Re: The Sex.Com Chronicles, by Charles Carreon
Posted: Fri Jun 13, 2014 1:57 am
THE MAGICIAN AND HIS PHANTOMS
The day after we filed our massive reply briefs and declarations, Wagstaffe told me that he’d finally read through my declaration and voluminous exhibits with full attention, and was pleasantly surprised to see that we had convincingly proved all of Cohen’s sham companies were nothing other than Cohen’s corporate alter-egos. Wagstaffe thought I’d given Judge Ware good reason to “pierce the corporate veil,” under the alter-ego doctrine. He said he figured I was gathering up useful information with all of the discovery I was doing, but hadn’t realized it would end up being so comprehensive and convincing.
The alter-ego theory had assumed even greater importance for us when we realized that we had never sued Omnitec, because Cohen had obscured its significance quite effectively. The long-desired Wells Fargo bank records alone revealed the central role of Omnitec. No wonder Cohen stole them from Kinko’s. He had laundered the Sex.Com profits through five companies. Most of them were decoys, like Sporting Houses Management, Ocean Fund International and YNATA, that nominally “owned” Sex.Com. Others, like Omnitec and perhaps Sandman, were primarily bags of money that inflated as the money came in, then deflated to be sure that, as the YNATA name promised, they would “never amount to anything.”
The alter-ego doctrine is based on the reasonable proposition that a company has to operate on the same set of laws as a person, because at most, incorporation turns an inanimate stack of papers into a pseudo-human. A person can’t be allowed to immunize themselves from the consequences of their conduct simply by using a corporation to perform unlawful acts, so the doctrine holds that if a corporation is merely the alter ego of an individual, and has no true separate character, the acts of the corporation, and its legal liabilities, are binding upon that individual. Like many other legal doctrines, it rarely works as intended. For example, no court would pierce the corporate veil of the corporations that hooked children on cigarettes, or killed workers with asbestos, or despoiled countless acres of public lands with toxic waste. Such a result would be antithetical to the true purposes of our corporate system, which protects the individuals who drive our economic juggernauts from being judged too harshly when they occasionally steer us onto the reefs of mass misfortune. Someone has to run the world of industry, after all, and who but the rich would know how? While you may reject such a doctrine, the courts pretty much abide by it. On the other hand, amateur frauds like Omnitec that produce no apparent benefit for society are a fit subject for corporate piercing. This may seem ironic, because compared with Enron, that created money that never existed, Cohen’s business model was actually more legitimate -- at least the money he stole was real!
That real money, however, coursed its way through numerous illusory companies. We got the last piece to Cohen’s puzzle when we traced the flow of Sex.Com money to Omnitec’s Wells Fargo accounts, and thence to offshore banks. Omnitec’s role in the business was so central that Cohen probably created Ocean Fund, YNATA and other companies primarily to conceal its existence. By leading us down the Sandman’s trail, and in search of Vito Franko and Sir William Douglas, Cohen kept us barking up trees that held no treasures. Small wonder Cohen seemed amused by our efforts to unwind his twisted tales. Nevertheless, piercing Cohen’s serial deceptions was necessary to engineer his final defeat, because Gary had to defeat YNATA’s claim that it was a “bona fide purchaser for value.” To conceal the fact that YNATA’s acquisition of the domain was merely Cohen passing the domain from his right hand to his left, all Cohen had to do was contend that YNATA was actually owned by someone besides himself, to forge their signatures, and to procure their non-attendance at depositions. Since one who seeks to “pierce the corporate veil” in Federal court must prove by “clear and convincing evidence” that the doctrine applies, Cohen was hoping he could defeat our efforts to unmask his corporate alter-egos by propping up phantoms and charging Gary the expense of proving they were nonexistent. The burden was on us to prove that he was YNATA, and if we couldn’t produce such evidence, YNATA might prevail. It took a long time to dissolve all the phantoms. We just needed to keep Cohen talking. When someone is lying, there is no such thing as asking him too many questions.
