Deposition Transcript of Scott Rothstein - Trustee Services

1 UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF FLORIDA
2 FORT LAUDERDALE DIVISION
3
CASE NO. 09-34791-RBR
4 Adv. Pro No. 11-03014-BKC-RBR-A
5
IN RE:
6
ROTHSTEIN ROSENFELDT ADLER, P.A.,
7
Debtor.
8 ___________________________________/
HERBERT STETTIN, not individually but
9 as Chapter 11 Trustee of the estate of the
Debtor, Rothstein Rosenfeldt Adler, P.A.,
10
Plaintiff,
11 v.
12
FRANK J. PREVE, an individual, and
13 PREVE & ASSOCIATES, LLC, a limited
liability company,
14
Defendants.
15 /
16
17 500 East Broward Boulevard,
Ft. Lauderdale, Florida
18 Wednesday, June 13, 2012
12:00 p.m. - 4:06 p.m.
19
20
D E P O S I T I O N
21
Of
22
SCOTT ROTHSTEIN
23 (Via Video Conference)
24 Taken on behalf of the Trustee
pursuant to a notice of taking deposition
25
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1 APPEARANCES:
2 GENOVESE, JOBLOVE & BATTISTA, P.A. by
Jesus Suarez, Esq.
3 Attorney for the Trustee.
4
U.S. ATTORNEY'S OFFICE, by
5 Laurence LaVecchio, Esq.
Attorney for the Department of Justice.
6
7 MARC NURIK, P.A., by
Marc Nurik, Esq.
8 Attorney for Scott Rothstein.
(Appearing via Video Conference.)
9
10 MCINTOSH SCHWARTZ, P.L., by
Robert McIntosh, Esq.
11 Attorney for Ironshore Indemnity
12
RASCO KLOCK, by
13 John C. Shawde, Esq.
and
14 John D. Eaton, Esq.
Attorneys for Defendants.
15
16 CONRAD & SCHERER, by
James Silver, Esq.
17 Attorneys for Razorback Funding, LLC, D3
Capital Club & Other Investors.
18
19 AKERMAN SENTERFITT, by
Marc Gottlieb, Esq.
20 Attorney for Official Committee of Unsecured
Creditors.
21
22 VER PLOEG & LUMPKIN, P.A., by
Matthew Weaver, Esq.
23 Attorney for Robert Furr.
24
25
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1 ALSO PRESENT:
2 Frank Preve
Special Agent Taryn Guariglia
3 (Appearing via video conference.)
4
I N D E X
5
6 WITNESS DIRECT CROSS REDIRECT RECROSS
7 SCOTT ROTHSTEIN
8 (By Mr. Suarez) 5
(By Mr. Shawde) 101
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10
11
12
13
14
15
16
17
18
19
20
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1 EXHIBITS
2 PLAINTIFF'S FOR IDENTIFICATION
3
1 17
4 2 40
3 44
5 4 51
5 64
6 6 69
7 71
7 8 72
9 82
8 10 86
11 89
9 12 92
13 94
10
11
DEFENDANT'S
12
A 103
13 B 104
C 105
14 D 105
E 106
15 F 106
G 107
16 H 107
I 108
17 J 109
18
19
20
21
22
23
24
25
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1 Thereupon:
2 SCOTT ROTHSTEIN
3 was called as a witness and, having been duly sworn,
4 was examined and testified as follows:
5 THE WITNESS: I do.
6 DIRECT EXAMINATION
7 BY MR. SUAREZ:
8 Q. Mr. Rothstein, good morning or good
9 afternoon now. I'm Jesus Suarez, I'm with Genovese
10 Joblove and Battista, we are special counsel to Herb
11 the Chapter 11 Trustee in the Rothstein Rosenfeldt and
12 Adler bankruptcy case. We are here in this deposition
13 today in an adversary proceeding that's been filed by
14 the trustee captioned Stettin versus Preve and other
15 defendants.
16 Would the others present like to make
17 appearances?
18 MR. SHAWDE: No.
19 MR. SUAREZ: Anybody?
20 MR. SILVER: I'm Jim Silver from Conrad and
21 Scherer, I'm here solely to observe.
22 MR. MCINTOSH: Robert McIntosh, I represent
23 Ironshore Indemnity. I'm here to observe.
24 MR. WEAVER: Matt Weaver, I represent
25 Robert Furr as Trustee of Banyon 1030-32 and Banyon
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1 Income Fund. I'm also here to observe.
2 BY MR. SUAREZ:
3 Q. Mr. Rothstein, in December you gave a
4 deposition down here in South Florida. Do you recall
5 that?
6 MR. SHAWDE: Object to the --
7 THE WITNESS: I do.
8 BY MR. SUAREZ:
9 Q. The testimony that you gave in December was
10 truthful and accurate, to the best of your knowledge?
11 MR. SHAWDE: Object to the form.
12 THE WITNESS: It was.
13 BY MR. SUAREZ:
14 Q. And if I ask you the questions that were
15 asked in the December deposition, your answers, would
16 they be the same?
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: With the exception of the
19 changes that I made on my errata sheets, yes.
20 BY MR. SUAREZ:
21 Q. Thank you. Do you remember questions that
22 my colleague David Cimo asked you about three New York
23 hedge funds?
24 MR. SHAWDE: Again, object to the form.
25 THE WITNESS: I remember some of them. It
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1 was 10 days of deposition for almost seven hours a
2 day so ...
3 MR. SUAREZ: I understand.
4 THE WITNESS: I remember being asked
5 significantly about the New York hedge funds by
6 various people including Mr. Cimo.
7 BY MR. SUAREZ:
8 Q. And do you remember being asked questions by
9 Mr. Preve's lawyer, Ray Rasco?
10 A. I do.
11 Q. Okay. Monday of last week, when we had the
12 Rule 2004 component of this deposition, you testified
13 that there were a number of co-conspirators that
14 helped you carry out your scheme. Do you recall?
15 MR. SHAWDE: Object to the form. Object on
16 other grounds as well.
17 THE WITNESS: Yes.
18 MR. SUAREZ: Would you care to tell me what
19 those other grounds are?
20 MR. SHAWDE: Yeah, for all the reasons that
21 we've already objected to, the protocol order and
22 other issues that we brought up in the bankruptcy
23 case, which I won't waste the time going through
24 today given how short a time we have today.
25 MR. SUAREZ: Okay. Thank you.
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1 BY MR. SUAREZ:
2 Q. And Monday of last week you listed Frank
3 Preve as one of those co-conspirators. Do you recall?
4 A. That's correct.
5 Q. Can you explain to me how Mr. Preve assisted
6 you the carrying out your fraud.
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: I can give you an overview.
9 You have to go to the e-mails to really get a full
10 picture of it.
11 MR. SUAREZ: Let's start with an overview,
12 and then we can focus in.
13 MR. SHAWDE: Object to the form.
14 THE WITNESS: He assisted in soliciting
15 investors. He assisted in helping me handle the
16 bankers. He assisted in helping me prepare fake
17 opinion letters. He assisted me in coming up with
18 plans of action to deceive investors and others. He
19 assisted me in moving money between accounts in order
20 to facilitate the Ponzi scheme. He assisted me in
21 controlling our accountants. He assisted me with
22 preparation of the initial set of deal documents.
23 MR. SUAREZ: Thank you.
24 THE WITNESS: He assisted in holding off
25 auditors who would have likely discovered the Ponzi
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1 scheme. He assisted my CFO, who was also a
2 coconspirator, in making sure that balance statements
3 were correct. That's on overview, I'm certain that
4 there's more.
5 BY MR. SUAREZ:
6 Q. Thank you.
7 When did you first meet Mr. Preve?
8 A. To the best of my recollection, it was
9 sometime in 2006, 2007.
10 Q. How were you introduced?
11 A. I'd have to see a document to be sure.
12 Q. How were you introduced to Mr. Preve?
13 A. By Mr. Levin.
14 Q. And when did you first start doing business
15 with Mr. Preve?
16 MR. SHAWDE: Object to the form.
17 THE WITNESS: You have to show me a
18 document that has the first G deal on it, and I would
19 have started my business relationship with him just
20 prior to that.
21 BY MR. SUAREZ:
22 Q. When you first met Mr. Levin, your initial
23 set of transactions with Mr. Levin were through bridge
24 loans; is that correct?
25 MR. SHAWDE: Object to the form.
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1 THE WITNESS: They were through minimal
2 paper deals.
3 BY MR. SUAREZ:
4 Q. And there came a point in time that the
5 minimal -- I'm sorry, I'll strike that.
6 What do you mean by "minimal paper deals"?
7 A. As opposed to the full deal packets that we
8 ultimately used, they were conducted with a lot less
9 paper.
10 Q. Okay. And how would you describe those
11 deals that were conducted with a lot less paper?
12 MR. SHAWDE: Object to the form.
13 THE WITNESS: They were still settlement
14 funding.
15 BY MR. SUAREZ:
16 Q. What was the purpose of the deals? What was
17 the story? What was the scam?
18 MR. SHAWDE: Object to the form.
19 THE WITNESS: That there were plaintiffs in
20 employment related cases who were being offered
21 settlements by their employers that were confidential
22 in nature to be paid out over an extended period of
23 time. The plaintiffs, my clients, putative clients,
24 did not want to wait for their money and therefore
25 there was an opportunity to offer them a lump sum in
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1 exchange for the investor to receive the payment out
2 over time in the full amount and thereby earn a
3 significant amount of interest.
4 BY MR. SUAREZ:
5 Q. Was Mr. Levin one of these investors?
6 MR. SHAWDE: Object to the form.
7 THE WITNESS: Yes, sir.
8 BY MR. SUAREZ:
9 Q. And when Mr. Levin began investing in these
10 settlements, how were the deals documented?
11 MR. SHAWDE: Object to the form.
12 THE WITNESS: I don't have a specific
13 recollection. It was significantly less paper than
14 what I'll call the full deal packets. If you have a
15 packet to show me it would refresh my recollection.
16 BY MR. SUAREZ:
17 Q. I will in a second.
18 How did the full deal documents come about?
19 MR. SHAWDE: Object to the form.
20 THE WITNESS: At some point in time, as we
21 were approaching more sophisticated investors,
22 Mr. Preve and I decided that we needed a more
23 sophisticated deal packet.
24 BY MR. SUAREZ:
25 Q. Who were those more sophisticated investors?
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1 MR. SHAWDE: Object to the form.
2 THE WITNESS: The hedge funds. What we
3 call the New York hedge funds.
4 BY MR. SUAREZ:
5 Q. Were those Platinum, Centurion and Level 3?
6 A. To the best of my recollection, it was
7 initially Platinum and Centurion and Level 3 came into
8 the picture a little bit down the road.
9 Q. Earlier you testified that Mr. Preve helped
10 you solicit investors. Were the New York hedge funds
11 those investors or among those investors that
12 Mr. Preve helped you solicit?
13 A. Yes.
14 Q. And what was his role, what was Mr. Preve's
15 role in soliciting the New York hedge funds?
16 MR. SHAWDE: Object to the form.
17 THE WITNESS: I can only tell you what I
18 know he did. I can't tell you what additionally he
19 did behind the scenes.
20 BY MR. SUAREZ:
21 Q. What do you know that he did?
22 MR. SHAWDE: Object to the form.
23 THE WITNESS: He introduced me to them. He
24 helped me set up the deal documents. He and I made a
25 trip up to New York to pitch the deal to the hedge
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1 funds at their offices in Manhattan, helped me
2 establish protocol for dealing with them.
3 BY MR. SUAREZ:
4 Q. Earlier you talked about the G deals. The G
5 deals, were those the ones that were denominated for
6 investment by Banyon?
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: They were originally, sir,
9 deals that were, to my knowledge, specifically funded
10 by George Levin and his wife, Gayla Sue Levin. As
11 the investment grew, we went to outside funding
12 sources and they continued on to be G deals. But to
13 the best of my recollection, we always numbered them
14 with G and then a number.
15 BY MR. SUAREZ:
16 Q. Was Banyon 1030-32, LLC one of those outside
17 sources?
18 A. Well, let me explain it this way. To my
19 knowledge, Banyon 1030-32 was a shell that existed
20 prior to me meeting Mr. Levin and Mr. Preve that they
21 ended up utilizing as the investment vehicle for both
22 making investments utilizing Mr. Levin's personal
23 money, and significantly more so the investment
24 vehicle through which money was invested by other
25 investors which they solicited with my assistance.
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1 Q. Were the New York hedge funds among those
2 investors that they solicited with your assistance?
3 MR. SHAWDE: Object to the form.
4 THE WITNESS: Yes.
5 BY MR. SUAREZ:
6 Q. Okay. Did Mr. Preve help you document the
7 investment by the -- let me rephrase that.
8 Were you involved in documenting the
9 investment by the New York hedge funds at the Banyon
10 level?
