Day 3 Gary Michelson criminal trial. Interesting twists and turns. Forbes billionaire crazy perjury evil.

Gary Michelson came by himself today. For some strange reason he seemed to be frightened to show up by himself the first day or so. He'd run and hide in different rooms including the bathroom between sessions. I perceived this as the paranoia of a crazy person.

 There was only one witness which they did not want present for other witnesses and she gave her testimony today. There is nothing to worry about me posting my notes. There may be mistakes here. Please, correct me. These are not official minutes but merely the jist I would say.

This is to cut down on my typing.

Gary Karlin Michelson = G (someone else named Michelson in room)
Philip Richard Powers = P
Neil Campbell = N
DA Robert Knowles = K
Philip Richard Power's attorney Walter Urban = U
Judge Michael E Pastor = J
DA senior investigator William Villasenor = V
Costa Rica = CR
Dyke Huish, Neil Campbell's attorney  = H (I just got his name spelled properly) http://www.huishlaw.com/

Walter Urban was still cross examining Gary.
U: Are you familiar with real estate transactions in California?
G: Yes.
U: Are you familiar with the term "flipping?"
G: Ya. I understand the concept.
U: The concept being buy with the purposes of resale after upgrade?
G: Ya. The first property we (C&M Investments) bought was already listed. Therefore the seller paid P 6% comm.
U: Did P bring the property to you?
G: Yes. I never went to Costa Rica. N wanted to be the eyes, ears, even the legs of C&M. He wanted to retire there and a teak farm owner.
U: Did you have lawyers in Costa Rica and the US help you with these transactions?
G: I had a law firm in CR set up by Mr Munoz in 2000 or 2001. They were retained to make sure the property was "cleared" (of liens, ownership, title issues). Bill Capps was my lawyer in the US. He found Munoz for me. I started a partnership with N and myself in 2000. P would notify Munoz when the properties were cleared and Munoz would verify it with records. N had full authority, power over C&M. Once P drove Munoz out to see a farm to verify things.
U: Why did P need a power of attorney to buy for C&M?
G: He needed a power of attorney to buy for C&M.
U: When did this 6% commission start with P?
G: It started with the third property. In 2001 we agreed that P would get no more than 6% comm while negotiating the lowest price from the seller.
U: Are there any records that show 6% was paid to P?
G: Welllll.....in March 2006 P said he never took over 5.8% comm, and again in March 2010.
U: Were there any witnesses to this oral agreement of 6%?
G: N witnessed the oral agreement.
U: Where was P, N and you when you had this agreement?
G: N and I were in LA on the phone and P was in CR on the phone 2000 or 2001.
U: How long did it take to clear title on some properties?
G Sometimes up to five years. P would provide me with an invoice. N reviewed them. N was an active partner. I was a passive partner. C&M Limitado in CR was formed by P and his wife Virginia. Then signed it over to us. C&M Inc in the US is a partnership just to pay taxes. P was the actual manager of the properties and C&M. N was the general partner of C&M, not Powers.
U: When did you first feel concerned about the transactions?
G: End of 2005. That's why I hired David Cohen. "I had a lot of bad investments. I'm not a good business man." Cohen asked for all the records from P but didn't receive them.
U: When were your issues with P settled?
G: Bookeeping issues never resolved. P was flipping properties, doubling the prices, giving money to N.
U: Objection.
J. The last statements shall be stricken.
G. I learned about this in 2006 or 2007.  P gave docs to Judge Febrezian to give to Villasenor in mediation.
U: I want to show you the transcript of your recorded interview with V. Then I want to play tapes.
K: The confidentiality agreement was lifted on mediation when there were no results.
G: Can I talk about confidential mediation here and not be in contempt?
Sidebar in chambers about confidentiality of mediation negotiations.
J: G call your civil lawyer and ask him. I can't give legal advice. None of the lawyers in the room represents you. Next witness while we wait for G to call his attorneys.