The opportunity to get Cohen under oath one last time arose fortuitously. You may recall that Judge Trumbull ordered YNATA to either produce Sir William Douglas for deposition, or produce some corporate document to show that he was not in fact a YNATA corporate officer. This ruling must have delighted Cohen, who, seeing one more opportunity to forge his way out of trouble, had provided Dorband with the corporate resolution signed by several “officers” and YNATA’s “sole shareholder.” The resolution pointedly stated that Sir William Douglas had stopped working for YNATA the day before I served the notice to take his deposition. Besides Cohen himself, four imaginary persons had signed the resolution, which was just a few pages, and looked like a basic forgery project that had presented no challenge for Cohen. All this forgery was very good for us, I reminded myself, because winning in court is often based more on proving that your adversary is lying than proving that you are telling the truth. Thus the William Douglas story, tired as it was, continued to serve as a handy battering ram, cut from Cohen’s own corrupt timber.
When we insisted on deposing each of the signers of the resolution, Cohen played his position like a poker hand. He raised the bet. We wanted to poke holes in the YNATA corporate veil? We could pay for the right. During Christmas 1999, he’d tried to send me to Russia, Israel, Greece, and other distant lands with poor security. Now he found another use for hazardous venues. The corporate officers of YNATA were all in Caracas, Venezuela. Why could they not leave Caracas? Dorband explained that they could not obtain US entry visas. Why? Because they had all sold arms to Iran and Iraq in violation of the UN arms embargo. They were, in other words, gun runners, whom we would have to visit on their home turf in what was then the murder capital of the free world, a place where you could check into your hotel one night, and get hosed off the pavement before coffee the next morning.
Cohen’s Caracas gambit stimulated a round of soul-searching on the Kremen team. Gary was furious, and didn’t have the money to send me to Caracas, but he didn’t want Diestel to go alone. Diestel had his bags packed, and Wagstaffe thought he should go. If he didn’t, then Dorband could hold the depos, claim we’d had our shot at cross-examining the witnesses who would be unavailable for trial, and move to admit that un-cross-examined testimony at trial. That was a nasty prospect, but I argued that it was totally unreasonable to expect me to go to South America, and Gary to pay for it, after we had all three wasted our time and money traveling to Mexico for the sham “deposition” of Roman Caso, who discovered after his arrival that he was urgently required elsewhere. Gary backed my position, and we planted our heels. I wasn’t going to Caracas.
State Farm probably preferred having Diestel file a motion to compel YNATA to produce its officers for deposition in California over sending him to Caracas. It was certainly cheaper, and worth a try, so Diestel drafted and filed a declaration that recited the Roman Caso story to explain why we didn’t want to embark on another hegira through Latin America. We showed Judge Trumbull the resolution signed by the YNATA corporate insiders and asked, essentially, “What’s up with that?” YNATA can file declarations here, but its officers can’t abide the heat of our laws? YNATA submitted no supporting evidence for its inability to produce its officers for deposition in the U.S., aside from a note in Spanish from a purported Mexican lawyer.
Faced with yet another goofy international discovery scenario, Judge Trumbull considered the lessons of recent history, and concluded there was no need for Kremen’s lawyers to travel to Caracas and repeat a farcical experience. Ruling from the bench, she ordered YNATA to produce its officers in California, and to present a designated witness in San Diego to testify as to specified topics within YNATA’s corporate knowledge. Judge Trumbull was tired of Cohen’s game, and never ruled in his favor again. From what I could conclude, virtually all of the territory in her mind had been liberated by Kremen’s forces. Although it was not her job to determine the merits of Gary’s position, I suspect that, if Judge Ware had asked her for a thumbnail summary of Cohen’s case, she would have said, “Hang him.”
