DETORE TRIAL Jury hears USAG execs

J.J. Cafaro was expected on the witness stand today.
By PATRICIA MEADE
VINDICATOR CRIME REPORTER
CLEVELAND -- Capri S. Cafaro says she voiced ethical concerns about her father's aerospace company's paying a bunch of dinner checks in 1998 and 1999 for then-U.S. Rep. James A. Traficant Jr.
Cafaro, 25, of Washington, D.C., testified late Thursday and today in U.S. District Court at the trial of Virginia engineer and pilot Richard E. Detore, who is accused of taking part in a conspiracy to provide Traficant with illegal gratuities. The government said her father, shopping mall millionaire J.J. Cafaro of Liberty; Traficant; Detore and Albert Lange Jr. participated in the scheme.
In the late 1990s, Detore and Lange were both executives at J.J. Cafaro's now-defunct USAerospace Group in Manassas, Va. J.J. Cafaro and Lange have admitted they colluded to keep Traficant happy with meals, boat repairs, a welder, generator and other gifts while he promoted USAG's laser lights technology with federal agencies.
J.J. Cafaro was expected to testify today.
Capri Cafaro's testimony centers on her time at USAG in the late 1990s, when she served as its president with the main goal of being her father's "eyes and ears."
Detore's expense reports
She told the jury Thursday that she reviewed Detore's expense reports that reflected all the dinners he -- and sometimes Lange -- had with Traficant at Taverna, a Greek restaurant in Washington.
She said she had a cursory knowledge of the ethics rules governing members of Congress and knew that they weren't to accept gifts that exceeded $50.
She expressed her concerns to Detore who, she said, answered that Traficant's portion of the bills didn't exceed $50. The government said the dinners, in 1998 and 1999, totaled more than $3,000.
Each year, members of the House must report gifts from one source that have a cumulative total of $250. During his 171/2 years in Congress, Traficant never reported any gifts.
Capri Cafaro said Detore, in explaining his wine-and-dine courting of Traficant, told her: "The chairman's hammering away for us on Capitol Hill, doing good things."
She said Traficant called everyone "chairman" and Detore picked up the expression.
Detore, 43, was fired by J.J. Cafaro in March 2000, in part because Detore made disparaging remarks about Capri Cafaro. Detore has a civil lawsuit pending over the firing.
Capri Cafaro said her first exposure to Traficant came in February 1998, when he showed up at USAG for a flight demonstration of the laser lights landing technology.
Boat in question
Matthew B. Kall, an assistant U.S. attorney, then posed a series of questions to Capri Cafaro about Traficant's 37-foot wooden boat, kept at the Eastern Powerboat Club on the Anacostia river in Washington.
Lange has testified that he passed himself off as restorer and buyer of the decrepit vessel when the actual buyer was to be J.J. Cafaro. Traficant accepted more than $26,000 in boat repairs and $13,000 cash from J.J. Cafaro -- and, in the end, kept the boat.
Had the full scheme materialized, J.J. Cafaro would have paid $27,000 in repairs and $27,000 to pay off the mortgage on the boat.
Capri Cafaro said Detore told her that Traficant's boat was being purchased to be used to test maritime applications of the USAG technology.
Kall asked why J.J. Cafaro's 100-foot wooden yacht wasn't suited. Too big, she said Detore told her.
What about Lange's 21-foot fiberglass boat? Too small, she was told.
Traficant's 37-footer was the right size and "he was helping us on Capitol Hill so we should consider helping him," Capri Cafaro said, quoting Detore.
Cafaro Co. employees Patricia DiRenzo, cash management supervisor, and Dominic Rosselli Jr., chief financial officer, testified Thursday about J.J. Cafaro and USAG. The Cafaro Co. is ranked 12th in real estate holdings in the United States.
Failed investments
Rosselli said the Cafaro Co. invested $26 million in J.J. Cafaro's Avanti sports car plant, which operated in Youngstown from 1986 to 1991. The entire investment was lost and J.J. Cafaro -- who gave Traficant an Avanti -- covered the loss personally.
Cafaro left the family business in 1989, returned as a consultant in 1992 and has been a vice president since 1995.
Cafaro's next investment, USAG, lost about $13 million, Rosselli said. He acknowledged under cross-examination that the loss would be less if the patent on the technology is still worth $6 million.
He said Detore owned 2.5 percent of USAG.
J.J. Cafaro's brother, Anthony M. Cafaro, president of the Cafaro Co., had set a $5 million spending cap for USAG. In June 1998, shortly before the $5 million cap was reached, Traficant sent a memo to J.J. Cafaro and issued a press release that promoted USAG technology and said the stage was set for legislation the following year that would require the technology at commercial airports.
Rosselli said it showed significant progress was being made.
Borrowing for USAG
When more money was needed for USAG, J.J. Cafaro borrowed $2.5 million from family trusts, obtained a $900,000 bank loan, $800,000 more from the family business, then used his personal accounts, Rosselli said.
In September 1998, Rosselli said he questioned a $3,000 payment to Lange, wondering if it should be shown as income or a business expense. The $3,000 was eventually paid as a business expense and a corrected 1099 IRS form issued to show that it wasn't income, he said.
DiRenzo, meanwhile, identified a series of J.J. Cafaro's checks from 1998 that were endorsed by Lange, who testified they were reimbursements for repairs to Traficant's boat.
She said she questioned a Dec. 24, 1998 check to Detore for boat repairs because, in her mind, "aerospace" meant air, not water. She passed the question on to Rosselli, who learned from J.J. Cafaro that USAG bought a boat to demonstrate maritime aspects of the laser technology.
Denied use of charge card
After charging personal items in late 1998, such as $70,000 worth of jewelry, on the Cafaro Co. American Express business expense card, J.J. Cafaro was denied use of the card, she said. He was given a Visa card in June 1999, with a $10,000 limit.
Under cross-examination, DiRenzo said it was common for J.J. Cafaro to bounce checks, which sometimes caused her stress.
DiRenzo said two of J.J. Cafaro's personal checks, for $5,000 and $8,000, were cashed and 130 $100 bills given to him Nov. 13, 1998.
Cafaro has said he delivered the cash to Traficant the next day at Youngstown State University. The $13,000 payment represented about half the purchase price of the boat.
Cafaro draws $5,770 weekly in his paycheck from the Cafaro Co., and $20,000 is wired to Cafaro's wife's account each month for expenses, DiRenzo said.
meade@vindy.com