Day 17: Bob Mayo Blogs The Cyril Wecht Trial In Pittsburgh

POSTED: 10:12 am EST February 28, 2008
UPDATED: 4:04 pm EST February 28, 2008

Channel 4 Action News reporter Bob Mayo is covering the trial of Dr. Cyril Wecht at the federal courthouse in downtown Pittsburgh. He will be posting blogs as often as possible from court. These are the raw notes that were sent on his mobile device.

Wecht Day 17 - Feb. 28, 2008 - 8:30 a.m. update

Judge Arthur Schwab repeats his periodic reminder to the jurors not to discuss the case and to avoid news coverage. He observes that if they are "news junkies" like he is, then they've probably found that they've gained a couple of hours of productive time as a result of that.

8:34 AM Prosecutor Steve Stallings continues to question witness Bryan Hinds, an accountant who did tax preparation and other work for Wecht's private business.

They're reviewing a financial document from Wecht Pathology. To recap, they had looked at the ($600,996.44) salaries of officers ($540,000) and other employees ($60,996.44) of the business. (Wecht was the only officer of the business)

He testifies that for the pension plan the government requires annual reporting and that every participant get an annual summary. That amount is based on their annual compensation.

The largest portion would have consisted of Dr. Wecht's compensation of $540,000.

Now we're looking at a copy of a Wecht's Dividend Miles (frequent flyers) VISA card statement. Stallings is about to ask about some handwritten notations on this statement. This is a credit card statement from 1999 that was used to prepare Wecht Pathology's corporate tax return for that year.

Hinds says when his office was first engaged to do the work in 1999, there was a woman who did most of the work. He personally took over handling the account in 2001. In 1999 the witness would have reviewed her work.

Now they're looking at a July 14, 1999 from the Wecht Law Firm formally hiring Hinds' firm to take over accounting services for the Wecht Law Firm and for Wecht Pathology.

Back to the Visa bill and why there was handwriting on the statement. He says the card was used for both personal and business. The handwriting is notation from the client indicating which are business expenses. Hinds says the handwriting looks like Dr. Wecht's. The business portion of the bill charges were paid with a business check. In this case, the $299.49 payment would have been considered a business expense of Wecht Pathology.

Stallings turns to another exhibit -- an American Express card statement provided to him to assist in preparing the tax return. There's a handwritten notation on here noting that it was paid for with a business check. In this case, the witness says he was initially told by Maribeth Blettner (Wecht's former secretary) that the American Express cards were to be considered all business expenses.

Stallings asks if he had to later verify that. Hinds says they analyzed the statements and "pulled out" those that did not appear to be business expenses. He knew, for example, the entire family would take annual trips for Florida. He said when grandchildren were going to Florida, that probably was not a business expense--so he would pull those out.

Next exhibit: the accounting firm's summary of 1999 payroll. It lists Cyril Wecht, Maribeth Blettner, Darlene Drewery (Brewer), and Florence Johnson as "W-2" employees.

Another exhibit: page one of Wecht Pathology's general ledger for the year 2000. The last page of the general ledger and the next to last page. There's a handwritten note from Pam Daubner (sp), a woman in his office. It says that she was told these were all business charges, but that she pulled out charges by Ben, Sigrid, and Ingrid that were apparently not.

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Now we're looking at a Profit and Loss detail for Wecht Pathology from January through December 2001.

Next, we're looking at a file copy of the tax return for the business for 1999. Stallings highlights the portion marked "income". The gross receipts on sales is $929,438. He says it would have come from the general ledger. Now we're looking at the deductions. the compensation of officers --- Wecht's salary-- is $540,000, a figure we saw earlier. The total deductions are $904,175, leaving the taxable income of $28,263.
Stallings questions whether a figure like that is unusual for a business of this size and type.
The return also shows credit for an overpayment of the previous year of $1,217 and estimated payments made of $11,143.
The bottom line: the return lists an overpayment of taxes for the year of $5,968.

Q: Can you tell us what line on here would have included the expenses from the American Express bills? A: Line 26, which references a statement. it's included as a subset within an overall figure of $208,788.

Now, we're looking at Schedule E, compensation of officers. Wecht is the only officer --$540,000. There's a column that asks "percentage of time devoted to business." It says "100 percent." He says that's standard and the accounting firm would have put that in without a discussion with Wecht. His accounting firm would not have mailed the return to the IRS. It would have been provided to Wecht to sign and mail.