11 MR. SHAWDE: Object to the form.
12 THE WITNESS: As I understand it now, post
13 my turning myself in, there was a significant amount
14 of paperwork that went on behind the scenes that I
15 was not privy to. Some I was, from time to time,
16 they elicited my assistance in looking at certain
17 things, making certain things were worded correctly.
18 But there was, to my knowledge, a significant amount
19 of paperwork between what I'll call the Banyon
20 entities and the hedge funds. Because you must
21 remember that in addition to 1030-32 they created
22 Banyon Income Fund, and other investment vehicles
23 that were backed up to that, so to speak.
24 BY MR. SUAREZ:
25 Q. Do you know what kind of funding commitment
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1 the New York hedge funds made to the Banyon entities?
2 MR. SHAWDE: Object to the form.
3 THE WITNESS: To the best of my
4 recollection it varied from between 50 million to a
5 150 million. But there should be documents that
6 verify that one way or the other.
7 BY MR. SUAREZ:
8 Q. Who were the principals of the New York
9 hedge funds?
10 MR. SHAWDE: Object to the form.
11 THE WITNESS: I can only tell you to my
12 knowledge. So, to my knowledge, it was Murray
13 Huberfeld, Mark Nordlicht, Ari Glass, somebody named
14 Bodner, Gilat Calter (phonetic), Brian Jedwab.
15 That's all I recall at this moment, there may be
16 more.
17 BY MR. SUAREZ:
18 Q. At some point in time did the New York hedge
19 funds become concerned with the investment that they
20 had in Banyon?
21 MR. SHAWDE: Object to the form.
22 THE WITNESS: If you are asking me was
23 there a point in time when I came to know this, I can
24 answer that. I can't tell you if behind the scenes
25 they were concerned at a different point in time. I
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1 can only tell you what I know.
2 MR. SUAREZ: Of course.
3 THE WITNESS: The answer to your question,
4 as long as it's exclusively to what I specifically
5 know, the answer the yes.
6 BY MR. SUAREZ:
7 Q. When was that?
8 MR. SHAWDE: Object to the form.
9 THE WITNESS: I do not remember the date.
10 BY MR. SUAREZ:
11 Q. Okay. Do you recall a trip by Brian Jedwab
12 to South Florida to do enhanced due diligence?
13 MR. SHAWDE: Object to the form.
14 THE WITNESS: I do.
15 BY MR. SUAREZ:
16 Q. Do you recall approximately when that was?
17 A. There should be a document that would
18 refresh my recollection. I do not want to guess.
19 Q. I'm not trying to --
20 A. I don't have a specific recollection.
21 Q. I'm not trying to give you a memory test,
22 I'm just trying to lay some time frames out here.
23 MR. SHAWDE: I request that Mr. Rothstein
24 be allowed to finish his answer first before
25 interrupting him, thank you.
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1 MR. SUAREZ: Thank you, Jack. I appreciate
2 that.
3 Is there something else that you want to
4 say?
5 MR. SHAWDE: I'm good.
6 MR. SUAREZ: You are good, okay.
7 I'm going to mark Trustee's Exhibit 1 what
8 was previously provided to you as Bates range T-FJP 70
9 through T-FJP 140.
10 [The E-Mail referred to was marked for
11 identification as Trustee's Exhibit 1.]
12 BY MR. SUAREZ:
13 Q. I want to draw your attention,
14 Mr. Rothstein, to the second page of this exhibit, to
15 the first e-mail on this chain from
16 Gsteinbach@SFSfunding.com to Scott Rothstein. Who is
17 Gsteinbach@SFSfunding.com?
18 A. Frank Preve.
19 Q. Do you know why he used the alias
20 GSteinbach@SFSfunding.com?
21 MR. SHAWDE: Object to the form.
22 THE WITNESS: Yes.
23 BY MR. SUAREZ:
24 Q. Why?
25 MR. SHAWDE: Object to the form.
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1 THE WITNESS: Because this was a side deal
2 that he did not want Mr. Levin to know about.
3 BY MR. SUAREZ:
4 Q. Why did he not want Mr. Levin to know about
5 this side deal?
6 MR. SHAWDE: Object to the form.
7 THE WITNESS: To my understanding, he
8 wasn't supposed to be doing deals that did not
9 involve Mr. Levin.
10 BY MR. SUAREZ:
11 Q. What was -- I'm sorry. What was Mr. Preve's
12 relationship with Mr. Levin?
13 MR. SHAWDE: Object to the form.
14 THE WITNESS: They were friends and
15 Mr. Preve ran a significant number of Mr. Levin's
16 companies for him, including the Banyon entities.
17 BY MR. SUAREZ:
18 Q. What do you mean when you say Mr. Preve ran
19 the Banyon entities?
20 A. Well, my impression was the bulk of the time
21 that I did business with Mr. Levin and Mr. Preve,
22 Mr. Preve was in charge of the day-to-day operations
23 of what appeared to be the bulk of Mr. Levin's
24 businesses. Mr. Levin was not in the office
25 frequently. Mr. Preve was there nearly every day.
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1 The bulk of my -- the detailed interaction I had with
2 regard to the investments and with regard to even
3 other investments that Mr. Levin and I were making
4 together, for example, in Edify were all conducted on
5 a transactional level with Mr. Preve.
6 Q. Have you ever used the term "players" to
7 describe people?
8 A. Yes.
9 Q. What do you mean when you describe someone
10 as a player?
11 MR. SHAWDE: Object to the form.
12 THE WITNESS: For me, for me, a player is
13 someone who is susceptible to engaging in illegal
14 activity.
15 BY MR. SUAREZ:
16 Q. Was Mr. Preve a player?
17 MR. SHAWDE: Object to the form.
18 MR. SUAREZ: What's wrong with the form of
19 that question?
20 THE WITNESS: Yes.
21 MR. SUAREZ: Jack?
22 MR. SHAWDE: He's already answered it,
23 so ...
24 BY MR. SUAREZ:
25 Q. How was Mr. Preve a player?
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1 MR. SHAWDE: Object to the form. Can you
2 narrow the question for me. That's a very broad
3 question because it encompasses all of my dealing
4 with him over a significant period of time.
5 BY MR. SUAREZ:
6 Q. I'll state it differently.
7 What about your interactions with Mr. Preve
8 led you to conclude that he was a player?
9 MR. SHAWDE: Same objection.
10 THE WITNESS: If you review the e-mail
11 traffic between me and Mr. Preve, you can clearly see
12 that he was engaged in significant amounts of fraud
13 with me, running the gamut from lying to investors,
14 stealing investors' money to pay Mr. Levin's bills,
15 moving money around to create the appearance that
16 more money existed than did. He worked with me to
17 get the hedge funds at the end of the day to lie
18 about the sanctity and security and creditworthiness
19 of our investment strategy. He sent me documents to
20 attach to things to pretend that they were mine, to
21 create the appearance of something that did not
22 exist.
23 I mean, there's literally -- we'd have to
24 sit and go through all the e-mails, over 7,000
25 e-mails between Mr. Preve and I to understand. But
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1 it was clear early on that he was a player as far as
2 I was concerned. Probably one of the most glaring
3 things that ever occurred was when he was -- became
4 clearly aware that there was inadequate money in our
5 trust account at Gibraltar and TD and nothing was
6 ever done about it.
7 BY MR. SUAREZ:
8 Q. How did Mr. Preve become clearly aware that
9 there were inadequate monies in your trust accounts at
10 Gibraltar and TD?
11 A. He spoke to Mr. Spinosa at TD and John
12 Harris at Gibraltar regarding credit lines and when he
13 threw out there that he couldn't understand why the
14 credit lines were not being approved because we had X
15 number of dollars on deposit of 20 something million,
16 I don't remember the exact amount, on deposit with
17 these particular banks, Mr. Harris basically told him
18 that the money was not there. And Mr. Spinosa, if I'm
19 recalling and e-mail that Frank sent to George
20 correctly, Mr. Spinosa confirmed that the money wasn't
21 there. And all Mr. Preve did in response, to my
22 knowledge, was write an e-mail to Mr. Levin saying,
23 well, after Mr. Spinosa, after Frank confirmed to me,
24 meaning to Mr. Preve, that the money was not in the
25 trust account, I had to sit there and just smile in
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1 case we needed him for something in the future. So
2 it's all of those things, plus a significant amount
3 more.
4 Q. Okay. Let's go back to Trustee's Exhibit 1.
5 A. Okay.
6 Q. Back to the second page of that e-mail
7 chain. The original e-mail is from
8 GSteinbach@SFSfunding, who you've testified you
9 understood to be Mr. Preve's alias, to Scott
10 Rothstein.
11 A. Can you give me the Bates number? The
12 exhibit number doesn't work on this computer, I need
13 the Bates number.
14 Q. FJP 71.
15 A. Which one of -- which part of it?
16 Q. In initial e-mail, the original message.
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: I have it.
19 BY MR. SUAREZ:
20 Q. When you received an e-mail from
21 GSteinbach@SFSfunding.com, did you ask Mr. Preve,
22 "Hey, why are you sending me e-mails at
23 SFSfunding.com?"
24 MR. SHAWDE: Object to the form.
25 THE WITNESS: We joked around about it.
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1 BY MR. SUAREZ:
2 Q. What did you joke about?
3 A. Who the hell is Gsteinbach.
4 Q. And what did Mr. Preve tell you?
5 A. It was Guido Steinbach. Guido was the
6 nickname I think I gave him. He might have given it
7 to himself, but I think I gave it to him, I think I
8 started calling him Guido. It was a name he created
9 for SFS and I let it go at that.
10 Q. You respond to him, "I am out of the office
11 in fed court. Send me the deal details that I sent
12 you so I can work on the docs while I am sitting here.
13 I can access the forms but not the deal details as
14 they are secure and not accessible by wireless from
15 outside for obvious reasons." What did you mean by
16 that?
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: To send me the documents, the
19 deal details, that's it.
20 BY MR. SUAREZ:
21 Q. What do you mean by "the deal details"?
22 A. The amounts to pay out, the funding dates,
23 that type of stuff.
24 Q. Do I understand correctly that Mr. Preve
25 would be the one that would tell you when to fund the
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1 deal?
2 MR. SHAWDE: Object to the form.
3 THE WITNESS: I would tell him when I
4 needed the money and he would ultimately tell me when
5 I could have the money.
6 BY MR. SUAREZ:
7 Q. Can you explain to me what you mean by that?
8 A. Well, just because I wanted money didn't
9 mean I could have the money.
10 Q. So it was Mr. Preve's job to tell you when
11 you could have the money?
12 MR. SHAWDE: Object to the form.
13 THE WITNESS: Among other things, yes.
14 BY MR. SUAREZ:
15 Q. What were those other things?
16 A. All the things that we've been talking
17 about. Again, you are talking about over 7,000
18 e-mails.
19 Q. Turn back to FJ --
20 A. Handling the investor side of this.
21 Q. I'm sorry.
22 Turn back to FJP 70, please. The following
23 message from Gsteinbach to Scott Rothstein on
24 December 2nd, 2008 at the bottom half of the page
25 there.
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1 A. I have it.
2 Q. It says, "Based on 11 million funded, 11
3 million ROI," does that mean that if the investor put
4 in $11 million they'll get out $22 million?
5 A. Correct.
6 Q. Explain to me what the schedule below that
7 means.
8 MR. SHAWDE: Okay.
9 THE WITNESS: Just means that I'm going to
10 send $3,666,666.65 in January, February, March, April
11 and May of 2009, and then the same amount less $.02
12 in June of 2009 payable to Regent Capital.
13 BY MR. SUAREZ:
14 Q. And are these terms that would have been
15 dictated by your purported settlement with the
16 putative defendant or were these terms that were
17 dictated by Regent Capital?
18 MR. SHAWDE: Okay.
19 THE WITNESS: It should have been dictated
20 by me, but you can refer to the original funding
21 document to determine that.
22 BY MR. SUAREZ:
23 Q. Okay. At the time Mr. Preve sent you this
24 e-mail, did you know who Regent Capital was?
25 MR. SHAWDE: Object to the form.
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1 THE WITNESS: Did I know?
2 MR. SUAREZ: Yes.
3 THE WITNESS: Yes.
4 BY MR. SUAREZ:
5 Q. Who did you understand Regent Capital to be
6 at that time?
7 A. When I first got it, Murray Huberfeld, Jack
8 Simony, and Frank Preve.
9 Q. But wait a minute, weren't those the
10 principals of the hedge funds that were Banyon's
11 funding sources?
12 MR. SHAWDE: Object to the form.
13 THE WITNESS: Yes.
14 BY MR. SUAREZ:
15 Q. So why would they be investing through a
16 separate entity?
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: Actually, by this time the
19 hedge funds were giving us significant problems.
20 However, other parties wanted to continue to invest
21 obviously significant amounts of money with us.
