DAY 2 Trial of Carrie Neighbors

8/6/2019 DAY 2 Trial of Carrie Neighbors

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USA V CARRIE NEIGHBORS

NANCY MORONEY WISS, CSR, RMR, FCRR

UNITED STATES DISTRICT COURTDISTRICT OF KANSAS

UNITED STATES OF AMERICA, Docket No. 07-20124

Plaintiff, Kansas City, Kansas

Date: 9/14/10v.

CARRIE NEIGHBORS,

Defendant....................

TRANSCRIPT OFJURY TRIAL - DAY TWO

BEFORE THE HONORABLE CARLOS MURGUIA,UNITED STATES DISTRICT JUDGE.

APPEARANCES:

For the Plaintiff: Marietta ParkerAsst. US Attorney360 US Courthouse500 State AvenueKansas City, KS 66101

For the Defendant: John Duma

Attorney at Law303 E Poplar StreetOlathe, KS 66061

Court Reporter: Nancy Moroney Wiss, CSR, RMR, FCRROfficial Court Reporter558 US Courthouse500 State AvenueKansas City, KS 66101


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I N D E X

GOVERNMENT'S WITNESSES:David Nitz

Direct Exam by Ms. Parker 5Cross Exam by Mr. Duma 57

Re-Direct Exam by Ms. Parker 65Jason Steffen

Direct Exam by Ms. Parker 72Nicolle Beach

Direct Exam by Ms. Parker 90Cross Exam by Mr. Duma 115Re-Direct Exam by Ms. Parker 122

Peter Anthony GarciaDirect Exam by Ms. Parker 125Cross Exam by Mr. Duma 131

Timothy J CoulterDirect Exam by Mr. Oakley 139Cross Exam by Mr. Duma 158Re-Direct Exam by Mr. Oakley 160

Vicki CoulterDirect Exam by Mr. Oakley 164Cross Exam by Mr. Duma 168

Travis KaiserDirect Exam by Ms. Parker 171Cross Exam by Mr. Duma 195Re-Direct Exam by Ms. Parker 201

Micky RantzDirect Exam by Ms. Parker 204

EXHIBITS: OFFERED RECEIVEDGovt's 1.1, 1.1 TR 253 253Govt's 1.2, 1.3 251 251Govt's 1.4 254 254Govt's 1.5, 1.6 259 260Govt's 2.1, 2.1 TR 268 268Govt's 2.2, 2.3 52,266 52,266Govt's 2.4, 2.5 268 269Govt's 3.1, 3.1 TR 274 275Govt's 3.2 52,272 52,272Govt's 3.3, 3.5, 3.6 272 272

Govt's 3.7, 3.8, 3.9, 3.10 276 276Govt's 4.2, 4.3, 4.4, 4.5 52 52Govt's 5.2, 5.3 52 52Govt's 6.1, 6.2 52 52Govt's 7.2, 7.3 52 52Govt's 9.2 52 52Govt's 10.1 183 183Govt's 10.2, 10.3 52 52Govt's 10.5, 10.6, 10.7 52 52


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EXHIBITS: OFFERED RECEIVEDGovt's 10.5A, 10.6B, 10.7C 147 147Govt's 11.1 103 103Govt's 11.2 44 45Govt's 11.5, 11.6 127 127Govt's 12.1 106 106

Govt's 12.2 52 52Govt's 12.3 76 76Govt's 13.1 108 109Govt's 13.2 52 52Govt's 14.2, 14.3 52 52Govt's 15.3 52 52Govt's 16.3 52 52Govt's 17.2 184 184Govt's 17.3 52 52Govt's 18.3 52 52Govt's 100 6 6Govt's 101 6 6Govt's 109, 109.1 25 25Govt's 110 37 37Govt's 111 38 38Govt's 112 39 39Govt's 113 40 40Govt's 114-124 16 16Govt's 125 209 209Govt's 126 225 225Govt's 128 214 214Govt's 129, 129 TR 247 248Govt's 130 226 227

Govt's 131 226 226Govt's 223.1 114 115Govt's 223.2 52 52Govt's 224 83 83Govt's 229 79 79Govt's 232, 233 54 54Govt's 241 16 16Govt's 242 16 16Govt's 243 56 56


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(9:03 AM, court and jury returned.)

THE COURT: Get everybody situated in your

chair over there. We had to add a chair in the end for

our box; only has 14 seats and we have 16 people, so

we've added those -- those chairs. Hopefully, Mr.

Heintzelman and Miss Reed, you can see and hear

everything as well. If you don't or if you have some

difficulty, please let me know. Good morning.

THE JURY: Good morning.

THE COURT: Thank you. Hopefully everybody

had a good night's rest. We're ready to go. We had a

full day yesterday as you're aware. We're in a

different courtroom than the big courtroom upstairs. A

lot more people. And we went through the process as

you're now aware of selecting this jury. And it took

most of our day. But we did start with the trial late

yesterday afternoon at which time if you recall, court

read to you some preliminary jury instructions. Also

the parties, the government and the defendant gave you

their opening statements. At this time the court is

ready to have the government present their evidence in

their case-in-chief and we're ready to start at this

time. Miss Parker?

MS. PARKER: Thank you, Your Honor. As its

first witness, the United States will call United States


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Postal Inspector David Nitz.

THE COURT: Before you take your seat, what

I need for you to do is raise your right hand.

(Witness sworn.)

THE WITNESS: I do.

THE COURT: Please take your seat. Careful

as you get in there. You might want to move that

microphone around. If you would, as you give your

answers to the questions you're asked, please speak up

loud and clear and speak into the microphone. Have you

start with you stating your name.

THE WITNESS: My name is David Nitz, last

name is spelled N I T Z.