Now we're looking at the statement from the tax return that would have listed the American Express bill expenses. It would have been reflected largely within travel of $24,429 and 50 percent of meals and expenses of $8,010. Now we're looking back on the return at the total tax on line 31: $6,392; that's a flat rate of 30 percent of the taxable income on line 30. That comes from line 28, which depends in part on the deductions of $208,788 discussed earlier.

Next: the year 2000 tax return. Total income: $1,096,039 (???? double check figure ????) .... that's from the books of Wecht Pathology. Other deductions of that year $260,837.

The tax due that year after taking into account estimated tax payments is $2,764.
Again in 2000, Wecht is the only compensated officer, with a compensation of $623,527.

Now we're looking at Wecht Pathology's City of Pittsburgh business privilege tax return. He says they'd sent them the prepared Federal, state, and city returns together to Wecht's administrative assistant.

Now, the 2001 return. It show $1,074,??? total income. (Aside: the figures are being said too quickly and flashed on and off the screen too quickly to note them completely. I'm going to look for a larger pattern or prosecution point here, rather than document the detailed figures at this point.)

9:24 AM The testimony of Bryan Hinds is continuing.

9:25 AM : Stallings asks Hinds if the firm ever give him any expense invoices from Wecht Pathology to the private clients. Hinds answers no--- that "there was no need to".

Did he have any role in preparing Wecht's personal tax returns. Hinds says that, no, he did not.

9:35 AM Judge says they will take a break until 9:50 AM.

9:53 AM We're back. Judge Schwab tells the jurors that he's providing them with "three dozen homemade oatmeal chocolate chip cookies" and that "We want to make sure they don't slow your return back from the break".

Assistant U.S. Attorney Steve Stallings resumes his questioning of Wecht's accountant Brian Hinds..

Next document: a copy of a Wall Street Journal article with a handwritten note from Wecht to Hinds: "What's this about and can I do it? If the next VP of the United States can.."

It's an news article about the tax returns of former vice-presidential candidate John Edwards and how his corporate taxes were structured.

Now we're looking at a 2004 profit and loss statement from Wecht Pathology.

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Another document: the 2002 tax return of Wecht Pathology: for the first time there is a listing of costs of goods sold: $160,501. He says it was a matter of presentation.. a way he decided to categorize an item related to a contractor. This tax return shows an overpayment of $4,000. Once again, Wecht is the only compensated corporate officer. His compensation was $620,000.

Next: 2003 return. Almost $1.26 Million in corporate receipts. $664,000 compensation for Wecht.

2004 return: $555,000 compensation for Wecht.

In 2005 he began having to deal with Wecht's wife, Sigrid Wecht concerning the return. In a letter, Hinds asked Mrs. Wecht for "the amount of expense reimbursement checks that Dr. Wecht has cashed during 2005 that did not get deposited into the corporate account". He says he had gotten a call from attorney Stanley Preiser... a member of Wecht's legal team... asking about it.

Hinds says he called Sigrid Wecht and she confirmed that from time to time this did occur. These checks would not be deposited into the account of the corporation. Hinds says he told her "this has to stop". He says he told her that those checks have to be deposited.

The corporation was paying for various expenses and that when the money came in, it wasn't be deposited into the corporation; it was being cashed and not entered into the corporate books.

He says he had "no idea whatsoever" this was doing on. He says it was income to the corporation and Hinds acknowledges it would have an effect on the tax obligation.

Defense attorney Jerry McDevitt objects and says there are no tax charges in the indictment of Wecht. The judge asks Stallings if he agrees to stipulate to that point. Stallings does, but when the judge allows Stallings to continue with this line of questioning, McDevitt objects again. There's a terse back and forth. The judge allows the line of questioning to continue.

Hinds says he was told that for 2005 the total of the expense reimbursements checks cashed by Wecht and not deposited was the neighborhood of $20,000.

Hinds says he did not ask about prior years. Stallings: did the defendant approach you with a question about prior years? Yes. Got call from Dr. Wecht inquiring about 2001 though 2004, and asking about amending those returns.

