TRANSCRIPTION BY XSCRIBE
JAMES YEOMANS, OFFICIAL REPORTER, UBDe, 415 863-5179
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 91
2885
GOVERNMENT COUNSEL COME IN, PLEASE, I NEED TO SEE THEM ABOUT A
MATTER HERE.
(PAUSE IN THE PROCEEDINGS)
THE COURT: I RECEIVED FROM THE GOVERNMENT THIS
MORNING A DOCUMENT ENTITLED, IIEX PARTE SUBMISSIONS " REGARDING
WI TNESS TERRI ROBINS.
NOW, IS SHE GOING TO BE COMING IN THIS MORNING?
MR. SMETANA: IT WAS OUR INTENT TO DO SO IF MR. HARDY
WAS IN THE PROCESS OF PRE-TRYING YESTERDAY WHEN HE DISCOVERED
THIS.
MR. HARDY: ONE CORRECTION TO THE SUBMISSION. THE
DATES ARE WRONG. APPARENTLY, IT WAS TWO YEARS AFTER THE PACT.
IT WAS 1993 AND 1994.
THE COURT: BUT NOW WHAT BOTHERS ME IS THAT SHE DOES
HAVE AND DOES KNOW OF STATEMENTS BY ARMSTRONG. YOU NOW KNOW OF
STATEMENTS BY ARMSTRONG.
MR. HARDY: WE KNOW SHE APPARENTLY DID RECORD SOME
STATEMENTS.
THE COURT: YOU HAVEN'T SEEN THE STATEMENTS?
MR. SMETANA: AGAIN, WE FOUND OUT YESTERDAY AND SINCE
THIS MORNING TALKED WITH THE FBI SPECIAL AGENT INVOLVED WHO
CONFIRMED FIRST, THAT IT WAS AN INVESTIGATION OF AN ENTIRELY
DIFFERENT COMPANY.
THE COURT: HE STILL MADE STATEMENTS.
MR. SMETANA: AND, SECONDLY, SHE WAS INSTRUCTED NOT TO
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 92
ASK OR DISCUSS HAMILTON TAFT.
THE COURT: BUT SAY -- IT'S NOT JUST
THE WITNESS ITSELF I'M CONCERNED ABOUT, IT'S ALSO POSSIBLY
EXCULPATORY THINGS THAT WERE SAID. I THINK THE DEFENSE HAS A
RIGHT TO THOSE STATEMENTS BOTH BECAUSE THEY ARE, AI
STATEMENTS OF THE WITNESS AND, B, BECAUSE THEY'RE POTENTIAL
BRADY MATERIAL. I DONJT KNOW WHETHER THEY ARE OR NOT.
MR. HARDY: WE I VE NEVER SEEN THEM. WE I RE NOT
THAT CONCLUSION AT ALL, THAT'S WHY WE BROUGHT
YOUR ATTENTION.
THE HOW CAN WE GO AHEAD ROB INS?
MR. HARDY: CAN WE DO THIS? WE REVEAL THE FACT
THAT THE PAYMENT OF MONIES BY THE FBI TO TERRI ROBINS DURING
THE PER
DEFENSE
HERE,
CROSS SHE
1993 TO 1994?
THE COURT: DIRECT?
MR, HARDY: IN OUR DIRECT I OR WOULD BE LEFT TO THE
NOW, THEN ORDER UP ALL OF THAT/ GET IT FAXED
FEDEXED OUT HERE.
SHE'S RELEASED FROM TESTIFYING AFTER DIRECT AND
BE RELEASED SUBJECT TO RECALL FOR THE
CROSS-EXAMINATION ON THOSE POINTS. IS THAT IBLE?
TO THE SO THAT WE CAN TURNOVER THE
THEY CAN REVIEW THEM, THEY CAN DECIDE WHETHER OR NOT THEYJRE
ISSUES WANT TO BRING UP.
THE COURT: YOU DON'T THINK IT MIGHT BE BETTER TO
JAMES ~ ~ " ~ " V , OFFICIAL REPORTER, USDe, 415-863-5179
6
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 93
ROBINS?
MR. SMETANA: WE PROPOSE TO REST
WE'RE ABOUT DONE.
2887
OR WEDNESDAY.
THE COURT: I THINK WE'RE NOW AT A POINT WE HAVE TO
TELL THE DEFENSE ABOUT THE PROBLEM. NOW, SO YOUR SUGGESTION IS
WE GO ~ ~ ~ = ~ WITH WHAT WE'VE GOT AND THAT THE ONLY QUESTION THEN
WOULD WHAT TO DO ABOUT THE STATEMENTS THEMSELVES?
MR. HARDY: CORRECT. TIlEY MAY NOT WANT TO GO INTO
THEM THEY LOOK AT THEM.
THE COURT! THEY MAY BE JUST TOTALLY IRRELEVANT. BUT
IT'S A PIECE OF MEAT FOR TO JUMP ALL OVER AND I
HAVE TO BE CONCERNED THAT IF SHE HAS RECORDED IT AND THEY ARE
PRODUCED AS WITNESS STATEMENTS AND WHETHER THERE'S POSSIBLY ANY
BRADY MATERIAL IN THERE. YET NONE OF US KNOW THAT.
(PROCEEDINGS HELD IN OPEN NOT PRESENT:)
THE COURT: LET THE RECORD I'VE RECEIVED THIS
A STATEMENT FROM THE GOVERNMENT WITNESS TERRI
ROBINS, AND THIS RAISES SOME ABOUT MS. ROBINS AS A
WITNESS AND'S, I GUESS, ANTICIPATED TO BE YOUR NEXT
WITNESS?
MR. HARDY: THAT'S
THE COURT: APPARENTLY, IT CAME TO LIGHT OVER THE
WEEKEND IN THE PRE-TESTIMONY BETWEEN THE
GOVERNMENT COUNSEL HERE AND MS. ROBINS, WHICH SHE WAS ASSISTING
YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 94
2888
THE FBI AND ANOTHER INVESTIGATION OF HAMILTON TAFT INVOLVING
COMPUTECH AND THAT SHE WAS PAID BY THE FBI FOR WHAT, I DON'T
KNOW, TIME, EXPENSES, I'M NOT SURE WHAT. SHE DID RECORD
CONVERSATIONS WITH MR. ARMSTRONG.
NOW, AS I TOLD GOVERNMENT COUNSEL, I THINK THOSE
STATEMENTS THAT SHE RECORDED HAVE TO BE PRODUCED TO THE DEFENSE
BOTH AS STATEMENTS OF THE DEFENDANT AND FOR POTENTIAL BRADY
MATERIAL. NOBODY HAS YET REVIEWED THESE. IT'S MY
UNDERSTANDING GOVERNMENT COUNSEL DOESN'T KNOW WHAT'S IN THOSE
STATEMENTS, JUST FOUND OUT ABOUT IT THIS WEEKEND.
MR. HARDY! THAT 1 S CORRECT.
THE COURT: SO THE STATEMENTS HAVE TO BE PRODUCED. SO
THE QUESTION IS WHAT WE CAN DO WITH MS. ROBINS WHO'S COMING IN
TO TESTIFY TODAY. THE GOVERNMENT SUGGESTS - - WELL, MAYBE YOU
BETTER STATE THE SUGGESTION.
MR. HARDY: GOVERNMENT SUGGESTS THAT WE PROCEED TODAY
AND WHEN WE'VE FINISHED WITH THE TESTIMONY THAT THE PLAINTIFF
CROSS-EXAMINATION, WHATEVER CROSS-EXAMINATION THAT YOU GO INTO,
THAT SHE BE RELEASED SUBJECT TO RECALL FOLLOWING THE REVIEW OF
THOSE STATEMENTS, SHE BE CALLED ON CROSS ON THOSE POINTS.
WE DON'T KNOW IF YOU'RE GOING TO WANT TO GO INTO THOSE
POINTS OR NOT. WE DON'T KNOW WHAT'S THERE, BUT WE'RE RUNNING
LOW ON WITNESSES.
THE COURT: HOW SOON CAN YOU HAVE THE STATEMENTS?
MR. SMETANA: I DON'T EVEN KNOW AT THIS POINT WHAT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 95
EXHIBIT T

NORTHERN
BEFORE THE HO:N01WlLE
UNITED OF
PLAINTIFF,
VS.
• I
DEFENDANTS.
OF
. LEGGE, JtJDGE
)
)
)
}
\
CR 94-0276 CAL J
)
}
)
)
)
SAJ.V FORNIA
27, 1997
PAGES 3441 - 3639
AVENUE
I CALIFORNIA 102
BY; GEORGE D. I ESQ.
RONALD D. SMETANA,
ASSISTANT UNITED STATES
2450 550
SANTA MONICAl CALIFORNIA 90404
SOLOMON WOLLACK, ESQ.
