By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
David Lewis, Berger's attorney, says he developed three different defenses and used them all at Berger's trial. First, he argued that Norm was under such close scrutiny that the IRS agents watching him knew what he was doing. Second, he argued that government rules permitted "churning" of investigative proceeds. Nearly all the money Norm might have received was quickly lost at the gambling tables, and as part of his undercover persona, Berger needed to pose as a high roller.
His third defense was more complicated, but seemed to be the one that worked. The government's case relied ultimately on the testimony of Norm's cronies and former girlfriend because no bank records tied Norm directly to the stolen funds. The loans and check-cashing favors put Norm one step away from the money. So Lewis went after the chief government witnesses, Galanti and Pomilio, who turned out to be easy targets to discredit.
"When she [Pomilio] took the stand, she looked like she was married to the mob," says Lewis, who attacked Pomilio's assertion that she gave the money to Norm after she cashed the investors' checks. "We had records of her spending thousands of dollars on clothes and a trip to Europe...Meanwhile, Norm is living in a tiny apartment, driving this tiny old car. Where was all the money?" Lewis says. Galanti testified "just as a mobster would," Lewis recalls. "He was going to give just enough to make the government happy, but he'd go...'Maybe it was like that.' and 'If you say so.' It was clear he didn't want to hurt Norm."
Berger had fashioned his own elaborate explanations for how Gray's checks got into the accounts of his friends, but Lewis decided not to put that material before the jury. "I pretty much got in everything I wanted through [the prosecution's] witnesses," says Lewis, who portrayed his client as a man who risked his own life to help the government bring down a huge investment scam.
After four hours of deliberation, the jury apparently liked that view of Norm. It acquitted him on all counts.
"The judge left the courtroom cradling his head in disbelief," recalls Assistant U.S. Attorney Larry Jarrett, who lost the case. "I remember we didn't have the best witnesses that we might have, but they testified truthfully. I felt wholeheartedly then and I still believe Norm committed violations of federal law. He was guilty then, and he's guilty now."
Although Berger was clear of the federal case, it's never wise to mess with the IRS. The agency audited Berger's personal finances and went after him for tax evasion -- including such things as nonpayment of taxes on the $28,000 he said he made "laundering" money for the peso crooks. IRS accountants accused Berger of underestimating his income by $135,685 in 1989 and by $75,515 in 1988, resulting in underpayment of $52,300 in income taxes. Norm declared bankruptcy, his wife left him for good, and a federal tax lien was levied against the couple's Plano house. Kathleen Berger, who still lives there, say the lien amounts to about $16,000.
After such an ordeal, most people would have breathed a sigh of relief, let go, and moved on. Norm Berger is not one of them.
He is as conversant today with these fading events as he was five years ago. Over the years he has hauled his box of smoke-saturated, coffee-stained documents to various reporters, spinning tales of IRS agents on the take and government agents having affairs, stories for which he has no proof other than his own word.
"Norm is a persistent man," says Lewis, the attorney.
Berger, who lives now on Social Security and the occasional job installing wood floors, and whose small apartment is littered with balsa-wood airplane parts, says he is motivated by the desire to clear his name. Not that his name was ever sullied in any public way. Few of the events he was connected with were ever publicized, before or after his trial.
"There's no doubt he felt betrayed," says Blau, who says he still talks with Berger from time to time. "He felt betrayed by the agents he was working with. He felt they led him into a series of traps and it was their fault the way things turned out. He had worked hard for them as an informant, and they repaid him by prosecuting him."
Over the past several years, four different agents with the IRS internal-affairs department have told Berger or his attorney that they have been looking into his allegations, but Webster and other attorneys say the statute of limitations on such matters has long passed. "Agents got commendations for their work on the peso case," says Webster. "Not a single person's career has been affected by what Norm has had to say."
One government employee, who asked not to be identified, says Berger spent years calling prosecutors from U.S. Attorney Paul Coggins on down in an attempt to get someone to take his accusations seriously. "He called investigators and people in the U.S. Attorney's Office ranting and raving about his case. It got to the point where people wouldn't tolerate him. He got scary. People swallowed a tremendous amount of Berger's shit, and finally they stopped taking his calls. He spun out over this case."