THE COURT: Thank you. Miss Parker.

MS. PARKER: Thank you, Your Honor.

DAVID NITZ,

Called as a witness on behalf of the government, having

been first duly sworn, testified as follows:

DIRECT EXAMINATION

BY MS. PARKER:

Q. Sir, where are you employed?

A. I'm employed by the United States Postal

Inspection Service as a United States postal inspector.

MS. PARKER: And Your Honor, before we get

into the testimony of Office-- of Agent Nitz, I would


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like to offer Government's Exhibit 100, which is a

stipulation to the business records foundation of

certain of the documents that Agent Nitz is going to be

testifying about, and I would offer Government's

Exhibit 101, which is a stipulation to certain facts

that -- some of which will be covered by Inspector Nitz

during his testimony.

THE COURT: In regards -- in regards to

Exhibit Numbers 100, 101, any objection, Mr. Duma?

MR. DUMA: No, Your Honor.

THE COURT: What the court would tell you is

that these exhibits are now admitted, and usually the

exhibit is admitted just by the fact that the court

makes a ruling and it gets admitted. There may or may

not be objections to it being admitted. In this

particular instance, I believe I heard the government's

attorney say this was a stipulation which also you'll

get an instruction on regarding stipulations, but in

essence, it means that this is an exhibit the parties

agreed on in regards to this evidence that's going to be

presented to you at this time. Miss Parker. Continue.

MS. PARKER: Thank you, Your Honor.

BY MS. PARKER:

Q. Inspector Nitz, have you been involved in an

investigation that has been referred to as the Yellow


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House investigation?

A. Yes, I have.

Q. And when did your involvement begin?

A. My involvement began shortly before the execution

of the first two search warrants in December of 2005,

probably about the latter week or two of November of

2005.

Q. And what interest does the United States Postal

Inspection have in this case? What allows you to have

jurisdiction to investigate?

A. What allows the inspection service to have

jurisdiction in a case is the use of the United States

mail involved in some sort of alleged or criminal

activity.

Q. And how long have you been with the postal

inspection service?

A. I started in January of 1999.

Q. All right. And before that, what did you do?

A. Before that, I was a postal -- or excuse me, an

auditor, tax auditor with the Missouri Department of

Revenue.

Q. And as a postal inspector, would you tell the

jury what types of investigations you most frequently

conduct?

A. Most frequent investigation, I've conducted


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probably include mail fraud and mail theft. I've also

conducted investigations in most of the areas including

the prohibited mails, child exploitation, narcotics,

bottom investigations, as well.

Q. All right. And what training or experience do

you have in the field of financial analysis or document

analysis?

A. Well, beginning with my degree, I have a degree

in accounting from Northeast Missouri State University

in Kirksville, graduated from there in 1992, with the

state. I conducted investigations of business records

for compliance with tax laws. Most of that time with

the state was spent assigned to our criminal

investigation bureau to conduct those investigations in

support of criminal cases, and then just training and

experience in working mail fraud investigations, and

tracing money through those types of investigations with

the postal inspection service.

Q. And you've testified that you became involved in

this investigation shortly before the first search

warrant -- warrants were executed in December of 2005?

A. That's correct.

Q. And what were the circumstances that got you

involved in this?

A. Lawrence Police Department contacted the


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inspection service in our Kansas City field offices,

requesting assistance from us for a potential case that

we may be interested in participating in, and I was

assigned that investigation probably partly because of

my background and also experience in working financial

investigations, because that was going to be primarily

the focus if I was involved in the case as far as my

aspect or part of the case would be the financial

investigative part.

Q. And in the course of this investigation, were

records obtained?

A. Yes, they were.

Q. And how were they obtained?

A. The financial records were obtained both through

state search warrants executed at the time of the search

warrants on the physical business and the house, as well

as follow-up federal grand jury subpoenas for records.

Q. All right. And there are several boxes here in

the courtroom on the floor and on the table in front of

you. Are you familiar with the contents of those boxes?

A. I am.

Q. And are they the financial records that were

obtained in this investigation that you have done some

analysis on?

A. Yes.


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Q. I'm going -- may I approach the witness, Your

Honor?

THE COURT: Yes.

BY MS. PARKER:

Q. And with the court's permission, I'm just going

to put the box over here for simplicity sake. Can you

tell the court and the jury what Exhibit 102 is?

A. Exhibit 102 is a bank account from Intrust Bank.

Q. And who was the signatory on that bank account?

A. The signers on the account are Guy Neighbors,

Carrie Neighbors and AJ Neighbors.

Q. What are is last four digits of that bank account

number?

A. Last four digits are 3603.

Q. All right. And what period of time do these

checks in Exhibit 102 cover?

A. January of 2004 through December 2005.

Q. Show you Government's Exhibit 103. What is that?

A. Government's Exhibit 103 is for an Intrust Bank

account ending in the account number 4014.

Q. And who are the account holders?

A. Guy and Carrie Neighbors, the account is listed

as Professional Delivery Services, DBA Yellow House

Store Topeka.

Q. And what period of time do these checks cover?


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A. March of 2004 through December of 2005.

Q. Show you Government's Exhibit 104. Can you tell

the court and jury what that is?

A. Yes, Exhibit 104 is for another Intrust Bank

account ending in 4197, and it is for Yellow House

Quality Appliances, Incorporated or Inc, attention

Carrie M. Neighbors.

Q. All right. What period of time do these records

in 104 cover?

A. February through April of 2004.

Q. Show you Government's Exhibit 105. Can you

identify that please?

A. Yes. Government's Exhibit 105 is Intrust Bank

records for account ending in 4286, and it is Carrie

Neighbors DBA Yellow House Store, Topeka, with signers

Carrie Neighbors and Guy Neighbors.

