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This is part 4 of the testimony of Joseph Lauricella, regarding a suit against someone accused of stealing computer files. Mr. Lauricella testifies that he was paid by WMX, the giant waste handling firm, and a WMX subsidiary - called Rail-Cycle - to create a fake environmental organization, buy the stolen computer files, and attempt to discredit a company opposed to a huge WMX landfill project in Cadiz, California. The proposed operation would handle the garbage of Los Angeles and would become the world's largest dump. Cadiz Land Company says it would jeopardize a precious ground water resource. (Back to Part 3 for previous tesimony.)

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

No. CIV 97-1286

CADIZ LAND COMPANY, INC., et al., Plaintiff,

vs.

CYNTHIA EISENBERGER, individual, 

Defendant.

SWORN STATEMENT OF JOSEPH ERNEST LAURICELLA taken on behalf of

Plaintiff, at Valley Medical Center, 751 So. Bascom Avenue, San Jose,

California, commencing at 10:20 a.m., Saturday, August 2, 1997, before

Sharen H. Dains, CSR No. 2040.

A P P E A R A N C E S:

FOR THE PLAINTIFF:

MILLER & HOLGUIN

BY: Deborah A. Klar, Esq.

1801 Century Park East

7th Floor

Los Angeles, CA 90067

I N D E X

WITNESS: JOSEPH LAURICELLA

EXAMINATIONPAGEBY MS. KLAR5

EXHIBITS:  NUMBER

DESCRIPTION

PAGEDThree-page Document20EDocument CLC 23 - 4923FBates Stamped CLC 50

-5627GOne-page Document CLC 005831HOne-page Document CLC 4533IMinutes of

Director's Meeting38JHand-out Document47KLetter of October 10, 199653

(All exhibits were retained by Counsel)

JOSEPH ERNEST LAURICELLA,

having first been duly sworn, was

examined and gave the following statement:

MS: KLAR: This is a continuation of the sworn statement of Mr. Joseph

Lauricella.

Q. Mr. Lauricella, yesterday at the conclusion we were talking about a

visit that you had with other individuals on the Securities Exchange

Commission. I'd like you to go back to that and tell me if you recall

when you visited the SEC?

A. I preface this all again with the same problem: Without having my

actual file with me that gives the dates and times, it's going to be

really hard.

The things I did for the company, maybe four or five times a day on a

constant basis -- try to remember one incident as far as the dates are

concerned -- I can tell you what happened at the incident, because that

was more important than the dates at that point in time.

If the court were giving me an order to give my computer back and give

the information back, I can give you a date in time. My dates are all in

the computer. But I can tell you what happened.

Q. Who went with you to the SEC?

A. There was Paul Limon -- strike that. It was Jay Marti and it was Mr.

Paxton and Jessie, I believe, and myself. I'm really not sure Jessie

went with me or not, but I know that it was Marti and myself and Paxton.

Q. And in advance of that meeting, is it correct that you received a

packet of materials from Mr. Odell that you were instructed to deliver

to the SEC?

A. Well, I was given a package of material from Mr. Glen Odell, but I

was not instructed to give that material to either Mr. Marti or Mr.

Paxton for them to present to the SEC, because I was at that point in

time consultant to Waste Management, and since the material was

inflammatory to say the least, and pertained to materials between Cadiz

Land Company and Waste Management, because there was some stuff in there

that wasn't true, I was not to hand that person -- nor take part in any

verbal discussions with the SEC.

However, we went to the SEC and actually sat down, it was in a glass

office there and we all sat down at the desk, Jake didn't say anything,

Ed Paxton froze up, so all three of us are sitting there like bumps on a

log, so I proceeded to give the spiel and hand over the information to

them.

Q. Now did Mr. Odell instruct you to have Mr. Marti hand over this

information for the presentation?

A. Hand over the information and to give a specific statement to the SEC

in regards to the wrong-doings, purported wrong-doings by Cadiz Land

Company and more specifically Keith Brackpool.

Q. Now did Mr. Odell tell you why he wanted this information presented

to the SEC at that time?

A. Yes, it was to sink a submarine deal that was going on at that point

in time with Sun World and Cadiz Land Company. And also the general

thing was the submarine -- or to sink, what we used to call the

submarine, Cadiz Land Company, drop their stock down so they couldn't

afford to sit there and mess with Waste Land Management and our landfill

project.

If Glen Odell and people in the office figured that Cadiz Land Company

were too busy keeping their stock and their company alive, then they

wouldn't bother to try to screw with us in our landfill project.