The depositions of imaginary people never happen. Although Judge Trumbull ordered the YNATA directors and officers to testify in the United States, they never came. Dorband’s bland letters responded to my demand that YNATA produce its officers as ordered by simply stating that Cohen could do nothing to procure their presence, nor could the corporate officers themselves travel here in violation of visa restrictions. It was all too convenient, and devilishly frustrating for Gary. Cohen appeared to be using the signatures of people allegedly in foreign countries to add an international glow to his forgeries, while shielding their origins from inquiry. Still, Dorband’s mask stayed in place, and the existence of YNATA’s officers was untested. To all appearance, Cohen was getting away with forgery again.
It was thus especially important that Judge Trumbull had also ordered YNATA to designate a witness to testify in California. The corporation didn’t need an entry visa to get in the country -- it was already present before the court. We could anticipate that, even if he were subpoenaed to testify at trial, Cohen would deny knowledge of YNATA’s activities, and characterize even his signature on the forged corporate resolution as the artifact of some clerical task to which he had accorded little attention. So it was essential to get some human being on the record who was authorized to testify for YNATA. Judge Trumbull had ordered the deposition to take place in San Diego, and the only question was who Cohen would find to occupy the witness seat in Beth Ballerini’s conference room. As the day for the deposition approached, Dorband wasn’t forthcoming about who that would be.
As November 4th, the date set for the deposition approached, Dorband temporized, avoiding phone calls, buying time. We had reached, and he knew it, that point in the hunt when the predators are closing in on the quarry, having kept it on the run for long enough to induce exhaustion. In the hunt, pursuers take turns keeping pressure on their prey, to deprive it of rest and drive it to collapse. Bob Dorband was tired. You could see it in his face, hear it in his voice. We, on the other hand, had sighted the pulsing jugular of cash, like a vein beating hard on the neck of our prey, Omnitec, a lumbering beast full of tasty blood and fat to appease our hunger. Cohen was too arrogant to pay attention to Dorband’s lagging stride. Playing the role of a mad genius who had planned for every contingency, he was not expecting any reversals. He didn’t realize that Bob Dorband had tired of fronting for a humongous liar, had stopped caring about the outcome, and was beginning to let the chips land where they might.
As the hail of lead that was daily trained in his direction took its toll, Bob’s writing lost its zip. Instead of sounding pithy and biting, his arguments seemed short and inadequate. He had bandied words well at the pleading stage, where only theoretical principles were at stake, but once we started to trade heavily in facts, he found that he could rarely cook up a convincing story from Cohen’s stock of lies. Cohen’s record of weird conduct had been thoroughly documented in the court’s records, so there was an inexhaustible source of evidence to support our claim that he was a lying crook who breathed deception. Dorband’s job had thus been reduced to that of the loyal courtier, insisting that the King certainly did have clothes, and of the finest.
Still, Bob fulfilled his role with dastardly aplomb to the bitter end. He never dropped his sword for an instant, never pled for quarter, and never betrayed a hint of despair, regardless of the odds against him. Dorband earned my resentful admiration as he slogged on through the fall of 2000. As the weeks stretched out and the frequency and intensity of our attacks steadily mounted, Bob kept up a stream of correspondence or avoided communications, as circumstances required, conceding nothing, disputing whatever was disputable, and scoffing at the purported significance of whatever he could not deny. His loyalty was manifest by the rigor of his efforts.
Clever advocates always keep silent about bad facts as long as possible, because the earlier you reveal them, the more likely it is that your adversary will use them against you. Following that rule, Dorband kept us in suspense about who YNATA would present as its witness on the fourth of November until a few days before the deposition. I shouldn’t have been surprised by Dorband’s disclosure that Cohen would appear as YNATA’s witness, but it seemed like such a bad move on Cohen’s part that I actually was. Then again, remembering how badly Roman Caso had performed as the Sandman designee, I figured Cohen probably knew better than to try using a puppet a second time. When Ana heard that Cohen would testify for YNATA at the deposition, she talked Gary into letting her accompany me as an assistant. I loved the idea, since Ana’s ability to keep paperwork organized had grown to the point where she did it better than anyone but her mom. Gary surprised me by deciding to skip the trip, and got a kick out of authorizing Ana to go in his place.
