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Стенограмма суда над Берлиным и Эдвардс

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TRANSCRIPT OF THE ALLOCUTION HEARING PURSUANT TO THE GUILTY PLEA OF LUCY EDWARDS

In the United States District Court for the Southern District of New York February 16, 2002

USTATES STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA, v. 99 Cr. 914 (SWK)

PETER BERLIN, LUCY EDWARDS, BENEX INTERNATIONAL CO., BECS INTERNATIONAL CO., INC. and LOWLAND, INC., Defendants.

10 February 16, 2000 10:00 a.m.

Before:

HON. SHIRLEY WOHL KRAM, District Judge

APPEARANCES:

MARY JO WHITE United States Attorney for the Southern District of New York
GARY STEIN, DEBORAH LANDIS, Assistant United States Attorneys
CURTIS, MALLET-PREVOST, COLT & MOSLE Attorney for Defendants New York, New York 101 Park Avenue
T. BARRY KINGHAM, ESQ., SANUAL ROSENTHAL, ESQ., Of counsel

THE COURT: All right. Mr. Berlin, Ms. Edwards, would you stand, please. I have been advised that it is your desire to waive indictment today, to consent to the filing of the superseding information and to plead guilty to the charges that are contained in that superseding information. I also understand that three corporations controlled by Mr. Berlin will also waive indictment and enter pleas of guilty today to the charges in the superseding information. Is that correct?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: I have also been advised that both of the individual defendants and the three corporations are all represented by the same attorneys, T. Barry Kingham and Samuel Rosenthal of the law firm of Curtis, Mallet. Is that correct?

DEFENDANT BERLIN: Yes.

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: Before we can proceed further, I must ascertain whether you are fully prepared to proceed today all represented by the same attorneys. I want to advise you that the United States Constitution guarantees every criminal defendant the right to be represented by an attorney whose loyalties are to that defendant and to that defendant alone. However, a criminal defendant also has the right under most circumstances to be represented by the attorney of his or her choice. Two or more defendants can be permitted to be represented by the same lawyer so long as they all understand the nature of the possible conflict of interest that can arise in such circumstances and so long as they voluntarily waive their right to have an attorney that only represents one client. In order for me to determine whether you each understand your right to a conflict-free counsel and desire to waive that right, I must ask you some questions. Mr. Berlin how old are you?

DEFENDANT BERLIN: Forty-five, your Honor.

THE COURT: Ms. Edwards, how old are you?

DEFENDANT EDWARDS: I'm 41, your Honor.

THE COURT: How far did each of you go in school? How many years did you attend school, Mr. Berlin?

DEFENDANT BERLIN: Sixteen years.

THE COURT: And you graduated from --

DEFENDANT BERLIN: I graduated in Russia from Moscow Physical Technical Institute and I have a Ph.D. degree.

THE COURT: And you?

DEFENDANT EDWARDS: I have high school and two years of college.

THE COURT: Each of you speak and read English?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: It is important that you understand everything that is said during these proceedings today. If at any time something is said that you do not understand or you want something explained to you, you should inform me right away so that explanation can be made. Have either of you recently consulted a doctor for any medical condition?

DEFENDANT EDWARDS: No.

DEFENDANT BERLIN: No.

THE COURT: Have you within the past 24 hours taken any alcohol, drugs or pills of any kind?

DEFENDANT EDWARDS: No.

DEFENDANT BERLIN: No.

THE COURT: Ms. Edwards, you are currently represented by T. Barry Kingham and Samuel Rosenthal. Are you aware that Mr. Kingham and Mr. Rosenthal also currently represent your husband, Peter Berlin, as well as the corporations Benex, BECS and Lowland?

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: Mr. Berlin, you are currently represented by the same two attorneys. Are you aware that Mr. Kingham and Mr. Rosenthal also currently represent your wife, Lucy Edwards, and the three corporations I just mentioned?

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Have both of you discussed with your lawyers the fact that under certain circumstances your interests and the interest of your spouse might differ? Do you understand that your individual interests and the interests of the three corporations might be different?

DEFENDANT EDWARDS: Yes.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Now I want to give you some examples of how the two of you can have different interests in a criminal case and how a conflict of interest could arise if one lawyer is representing both of you. For example, each of you must decide whether to stand trial in this case or to plead guilty. It might be in the interest of one of you to plead guilty, but not in the interest of the other one. If you were represented by separate attorneys, each attorney would advise you with only your own best interest in mind. But if you are represented by the same lawyer, that lawyer would have to compromise the interests of one client for the sake of the other. In other words, your attorney would have divided loyalties rather than being in a position to focus solely and exclusively on your own individual needs. Similarly, if there were a trial in this case, it might be in your individual interest to offer certain evidence or proof or to make certain legal arguments on your own behalf, but those same arguments could be harmful to your spouses defense, and if you both have the same lawyer that lawyer would then be forced to choose one client's interest over the other. The same could happen at the time of sentencing. At sentencing there might be certain facts or arguments, your lawyer would want to bring to my attention that would be helpful to one of you but harmful to the other. As a result, not wanting to hurt one of you, your attorney might decide not to mention the facts or the argument that would help the other. This is what can happen when an attorney has divided loyalties. Do you understand what I have explained to you?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes.

THE COURT: Do you understand that you have the right to counsel free of conflict whose loyalty to you is absolutely undivided, who is not subject to any factor that might in anyway intrude upon his loyalty to your interests?

DEFENDANT EDWARDS: Yes.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: The examples I have just given also apply to the three corporations. Do you understand that?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes.

THE COURT: Have you discussed with Mr. Kingham or Mr. Rosenthal the fact that they represent both of you and the three corporations and this might present a conflict of interest?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes.

THE COURT: Mr. Berlin, would you please explain to me in your own words what you understand to be the potential conflict of interest in this case as a result of the facts that I have just described to you.

DEFENDANT BERLIN: In the case of conflict of interest, it might happen that our lawyer representing both of us should make a decision in favor of one of us and disadvantaged the other. I completely understand that.

THE COURT: Well, I think you understand it. Ms. Edwards, can you explain to me what your understanding is of what I said.

