Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 1 of 28

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA _________________ UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) vs. ) ) EITAN MAXIMOV, ) ) Defendant. ) ) ______________________________) BEFORE:

CR 08-0368-PHX-DGC Phoenix, Arizona July 22, 2008 4:58 p.m.

THE HONORABLE LAWRENCE O. ANDERSON, MAGISTRATE JUDGE

TRANSCRIPT OF PROCEEDINGS DETENTION HEARING

Transcriptionist: Linda Schroeder Sandra Day O'Connor U.S. Courthouse, Suite 312 401 West Washington Street, Spc. 32 Phoenix, Arizona 85003-2151 (602) 322-7249 Proceedings Recorded by Electronic Sound Recording Transcript Produced by Transcriptionist

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 2 of 28

2

1 2 3 4 5 6 For the Government:

A P P E A R A N C E S

U.S. Attorney's Office By: KEVIN M. RAPP, ESQ. 40 North Central Avenue, Suite 1200 Phoenix, AZ 85004 For the Defendant Maximov:

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 UNITED STATES DISTRICT COURT Law Office of Allen B. Bickart By: ALLEN B. BICKART, ESQ. 812 Clubhouse Drive Prescott, AZ 86303 STEPHEN C. KUNKLE, ESQ. 7227 North 16th Street, Suite 224 Phoenix, AZ 85020

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 3 of 28

3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 proffer.

THE CLERK:

Criminal docket 08-368, United States of

America versus Eitan Maximov, on for detention hearing. MR. RAPP: United States. THE COURT: evening to you, sir. MR. BICKART: Good evening, Your Honor. Allen Bickart Welcome to night court, Mr. Rapp. Good Good evening. Kevin Rapp on behalf of the

and Stephen Kunkle on behalf of Mr. Maximov. THE COURT: All right. Good afternoon, gentlemen, and

good afternoon, Mr. Maximov.

And I apologize that we're

starting this hearing at 5:00 instead of the scheduled time at 4:15. As you've been able to see, counsel, I've been very,

very busy this afternoon and tried to move these cases on as best I could. Is the government ready to proceed, Mr. Rapp? MR. RAPP: THE COURT: Mr. Bickart? MR. BICKART: THE COURT: All right. Yes, I am, Your Honor. You may be seated, Mr. Maximov. Do you intend to call any witnesses or Yes, Your Honor. And you're prepared to proceed,

just proceed by proffer, Mr. Rapp? MR. RAPP: Judge, it's my intent to proceed by

THE COURT:

All right.

You may proceed.

UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 4 of 28

4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

MR. RAPP:

Judge, I know you have had -- you have not

had the opportunity to read the pretrial services report, or have you? THE COURT: MR. RAPP: Well, I'm reading it as you're talking. Okay. Well, both the original report and

the addendum recommend that the defendant be detained because there are no conditions that would secure his release. This defendant has no employment. reportable wages. He has no He has ties

He has no property in Arizona.

to a foreign country, that is, Israel. arrested, he was returning from Israel.

Indeed, when he was He is facing prison if The

convicted of the offenses charged in the indictment.

indictment contains property that has been foreclosed upon resulting -- due to the defendant's fraudulent activities that would result -- that did result in a $3.6 million loss. As the Court knows, the loss amount drives the Guidelines. That is approximately a 16-level increase from a The

base offense level of 6, and that's where you just start.

evidence in this case shows that it was the defendant who was directing these fraudulent activities and is subject to an increase under the advisory guidelines for a leadership role. The government views the fraudulent activities as sophisticated which, under 2B1, would result in an additional two-level increase in his guideline range. And therefore he is

looking at prison somewhere between five and ten years. UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 5 of 28

5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

He is a lawful permanent resident.

If he's convicted

of these offenses -- they are aggravated felonies -- he's subject to deportability. He has no family in Arizona. He has an ex-wife here. He has He

family in Canada and in Israel. does have two children.

