Claim 15 of 15

“He forged checks for money. He owed Joseph $42,000 and was being sidelined.”

What the State said

Mr. Imes gave the jury the motive in one line: the $42,000, the forged checks, and being sidelined: (RT 8213:22-26)

Why? Because he owes $42,000.00, he forged checks, he’s being sidelined. He’s not going to let that happen, because he’s a greedy, self-centered, self-interested man. And we’ll talk about more motive as we go along, but up to this point, that’s what you know about the defendant’s state of mind.

See the trial transcript (RT 8212-8214, Mr. Imes)

What the State already knew

DuGal, at trial, on money moving through EIP “at the discretion of the defendant and Dan Cavanaugh”: “when I clarified it with them and with the family, and I got a unilateral answer that yep, that was okay. I had no reason to question what they were doing at that point in the investigation. None.” (RT 2521, What I told them, and when).

The record

The money is laid out in five parts: February 22, 2010; the pages I wrote in Susan Blake’s car; Saudi Arabia: built, paid for, installed; where the money went, including the $42,000; and Metro was paid.

Claim 15, the money: 1 of 5

February 22, 2010

Three records from one day, and Metro’s own statement.

1. The Paul Mitchell wire came in

San Bernardino’s bank report (Bates 007447): “February 22, 2010, a wire transfer from MW Mitchell Construction for $5,000.00.” The defense flow chart, Exhibit 1123, box 7, shows the same wire into my account ending 2519.

See the bank report (Bates 007447)

2. I told San Diego what I was going to do with it

That day Det. DuGal was interviewing Dan Kavanaugh. With DuGal there, Dan called me and put me on speakerphone (the San Diego transcript file is titled “Daniel Kavanaugh 2-22-10 #2”). After DuGal’s questions about the fountains, Dan brought up the Paul Mitchell wire, and I told DuGal where every dollar of it was going: to Metro, which would not release the waterfalls without it. This is the whole exchange, to the end of that page of the transcript: (pp. 22:16-23:27)

See the transcript (San Diego interview of Dan Kavanaugh, 2-22-10, pages 22, 23)

3. I took the money out

The same bank report (Bates 007448): “February 22, 2010, $4,900.00 withdrawal from La Verne Baking Center.” Exhibit 1123, box 8: “Charles Merritt pays $4,900 to Metro Sheet Metal on 2/22/10 to cover part of remaining balance on invoice.”

See the bank report (Bates 007448)

See Exhibit 1123 (flow of money, Paul Mitchell)

4. Metro’s own records show it was paid

Metro Sheet Metal’s own statement to Earth Inspired Products, dated 3/1/2010, lists invoice #3728 for the Paul Mitchell feature, $14,700.00; payments received of $6,350.00 by check #1116 on 02/04/2010 and $4,900.00 by direct deposit on 02/22/2010; and $3,450.00 still owing.

See Metro’s statement (March 1, 2010)

Exhibit 1123 sourced box 8 to my bank account and to “Metro Sheet Metal Statement dated 3/1/10.” Box 3 shows Metro’s invoice for the Paul Mitchell work: invoice #3728, February 2, 2010, $14,700.00, “as seen on statement dated 3/1/10.” Box 10 shows my $3,600.00 withdrawal on March 8, 2010, with the note: “This amount would cover the remaining balance to Metro Sheet Metal.”

At trial, the defense accountant wanted to show the jury this chart, with my $4,900 payment to Metro on it. The prosecution objected, and the court agreed.

What was argued (April 29, 2019, outside the jury’s presence)

After the court struck box 9, Ms. Rodriguez objected to boxes 8 and 10. She called the payments to Metro “pure speculation”; Mr. Imes called them hearsay; Mr. Maline answered that Metro’s bookkeeper had verified the statement; Ms. Rodriguez replied that Ms. Garcia “specifically said she did not create invoices,” Mr. Daugherty that “She wasn’t even shown it,” and Mr. Imes that it “was shown to Mr. Sequieda. He didn’t know what it was” (RT 7017:1-13). This is how the argument began: (RT 7015:26-7016:28)

See the trial transcript (RT 7015, 7016)

The ruling

When the court came back to it, it struck box 8 because Metro’s receipt of the $4,900 rested on Metro’s statement, Exhibit 740, which it had already kept out. It allowed box 10, my $3,600 withdrawal, but only as a withdrawal. Here is the ruling on boxes 8, 9 and 10: (RT 7024:22-7025:18)

See the trial transcript (RT 7024, 7025)

Exhibit 740 is Metro’s March 1, 2010 statement shown above. Because the court kept it out, box 3 (Metro’s invoice) and box 8 (my $4,900 to Metro) were removed from the chart, along with box 9, which was struck separately. The jury saw it as Exhibit 1133. The one thing the jury heard from the statement was that $3,450 was still due. (RT 7015, 7024-7026, 7086-7090)

