From: Kelley Lynch <kelley.lynch.2010@gmail.com>
Date: Fri, Mar 15, 2013 at 6:03 PM
Subject: IRS and FTB
To: Dennis <Dennis@riordan-horgan.com>, "*irs. commissioner" <*IRS.Commissioner@irs.gov>, Washington Field <washington.field@ic.fbi.gov>, ASKDOJ <ASKDOJ@usdoj.gov>, "Kelly.Sopko" <Kelly.Sopko@tigta.treas.gov>, "Doug.Davis" <Doug.Davis@ftb.ca.gov>
To the IRS and FTB,
Date: Fri, Mar 15, 2013 at 6:03 PM
Subject: IRS and FTB
To: Dennis <Dennis@riordan-horgan.com>, "*irs. commissioner" <*IRS.Commissioner@irs.gov>, Washington Field <washington.field@ic.fbi.gov>, ASKDOJ <ASKDOJ@usdoj.gov>, "Kelly.Sopko" <Kelly.Sopko@tigta.treas.gov>, "Doug.Davis" <Doug.Davis@ftb.ca.gov>
To the IRS and FTB,
This appears to be an IRS/FTB case that LA was running. The IRS and FTB are not relentlessly pursuing me. The K-1s are illegal. The expense ledger is fraudulent. The refund is fraudulent and based on Cohen's lies, fraud, perjury, and concealment. And, my lawyer was correct - the plan was to discredit me. Streeter's comments about the IRS contacting me re. back taxes is fairly outrageous. It's also a bald-faced lie. That's because this trial is a ruse. It's an IRS matter with illegal discovery regarding Phil Spector. The lunatic printed out the same emails over and over again. This appeal is going to be abandoned. I refuse to continue to engage in this insanity and the prosecutorial misconduct is outrageous - as are her lies; Cohen, Kory, and Rice's perjury; and the ongoing situation with the City Attorney's office. I think the IRS and FTB should speak to the City Attorney's office directly. Perhaps they won't feel as comfortable threatening you as they do me.
All the best,
Kelley
FEDERAL TAX MATTERS
Streeter: And do you also recall discussion about K-1, criminal K-1?
Cohen: Yes, that was a constant theme.
Streeter: Do you know what a K-1 is, Mr. Cohen?
Cohen: Well, I didn’t until I asked.
Streeter Who did you ask.
Cohen: I asked my attorney. RT 82
Streeter: Who took care of filing documents with the IRS?
Cohen: That was Ms. Lynch. RT 82
Streeter: When Ms. Lynch was in your employ as business manager, what role you had in taking care of the financial documents?
Cohen: … Ms. Lynch was handling all financial affairs. She would choose the accountants, the lawyers … RT 83
Streeter: Now, there is a mention of the K-1... Do you know what a W2 is?
Cohen: W2? No, I don’t.
Streeter: How about a 1099?
Cohen: A 1099, yes, is issued by an employer to an employee.
Streeter: Did you ever issue one of those when Ms. Lynch was in your employee?
Cohen: No, I never even saw the documents. RT 83
Streeter: Do you recall any mention of a business relationship that you and she may have had?
Cohen: Yes, she spoke about her -- her taxation. RT 156
Streeter: The people recall you testifying previously that Ms. Lynch has on some occasions asked about getting tax returns; is that correct?
Cohen: Yes, many times.
Streeter: Amended tax returns; is that correct?
Cohen: Yes, Ma’am. RT157
Streeter: Do you recall of those emails how many had a request for tax information?
Cohen: Yes, I do. RT 167
Streeter: That’s the only email that made mention of a request for tax information?
Cohen: That’s correct. RT 170
Leonard Cohen Cross:
Public Defender; You said that you were unfamiliar with what a K-1 was, correct?:
Cohen: Yes, sir.
PD: Okay. Now, do you know what a K-1 is now?
Cohen: I have a perfect -- a sense of what it is, but I wouldn’t be able to teach it.
PD: And is it fair to say that you’ve gotten emails through the years referencing a K-1?
Cohen: That’s correct. RT 280
PD: Now, since you’ve been receiving emails requesting tax information, have you called these peo9ple to say can you get me this tax information? RT 280
PD: And so it would be fair to say that there was tax information that was requested by Ms. Lynch, correct?
Cohen: Hidden in the volume of the emails there was a request for tax information which Ms. Lynch already had. RT 281
PD: There were requests in those emails for tax information, correct?
Cohen: Yes, sir. RT 281
Did you ever bring that attention to whoever handled your taxes?