He has been separated from his wife,

and the divorce has been finalized for approximately three years. He has not paid -- He has paid very little child He has challenged the paternity of his

support, if any.

youngest child, and that has been resolved as being his child, though there is no parent/child relationship with his youngest child. He has traveled to Thailand in 2005. With respect to the information in the pretrial services report, you will see on the addendum he has all of these companies that are listed as him having business affiliations. All State Van Lines Worldwide, Aragon

Development, Eilon Properties, Hollywood Auto Import, none of those are viable companies. company. Aragon Stables is not a viable

Eilon Properties, Aragon Luxury Real Estate, Aragon

Stables, none of these is he drawing any income from. Oddly enough, he says that Connect America Worldwide Transportation in the first pretrial services report is the company by which he is drawing income from. The pretrial

services report says this business is active and in good standing. The government's information is contrary to that.

As of today, we received a certificate of dissolution dated UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 6 of 28

6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

7-14 of 2008 for Connect America Worldwide Transportation. This is not a viable company. It is a company, I should add, The defendants --

that he used during the course of the fraud.

His co-defendants have advised that he directed them to put this company down as their company and that they worked for him. That information was fraudulent. In terms of the case against the defendant, we have an informant in this case -THE COURT: you. MR. RAPP: THE COURT: Good. I've been here before. Yeah, you have, and you've paid attention. You know every question I'm going to ask

I want to hear what you have to say. MR. RAPP: In terms of the evidence in this case, we

do have an informant where this defendant has been -- has made tape recorded incriminating statements. We have loan documents

with the co-defendants who have advised investigating agents that this defendant directed them to put the false information on the loan document to purchase the house. gone into foreclosure. During the divorce proceedings, as the Court can imagine, there was depositions, questions by the judge regarding this defendant's financial activities. It is the The house now has

government's view that during his deposition, he made incriminating statements regarding his involvement in this UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 7 of 28

7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

cash-back scheme.

Again, we have cooperating co-defendants, We view the

and we have loan documents that speak for itself. evidence against this defendant as strong.

Based on all those factors, based on the fact that he has no job, no assets in this state -- He has strong ties to a foreign country. He doesn't even have a place to live,

although there is some suggestion that he could live with his ex-girlfriend, though I will tell you during the interview he was confused as to what her residence was. So with all those factors, the government believes this defendant is -- agrees with the pretrial services report and the pretrial services writer that this defendant is a risk to flee the country. THE COURT: fraud cases. Mr. Rapp, we've had a number of mortgage

That seems to be one of the primary areas that I don't recognize this. Can you give me a

you're focusing on.

little bit of a background as to what the scheme was? I see in reviewing the indictment that there were straw purchasers. Is there allegations that they fraudulently Or

increased the value of the home and then got cash back? give me some sense of what happened in this particular indictment in terms of the bank fraud or mortgage fraud. MR. RAPP: Certainly.

In general terms, Judge, what

they do is they find a seller willing to sell the property, Mr. Maximov does, approaches them, increases the sale price of UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 8 of 28

8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

the house by -- through an appraiser who is willing to puff up the price. The difference between what the seller wants to

sell the house for and the difference between the inflated value of the house, Mr. Maximov is able to get the escrow officer to give that money in the form of cash back to him, and he has that wired to one of the many LLC's that he has on his -- that he's incorporated, Connect America Worldwide, Aragon Stables, Eilon Properties. He then takes that money,

keeps it for his own, pays some kickbacks to real estate agents, escrow officers, and the like. The property -- The

person whose name is on the property does not have the financial viability to sustain the payments because they don't -THE COURT: MR. RAPP: The so-called buyer? The straw buyer, yes, the straw buyer who

Mr. Maximov directed to fill out the uniform loan application. They've inflated their gross monthly income, their assets, their liabilities, put down businesses and indeed Connect America Worldwide that they never worked for, so that they would qualify for the loan. They never make any payments. They can't qualify for the loan. The houses go into foreclosure.

I would add that the defendant's own residence, the Sweetwater residence that he lists as one of his previous residences, is in foreclosure. That's the scheme.