Hinds says he conveyed to Wecht he didn't feel that was the right thing to do. Hinds says he didn't know what numbers he would use, and that it's not the sort of thing you would guess at.

Did you come to learn that amended returns had been filed? Yes. This past summer he got and returned a call from Dr. Wecht. Wecht told him he got a message from the IRS. It was an interest note for a prior year. The IRS was charging interest on the amount in the amended returns that Wecht had filed. What was the total amount for 2001 through 2004 that the defendant included on his amended returns. A: Based on the tax paid..it was over $100,000 total for 2001 though 2004. and $20,000 for 2005. Approximately $20,000 a year in cashed checks that did not get deposited into the Wecht corporate accounts.

10:21 AM Stallings: That's all I have, your honor. McDevitt stands to cross-examine witness Hinds.

McDevitt: Would you agree Dr. Wecht never told you to cheat on taxes? Hinds: Correct. Never told you to cut corners? No. Can you cite a single instance where you asked for information and didn't get it? Can't think of any.

This call from Mr. Priser was in 2005? McDevitt's questions frame this possible bookkeeping errors by Wecht's secretaries which Wecht's attorneys were trying to reconstruct and correct.

Dr. Wecht told you that what he wanted to do was amend the tax returns and do the best he could to (make this right)? McDevitt: There's not a tax charge in this criminal case, is there? Hinds: No. McDevitt attempts to ask about the investigation of Wecht and whether authorities had been looking into trying to pursue tax charges against Wecht. The prosecution objects and the judge sustains the objection. McDevitt asks for the reason for the objection: "I want to make a record" and "what is the basis of the objection to the question". Did you meet with agent Orsini? Who was with him? Mr. Stallings and someone from the IRS. Met several times.

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McDevitt establishes that Dr. Wecht relied on his secretaries and Hinds' accounting firm to prepare his financial and tax return information, and wasn't personally involved in the details. Q: Would you say this is a routine bookkeeping error? A: I don't know how return it is; it is a procedural error. Q: It was corrected? A: So far as I know.

10:38 AM McDevitt's cross examination of Hinds continues.

10:39 AM McDevitt points out in court document to Hinds: a category in Wecht Pathology's books called "810 - Reimbursed Expenses".

10:40 AM Do you understand now that what Dr. Wecht did was charge clients two bills, one for services and one for expenses? Yes.

McDevitt reviews secretaries procedures with Hinds. He notes that clients were instructed to write two checks, on for professional services and one for expenses.

He also notes that when clients wrote a single combined check, a check was made out to Wecht for that expense reimbursement portion.

10:45 AM Re-direct questioning of Hinds by Stallings.

10:46 AM Hinds' testimony concludes.

10:50 AM Next prosecution witness: Diane Riggle, legal assistant who worked at a law firm that represented a coal company. Wecht represented a widow involved in a black lung case involving that company. There is brief testimony concerning the billing of the company for autopsy slides. She made a check payable directly to Wecht. She dealt with secretary Eileen Young.

10:58AM Lori Newman (sp?) Paralegal for Burns, White, and Hickman for 8 1/2 years. In June 2004 worked for Christopher Pearson, an attorney at the firm.

Prosecutor Jim Wilson shows her a document. At that time her name was Lori Peffer. Did work on the Thomas J. Bosek case. Her role was to obtain medical records or tissue slides. She had occasion to be in contact with Wecht Pathology.

He shows her documents and has her confirm that the check cut to pay for the slides was made payable to Dr. Cyril Wecht.

Cross examination by defense attorney Mark Rush. His questions establish that this was a black lung case.

11:06 AM Stallings asks the judge to read into record the two statements submitted to the court.

Two judicial notices:

-"I have taken judicial notice of certain facts. that" area codes (reads a list) are outside the state of Pennsylvania. Faxes transmitted to those area codes are interstate wire transmissions.

- That Allegheny County received federal funding in excess of $10,000 for the years in question.

11:11 AM Stallings calls his next witness: James Flynn. He's the County Manager of Allegheny County. Has been since January of 2004. He's the highest ranking non-elected official in Allegheny County government's executive branch. He's responsible for the day to day operations of Allegheny County's executive branch.

