Jack Norman Myers, a Malibu investment banker and longtime associate of Richard T. Silberman, admitted Thursday at the San Diego financier’s money-laundering trial that he knew all along that the two deals at the heart of the case were illegal.
But Myers, who agreed to testify against Silberman under a plea bargain struck a few weeks ago, said he had no idea that the cash he helped move in the two transactions had been portrayed to Silberman as the proceeds of Colombian cocaine dealing.
Although his testimony was of no help to federal prosecutors on that critical point, Myers also said he knew of no threats aimed at Silberman, rebutting a key defense contention. And he said Silberman once disclosed that he was ready to protect the two of them “with muscle.”
Myers appeared at ease on the witness stand, even laughing as he listened to taped discussions with Silberman of the deals. Their conversations, which had been secretly recorded by the FBI, were laced with raunchy bantering between the two old friends.
In contrast, Silberman, who has known Myers since both were active political fund-raisers for former Gov. Edmund G. Brown Jr., appeared ashen as he sat through Myers’ testimony.
Silberman, 61, a prominent businessman who served as a top aide in the Brown administration, is standing trial on seven counts stemming from allegations that he laundered $300,000 that an undercover FBI agent characterized as the proceeds of Colombian drug deals.
If convicted, he faces up to 75 years in prison. His trial, which began two weeks ago today before U.S. District Judge J. Lawrence Irving, is expected to last six weeks.
A couple of days before testimony began, Myers, 44, who had been indicted last year with Silberman, agreed to a plea bargain. Charged with being a courier in the alleged money-laundering scheme, Myers pleaded guilty to one criminal count of violating federal currency laws.
Under the deal, Myers, who was once married to Los Angeles socialite Lynn Wasserman, daughter of MCA Chairman Lew Wasserman, agreed to testify against Silberman. In exchange, prosecutors agreed to dismiss five related charges against Myers and to recommend that he receive a maximum sentence of six months at a minimum-security federal prison.
Myers said Thursday that he had invested in 1988 in Silberman’s San Diego-based gold mining company, Yuba Natural Resources, but was having cash-flow problems that November when Silberman had a suggestion.
Silberman wanted help moving money that nervous Mexican businessmen had stashed in American safe-deposit boxes, Myers said. The Mexican investors wanted to move the money out of the United States without creating any records, Myers said.
Myers’ testimony on this point was in line with a defense contention that Silberman was merely moving money in confidence for Mexicans. Prosecutors contend that that is nothing more than a cover story.
Myers said, however, that he knew that what Silberman was proposing was illegal because federal law requires that a report be filed for any transaction involving more than $10,000.
However, Myers said, he was attracted by the fees the deal could generate and eventually was put in touch with an investment broker who said he could move the money, Terry Ziegler, 45, of Moorpark in Ventura County. Ziegler, indicted on five charges related to the alleged laundering scheme, pleaded guilty April 10 to a single felony count.
The first deal, prosecutors contend, involved a swap of $100,000 for stock in a Silberman gold mining subsidiary.
On Nov. 30, 1988, Myers said, he and Darryl Nakatsuka, 43, of Los Angeles, picked up $100,000 from the undercover agent, Peter Ahearn, in a Los Angeles airport hotel. Prosecutors contend that Ziegler broke the money into smaller sums over the next few days before wiring it to a Hong Kong account they say was controlled by Silberman.
The second deal, according to prosecutors, was an exchange of $200,000 for U.S. Treasury bonds, again arranged by Myers, through Ziegler. It swung into action on Feb. 22, 1989, when, Myers said, he and Nakatsuka collected the cash from Ahearn at a San Diego hotel.
Ahearn expected $176,000 in bonds, after subtracting for commissions, Myers said. But when he picked up the bonds from Ziegler, Myers said, they were as much as $50,000 shy.
“We delivered them as they were,” Myers said, adding that Silberman told him, “Let’s just give it to them, we’ll see what happens.”
What happened, Myers said, is that Nakatsuka, who worked for Ziegler, said to both Myers and Silberman that he was tired of defending his boss and was prepared to “take you out in 15 minutes if I wanted to.”
At a March meeting in Encino, Myers said, he discussed the discrepancy with Robert Benjamin, who is a key government informer in the case, and Carmine DiNunzio, an associate of reputed mobster Chris Petti. It was through Petti that Silberman met Ahearn, according to prosecutors.
Defense attorneys contend that Benjamin coerced Silberman into the second deal by threatening his family. But at that March meeting, according to Myers, when DiNunzio “got threatening,” Benjamin, in a “very quiet, polite voice,” said, “Be quiet, Carmine, eat your soup.”
Myers said he knew of no threats directed at Silberman--from Benjamin or anyone else.
Meanwhile, Myers said, Silberman assured him: “Don’t worry. I can protect us with muscle if I want to. I’ve got the guy who runs Southern California.”
Myers did not explain the reference.
To try to make up the shortfall in the second deal, Myers and Silberman suggested a third deal, in which they would cut their commissions but move a large amount of cash. Myers said he understood the deal would involve $1 million.
Silberman was arrested April 7, 1989, moments after leaving a San Diego hotel room where, Ahearn has testified, they were negotiating the third deal.
Myers is scheduled to testify again today under cross-examination from lead defense lawyer James J. Brosnahan.