Free Transcript - District Court of Arizona - Arizona

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA __________ UNITED STATES OF AMERICA, Plaintiff, ) ) ) ) ) ) ) ) ) ) )

5 vs. 6 GLEN BECK, 7 Defendant. 8 9

CR 03-00890-PHX-JAT Phoenix, Arizona December 10, 2007 4:28 p.m.

REPORTER'S TRANSCRIPT OF PROCEEDINGS 10 (Hearing re: Petition on Probation) 11 12 13 14 15 16 17 For the Defendant: 18 19 20 21 22 23 24 25 Official U.S. Court Reporter: David C. German, RMR, CRR Sandra Day O'Connor U.S. Courthouse, Suite 312 401 West Washington Street, SPC-39 Phoenix, Arizona 85003-2151 (602) 322-7251 PROCEEDINGS TAKEN BY STENOGRAPHIC COURT REPORTER TRANSCRIPT PREPARED BY COMPUTER-AIDED TRANSCRIPTION Lawrence A. Hammond Attorney at Law Osborn Maledon, P.A. 2929 North Central Avenue Phoenix, Arizona 85012-2794 (602) 640-9000 BEFORE: APPEARANCES: For the Plaintiff: Darcy Cerow Assistant U.S. Attorney Two Renaissance Square 40 N. Central Avenue, Suite 1200 Phoenix, Arizona 85004-4408 (602) 514-7500 THE HONORABLE JAMES A. TEILBORG, JUDGE

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Phoenix, Arizona December 10, 2007 (Proceedings convened at 4:28 p.m.) THE COURT: Thank you. Please be seated.
04:28:55

I'll ask the clerk to call the next matter,

THE DEPUTY CLERK:

Case number CR 03-890, United This is the time

States of America versus Glen A. Beck. set for evidentiary hearing.

Counsel, please announce for the record. MS. CEROW: Good afternoon, Your Honor. Darcy

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Cerow appearing on behalf of the United States. THE COURT: Good afternoon, Miss Cerow. Good afternoon, Judge Teilborg.
04:29:16

MR. HAMMOND:

Larry Hammond on behalf of Glen Beck. THE COURT: Good afternoon, Mr. Hammond.

I'm a poor imitation of Judge Silver, though. MR. HAMMOND: THE COURT: Did I say Judge Silver?

I thought you did but, you know,
04:29:34

maybe -- maybe my hearing -MR. HAMMOND: Oh, my gosh. I'm stunned. If the

word Silver came out of my mouth, I apologize. THE COURT: It may well have been that my hearing

aid did a bad job of translating it, too, so -- they -they do have a bit of a similar ring to it.
04:29:47

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In any event -MR. HAMMOND: THE COURT: All right. Well, you stopped my heart so --

I don't want to do that. This is the time set for an evidentiary Is that the plan? I hope it is not, Your Honor. We -- I
04:30:00

hearing on this matter. MR. HAMMOND:

thought that Miss Cerow and I had worked out a resolution that we were prepared to present to the Court. In our conversations

while we were awaiting the proceeding this afternoon, I discovered that there may be a couple of issues that we have not pinned down as well as I thought we had, but I hope that we still are able to resolve this without an evidentiary hearing. But that's -- that was our goal and I thought we had achieved it. THE COURT: MS. CEROW: All right. Let's hear from Miss Cerow.
04:30:35 04:30:20

Your Honor, it's my understanding the

defendant was going to admit allegation E and we were going to defer to the Court regarding disposition and I was going explain to the Court and Mr. Hammond was going to explain on behalf of his client why we would be dismissing the remaining allegations. THE COURT: MS. CEROW: All right. Regarding disposition, what Mr. Hammond's
04:30:50

referring to are clarifications of conditions that the defendant should be complying with regarding his supervised
04:31:04

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release. THE COURT: All right.

So then your understanding, Miss Cerow, was that he would admit to E and then -- and you said defer to the Court with regard -MS. CEROW: THE COURT: MS. CEROW: To disposition. -- to the disposition. And then explain to the Court my reasons
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for dismissing -- moving to dismiss the remaining allegations. THE COURT: All right.
04:31:53

Mr. Hammond, what's -- what, then, is in dispute over that description of the status? MR. HAMMOND: It is close, Your Honor.

