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Finally--RW Professional Trial underway

by Christopher Menkin

The trial against the officers of RW Professional, Island Park, New York was postponed several times. It is now underway, Assistant U.S. Attorney Linda Lacewell told Leasing News. All the officers have reportedly made a “deal,” except the “boss.” Barry Drayer, age 66, who continues to deny he was the person running the company or was responsible for money laundering and other charges of interstate fraud.

In a previous move to have the trial postponed, Drayer was described by his attorney Steve Zissou as “ ...just a salesman. ”

In the latest, it is now claimed the case was brought by “... a disgruntled employee and a rival firm that wanted to take over its business.”

Earlier bets were that Drayer was going to use the “snake oil” he reportedly rubbed on Vanguard Leasing, Old Kent, CIT, and with Tom Depping at Sierra Cities. He got caught up with American Express Business Finance for over $20 million from the Sierra Cities portfolio (they'll never see the money is the scuttlebutt and have their legal case on hold, pending the results of this trial) and Crawford & Sons, a Fayetteville, New York, and a host of community banks owed over $15 million, who will be lucky to get a dime on the dollar, it is reported. They have their court case on hold too. This doesn't count the $38 million fine to Bank of New York over the RW professional matter as a result of the handling of the money by one of its officers. The bank is very healthy and wrote this off.

Many lessees were faced with law suits from various banks claiming money was owed to them from leases assigned by RW Professional. Others paid off leases early to RW Professional, who evidently pocketed the money to help make the Ponzi scheme work as RW Professional continued to make leasing payments direct after double dipping and triple dipping leases. The scheme worked as long as sales continued and RW Professional continued to lower margins and reportedly falsify credit to book more leases. The operation reportedly worked before at various other banks, but the perfect storm hit the system. Drayer evidently thought he again could beat the system, actually going through several attorneys in the process, and changes of U.S. attorneys who had originally started the case four years ago.

It does not appear Assistant U.S. Attorney Linda Lacewell is going to let Barry Drayer “skate” free this time.

The other officers, all his relatives, have already pleaded guilty to various charges in the case: his sister Rochelle Besser, 69, the alleged “front” president; his brother Roger Drayer, 63, vice president of marketing; a nephew, Adam Drayer, a computer technician, 26; and a niece, Jennifer Tarantino, 34.

A second defendant in the trial, Stephen Barker, 42, of Lake Forest, Calif., president of Carefree Financial Service, is a well-known lease broker, whose family is still active in the profession. His father, Tony, reportedly active in Carefree Financial Services and an alleged ordained minister, moved back to his native South Africa. His son Bryn allegedly accompanied him out of the country. Barker's other brother, who was allegedly not involved, is still active in the leasing business. He was never named in the matter.

Perhaps the “disgruntled employee”, according to Drayer's attorney Steve Zissou, is Steve Barker, a religious man, who has reportedly lost all his assets defending himself. His crime, he says, he trusted Barry Drayer. He is charged with conspiracy. Barker's attorney, Terrence Buckley of Islandia, said his client was not involved in any crimes. Unfortunately, earlier testimony is powerful evidence against him, as Barker originally told the authorities “all.” It also is perhaps why he is being tried as a co-defendant. Drayer perhaps blames Barker for “talking.”

What Barker told the authorities: he was only doing what Drayer told him to do. He thought it was proper as it was under the direction of his “funder.” He didn't know RW Professional was floating payments, he claims. He didn't know he was doing anything illegal. In July, 2001, he had talked to a “colleague” about what he was doing, and was advised to discuss the matter with the FBI, that ignorance was not a good excuse.

The feds want him in the trial because he personally can testify who really did call the shots, that Drayer was not just a salesman and the cards did not come tumbling down because of a rival firm. The economy pushed the Ponzi firm into not working.

And Greg McIntosh, in a new position at American Express Business Finance, had the brains to look into the names of checks coming in that others had ignored in the past. Then Finance Team of America ((now called Bankers Healthcare (the Castros)) began warning the industry of deals supposedly funded, but not, and deals not paid. The Castros filed a complaint with the Massachusetts attorney general claiming he had not paid them over $125,000 in commissions and questioned his way of doing business. Leasing. News printed their letters and this information, plus the dealings while at Sierra Cities/First Sierra in several articles co-written with Charlie Lester. Community banks were the first to also find leases not being paid. In reality, Finance Team of American Bankers Healthcare) were not rivals, but one of RW Professionals sources of business.

