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Government Uses Flow Chart to Explain Marcos Building Purchase

May 8, 1990

NEW YORK (AP) _ The federal fraud and embezzlement trial of Imelda Marcos recessed abruptly Tuesday for the second time in two weeks when her blood pressure soared during testimony about her family.

Mrs. Marcos, 60, former first lady of the Philippines, began sobbing when defense lawyer Gerry Spence cross-examined FBI agent James Trimbach on his testimony about the Marcoses’ using allegedly stolen money for their own ends.

Spence, apparently referring to the Marcoses’ daughter Imee, asked whether there was ″anything wrong with paying for your children’s education?″

Mrs. Marcos began to sob, and friends said later that she was upset by the allusion to her older daughter, whom she has not seen in four years. Imee lives in Morocco and is not allowed to travel on a Philippine passport, they said.

After the judge declared a recess, she was taken to a nurse’s station.

Aides to Mrs. Marcos quoted her physician, Dr. Rafael Zagala, as saying her blood pressure had jumped.

She later left the courthouse, quietly crying, on the arm of a marshal and climbed into her black van to return to her midtown apartment. Spence said he hoped Mrs. Marcos could return to court on Wednesday.

Earlier, prosecutors used a giant flow chart and Trimbach to explain how Mrs. Marcos and her late husband allegedly used stolen money to secretly buy a New York office building.

They said that through money transfers involving 14 banks in New York, California, the Bahamas and the Philippines, the Marcoses paid $51 million for the Crown Building, a gilded tower across Fifth Avenue from Tiffany’s.

It was the first of four buildings the prosecution says were bought by the Marcoses with some of the $220 million allegedly plundered from their country’s treasury during former President Ferdinand Marcos’ 20 years in power.

Mrs. Marcos is on trial in federal court for fraud and embezzlement, along with Saudi Arabian financier Adnan Khashoggi, who is accused of helping the Marcoses conceal their purchases. Marcos died in exile in Hawaii in September.

Assistant U.S. Attorney Debra Livingston used the board covered with boxes and arrows to show jurors how money moved from accounts held by the Marcoses and their allies to other accounts and eventually to the Crown purchase.

Many witnesses, including several former bank officials, have testified that Marcos used Philippine banks and government-owned companies controlled by cronies to launder and conceal money allegedly drained from the country’s dollar reserves or skimmed from government contracts.

The chart purported to show that in September 1981, funds held in five different banks were channeled through intermediate accounts in six separate transactions, and eventually to the Crown Building purchase.

Most of the money, including $30 million from the Traders Royal Bank of Manila, converged in a $43,128,239.25 deposit to the New York branch of Banque Paribas of Geneva.

Prosecutors say that the Banque Paribas account was managed by Stephane Cattuai, whom they have described as the Marcoses’ personal Swiss banker, and that the money represented the bulk of the payment for the Crown Building.

Among the banks listed on the chart was the California Overseas Bank, which on Monday was ordered by Judge John F. Keenan to be turned over to the Philippine government as part of a plea bargain by its former owner, Robert S. Benedicto.

Benedicto, a Marcos friend, originally was indicted as a co-conspirator but fled to Spain and then Venezuela. He gave up ownership of the bank and pleaded guilty to wire fraud in exchange for being dropped from the case.

His lawyer, Wayne W. Smith, said the bank was worth between $20 million and $30 million.

In a related development, the Los Angeles Times said the Marcoses doled out about $8.5 million to politicians, reporters and others in the final days of Marcos’ regime in a desperate bid to retain power.

The ledger was among documents found at Malacanang Palace after Marcos fled a popular revolt on Feb. 25, 1986, and Corazon Aquino, who had defeated Marcos in an election days earlier, was installed as president.

It showed that Mrs. Marcos gave watches and envelopes of cash to members of the national press corps during the campaign, and that as votes were being counted she handed out money gifts at a dinner for members of a government agency assigned to investigate election fraud.

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