Of the allegations, we are prepared to acknowledge the fifth, or E, and to explain the circumstances of that to the Court, and we understand that the other allegations were to be dismissed and the -- when I said disposition, the disposition that I understood that the Government and we have been working on was a disposition whereby there would be additional terms agreed upon, terms of supervision of his probation, and it's those additional terms of probation that I'm not sure that we are in complete agreement on. And I think, Your Honor, I could probably summarize where we stand if that would be helpful. THE COURT: Give me just a moment here and then I'm
04:33:18 04:32:38 04:32:14

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sure it will be. All right. Mr. Hammond? Your Honor, I think I can summarize

MR. HAMMOND:

where we stand and what the issues are that have divided us, and I think maybe a word of background would be helpful first. This is a case in which Mr. Beck has been involved with the Government for a very long time. back in 1997. This matter began
04:35:39

Mr. Beck was eventually charged in Michigan. He cooperated with the
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The case was transferred down here.

Government for a period of, I don't know, five or six years. Prior to his sentencing he changed his plea and cooperated, and it was all done under seal in front of Judge Strand, for a several-year period. During that period of time, there were numerous conversations with the Court and with the Government, both -some of them on the record that we have transcripts of, some of them done in chambers because of the nature of the cooperation, but over that period of time a pattern developed of the relationship between Mr. Beck and the Government with respect to his business. And when the eventual sentencing occurred Judge Strand had conversations with us that were on the record about what Mr. Beck should do after sentencing in terms of his business activity, particularly his business travel, and at the time of his sentencing it was not obvious to me that the Probation

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04:36:42

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Office was unaware of those arrangements.

It wasn't until

sometime significantly later that we discovered that the probation officer who had been assigned to the case was unaware of the arrangements or believes she was unaware of the arrangements. Mr. Beck thinks he told her about them.
04:37:28

But the issues that then wound up being ones of some disagreement between the Probation Office and us had to do with the circumstances of his business travel, and that one of them, I think -- there's three areas of conversations that Miss Cerow and I have had. One had to do with travel; the other had to do
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with providing records when requested by the Probation Office; and the third one had to do with the issue of a lease on his apartment in Scottsdale. And so those three areas became sources of disagreement or conversation between us and the Probation Office that I think we are now pretty well close to having resolved. On the issue of travel, the Government, I understand, is prepared to dismiss the allegation because of a recognition that there may very well have been a misunderstanding, but Mr. Beck has a business that requires him to travel on virtually -- he travels every week but sometimes several times a week to known locations, to Idaho, to Kansas City, but primarily to the Bay area where he has his principal business. He also travels periodically to Florida where the board of
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directors of his organization meets. Our understanding was, and I hope it still is, that while in the past it was our belief that he needed to advise the Probation Office of his travel only when it was personal travel, now they have said that, to the extent that he can do it in advance, he needs to seek approval of all travel. And those occasions, and they will be frequent, in which he does not know ten days in advance where he is going to have to be because of the nature of his business, because it is a service profession and because they have to be in contact with the people who they market their services to, in those cases he will notify the probation officer, he will call her, he will make sure that she knows his itinerary, where he's going, when he's going and when he's going to come back. we've said we're prepared to do that going forward. So that, I thought, was a resolution, and I hope it still is, as to the question of travel. With respect to the question of business records, there is, I hope, an understanding now that we have tried to put into some agreed-upon terms that whatever the Probation Office wants by way of business records, if they request it, we will get it for the Probation Office. There have been, I think, differences about what they have asked for, when they have asked for it. It's been -- it's
04:40:37 04:40:14 04:39:36 04:39:17

And
04:39:53

been confusing to us, but what we've said, to try to cut

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through all of that, is that, understanding that there have been miscommunications in the past, what we're willing to say now is that, going forward, if the Probation Office requests that we provide business records, credit card statements, bank statements, whatever they want, both business and personal, we will provide them. I do think that this is going to turn out to be unduly burdensome. It's a lot of material. If he provides it on a
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monthly basis, it will be a couple inches of information, and I believe eventually the Probation Office will decide it doesn't really need that, but if they want it now what we've said is that if they request it we'll get it for them. The third and final item that I think divided us was the question of the lease on his apartment in Scottsdale. He
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had an opportunity to enter into a lease many months ago now to reside with his daughter. His daughter was going to pay $500

of the rent he was paying, which turns out to be about $700. He talked to the probation officer about that. of his intention to do that. The standard term under his change of plea, Term Number 7, said he was supposed to notify her. He failed to
04:41:53

He informed her

understand that she believed that this was a financial obligation he was undertaking that would require her approval. He acknowledges that he failed to get her approval, although she certainly knew where he was.
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We have now talked about that apartment.