Drayer's attorney tried not to have Barker a co-defendant and made many moves to have him removed.

From Pacer court records (public knowledge:)

"Due to unfortunate events, media and motion to sever the trial, the trial will not go forward as scheduled on 11/1/05 and the jury is excused. Mr. Drayer is in Steve Zissou's Office. Next in Court Conference is set for 11/8/05 at 9:00 a.m. Both defendants to waive speedy trial to 11/8/05. Both counsel for the defendants agree to waive speedy trial. (Coleman, Laurie) (Entered: 11/08/2005)

"Jury Selection 1/18/06 at 9:00 a.m. Government to submit another letter regarding severance issues with more case law that is current. Court reserves decision on defendant Drayer's motion for severance until after letter from Government is received. Waiver forms given to defendants' counsel for defendants' to execute. (Coleman, Laurie) (Entered: 11/16/2005)

"MEMORANDUM OF DECISION AND ORDER - This case involves charges of conspiracy to commit bank fraud, wire fraud, and money laundering. Presently before the Court is a motion by the Defendant Barry Drayer for severance of his trial from that of his codefendant Stephen Barker, who also joins in the motion. Ordered, that the 329 motion by Defendants for severance pursuant to Rule 14 is DENIED. SEE Decision for further details. (Ordered by Judge Arthur D. Spatt on 11/29/05). C/ECF. (Coleman, Laurie) (Entered: 11/30/2005)

"MOTION TERMINATED as to BARRY DRAYER, STEPHEN BARKER: The Government's 361 MOTION to Take Deposition (Videotaped) is WITHDRAWN (SEE document 363 Withdrawing Motion). (Coleman, Laurie) (Entered: 01/11/2006)

"01/22/2006 366 Letter regarding disclosure of tax returns as to Barry Drayer (Zissou, Steve) (Entered: 01/22/2006)

"01/23/2006 367 Letter in Response to Barry Drayer's Letter Opposing Disclosure of Certain Tax Return Information as to Barry Drayer, Stephen Barker (Lacewell, Linda) (Entered: 01/23/2006)"

This is evidently why Drayer didn't want Barker to be a co-defendant:

"Barker made a series of statements to federal agents both before and after his arrest. Specifically, Barker made incriminating statements to FBI agents in August of 2005, which also inculpated Barry Drayer. Barker also provided the government with a laptop computer and delivered an eight page typewritten single spaced statement. The statement attributes all criminal responsibility to Barry Drayer while attempting to excuse his own involvement in any illegality that he might have unwittingly aided and abetted. Barker states in this statement that Drayer told the unwitting Barker to form Medpro in order to facilitate Drayer's secret frauds. The Barker statement reads as follows:

"I can and am willing to testify to the above facts concerning my business dealings with PLS and Barry Drayer. I admit that I made it very easy for Barry Drayer to use me and that I was ignorant in hindsight. But I was NOT a co-conspirator. I was not a part of the “inner family circle” that existed at PLS. PLS was simply a place for me to submit credit applications for loan approval. I had the opportunity to do business with many other funding sources that offered the same programs offered by PLS but we had no reason to ever leave PLS. I would have earned the same referral fees from other funding sources.

"Looking at things now, hindsight is always 20/20 but I had no way of knowing that PLS was setting Medpro and Carefree up to “take the fall” if things ever went wrong for PLS. It is completely out of character for me or my family to participate in any type of fraud or co-conspiracy. Not only did we not have the knowledge of how the industry operated in order to perpetrate such a fraud, it completely violates our belief system which is based on strong Christian values. I trusted PLS and Barry Drayer and that trust allowed him to take advantage of me. By following the instructions of Barry Drayer and his Case 2:02-cr-00767-ADS Document 352 Filed 11/29/2005 Page 5 of 13"

Here is a copy of the full 13 pages:

If convicted, both could face up to 30 years in prison. With time off for good behavior, they could get out in 15 to 18 years.

Drayer could well then be well over 80 years old.

Previous RW Professional stories located here: