An Endless Stream of Lies (13 page)

THOUGHTS, COMMENTS AND ANALYSIS

What are your impressions, to this point, with regard to this circumstance?

Exactly what do you know?

What is it that you know that you don’t know?

What questions would you ask in order to know?

What steps would you take in order to know?

POINTS TO PONDER

1. In your opinion, should mitigating factors be a consideration in Alex’s sentencing determination?
   
2. If your answer to question number one is “yes,” what are those mitigating factors and why should they be a consideration?
   
3. If the answer to question number one is “no,” why not?
   
4. What questions would you pose to Alex at this point?
   

CONTENT – CONTEXT APPLICATION

The U.S. Attorney’s Office accused the vice president of a large banking enterprise of embezzling over eleven million dollars though a conspiracy scheme that operated over a nine year period. The fraudulent activities included false billing to the bank for millions of dollars’ worth of home renovations, jet skis, golf carts, jewelry and other assets.

The accused worked as a vice president in utility services. Within that operation, his responsibilities included invoice payments. The invoices were submitted to the bank by contractors who performed worked for the bank. The contractors involved would return a portion of the money paid or provide other goods and services to the defendant. The contractors involved did not know one another, only the defendant.

1. Having reviewed the pre-sentencing determination, in the reading of this chapter, if you were the officer, how would you proceed?
   
2. In your mind, what could serve as mitigating factors in the sentencing determination?
   
3. If the vice president were a young woman as opposed to an old man, would that be a determination?
   
4. Would you eliminate mitigating factors altogether? Why or why not?
   
5. What questions would you pose to this individual?
   

CHAPTER NINE

UNCHARTED WATERS

Why does the river rest so soon, and dry up,

And

Leave us to languish in the sand?

—
FAUST

NAVIGATION POINT AND HEADING
Alex has now come to a significant, transitional point in his voyage. It is the day and time for Alex to be sentenced. This is the point wherein the anchor of Alex’s actions is to be weighed, and his ship of fate, set sail. There are a number of effecting dynamics that will function to set his course. The court, attorneys from both sides, a relative, Alex’s wife, Alex himself, and victim representations will all have something to say at this ship’s christening ceremony.

CHANGE: LIFE’S ONLY CONSTANT

Each of us experiences the vicissitudes of life. This
is
life. Some changes are obviously positive, others painfully negative, while others are not easily determined until later on. But in most instances, life’s transitions do not transpire in a public forum, such as a courtroom with reporters, spectators and others. Not so for Alex. Now, his manipulations of things and people will be hoisted like the flag of a pirate ship, for all to see.

The sentencing hearing will unfold like a Greek play. The play is titled
United States of America versus Alexander G. Klosek
. On the playbill, we will find the antagonist, protagonists, the aggrieved, the chorus and, implicitly, even Hermes. Hermes was the Greek god of transitions and boundaries. More importantly, he was the protector of thieves.

The transcript of the sentencing hearing reads like the actors’ speaking parts. With the individual monologue, the character will walk onto the stage, speak their part and move to the side. In like manner of a Greek tragedy, it will all begin with the prologue, followed by the unfolding episodes. Throughout it all, only one person—Alex—will remain at center stage.

But this is not a play—this is life. Admittedly, perhaps, this sentencing hearing is life imitating art, but it is life nevertheless. Each actor will take their place on the stage and speak their lines. Some actors will be stage right and other actors will be stage left. The drama will continually build. There will be those who will advocate for Alex and others who will advocate against. Tension, like the strain on a ship’s mooring line in a storm, will grow stronger.

There will be no dimming of the lights, but it will grow enthrallingly quiet. The play begins. We hear the sliding of the four feet under the chair as it is pushed back from the table. Someone stands, faces the court and begins to speak.

THE PROLOGUE: A GOVERNMENTAL REPRESENTATIVE ADDRESSES THE COURT

Your Honor, I won’t add much. I’ll say this. The decision regarding the filing of a 5K motion and then the extent of it in this case was certainly out of the ordinary and, I would suggest, fairly difficult for the government and persons involved in the case to wrestle with. There are certain facts, though, that I believe are quite compelling.