The

Probation Office, I think, does not object to him now entering into a new lease that will become effective on January 1 at the same rate that he's been paying and with his daughter residing with him and paying $500 a month. So I think we have agreed that going forward there's not a problem with that, but they believe that he should acknowledge responsibility with respect to having failed to give her notice in advance, and we have said that as part of a resolution of this matter so that we can move forward he would do that. So our hope is that, with all of those things being said, we could agree on supplemental terms, which we've drafted and exchanged and which I hope are either acceptable or close to being acceptable, that would then bring this matter to a conclusion. THE COURT: MS. CEROW: Miss Cerow? Your Honor, beginning with the first
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allegation, the travel, according to Mr. Hammond, Judge Strand had authorized his client to travel, provided me a copy of the transcript, and according to the transcript he received permission to travel to California. He'd already been approved
04:43:24

for travel to New Mexico and to Idaho, and the Court said he could travel to those three places as long as the defendant complies with the notification requirements to Pretrial.
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I spoke with the pretrial officer. the defendant's travel.

They authorized

When Miss Spencer began supervision when the defendant was placed on probation, that travel authorization is not in the judgment and commitment order. There is nowhere
04:44:06

in the J and C that the defendant can travel without power mission. The J and C says he needs permission. So

Miss Spencer, relying on the J and C, told the defendant he could travel to California without permission because he was going there so frequently. Now, the defendant has traveled to Florida and has never had permission to go to Florida either from Judge Strand or from Miss Spencer. According to Mr. Hammond when we
04:44:27

discussed these issues, Miss Spencer had withdrawn her permission, her blanket permission, for the defendant to travel for business purposes due to what she perceived to be conduct that wasn't entirely truthful, and so she told him he now needed to have permission to travel. It is my understanding that the defendant contacted Mr. Hammond, Mr. Hammond told the defendant he could travel, not to worry about it, and that he could continue to travel without permission from Miss Spencer. When I discussed that with Mr. Hammond, that that is really not the way we should have done it, it should have come before the Court, I said nonetheless, the defendant has never
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had permission to go to Florida for this annual business meeting. A few weeks ago I asked Mr. Hammond if that annual business meeting was taking place. He advised it was. I said
04:45:46

he needs -- your client needs to get permission from Miss Spencer. That has not happened. I asked Mr. Hammond about it

today and Mr. Hammond said that it's his position that his client does not need permission to travel. So with that backdrop on the travel issue, we are not asking for new conditions from this Court, we're asking for clarification on some conditions, travel being one of them, because the J and C says he cannot travel without permission. THE COURT: I've got it here. MS. CEROW: Honor. THE COURT: MS. CEROW: All right. And so even though there was an agreement, It's Standard Condition Number 2, Your
04:46:50 04:46:06

The J and C affirmatively -- let's see --

and as I advised the Court it's in the transcript, with the exception of Florida, it's in the transcript, and Pretrial advised they did authorize him to travel. But that never made
04:47:06

it into the J and C, and so Miss Spencer is going by what's in the J and C, but having withdrawn her permission to travel, Mr. Hammond apparently advised his client that he could travel nonetheless.
04:47:27

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The Florida travel that's set, I guess, for next week still has not been approved by Miss Spencer, and I believe the defendant knew in advance about that trip so could have provided it. Regarding how often he takes trips, Miss Spencer has just given to me this morning documents she got pursuant to subpoena which indicates he does get a lot of advance notice for his trips. I mean, here's one for September 11 they made a And so it may not be a full
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reservation to fly on October 5th.

ten days but at least there is a period of time that he knows in advance that he can travel. The problem with him traveling without permission is that Miss Spencer doesn't know where he's at. So he's

basically going wherever he needs to go on business trips without notifying her. THE COURT: Well, is the Government satisfied with a
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condition in which he must notify Probation ten days in advance unless the travel necessity occurs on such short notice that ten days notice is not possible, in which event it shall be the, I don't know, earliest practical notice? MS. CEROW: We would agree to that.
04:49:01

And it should be with an itinerary so she knows where

THE COURT:

Now, I don't know how that works. It's another thing to get

It's
04:49:17

one thing to give notice.