DEFENDANT EDWARDS: I understand that being represented by the same lawyer, my husband and I, certainly evidence can be used in my husband's advantage or mine in one way or the other, but we are very satisfied and we would like to have Mr. T. Barry Kingham and Mr. Sam Rosenthal as lawyers. We would like to keep them.

THE COURT: All right. Do you understand that each of you and each of the corporations has the right to consult with a lawyer other than Mr. Kingham or Mr. Rosenthal in order to determine whether you wish them to continue to represent you?

DEFENDANT BERLIN: Yes.

DEFENDANT EDWARDS: Yes.

THE COURT: You have to say yes or no.

DEFENDANT EDWARDS: Yes.

THE COURT: You understand if you wish to consult with another lawyer and cannot afford to pay another lawyer other than Mr. Kingham or Mr. Rosenthal, that this court will appoint another lawyer for that purpose?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: That lawyer will not be associated with Mr. Kingham or Mr. Rosenthal. Would either of you like to consult with separate counsel or obtain separate advice on behalf of the corporations?

DEFENDANT BERLIN: No, your Honor.

DEFENDANT EDWARDS: No.

THE COURT: Have either of you received any inducement or promise that may have influenced your choice to have Mr. Kingham or Mr. Rosenthal represent you and the corporations in this case?

DEFENDANT EDWARDS: No.

DEFENDANT BERLIN: No, your Honor.

THE COURT: Have either of you been threatened in any way concerning your choice to have Mr. Kingham and Mr. Rosenthal represent you and the corporations in this case?

DEFENDANT BERLIN: No, your Honor.

DEFENDANT EDWARDS: No.

THE COURT: You are entitled to take time to think about these matters carefully before we proceed. Would either one of you like some additional time to consider this matter?

DEFENDANT EDWARDS: No, thank you.

DEFENDANT BERLIN: No, your Honor.

THE COURT: Mr. Berlin, understanding that Mr. Kingham and Mr. Rosenthal also represent Ms. Edwards in this case, do you wish to go forward today with them as your lawyers?

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Ms. Edwards, you have the same understanding that Mr. Kingham and Mr. Rosenthal also represent Mr. Berlin in this case. Do you wish to go forward today with these attorneys representing you?

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: Mr. Berlin, I understand you are the president of all three corporations, Benex, BECS and Lowland, and, therefore, you have the authority to act on their behalf, is that correct?

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: On behalf of the three corporations, Mr. Berlin, do you wish to go forward today with these attorneys as lawyers for the three corporations?

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Each of you having agreed to retain Mr. Kingham and Mr. Rosenthal as your lawyers and to proceed today, do you understand that if I agree to accept your plea of guilty, neither you nor the corporations will be able to complain later that you should each have had your own lawyer representing you?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: Is there anything I have said to you that you want me to explain to you further?

DEFENDANT EDWARDS: No, thank you.

DEFENDANT BERLIN: No, thank you.

THE COURT: All right. I hereby find, based upon the statements made by the individual defendants and by Mr. Berlin on behalf of the three corporate defendants, that the waiver of conflict-free counsel is knowing and voluntary and that all five defendants may proceed today represented by Mr. Kingham and Mr. Rosenthal. The defendants must be arraigned on the pending indictments before we proceed. All right. Proceed.

THE CLERK: Arrangement on case number 99 Crim. 914, United States of America versus Peter Berlin, Lucy Edwards, Benex International Company Incorporated, BECS International and Lowland Incorporated.

MR. STEIN: Your Honor, I am handing your deputy the indictment.

THE COURT: I am indicating the courtroom deputy is to administer the oath. LUCY EDWARDS, the defendant, having been duly sworn testified as follows: PETER BERLIN. the defendant, having been duly sworn testified as follows:

THE CLERK: Have you seen a copy of this indictment?

DEFENDANT EDWARDS: Yes.

DEFENDANT BERLIN: Yes.

THE CLERK: Would you like this indictment read to you at this time?

DEFENDANT EDWARDS: No, thank you.

DEFENDANT BERLIN: No.

THE CLERK: How do you plead on Count 1 of this indictment?

DEFENDANT EDWARDS: Not guilty.

DEFENDANT BERLIN: Not guilty.

THE CLERK: On Count 2 of this indictment?

DEFENDANT EDWARDS: Not guilty.

DEFENDANT BERLIN: Not guilty.

THE CLERK: And Counts 3 and 4 also include the corporations. They have already been arraigned on this matter.

MR. KINGHAM: Your Honor, not guilty pleas have already been entered by the corporations on the original indictment.

THE COURT: Mr. Berlin and Ms. Edwards, the court is informed that you wish to plead guilty to this information. Is that correct?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

MR. KINGHAM: Your Honor, may the defendants be seated during this inquiry, because it will take some time.

THE COURT: Yes, it is rather lengthy and I think that is appropriate. Before accepting your guilty pleas, I will ask you both a number of questions to assure that your plea is valid. If you don't understand any one of the questions or at any time you wish to consult with your attorney, please say so, because it is essential for a valid plea that you understand everything that transpires here today. Earlier you both informed me that you have not taken any drugs or alcohol in the past 24 hours. You understand what is happening here today?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes. Yes, your Honor.

THE COURT: Yes?

MR. STEIN: Your Honor, the defendants need to waive indictment. I don't know if you are getting to that or if you were going straight to the allocution, but that is something that needs to happen first. We have not filed a superseding information yet because they have not waived indictment.

THE COURT: I'm sorry, what?

MR. STEIN: They need to waive indictment and agree to the filing of charges based on an information. They have executed --

THE COURT: I thought they had already done that.

MR. STEIN: Well, they have executed waivers of indictment, which I have handed up to your clerk. She has the originals. But we would ask the court to advice the defendants of their right to be indicted by a grand jury as opposed to proceeding by way of information and make sure that they knowingly and intelligently waive it.

THE COURT: I thought that was done when they were arraigned on the indictment.

MR. STEIN: No. Mr. Berlin and Ms. Edwards had not appeared previously before the court. They remain on the indictment that was filed several months ago up to a few moments ago, and the instrument to which they will be pleading guilty is the information, the superseding information which has been handed up to your clerk but has not been filed.