Q. Did Mr. Odell tell you that there was information in this packet that

was presented to the SEC that was not true?

A. Mr. Odell would not have said that it was not true. Mr. Odell would

have said that it was -- and he did say that it had their own spin on

it, that kind of thing. And we both were led to believe -- or I was led

to believe along with Mr. Odell telling me, basically we can't say it's

not true, but the spin on it is their spin.

Q. "Their" being Waste Management?

A. Waste Management spin. However, he did note there were certain facts

and figures in there that I had told him because I had gathered some of

those facts and figures, were incorrect. And I had told him those facts

and figures were incorrect at the time I gathered them, and he proceeded

to let those facts go to the SEC, because it went better against CLCI

than to have the actual facts and figures the way it worked.

And he knew they were not right. He knew they were a lie, I guess is

what I'm saying.

Q. Do you know if the SEC took any action in response to the information

that you presented?

A. What the gentleman at the SEC said was he would take the information

and they would open up a file on it and they would proceed to look into

it. But that they would not contact and let us know anything had been

done, because they didn't do business that way.

And that they -- we would not know whether it would be done. The only

way we would know if anything had been done was if they went public with

it.

At that point in time he said thank you for your time, very, very,

interesting, we like to have problems like this brought to our attention

especially companies -- because the way we portrayed it we were trying

to screw their investors, basically. And that's because it was the way

it was presented by me to Glen.

Q. After you left the SEC did you call Mr. Odell?

A. Called him before and after. I called him during the whole trip over

there because that wasn't the only thing we did on that trip.

Q. What else did you do on that trip?

A. The same package we put together for SEC we put together for Church.

By the "we," was the San Bernardino Sun and maybe the reporter is

strictly -- maybe a one to one paper.

But we went to the San Bernardino Sun, and we also went to the Inland

Daily Press, same packet of information, and we also went to the lawyer

who is handling Sun World's -- I believe Sun World's debts or the

bankruptcy from Sun World.

Q. Does the name Sidley and Austin ring a bell, name of a law firm?

A. Without having my records telling me exactly -- but I do know it was

the lawyers for the --

Q. Sun World was in bankruptcy?

A. Bankruptcy and Wells were the lawyers who were handling the

bankruptcy or they were the ones handling something to do with the

acquisition by Cadiz.

And bearing in mind, too, when I was sent to this lawyer, this was not

something I had picked out, it was something that Glen Odell had picked

out.

Q. And what did Mr. Odell tell you to do with the package?

A. Get in there or Jake Marti and for Ed Paxton to get in there and see

this attorney, and try to queer the deal that was going on between Cadiz

Land Company and Sun World and to do as much in the game.

What he wanted me to do, what he wanted them to do basically is to say:

How could you trust this person, Keith Brackpool, because this is all

the stuff he's done, and the stuff we brought in -- the package we

brought was all the BS, the stuff that wasn't true.

But when Glen Odell found out in the past what he could do if you pile

up enough untruth down there, they don't go down and investigate the

stuff themselves, and we felt at least me might make some point that

way.

Q. Yesterday when we were speaking you mentioned a reporter that was

hired by Waste Management to do this rider; was that Church?

A. No.

Q. Do you remember the name of that reporter?

A. If I had my file I could give you all this stuff. I'm at a loss for

names and dates, really, because that's something I file and don't

bother with it after that.

Q. Do you know if Waste Management ever attempted or paid Church for an

reporting?

A. I can't say for positive. There were a lot of sweetheart deals made

for a lot of reporters that we did stuff for, acknowledged a lot of

stuff back-fired on Glen.

But, you know, it's kind of like the reporter we took up to Washington

to the landfill site up there. Reporter went and either three or four of

the people from Cadiz went up there, a landfill on a three-day visit.

We took the reporter up even though the reporter paid for it herself, we

pretty much wined and dined her at the time we were up there. Her name

was Julie and I believe -- I would have to guess -- she was the reporter

we took up.

Q. Did she prepare a story afterwards?

A. She did about a three-part story, of course it was in our favor.

(Off the record discussion.)

BY MS. KLAR:

Q. back on the record. That report, though, had nothing to do with

Cadiz, that had to do --

A. Had to do with Cadiz.

Everything we did had to do with Cadiz. If you look at them, none of

them are talking about the landfill i.e. by itself, it's also talking

about things Cadiz is doing to rape and pillage the land out there,

which is having a farm produce vegetables, which is kind of weird. We're

talking about we're putting a landfill in and you guys are putting a

farm in and you guys are raping the land and we are not.