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permission. MS. CEROW: Miss Spencer's advised me she cannot

remember ever saying no to anyone who wants to travel for business. THE COURT: Now, is it the Government's position that
04:49:32

this should apply to all travel -- well, be it personal or -well, what about -- this was -- we've been talking about business travel. What about personal travel? We would ask that it also be ordered for
04:49:54

MS. CEROW: personal travel. THE COURT:

And the philosophy would be -- the

underlying reason would be the same, I assume. MS. CEROW: THE COURT: is. MS. CEROW: THE COURT: Correct. Well, Mr. Hammond -- and you can remain Correct. And that's principally to know where he
04:50:02

seated, but -- and -- actually, I thought I heard you say pretty close to what I was alluding to, and that is that he would agree to notification in advance of -- at least ten days in advance of all travel unless that -- and -- and then this is where I built in my own phraseology. In which event -- unless
04:50:20

ten days notice is not possible, in which event it would be the notification as soon as possible. MR. HAMMOND: I think that actually in the language
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that we had drafted, Your Honor, it's very close to that. said that in the cases in which he's unable to provide

We

notification he will provide notification by telephone to the probation officer and provide an itinerary with as much notice as reasonably possible. THE COURT: me? MR. HAMMOND: I can. Do you have something drafted you can give
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With the Government's permission? MS. CEROW: THE COURT: All right. That's fine. Would you, please? Your drafting would be consistent with
04:51:18

what I was trying to say. MS. CEROW: Your Honor, if I might elaborate, it's our
04:51:57

intention that if the defendant gives notice, let's say today, that he needs to go to California on business that before he calls the airlines he calls Miss Spencer and says, "I need to go to California." She says, "Okay."

Because I don't want the exception to swallow up the rule, and so that's why the general ten days permission is the general rule and then if he can't give ten days then as soon as he knows he should contact her. THE COURT: Is that inconsistent with the drafting of
04:52:19

that paragraph Mr. Hammond has furnished us? MS. CEROW: I'm not sure it is because I think -- I
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have a copy.

When he knows of travel requirements sufficiently

in advance he is to provide notification to obtain approval in ten days, but I explained to Mr. Hammond that's the general rule. The way I see this written is more to in the circumstances in which he's unable to provide such notification he's to provide notification by telephone to the probation officer and provide an itinerary. So I tried to emphasize to Mr. Hammond the general rule in our district is ten-days-in-advance permission and then if those ten days can't be met, for whatever reason, then as soon as he knows. And that's why I gave him the example before
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he calls the airlines to get a ticket he should be contacting Miss Spencer and saying, "I just got notice I need to go to California in three days," or whatever the case may be. Now, it's been my experience that through this constant notification then it may -- there may come a time where Miss Spencer says, okay, if you need to go wherever, you don't need to provide me notification of that, but that would be something down the line. But my concern is this Florida
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trip that's coming up that obviously he's known about in advance and there's been no notification to her. THE COURT: It seems to me this might ought to be

modified by striking the words in the second sentence "where the defendant knows of travel requirements sufficiently in
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advance" and instead simply start that sentence by saying, "He is to provide notification and obtain approval from the probation officer ten days in advance." sentence seems to cover the exception: Because the next "In those circumstances
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in which he is unable to provide such notification, defendant is to provide notification by telephone to the probation officer and provide an itinerary with as much notice as reasonably possible." So it seems to me that starts out by saying the general rule is the defendant shall provide -- it starts out saying the defendant shall provide notification and obtain approval for travel outside the District of Arizona. That's the general rule. And the general rule goes on: He is to provide notification and obtain approval from the probation officer ten days in advance. Period. Period.

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And then the next sentence would seem to me to state the exception. MS. CEROW: and obtains approval. MR. HAMMOND: THE COURT: Cerow? MS. CEROW: If he provides -- on those exceptions, if In other words,
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Correct.

And if he provides notification
04:55:36

Your Honor, the --

Before you -- what did you just say, Miss

he provides notification and obtains approval.

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if he calls up and says, you know, I need to go tomorrow, is it okay, she'll say yes, but I want to make sure the defendant understands that he needs to report to her and obtain permission to leave the district. THE COURT: All right. Let me just -- I'll tell you
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what I think ought to be added to carry forward that thought and then I'll get your response, Mr. Hammond. Then I would modify the last sentence to say, "In those circumstances in which he is unable to provide such notification, defendant is to provide notification by telephone to the probation officer and provide an itinerary with as much notice as reasonably possible," comma, "and obtain approval," period. That's what I would say. have to say. MR. HAMMOND: Your Honor, let me address two things. But let me hear what you
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The last point, I think, is a problem for us, and the reasons why it is a problem for us have to do with the nature of his business and the nature of the Probation Office's work. He very often is required to travel to meet with advertisers, people who may give business to his company. there are large numbers of them. And
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We're talking about scores

and scores of advertisers who advertise through what is called RSVP. He does have to go on very short notice. It's the
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nature of his business, as I've said.

