Email? What Email?
by Diana Stricker & Marcia Chambers | Feb 6, 2013 5:13 pm
Posted to: Legal Writes
Branford Town Clerk Marianne Kelly (pictured) testified in U.S. District Court in Hartford yesterday that she actively participated in a Guilford “gifting table” for about a year and simply adored the experience. But when it came to two specific lines of inquiry, she clammed up.
She is the first elected official to testify about the tables, which the government calls a pyramid scheme. She admitted on the stand that she was concerned about the gifting table investigation because she is an elected official.
If the prosecutor who called her to testify thought she would weave together the role of the Ed Marcus family and law firm for the jury to see, he found out in court yesterday just how short her memory was.
Two Guilford women, key organizers of gifting tables on the shoreline are on trial charges of criminal wire fraud, conspiracy and filing false tax returns. A third has pleaded guilty and will be sentenced in federal court in March. Kelly smiled at them in the courtroom.
A gifting table is described by the U.S. Attorney’s office as a four-level pyramid, with eight participants assigned to the bottom row, four participants assigned to the third row, two participants assigned to the second row, and one participant assigned to the top row, the “dessert” of the dinner. Those below are “Entrees,” and those below them are “Soup and Salads.” The lowest rung, the eight who join by each giving $5,000 to the dessert, are known as the “Appetizers.” The table is dependent upon new participants coming in and paying $5,000 to the person in the “dessert” position, thus enabling the others to move up. Those reaching the top of the pyramid got $40,000. Kelly said her table did not use a food hierarchy, just 1,2,3,4.
In court yesterday, Kelly was asked about an email message bearing her name and billing records linking her to the Marcus family and the Marcus Law Firm. She rejected outright the notion that she had anything to do with either.
The writer of the email in question, identified in court as Kelly, suggested that attorney Shelley Marcus had an interest in joining a gifting table. Shelley Marcus has denied any such interest when she testified about her own role in the gifting table affair. (The governor recently nominated Marcus for a state Superior Court judgeship.)
Over the course of her testimony, Kelly outlined her relationship with Shelley, Jill and Ed Marcus and the Marcus Law Firm. She told the 15-member jury (including three alternates) that Jill Marcus, Ed’s wife, was a good friend of hers, she said, and that she asked Jill to join a gifting table. Jill Marcus, a member of the Branford Police Commission, got back to her a few days later to say she would not.
A Crucial Email
The email in question that was addressed to Jill Marcus said that Kelly was sending women to the Marcus Law Firm for advice about the gifting tables—an assertion Kelly denied in a separate interview with the Eagle. The email states that attorney Ed Marcus said the tables are legal. The email offers Kelly’s perspective on the Marcus family connection to the tables in Nov. 2009, shortly after then- Attorney General Richard Blumenthal issued a press release warning the public about “gifting clubs.”
Kelly, now in her fourth term as town clerk, said she put in the required $5,000 to enter the table and left after she learned of Blumenthal’s inquiry into the shoreline groups. But she didn’t leave immediately. Since she had progressed up the table ladder, she returned to the group to receive her own $5000 gift, thus breaking even. Then she left.
Under cross-examination in court yesterday she said that Ed Marcus, former state chairman of the Democratic Town Committee and a political kingmaker in his own right, helped run her first political campaign for town clerk in 2005. He has not run her campaigns since then, she said.
The Marcus Law firm served as the town’s attorneys from 2005 to 2007. The town filed a malpractice suit against the Marcus Law Firm in 2008, a case that has been discussed repeatedly and on the record at many town Board of Finance and Representative Town meetings since then.Trial is set in the malpractice case for June. As Town Clerk Kelly attended these meetings over the last four years.
Attorney Norm Pattis, who represents Donna Bello, one of the women on trial, asked Kelly if the town has sued the Marcus Law Firm for malpractice. Kelly again pleaded ignorance. “I believe it was malpractice,” she said. She observed that she had not read the lawsuit.