THE COURT: I understand that. But I had understood that they had been arraigned on the original indictment --

MR. STEIN: Just now.

THE COURT: So what is your problem?

MR. STEIN: That we would ask that the court -- it may be incorporated in what you are about to do, I don't know what you are planning to do --

THE COURT: I am asking them --

MR. STEIN: Make sure they waive indictment --

THE COURT: I am attempting to proceed with the allocution on the information.

MR. STEIN: Right. And as part of that --

THE COURT: Ms. Landis, I'm sorry, I think you handled the arraignment. What is the problem? MS. LANDIS: Your Honor, the two individual defendants have never appeared before today and so their arraignment on the original pending indictment just occurred a moment ago and so in order for them now to enter a guilty plea to the superseding information they have to on the record waive indictment so we can technically file that information before they can plead guilty.

THE COURT: All right. Will the two defendants stand, please. Go ahead.

THE CLERK: Mr. Berlin and Ms. Edwards, have you seen a copy of this superseding information, S1 99 Crim. 914, United States of America versus Peter Berlin, Lucy Edwards, Benex International, BECS International and Lowland, Inc.?

DEFENDANT EDWARDS: Yes.

DEFENDANT BERLIN: Yes, we have.

THE CLERK: Have you seen a copy of the waiver of indictment?

DEFENDANT EDWARDS: Yes, we did.

DEFENDANT BERLIN: Yes, I have.

THE CLERK: Before you signed it, did you discuss it with your attorney?

DEFENDANT EDWARDS: Yes.

DEFENDANT BERLIN: Yes.

THE CLERK: Did he explain it to you?

DEFENDANT BERLIN: Yes.

DEFENDANT EDWARDS: He did.

THE CLERK: Do you understand you are under no obligation to waive indictment?

DEFENDANT EDWARDS: Yes.

DEFENDANT BERLIN: Yes.

THE CLERK: Do you understand if you do not waive indictment, if the government wants to prosecute you, they will have to present this case to a grand jury which may or may not indict you?

DEFENDANT EDWARDS: Yes.

DEFENDANT BERLIN: Yes.

THE CLERK: Do you realize that by signing this waiver of indictment, you have given up your right to have this case presented to a grand jury?

DEFENDANT EDWARDS: Yes.

DEFENDANT BERLIN: Yes.

THE CLERK: Do you understand what a grand jury is?

DEFENDANT BERLIN: Yes.

DEFENDANT EDWARDS: Yes.

THE CLERK: And you have seen a copy of this information?

DEFENDANT EDWARDS: Yes. ,

DEFENDANT BERLIN: No.

THE CLERK: How do you plead on this new superseding information?

MR. KINGHAM: Your Honor, I believe the pleas will be guilty to Counts 1 and 2 on behalf of the individual defendants and Counts 3 and 4 on behalf of the corporate defendants. I'm sorry, 1, 3 and 4 for the corporate defendants. It will be guilty of the individuals on Counts 1 and 2, guilty for all three corporation as to 1, 3 and 4 after the court has conducted the allocution.

THE COURT: They have signed the waivers and that is now part of the court records.

MR. STEIN: That's correct, your Honor.

THE COURT: All right.

THE CLERK: I have to ask Mr. Berlin the same questions pertaining to the corporations itself. Mr. Berlin, on behalf of the corporations, Benex, BECS and Lowland Incorporated, you have signed a copy of this waiver of indictment on behalf of all three corporations?

DEFENDANT BERLIN: Yes.

THE CLERK: And, again, you did sign it and you discussed it with your attorney?

DEFENDANT BERLIN: Yes, I did.

THE CLERK: And they explained it to you thoroughly?

DEFENDANT BERLIN: Yes.

THE CLERK: Is it your intention to plead guilty on behalf of the corporations to the superseding information as well?

DEFENDANT BERLIN: Yes.

MR. STEIN: Thank you, your Honor.

THE COURT: Earlier you both informed me that you have not taken any drugs or alcohol in the past 24 hours, and you will both understand what is happening here today?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Does either counsel have any question regarding the defendants' competence to plead?

MR. STEIN: I do not, your Honor.

MR. KINGHAM: No, your Honor. THE

DEFENDANT: Counsel? MR. ROSENTHAL: No, your Honor.

THE COURT: Then I will make the finding for the record that the defendants are competent to plead. Have you each discussed your case with your attorney?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes.

THE COURT: And do you feel you have discussed it adequately?

DEFENDANT BERLIN: Yes.

DEFENDANT EDWARDS: Yes.

THE COURT: Are you satisfied with your attorneys' representation of you?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: I am now going to make sure you are aware of your constitutional rights. Do you understand that under the Constitution and the laws of the United States, you are entitled to a trial by a jury on the charges contained in this information?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes.

THE COURT: Do you both understand that at that trial you would be presumed to be innocent and the government would be required to prove you guilty by competent evidence beyond a reasonable doubt before you could be found guilty and that you would not have to prove you were innocent?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Do you both understand that in the course of that trial, witnesses for the government would have to come to court and testify in your presence and your attorney could cross-examine the witnesses for the government and object to evidence offered by the government?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Do you both understand that at that trial you would have the right to offer evidence on your own behalf, including the right to call and subpoena witnesses to testify in your behalf?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Do you both understand at that trial, while you would have the right to testify if you wanted to do so, you also would have the right not to testify and the right not to be compelled to incriminate yourself and that no inference or suggestion of guilt could be drawn from the fact that you did not testify?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Do you understand that you have the right to be represented by an attorney at every stage of these proceedings and, if necessary, an attorney could be appointed to represent you?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Do you both understand that the government would have to prove its case against you beyond a reasonable doubt to all the jurors?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: If you plead guilty and I accept your plea, do you understand that you will waive your right to a trial and all the other rights I have just discussed, there will be no trial and I will enter a judgment of guilty and sentence you on the basis of your guilty plea after considering a presentence report?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: If you plead guilty and I accept your plea, do you understand that I will ask you questions about what you did in order to satisfy myself that you are guilty as charged, that you will have to waive your right not to incriminate yourself, that you will have to acknowledge your guilt and that any false statements you made today could be used in future court proceedings against you for perjury or false statements?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Do you fully understand that you have the right to maintain your plea of not guilty and the right to go to trial on all counts of this information?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: Now that I have told you your rights, do