He's responsible for overseeing the preparation of the annual county budget. His job is an appointed position. He was appointed by County Executive Dan Onorato and reports to him. Before that Flynn was deputy county controller, starting in February of 2000. The controller's office is responsible paying the bills and payroll of the county. There's also an audit division and a computer division. In the controller's office he reported directly to then-controller Dan Onorato.

During the period in question, both the controller's office and coroner's office were "row offices" -- independently elected county offices. Procurement and purchasing and budget preparation of the row offices were covered by the county ethics code and the second class county code (and administrative code).

Under the county ethics code, are there prohibitions on the use of public resources for private gain?

Flynn: it lays out various prohibitions. Does it apply to row officers? Yes.

He doesn't know what was applicable prior to 2000. He's also not aware of what state rules may be applicable.

Do row officers typically get use of a county vehicle, paid for by the citizens of Allegheny County? Some did. Coroner's office among them. They are issued a county credit card that is res

Did the county ever authorize the defendant to use his vehicle for private financial gain?

Objection. Judge tells him to rephrase.

Did county authorize it? Not aware.

Did her ever ask for such permission? Not aware.

Did you ever permit the defendant to use his vehicle for private financial gain? Not that I recall, no.

Asks about use of county computers.

Shows Flynn a document -- part of county computer policies from Allegheny County Division of Computer Services.

Looking at section: "employees shall not use county computer systems for personal or non-county business related purposes".

Next: County's Electronic Mail Security Policy. Authorized Usage: "generally must be used for only (county) business activities". Also says must not be used for "political advocacy efforts, private business activities".

This policy is dated July, 2002.

Q: As county manager, did you ever authorize the defendant to use county computer resources in contravention of this policy? A: No.

Shows another document: a form filled out--a request from Wecht for access to the county computer network by Wecht.

The document includes a section that says "employees should not use e-mail for such purposes as soliciting or proselytizing for private commercial purposes."

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Did you ever authorize the defendant to use county labs for private financial gain? No.

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Stallings walks Flynn through a county government "request for executive action" on a contract.

Moves on another document:

"Addendum to Memorandum of Understanding with Wecht Pathology Associates".

Q: Does this appear to be a contract with Allegheny County? No, it does not.

If the coroner's office wants to get county approval for a contract, what the procedures? Submit a request for executive action, it would go through a process of review by the county law department and then submission to him as county manager.

Stallings shows another document: a January 18, 2006 letter from Wecht to the county solicitor.

From January 2006 on, there was no longer a county coroner's office. Wecht was the acting medical examiner until later that month.

Stallings establishes that he was asked to determine if there was contract between the medical examiner's office and Carlow University. He was asked. He found none.

(McDevitt objected that the question doesn't make clear who asked. The judge overruled the objection.)

Stallings moves on to ask about the county establishing a merit hiring policy and establishes that row offices, including the coroner's office, established their own.

Another document -- the coroner's office policy. It includes this: "All employees of the county coroner's office are subject to the Pennsylvania Ethics Code."

Stallings asks about any county audits of the coroner's office. Shows Flynn document: A 2004 performance audit of the Allegheny County Coroner's Office by the county controller after Flynn had become county manager. A performance audit is not designed to catch fraud -- they examine processes. Financial audits look at financial statements but are not designed to catch fraud either.

Next: a May 2, 2003 letter referencing a financial audit of the coroner's office when Dan Onorato was controller and Flynn was deputy controller.

Next document: a 2001 statement of financial interest form filed with the county by Dr. Wecht in February 2005. Stallings establishes though Flynn that there's no county enforcement provision when not filed. Wecht shows that Wecht's 2002 statement was filed in 2005 as well.

12:06 PM McDevitt begins cross examination of Flynn. He asks if the county has any criminal penalties associated with the home rule charter? Flynn says he doesn't believe any were enacted.

Do you know the relationship between the home rule charter and the second class county code, if there's a conflict? Flynn says he's not aware of any conflict.

McDevitt asks if there are not parts of the second class county code that gave separate powers to the coroner, not subject to the politicians on Grant Street.

His decisions could not be overruled if they were duties of the coroner? Flynn says yes, except for the exceptions mentioned earlier. McDevitt asks if the power to decide what to do with unclaimed cadavers was the coroner's alone. Flynn agrees.

You wouldn't be here to pass judgment or express any view on what Dr. Wecht did with cadavers when he was coroner of Allegheny County? Flynn says he's here under subpoena.