Assistant U.S. Attorney Peter Jongbloed called Kelly as the government’s witness in order to pose questions to her aimed at providing the links to the Marcus family she described in her email. But she steadfastly refused any knowledge of the email, of writing it or sending it.
When asked if anyone else was home when the email was sent in Nov. 2009, she replied that she didn’t know.
Asked by Jongbloed why the email had her address, she said she didn’t know.
Jongbloed clearly intended to use the email to show that Kelly directed gifting table participants to the Marcus Law Firm and was eager to recruit both Shelley and Jill Marcus to the fold.
Kelly told the Eagle in an interview she knew nothing about this email: “I don’t recall writing this, and I never spoke to Ed Marcus about this. I never sat down with Shelley. I have never seen this e-mail. I just don’t know where it came from.”
Kelly told the Eagle in an interview before she testified that she did not give the Marcus law firm the names of any potential gifting table clients. One of her table companions, she said, needed a divorce lawyer, so she sent her to Shelley Marcus. The divorce lawyer part of the story was not discussed in court yesterday, but the fact that she may have sent some women to the Marcus Law Firm was.
At one time Ed Marcus, Shelley Marcus and the law firm represented the women on trial ,Bello and Jill Platt and others, in a civil case brought by the state Attorney General’s office against them. In a March 2010 article in the New Haven Register, Ed Marcus was quoted saying, “My position is that it is legal, speaking of the table.” But in court this week, he said he changed his mind six months later after investigating how the tables worked.
On the witness stand, Kelly’s mind also went blank when she was asked to explain the Marcus Law Firm’s billing records that showed she had consulted a Marcus Law firm attorney by phone on July 27, 2010. She was listed on the billing records in familiar terms, “Marianne,” without her last name. She said she simply could not understand the billing records, maintaining she received no legal advice from the Marcus Law Firm. She also said under cross-examination that she received no bill.
At one point in an interview with the Branford Eagle after she testified yesterday, Kelly said of the email and the billing records that “I feel like I am in a movie.”
Joining a Gifting Table
At the outset of her testimony, Kelly explained to the jury that a friend told her about the gifting tables and that, “It piqued my curiosity.”
She said she did some online research and found both positive and negative information about gifting tables. She said she then met with Jill Platt and another woman and that, “They explained it was straight cash gifting and it was legal.” Kelly said she did more online research and concluded that straight cash gifting was legal.
Kelly said she joined in March 2009, and gave $5,000 to Jill Platt. She told Jongbloed she never signed any gifting statement.
She described her membership in glowing terms. “It was incredible. The women were incredible. It was amazing and you just wanted to join,” Kelly said, adding that the group also did some “philanthropic stuff.” Her testimony echoed sentiments of prior witnesses who talked of their shared confidence in the sisterhood and the camaraderie they shared.
Jongbloed asked if Ed Marcus ever represented Kelly personally, and she said yes. He asked if Marcus committed malpractice in her case, apparently a reference to the town of Branford’s pending malpractice case against the Marcus Law Firm in connection with its representation of the Tabor case. At that time the Marcus Law Firm was the town’s counsel. “It worked out fine,” Kelly responded in regard to her personal case.
Jongbloed asked about her long-term relationship with the Marcus family.
Kelly told Jongbloed that she had known Jill Marcus for years, and that she invited Jill to join the group. She said she never asked Shelley Marcus to join. She said she did send emails to Jill Marcus, but it was “just regular friend stuff.”
She told Jongbloed that her group used numerical levels instead of food terms like “appetizer” and “dessert.” Kelly said she brought two women into the group and moved to the next level. She did not identify them.
When asked by Jongbloed if she expected to make money, she replied. “It would have been nice. I was hopeful. … It was worth the $5,000 just to be part to this group.” Jongbloed then asked if she would have given that much money if she was not expecting a return. “No,” she reponded.
Kelly told Jongbloed she quit the group when she learned that Blumenthal was conducting an investigation into the gifting tables. “I would never do anything wrong. So, I said ‘Oh my God!’”