See the trial transcript (RT 7017, 7026)

See the finished Paul Mitchell waterfall

Claim 15, the money: 2 of 5

The pages I wrote in Susan Blake’s car

What the State said

When the court denied the defense motion for acquittal, it relied on what Susan Blake said I had told her: (RT 4995:23-4996:2)

THE COURT: Susan Blake ultimately did advance Mr. Merritt over $5,000 of her own funds, ostensibly to complete existing projects with the understanding she would be paid back when those projects were completed. Mr. Merritt subsequently reported to Ms. Blake that, indeed, the Saudi Arabia project had been completed and he had received $17,000 for that project. So Ms. Blake asked him to repay the $5,000 that he had — that she had advanced him. He did not do so.

See the trial transcript (RT 4995)

But in front of the jury, Mr. Maline asked her what she told customers who called about their waterfalls, whether I went to Saudi Arabia and finished the waterfall, and what I was paid. She said she would ask Chase, that she never got confirmation, that she didn’t know the amount, and that she never knew I completed the job or received the funds: (RT 5512:7-5514:14)

See the trial transcript (RT 5512, 5513, 5514)

What the record shows

In her recorded interview with San Bernardino on August 13, 2014, she had told detectives the opposite: that I told her I went, and what I was paid: (pp. 91:3-92:23)

See Susan Blake’s interview (August 13, 2014, pages 91-92)

When she was recalled at trial, Mr. Maline asked her about the pages I had written out for her. She told him he was missing one: (RT 5541:6-5542:11)

See the trial transcript (RT 5541, 5542)

See my three pages from March 17, 2010

Claim 15, the money: 3 of 5

Saudi Arabia: built, paid for, installed

What the State said

In closing, Mr. Imes told the jury there was “no indication that full deposits had been received” for the Saudi job when the February 2 check was written: (RT 8191:23-8192:6, quoted in full in What happened)

What is interesting to note, there is no indication that full deposits had been received for the Saudi Arabia project, at this point, or that Joseph McStay actually created these checks to give to the defendant. In fact, the defendant was at home during that time, where there was computer in the clubhouse that he could easily use. But again, checks that were created, printed, and deleted, by a man who had never really done that before, that was not his business practice; checks that could have been given to the defendant on the 31st, when he was physically there, or potentially given to him at this mysterious meeting that may have occurred or may not have occurred on February 4th.

See the trial transcript (RT 8190-8192, Mr. Imes)

On the February 8 check, he told them there was no evidence the job had even been built: (RT 8219:18-8220:8)

See the trial transcript (RT 8218-8221, Mr. Imes)

Later in his closing, he told the jury the checks were for projects that “hadn’t even started or hadn’t even been finished,” and that Joseph would never have given control to a person he was “attempting to sideline”: (RT 8223:18-8224:25)

See the trial transcript (RT 8223, 8224)

In rebuttal, Ms. Rodriguez told the jury I never got paid before doing the work (while conceding I “would get money — money up front before, but only when he was purchasing materials”), that the job wasn’t finished, and that I wasn’t owed the money yet: (RT 8419:20-8420:7)

The other part of this e-mail that’s important to look at is the Paul Mitchell and Saudi Arabia jobs. Look at the spreadsheets. Since when does the defendant ever get paid for jobs before he does the work? He doesn’t. He has to do the work before he gets the money. That’s the way that the arrangement works.
He would get money — money up front before, but only when he was purchasing materials. He’s not purchasing materials anymore. This does not reflect that.
The other part of that that’s important is, that when we looked at the bank records, what we saw was that Joseph received an initial deposit for the Saudi Arabia job but never the end of the money. All of that money — or the majority of it actually went to the defendant. So Joseph doesn’t owe that money yet because that job isn’t complete, the work hadn’t been performed, and the defendant wasn’t up to being paid yet for work that he had not yet done.

