Free Exhibit List - District Court of Connecticut - Connecticut

Case 3:02-cr-00264-AHN

Document 1428

Filed 01/04/2005

Page 1 of 21

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT UNITED STATES OF AMERICA v. WALTER FORBES and E. KIRK SHELTON : : : CASE NO. 3:02CV264 (AWT)

GOVERNMENT'S DEMONSTRATIVE EXHIBITS

Exh. No.

Date Offered (all 2004) 5/10

Admitted (all ID only)

Description of Exhibit

3997

ID only

Revenue - Expenses Earnings before one-time charges - Merger costs Earnings

3998

5/10

ID only

Revenue - Expenses Earnings (or Income)

3999

5/10

ID only

Revenue - Expenses Operating Income (I.B.O.T.C.) Merger Costs (Merger Reserve) Income

4000

5/11

ID only

Forbes 1.5 million $25 37.5 million

Shelton Corigliano 1.6 million .4 million $25 $25 $40 mil $10

4001

5/11

ID only

Balance Sheet - Reserve for Refunds Assets Liabilities Equity Stock

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 5/11

Document 1428

Filed 01/04/2005

Page 2 of 21

Admitted (all ID only)

Description of Exhibit

4002

ID only

Income Statement Fees Statement Revenue Sales Expenses Earnings from merger costs Profit Net Income Net Earnings

4003

5/11

ID only

Cash Flow Statement Options Investments Finance - Loans/Stock Sales Change in Cash

4004

5/11

ID only

Audit Report/MD&A Balance Sheet Income Stmt Cash Flows Footnotes

4005

5/11

ID only

April `97 - Mid dle `98

4006

5/17

ID only

Cendant/CUC Int'l./SafeCard

4007

5/17

ID only

March `98 Shelton Corigliano Menchaca Pember Speaks

4008

5/17

ID only

Shelton Corigliano Pember Speaks

4009

5/17

ID only

`98 Budget CUC Division Comp-U-Card CUI

105 Million 126 Million 130 Million

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 5/17

Document 1428

Filed 01/04/2005

Page 3 of 21

Admitted (all ID only)

Description of Exhibit

4010

ID only

1/9/98 38 million 53 million

/ 1/28/98 / 134 million / 85 million

4011

5/17

ID only

Immediate Revenue /deferred program

4012

5/17

ID only

$40.3 Million - 20.7 - 19.6

4013

5/17

ID only

29990 NAOG - 29305 NUMA - 875,000

4014

5/17

ID only

3/4/98 email 3/5/98

4015

5/17

ID only

1. Reverse 200M of merger reserves into revenue 2. Asked for Scott Forbes help in reversal of 200 million

4016

5/17

ID only

3. January results better than planned - 50 only $20 million of the planned $25 million was reversed into revenue

4017

5/17

ID only

Immediate Recognition deferred recognition

4018

5/17

ID only

$41.1 million 6.5 47.6

4019

6/8

ID only

10-Q / 433 million / 267 million / 40.6 % CUC

Consolidation 433 million 267 million

4020

6/8

ID only

3046 / 1535 175 million / 3 million 172 million

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 6/8

Document 1428

Filed 01/04/2005

Page 4 of 21

Admitted (all ID only)

Description of Exhibit

4021

ID only

21,924,000 - CUC Pub

4022

6/8

ID only

707 Summer Street

-

595 Summer

4023

6/8

ID only

1996 / 1997 / 1998 NI $283 (+30%) $387(+25%) $478 EPS $.70 $.89 $1.10

4024

skip

4025

5/27

ID only

CUC/CFO - Controller Controller/CompUCard Controller/BCT Controller/EPUB Controller/NAOG

4026

5/27

ID only

1/31/97 Comp-U-Card Ideon Merger Reserve $44,000,000 Commission Payable 9,000,000 Membership Cancellation Reserve 15,000,000 $68,000,000 Revenue Recognition $40,000,000

4027

6/9

ID only

$ 88,700,000 $ 17,000,000 $105,700,000 84,854,000 ($20,846,000)

4028

6/9

ID only

105,700,000 84,854,000 556,398,000 $641,252,000 Operating Income

4028A

6/9

ID only

105,700,000 ÷ 641252000 = .1648 x 100 = 16.48%

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 6/9

Document 1428

Filed 01/04/2005

Page 5 of 21

Admitted (all ID only)

Description of Exhibit

4029

ID only

$44,000,000 9,000,000 15,000,000 $68,000,000

4030

6/9

ID only

276,241,000 179,945,000 $456,186,000 $ 68,000,000 14.91%

4031

6/9

ID only

68,000,000 ÷ 456,186,000 14.91 x 100 = 14,91%

4032

6/9

ID only

Not Agreed To - Existing Reserves (drawn by Mr. Albright)

4033

6/10

ID only

Mr. Sabatino's Employment History

4033A

6/10

ID only

Mr. Sabatino's Employment History (cont'd.)