22 BY MR. SUAREZ:
23 Q. When you say, "by this time the hedge funds
24 were giving us significant problems," what do you mean
25 by that?
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1 A. In terms of due diligence and the like.
2 Q. Due diligence because the hedge funds wanted
3 to conduct due diligence?
4 A. No. Do you have the date that Jedwab came
5 down here?
6 Q. I don't have an exhibit with it in front of
7 you, but I'll represent to you that it was late
8 December of 2008.
9 MR. SHAWDE: Object to the form.
10 THE WITNESS: That's what I'm talking
11 about. They were -- they had basically sloped
12 funding to near nonexistent funding. They were
13 sending people in to do what I referred to as
14 enhanced due diligence. We needed money for the
15 Ponzi scheme. Regent was a source. We were so
16 desperate for money that I offered what was
17 practically I think probably, if not the most, one of
18 the most lucrative deals I ever offered in the
19 history of the Ponzi scheme. In addition, I was
20 offering the significant return because these were
21 people that could really help us continue what we
22 were doing. Jack Simony was involved. He had been
23 very helpful to us. Mr. Preve obviously. Even as I
24 sit here today, I don't know exactly what Mr. Preve's
25 role was as a partner or not with the Regent Capital
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1 deal.
2 BY MR. SUAREZ:
3 Q. Was Mr. Preve the person that brought the
4 Regent Capital deal to you?
5 A. No, I would have brought the deal, he would
6 have brought the investor.
7 Q. Is he the one that brought Regent Capital as
8 an investor to this deal? What came first the chicken
9 or the egg, did Mr. Preve bring Regent to you or did
10 you bring the deal to Regent?
11 MR. SHAWDE: Object to the form.
12 THE WITNESS: My recollection is that I
13 presented the deal and he found, along with Jack
14 Simony, this funding source.
15 BY MR. SUAREZ:
16 Q. You told me a moment ago this was one of the
17 most lucrative deals that you had offered, correct?
18 A. Yes.
19 Q. Was there a specific reason why this deal
20 ended up in the hands of an entity controlled by the
21 principals of the hedge funds that were starting to be
22 very concerned about their investment in your
23 confidential settlements?
24 MR. SHAWDE: Object to the form.
25 THE WITNESS: At this time -- first of all,
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1 we needed the capital. We were very low on capital.
2 And number two, Jack Simony and Mr. Preve were
3 extremely close to me, so that's why the deal was
4 offered and structured in the manner in which it
5 ultimately was. But I needed the money regardless, I
6 mean, the Ponzi scheme was on the verge of having
7 real problems financially, so I wanted to make it a
8 lucrative deal as possible.
9 BY MR. SUAREZ:
10 Q. If I understand the terms of this deal, the
11 settlement would have been executed on December
12 the 2nd, when would the first payment have been due to
13 the plaintiff if this was a real deal?
14 MR. SHAWDE: Object to the form.
15 THE WITNESS: According to the document
16 Bates numbered 70, it would have been due on
17 January 7, 2009.
18 BY MR. SUAREZ:
19 Q. Is that the amount that would have been due
20 to the plaintiff or the amount due to Regent Capital?
21 A. Due to Regent.
22 Q. At the top of this page it says, "Client is
23 Risa Claremont." You see that?
24 A. Hold on. Yes.
25 Q. Risa Claremont wasn't a real client of RRA,
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1 was she?
2 A. Not a real person.
3 Q. And the defendant -- see it says, "Def is
4 Beacon Capital Partners." Does Beacon Capital
5 Partners exist?
6 A. To my knowledge, no.
7 Q. How did you come up with those names?
8 A. Debra Villegas came up with them.
9 Q. Okay. But --
10 MR. SHAWDE: Let the record reflect that
11 Mr. Rothstein winked at someone who was in the room
12 prior to Mr. Suarez giving his -- starting his next
13 question.
14 MR. SUAREZ: Okay.
15 THE WITNESS: I what?
16 MR. SUAREZ: Apparently you are winking at
17 somebody. Are you winking at somebody over there?
18 Mr. Shawde thinks you are winking at somebody.
19 THE WITNESS: I can't tell you where I am,
20 but there's no one there.
21 MR. SUAREZ: You told me the other day you
22 were in Guantanamo. That's a joke.
23 THE WITNESS: I know.
24 BY MR. SUAREZ:
25 Q. All right. See on this page where it says
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1 "Magic"? I'm looking at FJP 70.
2 A. Yes.
3 Q. 30,360,000.
4 A. I got it.
5 Q. Who would have written that?
6 MR. SHAWDE: Object to the form.
7 THE WITNESS: Debra Villegas.
8 BY MR. SUAREZ:
9 Q. What did "Magic" mean?
10 MR. SHAWDE: Okay.
11 THE WITNESS: Magic was the number that Deb
12 came up with by combining what was coming in --
13 excuse me what was due to the plaintiff, plus our
14 alleged attorney's fees and costs. So it was the
15 total amount of the putative settlement.
16 BY MR. SUAREZ:
17 Q. Mr. Rothstein, I didn't want to spend the
18 time recreating the wheel from last Monday and going
19 through how these fake settlements were supposed to
20 have worked, but I think maybe we should.
21 This settlement document, G-350, that you
22 denominated G-350, what is this deal? Explain this
23 deal to me, please.
24 MR. SHAWDE: Object to the form.
25 THE WITNESS: I didn't denominate this
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1 G-350. That number was given to it by Deb.
2 BY MR. SUAREZ:
3 Q. Okay. Deb is Debra Villegas the former CFO
4 of RRA?
5 A. Yes.
6 Q. Or COO, I'm sorry.
7 A. Yes, she was the COO.
8 Q. Who was the CFO of RRA?
9 MR. SHAWDE: Object to the form.
10 THE WITNESS: Irene Stay, formerly Irene
11 Shannon.
12 BY MR. SUAREZ:
13 Q. G-350 was allegedly a settlement that you
14 had reached on behalf of a putative plaintiff, with a
15 putative defendant, to set some sort of litigation
16 claim; is that correct?
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: Yes.
19 BY MR. SUAREZ:
20 Q. Okay. And the purpose of offering this
21 settlement to Regent Capital Partners was to allow the
22 defendant to receive -- I'm sorry, was to allow the
23 plaintiff to receive a lump sum of cash as opposed to
24 an income stream which would then be assigned to
25 Regent Capital; is that correct?
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1 MR. SHAWDE: Object to the form.
2 THE WITNESS: Well, the purpose was to
3 inject more money into the Ponzi scheme. The story
4 line was what you just said.
5 BY MR. SUAREZ:
6 Q. All right. In your own word, what was the
7 story line behind the settlement that you were
8 offering that was denominated G-350?
9 MR. SHAWDE: Object to the form.
10 THE WITNESS: At client of our firm, Risa
11 Claremont, was settling some type of employment claim
12 with Beacon Capital Partners to the amount of
13 $30,360,000. That she was giving up substantial
14 amount of her money, $11 million of it, in order to
15 receive the money in a lump sum and that some
16 investor could make $11 million in a very short
17 period of time by investing in this deal. That was
18 the story line.
19 BY MR. SUAREZ:
20 Q. But Risa Claremont didn't exist, right?
21 MR. SHAWDE: Objection, asked and answered.
22 THE WITNESS: Right.
23 BY MR. SUAREZ:
24 Q. And Beacon Capital Partners didn't exist,
25 correct?
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1 MR. SHAWDE: Object to the form.
2 THE WITNESS: Correct.
3 BY MR. SUAREZ:
4 Q. And this litigation didn't exist, correct?
5 MR. SHAWDE: Object to the form.
6 THE WITNESS: Correct.
7 BY MR. SUAREZ:
8 Q. And nobody ever paid $30 million to settle a
9 claim by Risa Claremont against Beacon Capital
10 Partners, correct?
11 MR. SHAWDE: Object to the form.
12 THE WITNESS: Correct.
13 BY MR. SUAREZ:
14 Q. The settlement terms of G-350, when did they
15 require Regent Capital Partners to invest $11 million
16 or to pay $11 million?
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: I don't remember. I need to
19 see the document that says that.
20 BY MR. SUAREZ:
21 Q. Okay. If you look at the top of the e-mail,
22 at FJP 70, T-FJP 70, it says, "Funding 11 million,
23 payout should read exactly as below." Do you see
24 that?
25 A. I do.
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1 Q. Okay. The first payment due to Regent
2 Capital Partners would have been on January 7th, of
3 2009, correct?
4 MR. SHAWDE: Object to the form.
5 THE WITNESS: Yes, sir.
6 BY MR. SUAREZ:
7 Q. Okay. And the second payment would have
8 been due on February 7th?
9 A. 2009, correct.
10 MR. SHAWDE: Same objection, witness has
11 already said he has to see the deal document.
12 MR. SUAREZ: Thank you, Mr. Shawde.
13 THE WITNESS: Yes.
14 BY MR. SUAREZ:
15 Q. And the third payment there says it would
16 have been due on March 7th of 2009, correct?
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: Yes.
19 BY MR. SUAREZ:
20 Q. Then the following payment on April 7th, of
21 2009, correct?
22 MR. SHAWDE: Same objection.
23 THE WITNESS: Yes.
24 BY MR. SUAREZ:
25 Q. The following payment on May 7th of 2009,
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1 correct?
2 MR. SHAWDE: Same objection.
3 THE WITNESS: That's correct.
4 BY MR. SUAREZ:
5 Q. And one final payment on June 7, 2009 for
6 $3,666,666.65, correct?
7 MR. SHAWDE: Same objection.
8 THE WITNESS: Yes, sir.
9 BY MR. SUAREZ:
10 Q. For a total repayment to Regent Capital of
11 22 million, correct?
12 MR. SHAWDE: Same objection.
13 THE WITNESS: Yes, sir.
14 BY MR. SUAREZ:
15 Q. Okay. During this period of December 2008,
16 you testified that the New York hedge funds engaged in
17 enhanced due diligence, correct?
18 MR. SHAWDE: Object to the form.
19 THE WITNESS: Yes, sir.
20 BY MR. SUAREZ:
21 Q. What enhanced due diligence did the New York
22 hedge funds conduct in December 2008?
23 A. Brian Jedwab and Ari Glass travelled to
24 South Florida to accompany me on meetings with three
25 groups of lawyers allegedly referring us hundreds of
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1 millions of dollars of employment cases.
2 Q. Was Mr. Preve aware that Mr. Jedwab was
3 coming down in December of 2008 to conduct enhanced
4 due diligence?
5 MR. SHAWDE: Object to the form.
6 THE WITNESS: Yes.
7 BY MR. SUAREZ:
8 Q. Did you speak about the enhanced due
9 diligence that Brian Jedwab came down to conduct in
10 December of 2008 with Mr. Preve?
11 MR. SHAWDE: Madam court reporter, can you
12 please read that question back?
13 MR. SUAREZ: I'll restate it.
14 BY MR. SUAREZ:
15 Q. What did you tell Mr. Preve about the
16 enhanced due diligence that Brian Jedwab came down to
17 conduct in December of 2008?
18 MR. SHAWDE: Did you say what did you tell?
19 MR. SUAREZ: Yes.
20 THE WITNESS: You have to give me a time
21 frame. Are you talking about before --
22 MR. SUAREZ: Before.
23 THE WITNESS: -- the due diligence took
24 place, while it was taking place or after.
25 BY MR. SUAREZ:
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1 Q. Let's start with before, what did you tell
2 Mr. Preve before the due diligence took place?
3 A. Mr. Preve and I had multiple conversations
4 expressing our concern with having to go through this
5 crap again with the hedge funds, because as we used to
6 call it, we kept pulling our pants down for them and
7 they never seemed satisfied.
8 Q. Why was Mr. Preve concerned that the hedge
9 funds were coming down to do additional diligence?
10 MR. SHAWDE: Object to the form.
11 THE WITNESS: You want to know to my
12 knowledge, right? Because I don't know what was
13 actually inside his head.
14 MR. SUAREZ: To your knowledge.
15 MR. SHAWDE: Object to the form.
16 BY MR. SUAREZ:
17 Q. Let me restate the question.
18 Did Mr. Preve tell you that he was concerned
19 about the hedge funds coming to do additional due
20 diligence in December of 2008?
21 A. Yes.
22 Q. What did he tell you about his concern that
23 the hedge funds were coming to do additional due
24 diligence in December of 2008?
25 A. He told me that he didn't like them poking
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1 around in your business, not using those exact words.
2 But he and I had a lot of conversations along these
3 line with regard to these guys from the hedge funds
4 and that I needed to make sure that everything was
5 perfectly in line so that the due diligence was
6 flawless because that was the only way we had any hope
7 of getting any significant continued funding from the
8 hedge funds.
9 Q. And did Mr. Preve draw any connection for
10 you between the enhanced due diligence that the hedge
11 funds were performing in December of 2008 and G-350?