He is -- he quite often

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purchases tickets on Southwest Airlines, because Southwest allows you to do this, in advance so he has those tickets available so he can go whenever it's necessary to go, but quite often he doesn't know until the day before, often the same day he travels. And I mean -- by saying this, please understand I mean no disrespect to the Probation Office, but I've called Miss Spencer myself half a dozen times in the last six months. I have never gotten her directly voice to voice. It is
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necessary to leave a voice mail for her and she responds when she can. I don't believe, given the long history of his business travel, that it would be unreasonable to say that as long as she knows where he is, as long as he gives her an itinerary, we can assume she will approve it, but if she doesn't get back to him I really don't want him to say he cannot go, he cannot do his business. And it was -- it was that issue that I was afraid was going to have to require us to have an evidentiary hearing so you could hear a full development of what his business is, as Judge Strand did several years ago, but I -- I think we're not that far apart. I don't believe that the probation officer

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04:58:34

would object, but I do believe there will be times when she won't get back to him, and that presents a problem for us. So on that score, I would like to say let's leave the
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language as it is and let's try it for a while.

If, in fact,

it doesn't work, then we'll come back to the Court. But I -- I really think -- I don't want to set this gentleman up for failure. I don't want to have us back here in
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two months because there was a time when he didn't get a call back from Miss Spencer. THE COURT: What percentage of his travel truly

involves this less-than-ten-days-notice situation? MR. HAMMOND: I would say the majority of it. I
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think, if he testified, it would be somewhere in the 70 to 80 percent. He goes back and forth to these places with great

frequency and has for years. And, indeed, Your Honor, just so I'm clear about this, because I want to address the Florida matter as well, when Mr. Beck first met with the Probation Office he believes he explained this and he was told, he believes, by the Probation Office that he needed to give notification for personal travel. He was given a form for travel that the probation officer wrote the word "personal" across the top of, personal only, and so for years we have operated on that assumption. What we're now saying is if the Probation Office wants to have notification and if they want to have permission obtained in advance when he has ten days, he'll do that, but historically that has not been necessary and I think it's worked no disadvantage to the public interest or to anything
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else. So that's our problem. THE COURT: Cerow. Well, I would only suggest this, Miss

And I want to make -- I -- I think that Mr. Beck has to
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understand that he's not dictating the terms here, and I'm not -- I'm not quite sure how much of an issue of attitude permeates this whole thing, and I don't need to get into that today, but having said that -- and I understand -- I understand the conceptual reason why Probation would like to have the right to actually grant approval. I guess I would wonder out loud whether in the under-ten-day situation it is not sufficient that he provide the notification -- I don't know -- maybe even be required to fax the itinerary -- I don't know -- with the recognition that the burden is going to be on him to make this work and make it work right and if it doesn't then, at least, this Court is going to make sure he understands clearly who is in charge on this deal, because I really don't have much patients for him to dictate how this is going to work. So I -- I throw that out. MS. CEROW: Your Honor, faxing it is a great idea. I

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05:02:04

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mean, he can fax his itinerary to her on these short-term situations where he doesn't know in advance, as long as that exception doesn't start the rule. If it does and there's a
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problem, we can certainly come back.

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THE COURT:

Come back and we'll -- we'll go back

MS. CEROW:

But I think the basic general rule needs

to be there that he obtains permission. MR. HAMMOND: Your Honor, from our standpoint, we
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would prefer to fax it because we think it will give us a record of his attempts to communicate. THE COURT: Yeah. It seems to me if the -- if the

underlying need is, A, making sure -- I suppose it's twofold. A, making sure he's not just willy nilly departing the jurisdiction, but more importantly, that Probation knows where he is at any given point. It seems to me it is a reasonable
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solution to deal with these under-ten-day situations in some way that still satisfies the need to know where he is but will allow him to do business as he is currently doing it. So then if that were to be the case, I would reword that last sentence so that it says what it says but after the word -- after the word "possible" then, comma, "and fax the itinerary to Probation". MS. CEROW: THE COURT: That's fine with the Government. All right. Your Honor, that's fine with us as well.
05:04:15 05:03:41

MR. HAMMOND:

I do need to address the Florida matter very briefly. THE COURT: All right. Because I think that is an issue.
05:04:23

MR. HAMMOND:

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He does have an annual board meeting that he has attended for many years now. He -- and on my -- maybe this

was my mistake, and if so, I should take responsibility for it, but -- but we have in the past believed that as long as that trip is solely for business that, as the Court had agreed before sentencing and as we thought had been agreed afterwards, he did not need to obtain approval. We're now agreeing that he
05:04:42

does need to obtain approval ten days in advance for things that he knows are going to happen. The board meeting is one he
05:05:04

always knows about in advance, and it was only because this matter had not yet been resolved I told him let's wait and leave that to the Court. But it is important that he go to the board meeting. It is the 14th of December. I would like to have an agreement I know they won't

that he will provide his itinerary to them. have any objection to it. years.