The defendant explains this scheme to a confidential UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 9 of 28

9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

informant while he's being taped, views it as creative financing. During the course of this scheme, they'll do things

such as creating addendums that -- where the defendant will require the parties that he'll get $500,000 back, and all the parties agree that this addendum will not go to the lender. And indeed they actually agree on the addendum that the lending institution will not see the fact that he's getting the half a million dollars back. scheme. THE COURT: Okay. Thank you. And I assume the That's essentially the

government has subpoenaed or seized bank records and bank accounts of some of these companies for Mr. Maximov, and so you're aware of the paper trail that's been created? MR. RAPP: If the Court is asking if we've issued

subpoenas to get bank records, escrow files, loan documents, real estate files, we've done that. THE COURT: Okay. And do those documents indeed

support the criminal charges here, or is this something that's kind of an ongoing investigation, and you're still looking at it? MR. RAPP: charged. No. They support the charges as they are

I will tell you that this is an ongoing

investigation, and we're looking into some other activities of Mr. Maximov. THE COURT: All right. So obviously the government is

UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 10 of 28

10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

requesting that he be detained as a serious flight risk. Mr. Bickart, I don't know if you or co-counsel are going to -MR. BICKART: THE COURT: I will. -- do the proffer. Okay. And are you

going to call any witnesses or not, or solely a proffer, Mr. Bickart? MR. BICKART: Well, I have one witness here, Your

Honor, and that is the young lady who is referred to in the presentence -- pretrial services report with respect to her willingness to have Mr. Maximov reside with her under an electronic monitoring arrangement until he can obtain an apartment with a fixed phone, which is in the works, Your Honor. THE COURT: please. All right. name? MR. BICKART: THE COURT: MR. BICKART: Scottsdale. THE COURT: Okay. All right. And so if that's your Her name Sherry Sapir, S-a-p-i-r. All right. She resides at 7027 North 79th Place in Thank you. What is this young lady's Okay. If she would just raise her hand,

proffer, then, regarding the availability of this place to live, then I think that's sufficient. I don't need to hear

UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 11 of 28

11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

from her unless the government chooses to cross-examine her or challenge the credibility of your proffer. Okay?

What else do you wish for me to know, Mr. Bickart? MR. BICKART: situation, Your Honor. It seems that when someone is engaged in the real estate business, and they are then under indictment, and they are not further engaged in the real estate business, they have no occupation, and they have no income, and they are without means. And that's essentially the position of the government Well, you know, it's an interesting

with respect to Mr. Maximov. However, Mr. Maximov has an income of $1,733 a month from a contractual arrangement that he made from the sale of a business. alimony. And he is in arrearage in his child support and his However, he has been paying some payments each month. His father passed away, Your Honor, in the month of May. He's an Orthodox Jew. He flew to Israel for the funeral.

Under Orthodoxy, Your Honor, the first seven days of mourning is called Shiva. He performed that. The next 30 days are

considered to be those days where each day he is to attend the cemetery and do that. in Israel. That accounts for five weeks of his stay But

He then made arrangements to return to Israel.

let me proffer to you what occurred before he left. About six months prior to his father's death, he became aware of the fact through some acquaintance that the UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 12 of 28

12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

government was investigating some of his activities. He went, and he engaged Bill Foreman as his attorney, paid him fees, discussed the matter, and was advised that he would be represented. At that point two of the co-defendants

in this case felt that they wanted Mr. Foreman to represent them, and he said he couldn't, he had a conflict, and he directed them to other counsel. It now appears that Mr. Foreman is representing at least one of the other defendants in this proceeding. And when

Mr. Maximov returned, he was arrested -- not on the ground -he was arrested in the aircraft. And before he came back, it is submitted by way of proffer that he was aware of the fact that charges were imminent and that he was going to be arrested in the State of Arizona, yet he chose to return. He is a resident alien. He

has been so for a number of years and is pending citizenship at the moment. He does not want to return to Israel. He went to

Thailand, I believe, on a vacation in 2005. serious travel internationally that he did.

And that's the

Now, I submit to the Court that if I were before the Court under similar circumstances -- well, I've gone to England, and I've gone to France, but I've come back to the United States -- I would say that, in my present financial condition, I would say that I might be a suspect to be detained for the same period of time for the same specious reasoning. UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 13 of 28

13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 scheme.