you still want to plead guilty?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: If I accept your plea, you will be sentenced under the sentencing guidelines. Has your attorney explained to you that the sentencing guidelines apply to this case and how they will affect your sentencing?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Do you understand that a sentencing range will be calculated in accordance with the sentencing guidelines and that I retain the discretion under certain circumstances to impose a sentence within the guideline range or a lesser or greater sentence up to the maximum permitted by law? If I impose a lesser sentence than the guideline range, the government has the right to appeal my sentence, and if I impose a sentence greater than the guideline range, you will have the right to appeal my sentence. Do you understand that under the sentencing guidelines, parole has been abolished and that if you are sentenced to prison you will not be released on parole?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: You have received a copy of the

superseding information?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: You have discussed that information with your attorney?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Have you discussed with your attorney the specific charges in that information to which you intend to plead guilty?

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Do you want to have that information read to you now?

DEFENDANT BERLIN: No.

DEFENDANT EDWARDS: No, your Honor.

THE COURT: All right. I will now describe the charges against you and what the government would have to prove for you to be found guilty of them. Count 1 of the superseding information charges that between 1995 and September 1999, the two individual defendants, Peter Berlin and Lucy Edwards, and the three corporate defendants, Benex International Company, Inc., (Benex), BECS International, L.L.C., (BECS), and Lowland, Inc., (Lowland), unlawfully, willfully and knowingly participated in a conspiracy together with other individuals to violate various laws and to defraud the Internal Revenue Service in violation of the Title 18, United States Code, Section 371. The conspiracy charged in the information had multiple goals which included: 1. One conducting unauthorized and unregulated banking activities in violation of Title 12, United States Code, 378(a)(2.) 2. Establishing a branch of a foreign bank in the United States without the approval of the Board of Governors of the Federal Reserve in violation of Title 12, United States Code, section 3105(d)(1) and 3111. 3. Operating an illegal money-transmitting business in violation of Title 18, United States Code, Section 1960. 4. Laundering money through international funds transfers intended to promote criminal activity, including a wire fraud service scheme to defraud the Russian government of customs duties and tax revenues in violation of Title 18, United States Code, Section 1956(a)(2)(A). 5. Corruptly making payments to a bank employee with intent to influence that employee in violation of Title 18, United States Code, Section 215(a)(1). 6. Corruptly receiving payments as a bank officer with the intent to be rewarded in connection with the business of the bank in violation of Title 18, United States Code, Section 215(a)(1). 7. Evading the payment of individual income taxes to the United States in violation of Title 26, United States Code, Section 2701. 8. Fraudulently obtaining visas for Russian nationals to enter the United States in violation of Title 18, United States Code, Section 1546(a). And 9, laundering unlawful payments to a bank officer through offshore accounts in violation of Title 18, United States Code, Section 1956(a)(2). The information is quite detailed. The following statement summarizes the allegations contained in Count 1 which describe how this scheme was carried out. Count 1 charges that the conspiracy began in late 1995 when Peter Berlin and his wife, Lucy Edwards, who was then a vice president in the Bank of New York Eastern European Division in Manhattan, entered into an agreement with certain co-conspirators, including Russian individuals who acquired control of a Russian bank called DKB. The members of the conspiracy agreed that Berlin would open an account at the Bank of New York so that the Russian co-conspirators could again access to electronic banking software called micro/CASH-Register which would enable the members of the conspiracy to effect wire transfers out of the account. The information charges that in furtherance of this scheme in early 1996, Peter Berlin opened a corporate account at the Bank of New York in the name of Benex; that the Bank of New York authorized Benex to utilize the micro/CASH-Register software, and that Lucy Edwards installed the software in a computer located in an office in Forest Hills, Queens. According to the information, that Queens office was managed by individuals who were working for the Russian bank DKB. DKB would transfer funds into the Benex account in bulk amounts on a daily or an almost daily basis and then DKB would issue daily instructions from its offices in Moscow directing employees in the Queens office to transfer funds out of Benex' account utilizing the micro/CASH-Register software to various third party transferees located around the world. In approximately July 1996, according to Count 1, at the behest of the Russian co-conspirators, Peter Berlin opened a second account at the Bank of New York in the name of BECS. The bank also provided the micro/CASH-Register software for the BECS account and the members of the conspiracy began using BECS as well as Benex to transfer huge sums to third party beneficiaries throughout the world. Count 1 goes on to further charge that in the fall of 1998 the Russian co-conspirators explained to Peter Berlin and Lucy Edwards that they would be acquiring control of another Russian bank called Flamingo Bank and that they wanted to set up a new bank account through which they could transmit funds on behalf of Flamingo Bank. The information charges that Berlin then opened a third account at the Bank of New York in the name of Lowland and obtained a micro/CASH-Register software for use with the Lowland account. Russian members of the conspiracy traveled to the United States to set up an office for Lowland in New Jersey. Mr. Berlin aided them by hiring an individual to work for Flamingo Bank in the New Jersey office. The information charges that in April 1999, Flamingo Bank began transferring large sums of money into the Lowland account using micro/CASH-Register software located in Russia to wire transfer funds out. As alleged in the information, during the course of the conspiracy Benex, BECS and Lowland conducted no actual commercial activity through the micro/CASH-Register accounts and did not participate in the import, export, manufacture, distribution or shipping of goods. Instead, they operated as front companies for the Russian co-conspirators and the Russian banks they controlled. Count 1 charges that Benex, BECS and Lowland were not licensed to act as money-transmitting businesses or to conduct banking operations in the United States on behalf of DKB or Flamingo Bank and that using this scheme the members of the conspiracy were able to secretly and illegally transfer funds in and out of Russia and conduct illegal banking activities in the United States. As summarized in the information, a large number of Russian individuals and businesses uses this illegal banking operation to transfer and receive money in violation of Russian currency control limitations and to promote schemes to defraud the Russian government of custom duties and taxes. Count 1 charges that the illegal money-transmitting scheme was also used to facilitate other criminal activity, including the payment of $300,000 in ransom on behalf of a Russian businessman who had been kidnapped in Russia. Ultimately, as alleged in the information, a total of more than $7 billion of funds was deposited in and transmitted through the Benex, BECS and Lowland accounts at the Bank of New York. The information further charges in Count 1 that the Russian co-conspirators paid Peter Berlin and Lucy Edwards commissions based on the dollar value of transfers through the Benex, BECS and Lowland accounts and that from February 1996 to July 1999 Berlin and Edwards received a total of approximately $1.8 million in commission payments. The receipt of these payments by Edwards constituted receipt by a bank officer of unlawful payments. The information further charges that Berlin and Edwards caused these funds to be transferred, among other places, into offshore accounts that they had opened in the names of corporations they controlled and they concealed this commission income on their personal tax returns they filed with the Internal Revenue Service and failed to disclose the existence of foreign bank accounts. The information further alleges that after moving from New York to London in 1996, Peter Berlin and Lucy Edwards enlisted the help of another Bank of New York employee who worked in New York to assure the smooth functioning of the money-transmitting accounts in their absence. This bank employee dealt with problems that arose with particular wire transfers and notified Berlin about the volume of funds that passed through Benex, BECS and Lowland accounts so that he and Edwards could calculate their commissions. In exchange for these services, Berlin and Edwards paid the bank employee hundreds of dollars monthly. These payments constituted unlawful payments to a bank employee. Count 1 further charges that Edwards used her position at the Bank of New York to help hundreds of Russian nationals, most of them affiliated with the Russian banking industry, to enter the United States illegally. Now, the elements of Count 1: In order to prove the crime of conspiracy in violation of Title 18, United States Code, 371, the government must prove three elements beyond a reasonable doubt. These elements are: One, an agreement between two or more people to accomplish an illegal objective. Two, the defendants' willing participation in the conspiracy. And three, at least one overt act committed by one co-conspirator in furtherance of the conspiracy. Count 2 of the superseding information charges the substantive violation of Title 12, United States Code, Sections 3105(d)(1) and 3111 and Title 18, United States Code Section 2. Title 12, United States Code, Sections 3105(d)(1) and 3111 make it a crime for a foreign bank to establish a branch or agency in the United States without the prior approval of the Board of Governors of the Federal Reserve. Title 18, United States Code, Section 2, makes it a crime to aid or abet another person in committing a crime. Specifically, Count 2 charges that Peter Berlin and Lucy Edwards unlawfully, willfully and knowingly assisted the two Russian banks mentioned earlier, DKB and Flamingo Bank, in establishing places of business in the United States at which deposits were received and accepted without the prior approval of the Board of Governors of the Federal Reserve. In other words, according to the superseding information, the defendants assist DKB and Flamingo in using the Benex, BECS and Lowland accounts at the Bank of New York and the offices set up in Queens and New Jersey to operate an unlicensed branch of these foreign banks. Count 2 incorporates by reference the facts alleged in the earlier conspiracy count. The elements of Count 2 which the government must prove, there are five elements which must be proven beyond a reasonable doubt. One, the existence of a place of business in the United States at which deposits are received or accepted. Two, that this place of business is established and controlled by a foreign bank. Three, that the place of business does not have the approval of the Federal Reserve to operate. Four, that the defendants established this place of business or aided in establishing this place of business knowingly, in other words, that he or she knew that the approval of the Federal Reserve was required and knew that the business did not have approval. And five, that the defendant acted with intent to deceive, to gain financially, or cause financial gain to another. Now, do you both understand that the offense charged in Count 1 of the information carries a maximum sentence of five years imprisonment, a maximum term of three years supervised release, a maximum fine of the greatest of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross pecuniary loss to a person other than the defendant as a result of the offense, and a mandatory $100 special assessment? You could also be ordered to pay restitution. In addition, you are subject to forfeiture of the proceeds you derived from your criminal conduct, specifically including two Swiss Bank accounts, a brokerage account and real property located in London. Do you understand that the offense charged in Count 2 of the information carries a maximum sentence of five years imprisonment, a maximum term of three years supervised release, a maximum fine of $1 million for each day the offense continued, and a mandatory $100 special assessment? You could also be ordered to pay restitution. You must understand that in this case I must impose a special assessment of $100 on each count totaling $200. You must understand the maximum sentence on both counts to be ten years imprisonment.