12 MR. SHAWDE: Object to the form.
13 THE WITNESS: Did he draw a connection?
14 Are you asking me if we discussed what was going on?
15 MR. SUAREZ: Yes.
16 MR. SHAWDE: Object to the form.
17 THE WITNESS: Yes, there were several
18 conversations where I was basically asking -- we were
19 discussing the fact that what the hell is going on,
20 the hedge funds are saying they are not going to
21 invest any more money until they do this due
22 diligence. And meanwhile the main guy, basically the
23 Wizard of Oz, the guy controlling the strings, who
24 had all three hedge funds, Murray Huberfeld, was
25 investing $11 million with us.
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1 Ultimately, it turned out that
2 Mr. Nordlicht was part of Regent Group who was
3 another one of the senior partners of the hedge
4 funds. So we were like, what the hell is going on?
5 These guys are saying on one hand they can't invest
6 without this increased due diligence and on the other
7 hand they are giving us $11 million of their own
8 money. So that's the conversations we had.
9 BY MR. SUAREZ:
10 Q. When you were having these conversations,
11 did Mr. Preve tell you that either one of his entities
12 or Guido Steinbach would have received a significant
13 portion of the profits from G-350?
14 MR. SHAWDE: Object to the form.
15 THE WITNESS: It was my understanding that
16 he was going to be well taken care of out of this
17 deal. I didn't know whether he was an actual
18 participant or just getting a percentage for having
19 brought the deal to them, but he was going to be
20 compensated.
21 BY MR. SUAREZ:
22 Q. Okay. Can I turn you to Trustee's FJP 156
23 and 157 we'll mark that as Trustee's Exhibit 2.
24 [The Schedule and the Wire Transfer referred to
25 were marked for identification as Trustee's Exhibit
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1 2.]
2 BY MR. SUAREZ:
3 Q. The first page is a schedule prepared by the
4 Trustee's accountant. The second page is a wire
5 transfer that backs it up. Do you see that?
6 A. Yes.
7 Q. On January 2nd of 2009, RRA received a wire
8 of $11 million to fund the G-350 settlement?
9 MR. SHAWDE: Object to the form.
10 THE WITNESS: That's correct.
11 BY MR. SUAREZ:
12 Q. Did Mr. Preve tell you why that wire was
13 being sent on January 2nd, 2009?
14 A. I don't remember if we discussed it or not.
15 Q. What did Mr. Preve tell you about the source
16 of the $11 million sent to RRA on July -- sorry, on
17 January 2nd of 2009?
18 MR. SHAWDE: Object to the form.
19 THE WITNESS: I knew early on that it was
20 from Huberfeld and partners and that Simony and he
21 were involved in it at some level. I didn't know
22 that Nordlicht was involved until some time later. I
23 do not remember when Mr. Preve told me all that.
24 BY MR. SUAREZ:
25 Q. If you went back to Trustee's Exhibit 1,
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1 starting at FJP 70, could you tell me when this wire
2 should have been received, when these $11 million
3 should have been funded under the deal documents to
4 RRA?
5 MR. SHAWDE: Object to the form.
6 THE WITNESS: On or around December 2nd,
7 2008. But certainly no later than December 7th,
8 2008.
9 BY MR. SUAREZ:
10 Q. And why no later than December 7, 2008?
11 A. Because the first payment, as I proposed the
12 deal, the first payment was due on January 7th, 2009.
13 Q. As you proposed?
14 A. So it would make no sense -- hang on. It
15 would make no sense in the context of a real
16 settlement that someone was going to give up an
17 additional -- what amounted to $3,666,000 and change
18 of her money if she was only receiving it a couple of
19 days before that or on or about that date.
20 Q. Did you discuss that with Mr. Preve?
21 A. We may have.
22 Q. Do you recall anything about that
23 discussion?
24 MR. SHAWDE: Object to the form, lacks
25 predicate.
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1 BY MR. SUAREZ:
2 Q. What do you recall about that discussion?
3 MR. SHAWDE: Object to the form. The
4 witness didn't testify there was a discussion.
5 THE WITNESS: What's the question now?
6 BY MR. SUAREZ:
7 Q. All right. We talked about how the
8 settlement should have been funded in December
9 of 2008, but the wire actually didn't come in until
10 December -- I'm sorry, January of 2009. You said it
11 would have made no sense for the putative plaintiff to
12 give up all this money when she would have gotten it a
13 couple of days later anyway, correct?
14 MR. SHAWDE: Object to the form.
15 THE WITNESS: If this was real, certainly.
16 BY MR. SUAREZ:
17 Q. You say, "if this was real, certainly." Did
18 Mr. Preve tell you he knew this was real?
19 MR. SHAWDE: Object to the form.
20 THE WITNESS: No, that's not what I'm
21 saying.
22 BY MR. SUAREZ:
23 Q. What are you saying?
24 MR. SHAWDE: Object to the form.
25 THE WITNESS: I'm saying that it made
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1 absolutely no sense the way this was being funded and
2 handled. That's one of the reasons that Mr. Preve
3 and I joked around from time to time about the fact
4 that it certainly seemed like a lot of these people
5 had a pretty good idea of what was going on because
6 it made no sense. You are funding a deal for
7 $11 million basically the day the first payment is
8 due. It makes no sense.
9 BY MR. SUAREZ:
10 Q. I'm sorry, I am not sure I understand. Can
11 you explain to me what you were joking around
12 Mr. Preve about that's not making any sense?
13 MR. SHAWDE: Object to the form. Asked and
14 answered.
15 THE WITNESS: That no one is coming to us
16 saying, wait a second, this woman is going to give up
17 this first payment of $3,666,000 when she hasn't
18 received her money. It makes no sense. No one was
19 saying that to us. No one really cared. They would
20 care that they were getting $11 million on there, $11
21 million paid out over a really short period of time.
22 (Thereupon, Mr. Gottlieb entered the room.)
23 BY MR. SUAREZ:
24 Q. I'll turn you to Bates FJP 142, which I'll
25 mark as Trustee's Exhibit 3.
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1 [The E-mail referred to was marked for
2 identification as Trustee's Exhibit 3.]
3 BY MR. SUAREZ:
4 Q. Take a second and review the e-mail.
5 A. Okay.
6 Q. A couple of things I want to ask about in
7 the e-mail.
8 A. Sure.
9 Q. Brian, who is Brian?
10 A. Brian Jedwab.
11 Q. Why did Mr. Mr. Preve suggest you
12 marginalize him and ignore him in this e-mail?
13 MR. SHAWDE: Object to the form.
14 THE WITNESS: Because we had felt that
15 Brian was the biggest problem on the hedge funds side
16 with regard to potentially blowing up what we were
17 doing.
18 BY MR. SUAREZ:
19 Q. What do you mean by "blowing up what we were
20 doing"?
21 A. We had a giant Ponzi scheme in the works and
22 Brian was doing a significant amount of due diligence,
23 not the best due diligence I've ever seen, but he was
24 certainly trying.
25 Q. And did you and Mr. Preve discuss supplying
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1 false information to Brian in the course of his due
2 diligence?
3 A. Did we provide Brian with false information?
4 Q. Yes.
5 A. Yes.
6 Q. Did Mr. Preve assist you in providing false
7 information to Brian?
8 A. Yes.
9 Q. How did Mr. Preve assist you in providing
10 false information to Brian?
11 A. He was backing up everything that I was
12 saying. I wasn't there during a lot of the
13 conversations that Mr. Preve had with Brian without
14 me, but he certainly backed up everything I was
15 saying, including what I did with the lawyers down
16 here.
17 Q. Can you explain to me what you mean by "what
18 you did with the lawyers down here"?
19 A. Yes. Mr. Preve was well aware of the fact
20 that when we set up this ultimate due diligence deal,
21 that the lawyers that I was having say that they are
22 sending us all these cases were not sending us
23 anything of any significance. He knew who the lawyers
24 were. As a matter of fact, he knew that Doug Bates,
25 okay, was a friend of mine, okay, who was doing
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1 workers' comp and other civil rights type cases. He
2 knew they were a small firm out in Plantation,
3 Florida. He knew that Rosin was a criminal defense
4 lawyer who advertised on bus benches, and he knew by
5 the same token that Hirschowitz was a small firm. Yet
6 he backed up the questions by Jedwab, he backed up the
7 fact that these firms were substantial enough to be
8 sending me hundreds of millions of dollars in cases
9 and that they were receiving tens of millions of
10 dollars in referrals, fees back from me. That's one
11 of the ways.
12 Q. Mr. Preve knew that wasn't true?
13 MR. SHAWDE: Object to the form, knew what
14 wasn't true?
15 THE WITNESS: I have to agree with the
16 objection. I don't know what you are asking me.
17 BY MR. SUAREZ:
18 Q. You said that Mr. Preve backed up these
19 firms were sending you all this business, right?
20 A. Yes.
21 Q. Who did he back that up to?
22 A. Brian Jedwab, Jack Simony, Mark Nordlicht.
23 Q. When he backed that up, did Mr. Preve know
24 that it wasn't true?
25 MR. SHAWDE: Object to the form.
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1 THE WITNESS: Yes.
2 BY MR. SUAREZ:
3 Q. How did he know it wasn't true?
4 A. We discussed it on a number of occasions.
5 But more than that, just take a look at all the e-mail
6 traffic, you can't take anything in this case and pull
7 it out of context. If you look at what was going on,
8 the lies about the amount of money, the lies from the
9 bankers, me changing balance statements based upon
10 things that he said to me, me sending documents that
11 he sent me to the accounts that he actually prepared
12 and told me to scribble on them to make it look like I
13 had been working on them. I mean, there's such a
14 significant myriad of things that were going on,
15 papering in excess of -- excuse me, giving me over
16 $25 million of investor money without any paper, which
17 certainly could never have happened if this was a
18 legitimate investment. The investment didn't work
19 that way. At the very least, he would have had to
20 have a settlement agreement. Take all these things
21 together and it's clear that he knew what was going
22 on.
23 Q. Going back to Trustee's Exhibit 3, which is
24 a T-FJP 142.
25 A. Got it.
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1 Q. You see where Mr. Preve writes you, "We can
2 give them the finger or worse," at the end of the
3 first paragraph?
4 A. Yes.
5 Q. What did he mean by that?
6 MR. SHAWDE: Object to the form.
7 BY MR. SUAREZ:
8 Q. What was your understanding of what he meant
9 by "we can give them the finger or worse"?
10 MR. SHAWDE: Object to the form.
11 THE WITNESS: Give them the finger, them
12 tell them to F off, to go away and do no more
13 business with them or never pay them anything, keep
14 all their money.
15 BY MR. SUAREZ:
16 Q. "Them" being the New York hedge funds?
17 A. Yes.
18 Q. All right. The bottom sentence right before
19 he signs Frank Preve in the e-mail, Mr. Preve signs
20 Frank Preve in the e-mail, "You just have to keep your
21 fingers in the dike until one of these come thru. I
22 will keep pouring any excess cash into the coffers."
23 Do you see that sentence?
24 A. I do.
25 Q. Is that what you previously identified as
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1 Ponzi speak?
2 MR. SHAWDE: Object to the form.
3 THE WITNESS: Yes.
4 BY MR. SUAREZ:
5 Q. Can you explain to me how that's Ponzi
6 speak?
7 MR. SHAWDE: Object to the form.
8 BY MR. SUAREZ:
9 Q. What the real message that Mr. Preve was
10 trying to communicate to you there was?
11 MR. SHAWDE: Object to the form.
12 THE WITNESS: He's telling me that I've got
13 to do the best I can with what we've got in making
14 the investor payments, and that as he gets money in
15 from new investors, he'll forward it so I can pay the
16 old investors the payments that are due.
17 BY MR. SUAREZ:
18 Q. But what -- I'm sorry, I'm retracting that
19 question.
20 All right. In April of 2009, did you miss a
21 payment to Banyon?
22 MR. SHAWDE: Object to the form.
23 THE WITNESS: In April of 2009, you have to
24 be much more specific with me.
25
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1 BY MR. SUAREZ:
2 Q. All right.
3 Can you turn to FJP 150? I'll mark that as
4 Trustee's Exhibit 4.
5 [The E-mail referred to was marked for
6 identification as Trustee's Exhibit 4.]
7 THE WITNESS: Got it.
8 BY MR. SUAREZ:
9 Q. Start all the way at the bottom. See where
10 it says in a message dated 4/7/2009 SRothstein writes,
11 "Who is Regent investors.... Mayer is calling me about
12 them???"
13 A. Got it.
14 Q. Do you recall sending that e-mail?
15 A. I do.
16 Q. Why were you asking Mr. Preve who is Regent
17 investors?
18 MR. SHAWDE: Object to the form.
19 THE WITNESS: Because at this point in time
20 I was confused because I must not have known that
21 Mayer Nordlicht, that Mark Nordlicht was one of the
22 investors and he was specifically calling me about a
23 payment that was due on the Regent deal.