Ana’s presence at the deposition completely changed Cohen’s demeanor. Gone were the lewd comments, the sneers and jeers. I had less need of attitude as well, having finally gotten fully prepared to question him about the issues that would come up at trial. With my documents in chronological order, premarked with exhibit numbers in one big binder, I was ready to begin my march on the capital of Cohen’s deceptions -- YNATA. Although Cohen’s shell game had lost much of its mystery, the best time to ask questions is when you know the answers. Over a year after my first, vertiginous meeting with the master-deceiver, I had learned a great deal about Cohen’s affairs. Directed by Gary’s indefatigable research, our barrage of subpoenas had produced hard data that revealed the extent of the wealth Cohen controlled. I assumed that Cohen was fully aware of how much we knew, since we’d put it all into the documents we had already filed with Judge Ware. It was a far different situation than the one I’d faced the first time we met.
Cohen knew we had Levinson’s Union Bank records showing monthly deposits to Omnitec’s Wells Fargo account. He knew we had brokerage statements referring to “Omnitec, DBA Sex.Com,” and other financial documents that proved he owned Omnitec. He knew we had the loan file for his place in Rancho Santa Fe that proved he bought the house with Omnitec funds. He knew he had signed all those Omnitec checks and wire transfers. But when I showed Cohen these records, he seemed unaffected, and peeled off new lies like a series of hundred-dollar bills fresh from the mint. Cohen’s latest lies were intended to rebut the claims we’d made in our latest filing, by denying that all Cohen’s money came from Sex.Com.
Omnitec, Cohen explained, was “a bill-pay company,” and very little of the money in its accounts came from Sex.Com. The Wells Fargo Anaheim Hills records showed different, of course -- all the money came from Levinson, the Sex.Com bagman. Like most corporate criminals, Cohen would calmly trot out the latest lie, then fade into vagueness when asked to provide corroboration for his assertions. He couldn’t give details about Omnitec because he wasn’t there to testify on behalf of Omnitec. When I asked him to explain what YNATA knew about the financial affairs of Omnitec, its wholly-owned subsidiary, he refused on the grounds that he was bound by a confidentiality agreement that was conveniently located in Venezuela. Further, it would be a violation of Venezuelan criminal law to breach the confidentiality agreement. His memory was conveniently vague on all details. Diestel, sitting quietly to my right, shook his head in gentle disgust as the new lies befouled the room.
One question, and only one, provoked Cohen to depart from his script of wholesale denial and out-of-the-loop executive ignorance. After he agreed with me that YNATA derived its claim to ownership of Sex.Com from the rights of Steven Michael Cohen, I asked whether YNATA had any other basis for claiming ownership of the domain, if Steven Michael Cohen’s rights to Sex.Com were proven to be invalid. After Dorband declined Cohen’s request to answer the question for him, Cohen launched into a proclamation of his deep, abiding faith that Kremen had no rights, had no standing, and never would be found to have any rights. Therefore, he concluded, YNATA would never have to deal with the issue, and it was irrelevant.
Most people, not suffering from brain damage, recognize their signature on the documents they signed. It is a hard question to deny when your signature is staring up at you from the page and someone asks: “Did you sign this document?” But when I showed Cohen a dozen or more checks and wire transfers he’d signed on behalf of Omnitec, he refused to identify his own signature even once. He couldn’t remember when or why he signed the checks, assuming he’d signed them at all, which he declined to concede.
Cohen adhered to a disciplined act of self-obliteration. Committed to denying his role in any recent transactions involving Sex.Com, he nevertheless was forced to appear as a witness for a corporation whose workings he was at pains to conceal. In defense, he argued that in fulfilling his duties as YNATA’s designated witness, his personal knowledge was irrelevant. As YNATA’s designated witness, he officially knew nothing, and would gladly testify to it. His phantoms were meant to be the focus of your attention, and to them your attention was duly directed.
