Wednesday, April 15, 1998 | 4:42 a.m.
Gustafson pleaded guilty to bankruptcy fraud in 1995 and agreed to testify against other defendants in a federal bankruptcy fraud case here. He said he hopes his cooperation will result in a reduction of his sentence.
Attorney Frank Cremen, who represents longtime Las Vegan Nicholas Tanno in the case, often raised his voice Tuesday as he asked Gustafson questions about his prior convictions and government cooperation.
Gustafson, a Minneapolis businessman, spent 40 months in prison from 1984 to 1987 for committing bank fraud and other crimes in a separate case.
During his testimony, which began last week, Gustafson said he wrote about his bank fraud prosecution while in prison. He described the writings as "an accumulation of some conversations and memories."
While questioning Gustafson on Tuesday, Cremen commented on those writings, which implied prosecutors influenced his previous testimony.
When the attorney asked Gustafson if he remembered writing about prosecutors coaching their witnesses, he replied, "No, I don't recall that at all."
Gustafson is testifying in the current case against Minnesota attorney John Jagiela, Tanno and former Tropicana landlords Fred and Edward Doumani.
Senior U.S. District Judge Justin Quackenbush of Spokane, Wash., is presiding over the trial, which revolves around the 1979 sale of the Tropicana and a $34 million judgment that stemmed from a breach of contract lawsuit.
Hotel Conquistador Inc. sold the hotel to Ramada in 1979 and later accused Ramada of breaching its contract. Defendants in the case are accused of trying to skirt bankruptcy laws in an effort to personally hold onto proceeds of the District Court judgment that resulted from the lawsuit.
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