See the trial transcript (RT 8419, 8420)

What the record shows

On February 22, 2010, on speakerphone with DuGal, I told him where both jobs stood: the Paul Mitchell fountain virtually done, and the three Saudi waterfalls to be finished that week: (transcript pp. 21:26-22:14)

DUGAL: You’re currently manufacturing these fountains?
MERRITT: I’m sorry say it again
DUGAL: Are you currently manufacturing those fountains or you acquire the-the material for ’em?
MERRITT: Yes actually Paul Mitch the Paul Mitchell fountain um is virtually done all everything all the stainless is done the glass is here we actually just took pictures of everything from Paul Mitchell waterfall and sent them, and sent them to Paul Mitchell or I mean uh Mark Mitchell to confirm that we are pretty much done with it
KAVANAUGH: And then Chase tell them.. tell
MERRITT: The Saudi Arabia (inaudible) two the two largest waterfalls I’ve done I ordered the glass in place and all we have is the smaller of the three which would be curve water feature all of the stainless steel is done it’s all (inaudible) we are now doing the (inaudible) which you see during (inaudible) into this week
KAVANAUGH: Hey Chase tell them..
MERRITT: all three should be completely finished be, by the end of this week

See the transcript (San Diego interview of Dan Kavanaugh, 2-22-10, pages 21, 22)

The customer was Rahage Trading Est. in Riyadh. Its procurement manager wrote to Susan Blake, in an e-mail headed “PO for Earth Inspired,” that the job was paid in full and that I was needed in Riyadh for the installation. This is the whole e-mail:

Subject: PO for Earth Inspired
Dear Susan,
Again and again we have settled COMPLETE payment INCLUSIVE of the installation supervison (US $4000)
Please refer to the attached Pro-forma invoice from EIP and the PO that we raised in conformity with it
I sent you 2 days ago the proof of payments made to you for the total value of the PO which is US $61,542.25
Trust this is very clear.
In return we hereby strongly claim that Mr. Chase needs to immediately arrive in Riyadh to supervise the assembly and installation of the waterfalls.
I will need to ask our Logistic department book him on the earliest flight as time is extremely critical and the handover is only 4 days away.
Please make sure Mr. Chase sends us his passport copy with the Saudi visa stamped on it.
Regards,
Procurement Manager
Rahage Trading Est.

See the e-mails (Exhibit 990 and the Rahage purchase order)

The State told the jury there was no proof the Saudi deposit had come in, or that I was entitled to a deposit check. Mr. Imes said it twice in closing. The first, quoted above, was that there was “no indication that full deposits had been received.” The second: (RT 8193:13-21)

Again, in isolation, that $2,500.00 check for 2495, that check standing alone may have an innocent interpretation, but it’s a deposit payment to the defendant for Saudi Arabia, except for you never heard any evidence of when that project started or whether he was entitled to a deposit. You also can’t reconcile it with all of the other attendant circumstances. All of those attendant circumstances, including the deletion, point to it now being evidence of guilt because that’s the only reasonable interpretation.

See the trial transcript (RT 8193)

The jury had already heard the answer. Rahage’s payments came through Kocache Enterprises; both March 5 wires reference the purchase order. The defense accountant, Mr. Shogren, walked the jury through Exhibit 1115: the 50 percent deposit invoiced in QuickBooks, the deposit, $30,733.25, arriving by wire on January 22, and Joseph paying Metro its 50 percent the same day: (RT 7081:1-7082:13)

See the trial transcript (RT 7081, 7082)

The Metro check is on the State’s own check list: #4153, $9,250.00, January 22, 2010, marked “AZZOUZI1001 – 50% Deposit.” (Bates 007417)

See the State’s check list (Bates 007417)

The next day, Ms. Rodriguez went after that same January 22 wire on cross-examination, suggesting nothing showed what it was for. Mr. Shogren answered from Union Bank’s wire report: the money came from Kocache: (RT 7144:16-7146:10)

See the trial transcript (RT 7144, 7145, 7146)

The balance came from the same company. On March 5, 2010, Kocache wired $13,862.00 to me and $16,839.25 to Dan Kavanaugh, each marked “balance of payment of PO.” (Exhibit 1115, boxes 6-7; my $13,862.00 wire also appears in the bank report, Bates 007447)

Even so, Mr. Imes told the jury in closing that nobody had made the link. He named the company himself, said it was “presumably” the Saudi job, and said “No one ever connected the dot”: (RT 8259:17-22)

A BIG DEAL WAS MADE ABOUT THE SAUDI ARABIA PROJECT. WHAT DID THOSE RECORDS SHOW? THOSE RECORDS SHOW PAYMENTS COMING IN FROM THIS COMPANY, KOKESHI, WHICH PRESUMABLY IS THE SAUDI ARABIA PROJECT. NO ONE EVER CONNECTED THE DOT. AND WHERE DID THAT MONEY GO. HMM. TO DAN KAVANAUGH AND TO THE DEFENDANT.

See the trial transcript (RT 8259)

The dot had been connected twice in front of that jury: by the defense accountant on direct, and by the State’s own cross-examination the next day.