Q. And what period of time does 105 cover?

A. Covers January of 2004 through March of 2005.

Q. Show you Government's Exhibit 106. Can you

identify that please?

A. It's another Intrust Bank account ending in 7108,

and it is for Carrie M. Neighbors DBA Yellow House Store

covering the periods of January through March of 2004.

Q. All right. And finally, in this box I show you

Government's Exhibit 107. What's that?


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A. Government's Exhibit 107 is Intrust Bank records

for account ending in 1169. It's for Guy Neighbors DBA

Guy's Store.

Q. What period of time does Exhibit 107 cover?

A. December of 2005 through January of 2006.

MS. PARKER: Your Honor, these documents are

being identified and the foundation being laid for the

purpose of supporting summaries, but we will not offer

them into the record as an exhibit unless and until it

becomes necessary to do so.

BY MS. PARKER:

Q. Finally, for purposes of identification, I'm

going to show you what's been marked Exhibit 108. What

is that?

A. Exhibit 108 is for the Commerce Bank records

ending in account 90223. It is for Carrie M. Neighbors,

Guy Neighbors, DBA Yellow House Quality Appliance at the

1904 Massachusetts address.

Q. All right. And who are the signers on there?

A. Carrie M. Neighbors and Guy Neighbors.

Q. All right. What period of time do the documents

in Exhibit 108 cover?

A. January 2004 through December 2005.

Q. And these were identified for the same purpose,

Your Honor. Now, all of these documents, Exhibits 102


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through 108, did you conduct some financial analysis on

those documents?

A. Yes, I did.

Q. Would you tell the grand jury what kind -- I'm

sorry, the court and the jury what kind of an analysis

you performed on this big stack of documents?

A. The primary analysis conducted on -- on these

records was to determine who checks were being written

to, for the purpose of identifying not only who the

Neighbors were writing checks to, but in what volume or

quantity they were writing them.

Q. So, is it fair to say that you took those checks

and you isolated checks out by who the -- who the check

was written to?

A. Yes, that's correct.

Q. All right. And then did you make some exhibits

and some summaries of those exhibits?

A. Yes.

Q. Let me start with Exhibit 114. Would you tell

the grand jury what that is please -- I'm sorry, the

jury what that is please?

A. Exhibit 114 is a notebook containing copies of

checks payable to Nicolle Beach as well as a summary

chart of those -- those checks.

Q. And all of these books I'm about to ask you to


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identify, the contents of those books are duplicates of

the checks that you have just identified in Exhibits 102

through 108?

A. Yes, they are.

Q. And then at the front of each of those books is a

summary that basically on one or two pages summarizes

the information in each book, correct?

A. Yes, it does.

Q. All right. What is Exhibit 115?

A. 115 is the same type of notebook containing

copies of checks and a summary for checks payable to

Travis Kaiser.

Q. All right. Exhibit 116. What's that?

A. Exhibit 116 is a notebook for checks and summary

charts for Joey Cadenhead.

Q. Exhibit Number 117. Can you identify that

please?

A. Yes. Exhibit Number 117 is for checks and

summary charts for checks payable to Laura Helm.

Q. Exhibit Number 118, I'm handing you that. What

is that?

A. Exhibit Number 118 is for checks written from

Yellow House to Lewis Parsons and a summary chart.

Q. Exhibit 119?

A. 119 is the checks and summary chart for checks


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payable to Norma Payne.

Q. Exhibit 120, what is that?

A. Notebook containing checks and summary chart for

checks payable to Michael Aldridge.

Q. Can you identify the contents of Exhibit 121?

A. Yes, Exhibit 121 is for checks and summary charts

for checks payable to Bradley Byrne.

Q. Show you Exhibit 122. What is that?

A. 122 is the checks and summary chart for checks

payable to Pat Nieder or -- Pat Nieder or Patrick

Nieder.

Q. All right. Exhibit 123. What's that?

A. 123 is for checks and summary charts for checks

payable to Stacy Barnes or Stacy Barnes-Catlett.

Q. All right. Exhibit 124. What is that?

A. Exhibit 124 is for checks and summary charts for

checks payable to Jim or James Ludwig.

Q. And finally in the notebook area, what's Exhibit

Number 1-- I'm sorry, 242?

A. Exhibit 242 is a summary and copies of checks for

checks payable between the various Yellow House Store

checking accounts or bank accounts.

Q. And Exhibit Number 241. Tell the jury what that

is.

A. 241 is a summary chart for checks payable to


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Marcus Crawford.

MS. PARKER: Your Honor, at this time the

United States would offer Government's Exhibits 241 and

242, and Exhibits 114, 115, 116, 117, 118, 119, 120,

121, 122, 123, and 124.

THE COURT: Any objections?

MR. DUMA: No objections, Your Honor.

THE COURT: At this time the court is going

to admit Exhibits 241 and 242 as well as admit Exhibits

114 through 124.

MS. PARKER: All right.

BY MS. PARKER:

Q. All right. Now, if you would open Government's

Exhibit -- well, the one that's there on the witness

stand. I believe it's Exhibit 124, is that right?

A. That's correct.

Q. All right. And I'm going to put up on the

overhead the document. Do you see that?

A. Yes, I do.

Q. All right. And is this document --

THE COURT: Are your monitors on in the jury

box?

UNIDENTIFIED JUROR: Can you make it a

little bigger?

UNIDENTIFIED JUROR: Yeah, can it go larger?


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BY MS. PARKER:

Q. Now, we'll zoom in and get a little closer on

some of these columns, but for the purpose of explaining

the entire summary chart, can you tell the jury what

each column stands for?