24 BY MR. SUAREZ:
25 Q. Why was Mayer Nordlicht calling you about a
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1 payment that was due on the Regent deal?
2 MR. SHAWDE: Object to the form.
3 THE WITNESS: Because I didn't make it.
4 BY MR. SUAREZ:
5 Q. Did Mr. Preve know you didn't make a payment
6 on the Regent deal that was due?
7 A. Yes.
8 Q. Did you tell him that you didn't make the
9 payment that was due to Regent on that day?
10 A. Yes, sir.
11 Q. What did you discuss with Mr. Preve about
12 the payment due to Regent that you had missed?
13 A. I told him I didn't have the cash in-house
14 to make the payment.
15 Q. Shouldn't you have had the cash in-house to
16 make the payment if you had all those pre funded
17 settlement deals in trust accounts and banks?
18 MR. SHAWDE: Object to the form.
19 THE WITNESS: Of course.
20 BY MR. SUAREZ:
21 Q. Did Mr. Preve ask you why you didn't have
22 the cash in-house to make the deal -- to make the
23 payment if you had all these pre funded settlement
24 accounts in your trust accounts?
25 A. No.
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1 Q. Why didn't Mr. Preve -- why do you believe
2 Mr. Preve didn't ask you?
3 MR. SHAWDE: Object to the form.
4 MR. SUAREZ: Can I finish my question
5 before you object to form?
6 MR. SHAWDE: I'm sorry, I thought you
7 finished. I'll wait for you to finish.
8 MR. SUAREZ: Then object to the form.
9 MR. SHAWDE: Then I object to the form.
10 MR. SUAREZ: Deal.
11 BY MR. SUAREZ:
12 Q. Why was it -- why do you believe that
13 Mr. Preve did not ask you why you missed the payment
14 when you had all of these pre funded settlements in
15 your trust accounts?
16 MR. SHAWDE: Object to the form.
17 MR. SUAREZ: There you go.
18 MR. SHAWDE: Asking the witness to
19 speculate into Mr. Preve's mind.
20 THE WITNESS: Because he knew that the
21 money wasn't there. He knew I was spending it on
22 other things. He knew I was paying earlier investors
23 with the money as it came in. He knew that he was
24 taking some of the money to pay Levin's bills. There
25 is a whole myriad of answers to that particular
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1 question.
2 BY MR. SUAREZ:
3 Q. How did he know that?
4 MR. SHAWDE: Object to the form.
5 THE WITNESS: Because he was involved in
6 the Ponzi scheme.
7 BY MR. SUAREZ:
8 Q. He was involved in the Ponzi -- did you
9 speak about the Ponzi?
10 MR. SHAWDE: Object to the form.
11 THE WITNESS: Without referring to the word
12 "Ponzi," Mr. Preve regularly had conversations as it
13 was necessary about how to keep this fraud going, how
14 to get new investors, how to make it look like money
15 was there that wasn't there, how to deal with
16 defaults that we were suffering, all kinds of things.
17 Again, go look at all the e-mails, take it all as one
18 big picture. You'll see exactly what I'm talking
19 about.
20 BY MR. SUAREZ:
21 Q. On April 7th of 2009, was there a missed
22 payment to the New York hedge funds?
23 A. Yes.
24 Q. What do you recall about the missed payment
25 to the New York hedge funds?
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1 MR. SHAWDE: Object to the form.
2 THE WITNESS: I don't recall specifically.
3 I need to see a document to refresh my recollection.
4 I do remember missing a large payment and having to
5 come up with all kinds of stories to cover it.
6 BY MR. SUAREZ:
7 Q. The second portion of this e-mail, Trustee's
8 exhibit --
9 A. Can we take one second so I can use the
10 restroom, please?
11 MR. SUAREZ: Absolutely.
12 [Short recess taken.]
13 BY MR. SUAREZ:
14 Q. In April of 2009 there was a missed payment
15 to the New York hedge funds. The New York hedge funds
16 went wild and started sending people down here and
17 ultimately stopped funding. Is that -- do you
18 remember that time period?
19 MR. SHAWDE: Object -- is the question does
20 he remember?
21 THE WITNESS: I do.
22 BY MR. SUAREZ:
23 Q. All right. And you came up with a story to
24 explain to the funds why you had missed that payment;
25 is that correct?
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1 A. I did.
2 Q. What was that story?
3 A. That the Bar was investigating me for not
4 doing what I said I was going to do with regard to
5 funding of these clients and that they had frozen the
6 money in my trust accounts.
7 Q. Was that story true?
8 A. No, sir.
9 Q. What really happened?
10 MR. SHAWDE: Object to the form.
11 THE WITNESS: We were out of money.
12 BY MR. SUAREZ:
13 Q. Because the confidential settlements didn't
14 exist and weren't pre funded in your trust account,
15 correct?
16 MR. SHAWDE: Object to the form.
17 THE WITNESS: Correct.
18 BY MR. SUAREZ:
19 Q. At the risk of stating the obvious.
20 I just want to focus in on that time period
21 here when there's the missed payments to the funds.
22 Do you agree with me that Banyon, whichever one of the
23 appropriate Banyon entities, was the party that was
24 acquiring the interest in the confidentiality
25 settlements?
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1 MR. SHAWDE: Object to the form.
2 THE WITNESS: Yes, the Banyon entities were
3 acquiring the interest on behalf of their investors.
4 BY MR. SUAREZ:
5 Q. And three of the investors were the New York
6 hedge funds?
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: Correct.
9 BY MR. SUAREZ:
10 Q. And the New York hedge funds sent money down
11 to you through Banyon and you sent money up to them
12 through Banyon, correct?
13 MR. SHAWDE: Object to the form.
14 BY MR. SUAREZ:
15 Q. Through certain of the Banyon entities?
16 A. Correct.
17 Q. At some point in time, in April of 2009, you
18 were unable to send money up to the New York hedge
19 funds through the Banyon entities anymore, correct?
20 A. That's correct.
21 Q. How did the income hedge funds react?
22 MR. SHAWDE: Object to the form.
23 THE WITNESS: They were unhappy.
24 BY MR. SUAREZ:
25 Q. Did they send people down here, did the New
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1 York hedge funds send people down here to do
2 additional diligence?
3 A. At various points in time, yes.
4 Q. And one of the stories why -- you came up
5 with why you couldn't pay them back any more money was
6 that the Bar had frozen your trust accounts, correct?
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: Yes.
9 BY MR. SUAREZ:
10 Q. The Bar, in fact, never froze your trust
11 accounts, correct, in April of 2009?
12 MR. SHAWDE: Object to the form.
13 THE WITNESS: Correct.
14 BY MR. SUAREZ:
15 Q. At some point did you set up a call with the
16 New York hedge funds and someone purporting to be an
17 attorney for the Florida Bar?
18 A. I did.
19 Q. What was the purpose of that phone call?
20 A. To make the hedge funds believe that I was
21 really having problems with the Florida Bar.
22 Q. But, of course, you were not really having
23 problems with the Florida Bar, you just ran out of
24 money to pay back your investors?
25 MR. SHAWDE: Object to the form.
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1 THE WITNESS: Correct.
2 BY MR. SUAREZ:
3 Q. Did you tell Mr. Preve that you were having
4 problems with the Florida Bar?
5 MR. SHAWDE: Object to the form.
6 THE WITNESS: Early on I did, yes. Not
7 having to do with this, early on.
8 BY MR. SUAREZ:
9 Q. Can you explain what you mean by "early on"?
10 A. I need to see the paperwork that goes with
11 it, but I remember discussing it with him early on.
12 Q. Well, when you set up --
13 A. I need the document to refresh my
14 recollection, I can't tell you.
15 Q. Trustee's Exhibit 4.
16 A. What's the Bates number?
17 Q. FJP 150.
18 A. Got it.
19 Q. You write Mr. Preve to tell him that, "I am
20 with my Bar lawyer, she is trying to help as best she
21 can." You see that at the top of that e-mail?
22 A. I do.
23 Q. Did you tell Mr. Preve in April of 2009, on
24 April 7th of 2009, that you were having problems with
25 the Florida Bar?
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1 A. I wrote him this letter saying that, but he
2 knew this was not real by this time, yes.
3 Q. How did he know it wasn't real at that time?
4 A. I told him.
5 Q. What did you tell him?
6 A. During a few conversations that I had with
7 him when I first came up with the Bar thing. He
8 expressed to me that he knew it was a bunch of crap
9 because, to his understanding from speaking to other
10 lawyers that he spoke to, the Bar can't freeze your
11 trust accounts without a court order. That there
12 would be numbers assigned to grievances. He also knew
13 that there were no real clients. He also knew that
14 there were no real defendants. So why would there be
15 a real problem with the Bar freezing money that wasn't
16 really there. That's all I recall at this moment.
17 There may be more.
18 Q. If Mr. Preve knew that the story about the
19 Florida Bar freezing your trust accounts was not true,
20 why would you write him an e-mail telling him that you
21 were meeting with your Florida Bar lawyer?
22 A. It's Ponzi speak. And as I testified
23 previously on several occasions, it has two purposes.
24 Q. And what are those purposes, Mr. Rothstein?
25 A. One was to convey a message to the person,
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1 that's one of the potential purposes, and the other is
2 to provide him with plausible deniability so that he
3 can utilize the documents to either read from or
4 forward to the parties that we were trying to fool.
5 Q. In other words, you sent him this e-mail to
6 make sure you were both on the same page about the
7 concocted Florida Bar story, correct?
8 MR. SHAWDE: Object to the form.
9 THE WITNESS: Among other things, yes.
10 BY MR. SUAREZ:
11 Q. Okay. Second paragraph of that top portion
12 of the e-mail you write, "Do not say anything about
13 any of this in the default letter." What default
14 letter were you talking about?
15 (Thereupon, Mr. LaVecchio exited the room.)
16 THE WITNESS: Mr. Preve and I had discussed
17 sending a default letter to the hedge funds saying
18 that they were in default of their funding
19 obligations. It was part of the war that we were
20 having with the hedge funds at this point in time
21 because of their failure to fund.
22 BY MR. SUAREZ:
23 Q. Can you describe what you mean by a war you
24 were having with the New York hedge funds because of
25 their failure to funds?
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1 A. We needed the money for the Ponzi scheme.
2 They weren't funding as they had kept telling us they
3 were going to fund. They were not living up to their
4 obligation under their funding agreements with Banyon.
5 We were trying to press them into funding.
6 Q. But, of course, your only source of
7 repayment to the funds was the money that they were
8 sending down to you, correct?
9 MR. SHAWDE: Object.
10 THE WITNESS: No, no, that's incorrect.
11 MR. SUAREZ: Oh, I'm sorry, correct me
12 then.
13 MR. SHAWDE: Object to the form.
14 THE WITNESS: There was money coming in
15 from other investors as well.
16 MR. SUAREZ: Oh, okay. Thank you.
17 THE WITNESS: You are welcome.
18 MR. SHAWDE: You guys want a moment,
19 perhaps?
20 MR. SUAREZ: A moment for what? I didn't
21 understand that remark? Do you need a moment? Jack?
22 MR. SHAWDE: No.
23 MR. SUAREZ: Oh, okay.
24 BY MR. SUAREZ:
25 Q. When you write Mr. Preve this e-mail on
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1 April 7th of 2009, let's assume Mr. Preve says that he
2 didn't know that this was one giant fraud, let's
3 assume that Mr. Preve says that he thought that these
4 confidential settlements were completely legitimate.
5 Let's assume all of that for a moment.
6 When you write this e-mail to Mr. Preve on
7 April 7th of 2009, at the very least you would agree
8 that Mr. Preve knew that your confidential settlement
9 business was in serious trouble, correct?
10 MR. SHAWDE: Object to the form. The
11 witness isn't here to speculate or make assumptions.
12 The witness is here as a fact witness.
13 MR. SUAREZ: Thank you, Jack.
14 You can answer if you understood my
15 question. I think you did.
16 THE WITNESS: Assuming everything you said,
17 then -- I don't even remember the question now. Can
18 you ask me the question again? You don't need to go
19 back through all those assumptions and everything,
20 just get to the heart of the question.
21 (Thereupon, Mr. LaVecchio entered the room.)
22 BY MR. SUAREZ:
23 Q. The heart of the question is, even if
24 Mr. Preve -- let me restate that.
25 The heart of the question is, even if
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1 Mr. Preve were to say that he didn't know that you
2 were running a full-blown Ponzi scheme, at the very
3 least you'd agree that he knew that you weren't paying
4 your investors back on time, correct?
5 MR. SHAWDE: Object to the form.
6 THE WITNESS: That's correct. That's the
7 point I was trying to make earlier, yes.
8 BY MR. SUAREZ:
9 Q. I know the question may sound ridiculous,
10 but in bankruptcy lawyer speak it should have some
11 sense.