Acknowledges that Wecht didn't need his approval for disposing of cadavers unless it involves a contract.

McDevitt refers a portion of the law that speaks about "inconsequential financial impact".

Now asks if the county computer policy applies to computers provided by and purchased by the county to employees. Flynn says yes.

McDevitt asks there's never been a prohibition against a county employee holding a second job, has there? No.

Q: There's never been a prohibition against Dr. Wecht purchasing a computer for one of his employees to use in her private and public work? Acknowledges there was not.

McDevitt asks if he was ever present in the coroner's office with Dan Onorato to discuss politics. Flynn says he doesn't recall such a meeting.

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Do you know of one individual employed by Allegheny County who's ever been prosecution for violation of federal mail fraud? No.

In the history of Allegheny County, for violating computer policy? Says there may have been some recently. McDevitt suggests there aren't other than Wecht.

McDevitt : do you have any knowledge that Dr. Wecht ever *directed* anyone to use county labs for private business? He does not.

Do you think it's a secret Dr. Wecht was doing all this consulting work? Acknowledges seeing news reports.

Would you agree Dr. Wecht's activities was known everywhere in this county and in this country?

Did you he was doing private consulting work? He did.

Did Dan Onorato? Says doesn't know.

Did you ever discuss it, did he express surprise? I don't know what we discussed.

12:30 PM break for lunch.

1:34 PM McDevitt's cross examination of Flynn continues. Did Dr. Wecht ever give you signed copies of any of the books he's written. He says he gave him one. He read through bits and pieces of it. Gave Mr. Onorato a copy? Yes. Same time as him.

Do you know if the book describes his private work at the coroners office, and parts were written by people from the coroner's office. He doesn't recall.

Shows Flynn a document. You see the name "Grace Ann Geibel". A: I think she was president of Carlow College. Testifies he doesn't know about Wecht's agreement with Carlow.

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McDevitt moves on to discuss state requirements for filing statements of financial interests under the ethics law. Asks him who has enforcement responsibilities if someone files falsely. He doesn't know.

Asks him if he's familiar with the honorarium portion of the state ethics code. He says he's read them.

McDevitt reads a portion of the code to him and then asks him if understands it. He answers no, that he'd have to go over it more slowly. McDevitt asks if portions of the code are poorly written. Flynn says some of them are.

Asks Flynn about meeting with FBI Agent Orsini in August 2005. Did he tell the agent that Wecht's name and reputation are very good, aside from this investigation? Yes.

Acknowledges that Onorato appointed Wecht acting medical examiner until Wecht resigned because of this investigation.

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McDevitt has them go over the county controller's performance audit of the coroner's office, noting the only significant recommendation is for a centralized database.

The audit notes that some of the responsibilities of the coroner's office is "the disposal of unclaimed bodies".

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Is there any training that Dr. Wecht attended or the county provided on the e-mail and computer usage policies? Flynn says that there are programs for newly hired employees.

Asks if there's any specific federal law that governs whether a state or local official uses an office fax machine? Flynn: I'm not aware of any.

2:12 PM Re-direct by Assistant U.S. Attorney Steve Stallings. Establishes through his questions

What did he do to determine whether Allegheny County had any contracts with Carlow University? Checked through records of executive actions. Did not find any. Did he after that approve any agreement to ship bodies to a private institution? He doesn't recall that he did. Is that something he would remember? Yes.

Calls up a document from January 18, 2006. A letter from Wecht to the county solicitor about it. Stalling says the letter to a contract "that doesn't even exist".

In response to Stallings, assuming that there is a value to a human cadaver, Flynn says the value should come to the county.

Shows Flynn state statute on removal of bodies to morgue. Asks if he found a single certificate signed by the coroner as described in the law that authorized sending a body to Carlow. He answers no. Flynn, in answer to Stallings question, says he is not aware of any authorization under law for Wecht to do so.

Were you aware that the defendant had George Hollis preparing slides for his private business? No.

Were you aware that Dr. Wecht was having Eileen Young do work for his private business at the coroner's office on county time? No.

Were you aware Dr. Wecht was taking his county car to other counties-- his private clients-- and billing them for mileage? No.

2:28 PM Re-cross by McDevitt.