Cohen: Yes, sir. And it was determined by two courts of this country and the IRS that -- RT 281
Cohen: It was determined, sir, that I had no tax responsibility in regard to Ms. Lynch. The two courts had decided that money had been taken from me … Two courts had given me a default -- or one court had given me a default judgment; the other court affirmed that default judgment. But, more significantly, the IRS accepted the results of that default judgment and awarded me a tax refund, so Ms. Lynch has no cause to ask me for any taxation information. The forensic report on which the default judgments were made were very specific and Ms. Lynch has read them. That is the forensic report that Ms. Lynch has been asking for. The only problem is she doesn’t like the results.
PD: Do you remember what my question was? RT 282
Traditional Holdings, LLC - Leonard Cohen’s level of borrowing was dangerous to the structure. Review the fraudulent ledger. Adam Cohen’s house is in a questionable column.
Public Defender: And in fact you had actually taken money from that account to buy homes, correct?
Cohen: Yes, I had.
PD: You took money from that account to buy a house for your son, correct? RT 287
Cohen: That’s correct.
PD: To buy a house for your girlfriend, correct?
Cohen: Yes.
PD: Okay. So you -- it’s fair to say that you did take money from that account?
Cohen: That’s correct, yes.
PD: You were aware enough about that account to know that you could take money from that account?
Cohen: That’s correct. RT 288
Streeter - sidebar: And then that will lead to further -- the people asking more questions of the person in particular that was responsible for getting the default judgment in the holding of the IRS, which was Mr. Kory. RT 289/290
Social Security Number
PD: You never changed your social security number, correct?
Cohen: No, I didn’t change my social security number. RT 303
Streeter: How come you haven’t changed your social security number.
Cohen: I don’t think that’s -- I don’t think y9ou can change your social security number. RT 319
Michelle Rice Direct:
Streeter: Do you remember what was said in that first email that you got a half hour later? … It was a fraudulent restraining order. What else did she say?
Rice: That she had valid reason for contacting me and it was in, you know, she wanted tax information. Something to that effect. RT 333
Rice: I’m Mr. Cohen’s attorney. And to the extent that she’s asking for tax information, we don’t have that information. RT 361
Public Defender: To your knowledge, has Mr. Cohen ever directly sent Ms. Lynch any documentation?
Rice: It would be a violation of the restraining order. RT 362
Public Defender: But you believe that she wasn’t represented by counsel?
Rice: That’s correct. RT 368
PD: Even though you felt you were a protected person, you directly contacted Ms. Lynch and you gave her misinformation … RT 370
Sidebar: IRS Binder and Agent Luis Tejeda/IRS
Public Defender: We received a binder from Ms. Streeter that was provided to her by one of the witnesses that includes, you know, we believe a highly relevant witness that goes to Mr. Kory’s anticipated testimony based on what she provided us. He’s an agent of the IRS and we have subpoenaed him. We received that information on Monday. We subpoenaed him, he’s received that subpoena, but pursuant to federal regulations he has to clear that before he can testify with the appropriate authorities. I spoke with the agent this morning. That request is being considered and evaluated by their attorneys. And as I said, they’ll give me an answer by this afternoon regarding whether or not he will be able to testify and as to what he will testify to. Based on the fact that we received the binder on Monday …
Court: What does his testimony go to?
PD: We also think that … they go to the … motivation of the people’s witnesses. RT 385
Public Defender: Our plans are we want to find out about Agent Tejeda.
Court: I will tell you my strong view is I’m not going to delay the trial for Agent Tejeda. You guys, whether you knew his name or not, you were well aware of the relationship, if any, and I think it was quite tangential of the merits of the IRS thing long before the trial, and I’m not going to delay at this point the trial.
PD: … He said he was going to call … Your ruling is not that he’s not precluded from testifying; it’s that you won’t delay the trial.
Court: I won’t delay the trial. RT 432
Public Defender: Of a potential witness that we had mentioned. I believe we’ll wrap this up.
Court: IRS. What is the status.
Public Defender: We weren’t able to hear back from him.
Court: Who is this person?
Public Defender: Mr. Luis Tejeda was mentioned.
Court: Your client has had knowledge of him for quite some time. It’s not a surprise; that should have been taken care of. I’m not going to delay the case for now. RT 528
Robert Kory Cross:
Kory: We submitted the documents at length to Luis Tejeda, who is the head of fraud for the Internal Revenue Service in the Western United States. After Ms. Lynch … in 2007, Ms. Lynch contacted in response to, I think, a general ad encouraging employees to turn in their employers if the employees knew about their employer’s tax fraud. Ms. Lynch contacted a woman named -- an agent named Kelly Sopko. Kelly Sopko referred the matter, all her allegations related to Mr. Cohen -- RT 422
Kory: All I know is the -- she writes in her emails and she complains that the IRS and the Franchise Tax Board are pursuing her relentlessly. So I don’t know the -- I suspect, but don’t know the substance of why they‘re pursuing her. RT 423
Kory: What I saw is a request that we change the forensic accounting. That we withdraw a K-1. RT 426 Because she saw that we were reporting, that we had reported to the Internal Revenue Service that money that Mr. Cohen had paid taxes on he did not receive. And therefore, Mr. -- when we reported that to the IRS we declared a theft loss. Mr. Cohen got a tax refund. RT 426
Kory: As I read them, as I read them, I was reading a formidable, intelligent person with sophisticated tax knowledge who had the forensic accounting and the K-1s and all the tax information in her possession, and she was requesting that we somehow modify what we had reported. RT 426 It’s a zero sum game. If somebody gets a tax refund somebody else has to pay the taxes. RT 427
PD: … She requested tax information... did she request that information, Mr. Kory?
