Sometime in 2006, Shelton developer James Botti invited Andre Czaplinski into his Bridgeport Avenue office and took a large square box out of his 6‑foot-tall safe.
“This is top secret,” Botti allegedly told Czaplinski. “Don’t tell anyone what I’m about to tell you.”
Botti then opened the 2‑foot by 2‑foot box, revealing stacks of $100 bills packaged in groups of $10,000 each, held together with rubber bands, Czaplinski said.
Botti and Czaplinski counted 87 stacks: $870,000 in cash.
That’s according to testimony from Czaplinski at the first day of Botti’s federal money structuring trial at U.S. District Court in New Haven Monday.
U.S. attorneys are trying to prove that Botti structured that cash — meaning he split it into transactions of less than $10,000 to avoid detection from the IRS — and that he lied about its existence when IRS agents started asking about it in 2006.
The prosecutors say he worked with his father to structure the money in several different bank accounts.
Botti, 46, a Shelton developer, was charged in November 2008 with conspiracy to structure cash transactions, structuring and two counts of giving false statements to a federal agent.
He has pleaded not guilty and attorney William Dow III is arguing on his behalf at the trial this week.
On the first day of arguments, five witnesses testified — detailing cash deposits to the Naugatuck Valley Savings and Loan, the cash Botti allegedly kept in his office safe and his initial interview with IRS criminal investigators on July 14, 2006.
Czaplinski
Czaplinski, 35, a Shelton contractor who rented space in one of Botti’s Bridgeport Avenue buildings, was the last witness to be heard Monday, and his testimony will continue Tuesday morning.
Czaplinski was granted immunity from federal charges in return for his testimony, although it was not yet made clear through his testimony what part he may have played in the alleged crime.
Czaplinski detailed his relationship with Botti, which started as professional and grew into friendship. Czaplinski said the two embarked on a development partnership in 2004, at which point Czaplinski took out a home equity loan to lend Botti $80,000.
“Every night we hung out together, drank coffee together,” said Czaplinski, who owned a doughnut shop in the gas station convenient store at 484 Bridgeport Ave.
Botti’s office was on the second floor of that building, and the two would gather there after work, Czaplinski said.
The night they counted the stacks of cash came after Botti told Czaplinski he was offered $2 million in cash for a property at 350 Bridgeport Ave. in Shelton.
“He asked if I thought this could be an IRS operation or an IRS sting,” Czaplinski testified about the alleged offer. “I said, ‘I think it is an IRS sting.’ I said ‘Don’t take the money.’”
Czaplinski’s testimony did not reveal yet whether the $870,000 in cash was related to that alleged $2 million offer; Czaplinski simply testified that he helped count the $870,000 after Botti told him about the proposal.
IRS Agents Come Knocking
A key point in the case is whether Botti lied to IRS criminal investigators about how much cash he had.
One of the two agents who investigated Botti testified Monday about his initial interview with Botti on July 14, 2006.
Agent Charles Cooney said he and another agent met Botti at his Bridgeport Avenue office, and discussed his tax returns from 1999 to 2004 in a kitchenette in the office for four hours.
According to Cooney’s testimony, Botti told agents he kept no more than $5,000 in cash on hand at the end of any given year and that at the time he only had whatever cash was in his pockets.
“At the very moment he was making that statement, his father was removing the hundreds of thousands of dollars in cash,” stored in the office safe, Assistant U.S. Attorney Rahul Kale said during his opening statement.
But upon cross examination of Agent Cooney, Botti’s attorney Dow wondered how precise the questioning had been that day.
Dow questioned whether it is possible to know if Botti lied, since the interview was not tape recorded. In addition, the report written about the conversation was drafted 10 days after the conversation took place.
“You don’t have an instant replay for the interview that went on for four hours,” Dow said to Cooney in his questioning.
“No I do not,” Cooney replied.
Dow said Conney’s questions to Botti about cash on hand and how he received rent payments were vague.
“You don’t know what he understood the question to mean. You didn’t say ‘this year,’ ‘last year,’ ‘forever,’” Dow said.
“That is correct,” Cooney replied.
Defense
Dow also questioned whether the government’s evidence in the case applies to the structuring charges.
During his opening statements, Dow said the evidence leans more toward tax crimes, such as failure to pay or failure to file — crimes with which Botti has not been charged.
“It is a very narrow case,” Dow said. “It is not a crime to get cash. It is not a crime to pay bills in cash. It’s not a crime to pay for services in cash.”
He asked the jurors to really question whether Botti had the “specific intent” to avoid filing federally mandated forms at the banks.