I think, Your Honor, that the government is stating its case in a little different posture. Throughout Mr. Rapp's

dissertation of how the evidence was going to be obtained and how it was going to come in, one salient thing was omitted: The appraiser. No mortgage is going to be written for the size of mortgages that were involved in these transactions unless two appraisers certified to the mortgage companies their appraisal. He didn't say that the appraiser was part of the He didn't say he was paid, he was encouraged, or

anything else. The banking institution relies on the appraisal. And

if the appraiser says no, it's not worth that money, then the mortgage isn't given. I submit to the Court that there is a lot to be seen between the allegation and the conclusion. And I'd suggest to

the Court that the same presumption should apply to a defendant as he sits here today, before any evidence is heard, before any discovery is given, as to whether there is such a viable case against the defendant. this Court. Now, there are various things in these reports that are in error. When he returned, having flown from Israel to There is a charge, as always, before

Atlanta, Atlanta to Phoenix, he was taken to pretrial services. And he thinks in Hebrew before he thinks in English, just like UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 14 of 28

14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

these gentlemen that were here before the Court just previously. They think in Spanish before -- if they even had a

rudimentary knowledge of English. And when he was asked the question about his residence, he gave them, since his business had been closed down, he gave them the post office box. But yet later on in

the report, he did give them the correct address where he was living before he went to his girlfriend's father's funeral. And that was 2402 East Esplanade Lane, Apartment No. 805. And

that's where he had been living, where he has a lease option on the property. It's an apartment at 24th Street and Camelback.

It was attributed to Ms. Sapir, but she really resides at the 79th Place address, which is in the next paragraph down. She does not reside at Esplanade Lane. lives at that address. I submit to the Court that Mr. Maximov is not the villain that Mr. Rapp would suggest. He served his time in the He was given The Mr. Maximov

military in Israel in the IDF in the air force. two commendations. He was honorably discharged.

commendation was for saving another serviceman's life who was severely injured in the legs by shells. He came to the United States as an immigrant with the intention of becoming a citizen of the United States, and that is still his intention now. Whether or not this matter results in a conviction and UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 15 of 28

15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

the actions of the Immigration Act are brought into play is not a concern at this moment. The biggest concern at this moment

is the defendant with respect to the allegations that are set forth in the indictment. I submit to the Court that he has a family. two children here, an ex-wife. He has

He has a brother in Canada, a

brother in Florida, two of them in Israel -- or one in Israel, I believe. And other than a traffic ticket that he paid a $233 fine on, there is no failure to appear, no running away. As a

matter of fact, if he were to testify here, I would proffer that he was aware of this pending matter and returned notwithstanding his knowledge. He expected to be arrested, but he didn't expect to be arrested in the airplane that he had traveled from Atlanta to Phoenix on. THE COURT: Phoenix? MR. BICKART: jet way. custody. THE COURT: passengers? MR. BICKART: THE COURT: Yes, sir. Okay. You mean in front of all the other Yes, in the airplane, not even in the Was he arrested when the plane landed in

The agents came onto the plane and took him into

UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 16 of 28

16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 support.

MR. BICKART:

I submit to the Court that he has family

They are supporting him financially at the moment

until he can get some work additionally to the $1,733 a month that he earns. Now, Judge, when the Act was created with respect to this presumption, whether there are other alternatives -THE COURT: Hold on. Hold on. There's no presumption

of detention in this case. MR. BICKART: THE COURT: No. The only presumption I'm aware of is the

presumption of innocence. MR. BICKART: THE COURT: MR. BICKART: That's right. Okay. Go ahead.

What I meant to say was that when the

Act was created, they took into consideration the presumption of innocence and balancing whether or not there are some conditions that would apply that would make him answerable to the Court without a flight of risk -- a risk of flight, rather. I submit to the Court that electronic monitoring is an appropriate method. I submit to the Court that an appearance

bond, where his family is willing to help him post it, is appropriate. THE COURT: What can you tell me about the two

failure-to-appear in Scottsdale Municipal Court? MR. BICKART: It was a photo radar ticket, Your Honor,

UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 17 of 28

17

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

and he just absolutely mentally at the time didn't register, and when he came to the realization, he went in and paid the fine. THE COURT: And a process server served him with

something, a failure to appear or something -MR. BICKART: THE COURT: Yeah, an FTA. -- for him to appear on a second date, and

he didn't show up on the date that he was supposed to. MR. BICKART: later. THE COURT: MR. BICKART: Ten days later according -And he satisfied the sanction. This all, by the No, he didn't. He showed up two days

He was acquitted on another offense. way, was handed to me just before this hearing. THE COURT: MR. BICKART: THE COURT: MR. BICKART: THE COURT:

Well, do you want more time? No, I don't want more time. He has children here in Phoenix? Yes, sir. Where is that in the report? I probably

skipped over it unintentionally. MR. BICKART: THE COURT: old are they? It's not in the report. Okay. Tell me about his children. How

Where do they live? I'm sorry.