Kory: I -- I suppose … RT 427 But I always recall that those requests to him, as what I thought were part of a ruse. RT 427 I directly gave documents -- I gave all the documents required for her tax information when she was fully represented in January -- January, February, March, April 2004. By then we had completed our forensic accounting, all the information was given to her. Very sophisticated tax lawyer and to her tax accountants, and she fired them. RT 428
Kelley Lynch Direct:
Public Defender: You said that your business relationship ended on October 21, 2004?
Lynch: Essentially, yes.
PD: Why did it end?
Lynch: well, it’s a complicated answer, but I would say because Leonard Cohen heard I was going to the Internal Revenue Service about what I was told is criminal tax fraud. RT 458 I was told by Mr. Kory that there’s fraud, tax fraud on every entity: Blue Mist Touring, Traditional Holdings, LC Investments. There were problems with the Stranger Music deal that had tax issues. The IRS would demand information going back years, and the holding periods with respect to copyrights that were sold are illegal … He asked me if I would mediate with Mr. Cohen in a private mediation on Mr. Cohen’s side against his advisors. Particularly they wanted to go after Neal Greenberg and Richard Westin and their insurance companies. Mr. Kory told me that … Arthur Indursky, Don Friedman and Stuart Fried of Grubman, Indursky firm committed fraud in the inducement, as did Greg McBowman. RT 459
Public Defender: Were you asked to give false information that would hurt Mr. Greenberg and help Mr. Cohen?
Lynch: I don’t know if I was asked to give false information. I would not characterize the conversation that way. I was asked to testify that Neal Greenberg defrauded Leonard Cohen, and I most certainly do not feel that Neal Greenberg defrauded him. I feel that Leonard Cohen, Neal Greenberg and Richard Westin were wrapped in attorney/client privilege and they all defrauded the U.S. government.
PD: Did you ever agree to any of that?
Lynch: No. I felt I was being asked to participate in criminal conduct. RT 460
Public Defender: Now, you mentioned earlier about IRS and tax situation. Were you ever contacted by any tax authorities regarding Mr. Cohen’s taxes?
Lynch: I don’t know if I was contacted regarding Mr. Cohen’s taxes. As I reported the tax fraud to Agent Bill Betzer, I was working on paying my own taxes, and he suggested that I contact the Fraud Unit with anything I had to report. And so I contacted the Fraud Unit by phone and then I filed a complaint online with the IRS. And I also called the IRS in Washington.
PD: When were you told to contact the Fraud Unit?
Lynch: I spoke to Agent Bill Betzer on April 15, 2005 after I paid my taxes in full. RT 463
PD: You heard voice mails regarding IRS; is that correct?
Lynch: Right.
PD: Can you tell us what you meant?
Lynch: What I meant by the IRS?
PD: Yes.
Lynch: Well, I did receive an email -- I mean I did receive a phone call from Agent Kelly Sopko of the Treasury regarding this matter. And I did meet with her and her partner, whose name is Brandon.
PD: What year was that?
Lynch: That was 2007. RT 464
PD: Did you write about this in any of your emails?
Lynch: Yeah, I did write about that.
PD: What did you write about in those emails?
Lynch: Well, I think I attached Agent Sopko’s email to me, saying that she found an appropriate individual for me, which is Agent -- to report this to, which is Agent Luis Tejeda of the IRS Unit in Los Angeles. And to go to Agent Tejeda with whatever information and evidence I had regarding this tax fraud.
PD: Did you ever notify Mr. Cohen or any of his representatives about this tax issue?
Lynch: Well, they have a copy of the email to me from Kelly Sopko. So yes, I did. RT 465
PD: Who is Doug Davis?
Lynch: Doug Davis is a tax advocate that was assigned to me to remove the lien while I attempted once again to get the tax information I needed to file my returns. RT 470
Public Defender: You mentioned earlier also about t tax information that you had learned about regarding -- or after your conversation with Doug Davis. What exactly did you -- what kind of tax information were you looking for?