I wrote e-mails from Saudi Arabia, and after. On June 17, 2010, I wrote to Susan Blake from Riyadh. It is not a friendly e-mail; she and Dan had been telling people things about me, and I said so. But it puts me in Saudi Arabia, finishing the job:

See the e-mails (Exhibit 990 and the Rahage purchase order)

Two days later I wrote to Cathy:

Sat, June 19, 2010 8:39:16 AM
just hi
end of the day, got the second feature pretty much done. met a couple taleban today. nice people, unbelievably giving and polite.
love YA CHASE

See the e-mails (Exhibit 990 and the Rahage purchase order)

And on June 26, to Susan again, that the Saudi waterfalls were installed:

Sat, June 26, 2010 2:46:21 PM
susan, I understand that you are telling people that I am wanted for fraud by the the FBI for taking peoples money and not giving them waterfalls. you and I know that that is not true. I was in saudi arabia and not able to get in touch with my client for a while, but telling them that I was wanted is slander.. so I hope for your sake that you will stop talking to people about me. saudi arabias falls are installed. but they still need the sponge, remote controls, and something else. all of which were at your friends shop. call me or reply please, and let me know you got this. I do not want to have any more problems with you and dan, but if you continue to push me into a corner, I will take legal action.

See the e-mails (Exhibit 990 and the Rahage purchase order)

At trial Mr. Maline showed Susan Blake the e-mails I sent her from Saudi Arabia. She did not remember them: (RT 5513:5-19)

Q (BY MR. MALINE:) Okay. And do you recall that when Chase was in Saudi Arabia that he sent you an e-mail?
A Not from Saudi — I don’t know.
Q I’m going to have you take a look at Exhibit 990, if you could read that and tell me if that refreshes your recollection.
A Okay.
Q Do you recall that?
A I don’t remember this e-mail.
Q Okay. I will take it out. There’s more pages.
A Oh, there’s more. Is this the same date?
Q If you look at page 2 on the bottom, that will give you the date.
A I don’t remember ever seeing this.
Q Okay. So you don’t recall these e-mails?
A No.

See the trial transcript (RT 5513)

The defense accountant walked the jury through Exhibit 1115, the Saudi chart, box by box: the January 22 deposit, my three checks, the two March 5 wires from Kocache, and what the customer paid in all. Ms. Rodriguez’s objection to when my share started to accrue was overruled; Mr. Imes’s objection to the next question was sustained and that answer stricken. He found no claim that the job wasn’t finished: (RT 7083:7-7086:21)

See the trial transcript (RT 7083, 7084, 7085, 7086)

See my photos from Saudi Arabia

See the bank report (Bates 007447)

Claim 15, the money: 4 of 5

Where the money went

The money, in short

• Saudi Arabia: the customer paid $61,434 on a $61,542.50 invoice. I received $25,207: three checks, for $2,495, $6,500 and $2,350, and the $13,862 wire. Metro was paid $18,500 for its part: $9,250 by Joseph and, by my accounting, $9,250 by me.
• Paul Mitchell: a $31,500 job. I received $9,500: the $4,500 check and the $5,000 wire. Of that, I paid Metro $8,500: $4,900 on February 22 and $3,600 on March 8. Joseph had paid Metro $6,350 to start the work.
• Two more checks dated February 4 went straight to Metro: $1,650 and $250.

What I told San Diego in February 2010

At my first interview, I explained to Det. DuGal how Joseph and I split the money. This is the whole paragraph of his follow-up report: (Bates 001675)

See DuGal’s report (Bates 001673-001675)

The defense flow charts

The defense accountant traced the deposits, checks and wires on each job in two charts: Exhibit 1115 for Saudi Arabia and Exhibit 1123 for Paul Mitchell. The court let him use 1115, and a modified 1123 (February 22, 2010). Both were shown to the jury. The Paul Mitchell chart was shown, with boxes ordered removed, as Exhibit 1133. (RT 7011:16-7012:17, 7015-7026, 7086-7090)

See the trial transcript (RT 7011, 7012)

Saudi Arabia (Exhibit 1115)

• Invoice #1078, October 28, 2009: $61,542.50.
• January 22, 2010: $30,733.25 wired into Joseph’s account. The same day, Joseph paid Metro $9,250.00 (“AZZOUZI1001 – 50% Deposit”; check #4153 on the State’s list, Bates 007417).
• Checks to me on Joseph’s account: $2,495.00 (#4240, “depsit sa 1001”), $6,500.00 (#4241, “saudi arabia final”), $2,350.00 (#4242, “lighting install sa(1001)”).
• March 5, 2010: Kocache wired $16,839.25 to Kavanaugh and $13,862.00 to me.