12 I'd like to turn you to Trustee's Exhibit
13 FJP 141, which I'm going to mark as Trustee's 5.
14 [The E-mail referred to was marked for
15 identification as Trustee's Exhibit 5.]
16 THE WITNESS: I got it.
17 BY MR. SUAREZ:
18 Q. See where it says, "Hey, triple GGG"?
19 A. Yes.
20 Q. That's you writing to Mr. Preve, right?
21 A. Correct.
22 Q. What does triple GGG mean?
23 A. Guido Guido Guido.
24 Q. Is that a nickname you came up for
25 Mr. Preve? Was that your nickname for Mr. Preve?
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1 A. I think I came up with it, yes, yes.
2 Q. No, I'm sorry, go ahead, I interrupted you.
3 A. No, that's okay.
4 Q. All right. See where it says, "Do not
5 forget to let Jack know that we now know that they are
6 all in this together." What are you talking about?
7 A. Yes. At this point in time everything is
8 exploding with the hedge funds. They have cut off our
9 funding. We are cutting off their funding. We are
10 basically at war. Everyone is trying to get a leg up
11 on the other party. I'm reminding Mr. Preve to
12 utilize the whole SFS/Regent side deal, okay, to gain
13 an additional leg up, that we know that Mayer is
14 involved in this, that we know they are probably
15 hiding it from other people at their hedge fund, that
16 they are double dealing with or side dealing these
17 people. And that we are prepared to go to war and
18 blow this thing up if necessary.
19 (Thereupon, Mr. LaVecchio exited the room and
20 Mr. Kaplan entered the room.)
21 BY MR. SUAREZ:
22 Q. Did Mr. Preve communicate this to the hedge
23 funds?
24 MR. SHAWDE: Object to the form.
25 THE WITNESS: Yes, he did.
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1 BY MR. SUAREZ:
2 Q. How do you know that?
3 A. Because he wrote me an e-mail back telling
4 me he brought it up.
5 Q. At the time that you wrote this e-mail to
6 Mr. Preve, did you know he had an interest in the
7 Regent side deal?
8 MR. SHAWDE: Object to the form.
9 THE WITNESS: I'm fairly certain I did. I
10 don't have a specific recollection one way or the
11 other, but I'm fairly certain he did.
12 BY MR. SUAREZ:
13 Q. Mr. Preve --
14 A. Excuse me, that I knew.
15 Q. Mr. Preve responded to your e-mail of April
16 the 8th 2009 later that morning at 10:14 a.m., see
17 that there? He was later shocked -- I'm sorry, "He
18 was shocked when I brought it up. We will have that
19 little one-on-one with you, me and he later." Do you
20 know what he meant by that?
21 MR. SHAWDE: Object to the form.
22 THE WITNESS: I do.
23 BY MR. SUAREZ:
24 Q. What did Mr. Preve mean by that?
25 MR. SHAWDE: Object to the form.
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1 THE WITNESS: He and I had discussed the
2 fact that I was going to sit down with Jack Simony
3 and tell him that if he didn't get these guys to fund
4 that we were on the verge of DOMAD, doctrine of
5 mutually assured destruction. That they were going
6 to fire, we'd fire, and everyone would blow up and
7 everyone was going down together. That we were
8 either going to fight through this together and get
9 things back on track or everybody was in trouble.
10 BY MR. SUAREZ:
11 Q. What were you going to get back on track?
12 MR. SHAWDE: Object to the form.
13 THE WITNESS: I wanted them to fund. If
14 they funded I was going to start paying them again.
15 BY MR. SUAREZ:
16 Q. The following line of that e-mail from
17 Mr. Preve, "The grand question is what is going to
18 make all of this right?" Is that more Ponzi speak?
19 MR. SHAWDE: Object to the form.
20 THE WITNESS: I don't necessarily know that
21 it's Ponzi speak. I think it's him asking me what
22 the hell are we going to do to fix this.
23 BY MR. SUAREZ:
24 Q. Did he have any suggestions?
25 A. I don't recall one way or the other. I'm
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1 sure he did. He was -- he's extremely bright. I
2 mean, we tried to brainstorm as much as we could to
3 get this back on track with the hedge funds.
4 Q. Ultimately you were unable to get back on
5 track with the hedge funds, correct?
6 MR. SHAWDE: Object to the form.
7 THE WITNESS: That's correct.
8 BY MR. SUAREZ:
9 Q. Did you reach some sort of understanding
10 with the hedge funds about how you'd pay them out?
11 A. A loose understanding, but yes.
12 Q. And what was that loose understanding?
13 A. It was originally we were going to try to
14 get them a certain amount of money every week. I
15 don't remember what the amount was. For some reason
16 15 million is popping into my head. I don't know if
17 that was -- I think that was weekly, it could have
18 been monthly. I need to see the document to refresh
19 my recollection on that. But ultimately what we did
20 was, after we got money into the Ponzi scheme from
21 other investors, I took that money and I paid parts of
22 it out to the various hedge funds. And ultimately, to
23 the best of my recollection, I think I paid them back
24 just about everything that they had outstanding with
25 the exception of maybe 15, 18 million bucks.
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1 Q. Did you tell Mr. Preve that that's how you
2 were paying out the hedge funds?
3 A. I don't understand what you mean. I made
4 all the payments through the accounts that he was
5 controlling, the BIF accounts, all those accounts, so
6 he would have to know that's how I was paying them.
7 Q. Okay. Let me turn you then --
8 A. He was seeing the money going through the
9 accounts.
10 Q. I think that's correct.
11 Can you turn to Trustee's Exhibit FJP 146
12 and 147, which I'll mark as Exhibit 6.
13 [The E-mails referred to were marked for
14 identification as Trustee's Exhibit 6.]
15 BY MR. SUAREZ:
16 Q. The bottom of the e-mail there is an e-mail
17 from Mr. Preve to Mark Nordlicht and Jack Simony.
18 A. Frank --
19 Q. Yes, no, nothing?
20 MR. SHAWDE: I don't know, is that a
21 question? Is that just a statement?
22 MR. SUAREZ: I thought you had said
23 something, I wanted to know if you needed something.
24 MR. SHAWDE: No.
25
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1 BY MR. SUAREZ:
2 Q. This is an e-mail exchange between the funds
3 and Mr. Preve which he forwarded to you. And your
4 response is, "What the hell is that bullshit about you
5 being concerned about the lack of direct releases?"
6 MR. SHAWDE: Object to the form lack of
7 predicate.
8 BY MR. SUAREZ:
9 Q. You see that?
10 A. I do.
11 Q. What did you mean by that?
12 A. Mr. Preve was writing a CYA letter -- e-mail
13 and I was pissed because it looked like he was
14 throwing everything off on me and then he was
15 questioning me as opposed to just kind of running with
16 the Bar thing. I mean, he threw the Bar thing in
17 there, but he's saying, oh, you are not the only
18 people concerned, hedge funds, I'm concerned too, and
19 I found it to be obnoxious.
20 Q. Why did you find it to be obnoxious?
21 MR. SHAWDE: Object to the form.
22 THE WITNESS: Because we were all in this
23 mess together and it was unnecessary for him to say
24 that. As you can tell from my e-mail, I am extremely
25 aggravated because he was making me sound like I was
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1 the problem as opposed to the way we were playing
2 this, which was the hedge funds were the problem.
3 They are the guys that created the problem that I'm
4 now having with the Bar.
5 MR. SUAREZ: I see.
6 I'll mark Trustee's Exhibit FJP 151 as
7 Exhibit 7.
8 [The e-mail referred to was marked for
9 identification as Trustee's Exhibit 7.]
10 BY MR. SUAREZ:
11 Q. Do you have that, Mr. Rothstein?
12 A. Yes, sir.
13 Q. Your initial e-mail to Mr. Preve is dated
14 April 9, 2000. "Hey GGG, did we ever get the call
15 back from Mayer as to whether Platinum was going to
16 fund another 20 million this coming Friday? Let me
17 know. Trying to dig out of the black hole." What was
18 the purpose of this e-mail to Mr. Preve?
19 A. Are we getting another $20 million in.
20 Q. What did you mean?
21 A. Trying to keep the Ponzi scheme from
22 exploding.
23 Q. Why didn't you use the words, "trying to
24 keep the Ponzi scheme from exploding"?
25 A. I never used those words in any e-mail.
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1 Q. Okay.
2 A. That's not the way I spoke. Use Ponzi
3 speak. You try to avoid detection. Don't try to
4 increase your likelihood of detection. Try to keep
5 everything looking as real as possible.
6 Q. Was Mr. Preve fluent in Ponzi speak?
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: Read all his e-mails, he
9 clearly was. Although, I must tell you going back
10 and reviewing all of these e-mails, he was a little
11 too liberal with speaking directly about fraudulent
12 items that were occurring.
13 MR. SUAREZ: Can you turn to Trustee's FJP
14 143 and 144? I'll mark this as Trustee's Exhibit 8.
15 [The E-mail referred to was marked for
16 identification as Trustee's Exhibit 8.]
17 BY MR. SUAREZ:
18 Q. At the bottom of this e-mail chain, that's
19 an e-mail from Mr. Preve dated April 16, 2009, to
20 GeorgeGLevin@MSN.com, copy to Scott Rothstein, subject
21 compliance. Do you see that?
22 A. I do. I see that's in the middle, there's
23 an e-mail from me first.
24 MR. SHAWDE: Object to the form, lack of
25 predicate.
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1 BY MR. SUAREZ:
2 Q. On Page 144? I don't see your --
3 A. I'm sorry, I was -- hang on. Hang on.
4 Q. All right.
5 A. I have 144 now. Yes, I see the e-mail you
6 are talking about.
7 Q. You see the e-mail.
8 A. I do.
9 Q. Can you take a second to read the e-mail?
10 A. Okay. I've reviewed it.
11 Q. Okay. The first sentence, let's go through
12 this e-mail line by line. "I'm sending out the
13 compliance certificates to Platinum and Centurion
14 dated as of 4/8/9 because there is a line in the
15 certificate to point out any defaults. Normally I
16 send them as of the 15th."
17 Do you know why Mr. Preve was sending out
18 compliance certificates early?
19 MR. SHAWDE: Object to the form.
20 THE WITNESS: I do.
21 BY MR. SUAREZ:
22 Q. Why is that?
23 A. He and I discussed the fact that we did not
24 want to basically commit any more fraud than we had
25 to, and if he backdated the compliance certificates
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1 then, in essence, by backdating it we were not yet in
2 default with the hedge funds.
3 Q. Let me understand this correctly. After
4 April the 8th of 2009 who was in default with the
5 hedge funds?
6 A. Banyon.
7 Q. Mr. Preve obviously knew that Banyon was in
8 default with the hedge funds after April the 8th,
9 2009?
10 MR. SHAWDE: Object to the form.
11 THE WITNESS: Yes.
12 BY MR. SUAREZ:
13 Q. What did you discuss with Mr. Preve about
14 Banyon's default to the hedge funds after April 8,
15 2009?
16 A. That's too broad a question because those
17 conversations -- we had probably over a hundred
18 conversations about this default issue over the
19 following days, weeks and months. If you want to know
20 what I discussed specifically with regard to the
21 compliance certificates, that's a more narrow
22 question.
23 Q. All right. Tell me specifically with regard
24 to the compliance certificates, what did you discuss?
25 MR. SHAWDE: Object to the form.
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1 THE WITNESS: The fact that he's got to
2 send out his compliance certificates, that we wanted
3 to put little potential written fraudulent documents
4 into the information stream as possible. And he came
5 up with the idea, as is evidenced by this e-mail,
6 that he would backdate the compliance certificates to
7 a date pre default. So in essence, even though he
8 was sending it out on a date where we were in
9 default, excuse me, where Banyon was in default, he
10 was backdating it so that it did not appear -- well,
11 actually, so that as of the date that he signed the
12 documents we were in compliance.
13 BY MR. SUAREZ:
14 Q. And why was it important for Mr. Preve to
15 send out compliance certificates that said you were in
16 compliance?
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: It was part of one -- it was
19 one of the covenants in the loan agreements between
20 Banyon and the hedge funds.
21 BY MR. SUAREZ:
22 Q. All right. The following sentence he
23 writes, "I also had a call from Deutsch Bank asking if
24 all the lines were in good standing, to which I
25 replied affirmatively." What's Deutsche Bank?
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1 A. Yes, sir.
2 Q. What was with Deutsche Bank's involvement at
3 this time in the Ponzi scheme?
4 MR. SHAWDE: Object to the form.
5 THE WITNESS: Mr. Levin and Mr. Preve were
6 negotiating with Deutsche Bank to potentially provide
7 us with a new line of funding.
8 BY MR. SUAREZ:
9 Q. So if on April 16th, 2009, Mr. Preve told
10 Deutsch Bank that the lines were in good standing,
11 that would not be correct?