A. Yes. The original order column is just ordering

of how we entered them in to begin with.

Q. All right. That's your number, that's first

check, second check?

A. Yes.

Q. All right. And then the next column, it says

bank. What's that?

A. That is the actual bank that the account is drawn

on. Particularly, this one, the first one listed is

Intrust.

Q. So, that relates to the Intrust Bank records

you've just testified about?

A. Correct.

Q. All right. What does account number mean? I

think it's obvious, but --

A. Yeah, account number is the last few digits of

the account number.

Q. Then there is a column that is entitled count.

What does that stand for?

A. That count is to reference any of the checks that


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are associated to a particular count in the indictment.

Q. All right. So, this check here that's numbered

15 on the list that has the 16 next to it, that check

relates to the charges in Count 16, is that correct?

A. Correct.

Q. All right. Then the next column is a column

entitled overt act. What's that?

A. That's a column that references back to the

indictment as well basically a paragraph number of an

overt act.

Q. And then the column entitled source, bank or SW,

what does that mean?

A. That means that is the source of where we

obtained the records, either from -- directly from the

bank or via search warrant.

Q. And the next column bate stamped number

beginning?

A. Yeah, bate stamp number is a reference to the

number that is printed on the bottom right of the check

in the process of preparing them for court.

Q. All right. So, that is a number that enables you

if you need to go to that big box of checks to go

immediately by the bate stamp number to find it if you

need to?

A. Correct.


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Q. The next column is for what?

A. Umm, that is a sub-section if it was needed, if

there was more than one page referencing a particular

check, or like if I was referencing a bank statement

somewhere.

Q. The next one, bate stamp?

A. It would be the ending number of that.

Q. That's pretty blank?

A. Yes, most of the checks are contained on one

page. Some of them are on two pages.

Q. BS number?

A. That's the bate stamp sub-section, the ending

part of it. So, if there's one that's listed as 325 A,

then the A would be the sub-section part of that.

Q. So, the four columns we've just talked about are

really columns that would have provided you with the

information you need to quickly go to a check that's on

this list. Is that fair?

A. Correct. Yeah.

Q. The next check, check date?

A. That is the date that is reflected on the check

itself as far as when the check was made payable for.

Q. All right. Date paid?

A. That would reference when -- when the check

cleared the bank or appeared to be presented for


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payment.

Q. Check number, I assume that means that's the

number on the check?

A. Correct.

Q. That's the printed number that the bank sends

when it sends a checkbook -- a book of checks?

A. Yes.

Q. All right. Amount?

A. That is the amount that is written on the check

payable for the amount for.

Q. And the next column is witness?

A. Yeah, witness, that is just the last name of the

person that the check was written to.

Q. All right. And how about payee, what is that?

A. The payee is the actual person that the check was

written payable to.

Q. Now, in most of the entries here on this first

page of the summary, it shows the witness and the payee

as James Ludwig, correct?

A. Correct.

Q. All right. But on this very top one, the payee

is Arlette Ludwig. Do you know who that is?

A. Yes, that is the wife of James Ludwig.

Q. And so, that means the check was made out to

Arlette, but James Ludwig has information about it?


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A. Yes.

Q. And then finally, the memo column here. What

does that represent?

A. That represents the description that was written

on the check itself in the memo column by the person

writing and signing the check.

Q. All right. And these are checks I believe you've

all ready testified to that were written on bank

accounts belonging to either Guy or Carrie Neighbors?

A. Yes.

Q. Or both?

A. Yes.

Q. And so, the memo section of the check would have

been filled in by Guy or Carrie Neighbors, or at least

would have been there when either one of them signed the

check?

A. That would be the presumption. It was on the

check all ready when we obtained them.

Q. Okay. And let's just go down this column here,

and the -- I -- I've zoomed in a little bit so that what

we've got I think a little bit more readable now are the

check dates, and I'm really interested in the check

dates and in the memo section. On January the 8th of

2004, a check was written which indicates that it was

for -- or at least the memo section says Samsung DVD


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VCR. Do you see that?

A. Yes.

Q. All right. And from your investigation, have you

been able to determine that the memo section is

basically a recording of what the person came in and

sold at the Yellow House?


Q. All right. So, this would indicate that on

January 6th, a DVD VCR was sold?

A. Yes.

Q. All right. What -- on January the 14th, what was

sold?

A. Tools.

Q. All right. And on January the 28th, what was

sold?

A. DVD and Craftsman.

Q. All right. On January 29th, what was sold?

A. Tools.

Q. On -- again, on January 29th, what was sold?

A. Tools.

Q. Again on January 29th, what was sold?

A. Tools.

Q. All right. And this goes down like that for one,

two, three, four, five, six pages. Do you agree?

A. Yes.


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Q. Or five and a half pages, five pages and a little

bit of six?

A. Yes.

Q. All right. And what is the last date that you

had a check for where Jim Ludwig was the payee?

A. On November 28th, 2005.

Q. And what was sold that day?

A. Tools.

Q. And there is a column here under amount that has

the total there. What is that?

A. That's the total of the checks on the summary

chart.

Q. Total of the value of the checks?

A. The value, yes.

Q. So, the Yellow House bank accounts were used to

transfer $104,616.30 to James Ludwig or a member of his

family --

A. Yes.

Q. -- during this period of time. Now, did you get

checks after December 31st of 2004?

A. Umm, after December 2004?

Q. I'm sorry, 2005.

A. We obtained a few checks for -- just based on the

investigation.

Q. But the search warrants and subpoenas were not


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issued for any checks of 2006, except for the few that

you've referred to, mainly checks for Joey Cadenhead?

A. That's correct.

Q. All right. So, the summary charts that you

prepared here really only go up until December of '05?