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: I am sorry, did you have a question?

MR. KINGHAM: I think, your Honor, the defendants were responding they understand the sentencing information the court just read.

THE COURT: Fine. In addition, you should be aware that if a term of supervised release is imposed and the conditions of the supervised release term are violated, you may be required to serve a further term of imprisonment equal to the period of supervised release with no credit for the time already spent on supervised release. Now, has anyone threatened either one of you or anyone else or forced you in any way to plead guilty?

DEFENDANT EDWARDS: No.

DEFENDANT BERLIN: No.

THE COURT: Has there been any agreement entered into between you and the counsel for the government?

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: Is there an agreement and do you have a copy of that agreement?

MR. STEIN: I do.

THE COURT: Would you hand it up, please.

MR. STEIN: Yes, your Honor. I am handing up originals of agreements between --

THE COURT: We are not going to mark them as exhibits.

MR. STEIN: -- Mr. Berlin and Ms. Edwards dated February 16, 2000. The government asks that they not be marked and not made a part of the record and they be returned to the government at the conclusion of the proceedings.

THE COURT: The court has been given two documents. One relates to Mr. Berlin and one relates to Ms. Edwards. Mr. Berlin, did you sign this agreement?

DEFENDANT BERLIN: Yes, I did, your Honor.

THE COURT: Do you want to see it?

DEFENDANT BERLIN: I have a copy.

MR. KINGHAM: Your Honor, the defendant has a copy.

DEFENDANT BERLIN: Yes, I have a copy.