Lynch: Well, Doug Davis was a very kind man and agreed to remove the tax lien. Because I would have ended up homeless again. But he told me he would give me 60 days to obtain -- first of all, we went over the fact that I was confused about what to call what I thought were my commissions on “Dear Heather,” because Leonard Cohen had said if he deposited it into his personal account, I wasn’t entitled to it. I have evidence proving otherwise … So he told me they don’t believe I did charitable or pro bono work. So Doug Davis told me to report that as income, and I told Mr. Davis this has been since 2004, I would call City National Bank to see if I could get copies of my bank statements, even though I don’t have the money. He said they probably won’t have them any longer. So, they didn’t call me back, they refused to call me back. I called their legal department. RT 477
Public Defender: What tax information were you requesting?
Lynch: I am trying to determine the total amount that i was given as a commission in the year 2004. Not just for “Dear Heather,” there are other royalties.
PD: Did you try to get this information from other sources?
Lynch: Well, I tried to get it from City National Bank, which would be the only other source.
PD: Did you actually have those actual physical records in your possession?
Lynch: No. I’ve lost everything.
PD: When did you lose everything?
Lynch: Well, I lost my house in 2005 and my storage in 2006. RT 478
PD: From 2006 to 2012, did you ever receive the documentation that you were requesting from Mr. Cohen?
Lynch: No, I have not. RT 479
Kelley Lynch Cross:
Streeter: You mentioned that you were trying to contact Mr. Cohen in reference to tax information you needed, right? That your 1099 or K-1?
Lynch: Many different tax and accounting and financial information I required to deal with my federal and state tax returns. I think we’re really clear, right? You’ve read the emails? RT 495
Streeter: Now, once you were released from or quit Mr. Cohen’s employ, at some point later the IRS was of the opinion that the money that was missing out of his account, that was income to you, correct?
Lynch: I’ve never heard that. I’ve met with the agents for the Treasury and I’ve never been told that.
Streeter: Well, you mentioned --
Lynch: I talked to Agent Tejeda, I’ve never heard that.
Streeter: Well, you mentioned that the IRS came after you --
Lynch: They didn’t come after me. RT 495
Streeter: Okay -- did the IRS ever contact you”?
Lynch: No.
Streeter: After you quit Mr. Cohen’s employ, did the IRS ever contact you about paying back taxes?
Lynch: No. I was arranging to pay taxes that were current that had nothing to do with this and they didn’t -- they sent me a tax notice in 2004. It has nothing to do with this situation, and I paid that. Since that, no I’ve never heard from the IRS that I owed the money. RT 496
Streeter: And the IRS never contacted you about any back taxes that you owe?
Lynch: The state told me that because I don’t have the tax infor4mation, I need to file my returns, including any deductions, business expenses, follow my prior year tax returns and guess. So I contacted the IRS for that, for those returns, and I was told the IRS would like me to file my 2004 and 2005 returns. I don’t owe any money. I lost my greeting card company. I have huge losses.
Streeter: So it’s your testimony that no one associated with Mr. Cohen, Mr. Kory, Ms. Rice, or any of his business people ever gave you information, the tax documents that you are requesting?
Lynch: For the years 2004 and 2005, that’s correct. RT 497
Streeter: Now, you mentioned that the reason that you continued to contact Mr. Cohen was solely for business purposes, that it was to get the information for the tax documents?
Lynch: Did I say solely for business purposes.
Public Defender: Misstates the evidence. RT 497
Lynch: One of the main reasons I contacted Leonard Cohen is for -- I have K-1s that were transmitted to the IRS that do not belong to me. I was not a partner on LC Investments. That causes tremendous confusion with my taxes. I have a default judgment where two companies have been -- Leonard Cohen said he’s the beneficial owner. That is not factual. I have the evidence. This caused my federal tax returns that were filed to be altered. This causes confusion for me … I have tried to get all of this clarified. I’ve asked for -- there is not a forensic accounting. there is a ledger. RT 497
Streeter: You didn’t feel that those were harassing, right, Ms. Lynch?
Lynch: Asking for information for my federal tax returns and state -- including when I’ve been garnished is harassment? RT 498 I feel like I’m being harassed by not being given the information. RT 498
Lynch: But Stranger Music is a tax problem, and I’ve gone to the IRS on that as well. So that is a tax matter, yes. RT 500
Streeter: Where on the first page is there any mention about taxes?
Lynch: It’s on the second page.
Streeter: But on the first page. RT 507
Lynch: THe SWAT incident on the first page.
Streeter: That has nothing to do with your tax issues?