388 STREET I SUITE 1080
SAN I CALIFORNIA 111
ON NEXT PAGE:)
REPORTED BY: JAMES ~ 1 . YEOMANS t CSR
OFFICIAL COuKT REPORTER
COMPUTERIZED BY
JAMES -863-5179
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 96
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2S
3446
THE COURT; YES. COMPUCHECK INVESTIGATION? IS THAT
WHAT YOU'RE TALKING ABOUT? YES. THEY FILED SOME STUFF AND, I
GUESS, THEY GAVE IT JUST TO COUNSEL FOR MR. ARMSTRONG BECAUSE I
DON'T THINK MR. FOWLES IS INVOLVED IN IT, AT LEAST, FROM WHAT I
SAW.
MR. SMETANA: THE QUOTE STATEMENTS OF TIrE DEFENDANT
THAT WE HAVE AND ANY POTENTIAL BRADY THAT WE HAVE RELATE ONLY
TO MR. ARMSTRONG AND NOT TO MR. FOWLES. THOSE HA.VE BEEN
PROVIDED TO COUNSEL FOR MR. ARMSTRONG.
THE COURT: AS I SAID, I GOT A GREAT BIG BOX FRIDAY
AFTERNOON FULL OF MATERIAL ON THAT, SO WHAT DO YOU FOLKS WANT
TO DO?
MR. BROWN: LET'S TALK ABOUT THESE TAPES. I KNOW
FIRST, I KNOW THE COURT IS PROBABLY VERY CONCERNED, I KNOW WE
ARE. FROM OUR PERSPECTIVE, YOUR HONOR, IT'S A MAJOR PROBLEM.
WE'VE JUST RECEIVED -- WE HEARD ON FRIDAY, I BELIEVE,
AFTERNOON THAT THEY HAD FINALLY AND I DON'T, I DON'T BELIEVE
IT'S MR. SMETANA OR MR. HATCHER OR MR. HARDY'S FAULT, BUT IT'S
ONE GOVERNMENT AND WE ALL KNOW HOW THOSE THEORIES WORK, IT'S
THE ABOUT FBI IN DALLAS.
WHAT APPARENTLY HAS HAPPENED HERE, WHILE MR. ARMSTRONG
WAS CLEARLY REPRESENTED BY COUNSEL AND WHILE THERE WAS, I
BELIEVE, GRAND JURY GOING ON IN THIS CASE, MS. ROBINS WAS
ACTING AS AN INFORMANT FOR THE FBI DOWN IN DALLAS. IT REALLY
IS HARD TO IMAGINE, WITH THE FACT THAT SHE WAS A GRAND JURY
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 97
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WITNESS OF THE GOVERNMENT HERE, THE FBI HERE IN LOS ANGELES DID
A NUMBER OF INTERVIEWS DOWN IN THE DALLAs AREA.
MR. MURPHY WENT DOWN THERE ON OCCAS ION WE KNOW FROM
MR. EVERETT WHO WAS FORMALLY WORKING WITH THE GOVERNMENT
THAT - - ON ONE OCCASION, AT LEAST, THAT WERE SOME DALLAS AGENTS
THAT WORKED WITH MR. MURPHY WHEN THEY WERE IN DALLAS, THAT THIS
INFORMATION WASN'T KNOWN, ALTHOUGH, IT'S NOT REALLY OUR PROBLEM
WHETHER IT WAS COMMUNICATED TO THE SAN FRANCISCO --
THE COURT: IT IS YOUR PROBLEM. WHAT DO YOU WANT TO
DO ABOUT IT? WHAT DO YOU WANT TO DO?
MR. BROWN: YOUR HONOR, WE'VE JUST RECEIVED - - LET ME
TELL YOU WHAT'S HAPPENED. THE GOVERNMENT - - APPARENTLY,
THERE'S SOME -- 35 SOME TAPES WITH 70 SOME HOURS OF INFORMATION
ON IT.
THE COURT: I'VE GOT A GREAT BIG BOX, LITERALLY A BIG
BOX, OF MATERIAL THEY BROUGHT IN MY OFFICE FRIDAY AFTERNOON.
MR. BROWN: ALL WITH SOUND RECORDINGS ON THEM.
THE COURT: NOT ALL, SUBSTANTIAL QUANTITY OF PAPER IN
THERE. I'M NOT SURE QUITE WHAT IT IS. WHAT I ATTEMPTED TO DO
IS START WITH WHAT WAS OBVIOUSLY GREATEST INTEREST TO YOU, THAT
IS THE TAPES AND, I GUESS I THE OTHER STATEMENTS WHICH HAD MR.