THE COURT: I want you to look at the copies I have and make sure you signed those two, and that Ms. Edwards signed as well. (Handing to the defendants) (Pause)

DEFENDANT EDWARDS: Yes, your Honor.

DEFENDANT BERLIN: Yes, your Honor.

THE COURT: Do all the parties agree that these documents contain the substance of the plea agreement?

MR. KINGHAM: Yes, your Honor.

MR. STEIN: Yes, your Honor.

THE COURT: Counsel for the defendants as well? MR. ROSENTHAL: Yes, your Honor.

MR. KINGHAM: We do, your Honor.

THE COURT: Has anyone made any promise other than what is in these agreements that induced you to plead guilty?

DEFENDANT BERLIN: No, your Honor.

DEFENDANT EDWARDS: No, your Honor.

THE COURT: Has anyone made any prediction or a promise to you as to what your sentence will be?

DEFENDANT BERLIN: No, your Honor.

DEFENDANT EDWARDS: No, your Honor.

THE COURT: I want you to understand that any recommendation of sentence agreed to by you and the prosecution or any agreement that the prosecution will not oppose your attorneys' request at sentence or anyone's predictions are not binding on the court and that you might, on the basis of your guilty plea, receive up to the maximum sentence I described to you earlier?

DEFENDANT BERLIN: Yes, your Honor.

DEFENDANT EDWARDS: Yes, your Honor.

THE COURT: Mr. Berlin, will you explain to me in your own words what it is you did and how you violated the law?

DEFENDANT BERLIN: Yes, your Honor. From 1993 onward I was the president of Benex, and later BECS and Lowland. I agreed with my wife, Lucy Edwards, and other people and entities to set up accounts at the Bank of New York for three entities, Benex, BECS and Lowland. This was done for various purposes which were illegal under U.S. law. I did so to facilitate the movement of funds into and out of Russia and to accomplish a number of objects which I either knew were unlawful, or I deliberately closed my eyes to what I had reason to know was unlawful. I personally undertook various acts in order to further this illegal agreement. In late 1995, my wife was approached by certain people involved in the banking industry in Russia whom she knew from her work at the Eastern European Division at the Bank of New York. They wanted to have installed a Bank of New York software product, known as micro/CASH, to help them transfer funds through the Bank of New York. Micro/CASH is an electronic banking system that permits a customer to initiate and execute wire transfer instructions to an account. As a result, I agreed to open an account at the Bank of New York in the name of my company, Benex, to get the micro/CASH software. This software was later installed at the Queens office, and was run by associates of the Russian bankers. Later in 1996, I established another company, BECS, to do the same business. I also opened an account at Bank of New York for BECS which obtained the micro/CASH software. The Benex and BECS accounts were set up on behalf of the Russian bankers, who had acquired control of a Russian bank in Moscow, DKB. I knew that the Benex and BECS accounts, as well as the Queens office, were operated by DKB to facilitate the movement of large amounts of money out of and into Russia. Later on, in 1998, the DKB people asked us to set up another U.S. company and account at the Bank of New York to transfer money using the micro/CASH software. To this end, I set up a company called Lowland in Jersey City, and an account for Lowland at the Bank of New York. In exchange for setting up these accounts and helping with the transfer of funds, my wife and I were paid commissions by other members of the conspiracy. These commissions were a percentage of the total amount of money which flowed through the Benex, BECS and Lowland accounts. In these transactions, I acted to benefit myself, my wife and my family. I understood that using the offices in Queens and New Jersey and the bank accounts of Benex, BECS and Lowland at Bank of New York the Russian bankers were conducting banking operations in the United States and essentially operating like they had a branch or agency in the United States. I knew that they needed a license to operate a bank in the United States, and specifically, that a foreign bank had to have approval from the Federal Reserve to operate in the United States. I knew that DKB did not have such a license or approvals. I nevertheless assisted Benex, BECS and Lowland to facilitate the transfers of money both into and out of Russia, knowing that the bank in Russia responsible for initiating these transfers, DKB, was not approved by the Federal Reserve to operate a branch or agency in the United States. I also knew that when DKB first began using Benex to transfer money into and out of Russia, it did not have the necessary license from the Russian government to maintain an account in the United States. I knew that Benex, BECS and Lowland were in the business of transmitting money. Although I did not know specifically at the time that money-transmitting businesses require a particular license, I now understand that others involved in this scheme were aware that a license was required in order to conduct the money-transmitting business. I knew that Benex, BECS and Lowland never acquired any licenses. I knew that the banking business in New York was heavily regulated and that some banking functions must be approved or licensed by authorities. And I did not want the authorities to interfere with the operations of Benex, BECS and Lowland so I made no effort to inquire about a license. I knew that banks in Russia would assist customers in transferring funds out of Russia in violation of currency control regulations so as to deprive the Russian government of taxes or customs duties. I did not know the extent to which persons and entities using Benex, BECS and Lowland to accomplish money transfers were doing so in order to deprive the Russian government out of taxes or duties. On occasion, I personally assisted other individuals to transfer money through the Benex, BECS and Lowland accounts when I knew that the reason, intent and purpose of using these entities was to evade the payment of taxes and duties in Russia. However, a number of facts suggested to me, and I in fact suspected, that the accounts of Benex, BECS or Lowland were being used for illicit purposes, and specifically to prevent the Russian government from collecting tax and duties from transactions. These facts included: There was no convincing explanation from DKB as to why it would use Benex, BECS and Lowland to accomplish transfers after DKB obtained its own account at Bank of New York. I learned during the course of the operation of the accounts from DKB that it had destroyed documents to keep them away from the Russian tax police. In 1998, DKB instructed us to cease using BECS for fear of attracting attention after the FBI began making inquiries. DKB had asked me for, and I gave them, the Benex corporate seal which I knew they might use to create false documents. I knew that DKB had a bank of Nauru called Sinex bank which it was using to make transfers to the Benex and BECS accounts. I was aware that American banks were suspicious of banks in Nauru. I noticed that in the transfer records, DKB was describing Sinex bank as being located in Australia, which I assumed was a way of disguising the fact that it was a Nauru bank to make things look better. Based upon all of these facts and others, I assumed that one reason DKB probably was using Benex, BECS and Lowland to transfer money into and out of Russia was so that their customers could evade payment of taxes and duties in Russia. However, I deliberately closed my eyes and did not try to determine if this was, in fact, the case. In September 1999, after the United States government's investigation was reported in the media, it was confirmed to my wife by a representative of the Russian bankers that the purpose of the transfers was to evade taxes and duties in Russia. I assumed that it was unlawful for an employee of Bank of New York to accept money in return for the performance of official bank duties. In return for assistance in connection with the Benex, BECS and Lowland accounts and making sure that they ran smoothly, my wife personally derived a financial benefit by sharing in the commissions we received. At the time that we received the benefit of the commissions paid to Benex, BECS and Lowland, my wife was an officer of the Bank of New York, and used her position, along with others at the bank, to facilitate the illegal scheme. In addition, my wife and I requested that DKB forward the commissions we received from this illegal scheme to bank accounts we controlled outside the United States in the names of offshore operations. I did this to help further the scheme. I agreed with my wife that we would sign personal joint United States income tax returns on which we were required to report all income obtained from commissions earned from Benex and BECS. However, we did not report all of the income on our 1996 and 1997 returns. We intentionally failed to report all but a small portion of the income received from DKB, even though we knew we should do so. We did not report that income because we did not want to pay taxes on it. In addition, after my wife and I moved to London, we arranged that payments would be made to another Bank of New York employee in New York in the amount of $500 per month. She received these payments from us in return for serving as a point of contact at the Bank of New York in the event there were problems with transfers and to send me account statements so that I could calculate commissions we were owed.