Lynch: But it has to do with criminal activity I believe. RT 507
Streeter Closing:
This is the other thing the people found a little interesting. She knows what a 1099 is a K-1 -- a K-1. Whoever heard of a K-1 before this case? The FTB and the IRS. Did anyone know there was a difference between the FTB and the IRS? Or what the FTB is? … This is a woman who knows what a K-1 is … RT 566
So this isn’t about Ms. Lynch being angry that she didn’t get her tax documents. RT 577 So what you have here, what this is proof of is not a woman who legitimately wants her IRS records or documents. It’s the unraveling of a con. RT 578
Defense Closing:
She was a whistle blower, reporting what she thought was criminal and fraudulent conduct. She’s asking for help from Steve Cooley, the DA, the IRS, the FBI, Department of Justice, lawyers she thought might help her. RT 581
Cohen was testifying he doesn’t know what a W-2 form is, he only learned recently that a K-1 form has to do with taxes, and that he only asked two real questions when things come up in his financial and legal affairs: Is it legal? Is it safe? And he doesn’t want to get involved too much in the intricacies of these legal issues because it inteferes with his creative process … But when my co-counsel was cross-examining him on issues such as a default judgment entered against Ms. Lynch, all of a sudden Mr. Cohen had details about how a forensic accounting was entered and the judge relied up0on that. He’s won two judgments against her. He knew details, where just on direct examination he doesn’t get involved in these type of things. It seems like he has a lot more to say than he was letting on to. RT 585
Streeter: And do you also recall discussion about K-1, criminal K-1?
Cohen: Yes, that was a constant theme.
Streeter: Do you know what a K-1 is, Mr. Cohen?
Cohen: Well, I didn’t until I asked.
Streeter Who did you ask.
Cohen: I asked my attorney. RT 82
Streeter: Who took care of filing documents with the IRS?
Cohen: That was Ms. Lynch. RT 82
Streeter: When Ms. Lynch was in your employ as business manager, what role you had in taking care of the financial documents?
Cohen: … Ms. Lynch was handling all financial affairs. She would choose the accountants, the lawyers … RT 83
Streeter: Now, there is a mention of the K-1... Do you know what a W2 is?
Cohen: W2? No, I don’t.
Streeter: How about a 1099?
Cohen: A 1099, yes, is issued by an employer to an employee.
Streeter: Did you ever issue one of those when Ms. Lynch was in your employee?
Cohen: No, I never even saw the documents. RT 83
Streeter: Do you recall any mention of a business relationship that you and she may have had?
Cohen: Yes, she spoke about her -- her taxation. RT 156
Streeter: The people recall you testifying previously that Ms. Lynch has on some occasions asked about getting tax returns; is that correct?
Cohen: Yes, many times.
Streeter: Amended tax returns; is that correct?
Cohen: Yes, Ma’am. RT157
Streeter: Do you recall of those emails how many had a request for tax information?
Cohen: Yes, I do. RT 167
Streeter: That’s the only email that made mention of a request for tax information?
Cohen: That’s correct. RT 170
Leonard Cohen Cross:
Public Defender; You said that you were unfamiliar with what a K-1 was, correct?:
Cohen: Yes, sir.
PD: Okay. Now, do you know what a K-1 is now?
Cohen: I have a perfect -- a sense of what it is, but I wouldn’t be able to teach it.
PD: And is it fair to say that you’ve gotten emails through the years referencing a K-1?
Cohen: That’s correct. RT 280
PD: Now, since you’ve been receiving emails requesting tax information, have you called these peo9ple to say can you get me this tax information? RT 280
PD: And so it would be fair to say that there was tax information that was requested by Ms. Lynch, correct?
Cohen: Hidden in the volume of the emails there was a request for tax information which Ms. Lynch already had. RT 281
PD: There were requests in those emails for tax information, correct?
Cohen: Yes, sir. RT 281
Did you ever bring that attention to whoever handled your taxes?
Cohen: Yes, sir. And it was determined by two courts of this country and the IRS that -- RT 281
Cohen: It was determined, sir, that I had no tax responsibility in regard to Ms. Lynch. The two courts had decided that money had been taken from me … Two courts had given me a default -- or one court had given me a default judgment; the other court affirmed that default judgment. But, more significantly, the IRS accepted the results of that default judgment and awarded me a tax refund, so Ms. Lynch has no cause to ask me for any taxation information. The forensic report on which the default judgments were made were very specific and Ms. Lynch has read them. That is the forensic report that Ms. Lynch has been asking for. The only problem is she doesn’t like the results.
PD: Do you remember what my question was? RT 282
Traditional Holdings, LLC - Leonard Cohen’s level of borrowing was dangerous to the structure. Review the fraudulent ledger. Adam Cohen’s house is in a questionable column.
Public Defender: And in fact you had actually taken money from that account to buy homes, correct?
Cohen: Yes, I had.
PD: You took money from that account to buy a house for your son, correct? RT 287
Cohen: That’s correct.
PD: To buy a house for your girlfriend, correct?
Cohen: Yes.
PD: Okay. So you -- it’s fair to say that you did take money from that account?
Cohen: That’s correct, yes.
PD: You were aware enough about that account to know that you could take money from that account?