4033B

6/10

ID only

Mr. Sabatino's Employment History (cont'd.)

4034

6/10

ID only

Unsupported Topside Adjustment

4035

6/10

ID only

176 Million 149 + 27 = 176 million

4036

6/10

ID only

Revenue 456,130 620,407

4037

6/10

ID only

1st Q = 4/30

2nd Q

7/31

3rd Q 10/31

4038

6/10

ID only

Cheat Sheet

4039

6/10

ID only

9512

9520

9530

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 6/10

Document 1428

Filed 01/04/2005

Page 6 of 21

Admitted (all ID only)

Description of Exhibit

4040

ID only

9512 - 274,448 - reduction 4 million 82,217 increase 2 million

4041

6/10

ID only

Revenue + 47,444,000 - Expenses - 14,700,000 + 62,144,000 Press 114,034,000 #4 51,890,000

4042

6/10

ID only

137,498 - 88,155 P&L - 73,455 Consol. = 14,700

4043

6/10

ID only

Revenue 105,000,000 - Expenses 18,000,000 292,002 296,098 401,098

4044

6/10

ID only

- 18 + G&A 4 million - marktg 8 million - oper. 14 million

4045

6/10

ID only

65,805 increase 2 million

4046

6/10

ID only

48 million 4th Q 80 million 3rd Q 78 million 2nd Q 89 million 1st Q 295 million - 130 million = 165 million

4047

6/14

ID only

April 95 Revenue + 4,500,000 Expenses - 13,807,000 Op. Ex. - 10,011,000 Marketing ex. - 3,905,000 G&A + 109,000 - 13,807,000 18,307,000

4048

6/14

ID only

55,429,000

4049

6/14

ID only

July 95 Revenue - 4,500,000 Expenses - 17,493,000 12,993,000 61,406,000

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 6/14

Document 1428

Filed 01/04/2005

Page 7 of 21

Admitted (all ID only)

Description of Exhibit

4050

ID only

October 95 Revenue - 15,833,000 Expenses - 15,033,000 290,054,000 -279,701,000 10,833,000

4051

6/14

ID only

October 95 Expenses Operating 27,800,000 Marketing 4,400,000 G&A 3,300,000 decrease of 35,500,000 10,833,000 15,033,000 46,333,000 31,300,000

4052

6/14

ID only

Marketing 154,176,000 143,343,000 10,933,000 Operating 54,356,000 54,362,000 6,000

4053

6/14

ID only

G&A 34,948,000 35,687,000 739,000

4054

6/14

ID only

April 96 Revenue: + 15,000,000 Expenses - 27,195,000 113,421 Op. - 12,958,000 21,166,000 21,168,000

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 6/14

Document 1428

Filed 01/04/2005

Page 8 of 21

Admitted (all ID only)

Description of Exhibit

4055

ID only

April 96 Expenses Op. - 12,956,000 Mark. - 11,429,000 47,334,000 G&A - 2,810,000 13m124m000 27,195,000

4056

6/14

ID only

$78,660,000

4057

6/14

ID only

2nd Q 7/31/96 Revenue + 16,700,000 Expenses - 23,650,000 Revenue 203,066,000 234,766,000 31,700,000

4058

6/14

ID only

Mark. 122,732,000 90,228,000 32,504,000 75,000 - 32,429,000

4059

6/14

ID only

Operating 67,336,000 49,380,000 -17,956,000

4060

6/14

ID only

G&A 29,861,000 29,401,000 460,000 50,845,000 -27,195,000 23,650,000

4061

6/14

ID only

97,924,000

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 6/14

Document 1428

Filed 01/04/2005

Page 9 of 21

Admitted (all ID only)

Description of Exhibit

4062

ID only

October 96 Revenue - 17,907,000 13,793,000 234,766,000 +166,884,000 58,813,000 342,837,000

4063

6/14

ID only

- 73,157,000 50,845,000 22,312,000

4064

6/14

ID only

Accounts Payable 27,000,000 + 50,000,000 77,000,000

4065

6/14

ID only

CASH

200,000,000 - 75,000,000 125,000,000

4066

6/22

ID only

September 10, 1996 January 19, 1997 December 4, 1996 January 31, 1997 March 7, 1997 April 9, 1997