MR. KINGHAM: I should point out, your Honor, that the statement Mr. Berlin has just made relates to Count 1 and he will now proceed to describe the facts with respect to Count 2.

DEFENDANT BERLIN: As I have already stated, for my own financial gain I agreed to actively assist DKB to operate what was, in effect, a banking business in the United States even though none of these entities had a license from the U.S. government to operate as a bank or to operate a branch or agency in the United States. This included accepting wire transfer deposits, holding said sums in accounts at the Bank of New York, and transferring these sums to the other third parties at the direction of DKB. To my knowledge, DKB never obtained a license or the approval of the Federal Reserve to engage in such activities. I intentionally provided this assistance to DKB knowing that only a licensed bank was entitled to do what DKB was doing.

MR. KINGHAM: Your Honor, that concludes Mr. Berlin's description of the facts in response to the court's question.

THE COURT: All right. Ms. Edwards, I would like you to tell me what it is you did and what illegal acts you might have performed.

DEFENDANT EDWARDS: From late 1995 until 1999, as a vice president of Bank of New York, I agreed with my husband, Peter Berlin, and other people and entities to set up accounts at the Bank of New York for three entities, Benex, BECS and Lowland, for various purposes which were illegal under United States law. I did so to facilitate the movement of funds into and out of Russia, and to accomplish a number of objects which I either knew were unlawful or deliberately closed my eyes to what I had reason to know was unlawful activity. I personally undertook various acts in order to further this illegal agreement. In late 1995, I as well as the Queens office, were operated by DKB to facilitate the movement of large amounts of money out of and into Russia. Later on, in 1998, the DKB people told me that they would be acquiring a Russia bank named Flamingo and asked us to set up another United States company and account at the Bank of New York to transfer money using the micro/CASH software. To this end, my husband set up a company called Lowland in Jersey City, and an account for Lowland at the Bank of New York. In exchange for setting up these accounts and helping with the transfer of funds, my husband and I were paid commissions by other members of the conspiracy. These commissions were a percentage of the total amount of money which flowed through the Benex, BECS and Lowland accounts. In these transactions, I acted to benefit myself and my husband, and to develop more Russian business for the Eastern European Division of the Bank of New York. I understood that using the offices in Queens and New Jersey and the bank accounts at Benex, BECS and Lowland at Bank of New York the Russian bankers were conducting banking operations in the United States, and essentially operating like they had a branch or agency in the United States. I knew that they needed a license to operate a bank in the United States, and specifically that a foreign bank had to have approval from the Federal Reserve to operate in the United States. I knew that DKB and Flamingo did not have such a license or approvals. I nevertheless assisted Benex, BECS and Lowland to facilitate the transfers of money both into and out of Russia, knowing that the banks in Russia responsible for initiating these transfers, first DKB and later Flamingo bank, were not approved by the Federal Reserve to operate a branch or agency in the United States. I also knew that when DKB first began using Benex to transfer money into and out of Russia, it did not have the necessary license from the Russian government to maintain an account in the United States. I knew that Benex, BECS and Lowland were in the business of transmitting money. Although I did not know specifically at the time that money-transmitting business required a separate license, I now understand that others involved in this scheme were aware that a license was also required in order to conduct the money-transmitting business. I knew that Benex, BECS and Lowland never acquired any licenses. At that time I did not become aware of this requirement that a license be obtained to transmit money because I closed my eyes to that fact. I made no effort to inquire about a license or ensure that necessary licenses were obtained. I did not inquire further in order to avoid having the authorities interfere with the operations. Based on my knowledge of Russian banks and my work in the Eastern European Division of Bank of New York, I knew that banks in Russia would assist customers in transferring funds out of Russia in violation of currency control regulations so as to deprive the Russian government of taxes or custom duties. On occasion, I personally assisted others to transfer money through the Benex, BECS and Lowland accounts when I knew that the reason, intent and purpose of using these entities was to evade the payment of taxes and duties in Russia. I did not know the extent to which other persons and entities using Benex, BECS and Lowland to accomplish transfers were doing so in order to deprive the Russian government out of taxes or customs duties. However, a number of facts suggested to me and I, in fact, suspected that the accounts of Benex, BECS and Lowland were being used by many people for illicit purposes, and specifically to prevent the Russian government from collecting tax and duties from transactions. These facts included: There was no convincing explanation from DKB as to why it would use Benex, BECS and Lowland to accomplish transfers after DKB obtained its own account at Bank of New York, particularly since, as a client of the Eastern European Division, DKB was charged lower fees for wire transfers than it paid to Benex, BECS and Lowland. We were paid substantial commissions for doing little work other than setting up the accounts and assisting with problems as they arose in the Bank of New York in connection with the accounts. I learned during the course of the operation of the accounts from DKB that it had destroyed documents to keep them away from the Russian tax police. In 1998, DKB instructed us to cease using BECS for fear of attracting attention after the FBI began making inquiries. Fifth, I was aware that personnel from DKB were, on occasion, in fear of their customers and afraid to leave the bank because they said customers with machine guns were waiting for them. Based upon all of these facts and others, I assumed that one reason DKB used Benex, BECS and Lowland to transfer money into and out of Russia was probably so that their customers would evade payment of taxes and duties in Russia or to transfer money into overseas accounts that were opened without the proper license from the Central Bank of Russia. However, I closed my eyes and did not do anything to determine if it was the case. After the United States government's investigation was reported in the press in September 1999, it was confirmed to me by a representative of the Russian bankers that the purpose of the transfers was to evade taxes and duties in Russia. As an officer of Bank of New York, I knew that it was unlawful for an employee of Bank of New York to accept money in return for the performance of official bank duties. In return for assistance in connection with the Benex, BECS and Lowland accounts and making sure that they ran smoothly, I personally derived a financial benefit by sharing in the commissions my husband and I received. At the time that I received the benefit of the commissions paid to Benex, BECS and Lowland, I was an officer of the Bank of New York and used my position, along with others at the bank, to facilitate the illegal scheme. In addition, my husband and I requested that the Russian banks send the commissions we received from this illegal scheme to bank accounts we controlled outside the United States in the names of offshore corporations. I did this to help further the scheme. I agreed with my husband that we would sign personal joint United States income tax returns on which we were required to report all income obtained from commissions earned from Benex and BECS. However, we did not report all of the income on our 1996 and 1997 returns. We intentionally failed to report all but a small portion of the income received from DKB, even though we knew we should do so. We did not report that income because we did not want to pay taxes on it. In addition, after I was assigned to the London office of Bank of New York in 1996, my husband and I arranged that payments would be made to another Bank of New York employee in New York, Svetlana Kudryatsev, in the amount of $500 per month. She received these payments from us in return for serving as a point of contact at the Bank of New York in the event there were problems with transfers and to send my husband account statements so that he could calculates commissions we were owed. Finally, as part of my duties at Bank of New York, I would assist customers of the bank to obtain visas to enter the United States for business trips. On occasion, and consistent with the practice of the Eastern European Division of the Bank of New York, I prepared false documents for Russian bankers who were customers of Bank of New York and which documents went to various United States embassies. Those documents stated that the applicants for the visa intended to come to this country for legitimate business purposes, when I knew that they wanted to come for other reasons.