Cohen: That’s correct. RT 288
Streeter - sidebar: And then that will lead to further -- the people asking more questions of the person in particular that was responsible for getting the default judgment in the holding of the IRS, which was Mr. Kory. RT 289/290
Social Security Number
PD: You never changed your social security number, correct?
Cohen: No, I didn’t change my social security number. RT 303
Streeter: How come you haven’t changed your social security number.
Cohen: I don’t think that’s -- I don’t think y9ou can change your social security number. RT 319
Michelle Rice Direct:
Streeter: Do you remember what was said in that first email that you got a half hour later? … It was a fraudulent restraining order. What else did she say?
Rice: That she had valid reason for contacting me and it was in, you know, she wanted tax information. Something to that effect. RT 333
Rice: I’m Mr. Cohen’s attorney. And to the extent that she’s asking for tax information, we don’t have that information. RT 361
Public Defender: To your knowledge, has Mr. Cohen ever directly sent Ms. Lynch any documentation?
Rice: It would be a violation of the restraining order. RT 362
Public Defender: But you believe that she wasn’t represented by counsel?
Rice: That’s correct. RT 368
PD: Even though you felt you were a protected person, you directly contacted Ms. Lynch and you gave her misinformation … RT 370
Sidebar: IRS Binder and Agent Luis Tejeda/IRS
Public Defender: We received a binder from Ms. Streeter that was provided to her by one of the witnesses that includes, you know, we believe a highly relevant witness that goes to Mr. Kory’s anticipated testimony based on what she provided us. He’s an agent of the IRS and we have subpoenaed him. We received that information on Monday. We subpoenaed him, he’s received that subpoena, but pursuant to federal regulations he has to clear that before he can testify with the appropriate authorities. I spoke with the agent this morning. That request is being considered and evaluated by their attorneys. And as I said, they’ll give me an answer by this afternoon regarding whether or not he will be able to testify and as to what he will testify to. Based on the fact that we received the binder on Monday …
Court: What does his testimony go to?
PD: We also think that … they go to the … motivation of the people’s witnesses. RT 385
Public Defender: Our plans are we want to find out about Agent Tejeda.
Court: I will tell you my strong view is I’m not going to delay the trial for Agent Tejeda. You guys, whether you knew his name or not, you were well aware of the relationship, if any, and I think it was quite tangential of the merits of the IRS thing long before the trial, and I’m not going to delay at this point the trial.
PD: … He said he was going to call … Your ruling is not that he’s not precluded from testifying; it’s that you won’t delay the trial.
Court: I won’t delay the trial. RT 432
Public Defender: Of a potential witness that we had mentioned. I believe we’ll wrap this up.
Court: IRS. What is the status.
Public Defender: We weren’t able to hear back from him.
Court: Who is this person?
Public Defender: Mr. Luis Tejeda was mentioned.
Court: Your client has had knowledge of him for quite some time. It’s not a surprise; that should have been taken care of. I’m not going to delay the case for now. RT 528
Robert Kory Cross:
Kory: We submitted the documents at length to Luis Tejeda, who is the head of fraud for the Internal Revenue Service in the Western United States. After Ms. Lynch … in 2007, Ms. Lynch contacted in response to, I think, a general ad encouraging employees to turn in their employers if the employees knew about their employer’s tax fraud. Ms. Lynch contacted a woman named -- an agent named Kelly Sopko. Kelly Sopko referred the matter, all her allegations related to Mr. Cohen -- RT 422
Kory: All I know is the -- she writes in her emails and she complains that the IRS and the Franchise Tax Board are pursuing her relentlessly. So I don’t know the -- I suspect, but don’t know the substance of why they‘re pursuing her. RT 423
Kory: What I saw is a request that we change the forensic accounting. That we withdraw a K-1. RT 426 Because she saw that we were reporting, that we had reported to the Internal Revenue Service that money that Mr. Cohen had paid taxes on he did not receive. And therefore, Mr. -- when we reported that to the IRS we declared a theft loss. Mr. Cohen got a tax refund. RT 426
Kory: As I read them, as I read them, I was reading a formidable, intelligent person with sophisticated tax knowledge who had the forensic accounting and the K-1s and all the tax information in her possession, and she was requesting that we somehow modify what we had reported. RT 426 It’s a zero sum game. If somebody gets a tax refund somebody else has to pay the taxes. RT 427
PD: … She requested tax information... did she request that information, Mr. Kory?
Kory: I -- I suppose … RT 427 But I always recall that those requests to him, as what I thought were part of a ruse. RT 427 I directly gave documents -- I gave all the documents required for her tax information when she was fully represented in January -- January, February, March, April 2004. By then we had completed our forensic accounting, all the information was given to her. Very sophisticated tax lawyer and to her tax accountants, and she fired them. RT 428
Kelley Lynch Direct:
Public Defender: You said that your business relationship ended on October 21, 2004?