Does the Register of Wills register the wills? Flynn says he doesn't know. Clerk of courts? Did the person elected clerk of courts do the actual clerking? He didn't know.

Have you ever heard of the district attorney of Allegheny County trying a case in his life? Doesn't recall. acknowledges he has assistants. Has her ever heard of the U.S. Attorney for Western Pennsylvania trying a case? He doesn't know.

Defense enters into evidence the contract of the current Allegheny County Medical Examiner, Dr. Karl Williams. It's signed by county executive Dan Onorato.

His salary is $175,000 plus benefits. It says that he may engage in certain outside engagements as detailed in an attachment. He acknowledges he may not use county property or personnel in furtherance of non-county business and that any outside engagements must be approved in advance by the county manager.

McDevitt directs his attention to the coroner's statute within the county code. It says the coroner may order the removal of parts of a decedent's body for donation purposes in accordance with the law relating to anatomical gifts.

McDevitt asks, if you don't know that law, you don't have a clue whether Dr. Wecht can provide bodies to autopsies to Carlow? Flynn answers no. McDevitt asks Flynn if he's aware of any evidence Wecht ever sold an unclaimed body to anyone? Prosecution objects.

The defense lawyer asks whether Flynn knows or not whether the coroner had the authority to donate a body for research. Flynn says he's not familiar with that law.

2:43 PM Stallings: regarding that law, you don't know if the defendant got it wrong, do you? No.

Stallings asked if he ever saw anything in writing from the defendant authorizing an anatomical gift to Carlow? No.

Stalling asks whether the defendant had authorization for to benefit economically. Flynn answers that any financial benefit should go to the county.

The prosecution asks whether he'd find it unusual if U.S. Attorney Mary Beth Buchanan were in this courtroom representing private clients, using her government secretaries to do work for her. Flynn says he would.

2:40 PM Former Chief Deputy Coroner Joseph Dominick is called as a witness.

Joe Dominick is being questioned by Assistant U.S. Attorney Jim Wilson.

Currently works for UPMC in neuro-trauma step down unit. It deals with brain injuries. He's been there since August 2007.

Was with coroner's office until June 2006. His training includes the Pittsburgh Institute of Mortuary Science.

In January of 1996 was a deputy coroner at the Allegheny County Coroner's office. His testimony he's indicating he progressed through the ranks.

He says his job as Chief Deputy Coroner was the top management position under the coroner. He dealt with budget, management, hiring, firing, dealing with the news media. Dominick is testifying that in that job he would have direct contact with the coroner every day, sometimes several times a day. His office was on the same floor, just steps away. During the period from 1999 to 2005, a typical day? He'd review reports from the previous night. Payroll issues. Meeting with families. Attending inquests, as well as coroner's office meetings. Updating Dr. Wecht, visiting the autopsy rooms and the coroner's deputies' office.

He'd interact with the deputies on a fairly regular basis. Those deputies worked on three different eight hour daily shifts. His own workday was 9 AM to 5 or 6 PM.

Over what aspects of the office would you have management authority? Dominick says technically the whole office. By that he says he means that in some sections there were managers with special expertise who operate without much direct involvement from him. Autopsies, histology, photography, for example. The secretarial staff was run by Ann Marbury. the administrative assistant was over Marbury. The administrative assistant reported to Dr. Wecht.

Wilson now asks if he was aware of what has come to be called Wecht details. Dominick answers they were personal errands by deputies or other staff members conducted for Dr. Wecht. Transportation to and from airport. bringing people to and from office. Mail runs to his private office. Drop off and pick up things there. Trips to Duquesne University.

The frequency of these events? A: Depended. Could be once a day or multiple times in a day. Regularly in the course of a given week. Mail runs between the private office and the coroner's office could be more than once a day.

How would a deputy learn of a trip to the airport? It could be posted on advance notice, or on an intercom or phone call. If he got the information, it could be Dr. Wecht relaying it through him or one of the administrative assistants. Flo Johnson was an employee of Dr. Wecht's private practice but she was regularly going to and from the coroner's office. She had an access card to get into the coroner's office back door. He doesn't remember how he was told to get the "swipe card" for this non-county employee. He doesn't recall if it was directly from Wecht's instruction. Johnson also was assigned a parking place.

3:25 PM: Judge recesses trial until Monday.