First, when it started to come down, when the house of cards began to topple, we cannot ignore that it was Mr. Klosek that really took the first significant step of bringing it to the attention of federal law enforcement.

I wish I could report to the Court at this time that that resulted in the saving of millions more dollars for purposes of restitution. Unfortunately, that was not the case. However, especially when comparing him to Mr. Noel — the Court even had the opportunity to hear this morning, he still lives in the state of he did nothing wrong — I must credit Mr. Klosek for coming — not only recognizing just how wrong it was, but recognizing the magnitude and bringing it to the attention of the FBI. That was important.

He then, in all fairness, almost undid everything, every bit of good he began, with his years of dancing around the truth — and that’s not even a correct phrase — his utter ignoring of the truth for his part in it and also how it pertained to Mr. Noel. This was very significant because it was during this time that the government was preparing for trial, and Mr. Klosek, by necessity, was a very important witness for the government against Mr. Noel.

The prosecutors at the time, Ms. Rikard and Mr. Martens, both experienced and both very savvy, were relying an awful lot on what Mr. Klosek was saying, and literally right up to the eve of trial.

And Your Honor knows that very well. That had an awful lot of impact in terms of, number one, causing a continuance of the case and, number two, causing a great deal of disarray to the government’s pretrial preparation.

At the end of the day, the foul did not result in enormous harm because Mr. Noel was properly convicted; however, Mr. Klosek’s behavior during this time was significantly damaging.

And then he did testify at trial, and we believe he testified truthfully, we believe he testified effectively, and we believe his testimony has to be credited as substantial assistance for its part in leading to the conviction of Mr. Noel and, in fact, his sentencing today to 300 months.

So putting it all together, Judge, we ultimately had to fashion justice from it, and it is my submission to the Court at this time that we have done our best, and I believe we have made the right decision.

EPISODE ONE: THE COURT SPEAKS

The Court will grant the motion for a reduction for substantial assistance. The government has just described that assistance: that he went to the FBI in June of 2006 unprompted by any government agency; that that was the first indication the government had that a fraud was afoot; the government was able to salvage some of the victims’ investments because of his assistance; and that to that extent it was timely and further enabled the government to build a stronger case against the co-defendant.

That is, of course, undermined to some extent by the fact that he was not totally truthful in the period leading up to the trial, but by the time of the trial, he had evidently come clean and told the truth and did testify.

The diversion of funds fraud was uniquely the scheme of Mr. Noel, albeit this defendant had knowledge of it, or came to have it.

Nevertheless, the stock-trading fund was the primary vehicle of the conspiracy; and in terms of the losses to victims, the diversion of funds was the greater producer of losses, and that was more directly assignable to Mr. Noel’s involvement than Mr. Klosek’s, who had little to do with the start-up companies and the diversion of funds to them, and virtually nothing to do with it apart from Mr. Noel’s initiation.

Mr. Klosek’s decisions were unfortunately influenced, that is, his decisions about cooperation, by undue influence from his father, who unfortunately was encouraging the defendant to lie and position his testimony in various ways.

That was, to say the least, unflattering as far as the father is concerned. Nevertheless, the Court mentions that in putting the defendant’s cooperation and its shortcomings in context.

This defendant does pose a lesser risk of reoffending than Mr. Noel. He’s more likely to seek legitimate employment after his release from prison. These are factors the government has cited in terms of evaluating the defendant’s cooperation.

The government further points out that the defendant’s assistance in the context I have cited was extensive and significant and useful. The government has assigned weight and asks for a 120-month sentence, and the Court gives that substantial weight in that the government’s evaluation was not difficult to ascertain, nor is it difficult for the Court. But in the end, his testimony did appear to be complete and reliable.

And there were some risks of his cooperation in the sense that he wore a wire and was threatened by Mr. Noel in terms of the threat that he might become addicted because of some action on the part of Mr. Noel, or otherwise suffer consequences. So the Court evaluates that testimony and will make that a part of the sentence as we proceed.