A. That's correct. They generally just cover

January 2004 through December of 2005.

Q. And then the summary charts and the checks in all

of those books are set up just like the one we just

reviewed in James Ludwig's case, correct?

A. That's correct.

Q. Now, you also got some eBay and some PayPal

records, did you not?

A. Yes, I did.

Q. And what eBay records did you subpoena or -- or

what eBay records were obtained by search warrant?

A. EBay records that were obtained -- well, they

were eBay and PayPal records combined for Yellowhair

Bargains and Bargain Guy 44.

Q. All right. Let me show you -- Your Honor, would

you like me to ask each time I approach the witness for

permission or is --

THE COURT: That's not necessary, but thank

you for bringing that up.

BY MS. PARKER:


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Q. Show you Exhibit 109. What is that?

A. 109 is a CD or DVD, CD of the records that were

provided by eBay slash PayPal in referencing the

Yellowhair Bargains and Bargain Guy 44 accounts.

Q. And let me show you Government's Exhibit 109.1.

Would you tell the jury what that is?

A. 109.1 is printed hard copy information from the

records that were provided electronically from eBay and

PayPal, and includes information pertaining to the

owners of those accounts.

MS. PARKER: Your Honor, at this time,

government would offer Exhibits 109 and 109.1.

THE COURT: Any objection?

MR. DUMA: No objection, Your Honor.

THE COURT: At this time court admits

Exhibit 109 and 109.1.

BY MS. PARKER:

Q. Before we get into the information that you are

able to obtain from those eBay and PayPal records, I

want to go back for just a moment to our discussion of

the bank documents. In the course of your employment

and in your training and experience, are you aware of

how the banking industry affects inter-- interstate

commerce, if it does?

A. Yes. Yes, I am aware of that. Transactions


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that -- that get processed through banks, for instance,

checks will be processed through the bank that is the

owner of that check in a sense. So, whether it's

Intrust or Commerce Bank, those checks travel between

state lines in order to get processed and run through

the Federal Reserve Bank, for instance, locally here in

Kansas City, Missouri. Also, transactions that are

electronic as far as transfers between bank accounts or

in the -- in the specifics like of this case when we

have transfers that go from a PayPal account on eBay

that get transferred into the bank account in Kansas,

those would be traveling via interstate commerce or

affecting interstate commerce, traveling electronically

from, you know, say California to Kansas.

Q. And do the banks themselves engage in interstate

financial activity?

A. Yes, they do. There are inter-bank transfers

that are made electronically to more quickly transfer

funds than --

Q. Banks make loans for houses or businesses or to

buy commercial buildings in states other than where they

actually are situated themselves, correct?

A. That's correct.

Q. All right. So, in your professional opinion, do

the checks here represent activity that affects


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interstate commerce?

A. Yes, it does.

Q. All right. Now, we'll go back to the eBay and

the PayPal records. Exhibit 109, can you start with

Page 1?

A. This is on 109.1?

Q. 109.1. Before we go into talking about that,

these records were obtained by search warrant?


Q. How does that happen?

A. This was through a state search warrant.

Typically, on a state level, a search warrant will be

issued. For records on a federal level, it will be a

grand jury subpoena. In this case, search warrants were

obtained for business records by the Lawrence Police

Department at the same time the search warrants were

being applied for and obtained for the physical

locations of the business and the residence.

Q. So, the law enforcement agencies in this case did

not go out to eBay in California and search through

their records to find these. They served them with a

copy of the search warrant, and eBay then mailed back to

them these documents?

A. Yes, in the form of an electronic version.

Q. All right. And what was the type of information


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that was requested from eBay under that search warrant?

A. Basically, ownership and transaction activity.

Q. All right. And Exhibit 109.1 is a document that

relates to some of the information from the eBay

account, correct?

A. Correct, 109.1 references account ownership

information.

Q. All right. And let's start at the top here.

There is a column, eBay user ID, eBay e-mail address.

Do you see that?

A. Yes.

Q. All right. What's number one, what's that?

A. That is listing the eBay user Yellowhair Bargains

and the eBay e-mail address of

[email protected].

Q. Do you know what that negative $353.84 is?

A. I do not know.

Q. That's something that eBay provided to you?

A. Yes, that's in the original form. That wasn't

something I added.

Q. And then this is the form that they sent you this

information in, correct?

A. Correct.

Q. All right. The name of this account is what?

A. Yellow House.


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Q. With an address where?

A. 1904 Massachusetts Street, Lawrence, Kansas,

66046.

Q. And then it shows a creation date. What's that?

A. It shows a creation date of January 17th of 2003,

which is the date that eBay reflects as that account

being created -- or created.

Q. And then the account status, it shows suspended?

A. At the time that they printed this, it was

suspended.

Q. And what time -- what time-frame was this sent to

you and printed? Would this have been in 2006?

A. It would have been about the beginning of 2006.

I don't remember exactly when we received it.

Q. And then the number two here under the eBay

account, what is that?

A. Number two references Bargain Guy 44 with the

e-mail address of [email protected].

Q. All right. And the eBay user ID is the name that

would appear on the eBay site if Bargain Guy 44 was

selling something?

A. Correct.

Q. And then if someone wanted to communicate with

the owner of the Bargain Guy 44 account, they would send

an e-mail message to [email protected], is that


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right?

A. Yes, they could send an e-mail.

Q. And the name associated with that account is?

A. Guy Neighbors.

Q. And the address?

A. 1835 Northwest Topeka Boulevard, Number 131,

Topeka, Kansas.

Q. And then there are several telephone numbers

there, correct?

A. Yes.

Q. All right. And it shows that was created or that

account was opened when?