05:05:14

It's something he's done for many

But I don't want him to miss that board meeting. THE COURT: Why is Florida -- I mean, I realize -- I

realize originally California, New Mexico and Idaho were approved, but does the paragraph we've been working on -- is it intended -- if it is we've got to make it clear, but is it intended that it only apply to California, New Mexico -- in other words, is it intended that his general travel should be restricted to those three states, or is there any reason why this travel restriction shouldn't apply to any and all states?
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MR. HAMMOND:

I think it applies to any and all.

And

the only reason to go to Florida is not because he has a franchise there but because that's where the headquarters of the parent company is. THE COURT: I understand. I'm just trying to figure
05:06:05

out why Florida is getting our special attention. MR. HAMMOND: It's only getting our special attention That's what

today because there's a board meeting this Friday. I was concerned about. THE COURT: Oh, okay.

05:06:16

MR. HAMMOND:

I don't want to have to be put in the

position of asking the Court to rule on whether he can go this Friday or not. I think if we have an agreement and if he

provides the itinerary, I don't believe that the Probation Office will care about him going. THE COURT: All right.
05:06:30

Probation is shaking their head? MS. SPENCER: THE COURT: No.

Meaning no problem. Okay. We'll provide that before
05:06:38

MR. HAMMOND: tomorrow morning. THE COURT: MS. CEROW:

All right. So regarding allegation A, which was the

travel restriction, allegation B, which is related to the travel, the Government agreed to dismiss those two allegations
05:06:51

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because the defendant had relied on advice of counsel, which, of course, is a defense. THE COURT: MS. CEROW: THE COURT: MS. CEROW: So it's allegations A and B? And B. Are ordered dismissed, then. Okay.
05:07:04

And allegation C, which is reporting his residence, where he was staying in California, we now have the information about where he stays in California. He has an apartment there.
05:07:25

We now have the address of the apartment. Our concern was that when he told Miss Spencer where he was staying he gave basically the address of a facility that handles the mail only, it was not the physical address of his apartment, which, of course, is what she needs. that. So in talking with Mr. Hammond, I just decided, okay, there was confusion about it. So that there's no confusion in She now has

05:07:48

the future, I advised Mr. Hammond that wherever the defendant is staying he needs to provide the physical address of where he's at, not a post office box or a mail drop. So based on that conversation, I agree to dismiss allegation C. THE COURT: allegation C. MS. CEROW: Now, regarding allegation D, which are the
05:08:21 05:08:05

All right.

Then it is ordered dismissing

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business records, there's a couple of things that occurred there. The defendant advised -- Mr. Hammond advised that the defendant had provided documents to Miss Spencer. remembers receiving an envelope from him. what's in it. She
05:08:37

She doesn't remember

The Probation Office doesn't have those

documents, but Miss Spencer advised they could misplaced. So pending the resolution of this petition, the defendant, through Mr. Hammond, provided Miss Spencer documents for the last six months, the financial documents, which she does have. The concern I now have is, Mr. Hammond advising the Court, business records if they're requested, we shouldn't -Miss Spencer shouldn't have to request them, and she's advised me that Mr. Hammond has indicated that those requests will go through him, which is something that usually does not occur. When the probation officer requests the defendant to provide financial documents, like bank statements and credit card statements, the defendant usually brings them in. So I'm not sure and maybe Mr. Hammond can explain why he wants them to go through him. The reason I don't think that it's advisable to have upon the request of the probation officer is should there be any I'm not going do it because my attorney says I don't have to we're going to end up back here.
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So my recommendation, which I discussed with Mr. Hammond, is that every month the defendant provide with his monthly report a copy of his bank statements and credit card statements, both personal and business, because the defendant is self-employed, so to get a complete picture of his finances Miss Spencer needs to have both. There is a $1.8 million, I belive, restitution order in this case, and so part of her obligation is to work with the defendant to see how much he can pay towards restitution. So regarding the business records, it's our preference that he do that every month. Now, once she gets a clear picture of the defendant's finances, she's advised me she may not need them every month, but I think until she gets that he should supply that every month, along with a copy of his payment of restitution. We had an issue come up the last couple of months where I asked Miss Spencer if the defendant was current. advised me he was not. She
05:10:53 05:10:34 05:10:10

I spoke with Mr. Hammond about that.