ARMSTRONG ON THEM, SO --
MR. BROWN: I'LL TELL YOU, YOUR HONOR, WE WERE TOLD
THAT THERE WERE THREE HOURS WORTH OF SOUND RECORDINGS THAT
SPECIFICALLY MENTIONED HAMILTON TAFT. THE GOVERNMENT
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 98
1
2
ION THAT THE
THIS
3448
THEIR'
, INVOLVED MR.
3 ARMSTRONG BUT
4
5
'6
7
8
9
lAM
I
THE COURT: I GUESS THAT'S A FAIR
MR • BROWN: THAT I S WE WERE AnVI SED. THESE
HONOR, AT LEAST SOME BRADY MATERIAL.
SAYING I THINK THE GOVERNMENT WOULD
IN ONE OF THEIR MOTIONS THAT THEY FILED THIS MOTION ON
OF MIND. ASKING THAT WHATEVER INFORMATION FROM
10 THESE TAPES INDICATES MR. ARMSTRONG'S DENIAL OF ANY WRONGDOING
11 AT HAMILTON TAFT NOT BE PERMITTED TO BE ADDUCED DURING THE
12 COURSE OF THIS TRIAL.
13 THE COURT: PARDON ME A SECOND. I THINK I SEE MR.
14 SOLODOFF IN THE HALLWAY THERE.
MR. HATCHER, WOULD YOU TELL HIM THAT
TELEPHONE STANDBY AND IF WE NEED HIM WE WILL
JUST TO BE ON
HIM A
17 TELEPHONE CALL. HE SHOULD BE AVAILABLE BY TELEPHONE THIS WEEK.
18
19
GO AHEAD.
MR. BROWN: HONOR, FOR US TO
20 ASSESS THIS, AND I HATE TO SAY THIS, IT'S THREE HOURS, WE WERE
21
22
23
24
25
TOLD ABOUT ON FRIDAY. WE WERE IN THE MIDDLE OF --
WERE ARRIVING.
THE COURT: DOUBT YOU HAVE NOT HAD TIME TO LI STEN
TO THE TAPES. WHAT DO YOU WANT TO DO?