A. November 17th, 2003.

Q. All right. Now, we've talked about eBay.

There's PayPal e-mail addresses on here. How are PayPal

and eBay related, if you know?

A. EBay is the actual on line auction site where an

individual or business would -- would post something to

be sold, and that is where the auction takes place.

PayPal is a -- for lack of better description, similar

to bank account, basically making a transfer between

accounts. So, an individual can have a PayPal account

that they will pre-fund and have money available in that

or provide some sort of funding for that account, and

then if they purchase something from another eBay seller


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and that eBay seller has an account set up, then the

transfer of funds can go from one PayPal account to

another PayPal account rather than having to send a

check or money order or cash to the person who's selling

it.

Q. And the PayPal money in the PayPal account can be

transferred directly from PayPal to the account owner's

own bank account if they choose, correct?

A. Yes, it can.

Q. Now, the first PayPal e-mail address here is the

[email protected]?


Q. Same as the e-mail address that goes back to the

Yellow House, correct?

A. Yes.

Q. And the account number on this one ends in 8604,

correct?

A. Yes.

Q. All right. And the name that is associated with

that account as the owner?

A. Carrie Neighbors.

Q. And it has the 1904 Massachusetts address. If

you have another one, what's that?

A. 1104 Andover, Lawrence, Kansas. Address is the

physical residence of Guy and Carrie Neighbors.


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Q. All right. And the creation date of this account

was when?

A. March 7th, 2003.

Q. All right. And then there is a column there

indicating that the account should be restricted by the

time the law enforcement agents received the disk,

correct?

A. Yes.

Q. All right. PayPal account number two,

[email protected], same address as is on the Bargain

Guy 44 eBay user ID?

A. Well, it includes the address 1104 Andover.

Q. But I'm talking about just right now the -- the

e-mail address?

A. Oh, yes, the e-mail address.

Q. Same as in number two under eBay user ID?

A. Yes.

Q. All right. And this is associated with Guy

Neighbors?

A. Yes.

Q. And he also was using the 1104 Andover there,

correct?

A. Yes.

Q. All right. And this is the account that ends in

4029?


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A. Yes.

Q. And when was that created?

A. That was created November 18th, 2003.

Q. And again, that account should have been

restricted by the time this information was received by

law enforcement?

A. Yes.

Q. And then next page is just an address of the

contact to send the information to. That would be

Officer Micky Rantz of the Lawrence Police Department?

A. Yes.

Q. Now, Page 3 of Exhibit 109.1. Can you tell the

court and the jury what this document is?

A. This is the actual printed account information

page for the [email protected] or the Yellowhair

Bargains account in the name of Carrie Neighbors.

Q. All right. And down here, there is a column for

financials. Do you know what that's for?

A. Umm, that is going to reflect a balance that's

listed in the account as well as some dollar amounts

that the eBay or PayPal is reflecting as the amount

sent.

Q. And in this --

A. In the account.

Q. And in this case, for the Carrie Neighbors


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account, it shows $579,178.96?

A. Yes.

Q. And what is Page 2?

A. Page 2 is a continuation of the account

information page, and it lists -- down at the bottom, it

begins listing some of the addresses associated with the

account.

Q. And those are the addresses for the most part

that you have all ready testified about?

A. Yes.

Q. The next page?

A. It is Page 3 of the account information page. It

begins with the addresses, and then continues into the

bank accounts.

Q. So, it reflects some of the bank accounts that

you have all ready testified about?

A. Yes.

Q. Okay. And then the next page, this is product

information for Carrie Neighbors. Again, it's more

information relating to her account at eBay. I'm sorry,

this is a PayPal.

A. This is a PayPal information page.

Q. All right. Now I'm going to skip through some of

these, but in any event, going to the page that at the

top is listed as Page 5 of 8, do you have that?


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A. Yes.

Q. All right. And I'm going to the redemption codes

available, coupons available. That's more information

about the account?

A. Umm, yes, you're zoomed in right now on it,

but --

Q. So, there is extensive information that eBay and

PayPal are able to provide about its customers, correct?

A. Correct.

Q. You -- referring to the Document 109.1, one of

the accounts was bank account -- Intrust Bank account

ending in 42861 of the accounts associated with these

records?

A. It was listed in there.

Q. All right. Intrust Bank account ending in 4014.

Is that also associated with the PayPal and eBay

records?

A. Yes. Yes.

Q. Account ending in 7108 at Intrust Bank was also

linked to the eBay/PayPal records for Carrie and Guy

Neighbors?

A. Yes.

Q. And Intrust Bank account ending in 4197, that as

well?

A. Yes.


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Q. Intrust Bank account 8095, was that also

associated with the eBay/PayPal records?

A. Yes.

Q. Intrust Bank 0995, account ending in 0995, was

that also associated?

A. Yes.

Q. And finally, Commerce Bank account ending in

0223, was that associated with those records?

A. Yes.

Q. And the association of the bank and the account

numbers with those records, did that mean that PayPal

could transfer money in either Bargain Guy 44 or

Yellowhair Bargains accounts directly into the bank

accounts?

A. It could. If they chose to do that, they could

transfer money directly into those accounts.

Q. Okay. I want to show you what has been marked as

Government's Exhibit Number 110. Do you recognize that?

A. I do.

Q. What is that?

A. That is a print-out of all the information going

from left to right on, including all of the columns that

would be provided by eBay.

Q. All right.

MS. PARKER: Your Honor, at this time


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government offers Exhibit 110.

MR. DUMA: No objection.

THE COURT: At this time court admits

Exhibit Number 110.

BY MS. PARKER:

Q. All right. Is this the size it print out or has

this been enlarged just for demonstration purposes?

A. No, if you wanted to print all of the columns

that they provide, at least in somewhat readable form,

you would have to print it that large.