EPISODE TWO: ALEX’S ATTORNEY ADDRESSES THE COURT

Your Honor, in all candor, the Court’s summary just now has taken the wind out of much of what I was going to say today, so that will even further reduce the time I will have before the Court. But I believe the Court has accurately assessed, as it has articulated already, the nature of Mr. Klosek’s key involvement in this case. There are another few comments I’d like to add.

It’s also not to be underestimated that it was because of Mr. Klosek going to the original FBI agent in this case that he was able to cause this to happen, that he was able to cause the best team, the United States of America, to handle this — the scope of this kind of a case, to become involved to begin with.

I say that because I happen to have an entirely unrelated case, the clients were victims of a fraud scheme involving millions of dollars, that I’ve been trying to shop to different law enforcement entities for about a year. It ultimately may go somewhere. But Mr. Klosek was able to find the right agent at the right time and let him know what was going on, and by getting the FBI involved, that has brought us here today, and to bring Mr. Noel to justice, and to bring a million dollars in funds that had — you know, it has been said at different times there might be some sort of inevitable discovery of the fraud, but Mr. Klosek was able — because of the timing of this case, they were still able to seize almost a million dollars, which pales in comparison to the losses suffered by the victims, but certainly it’s not an insignificant amount.

He wore a wire.

He was threatened.

He testified. He was part of the conspiracy, played a significant role, but performed at the highest level of cooperation that can be recognized by the government or the Court in every aspect of this scheme, beginning with voluntary self-disclosure all the way through testimony at trial.

The United States evaluated the harm, the relative harm, done by Mr. Klosek at the beginning of this case with the initial plea agreement, which was a 60-month cap. Mr. Klosek, not motivated by greed or willful ill-will or wanting to destroy the government’s case or anything like that, but instead, I think, as observed by the Court, subject to the bizarre manipulation by his father, for no other explanation than a perverse desire to control Alex Klosek, Alex Klosek did not disclose the full extent of Noel’s involvement in part of that scheme, but ultimately did and testified truthfully at trial.

And, obviously, as a trial attorney and as a former Assistant U.S. Attorney and as the attorney there on the ground with Mr. Klosek in the interviews initially with the United States, my heart goes out to the prosecution team of having to deal with this situation on the eve of trial. It’s extraordinarily distressing and extremely regretful. However, Your Honor, with that in mind, the scope of what Mr. Klosek had done had already been evaluated, and the statements and the failures to disclose didn’t change what he had already admitted to have done. He fully admitted to have been involved in the scheme. Now, he obviously made misstatements about when Noel was involved in part of one of those schemes, but Mr. Klosek had fully admitted to the scope of his wrongdoing.

And, Your Honor, it also bears mentioning that the scope of his wrongdoing, again, while perhaps motivated by greed in the sense that he was able to earn a salary during that period of time, he was not engaged in the siphoning off of millions of dollars for other investment vehicles and things like that. His wrongdoing was shame at having lost that money, and then Noel’s, of course, siphoning off more funds until, for him, it came crashing down, and it was his guilt and his desire to do right at the end of the day that brought everyone here.

So it certainly is not — it’s not laudable, and Mr. Klosek has — he will forever have this felony conviction as a mark, will forever have an enormously massive restitution judgment against him that will follow him the rest of his life. The rest of his life he will always be paying money back to these victims in this case. Every month. Every time he earns a cent, he will be paying money back for the rest of his life. He is penniless, his wife will need to move back home with her parents, and he’s going to prison. He is — for all of his guilt, remorse, and the good works that he did when he recognized what was wrong, this man will be severely punished. This man would still be severely pushed even with the government’s original assessment of the level of wrongdoing he had done, which is 60 months.

Now, I can understand entirely the government’s recommendation of 120 months based on their experience in this case and the gut-wrenching situation that Mr. Klosek’s regrettable actions put them in. However, I would argue to the Court that’s not an evaluation of the 3553(a) factors in terms of the scope of what he has done in this case, the scope of what he has done to try to help rectify the wrongs, to bring a much worse man to justice, and considering the fact that he will forever be crippled by what he has done in this case, even with a prison term of 60 months in prison.