The day after we filed our massive reply briefs and declarations, Wagstaffe told me that he’d finally read through my declaration and voluminous exhibits with full attention, and was pleasantly surprised to see that we had convincingly proved all of Cohen’s sham companies were nothing other than Cohen’s corporate alter-egos. Wagstaffe thought I’d given Judge Ware good reason to “pierce the corporate veil,” under the alter-ego doctrine. He said he figured I was gathering up useful information with all of the discovery I was doing, but hadn’t realized it would end up being so comprehensive and convincing.
The alter-ego theory had assumed even greater importance for us when we realized that we had never sued Omnitec, because Cohen had obscured its significance quite effectively. The long-desired Wells Fargo bank records alone revealed the central role of Omnitec. No wonder Cohen stole them from Kinko’s. He had laundered the Sex.Com profits through five companies. Most of them were decoys, like Sporting Houses Management, Ocean Fund International and YNATA, that nominally “owned” Sex.Com. Others, like Omnitec and perhaps Sandman, were primarily bags of money that inflated as the money came in, then deflated to be sure that, as the YNATA name promised, they would “never amount to anything.”
The alter-ego doctrine is based on the reasonable proposition that a company has to operate on the same set of laws as a person, because at most, incorporation turns an inanimate stack of papers into a pseudo-human. A person can’t be allowed to immunize themselves from the consequences of their conduct simply by using a corporation to perform unlawful acts, so the doctrine holds that if a corporation is merely the alter ego of an individual, and has no true separate character, the acts of the corporation, and its legal liabilities, are binding upon that individual. Like many other legal doctrines, it rarely works as intended. For example, no court would pierce the corporate veil of the corporations that hooked children on cigarettes, or killed workers with asbestos, or despoiled countless acres of public lands with toxic waste. Such a result would be antithetical to the true purposes of our corporate system, which protects the individuals who drive our economic juggernauts from being judged too harshly when they occasionally steer us onto the reefs of mass misfortune. Someone has to run the world of industry, after all, and who but the rich would know how? While you may reject such a doctrine, the courts pretty much abide by it. On the other hand, amateur frauds like Omnitec that produce no apparent benefit for society are a fit subject for corporate piercing. This may seem ironic, because compared with Enron, that created money that never existed, Cohen’s business model was actually more legitimate -- at least the money he stole was real!
That real money, however, coursed its way through numerous illusory companies. We got the last piece to Cohen’s puzzle when we traced the flow of Sex.Com money to Omnitec’s Wells Fargo accounts, and thence to offshore banks. Omnitec’s role in the business was so central that Cohen probably created Ocean Fund, YNATA and other companies primarily to conceal its existence. By leading us down the Sandman’s trail, and in search of Vito Franko and Sir William Douglas, Cohen kept us barking up trees that held no treasures. Small wonder Cohen seemed amused by our efforts to unwind his twisted tales. Nevertheless, piercing Cohen’s serial deceptions was necessary to engineer his final defeat, because Gary had to defeat YNATA’s claim that it was a “bona fide purchaser for value.” To conceal the fact that YNATA’s acquisition of the domain was merely Cohen passing the domain from his right hand to his left, all Cohen had to do was contend that YNATA was actually owned by someone besides himself, to forge their signatures, and to procure their non-attendance at depositions. Since one who seeks to “pierce the corporate veil” in Federal court must prove by “clear and convincing evidence” that the doctrine applies, Cohen was hoping he could defeat our efforts to unmask his corporate alter-egos by propping up phantoms and charging Gary the expense of proving they were nonexistent. The burden was on us to prove that he was YNATA, and if we couldn’t produce such evidence, YNATA might prevail. It took a long time to dissolve all the phantoms. We just needed to keep Cohen talking. When someone is lying, there is no such thing as asking him too many questions.