4067

6/28

ID only

Mr. Corigliano's employment history

4068

6/28

ID only

Walter Forbes - CEO Chris McLeod - Pres. CompUCard Kirk Shelton - COO Stu Bell - CFO Cosmo C. Casper Sabatino Anne Pember

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 6/28

Document 1428

Filed 01/04/2005

Page 10 of 21

Admitted (all ID only)

Description of Exhibit

4069

ID only

Gov. 668 Gov 667

MCR $3.2 mil cash E&Y MCR $9 mil def. internal no auditors

4070

6/29

ID only

1991 Annual Report at Page 24 $28,775 + 4,629 - 16,481 = $49,885 Gov Ex. 665 $49,885

4071

6/29

ID only

Dining v. Shopping

4072

6/29

ID only

Ex. 600 March Gross Profit $36 mil Ex. 601 Feb Gross Profit $30 mil -

$6 mil

4073

6/29

ID only

Dining - Ex. 600 Net Renewals $4 mil Ex. 601 $2.2 mil - $1.8 mil Shopping Net Renewals - $4.2 mil $6 mil

4074

6/30

ID only

Dec. 1994 CUC Billion $ Sales New York Stock Exchange No MBA No Public CFO Experience No CFO Experience Public Acc't 22 months 5 years exp manip F/S

4075

6/30

ID only

1995 Forward Forbes - CEO Shelton - President Corigliano - CFO Essex - EPUB - FISI - BCI

4076

7/1

ID only

G Ex 1309 Software Merger Costs 10Q 7/31/96 $28.6 mil G Ex 1310 10Q 10/31/96 $48.6 mil

$20 mil

4077

7/1

ID only

Ideon Merger Costs

Gov 68 $100 mil Gov 1310 10/31/96 $127.2 mil increase ­ 27.2 mil

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 7/1

Document 1428

Filed 01/04/2005

Page 11 of 21

Admitted (all ID only)

Description of Exhibit

4078

ID only

62b Cheat Sheet $443,000,000 #18 337,000,000 106,000,000 Annual Report 447,000,000

4079

7/12

ID only

Shares Corigliano 381,000 Forbes 1,500,000 Shelton 1,600,000

Lost Value $ 2.7 mil $10.5 mil $11.2 mil

4080

7/12

ID only

10/90 met 1/91 beat 4/91 beat 7/91 beat 1/92 met 4/92 beat 7/92 beat 10/92 beat 4/93 met 7/93 met 10/93 met 1/94 beat

10/91 beat 1/93 beat

4080A

7/12

ID only

continuation of #4080

4080B

7/12

ID only

continuation of #4080A

4081

7/13

ID only

Date/CEO/Pres-COO/CFO (large blowup)

4082

7/13

ID only

CC/KS/WF - Salary, Bonus, Options

4083

7/13

ID only

12/17/97 - Forbes, Shelton, Corigliano

4084

7/14

IDonly

Stock Sales - Cosmo Corigliano

4085

7/14

IDonly

Anne Pember Severance

4086

8/3

IDonly

Anti-Benefits

4087

8/3

ID only

27.5 - 3 = $4.5M

4088

8/3

ID only

C. McLeod, T. Menchaca, T. Albright, A. Lipton

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 8/3

Document 1428

Filed 01/04/2005

Page 12 of 21

Admitted (all ID only)

Description of Exhibit

4089

ID only

with reserves - 68.5 cents

4090

8/3

ID only

447,750 - 170,145 = 277,605 - 405,000 = 68.5 cents

4091

8/3

ID only

Auditors

Analysts Lawyers W.Forbes K.Shelton

4092

8/4

ID only

CC, AP, TM, KS - CPAs

4093

8/4

ID only

CUC/Cendant `93-99

4094

8/4

ID only

Walter Forbes Bell Corigliano Sabatino Kearney

4095

8/4

ID only

CUC - $815,000

4096

8/4

ID only

Bell, Corigliano, Sabatino

4097

8/4

ID only

Stu Bell's Words: Walter wants EPS to be (a certain number)

4098

8/4

ID only

Pre-CC CFO Cosmo Corigliano's words: 1. Stu wants EPS to be (a certain number) 2. Walter wants EPS to be (a certain number)

4099

8/4

ID only

Post-CC CFO Cosmo's words: 1. Walter wants EPS to be (a certain number)