12 MR. SHAWDE: Object to the form.
13 THE WITNESS: That's correct. That was --
14 to say that they were in good standing on that date
15 was a lie.
16 BY MR. SUAREZ:
17 Q. Then the following sentence says, "At some
18 point Deutsche Bank is going to want to talk to
19 Platinum and Centurion - right now they say they have
20 tremendous interest from all of their fund managers
21 from Banyon product but they want to make sure we have
22 'liquidity backup.' I assured them we did." That
23 wouldn't have been an accurate assurance, correct?
24 MR. SHAWDE: Object to the form.
25 THE WITNESS: You are talking about the
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1 line where it says that they had liquidity backup?
2 MR. SUAREZ: Correct.
3 THE WITNESS: That was not true. That's
4 why it's in quotes.
5 BY MR. SUAREZ:
6 Q. Are quotes a way of indicating a double
7 meaning in Ponzi speak?
8 MR. SHAWDE: Object to the form.
9 THE WITNESS: It was when Frank and I were
10 writing to each over.
11 BY MR. SUAREZ:
12 Q. Okay. How about the ellipsis --
13 A. Me and George knew that there was no
14 liquidity backup. If we really had liquidity backup,
15 we wouldn't have had all these funding issues.
16 Q. And the reason you had the funding issues
17 wasn't because the Bar had frozen your trust accounts,
18 it's because the confidential settlements were
19 completely manufactured, correct?
20 MR. SHAWDE: Object to the form.
21 THE WITNESS: Yes.
22 BY MR. SUAREZ:
23 Q. Thank you.
24 Were you surprised that Mr. Preve would
25 write you an e-mail saying that he's misrepresented
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1 the status of the line to Deutsche Bank?
2 MR. SHAWDE: Object to the form.
3 THE WITNESS: Let me answer it in two
4 parts. I was not surprised that he was lying to
5 Deutsche Bank. And by this time, I wasn't surprised
6 that he confirmed it to me in an e-mail because he
7 had a habit of confirming things in e-mails that he
8 shouldn't be confirming in e-mails, things that would
9 have been better off handled over the phone.
10 BY MR. SUAREZ:
11 Q. Okay. Sorry, back to FJP 144. The
12 following line there, "The PPM should be here
13 shortly - the writer is also scheduling a trip down
14 here next week for a post-issuance wrap-up." Who's
15 the PPM he's talking about there?
16 MR. SHAWDE: Object to the form.
17 THE WITNESS: Private placement memorandum
18 they were working on to go ahead and attempt to
19 solicit new investors.
20 BY MR. SUAREZ:
21 Q. Is that the private placement memorandum
22 that was ultimately issued by Banyon Income Fund?
23 MR. SHAWDE: Object to the form.
24 THE WITNESS: I don't remember.
25
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1 BY MR. SUAREZ:
2 Q. But safe enough to say that at the time the
3 PPM was being drafted, this e-mail -- in this e-mail
4 Mr. Preve was confirming to you that he knew that the
5 Platinum lines were in default, correct?
6 MR. SHAWDE: Object to the form.
7 THE WITNESS: Sure. Because he's saying
8 he's concerned about the fact that they are going to
9 want to talk to -- the Deutsch Bank is going to want
10 to talk to Platinum and Centurion. And that was
11 something we obviously needed to handle because if
12 Platinum and Centurion were not willing to lie on our
13 behalf, we were going to have trouble getting any
14 future due diligence accomplished. So it was a
15 significant issue for all of us.
16 BY MR. SUAREZ:
17 Q. Okay. Let's skip to the top of this e-mail
18 at FJP 143. You write on April 16, 2009 at 4:46, to
19 Mr. Preve and Mr. Levin, you see the e-mail, it says,
20 "Then forget them. Ari has made it clear that he will
21 not let mark fund. He will report him to the SEC. He
22 said that to me several times prior to the holiday."
23 Who's Ari?
24 A. Ari Glass, one of the principals of the
25 hedge funds.
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1 Q. What was he going to report to the SEC?
2 MR. SHAWDE: Object to the form.
3 THE WITNESS: Well, as I sit here today,
4 I'm not actually sure he was ever going to report
5 anything to the SEC. As you know from my deposition
6 over 10 days in December, I learned that that was
7 just Ari trying to shake us up. But in the point in
8 time that we -- I was writing this, I believed that
9 Ari was threatening to go to the SED and tell them
10 that he thought there was a fraud going on.
11 BY MR. SUAREZ:
12 Q. Did you discuss with Mr. Preve Ari's threat
13 to go to the SEC and report that there was a fraud
14 going on?
15 MR. SHAWDE: Object to the form.
16 THE WITNESS: Oh, yeah.
17 BY MR. SUAREZ:
18 Q. What did you discuss with Mr. Preve?
19 A. I told him that we needed to get this guy
20 under control. That Mark and Jack needed to pull the
21 reins on this guy in that he was going cause this
22 entire thing to explode, that the hedge funds were
23 going to explode, that we were going to explode, that
24 everyone was going to go to jail, and it was not going
25 to be good for anybody.
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1 Q. And after reading this e-mail, can you tell
2 me more or less that conversation happened around
3 April 16, 2009?
4 MR. SHAWDE: Object to the form.
5 THE WITNESS: It happened around that time
6 and it happened on multiple occasions before and
7 after. Ari was a constant source of tension for us
8 and aggravation.
9 BY MR. SUAREZ:
10 Q. Did you and Mr. Preve discuss how to deal
11 with Ari?
12 A. As best as we could, yes.
13 Q. Did you give Mr. Preve instruction on how to
14 deal with Ari?
15 A. As you can see from this e-mail, from time
16 to time I did, yes, how I thought he should be dealt
17 with.
18 Q. Do you know if Mr. Preve followed your
19 suggestions on how he should deal with Ari?
20 A. To the best of my recollection he did.
21 Q. How do you know that?
22 A. Because we discussed it. And I discussed it
23 also with Mr. Simony that he had talked to Frank Preve
24 about things that I had discussed with him.
25 Q. Can you please turn to Trustee's Exhibit FJP
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1 148 and 149, which I'll mark as Trustee's Exhibit 9.
2 [The E-mail referred to was marked for
3 identification as Trustee's Exhibit 9.]
4 BY MR. SUAREZ:
5 Q. You see at the bottom of that e-mail you
6 write Guido?
7 A. Which, 148 or 149?
8 Q. I'm sorry, 148, all the way at the top of
9 page you write, "Guido, what funding are we expecting
10 this week so I could continue 'pleasing' the Bar
11 folks..." what did you mean by that?
12 A. I mean paying back investors that were due
13 money.
14 Q. Is there a reason that the word "pleasing"
15 is in quotations?
16 A. That's why, because there are no Bar people
17 to be pleasing.
18 Q. The following sentence, "In the meantime Deb
19 is papering all other deals from last week." What did
20 you mean by that?
21 A. It sounds like -- I need to see the other
22 e-mails surrounding this, but it sounds like we were
23 trying to catch up on old paperwork.
24 Q. When you say, "old paperwork," do you mean
25 papering deals that had been funded without any
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1 paperwork?
2 MR. SHAWDE: Object to the form.
3 THE WITNESS: Yes.
4 BY MR. SUAREZ:
5 Q. And whose responsibility was it to paper
6 those deals?
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: Debra Villegas.
9 BY MR. SUAREZ:
10 Q. What was Mr. Preve's role in papering the
11 deals?
12 MR. SHAWDE: Object to the form.
13 THE WITNESS: Making sure I had the
14 information from his side as to who the investors
15 were and the like, and then monitoring me to make
16 sure that the paper got done.
17 BY MR. SUAREZ:
18 Q. Did Mr. Preve ever send you investor money
19 without making sure that the paperwork had already
20 been done?
21 MR. SHAWDE: Object to the form.
22 THE WITNESS: Frequently.
23 BY MR. SUAREZ:
24 Q. Did you have any discussions with Mr. Preve
25 about why he was sending you investor money without
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1 documenting the paperwork ahead of time?
2 A. No.
3 Q. Did you ever ask Mr. Preve, "Why are you
4 sending me all this money without having deal
5 documents in place?"
6 MR. SHAWDE: Object to the form. He just
7 testified he had no conversations with him.
8 THE WITNESS: I knew why he was sending it
9 to me, I didn't need to discuss that with him.
10 BY MR. SUAREZ:
11 Q. How did you know why he was sending it to
12 you?
13 MR. SHAWDE: Object to the form.
14 THE WITNESS: Because we were running a
15 Ponzi scheme. We were out of money. He was sending
16 me as much money as he got in, as quickly as he got
17 it in, so I could pay the investors so that it didn't
18 blow up. We were running around so furiously to try
19 to keep up with payments that there was no time to
20 get the paper done.
21 BY MR. SUAREZ:
22 Q. So, in other words, by this point in May of
23 -- May 18, 2009, Mr. Preve is bringing you money from
24 wherever he can get it in order to pay back old
25 investors; is that correct?
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1 MR. SHAWDE: Object to the form.
2 THE WITNESS: Yes.
3 BY MR. SUAREZ:
4 Q. Of course, that's not a discussion you ever
5 had?
6 MR. SHAWDE: Object to the form.
7 BY MR. SUAREZ:
8 Q. Correct?
9 A. I don't know what you mean, that's a
10 discussion. We had a lot of discussions that revolved
11 around that because he did not want -- you can see
12 from his e-mail, he's clearly pissed off at me that
13 I'm not getting the paper back to him fast enough.
14 But when you take everything in context, it's very
15 simple. If you are saying that someone believed this
16 was a real investment, then there is no way on God's
17 green earth that any money could be funded without
18 paper because it necessitated at the very least a
19 confidential settlement agreement and release, which
20 we were doing sometime months later.
21 Q. When you say "we," do you mean you and
22 Mr. Preve?
23 MR. SHAWDE: Object to the form.
24 THE WITNESS: Me, Mr. Preve, Debra
25 Villegas, other people that were helping us at the
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1 time.
2 BY MR. SUAREZ:
3 Q. Forth -- fifth line at the top of that
4 e-mail, FJP 148, "Did Irene send SFS ... please
5 check ...." what did you mean by that?
6 A. Yes.
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: You mean what did I mean?
9 MR. SUAREZ: Right.
10 THE WITNESS: Well, this is sent by my
11 BlackBerry, so it meant I'm out of the office. So I
12 must be checking it to make sure that Irene sent an
13 SFS payment that was due to someone.
14 BY MR. SUAREZ:
15 Q. SFS being the entity that Mr. Steinbach
16 controlled?
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: There was no Mr. Steinbach.
19 MR. SUAREZ: That's right, it was Mr. Preve.
20 THE WITNESS: Correct.
21 MR. SUAREZ: Turn to FJP 152, please, which
22 I'll mark that together with FJP 153 as Trustee's
23 Exhibit 10.
24 [The E-mails referred to were marked for
25 identification as Trustee's Exhibit 10.]
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1 BY MR. SUAREZ:
2 Q. It's an e-mail dated June 8th, the original
3 message, from you to Mr. Preve, subject funding?
4 A. Yes.
5 Q. You start out, and some of the characters,
6 they are messed up here, hey, my bro, back, rested and
7 ready to rock and roll. In my never ending effort to
8 rid myself of the daily Bar visits, could you send me
9 what you -- to have in to me this week and the approx
10 when they will accept this and go away until Friday
11 which would be lovely. See that kind of garble?
12 A. Yes.
13 Q. What did you mean by that?
14 MR. SHAWDE: Object to the form.
15 THE WITNESS: Telling him I wanted to know
16 what his prediction is, his best estimate is, of how
17 much money he's going to be able to send me over the
18 week so that I can pay investors that need to be
19 paid.
20 BY MR. SUAREZ:
21 Q. Were you asking Mr. Preve how much new
22 investor money he could bring into the Ponzi that week
23 so that he can pay back old investors?
24 A. Yes.
25 MR. SHAWDE: Object to the form.
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1 BY MR. SUAREZ:
2 Q. Is that Ponzi, more Ponzi speak?
3 MR. SHAWDE: Object to the form.
4 THE WITNESS: Yes.
5 BY MR. SUAREZ:
6 Q. Mr. Preve responds, "Will get you the
7 schedule but don't internet this morning." And then
8 he says, please wire LMB for G321, G322, G323 and G401
9 a million six.
10 We'll stipulate the e-mail says what it says
11 and I'm paraphrasing.
12 MR. SHAWDE: Object to the form, lack of
13 predicate.
14 BY MR. SUAREZ:
15 Q. Who is LMB?
16 MR. SHAWDE: Object to the form.
17 THE WITNESS: LMB is Larry King, Michael
18 Brauser and some guy named Barry along with Frank.
19 BY MR. SUAREZ:
20 Q. Why was Mr. Preve asking you to wire LMB
21 $1,006,000 on June the 8th?