Who do they live with? Just a moment.

MR. BICKART:

(The defendant and his counsel confer off the record.) UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 18 of 28

18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

MR. BICKART:

There's a two-year-old and a

six-year-old living with his ex-wife in the City of Phoenix. He has visitation rights. She indicates that he does visit.

He pays $400 a month until his income will increase, which hopefully it will. THE COURT: So the home that he has to live at is

actually Ms. Sapir's home on North 79th Place? MR. BICKART: THE COURT: At the moment, yes. And the address 2402 East Esplanade Lane,

Unit 805, that's where Mr. Maximov has been living? MR. BICKART: Yes, sir. The only reason that we're

not asking for him to go to that address is that it has no hard line phone, and I can't arrange that quickly. THE COURT: And is that the Esplanade Towers there at

24th Street and Camelback? MR. BICKART: THE COURT: MR. BICKART: THE COURT: Yes, it is, Your Honor. Eighth floor? Yes, it is. Okay. Have there been any seizure

warrants issued to date that you are aware of that you can share with us, Mr. Rapp? MR. RAPP: THE COURT: No, Your Honor. I see on Page 2 of the addendum that's

dated last Friday, July 18th, it does say he has two children the middle of the page, second page, two children ages six and UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 19 of 28

19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

two born to this union to Ronit (indiscernible) Rosenberg. Does he or willing friends or family member have any ability to post a secured bond of any kind, Mr. Bickart? MR. BICKART: Your Honor. THE COURT: Okay. Can you tell me if a substantial Yes, sir, I think so. I believe so,

cash bond or secured bond is ordered in this case what they would be willing and able to post? MR. BICKART: Your Honor, I think that, in the short

term, I think that his brother in Canada might be able to arrange a $10,000 cash appearance bond. THE COURT: I want to make sure I've given you and

your client a full opportunity to be heard, Mr. Bickart, before I turn to the government for their rebuttal of some of the claims that you've made. MR. BICKART: one last thing. I talked to Mr. Rapp early this morning about this. I'm new in this case, and I'm gravely concerned about this business about Mr. Foreman and his being engaged in this matter. THE COURT: You know, that's really an important Have you finished, sir? I wanted to touch on

No, Your Honor.

issue, but it's collateral to this. MR. BICKART: It's collateral, but it led to a serious

problem in this case in the report -UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 20 of 28

20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

THE COURT: MR. BICKART: THE COURT:

And do you believe --- because the advice -Hold on. Do you believe that Mr. Foreman

is representing a co-defendant that has agreed to cooperate with the government? MR. BICKART: THE COURT: Yes, sir. Mr. Rapp, can you -- can you give us any Because if that's the

information about the accuracy of that?

case, I do have serious concerns, but it's collateral to the issue of detention in one way, but if this is the person that's willing to testify having now been being represented by Mr. Foreman, a very experienced criminal defense lawyer who formerly represented Mr. Maximov earlier, that gives me real cause for concern. So what are you able to share with me, if

anything, about that? MR. RAPP: Bartlemus. Judge, Mr. Foreman represents defendant

Now, defendant Bartlemus was indicted and arrested He just happens to be also a defendant in

in another case. this case.