K: Prosecution calls witness Jacquelyne Hernandez with Comercia Bank in the US with bank records of wire transactions of N.
H: Move to exclude witness. She is not the custodian of records. Her testimony is therefore irrelevant. There is a lack of foundation. No chain of custody of records.
K: She wrote the affidavit. She is the custodian of records.
H:  I didn't know that. Still there is no chain of custody. We don't know where these records have been for years. They could be altered.
J: Over ruled.
K: How long have you been at this bank?
W: 16 years. I can't verify that any of the docs are accurate. I was not present for the transfers. I am two levels away from the person who entered the data. I speak no Spanish. These look like the form of our docs but don't know if these are the exact numbers. I can only verify my signature.

She goes back outside so Neil's lawyer can object some more.
H: The DA produced documents which we don't know where they came from. They did not come from the bank. They were requested by the CR consulate in 2009 then came back to the US. They are inadmissible. DA should have gotten records straight from bank. Why not?
DA: Records are older possibly out of retention dates. That's why we got this. H thinks we're "trying to weasel this in."
H: I'm offended!
J: Stop that, you two. Let's bring back the bank person and ask her about retention dates.
DA: What is your retention policy?
W: 7 years. You can't request docs from 2006 today and receive them.
J: Court will receive docs by reference.
(break)

DA calls William Villasenor.
DA: How long have you been a peace officer?
V: 19 years, previously with LAPD, 12 years with DA. (he is senior investigator)
DA: Did you tape record an interview with G?
V: Yes. I have a transcript. I went to CR 12/2012. DA, I got the case to investigate 5/12. I didn't get info from G. I got it from his attorney Kirkland and Ellis, Sean Paisley. I also got records from the seizure of P's computers in CR.
H: Objection, double heresay.
J: Objection sustained.
V: I got records from CR police Carlos Garcia. I speak Spanish, learned it from my parents. The DOJ requested computers with CR police help. (P was raided at his home in the morning with his wife and kid there. They took four computers)
(Gary comes back in room says he can't get ahold of lawyer yet. J tells him to talk to a lawyer and come back at 1:30)

Lunch

G: I spoke with my attorney. If P waives confidentiality, I can testify.
U: J, I'd like to speak in chambers on record. (everyone goes to J's chambers)
J: (back in court) G, I want you to have an attorney present. This is the first time I've ever encountered this in a criminal case.
G: My attorney is civil with no criminal experience.
J: Get a criminal attorney referral.
G: P would not agree to waive it?
J: Can you get an attorney here Monday at 9 am? Go call your attorney again. (G leaves room to go call)
J: Good cause to pause for good legal reason. The question is, is a confidentiality clause privileged in a civil case in a criminal matter? (Judge looks on the Internet) Code of criminal evidence 11.15, 11.19 1998 case Winaker v Superior Court. The right to fair trial trumps any confidentiality agreement in a criminal case. (I personally dealt with same issue in civil court. Mediation, confidential settlement agreements are able to be divulged in later civil or criminal suit. They can be under seal, protective order)
(Gary comes back)
G: I just spoke with my civil attorney Luke Dauchot ( http://www.kirkland.com/sitecontent.cfm?contentId=220&itemid=8256&section=1 ), he quoted 11.19 a 1998 case. If P wants to ask about the confidential mediation, they have waived right to confidentiality.
J: We ended up at the same code while you were outside. Still, I think you need a lawyer present. Can your lawyer be here Monday at 9 a.m.?
G: Yes.
J. See everyone then.

Judge agrees to let all lawyers including G's email him over the next few days about a possible resolution. Everyone must be cc'd so it's not ex party comm.

I ran some more land comps. It seems the cheapest teak farm property you can buy is about $3,000/acre. That means Gary at a minimum tripled his investment. Based on other comps the value is about $10,000/acre. I'm looking at listings, not sales.