MR. BROWN: I REALLY HATE TO SAY THIS. I THINK WE
JAMES YEOMANS, OFFICIAL REPORTER, USDC/ 415-863-5179
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 99
3449
1 NEED AN OPPORTUNITY TO REVIEW THESE AND/ IF WE NEED TO TAKE A
2 DAY JUST TO REVIEW TAPES, I THINK WE NEED TO DO IT. WE
3 CAN 'T - - THE COURT - - I THINK THE COURT NEEDS TO REVIEW WHAT
4 MATERIAL IT HAS. THIS DEFINITELY HAS BRADY MATERIAL IN IT.
5 THERB'S ALL KINDS OF MOTIONS, AS THE COURT KNOWS,
6 INCLUDING MOTIONS FOR DISMISSAL THAT WE OUGHT TO PERHAPS BE
7 FILED REGARDING THIS SITUATION.
8 THERE/S MACIA PROBLEMS BECAUSE MR. ARMSTRONG IS
9 REPRESENTED BUT COUNSEL AT A TIME WHEN THE INVESTI ON
10 CLEARLY HAD FOCUSED ON HIM AND HE WAS A TARGET.
11 THERE'S A NUMBER OF OTHER REMEDIES, THE LEAST OF WHICH
12 WOULD BE TERRI ROBINS SHOULD NOT BE PERMITTED TO TESTIFY.
13
14
15
16
THE
STEP POSSIBLY
MEAN, I JUST
YOU? MAYBE
THE GOVERNMENT HAS ALREADY INDI THAT
AGAIN, WHAT DO YOU WANT TO DO? I
WHAT'S COULD COME OUT FOR
FOR A MOTION TO DISMISS. I DON'T KNOW
17 WHETHER THEY HAVE MERIT OR NOT.
18 MR. BROWN: THAT WOULD OBVIOUSLY BE WHAT WE'RE LOOKING
19 FOR.
20 THE COURT: NOT GOING TO BE WANTING TO PUT MR.
21 ARMSTRONG'S OWN STATEMENTS IN THIS CASE. BECAUSE YOU'D BE
22 DISCLOSING TO THE JURY THE FACT HE'S - OTHER INVESTIGATION IN
23 ANOTHER I WOOLDN'T THINK YOU'D WANT TO DO THAT. YOUR
24 CALL, BUT THAT'S A TACTICAL
25 MR. BROWN: WE WERE TOLD AND COURT WOULD HAVE TO
, USDC, 415-863-5179
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 100
3450
1 LOOK AT THE IN CAMERA MATERIAL.
2 THE COURT: DO I? I REALLY AM CHOKING ON THAT. IT'S
3 HOURS AND HOURS OF SITTING AND LISTENING.
MR. BROWN: I KNOW. 4
5 THE COURT: I'VE NEVER HAD ANY REASON TO QUESTION THE
6 GOVERNMENT'S GOOD FAITH WHEN THEY SAY HERE'S A TAPE THAT
7 SOMEBODY'S CONVERSATION IS ON AND THESE TAPES DON'T HAVE THAT
8 PERSON ON THE TAPE AT ALL. YOU KNOW, I GENERALLY TAKE THE
9 GOVERNMENT'S WORD ON THOSE THINGS. I'VE NEVER BEEN MISLED BY
10 THE GOVERNMENT.
11 MR. BROWN: WE, YOUR HONOR, WITH ALL -- IN ALL CANDOR,
12 WERE OFFERED THESE TAPES SOMETIME LATE FRIDAY AFTERNOON,
13 MID-AFTERNOON, AND I SIMPLY ADVISED MR. SMETANA TO FAX OVER
14 THESE VARIOUS MOTIONS THAT THE COURT HAS ..
15 IN LOOKING AT THOSE MOTIONS AND COORDINATING OUR
16 WITNESSES AND GETTING READY FOR TODAY AND THE COMPLETION OF
17 THAT, WE DID NOT HAVE TIME TO BE LISTENING AND EVALUATING THREE
18 HOURS.
19 I HAVE WITNESSES HERE FROM OUT OF TOWN TODAY. TO DO
20 JUSTICE TO THIS INFORMATION, QUITE FRANKLY, WE WOULD NEED TO
21 TAKE TODAY TO REVIEW THESE TAPES AND DETERMINE WHAT THE
22 APPROPRIATE RESPONSE THAT WE WOULD HAVE WI-TH REGARD TO THIS
23 BRADY MATERIAL AND WHATEVER OTHER INFORMATION PERTAINS TO THIS
24 CASE. THESE TAPES HAVE THREE HOURS OF COMMENTS BY - - AND
25 STATEMENTS BY THE DEFENDANT.
JAMES YEOMANS, OFFICIAL REPORTER, USDC, 415-863-5179 SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 101
EXHIBIT U

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SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 102
EXHIBIT V

, ..
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
No. 93-15455
IN RE: HAMILTON TAFT & COMPANY,
,
Debtor
FREDERICK S. WYLE, TRUSTEE,
Appellant
v.
S & S CREDIT COMPANY,
Appellee
ON APPEAL FROM THE JUDGMENT OF THE
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
BRIEF OF THE UNITED STATES AS AMICUS CURIAE
ON PETITION FOR REHEARING
On May 23, 1995, this Court invited the Government to file
an amicus brief "addressing whether the opinion filed in this
case, In re Hamilton Taft & Co., No. 93-15355 [sic], slip op.
filed May 2, 1995, adversely affects in any way the interests of
the IRS in collecting federal taxes." The following brief is
sUbmitted in response to that invitation.
STATEMENT
The case is an appeal from a District Court judgment
~ f f i r m i n g a Bankruptcy Court's refusal to treat a payment of
federal taxes as a voidable preference under Bankruptcy Code (11
000154
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 103
- 15 -
CONCLUSION
,
J
For the above stated reasons, this Court should grant the
petition for rehearing and affirm the jUdgment of the District
Court affirming the Bankruptcy Court's jUdgment insofar as it
refuses to treat payments made by debtor for S & S's trust fund
tax liabilities as voidable preferences.
Respectfully submitted,
LORETTA C. ARGRETT
Assistant Attorne General
c:::c..
L
<1. (oJ I) (L[LLtLA',c,J
GARY R ~ ALLEN 1 (202) 514-3361
GARY D. GRAY (202) 5 1 4 ~ 3 0 0 5
PAULA K. SPECK (202) 514-4329
Attorneys
Tax Division
Department of Justice
Post Office Box 502
Washington, D.C. 20044
Of Counsel:
MICHAEL JOSEPH YAMAGUCHI
United States Attorney
AUGUST 1995
000155
SUPPLEMENTAL EXHIBITS TO BRIEF PAGE 104

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