MR. KINGHAM: Your Honor, that concludes Ms. Edwards statement with respect to Count 1. We now move to Count 2.

DEFENDANT EDWARDS: As I have already stated, for my own financial gain and to increase the business of the Eastern European Division of Bank of New York, I actively assisted DKB and Flamingo Bank to operate what was, in effect, a banking business in the United States even though none of these entities had a banking license or approval from the Federal Reserve to operate as a bank or to operate as a branch or agency in the United States. The activities of DKB and Flamingo included accepting wire transfer deposits, holding said sums in accounts at the Bank of New York and transferring these sums to other third parties at the direction of DKB and the Flamingo Bank. To my knowledge, neither the DKB nor Flamingo ever obtained a banking license or the approval of the Federal Reserve to engage in such activities. I intentionally provided this assistance to DKB and Flamingo knowing only a branch or agency approved by the Federal Reserve Bank was entitled to do what DBD and Flamingo Bank was doing.

MR. KINGHAM: That concludes Ms. Edwards statement in response to the court's question.

THE COURT: Thank you. Mr. Stein, would you give me a summary of the government's evidence against these defendants.

MR. STEIN: Yes, your Honor. Your Honor, the summary of the information that you previously provided essentially summarizes the evidence that the government would be able to prove. Specifically, the evidence which shows that Mr. Berlin and Ms. Edward did engage in a conspiracy with others to accomplish the various illegal objectives described by the court in Count 1 and it would also show that they helped Russian banks set up illegal banking operations here in the United States without the approval of the Federal Reserve. The government would prove those charges through a variety of different kinds of evidence. The evidence includes, among other things, bank records from the Bank of New York concerning the transactions through the Benex, BECS, Lowland and related accounts; records obtained from the Queens office and the Jersey City office; testimony from witnesses knowledgeable about the operations of those offices; evidence gathered concerning the nature of the transactions that went through those accounts and the reasons why the transactions were made, including evidence concerning the transaction referred to in paragraph 20 of the information which relates to the payment of $300,000 in ransom money to the BECS account in June of 1998 in connection with the kidnapping of a Russian businessman. The evidence would also include documents and materials obtained through a search warrant executed by British law enforcement authorities on Mr. Berlin's and Ms. Edwards' residence in London in August of 1999. In addition, the evidence would include account records for defendants' offshore accounts in the Isle of Man and in London showing their receipt of the commissions that they earned through this scheme which totaled approximately $1.8 million, the tax returns filed by the defendants here in the United States in 1996 and 1997 which failed to report that income or the foreign bank accounts that they controlled during those years, and finally statements of the defendants themselves as well. That's a summary of the types of evidence the government has.

THE COURT: All right. Now I am directing this to counsel for the defendants. Do you agree with the government's summary of what the defendants did?

MR. KINGHAM: Yes, your Honor. MR. ROSENTHAL: Yes, your Honor.

THE COURT: All right. Would the defendants please stand. Mr. Berlin, how do you plead to Count 1 of the information?

DEFENDANT BERLIN: Guilty.

THE COURT: And how do you plead to Count 2?

DEFENDANT BERLIN: Guilty.

THE COURT: Ms. Edwards, how do you plead to Count 1 of the information?

DEFENDANT EDWARDS: Guilty, your Honor.

THE COURT: And Count 2?

DEFENDANT EDWARDS: Guilty.

MR. KINGHAM: Thank you, your Honor.
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