Miss Spencer then advised me that the Probation Office records are incorrect in how they relate to the court records. So in
05:11:16

order to protect the defendant's compliance, I think it would help if he gave a copy of his payment for restitution attached to his monthly supervision report so that when we do have these glitches between the courthouse financial unit and the Probation Office that Miss Spencer can look at the report and
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know that he's paid, unlike when I advised Mr. Hammond he hadn't paid, he had, in fact. helpful, too. THE COURT: All right.
05:12:01

So I think that would be

What you drafted and handed to me, Mr. Hammond, would -- it says the defendant shall submit complete credit card statements -- doesn't say bank statements -- credit card statements for any and all credit cards, personal or business, with his monthly supervision report. What about adding "bank statements" and "payment of restitution records"? MR. HAMMOND: Your Honor, that particular paragraph

05:12:20

number 8 was designed to address specifically the problem we had that and Miss Cerow explained to you about the credit card statements being lost. It wasn't intended to be exclusive.
05:12:39

The next paragraph, number 9, was intended to say to the Probation Office we will give you whatever you want, business or personal, as you request it. 9 covers that. My only dispute with the Probation Office -- and let me be clear about this. I do not want to be the go-between.
05:12:59

And so I think number

That's not what I want to do and it's not what I would expect to do under this agreement. It's the last thing I want to do.

But I don't want there to be disagreements in the future about what Mr. Beck provided and what he didn't. We spent a lot of
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time trying to unravel the question of what happened to the missing envelope. And so I don't want to be a part of this. I want it

to be done between the Probation Office and Mr. Beck, and I know he does, too. And in terms of the monthly payments, and he's made every one of these things, I don't want there to be any doubt about it so if providing a copy of the money order to Probation will help get them a better record, absolutely, he'll be happy to do that. The only issue that I think we had, Your Honor, is I don't want to put in here that he is going to be providing all of this information every month for some what could be forever. It's a huge amount of stuff. several businesses. So what I said is if the Probation Office wants it, whenever they want it, he'll get it, and if they want it for the next three months in a row he'll give it to them for the next three months in a row if they request it. That's all I've
05:14:16 05:13:47 05:13:30

It's a lot of work.

He's got
05:14:03

asked and I think under the circumstances it will avoid having us come back here at some future time. THE COURT: Well, but it seems to me that -- it seems

to me if they don't want it then they'll indicate that they don't want it any further. And maybe we need to have something
05:14:35

in there that says -- I mean, you seem to be saying they ought

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to have to ask for it each month, and it seems to me that's imposing a needless task on Probation. I agree with you. There may come a point where they

say I don't want it anymore but why not build something in where then if they make -- are to make a phone call or send a message, the message is not an ongoing message I want it, I want it, I want it, but rather a message saying I don't want it anymore. MR. HAMMOND: today. How about if they say -- they can say it
05:15:12 05:14:58

If they say to us that they want this material for the

next three months or four months and want to look it, that's all they have to say and we'll do it for the next three or four months. What I'm afraid of is if we say in here that he'll do

it every month, we're going to be creating a huge amount of work that nobody will look at. So -- but I'm happy to try to accommodate this. want to do is have clarity here. MS. CEROW: Your Honor, having worked with Probation All I
05:15:30

as long as I have on these kinds of cases, the defendant, if he provides it, she gets the picture and she can tell him after three or four months, okay, I don't need to see it every month but I'm going to want to see it every three to four months. But until that time, if they are going to supply it for three or four months and then we're done, that doesn't give us an accurate picture of the defendant's businesses that he owns
05:16:05 05:15:47

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over the long-term. And because restitution is part of the Court's order, the probation officer has an obligation to make sure that she stays current on the financial information. And so perhaps it can be, you know, the defendant shall supply these financial records, bank statements, credit card statements, until the probation officer -- every month unless otherwise directed by the probation officer. And I guess my confusion about the documents is I receive a credit card statement every month and bank statement and all I have to do -- if I had to turn over, all I'd be doing is copying it. So I don't -- I don't really see voluminous
05:16:49 05:16:23

paperwork, just bank records for the businesses and his personal bank statements, and credit card reports. THE COURT: Well, let me say this: I had not
05:17:12

intended to keep my staff here this late.