See the Saudi flow of money (Exhibit 1115)

Paul Mitchell (Exhibit 1123)

• Invoice #1082, January 4, 2010: $31,500.00. January 25: $16,000.00 deposited into Joseph’s account.
• February 1, 2010: Joseph paid Metro $6,350.00 (check #1116, “JF-PM1001,” written February 1; Metro’s statement shows it received February 4).
• Check #4237 to me, dated February 4, $4,500.00, “paul mitchell.” February 22: $5,000.00 wire to me from MW Mitchell Construction.

See Exhibit 1123 (flow of money, Paul Mitchell)

Metro’s statement of March 1, 2010 (Exhibit 740)

$14,700.00 billed (invoice #3728), payments of $6,350.00 and $4,900.00, and $3,450.00 still owing.

See Metro’s statement (March 1, 2010)

My accounting

• Metro was paid $18,500.00 for Saudi: Joseph’s $9,250.00, and $9,250.00 I paid from other withdrawals from my account (my own accounting; I have not yet found the withdrawal records for it).
• Metro was paid $14,850.00 for Paul Mitchell: Joseph’s $6,350.00 to start the job, my $4,900.00 on February 22 and my $3,600.00 on March 8.
• The $3,600 on March 8 paid off the $3,450 still owing on Metro’s March 1 statement, $150 over the balance.

See my accounting (Folder D, pages 54, 55, 83, 109, 80)

Joseph’s e-mail of February 1, 2010 (Exhibit 419)

The $42,000 the State relied on comes from an e-mail Joseph sent me at 11:42 a.m. on February 1, 2010, headed “Re. $$$ – PM & SA.” The same e-mail first sets out what I was owed on the two jobs, Paul Mitchell (PM) and Saudi Arabia (SA). This is the whole e-mail:

PM 15% $4725 Savings $3050 Total: $7775
SA 15% $7725 Savings $6500 Install $4000 Total$18,225
Total $26,000

As of 2.1.10
Chase Paid $173,255
Chase Owed $158,210
Overpaid $15,045

PLUS $8800 (Levine)
PLUS $19000 (Provecho)
Total $42,845

See Joseph’s e-mail of February 1, 2010 (Exhibit 419)

The defense accountant read the Saudi part of it to the jury: (RT 7083:1-6)

A And in that is a reference to the Saudi Arabia 15 percent 7,725. That’s actually only 13 percent of the total invoice. But that it’s referenced there. There’s a savings of 6,500 referenced, and an install price of 4,000, with a total for this job owed to Chase of 18,225.

See the trial transcript (RT 7083)

The e-mail also lists Levine ($8,800) and Provecho ($19,000). Those were not amounts I owed Joseph, and the accountant did not count them. The court said so, in summarizing his testimony: “The accountant testified that as of February the 1st, his — his opinion of that e-mail was that the defendant owed McStay, approximately, $15,000.00 not counting any amounts that might be due to McStay due to Provecho and Levine — Levine projects” (RT 7753:11-15). Mr. McGee had just told the court, “I think that’s been clarified that that’s not an amount owed” (RT 7753:9-10).

See the trial transcript (RT 7753)

Ms. Rodriguez answered him in rebuttal. She said I could not have had savings under the 15 percent model, that nothing in the e-mail said to subtract the $26,000 from the $42,000, and that after it I wrote myself another $15,845 in checks: (RT 8418:18-8419:14)

See the trial transcript (RT 8418, 8419)

Claim 15, the money: 5 of 5

Metro was paid

What the record shows

Dave Sequeida, Jr., of Metro Sheet Metal, was asked at trial about the damaged unit. He said it had been rebuilt, and that the insurance was to pay for it; for the money side he sent the jury to his father: (RT 2846:2-25)

Q (BY MR. MALINE:) Do you know what the dispute was regarding the damaged waterfall — water fountain?
A I don’t know if it was a dispute. They had already discussed that the insurance was going to pay for the unit. We remade the unit, rebuilt it. Shortly after that, the McStay family went missing.
Q You didn’t get your money when Joseph was still there and you had rebuilt that unit, you did not get paid for that unit; correct?
MR. IMES: Objection. Lacks foundation. Calls for speculation.
THE COURT: Overruled. He can answer if he knows.
THE WITNESS: Again, you would have to ask my father that.
Q (BY MR. MALINE:) When you mentioned earlier — you talked about the insurance or the damaged unit, do you remember that?
A Yeah.
Q So you know there was an issue regarding a damaged unit; correct?
A Yes, I had — had to rebuild it.
Q What was your understanding of the issue regarding the damaged unit?
A Again, I don’t handle the finances of that. I was in the back fabricating.