The opportunity to get Cohen under oath one last time arose fortuitously. You may recall that Judge Trumbull ordered YNATA to either produce Sir William Douglas for deposition, or produce some corporate document to show that he was not in fact a YNATA corporate officer. This ruling must have delighted Cohen, who, seeing one more opportunity to forge his way out of trouble, had provided Dorband with the corporate resolution signed by several “officers” and YNATA’s “sole shareholder.” The resolution pointedly stated that Sir William Douglas had stopped working for YNATA the day before I served the notice to take his deposition. Besides Cohen himself, four imaginary persons had signed the resolution, which was just a few pages, and looked like a basic forgery project that had presented no challenge for Cohen. All this forgery was very good for us, I reminded myself, because winning in court is often based more on proving that your adversary is lying than proving that you are telling the truth. Thus the William Douglas story, tired as it was, continued to serve as a handy battering ram, cut from Cohen’s own corrupt timber.
When we insisted on deposing each of the signers of the resolution, Cohen played his position like a poker hand. He raised the bet. We wanted to poke holes in the YNATA corporate veil? We could pay for the right. During Christmas 1999, he’d tried to send me to Russia, Israel, Greece, and other distant lands with poor security. Now he found another use for hazardous venues. The corporate officers of YNATA were all in Caracas, Venezuela. Why could they not leave Caracas? Dorband explained that they could not obtain US entry visas. Why? Because they had all sold arms to Iran and Iraq in violation of the UN arms embargo. They were, in other words, gun runners, whom we would have to visit on their home turf in what was then the murder capital of the free world, a place where you could check into your hotel one night, and get hosed off the pavement before coffee the next morning.
Cohen’s Caracas gambit stimulated a round of soul-searching on the Kremen team. Gary was furious, and didn’t have the money to send me to Caracas, but he didn’t want Diestel to go alone. Diestel had his bags packed, and Wagstaffe thought he should go. If he didn’t, then Dorband could hold the depos, claim we’d had our shot at cross-examining the witnesses who would be unavailable for trial, and move to admit that un-cross-examined testimony at trial. That was a nasty prospect, but I argued that it was totally unreasonable to expect me to go to South America, and Gary to pay for it, after we had all three wasted our time and money traveling to Mexico for the sham “deposition” of Roman Caso, who discovered after his arrival that he was urgently required elsewhere. Gary backed my position, and we planted our heels. I wasn’t going to Caracas.
State Farm probably preferred having Diestel file a motion to compel YNATA to produce its officers for deposition in California over sending him to Caracas. It was certainly cheaper, and worth a try, so Diestel drafted and filed a declaration that recited the Roman Caso story to explain why we didn’t want to embark on another hegira through Latin America. We showed Judge Trumbull the resolution signed by the YNATA corporate insiders and asked, essentially, “What’s up with that?” YNATA can file declarations here, but its officers can’t abide the heat of our laws? YNATA submitted no supporting evidence for its inability to produce its officers for deposition in the U.S., aside from a note in Spanish from a purported Mexican lawyer.
Faced with yet another goofy international discovery scenario, Judge Trumbull considered the lessons of recent history, and concluded there was no need for Kremen’s lawyers to travel to Caracas and repeat a farcical experience. Ruling from the bench, she ordered YNATA to produce its officers in California, and to present a designated witness in San Diego to testify as to specified topics within YNATA’s corporate knowledge. Judge Trumbull was tired of Cohen’s game, and never ruled in his favor again. From what I could conclude, virtually all of the territory in her mind had been liberated by Kremen’s forces. Although it was not her job to determine the merits of Gary’s position, I suspect that, if Judge Ware had asked her for a thumbnail summary of Cohen’s case, she would have said, “Hang him.”
