Jerry and Patricia A. Dixon, et al - Page 39




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          B.   Mr. Thompson                                                           
               Mr. Thompson appeared at the trial of the test cases and               
          produced eight pages of documents in response to the subpoena               
          duces tecum issued by Mr. McWade.54  The Government paid                    
          Mr. Thompson's travel, food, and lodging expenses.                          
          Mr. DeCastro conducted direct and redirect examinations of                  
          Mr. Thompson.  Mr. DeCastro questioned Mr. Thompson about his               
          participation in the acquisition of First Savings as well as the            
          Bauspar program to show that the Thompsons had financial dealings           
          with Mr. Kersting other than through the programs at issue in the           
          trial.  Mr. Thompson testified that, following a forced merger              
          between First Savings and First Federal Savings of Honolulu,                
          Mr. Kersting returned the Thompsons' $20,000 initial investment             
          in First Savings.  Mr. Thompson further testified that he lost              
          $80,000 in the Bauspar program.                                             
               Mr. McWade cross-examined Mr. Thompson.  Mr. Thompson had              
          never met Mr. McWade until he was scheduled to testify.  Pursuant           

          54  When Mr. McWade moved to have the Thompson documents                    
          admitted as evidence during Mr. Thompson's testimony, Mr. Izen              
          objected on the grounds that he had not had an opportunity to               
          review them.  Although Judge Goffe initially questioned whether             
          Mr. Izen should be permitted to object to the admission of the              
          Thompson documents, Mr. DeCastro indicated that he had no                   
          objection.  Judge Goffe then called a brief recess to allow                 
          Mr. Izen to review the documents and indicated that he would                
          allow Mr. Izen to subject Mr. Thompson to a voir dire                       
          examination.  Following the recess, Mr. Izen raised a limited               
          objection to the admissibility of the documents insofar as they             
          contained statements of Mr. Kersting's opinion of the tax laws.             
          Judge Goffe overruled Mr. Izen's objection and admitted the                 
          documents in evidence as respondent's exhibit SL.  Mr. Izen was             
          allowed to cross-examine Mr. Thompson without limitation.                   


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