Q. All right. And so, you, in -- during the period

of your analysis, took the -- is this the eBay

print-out?

A. That is the eBay print-out, yes.

Q. So, in order to have it in a usable format, using

all of the columns, you would have to have a stack of

documents this big?

A. Correct, if you wanted to print all the columns,

yes.

Q. So, did you then take the information on

Exhibit 109 and reduce it to a smaller size?

A. Yes.

Q. All right. Show you Government's Exhibit 111.

Can you identify that please?

A. Yeah, Exhibit 111 is the -- the print-out of the


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selected information, the columns that I left in for

analysis purposes.

Q. All right.


government offers Government's Exhibit 111.


MR. DUMA: No objection, Your Honor.

THE COURT: At this time the court admits

Exhibit Number 111.

BY MS. PARKER:

Q. And I'm going to put Exhibit 111 on the overhead

and just -- what was your purpose in doing this

analysis?

A. This -- the purpose of doing this analysis was

to -- well, this is actually the -- the complete printed

information from eBay including all the information that

was reflected in postings on the eBay sites.

Q. And this last column here has the high bidder

name that actually identifies who purchased the product?

A. Yes, that identifies who won the bid or the

bidding process for each item.

Q. All right. And all of these entries here in

Government's Exhibit 111, they relate only to the

Bargain Guy 44 and Yellowhair Bargains or Yellow House

accounts, correct?


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A. That's correct.

Q. Now, also on that disk was information for

PayPal, correct?

A. Correct.

Q. I'm going to show you Government's Exhibit 112.

What's that?

A. That is a print-out on large format of all of the

columns that are included for PayPal. PayPal has quite

a few additional columns than what eBay print-outs

actually have.


government would offer Government's Exhibit 112.




Exhibit Number 112.

BY MS. PARKER:

Q. Okay. And now I'm going to turn it right side up

and display this for the jury. Now, did you have to

enlarge this, or is this the size that it takes to print

out all the information directly from that disk about

PayPal?

A. That's the size if its basically shrunk down to

get onto that -- onto that paper right there.

Q. So, it's impractical to print out directly from


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the disk, the 109, the information from PayPal?

A. Yes, it would go on several pages just to include

all the columns of going from left to right.

Q. So, in order to have information in a usable

form, did you again take the disk and put it into a form

that was more easily dealt with?

A. Yes.

Q. All right. Can you tell the jury what Exhibit

113 is, please?

A. Exhibit 113 is the print-out of the PayPal

records associated with the Yellowhair Bargains and the

Guy -- or Bargain Guy 44 accounts.

Q. All right.

MS. PARKER: And Your Honor, at this time

the government would offer Government's Exhibit 113.




Exhibit Number 113.

BY MS. PARKER:

Q. Now, Exhibit 112 -- I'm sorry, 111 which is the

print-out of the eBay information, what did you do with

this? Did you make any summaries or reduce this to some

kind of a summary at all?

A. Umm, not so much the eBay, but did with the


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PayPal records.

Q. All right. The PayPal records in Exhibit 113,

what did you do with those in the course of your

investigation?

A. Took the -- I took -- took the information that

was contained in there listing their sales, and this is

the sales that would come through PayPal. This does not

include sales if somebody would mail a check or cash

payment or pay by credit card. This would be just the

sales that were completed through eBay and paid through

a PayPal account. Took that information and began

removing certain items that were sold by them that we do

not believe -- may not be related to the case,

particularly removing items such as conducted searches

and removed items such as appliances that were typically

being stored or sold in the store, such as a used oven

or refrigerator, some item like that. Conducted

searches, and this is electronic searches through the

spreadsheet for any item that lists used or used search

terms like -- for like -- like new, trying to remove

each item that was not an item that was listed as new or

new in the box type item, and then did a line by line

search of the remaining items to remove any additional

ones that we didn't think applies to the specifics of

this case.


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Q. All right. So, the final product that you have

reflected only the PayPal information relating to new

items sold by Yellow House. Is that a correct

statement?

A. Well, that exhibit actually is a printing of all

of the items. But in order for -- to determine maybe

like a dollar amount, approximate of the items that were

new or new in boxes items, I conducted that search and

removal of items. But the actual exhibit is a print-out

of -- of all the information.

Q. But after you winnowed out all of the extraneous

items and were left with what you believe was just an

accounting for new items, were you able to determine how

much the Yellow House stores received from PayPal for

new items?

A. Yes, it was a little over $600,000.

Q. And the $600,000, that is only PayPal. Are there

other methods for merchants who sell on eBay to get

payment besides going through PayPal?

A. Yes, they can receive payment via money order,

cash, check that would be mailed to them, they could

accept orders over the phone, or actually, I mean, not

orders, but payment over the phone using a credit card.

So, there could be other ways. It's just PayPal is one

way in which they can transfer money and pay for the


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item.

Q. All right. So, assuming that there was some

activity outside of the PayPal account, this $600,000

total figure would likely go up?

A. Yes.

Q. All right. Now, did you also isolate certain

pages from the eBay and the PayPal records?

A. Yeah. I isolated certain pages that related

specifically to the counts in the indictment.

Q. All right. I'm going to show you Exhibit 11.2.

What's that?

A. 11.2 is a print-out of eBay records relating to

Count 11, and on each of these pages in these, there

will be a line or more than one line depending on how

many items per page are related, that is highlighted,

and that highlights the items specifically related to

that count.

Q. All right. The highlights that are on these

exhibits in yellow are highlights you put there,

correct?

A. Correct.

Q. To indicate which of the lines relate to certain

counts, correct?

A. Yes.

Q. But other than that, have there been any changes


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made to those documents?