See the trial transcript (RT 2846)

His father, Dave Sequeida, Sr., owner of Metro Sheet Metal, told San Bernardino detectives on September 30, 2014 that when Joseph went missing, he didn’t think Joseph owed him anything for finished units other than the insurance unit, maybe “a couple hundred bucks here or there,” and that I never owed him anything: (p. 121:9-122:4)

DETECTIVE STEERS: Okay. At the time Joseph went missing, did he owe you any money for any units that were already done?
MR. SEQUEIDA: Other than the one that I got screwed on because of the insurance, I don’t think so. Maybe there was something that might have been minor. I wasn’t worried about it, a couple hundred bucks here or there.
DETECTIVE STEERS: Did Chase owe you money for anything?
MR. SEQUEIDA: Oh, no. I would have avoided that at all costs.
DETECTIVE STEERS: So at no point in time did Chase ever owe you money, or anything? It was always the dealings between him and Joseph and you and Joseph and no dealings between you and Chase? No triangle going on here?
MR. SEQUEIDA: No, especially after I went through the first time when that guy —
DETECTIVE STEERS: The dentist?
MR. SEQUEIDA: Yeah.

See the Sequeida interview (September 30, 2014, pages 121-124)

Asked about the last work he did for Joseph, he told them the Saudi waterfalls (“Dubai” in the interview) and the Paul Mitchell job were all done: (pp. 115:25-116:16)

DETECTIVE STEERS: And maybe you had told my partner when I stepped out. What — what was the last project that you did for Joseph?
MR. SEQUEIDA: It was either — either the — the unit that I never got paid for or maybe the one to (inaudible).
DETECTIVE STEERS: Okay.
MR. SEQUEIDA: Or maybe one —
DETECTIVE BACHMAN: Or maybe one — what?
MR. SEQUEIDA: I don’t even think I did any more after that. (Inaudible.)
DETECTIVE STEERS: Were the ones for Dubai all done?
MR. SEQUEIDA: Oh, yeah. Yeah.
DETECTIVE STEERS: Okay. The ones for Paul Mitchell, they were all done?
MR. SEQUEIDA: Yeah. Those was all done.

See the Sequeida interview (September 30, 2014, pages 113-116)

Later Bachman asked him about the calls to Joseph after the family went missing, and put a figure on the insurance unit himself: “$14,000, or whatever it was”: (p. 124:1-25)

See the Sequeida interview (September 30, 2014, pages 121-124)

Carmen Garcia, who Sequeida said “was handling all the paperwork” at Metro, told Det. Smith a different story about one of the jobs: (Carmen Garcia interview, September 30, 2014, pp. 9:24-11:3)

See the Garcia interview (pages 9, 10, 11)

She is conflating the jobs with the insurance unit. Metro’s own owner, the man who was owed the money, said the only thing still unpaid was the unit he “got screwed on because of the insurance,” and that the Saudi and Paul Mitchell work was “all done” (above). The $4,900 and $3,600 I paid Metro were for those two jobs.

There was no lawsuit against Michael. By her own account the papers were never served on him, she was gone from the business before anything more happened, and she doesn’t “really know what transpired there.”

Det. Smith’s report of the same interview goes further. It says that to Garcia’s knowledge, Metro “never received their percentage” on the two fountains (Bates 007391). That is not what she said in the interview itself: there she said they were paid “for one project but not the other” (p. 10:17-18), and Metro’s owner said otherwise (above). Either way, the report is wrong to say neither was paid.

Sequeida Sr. also told Bachman: (Sequeida interview, September 30, 2014, pp. 17:13-14, 19:5-7)

MR. SEQUEIDA: I never paid Chase or he never paid me, or anything else.
…
MR. SEQUEIDA: He paid it — sometimes he brought it himself. Most of time, Chase brought the checks. You know, a lot of times he just put it in the mail.

See the Sequeida interview (September 30, 2014, pp. 17-20)

That is technically correct. While Joseph was here, all the checks came from Joseph’s account, even the ones I wrote, and most of the time I was the one who brought them. After Joseph was gone I did only one job with Metro; for the others I used Walker in Rancho Cucamonga.

Just before that, Det. Smith asked her about the checks Metro received: (p. 9:14-21)

DETECTIVE SMITH: Okay. What about any — did you ever see anything odd in the checks?
MS. GARCIA: Actually, maybe the last check I thought it was kind of odd. I’m trying to remember why I thought it was odd. It might have been that the signature didn’t look right or — I remember thinking that the last check looked a little odd, but I can’t even — I can’t remember why. I think it might have been with the signature.

See the Garcia interview (page 9)

My accounting of the Junker rebuild

JUNKER Rebuild
merritt paid metro 4500.00
(crating inc) accessories 850.00
merritt paid total ($5350.00)

See what I gave counsel (Folder D, page 83)

My lawyers

What I gave counsel, and what they did with it

On October 16, 2017, I gave James McGee my notes on the checks, with a full accounting of the checks (Folder D). He put them into my permanent file that day.