4100

8/4

ID only

Casper Sabatino's Words

4101

8/4

ID only

July 93 = 1.7 million April 95 = 18.3 million

4102

8/4

ID only

5,000,000

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 8/4

Document 1428

Filed 01/04/2005

Page 13 of 21

Admitted (all ID only)

Description of Exhibit

4103

ID only

Sparks 1. Tango Communications 2. Match.com 1997 Acquisitions

4104

8/5

ID only

Tango 5 million + 2 million Match.com 5 million TOTAL: 12 million - 9.5 million = 2.5 million

4105

8/5

ID only

1/12/98, Revenue = 32.9 million Net Profit = 13.9 million 1/19/98 Revenue = 42.4 million Net Profit = 23.4 million

4106

8/17

ID only

Walter Forbes (Chairman/CEO) Kirk Shelton (Pres/CUC) Corigliano (CFO/CUC) A Pember Steve Speaks

4107

8/17

ID only

EX. #/DATE/# OF SHARES PURCHASED

4108

8/17

ID only

DATE OF SALE/# OF SHARES SOLD/PROCEEDS

4109

8/17

ID only

DATE OF SALE/# OF SHARES SOLD/PROCEEDS

4110

9/21

ID only

1998 Budget - Comp U Card 105 Mill. - NUMA 17 Mill. NAOG 14 mILL ncci 6 Mill Sparks 19 Mill. = 262 Mill

4111

8/4

ID only

(1) Old Numbers - HFS No Action (2) Lay Low (3) HS very upset (4) Budget Shortfall (5) No Use $165 M

4112

8/31

ID only

Late `94 - Fall 1995 - McLeod

4113

8/31

ID only

1/1997 Shelton Forbes Chris McLeod Pres CEO

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 8/31

Document 1428

Filed 01/04/2005

Page 14 of 21

Admitted (all ID only)

Description of Exhibit

4114

ID only

2 - 1 - 96 Bear S. Earnings 30%

2-8-96 EBIT 13%

4115

9/15

ID only

NO CLUE, NO HINT, NO SUGGESTION, NO INDICATION Corigliano/Pember hid fraud from Shelton

4116

9/20

ID only `94 `95

Salary 410K 450

Bonus 410K 450

Total Comp 750 850

4117

9/21

ID only

CUC + X

4118

9/21

ID only

Merger Reserve

4119

9/21

ID only

Cancel Reserves Return Reserves

4120

9/21

ID only

Middle `96, Late `96, Early `97

4121

9/21

ID only

$28 Million Merger Reserve

4122

9/22

ID only

107 Million

4123

9/22

ID only

Comp U Card 1-9-98

4124

9/22

ID only

January `98 15 million 1-12-98 15 million 1-19-98 24.5 million

4125

9/23

ID only

1987 Forbes Ch & CEO / \ Bell KS

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 9/23

Document 1428

Filed 01/04/2005

Page 15 of 21

Admitted (all ID only)

Description of Exhibit

4126

ID only

12/94 Forbes Ch & CEO / \ McLeod KS \ CC

4127

9/23

ID only

Forbes' Duties Deal with Wall Street 1991-4/15/98 Significant Role in Investor Relations Host Anayst Analyst Reports

4128

9/28

ID only

Forbes understands

4129

9/28

ID only

Forbes' Compensation (1993-1998)

4130

9/29

ID only

1997 CUC Board

4131

9/30

ID only

Labor Day - 1997

4132

9/30

ID only

Approx $10 Million Stock Sales

4133

9/30

ID only

Severance $47 Million company won't sue unless convicted

4134

10/18

ID only

Pre-1995 Gov. Exhibits

4135

10/18

ID only

Ex 609 Ex 856a Ex 3a Ex 3

Forbes \ Shelton \ Corigliano

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 10/18

Document 1428

Filed 01/04/2005

Page 16 of 21

Admitted (all ID only)

Description of Exhibit

4136

ID only

5K CS - June `99 Pember - Sept. `99 Corigliano - Jan. `00

4137

10/18

ID only

Cheat Sheets Ex 58 Ex 1777 Ex 62b Ex 1774 Kind of disappeared stop coming!