When questioned further about why she left, Kelly said, “I didn’t want to be part of the investigation.” She then added she was concerned because she holds an elected position. “I didn’t want anything to negatively impact me.”
When asked if she would have joined if she thought it was a pyramid scheme, she said, “No, absolutely not.”
She said the groups gave women a chance “to bond and nurture and empower each other.” She insisted “I wouldn’t do anything illegal.”
Kelly also told Jongbloed that there was an attorney in the group who said the gifting tables were “absolutely legal.” She said she could not remember the attorney’s name.
When asked if she ever returned to a meeting after the Blumenthal investigation began, Kelly said “I went to get my money back.”
Attorneys Skeptical About Testimony
Both prosecutor and defense attorneys viewed Kelly’s testimony with skepticism.
Under cross-examination from Attorney Jonathan Einhorn, who represents Jill Platt, Kelly further explained her reaction to learning of the investigation.
She told Einhorn that she was “very, very surprised” when she found out about the investigation, especially since the lawyer at one meeting said it was “100 percent legal.” She said she could not describe the lawyer, because there were so many people there, and that there could be 80 people at the parties. When asked if the gatherings were meetings or parties, Kelly smiled and said, “They were a lot of fun.”
She also told Pattis she didn’t write the email. When asked if she ever gave anyone else access to her email account, she said no.
“That’s not how I write,” she told Pattis in regard to the email, claiming she learned about the email from a newspaper account of Monday’s testimony. She said it is not her style of writing. “I wouldn’t have written it,” she said, adding that she wouldn’t have again asked Jill Marcus to join the group since she had already declined.
During cross-examination by Pattis, Kelly appeared to become defensive and was talking rapidly.
“I can’t even imagine I wrote that,” Kelly told Pattis in regard to the email. “I never would invite anybody with an email.’
When questioned further, Kelly said “I have been wracking my brain,” to recall any such email. “I don’t remember writing that.”
Pattis questioned her about billing records that suggested a telephone consultation with the Marcus firm on July 27, 2010. Kelly again denied talking with the firm about the gifting tables. When asked again about the billing record and the e-mail, she said, “I can’t explain it.”
Pattis asked her if Ed Marcus asked her to be quiet, and she said “no.”
Kelly then repeated her recurring statement: “I never spoke with Ed or Shelly Marcus about the gifting tables.”
Pattis ended his cross-examination by asking if she was familiar with the term “plausible deniability.”
He did not wait for an answer.
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Thank you, Diana and Marcia, for the first clear explanation I’ve seen about how the tables worked (I love the dinner metaphor). Looks like a classic Ponzi scheme to me…
And thank you also for the blow-by-blow of the testimony. I did find Pattis’s questioning somewhat puzzling. It sounded almost prosecutorial. Did you get a sense of where he was trying to go with it?
And I would also be very interested to hear, at some point, what you think would motivate a large group of apparently well-off, socially respectable, connected and even powerful women to engage in this shell game.
posted by: Moshe Gai on February 7, 2013 4:50am
Am I the only one who smells a rat in here?
Perhaps Norm Pattis’ plausible deniability sounds more articulated… And Norm is one of the better Attorneys of the greater New Haven area. In the old days he and his former partner John R. Williams were some of the most brave attorneys of this town.
I know the constitutions prohibits judgement by association, but I recall Aristo said: “Tell me who your friends are, and I will tell who you are”. Back at home we used to say that if you sleep with donkeys you smell a certain way.
Judging by the association and the repeated denying it seems plausible to smell a rat.
In politics “appearance” is indistinguishable from “reality”.
And the appearance in court is quite bothersome.
Thus Spake Moshe Gai
Pyramid, pyramid, pyramid. A Ponzi is where the Confidence Trickster returns part of the dupes investment as “returns.”
posted by: William Kurtz on February 7, 2013 12:40pm
Who falls for this kind of stuff? Every time I read about one of these schemes, it never ceases to amaze me. It’s one thing for an offer to be “too good to be true” (ah, but what if it is?) and quite another for it to basically promise something for nothing.