807  acres for $2.3M = $3,500. Currently some crops, 20 year old trees.
http://www.costaricarealestateservice.com/property/807-acre-costa-rica-agricultural-ranch-highway-frontage/?pid=16513&print=1

100 acres for $350K = $3,500. Ranch.
http://www.costaricarealestateservice.com/property/hundred-acre-farmland-river-city-views-palmar-norte/

250 acres for $600K = $2,400. Ranch.
http://www.costaricarealestateservice.com/property/250-acre-land-parcel-private-forest-reserve-near-san-isidro/

290 acres for $450K = $1,550 foreclosure. Not near roads. No utilities. In the middle of nowhere. Cheapest land I have found by far.
http://www.costaricarealestateservice.com/property/290-acre-ranch-property-southern-costa-rica-near-osa-penninsula/

750 acres for $6.9M = $9,200/acre. Near airport, river, roads, ranch and farm land.
http://www.costaricarealestateservice.com/property/750-acre-riverfront-farmland-with-great-commercial-land-development-potential/

72 acres for $795K = $11,000/acre. Near airport, road, stream, utilities.
http://www.costaricarealestateservice.com/property/72-acres-of-farmland-with-spring-water-in-central-costa-rica/

These last two properties seem similar to Gary's properties. Gary stated his land was near roads, airport, river.

Here is Panamerican Wood company website. They say they are one of the largest teak wood plantations in Costa Rica at 6,000 acres. You are supposed to take pasture land and turn it into a teak forest to improve the land. Why was Gary whining and saying he was sold pasture land when he wanted farm land? That's why the government gives the tax credits. I'm also looking at their farms. Teak trees are sticks. That's probably why they grow so fast because they just grow straight up with no side branches which can't be used. These trees are indeed deciduous. Gary was indeed there during the dry season. Gary made it sound like Powers was lying and giving excuses when it doesn't appear that he was. More about teak here.
http://www.panamericanwoods.net/

More about property sales in Costa Rica. Americans can own beach front property. Everyone just needs to make sure any property within two blocks of the beach has a special municipal lease. Gary was again talking out of his ass just like he did about education and Ben Franklin's patents.

Commissions are generally 3-10% for a regular home sale. There is no law about how much people can charge for a "commission." There are no licensed agents in the country. Anyone can be a real estate agent. Farm land with trees is very different than home sales. In Costa Rica you must add a 13% sales tax on the real estate agent commission which must be paid at close of escrow. Obviously if you had a real commission, the price would be even higher to the buyer. There is no capital gains tax in Costa Rica.

http://costarica.com/real-estate/faq.html

More interesting things. A real estate commission would have to have been included in the sales contract. All property sales must have a written contract so they can be recorded. That means Richard's commission, if there was one, would have been in the sales contracts. I doubt they were because there was no 6% agreement. They do not have MLS or standardized forms like we do here. Lawyers draft the agreements. If Gary really only wanted Powers to get 6%, he had to put it in the written contract which I assume his attorney drafted. Here's more. They offer title insurance. Gary could have bought title insurance. If you transfer title directly instead of transferring shares in a limitada, you have to pay more tax. Seems Powers was trying to save Gary or himself transfer tax. Here in Cali seller pays transfer tax. Gary is looking more ungrateful by the second. Gary is also looking like he did no due diligence whatsoever even though he had US and CR lawyers. The CR lawyer also spoke Spanish. Typical Gary. I saw him do the same with Ed Boks, pet kiosks, microchips..... In fact David Cohen took over in 2005 yet Gary continued to make "bad business deals" in 2006 and 2007. Gary is his own worst enemy. They say doctors are the worst investors and I agree.

http://american-european.net/article-costa-rica-real-estate-commissions-and-attorney-closing-fees-119.html

Some information on price padding in Costa Rica, "the practice known as "price padding" or "net pricings." This is the common practice of adding an amount to the seller's asking price (normally at least 15% and sometimes 100% or even more) and pocketing the difference. (This is usually on top of the commission they charge the seller or in some cases the buyer) and it is perfectly legal to do so."

Here they are talking about people who do not improve the property, clean liens, remove squattors.... They do nothing to the property, never own it. They just tell the buyer the actual sale price is higher than it is. This is legal and very common in Costa Rica. In the US this would be difficult because of disclosure laws, the MLS, easy availability of public property searches... This is something Gary's Costa Rica lawyer would have been responsible for investigating. This is not what Powers did. Powers bought the land, cleared the title, removed squattors, probably had it surveyed, soils tested, legally described, plat map made.....then I think he sold it to Gary. This is an awful lot of work. No one would do all that for 6%, not even in the US where things are easier.

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