The depositions of imaginary people never happen. Although Judge Trumbull ordered the YNATA directors and officers to testify in the United States, they never came. Dorband’s bland letters responded to my demand that YNATA produce its officers as ordered by simply stating that Cohen could do nothing to procure their presence, nor could the corporate officers themselves travel here in violation of visa restrictions. It was all too convenient, and devilishly frustrating for Gary. Cohen appeared to be using the signatures of people allegedly in foreign countries to add an international glow to his forgeries, while shielding their origins from inquiry. Still, Dorband’s mask stayed in place, and the existence of YNATA’s officers was untested. To all appearance, Cohen was getting away with forgery again.
It was thus especially important that Judge Trumbull had also ordered YNATA to designate a witness to testify in California. The corporation didn’t need an entry visa to get in the country -- it was already present before the court. We could anticipate that, even if he were subpoenaed to testify at trial, Cohen would deny knowledge of YNATA’s activities, and characterize even his signature on the forged corporate resolution as the artifact of some clerical task to which he had accorded little attention. So it was essential to get some human being on the record who was authorized to testify for YNATA. Judge Trumbull had ordered the deposition to take place in San Diego, and the only question was who Cohen would find to occupy the witness seat in Beth Ballerini’s conference room. As the day for the deposition approached, Dorband wasn’t forthcoming about who that would be.
As November 4th, the date set for the deposition approached, Dorband temporized, avoiding phone calls, buying time. We had reached, and he knew it, that point in the hunt when the predators are closing in on the quarry, having kept it on the run for long enough to induce exhaustion. In the hunt, pursuers take turns keeping pressure on their prey, to deprive it of rest and drive it to collapse. Bob Dorband was tired. You could see it in his face, hear it in his voice. We, on the other hand, had sighted the pulsing jugular of cash, like a vein beating hard on the neck of our prey, Omnitec, a lumbering beast full of tasty blood and fat to appease our hunger. Cohen was too arrogant to pay attention to Dorband’s lagging stride. Playing the role of a mad genius who had planned for every contingency, he was not expecting any reversals. He didn’t realize that Bob Dorband had tired of fronting for a humongous liar, had stopped caring about the outcome, and was beginning to let the chips land where they might.
As the hail of lead that was daily trained in his direction took its toll, Bob’s writing lost its zip. Instead of sounding pithy and biting, his arguments seemed short and inadequate. He had bandied words well at the pleading stage, where only theoretical principles were at stake, but once we started to trade heavily in facts, he found that he could rarely cook up a convincing story from Cohen’s stock of lies. Cohen’s record of weird conduct had been thoroughly documented in the court’s records, so there was an inexhaustible source of evidence to support our claim that he was a lying crook who breathed deception. Dorband’s job had thus been reduced to that of the loyal courtier, insisting that the King certainly did have clothes, and of the finest.
Still, Bob fulfilled his role with dastardly aplomb to the bitter end. He never dropped his sword for an instant, never pled for quarter, and never betrayed a hint of despair, regardless of the odds against him. Dorband earned my resentful admiration as he slogged on through the fall of 2000. As the weeks stretched out and the frequency and intensity of our attacks steadily mounted, Bob kept up a stream of correspondence or avoided communications, as circumstances required, conceding nothing, disputing whatever was disputable, and scoffing at the purported significance of whatever he could not deny. His loyalty was manifest by the rigor of his efforts.
Clever advocates always keep silent about bad facts as long as possible, because the earlier you reveal them, the more likely it is that your adversary will use them against you. Following that rule, Dorband kept us in suspense about who YNATA would present as its witness on the fourth of November until a few days before the deposition. I shouldn’t have been surprised by Dorband’s disclosure that Cohen would appear as YNATA’s witness, but it seemed like such a bad move on Cohen’s part that I actually was. Then again, remembering how badly Roman Caso had performed as the Sandman designee, I figured Cohen probably knew better than to try using a puppet a second time. When Ana heard that Cohen would testify for YNATA at the deposition, she talked Gary into letting her accompany me as an assistant. I loved the idea, since Ana’s ability to keep paperwork organized had grown to the point where she did it better than anyone but her mom. Gary surprised me by deciding to skip the trip, and got a kick out of authorizing Ana to go in his place.