Lynch: Essentially, yes.
PD: Why did it end?
Lynch: well, it’s a complicated answer, but I would say because Leonard Cohen heard I was going to the Internal Revenue Service about what I was told is criminal tax fraud. RT 458 I was told by Mr. Kory that there’s fraud, tax fraud on every entity: Blue Mist Touring, Traditional Holdings, LC Investments. There were problems with the Stranger Music deal that had tax issues. The IRS would demand information going back years, and the holding periods with respect to copyrights that were sold are illegal … He asked me if I would mediate with Mr. Cohen in a private mediation on Mr. Cohen’s side against his advisors. Particularly they wanted to go after Neal Greenberg and Richard Westin and their insurance companies. Mr. Kory told me that … Arthur Indursky, Don Friedman and Stuart Fried of Grubman, Indursky firm committed fraud in the inducement, as did Greg McBowman. RT 459
Public Defender: Were you asked to give false information that would hurt Mr. Greenberg and help Mr. Cohen?
Lynch: I don’t know if I was asked to give false information. I would not characterize the conversation that way. I was asked to testify that Neal Greenberg defrauded Leonard Cohen, and I most certainly do not feel that Neal Greenberg defrauded him. I feel that Leonard Cohen, Neal Greenberg and Richard Westin were wrapped in attorney/client privilege and they all defrauded the U.S. government.
PD: Did you ever agree to any of that?
Lynch: No. I felt I was being asked to participate in criminal conduct. RT 460
Public Defender: Now, you mentioned earlier about IRS and tax situation. Were you ever contacted by any tax authorities regarding Mr. Cohen’s taxes?
Lynch: I don’t know if I was contacted regarding Mr. Cohen’s taxes. As I reported the tax fraud to Agent Bill Betzer, I was working on paying my own taxes, and he suggested that I contact the Fraud Unit with anything I had to report. And so I contacted the Fraud Unit by phone and then I filed a complaint online with the IRS. And I also called the IRS in Washington.
PD: When were you told to contact the Fraud Unit?
Lynch: I spoke to Agent Bill Betzer on April 15, 2005 after I paid my taxes in full. RT 463
PD: You heard voice mails regarding IRS; is that correct?
Lynch: Right.
PD: Can you tell us what you meant?
Lynch: What I meant by the IRS?
PD: Yes.
Lynch: Well, I did receive an email -- I mean I did receive a phone call from Agent Kelly Sopko of the Treasury regarding this matter. And I did meet with her and her partner, whose name is Brandon.
PD: What year was that?
Lynch: That was 2007. RT 464
PD: Did you write about this in any of your emails?
Lynch: Yeah, I did write about that.
PD: What did you write about in those emails?
Lynch: Well, I think I attached Agent Sopko’s email to me, saying that she found an appropriate individual for me, which is Agent -- to report this to, which is Agent Luis Tejeda of the IRS Unit in Los Angeles. And to go to Agent Tejeda with whatever information and evidence I had regarding this tax fraud.
PD: Did you ever notify Mr. Cohen or any of his representatives about this tax issue?
Lynch: Well, they have a copy of the email to me from Kelly Sopko. So yes, I did. RT 465
PD: Who is Doug Davis?
Lynch: Doug Davis is a tax advocate that was assigned to me to remove the lien while I attempted once again to get the tax information I needed to file my returns. RT 470
Public Defender: You mentioned earlier also about t tax information that you had learned about regarding -- or after your conversation with Doug Davis. What exactly did you -- what kind of tax information were you looking for?
Lynch: Well, Doug Davis was a very kind man and agreed to remove the tax lien. Because I would have ended up homeless again. But he told me he would give me 60 days to obtain -- first of all, we went over the fact that I was confused about what to call what I thought were my commissions on “Dear Heather,” because Leonard Cohen had said if he deposited it into his personal account, I wasn’t entitled to it. I have evidence proving otherwise … So he told me they don’t believe I did charitable or pro bono work. So Doug Davis told me to report that as income, and I told Mr. Davis this has been since 2004, I would call City National Bank to see if I could get copies of my bank statements, even though I don’t have the money. He said they probably won’t have them any longer. So, they didn’t call me back, they refused to call me back. I called their legal department. RT 477
Public Defender: What tax information were you requesting?
Lynch: I am trying to determine the total amount that i was given as a commission in the year 2004. Not just for “Dear Heather,” there are other royalties.
PD: Did you try to get this information from other sources?
Lynch: Well, I tried to get it from City National Bank, which would be the only other source.
PD: Did you actually have those actual physical records in your possession?
Lynch: No. I’ve lost everything.
PD: When did you lose everything?
Lynch: Well, I lost my house in 2005 and my storage in 2006. RT 478
PD: From 2006 to 2012, did you ever receive the documentation that you were requesting from Mr. Cohen?