Mr. Foreman would not have known -- and I also

would suggest that's the case for Mr. Maximov -- that Mr. Bartlemus would have been indicted along with Mr. Maximov. I don't know if there's any truth to the fact that Mr. Maximov knew that there was a grand jury indictment against him, an investigation, that he would be arrested. of any information that he would have that. UNITED STATES DISTRICT COURT I don't know

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 21 of 28

21

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

But with respect to Mr. Foreman, Mr. Foreman just simply did not know that Mr. Bartlemus also was going to be indicted with Mr. Maximov. I couldn't envision how he would

know that, because I would not have in any way shared with him a grand jury indictment that was under seal which is now not under seal. So I can't speak to any of this about Mr. Foreman being retained on behalf of Mr. Maximov. could. Only Mr. Foreman

But I can tell you that Mr. Foreman did not somehow I can assure

know that Mr. Maximov was going to be indicted.

you of that, because I've had some conversations with him. MR. BICKART: Bill knew. I'm not suggesting, Your Honor, that

What I'm suggesting is that it had an impact on He advised Mr. Maximov, I

what occurred when he was arrested.

am informed that I am proffering it, that if he is questioned, to be very polite but to answer no questions and to call him. And when he was taken into custody in the aircraft, he asked the agents to call his attorney. They removed Mr. Foreman's

card from his wallet to call him, and he never heard a thing. When he encountered this gentleman from pretrial services, he gave serious omissions in answers because that's what he was instructed to do. THE COURT: Well, this is a cause for the concern, but

this is more for Judge Campbell than for me on the issue of detention. Anything else on the merits of the issue of UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 22 of 28

22

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

detention, Mr. Bickart? MR. BICKART: THE COURT: Nothing else, Your Honor. Mr. Rapp, I made an assumption, if not

heard you directly, perhaps indirectly, that the appraisals on these homes were significantly higher than the true fair market value of the home. MR. RAPP: Is that an incorrect assumption on my part? That's not incorrect. The appraiser is

indicted in this case. THE COURT: MR. RAPP: THE COURT: MR. RAPP: THE COURT: Oh, and the appraiser is whom? Andrew Ament. He is one of the appraisers.

Andrew Ament at the bottom? Yes. Okay. So your view, the government's

view, this was not an arm's length appraisal for a bank but, rather, somebody that was part of the conspiracy? MR. RAPP: THE COURT: Yes. Okay. Do you wish to address in response

to any of the proffers made by Mr. Bickart? MR. RAPP: Well, just with respect to his income,

Judge, the -- we've gotten Department of Economic Security reports that say that this defendant has no reportable wages in the last three years. He's saying that -- Counsel is saying I sure

that he has some kind of contract with other companies.

would like to see those contracts where he's receiving income. With respect to the -- his third-party release to an UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 23 of 28

23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

ex-girlfriend at a different location, I would sure like to know what her profession is and how she supports herself. THE COURT: MR. RAPP: THE COURT: don't we do this. Ms. Sapir? Yes. Okay. All right. It's 5:30 now. Why I'm

I'll continue this to another time.

going to order that Ms. Sapir appear at the next court hearing for cross-examination and give you an opportunity to challenge the proffer made by Mr. Bickart about her, if that's important to you. MR. RAPP: It's not that -- If Mr. Bickart can just

proffer to the Court what she does for a living. THE COURT: MR. RAPP: THE COURT: MR. BICKART: MR. RAPP: What she does for a living? What she does for a living. Do you know, Mr. Bickart? I don't know. I haven't asked her. Can she just advise the

Well, she's here.

Court what she does for a living? MR. BICKART: I can answer it in a moment if the Court

would give me an opportunity. THE COURT: All right. You may have that opportunity.

(Conference off the record.) MR. BICKART: Ms. Sapir advises me, Your Honor, that

she is a licensed general contractor in the State of Arizona, that she is also a licensed real estate broker, that she has an UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 24 of 28

24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

agency, she has salespeople working for her, and that she has built other things in the past. THE COURT: Mr. Rapp? MR. RAPP: It does, Judge, and just raises some This is a Okay. Does that satisfy your inquiry,

concerns that she's in the real estate market. mortgage fraud case.

And if this is the same woman, I think

she may have listed one of the subject properties in the indictment, which is the Sweetwater residence. In any event, I don't think an ex-girlfriend inspires a great deal of confidence that she'll be the third-party custodian for a defendant who has no employment and no income and no property and has some other ties to a foreign country. With respect to the cash bond, Judge, it would really have to be substantial, and, at least in the pretrial service report, the brother Moti Maximoff is willing to make available $5,000 for collateral in posting a bond. limit. And that is his

Apparently he has extended quite a bit of funds with

respect to the recent death of his father and the funeral, things involved in the funeral, to the tune of $53,000. Apparently $5,000 is all he is willing to make available for a cash bond at the moment. MR. BICKART: I would not have proffered ten, Your

Honor, unless I was sufficiently confident it could be arranged. UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 25 of 28

25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 comments. Mr. Rapp.