They quote the February 22, 2010 speakerphone call: the $5,000 wire, “withdrawing and giving direct to Metro Sheet Metal,” and “they will not release the waterfall.” They set out the calls to Joseph after each check, the State’s own bank report, on which I marked “to metro” beside the $4,900 and the $3,600, and my profit-split worksheets for each project.

My notes to counsel

On page 5 of my notes I pointed counsel to DuGal’s report of my February 17, 2010 interview, and to the speakerphone call:

See what I gave counsel (Folder D, pages 75, 76)

(The speakerphone call was February 22, 2010; my note had the date wrong.) On page 6, I went on:

“Reality is the checks were written by me for exactly what Joseph and I had discussed, and the money was dispersed specifically to finish projects that were in the works. This can be seen in my financial breakdown at the end of this summation. As can be seen on this breakdown, I lost well over 20,000.00 dollars combined by completing these projects, where’s the motive.”

See what I gave counsel (Folder D, page 76)

See what I gave counsel (Folder D, pages 36, 37, 38)

My QuickBooks notes, 2017 (Folder F)

In 2017 I gave my lawyers a second folder, on QuickBooks: 39 pages of passages I had copied by hand from the preliminary hearing, the interviews, the detectives’ reports and Bachman’s affidavit, each one tabbed to its page, and twelve pages of conclusions. The conclusions set out much of what is on this page: Hanke’s preliminary hearing testimony that the 2:44 cancellation “was done on a phone call,” when my 107-minute call did not begin until 3:11; Dron telling DuGal that people move from online to desktop “constantly”; Bachman swearing I “later admitted” what I had told San Diego in my first interview; DuGal telling QuickBooks I had never mentioned the calls; and why the old account was never deleted.

That was well over a year before the trial began in January 2019. Most of it was never used.

See my QuickBooks conclusions (Folder F, pages 1-12)

The motion for a new trial, January 2020

Before the motion for a new trial, I gave Mr. Maline a written list of what I wanted argued, and he agreed to argue it. His secretary, Stephanie Jefferson, typed it into my file on January 10 and 11, 2020, a week before the hearing. The checks and QuickBooks items on it include:

• “Second QB representative” and “Failure to call Shawn Flaustine” (page 2). I meant Shawn Augenstein, the representative who took the February 8 request.
• Under Mr. Maline’s own name: “Blake papers – didn’t use,” “1st ck. Written 3 wks after P.M. & S.A.,” and “Failure to call Josh Villanueva & Shawn Augustine” (page 4).
• Under Det. DuGal: “2-22-10 Kavenaugh int. (Def. intent),” “Specifically 4900 payment & 500 glass,” “Show forthrightness of def. (18-19 grand),” “Def. wrote checks,” “Def. called Q.B. (2-4 days after)” (page 11).
• “Checks: Omitted critical evidence” and “QuickBooks: Omitted critical witness (evidence)” (page 17).

See the list (pages 2, 4, 11, 17)

The whole list, which covers much more than the checks, is on the Advocates page.

At the hearing on January 17, 2020, Mr. Maline told the court:

MR. MALINE: “Yeah, before that, your Honor, I wanted to talk with my client. He wanted to talk to me during the break. He informed me, during the break, that he does not want me to continue as his lawyer, also some other issues that would necessitate me filing a — declaring a conflict based on what he has told me at this point. I don’t feel in good conscience based on what I have been told, that I could go forward. That’s where we’re at.” (RT 8869:16-23)

See the trial transcript (RT 8869)

The court held a sealed hearing and refused to relieve him (RT 8870, 8890). So he went on, by his own words under a conflict, and argued prosecutorial misconduct. In the transcript I find no argument about the February 22, 2010 call, my forthrightness, or Augenstein. He argued the cell-tower evidence, DNA, ineffective assistance, Dr. Rudin and prosecutorial misconduct, including the QuickBooks activity at 7:55 and 8:05 on February 4, and he called Mr. McGee as a witness (RT 8838-8930). He estimated 15 to 20 minutes for his misconduct argument, and the court gave him 15 (RT 8868:6-8). His written motion, filed 15 minutes before the hearing, is not reviewed here.

See the trial transcript (RT 8890)

When the court denied the motion, it relied in part on the checks and QuickBooks: (RT 8943:7-11, 8943:20-27)

THE COURT: “Then we know on February 1st and February 2nd, there were checks to Mr. Merritt on Joseph’s account on the Union Bank. The checks were printed and cashed, but the record of those checks were deleted, and that was the first time that had ever occurred.
…
We know that from December 2009 through February 4th or 5th of 2010, nearly $40,000.00 in checks had been written from Joseph to Mr. Merritt, they were cashed by Mr. Merritt, but not deposited into any accounts, there was no receipts or accounting for the money. Certainly supports the — and corroborates the information that Joseph had said to others as to his reasons for wanting to terminate his relationship with Mr. Merritt.”