Ana’s presence at the deposition completely changed Cohen’s demeanor. Gone were the lewd comments, the sneers and jeers. I had less need of attitude as well, having finally gotten fully prepared to question him about the issues that would come up at trial. With my documents in chronological order, premarked with exhibit numbers in one big binder, I was ready to begin my march on the capital of Cohen’s deceptions -- YNATA. Although Cohen’s shell game had lost much of its mystery, the best time to ask questions is when you know the answers. Over a year after my first, vertiginous meeting with the master-deceiver, I had learned a great deal about Cohen’s affairs. Directed by Gary’s indefatigable research, our barrage of subpoenas had produced hard data that revealed the extent of the wealth Cohen controlled. I assumed that Cohen was fully aware of how much we knew, since we’d put it all into the documents we had already filed with Judge Ware. It was a far different situation than the one I’d faced the first time we met.
Cohen knew we had Levinson’s Union Bank records showing monthly deposits to Omnitec’s Wells Fargo account. He knew we had brokerage statements referring to “Omnitec, DBA Sex.Com,” and other financial documents that proved he owned Omnitec. He knew we had the loan file for his place in Rancho Santa Fe that proved he bought the house with Omnitec funds. He knew he had signed all those Omnitec checks and wire transfers. But when I showed Cohen these records, he seemed unaffected, and peeled off new lies like a series of hundred-dollar bills fresh from the mint. Cohen’s latest lies were intended to rebut the claims we’d made in our latest filing, by denying that all Cohen’s money came from Sex.Com.
Omnitec, Cohen explained, was “a bill-pay company,” and very little of the money in its accounts came from Sex.Com. The Wells Fargo Anaheim Hills records showed different, of course -- all the money came from Levinson, the Sex.Com bagman. Like most corporate criminals, Cohen would calmly trot out the latest lie, then fade into vagueness when asked to provide corroboration for his assertions. He couldn’t give details about Omnitec because he wasn’t there to testify on behalf of Omnitec. When I asked him to explain what YNATA knew about the financial affairs of Omnitec, its wholly-owned subsidiary, he refused on the grounds that he was bound by a confidentiality agreement that was conveniently located in Venezuela. Further, it would be a violation of Venezuelan criminal law to breach the confidentiality agreement. His memory was conveniently vague on all details. Diestel, sitting quietly to my right, shook his head in gentle disgust as the new lies befouled the room.
One question, and only one, provoked Cohen to depart from his script of wholesale denial and out-of-the-loop executive ignorance. After he agreed with me that YNATA derived its claim to ownership of Sex.Com from the rights of Steven Michael Cohen, I asked whether YNATA had any other basis for claiming ownership of the domain, if Steven Michael Cohen’s rights to Sex.Com were proven to be invalid. After Dorband declined Cohen’s request to answer the question for him, Cohen launched into a proclamation of his deep, abiding faith that Kremen had no rights, had no standing, and never would be found to have any rights. Therefore, he concluded, YNATA would never have to deal with the issue, and it was irrelevant.
Most people, not suffering from brain damage, recognize their signature on the documents they signed. It is a hard question to deny when your signature is staring up at you from the page and someone asks: “Did you sign this document?” But when I showed Cohen a dozen or more checks and wire transfers he’d signed on behalf of Omnitec, he refused to identify his own signature even once. He couldn’t remember when or why he signed the checks, assuming he’d signed them at all, which he declined to concede.
Cohen adhered to a disciplined act of self-obliteration. Committed to denying his role in any recent transactions involving Sex.Com, he nevertheless was forced to appear as a witness for a corporation whose workings he was at pains to conceal. In defense, he argued that in fulfilling his duties as YNATA’s designated witness, his personal knowledge was irrelevant. As YNATA’s designated witness, he officially knew nothing, and would gladly testify to it. His phantoms were meant to be the focus of your attention, and to them your attention was duly directed.