THE COURT:

All right.

Thank you.

Thank you,

All right.

Let me first make a few preliminary

First of all, this is not an indictment in which

there's probable cause to believe that he's committed one of the serious -- one of the series of crimes in which a rebuttable presumption arises that he should be detained. The

government proffers that he should be detained because he's a serious flight risk. Let me point out that he's not here illegally. here legally. He's

That is -- inures to the benefit of Mr. Maximov.

That he has no prior criminal history, that certainly inures to the benefit of Mr. Maximov. I find that Ms. Sapir is an appropriate third-party custodian. There's no reason for me to believe that he could

not live with her to ensure that Mr. Maximov appears at all further proceedings. I find that there's no history or evidence of drug usage or drugs involved in this case or dangerous weapons and firearms. That certainly inures to the benefit of Mr. Maximov. This is not an easy call for an experienced magistrate judge because Mr. Maximov enjoys the presumption of innocence. By the same token, I believe that the government has a serious and substantial case against Mr. Maximov. I find that

even though there were meritorious reasons for him to travel to UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 26 of 28

26

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Israel, nevertheless, he has traveled internationally on a number of occasions, to Israel most recently for the death of his father, to Turkey, Thailand. Mr. Maximov is alleged to be a leader, and with the amount of loss that's alleged to have occurred in this case, Mr. Maximov is looking at a significant prison sentence, if convicted, with enhancements for his leadership role allegedly and for his use of sophisticated means. The Bail Reform Act requires me to impose the least onerous or least restrictive condition of release. The only evidence that I have that Mr. Maximov would take these orders of this Court to appear as required was two misdemeanor or municipal citations that were related to traffic matters. The only conclusion I can have from this is that

Mr. Maximov did not give those orders the weight that he should have. And the only reason I can judge -- The only way I can

judge your future behavior, Mr. Maximov, is to look at your past behavior. I believe that there are conditions of release that would assure his appearance. amount of $500,000 is ordered. A significant secured bond in the And he shall be detained until

that money is posted or property secured, and at that time conditions of release will be imposed. I don't know when/if your client can post this money. Let me say this for the record, that I believe that this is a UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 27 of 28

27

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

sufficient and necessary component to his appearing at all future court proceedings without which there was no reason -there would be no reason for Mr. Maximov to appear and remain in the United States. Mr. Bickart, when you and co-counsel, if they have the money and it's posted by way of cash or a bail bond, then contact Vickie, my judicial assistant, and we will set an appropriate hearing and give Mr. Rapp an opportunity to request a Nebbia hearing and make sure he believes that that's an appropriate source of the monies for the posting of the bond. Anything else, Mr. Rapp? MR. RAPP: THE COURT: MR. BICKART: Not from the government, no, Your Honor. All right. Mr. Bickart? If it's posted by way

Yes, Your Honor.

of surety bond, there wouldn't be any need for a Nebbia. THE COURT: MR. BICKART: THE COURT: If that's the case, that's true. Thank you. All right. But if it's a cash bond, then

perhaps there would be a question as to the source. MR. BICKART: THE COURT: Mr. Bickart? MR. BICKART: THE COURT: No, sir. All right. Thank you. We are adjourned. I understand that. Anything further from defense counsel,

(Proceedings recessed at 5:37 p.m.) UNITED STATES DISTRICT COURT

Case 2:08-cr-00368-DGC Document 40 Filed 08/06/08 Page 28 of 28

28

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2008.

C E R T I F I C A T E

I, LINDA SCHROEDER, court-approved transcriber, certify that the foregoing is a correct transcript from the official electronic sound recording of the proceedings in the above-entitled matter.

DATED at Phoenix, Arizona, this 5th day of August,

s/Linda Schroeder Linda Schroeder

UNITED STATES DISTRICT COURT