A. No.

Q. All right. Is there a number down in the corner?

A. Yes, the number down in the corner next to, for

instance, Exhibit -- you know, this is Government's

Exhibit 11.2. There's a number E B 136. That is

basically a bate stamp number that we had printed on

here so that once again I could refer back to a specific

page for that account that would have been in that full

complete print-out that we've all ready done.

MS. PARKER: I'm sorry, are you finished?

At this time the government offers Exhibit 1-- I'm

sorry, 11.2.


MR. DUMA: Judge, could I please ask one

question of this witness before I --

THE COURT: Yes.

MR. DUMA: Agent Nitz, that is as to a

specific count in the indictment, is that correct?

THE WITNESS: Yes, that relates to a

specific count in the indictment. 11.2 would be

referencing Count 11.

MR. DUMA: Thank you. No objections.

THE COURT: At this time the court does

admit Exhibit 11.2.


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BY MS. PARKER:

Q. And maybe that is good time to do a little bit of

explaining of how these exhibits are numbered. Exhibits

that start -- in this case we've referred to

Exhibit 11.2. What does that first number mean?

A. The first number 11 is a reference to Count 11 in

the indictment.

Q. And this would be the second document that

relates to Count 11?

A. Yes, the .2 would reference a second document.

Q. And so, any exhibit that starts in a Number 11

will be an exhibit that relates to Count 11, correct?

A. Correct.

Q. All right. There are 18 counts in the

indictment, correct?

A. Correct.

Q. All right. So, numbers starting with 2, 3, 4

would all relate to Count 2 or Count 3 or Count 4?

A. Correct.

Q. Then there are exhibits that have been marked Buy

One and Buy Two. What do those relate to?

A. Those are relating to specific buys, are relating

to undercover activity by our undercover officers. That

would be -- Buy One would reference the first sale of --

by the undercover officer to Carrie Neighbors or the


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first buy that she made from the undercover officer.

Q. And then there are documents that are -- and then

anything related to Buy One will be Buy 1.1, 1.2, Buy

1.2, Buy 1.3. So that you -- anybody reading those

numbers would know that all of these documents that have

Buy 1. something relate to that first buy on

October 27th?


Q. Now, we have documents that are marked CI 1.1, CI

1.2. What do those refer to?

A. Those refer to our confidential informant,

cooperating individual, specifically Joey Cadenhead.

And the one would reference the first sale to Yellow

House, CI 2 would reference a second sale, and any of

the .1 .2 .3 would reference individual documents or

items within that were associated with that first or the

second or the third buy.

Q. And at the request of the law enforcement agent,

Joey Cadenhead went into the Yellow House on three

occasions and had contact with Carrie Neighbors, is that

right?

A. Yes.

Q. And so, CI 1, 2, 3 are the references to those

three visits that were recorded?

A. Yes.


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Q. All right. Now, in front of you I have set a

stack of folders. Can you identify by exhibit number

what are contained in those folders?

A. Yes. Item 12.2 is an eBay print-out. It has two

highlighted items on there, but this references -- at

least one of those items references Count 12.

Q. All right. Do you also have Exhibit -- and

that -- these pages that you are referring to in this

stack you're about to identify all look like 11.2 as far

as their form goes?

A. Yes.

Q. All right. What's Exhibit 13.2? What does that

relate to?

A. 13.2 is another print-out from the eBay records,

and it references to Count 13.

Q. All right. Exhibit 20 -- I'm sorry, 223.2,

what's that?

A. That is another eBay print-out.

Q. All right. Exhibit 10.5?

A. Exhibit 10.5 is a -- another eBay print-out


Q. All right. Exhibit 10.6?

A. 10.6 is a -- an eBay print-out, and it also

references Count 10.

Q. Exhibit 10.7?


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A. Another eBay print-out referencing 10. -- or


Q. All right. Do you have Exhibit 10.2 there?

A. Yes.

Q. Is that another eBay page that references Count

10?

A. Yes.

Q. All right. Exhibit 10.3, is that an eBay page

that references Count 10?

A. 10.3 is a PayPal page in reference to Count 10.

Q. All right. Exhibit 17.3. What's that?

A. 17.3 is a pay -- a print-out from the PayPal

documents in reference to Count 17.

Q. All right. Exhibits 5.2 and 5.3, are those

documents that relate to Count 5?

A. Yes, they are. They are both eBay documents.

Q. Exhibits 7.2 and 7.3, are those documents

relating to Count 7?

A. Yes, they would be, and both of them are eBay

print-outs.

Q. Exhibit 18.3, what's that?

A. 18.3 is a PayPal print-out referencing Count --

or Count 18 for the transfer of funds to the bank

account.

Q. All right. That's for the transfer of funds from


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PayPal to one of the Yellow House bank accounts?

A. Yes.

Q. All right. And when those funds are transferred,

does PayPal transfer those electronically?

A. Yes, that is done electronically.

Q. And does that electronic transfer of funds from

PayPal into the Yellow House bank account affect

interstate commerce?

A. Yes, it does.

Q. Exhibits 2.2 and 2.3, what are they?

A. 2.2 is an eBay print-out in reference to Count 2

and Exhibit 2.3 is a PayPal print-out in reference to

Count 2.

Q. Now, when you say that 2.2 is an eBay account

record and 2.3 is a PayPal account record, are each one

of those clearly marked someplace where it shows this is

PayPal, this is eBay?

A. Yes, the eBay in particular 2.2 is in reference

to eBay Page Nine, E B Nine.

Q. All right. And how is that?

A. And then Pay --

Q. Where do you find that?

A. That is on the bottom right corner.

Q. All right. And I'm goin

Documents

DAY 2 Trial of Carrie Neighbors