Q. Interesting perspective. When you went to deliver the materials to

the law firm, did Mr. Marti and Mr. Paxton go in and deliver it?

A. You know, I believe what happened was Ed Paxton, I believe, stayed in

the car with Jessie, I think. More I think about it, Jessie was there

because I think Ed stayed in the car.

Ed wasn't feeling well at that time and he gets -- we were driving a

brand new car that was the company -- that Waste Management paid for,

and it was like this luxury car, but Ed Paxton said it was too small and

he was grumpy, so he stayed in the car. And Ed was kind of a grumpy kind

of a fellow.

Q. So you went in with Mr. Marti?

A. I went in with Marti.

Q. And do you remember what happened?

A. I believe we met with the gentleman who we were supposed to meet

with, secretary, but he was not there. We left all the information, left

the packet with them and got the phone number for Jake -- well, actually

that I could phone him back because I said I was Jake, to follow up on

the paperwork.

Q. You then reported back to Mr. Odell that you had accomplished these

various things?

A. Right, that's correct.

Q. you also mentioned yesterday spamming?

A. Yes.

Q. What is spamming?

(Off the record discussion.)

Q. What's spamming?

A. Spamming is when you do mass mailing to unspecific, unspecified group

of people, putting your message across. You e-mail without being asked,

or e-mail you may not know the recipient of e-mail and used for

advertising, used to get a point across.

Q. And you mentioned yesterday that was one of the activities in which

you engaged in connection with this, what I call the smear campaign?

A. Glen had decided to do -- he wanted me to get ahold of a program,

what's called strip e-mail addresses, so what I did is get ahold of the

program that does strip e-mail addresses.

Unless you are familiar with computers, what that does, goes through all

the services and pulled the e-mail services just randomly. So, basically

you get a million e-mail addresses and store them on you hard drive, do

a one-time letter as though it were coming from whoever, hit a button

and you mail up to one of these addresses, every one of those addresses,

that letter. You wouldn't have to type each one of them, just does it

automatically.

So I stripped all that e-mail addresses, stripped all the investor

e-mail addresses, and I hit all the news groups, and picked up all of

the different boards, BBS board that were accessible though the Internet

that are with foreign investments, and a lot of letter were sent out

saying different things about Cadiz Land Company that they were actually

falling apart, you better look out for them, such and such a party had

lost all kinds of money, as though I were the party or the person that

was writing the letter was a party that lost all kinds of money in a

business deal

And then I think we did one on the worker's conditions over there that

was to get us to -- Glen thought to get to the bleeding hard liberals.

We did that one.

also, we spammmed one on the drug thing, saying Cadiz Land Company was

involved with drug running. You want it all?

Q. As many as you can remember.

A. We spammed one of the drugs and we spammed one with the fact that

illegal aliens, we spammed one that there were suspicious things going

on out there as far as the field workers being treated badly.

Anyway -- the other thing is that two differing things spamming, and

Glen and I would conversationize on the Net

Q. We will get into that in a minute. What was the purpose of doing the

many spammings?

A. Bring the stock down, fluctuate the stock. The problem with the stock

is held by Cadiz Land Company, it's institution stock most of it is not

held by private investors other than people that work for the company,

but mostly institution, to California association and other ones it's

owned by, insurance company owns it.

Again I have all the listings of those things, I can give them to you

when I have my computer files. So they are a little harder to deal with,

so they were not as susceptible.

But what they are susceptible to is they are susceptible to an outside

public outcry that the company that they are backing or that they are

holding stock from is in some kind of inhumane way treating their

laborers or involved in -- I mean I don't think the California Teachers

Association want to be involved with a company that deals with drugs,

and that's what we led them to believe.

But we didn't do it directly, we did it by the spamming method, or by

building these websites and things.

Q. Okay. So it was an unexpressed purpose of the spamming to attempt to

manipulate the price of the stock?

A. Yes, exactly.

Q. And you had discussions with Mr. Odell about that and you understood

from your conversations with him --

A. Discussion with -- Mr. Odell had discussions with one other person

with the company. Other than Glen Odell, I can't --

Q. Did you talk with Stu Clark about it?

A. No, because that wouldn't be something I would talk about to Stu

Clark. Stu Clark said he knew about it because we laughed about it, but

I don't think I would have talked to Stu Clark about it directly.

God, who was the other person I talked to? It's kind of important, it

was a PR person.