4138

10/18

ID only

Deep dark secret club CC AP CS KK SS MS WF KS

Auditors

4139

10/18

ID only

1309 1310

28.6 48.6 20

4140

10/18

ID only D 397 G 1539

1813 68

4141

10/18

ID only

Neck red Hand shake Hand quivering Lip quivering

4142

10/18

ID only

Gov 17 Gov 1529 Gov 493

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 10/18

Document 1428

Filed 01/04/2005

Page 17 of 21

Admitted (all ID only)

Description of Exhibit

4143

ID only

Saving Anne Pember (1) Shelton pushing back Monaco (2) Forbes lobbies Silverman (3) Columbus Day Meeting (4) Shelton's 10/21/97 Memo (5) $605 Severance

4144

10/18

ID only

(1) Cendant Merger Reserve had Cushion (2) Rejects-in-Transit (3) Accrual deferral (4) Overstating Budget to HFS (5) 1/1998 Comp U Card used reserves (6) 20-25 Million (7) Academy Award (8) Sarkie's divisional #'s adjusted

4145

10/19

ID only

Count 1 Conspiracy

Ex 1311 Ex 506 Ex 519

Count 2

=

Mail Fraud Ex 390 Ex 9600

Count 3 = Mail Fraud Ex 1717 Charles Pasfield James Vandervort

4146

10/19

ID only

Count 4 = Wire Fraud Ex 376 Ex 376(b) Conn - NJ 2/2/98 Count 5 = False SEC - 10-Q Gov Ex 1314 Ex 9700

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 10/19

Document 1428

Filed 01/04/2005

Page 18 of 21

Admitted (all ID only)

Description of Exhibit

4147

ID only

Count 6 False SEC Filing Gov 1315 10-K Cosmo Corigliano Counts 7-12 Securities Fraud Ex 634 page 18 James Rowan - Hartford Steam Boiler

4148

10/19

ID only

Counts 13-16 Insider Trading Ex 433 Ex 434 Material Non-Public Information

4149

10/19

ID only

Ex 519 1/20/98 email

4150

10/19

ID only

March 6th 1998 Fraud Exploded Oct. 1997

4151

10/19

ID only

Ex 133, Ex 134, Ex 20458 vs Ex Demo 4110, 12/16/97, 268 million, 16 million, 107 million

4152

10/19

ID only

Ex 530 Forbes - merger reserves = very important to CUC D&T "too conservative"

4153

10/19

ID only

Jan 1998 - Gov 160

4154

10/19

ID only

* Hyperion * Booked 20 million plug * Mid Feb. Menchaca talks to Shelton about 30 vs 10 "He" (Shelton) will have the conversation

4155

10/19

ID only

End of February Merger Reserves

534

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 10/19

Document 1428

Filed 01/04/2005

Page 19 of 21

Admitted (all ID only)

Description of Exhibit

4156

ID only

CC - Shelton speaking AP - Shelton speaking SS - Shelton speaking SF - Shelton speaking

$165m reserves reserves reserves

Kirk Shelton v. "I did not"

4156-A

10/19

ID only

"Non-operating" items in 1997 E A R "Non Operating" N Merger Reserves $165 million I ____________ N ___________ G S 96 97 98

4157

10/19

ID only

3/9 166

Reversed 16 M OK Interval 3.8M 19.8M - 20M

4158

10/19

ID only

Stock Sales Severance 20,244 Vail 1828 Fla 1830 CT 1832

10M 47M

4159

11/1

ID only

MASTER CRIMINALS vs. ORDINARY CONSPIRATORS

4160

11/1

ID only

WHO SELECTED AP and CC?

4161

11/1

ID only

BENEFITS and ANTI-BENEFITS

4162

11/1

ID only

Who has the power?

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 11/1

Document 1428

Filed 01/04/2005

Page 20 of 21

Admitted (all ID only)

Description of Exhibit

4163

ID only

Pember has no motive to implicate Shelton

4164

11/1

ID only

ARGUMENTS are not EVIDENCE

4165

11/1

ID only

PLANE EXPENSES

4166

11/1

ID only

+ + + +

Fraud Mr. Puccio is talking about Shifting defense You get what you pay for Follow directions

4167

11/1

ID only

Forbes Shelton Bell Corigliano Pember Sabatino Speaks Kearney

4168

11/1

ID only

ROLES

4169

11/1

ID only

DEFENDANTS' TESTIMONY

4170

11/1

ID only

Ex 530 (The right question)

4171

11/1

ID only

STOCK SALES 4.5 4.1 OPTIONS 400,000 300,000 700,000

4172

11/1

ID only

NON-OPERATING CONFUSION

Case 3:02-cr-00264-AHN Exh. No. Date Offered (all 2004) 11/1

Document 1428

Filed 01/04/2005

Page 21 of 21

Admitted (all ID only)

Description of Exhibit

4173

ID only

INTERVAL COVER STORY

Rev. 11/9/04