See the trial transcript (RT 8943)

It went on to the request to delete the account and Baker’s e-mail (RT 8946:2-10, quoted under Claim 9). It also relied on a check Metro said I never delivered: “We also know that Joseph McStay gave a check to Mr. Merritt to deliver to Metro Sheet Metal for payment to Metro Sheet Metal for some of the work they did. And Metro Sheet Metal did not receive that check, and they were inquiring with Mr. McStay about the check, and there was back and forth discussion that it was given to Merritt, Merritt was supposed to deliver it, Merritt didn’t deliver it” (RT 8942:11-17). I never failed to deliver a check to Metro, and Joseph’s check records show it. My lawyers were not allowed to show the jury.

See the trial transcript (RT 8942)

What they did instead

I told my lawyers from the start that I wrote these checks and made these calls. Mr. McGee did say so to the jury in his closing: (RT 8311:11-15, 8343:21-27)

MR. MCGEE: “Now, he also returns home and writes checks and backdates them to the 4th because that’s the date that he was given the checks during the meeting, that was the day he was given instruction by Joseph to write those checks, and he’s calling to let him know he did it.”
…
MR. MCGEE: “What it was, is low and behold, he’s been up front with them since day one. Did they even bother listening to the interviews? Because since day one, he said, yeah, Joseph gave me the checks, told me when to write them, and told me to switch QuickBooks. This is from the beginning.”

See the trial transcript (RT 8311, 8343)

The State argued the signatures anyway, in both of its closing arguments. Mr. Imes, on my February 2 check and the $100 check: (RT 8192:24-8193:8)

MR. IMES: “Why is no computer activity showing a creation of the computer checks? Why are the signatures different? Did you not catch, when you saw these exhibits, this signature on the $100.00 check is distinctly different than the check for $2,400.00? So, maybe, there was an isolated, innocent explanation for the printed check that it was a deposit for the Saudi Arabia project. Okay. That standing alone would point to innocence.
However, when you put it all into context and answer all of those questions about all of the attendant circumstances on February 1st and 2nd, is that now a reasonable interpretation of that check? No. Why would those signatures be different? Better yet, why would they be written and deleted?”

See the trial transcript (RT 8192, 8193)

In rebuttal, the last argument the jury heard, Ms. Rodriguez told them “these signatures don’t match” and that the checks “were forged by the defendant” (RT 8422-8423, Claim 1).

Whose signature was on those checks only mattered if I had denied signing them. I never had. The two checks Mr. Imes compared were signed by two different people: Joseph signed the $100 handwritten check, and I signed the printed check later that same day (Claim 3). Of the February 2 check, I told Bachman in 2014 that I might have signed it, that Joseph was still here then, and that “I never wrote checks without him being okay with it” (Claim 4).

What was missing was the record itself, during the testimony. When Det. Smith told the jury I had admitted only receiving the checks, not writing them (“I’d have to review whatever transcript you are talking about”), Mr. McGee told the court “That statement is in evidence,” but nobody put my interview in front of him (RT 4138:13-23; What I told them, and when). When DuGal told the jury I had claimed a right to move money through PayPal, and was asked to find it in his reports, nobody came back to it after the break. And neither side called Shawn Augenstein, the representative who took the February 8 request; Ms. Rodriguez used that against me in rebuttal (Claim 8).

The recording of DuGal’s May 12, 2011 call with Annette Dron was in discovery, and I pointed my lawyers to it in my 2017 notes. In it, DuGal tells QuickBooks I never mentioned calling them, fifteen months after he read my notes about it aloud, and calls me a bad guy to the witness (Claim 12). Mr. Maline called Dron at trial, and she told the jury the request to move to Pro was one of their most frequent questions. But the recording was never played, and nobody asked DuGal about what he said in it. Mr. Maline’s office had sent Dron the audio and a transcript before she testified (RT 6250), but in front of the jury the transcript came out only to refresh her memory of one passage: Ms. Rodriguez pointed her to page 8, lines 12-18, and Mr. Maline then had her read pages 7 and 8 for context (RT 6276-6277, 6280).

See the trial transcript (RT 6250, 6276, 6277, 6280)

Mr. Maline did get the February 8 transfer request in front of the jury through Baker, over the State’s hearsay objection, and got Mike West to agree the data can be moved from online to a desktop copy (Claims 8 and 9). My lawyers also never used my phone record for January 31, the day the State said I took Joseph’s checks (Claim 1).