Lynch: No, I have not. RT 479
Kelley Lynch Cross:
Streeter: You mentioned that you were trying to contact Mr. Cohen in reference to tax information you needed, right? That your 1099 or K-1?
Lynch: Many different tax and accounting and financial information I required to deal with my federal and state tax returns. I think we’re really clear, right? You’ve read the emails? RT 495
Streeter: Now, once you were released from or quit Mr. Cohen’s employ, at some point later the IRS was of the opinion that the money that was missing out of his account, that was income to you, correct?
Lynch: I’ve never heard that. I’ve met with the agents for the Treasury and I’ve never been told that.
Streeter: Well, you mentioned --
Lynch: I talked to Agent Tejeda, I’ve never heard that.
Streeter: Well, you mentioned that the IRS came after you --
Lynch: They didn’t come after me. RT 495
Streeter: Okay -- did the IRS ever contact you”?
Lynch: No.
Streeter: After you quit Mr. Cohen’s employ, did the IRS ever contact you about paying back taxes?
Lynch: No. I was arranging to pay taxes that were current that had nothing to do with this and they didn’t -- they sent me a tax notice in 2004. It has nothing to do with this situation, and I paid that. Since that, no I’ve never heard from the IRS that I owed the money. RT 496
Streeter: And the IRS never contacted you about any back taxes that you owe?
Lynch: The state told me that because I don’t have the tax infor4mation, I need to file my returns, including any deductions, business expenses, follow my prior year tax returns and guess. So I contacted the IRS for that, for those returns, and I was told the IRS would like me to file my 2004 and 2005 returns. I don’t owe any money. I lost my greeting card company. I have huge losses.
Streeter: So it’s your testimony that no one associated with Mr. Cohen, Mr. Kory, Ms. Rice, or any of his business people ever gave you information, the tax documents that you are requesting?
Lynch: For the years 2004 and 2005, that’s correct. RT 497
Streeter: Now, you mentioned that the reason that you continued to contact Mr. Cohen was solely for business purposes, that it was to get the information for the tax documents?
Lynch: Did I say solely for business purposes.
Public Defender: Misstates the evidence. RT 497
Lynch: One of the main reasons I contacted Leonard Cohen is for -- I have K-1s that were transmitted to the IRS that do not belong to me. I was not a partner on LC Investments. That causes tremendous confusion with my taxes. I have a default judgment where two companies have been -- Leonard Cohen said he’s the beneficial owner. That is not factual. I have the evidence. This caused my federal tax returns that were filed to be altered. This causes confusion for me … I have tried to get all of this clarified. I’ve asked for -- there is not a forensic accounting. there is a ledger. RT 497
Streeter: You didn’t feel that those were harassing, right, Ms. Lynch?
Lynch: Asking for information for my federal tax returns and state -- including when I’ve been garnished is harassment? RT 498 I feel like I’m being harassed by not being given the information. RT 498
Lynch: But Stranger Music is a tax problem, and I’ve gone to the IRS on that as well. So that is a tax matter, yes. RT 500
Streeter: Where on the first page is there any mention about taxes?
Lynch: It’s on the second page.
Streeter: But on the first page. RT 507
Lynch: THe SWAT incident on the first page.
Streeter: That has nothing to do with your tax issues?
Lynch: But it has to do with criminal activity I believe. RT 507
Streeter Closing:
This is the other thing the people found a little interesting. She knows what a 1099 is a K-1 -- a K-1. Whoever heard of a K-1 before this case? The FTB and the IRS. Did anyone know there was a difference between the FTB and the IRS? Or what the FTB is? … This is a woman who knows what a K-1 is … RT 566
So this isn’t about Ms. Lynch being angry that she didn’t get her tax documents. RT 577 So what you have here, what this is proof of is not a woman who legitimately wants her IRS records or documents. It’s the unraveling of a con. RT 578
Defense Closing:
She was a whistle blower, reporting what she thought was criminal and fraudulent conduct. She’s asking for help from Steve Cooley, the DA, the IRS, the FBI, Department of Justice, lawyers she thought might help her. RT 581
Cohen was testifying he doesn’t know what a W-2 form is, he only learned recently that a K-1 form has to do with taxes, and that he only asked two real questions when things come up in his financial and legal affairs: Is it legal? Is it safe? And he doesn’t want to get involved too much in the intricacies of these legal issues because it inteferes with his creative process … But when my co-counsel was cross-examining him on issues such as a default judgment entered against Ms. Lynch, all of a sudden Mr. Cohen had details about how a forensic accounting was entered and the judge relied up0on that. He’s won two judgments against her. He knew details, where just on direct examination he doesn’t get involved in these type of things. It seems like he has a lot more to say than he was letting on to. RT 585