Q. In-house public relations?

(Off the record discussion.)

BY MS. KLAR:

Q. Then let me ask the reporter to mark as --

A. Also the company paid for -- expensed out the stripping, spamming

program, actually paid for three of them, program we used to strip the

e-mail addresses.

Q. Was that charged on a credit card?

A. That's charged on my expense report, but it was very specific on my

expense report.

MS. KLAR: If the reporter can mark as Exhibit D, three-page document

that has Bates numbers CLC 59 through 61.

(Exhibit D was marked for identification.)

BY MS. KLAR:

Q. Mr. Lauricella, can you look at what's been marked as Exhibit D, and

tell me if any of those pages have your handwriting on it?

A. Yes, where it says to Glen Odell. Second line says -- it's a website

address -- HTTP colon four slash four slash www dot money dot money dot

-- you want me to go through this whole thing? Would you want me to go

through all this?

Q. Just tell me what it is?

A. I faxed in over to Glen real quick, I believe I probably sent this to

his house or maybe to the office so that he could pick up some more

information about the company, about CLCI, I think.

I'd have to pull these numbers up, find out exactly what they are, but

that's what they appear to be.

Q. The next page?

A. These are from the American On Line, my B environmental account,

these are Cadiz Land Company Inc. places, stock and from 9/3/95 through

12/5/95. These are the volume, the high asking price, low bid price,

closing average.

Q. Why were you getting that information?

A. I was trying to figure out at that point who the stock was moving to

and correlate this between the buyers and see who is moving the stock up

and down.

Glen gave me that information because we figure out at what point in

time who was moving the stock, whether it was done on personal

transaction, or whether it was done on institutional transaction.

Q. Did you try to get information about sales from insiders at Cadiz by

getting different kind of SEC reports, form four, form three?

A. Yeah.

MS. KLAR: Let me have the reporter mark as next --

THE WITNESS: Can we go off record?

MS. KLAR: Yeah.

(Off the record discussion.)

MS. KLAR: I'd like the reporter to mark as Lauricella Exhibit E

documents date stamped CLC twenty-three through forty-nine.

(Exhibit E was marked for identification.)

BY MS. KLAR:

Q. Mr. Lauricella, if you can look through this package, it has various

reports that appear to be from Edgar, then there appear to be some other

reports that are in a different format that have the heading dialogue

filed five forty-nine insider trading MON.

And then at the end, pages forty-eight and forty-nine appear to be Lexus

Nexus, or from Data Central. So if you can look through these different

documents and tell me if you've seen them before, and if you have, what

you know about them. If you want to identify them by the Bates number in

the lower right hand corner --

A. Okay. CLC 023, CLC 024, CLC025, CLC 026. CLCI 027, -- 027 through

028, CLC 029. These are directly from Glen Odell. This is the stuff he

sent over. This is probably, from the looks of it, faxed over to us --

to me.

What this is just shows what he had picked up through the company using

the company's data base for insider trading. This right here, which is

CLC 031 through CLC 047 -- no, I take that back, 043. I'm sorry, from

031 to 0004, this was sent over too, but this did not come from Odell's

computer or Odell's system, this came off their investigators. This may

have been from Bob Muehl.

Q. M-U-E-H-L.

A. These are just more information that was given to me by Waste

Management to further the stock transaction insider trading, you know,

to be able to use against it, the change in holdings. But you can tell

the difference, you see the types of them. This came --

Q. Yes?

A. This came off the company --

Q. You are talking about twenty-three through twenty-nine?

A. Right. This came off of CLCI's computer. This one right here came off

of another computer because you can tell the way it says press return to

continue, this is off an old system. The company computer would not be

this old to do this, it would have completed a page.

Q. You just said the first pages came from --

A. CLCI -- from W.W. Max.

Q. You misspoke when you said CLCI?

A. That's right. This one also came from Waste Management, but did not

come off their computer, someone else's computer, and was sent to me by

Glen Odell.

Q. And this was in connection with your efforts to manipulate the stock?

A. Yeah. you got another 1048, 049. These are also from the company

computer.

Q. These are like twenty-three through twenty-nine?

A. Yeah just like twenty-three through twenty-nine. They have an account

with Meads so they may have pulled this right from Mead. This is not

from Mead, you can tell the difference obviously.

Q. Now you also talked about conversations on the Internet?

A. Yes.

Q. What's that about?

A. Okay, Glen and I set up actually through A-O-L.

Continue to Part 5 (Last)