In fact, I think

you may have -- in fact, I think I'm keeping them later than what I should. And -- so I'm -- I'm wondering out loud if we

can't figure out a method to continue this to another time and/or have you agree on -- I just don't want to rush it tonight. Frankly, we're short on time. So I -- I'm trying to
05:17:40

look for some other means by which we can get 'er done and -MR. HAMMOND: proposal. Your Honor, maybe I could make a

I think we're so close here that if we were to I didn't even
05:18:02

recess now -- and I apologize to your staff.

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know what time it was.

If we were to recess now, I think that

Miss Cerow and I can come up with language that we can submit to the Court. I don't even think we need to -- if we need to

come back for another time, we can, but I would believe that we're close enough now that we could simply work out some language and -THE COURT: Well, we still need to have -- he's going
05:18:19

to admit to allegation E, so I still have -- we still have to have an admit/deny hearing. whenever I can. MS. CEROW: Your Honor, we can reconvene for the But I'm happy to try to fit in
05:18:36

admit/deny hearing and disposition hearing at the same time if the Court and counsel wants to do that. If we're going to do

that, then we need to give Miss Spencer enough time to do a disposition report. THE COURT: All right. Let's see what time we have.
05:18:52

(Discussion with the deputy clerk.) THE COURT: 1:30 on January 7. I'm virtually certain that that's okay.
05:19:10

MR. HAMMOND: THE COURT: MS. CEROW: Judge. THE COURT:

All right. I think we need some interim conditions,

Well, let me -- let me, then, see if I can

state those for the record and if I have been able to state them then I will order them. Let me first attempt to state
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them. First, that the defendant shall provide notification and obtain approval for travel outside the District of Arizona. He is to provide notification and obtain approval from the probation officer ten days in advance. In those circumstances
05:19:45

in which he is unable to provide such notification, defendant is to provide notification by telephone to the probation officer and to provide an itinerary with as much notice as reasonably possible and fax the itinerary to Probation. We can come up with better syntax, hopefully. The defendant shall submit complete credit card statements and bank statements for any and all credit cards, personal or business, with his monthly supervision report and records concerning payment of restitution, and these records shall be supplied on a monthly basis unless otherwise directed by the probation officer. Do I need anything else at this point? MS. CEROW: Your Honor, I'm just asking Miss Spencer.
05:21:03 05:20:13

The Court's language was any documents pertaining to restitution. According to Mr. Hammond's proposal, would that
05:21:29

be income, employment benefits, et cetera? THE COURT: talking about? Well, is that the type of record we're

If so, then -It's my understanding that Mr. Beck is
05:21:51

MS. SPENCER:

paid by his business by direct deposit so his bank statements

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would meet the criteria. direct-deposited.

Some type of pay stub.

Because it's

I would be all right with his bank

statements and his credit card statements. THE COURT: between now -MS. SPENCER: THE COURT: Right. We're really just talking about something
05:22:05

-- and January 7th anyway.

So that's -MS. SPENCER: date, Your Honor. THE COURT: and the 7th? MR. HAMMOND: THE COURT: Yes. Can you live with that, then, between now That definitely suffices until that
05:22:11

All right.
05:22:18

Then it is ordered that those matters I've just set forth on the record shall serve as interim conditions. Anything else -MS. CEROW: THE COURT: MS. CEROW: THE COURT: No, Your Honor. -- until the 7th? No, Your Honor. Thank you. We'll see you on the 7th. Again, my

05:22:34

MR. HAMMOND:

Thank you, Your Honor.

apologies to your staff. THE COURT:

I lost track of the time.

Thank you.
05:22:42

(Proceedings recessed at 5:22 p.m.)

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C E R T I F I C A T E

I, DAVID C. GERMAN, Official Court Reporter, do hereby certify that I am duly appointed and qualified to act as Official Court Reporter for the United States District Court for the District of Arizona. I FURTHER CERTIFY that the proceedings and testimony reported by me on the date specified herein regarding the afore-captioned matter are contained fully and accurately in the notes taken by me upon said matter; that the same were transcribed by me with the aid of a computer; and that the foregoing is a true and correct transcript of the same, all done to the best of my skill and ability.

DATED at Phoenix, Arizona, this 27th day of December, 2007.

s/David C. German DAVID C. GERMAN, RMR, CRR OFFICIAL COURT REPORTER

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