22 MR. SHAWDE: Object to the form.
23 THE WITNESS: He frequently told me when
24 payments were due and reminding me to send wires.
25
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1 BY MR. SUAREZ:
2 Q. See the following sentence, "Do not wire
3 Regent money today until you hear from me"?
4 A. Yes.
5 Q. Do you know why he didn't want you to wire
6 the Regent money until you heard from him?
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: Yes.
9 BY MR. SUAREZ:
10 Q. Why is that?
11 A. Yes, because at a least one of those
12 payments was supposed to be directed to him, either
13 for him or for him and Jack Simony, and he did not
14 want me to send it to the regular Regent account until
15 he told me what to do with it.
16 Q. And what did he tell you to do with it?
17 A. I'd have to see the paperwork to know that.
18 I don't remember specifically off the top of my head.
19 Q. Okay. Can you turn to FJP 145. We'll mark
20 this one Trustee's 11.
21 [The E-mail referred to was marked for
22 identification as Trustee's Exhibit 11.]
23 BY MR. SUAREZ:
24 Q. It's an e-mail from Frank Preve to you,
25 Mr. Rothstein, subject help. Sent Thursday,
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1 October 15, 2009.
2 A. I have that.
3 MR. SHAWDE: Object to the form, lack of
4 predicate.
5 BY MR. SUAREZ:
6 Q. Okay, thank you.
7 He writes, "I can't solve problems because
8 lack of cash is tying my hands." Do you see that?
9 MR. SHAWDE: Object to the form.
10 THE WITNESS: I do.
11 BY MR. SUAREZ:
12 Q. Is that more Ponzi speak?
13 MR. SHAWDE: Object to the form.
14 THE WITNESS: I think it's a pretty direct
15 statement. It says I can't solve the problems,
16 problems I'm having with funding people, because he
17 doesn't have cash.
18 MR. SHAWDE: That's not Ponzi speak, to be
19 clear?
20 THE WITNESS: No, I guess you can put it in
21 the category of Ponzi speak because it's coded. I
22 mean, he's not saying, hey, I can't help you with the
23 Ponzi scheme because I don't have any cash. What
24 he's telling me is, we don't have cash, we got these
25 three things that are pressing and if we don't pay
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1 these three things we are going to have problems now
2 and in the future.
3 MR. SUAREZ: Okay. I won't ask for that to
4 come out of your time, Jack. You can have that one on
5 me. Thank you.
6 BY MR. SUAREZ:
7 Q. Paragraph 2 of that e-mail, see when he
8 says, "2. SFS"?
9 A. Yes.
10 Q. What's going on there? Can you explain to
11 me what you understood Mr. Preve was asking you to do
12 there?
13 MR. SHAWDE: Object to the form.
14 THE WITNESS: Yes.
15 BY MR. SUAREZ:
16 Q. Please explain.
17 A. This was around the point in time that we
18 had significant due diligence going on with what could
19 have been very significant new investors which would
20 have caused a -- which would have resulted in a
21 solution to a lot of our problems in the Ponzi scheme.
22 And what was occurring here was, part of the due
23 diligence was that investors, potential new investors
24 wanted to speak to the hedge funds to discuss the
25 investment. And we obviously had a major problem
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1 because we weren't paying the hedge funds as promised,
2 but we needed them to give us a positive credit
3 reference.
4 Jack, that's Jack Simony, was going to be
5 the go-between between the new hedge funds, the new
6 investors and the Centurion/Platinum folks. And there
7 was a delay in Jack getting back to them, as you can
8 see, because he's talking about them being deeply
9 suspicious that no one from Platinum and Centurion has
10 called them back. And he is telling you, Jack is
11 going to put his ass on the line. He's doesn't want
12 to risk his credibility. He needs to be paid. And he
13 was obviously getting part of those millions of
14 dollars I was sending in the SFS settlement. So I
15 needed to make sure that Jack was a happy camper so he
16 could lie for us.
17 Q. Understood. Can you turn to Exhibit FJP 1
18 and 2, which I'll mark as -- I'm sorry, 1, 2 and 3,
19 which I'll mark as Composite Exhibit 12.
20 A. All right.
21 [The Schedule referred to was marked for
22 identification as Trustee's Exhibit 12.]
23 BY MR. SUAREZ:
24 Q. The first page is a schedule prepared by the
25 trustee's accountants and the two pages behind it are
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1 the backup. They reflect payments by RRA to an entity
2 named Preve and Associates of $75,000 on October 22nd,
3 2008 and March 6, 2009 in the amount of $400,000.
4 A. Got it.
5 Q. Do you know why RRA paid Preve and
6 Associates, LLC this money?
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: Yes.
9 BY MR. SUAREZ:
10 Q. Why is that?
11 A. Mr. Preve and I discussed getting him some
12 additional money for all the work he was doing on the
13 Ponzi scheme and this was it.
14 Q. Can you describe that conversation for me in
15 more detail?
16 MR. SHAWDE: Object to the form.
17 THE WITNESS: We were just discussing
18 compensation in general. I was always under the
19 impression that he was being well taken care of by
20 the funds side deals and by Mr. Levin. But I told
21 him we are making a lot of money and I could send him
22 some and he said great. I said, "Okay, send me some
23 invoices and I'll pay you." He sent me some invoices
24 and I paid him.
25
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1 BY MR. SUAREZ:
2 Q. What were the invoices for?
3 MR. SHAWDE: Object to the form.
4 THE WITNESS: I think they said consulting.
5 BY MR. SUAREZ:
6 Q. And that would be consulting on how to run a
7 Ponzi scheme?
8 MR. SHAWDE: Object to the form.
9 THE WITNESS: In reality, yes.
10 BY MR. SUAREZ:
11 Q. I want to mark as Trustee's Exhibit 13,
12 T-FJP 69. And I apologize, I don't have the backup
13 for this one but I can provide it to you gentlemen
14 later.
15 This is a schedule of funds transferred to
16 SFS Funding, LLC on account of the Regent side deal.
17 [The Schedule referred to was marked for
18 identification as Trustee's Exhibit 13.]
19 BY MR. SUAREZ:
20 Q. On June the 11th, 2009, RRA records reflect
21 that SFS Funding, LLC was sent $1,400,000.
22 A. I see that.
23 MR. SHAWDE: Object to the form.
24 BY MR. SUAREZ:
25 Q. I ask you to accept that as true. Why would
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1 RRA send SFS Funding $1.4 million on --
2 MR. SHAWDE: Object to the form.
3 MR. SUAREZ: Can I --
4 MR. SHAWDE: Sorry, sorry, I thought you
5 were finished.
6 MR. SUAREZ: It's all right.
7 BY MR. SUAREZ:
8 Q. Why would RRA send SFS Funding $1.4 million
9 on June the 11th, 2009?
10 MR. SHAWDE: Object to the form.
11 THE WITNESS: We were paying them back
12 money on the Regent Capital deal.
13 BY MR. SUAREZ:
14 Q. Why would RRA send SFS Funding $750,000 on
15 August 6, 2009?
16 MR. SHAWDE: Object to the form.
17 (Thereupon, Mr. Preve exited the room.)
18 THE WITNESS: Same answer, we owed them
19 money from the Regent Capital deal.
20 BY MR. SUAREZ:
21 Q. And why would RRA send SFS Funding $600,000
22 on August 12, 2009?
23 MR. SHAWDE: Object to the form.
24 THE WITNESS: Same answer, that we owed
25 money from the Regent Capital deal.
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1 BY MR. SUAREZ:
2 Q. You said "We owed him money on the Regent
3 Capital deal." Was that Mr. Preve that you owed money
4 in re the Regent Capital deal?
5 MR. SHAWDE: Object to the form.
6 THE WITNESS: No, I said, "we owed them
7 money on the Regent Capital deal."
8 BY MR. SUAREZ:
9 Q. I'm sorry. But you understood SFS Funding,
10 LLC to be an entity controlled by Mr. Preve, correct?
11 MR. SHAWDE: Object to the form.
12 THE WITNESS: I can't say that it was
13 controlled by him, that he was one of the people that
14 controlled it along with Mr. Huberfeld, Mr. Simony
15 and Mr. Nordlicht.
16 BY MR. SUAREZ:
17 Q. But you understood Mr. Preve to be the Guido
18 Steinbach?
19 A. He was Guido Steinbach.
20 (Thereupon Mr. LaVecchio entered the room and
21 Mr. Kaplan exited the room.)
22 BY MR. SUAREZ:
23 Q. By June the 11th, certainly the Banyon lines
24 to Platinum and Centurion were in default, correct?
25 MR. SHAWDE: Object to the form.
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1 THE WITNESS: Yes.
2 BY MR. SUAREZ:
3 Q. But RRA was still making transfers to SFS
4 Funding, correct?
5 MR. SHAWDE: Object to the form.
6 THE WITNESS: Sure.
7 BY MR. SUAREZ:
8 Q. Did Mr. Preve ever have a discussion with
9 you about paying back SFS Funding even though other
10 investors in the Ponzi weren't getting paid back?
11 A. Yes.
12 Q. What can you describe to me about that
13 discussion?
14 A. Just that he was involved in it, Jack was
15 involved in it and other people that we were counting
16 on were involved in it and it was in all of our best
17 interests to get them paid.
18 Q. At that time Mr. Preve knew that you weren't
19 paying your other investors on time, correct?
20 MR. SHAWDE: Object to the form.
21 THE WITNESS: Yes, sir.
22 BY MR. SUAREZ:
23 Q. And at that time Mr. Preve let me rephrase
24 that.
25 By June the 11th, 2009 -- actually, I'll
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1 withdraw that question.
2 Did you provide Mr. Preve with the rock star
3 life-style?
4 MR. SHAWDE: Object to the form.
5 THE WITNESS: No, sir.
6 BY MR. SUAREZ:
7 Q. Why is that? Didn't he help you in the
8 Ponzi? Isn't that what guys that helped you in the
9 Ponzi got, a little bit of the rock star life-style?
10 MR. SHAWDE: Object to the form.
11 THE WITNESS: He was living a very nice life
12 with what he was getting from Banyon and Mr. Levin and
13 his side deals and the like. He didn't need my help.
14 BY MR. SUAREZ:
15 Q. Side deals like the four and a half million
16 that went to SFS Funding?
17 MR. SHAWDE: Object to the form.
18 THE WITNESS: All those things.
19 (Thereupon, Mr. LaVecchio exited the room.)
20 BY MR. SUAREZ:
21 Q. In the hierarchy of people that helped
22 you -- the first day of this second round of
23 depositions you described a number of people that had
24 been helpful to you in conducting your Ponzi scheme.
25 Where does Mr. Preve fall on that list?
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1 MR. SHAWDE: Object to the form.
2 THE WITNESS: Overall he was, other than
3 Debra Villegas, he was the most helpful person to me.
4 BY MR. SUAREZ:
5 Q. Did you ever have a discussion with
6 Mr. Preve about how you guys would bail yourselves out
7 of this?
8 MR. SHAWDE: Object to the form.
9 THE WITNESS: No.
10 BY MR. SUAREZ:
11 Q. Did you have any understanding about whether
12 you would exculpate Mr. Preve after your Ponzi scheme
13 was revealed?
14 MR. SHAWDE: Object to the form.
15 THE WITNESS: No. We never had any such
16 discussions. It was always our plan or my plan, that
17 he knew it was because I discussed it with him, that
18 eventually I was going to sell off, at least that was
19 my hope, I was going to sell off the businesses that
20 I had and ultimately pay off all the investors. In
21 the meantime, we were hoping to make a lot of money
22 through these investments, through the investment
23 scam.
24 BY MR. SUAREZ:
25 Q. After you fled to Morocco, Mr. Rothstein,
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1 did you send e-mails saying that Frank had done
2 nothing wrong?
3 MR. SHAWDE: Object to the form.
4 THE WITNESS: I did.
5 BY MR. SUAREZ:
6 Q. Did Mr. Preve, in fact, do something wrong?
7 MR. SHAWDE: Object to the form.
8 THE WITNESS: Yes.
9 BY MR. SUAREZ:
10 Q. Why did you send that e-mail then?
11 MR. SHAWDE: Object to the form.
12 THE WITNESS: At this point in time, as I
13 previously testified multiple times, I was suicidal
14 and I didn't feel as if I should put anyone else in
15 harm's way, if I could try to exculpate them even
16 though they had done some very bad things. And so I
17 sent out false exculpatory e-mails to certain people
18 so they can utilize it to save themselves after I
19 killed myself.
20 MR. SUAREZ: I have no more questions.
21 MR. SHAWDE: We are going that take a
22 break.
23 [Short recess taken.]
24
25
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1 CROSS EXAMINATION
2 BY MR. SHAWDE:
3 Q. Good afternoon, Mr. Rothstein. My name is
4 Mr. Shawde. I'm going to be asking some questions
5 this afternoon and a lot of my questions are going to
6 be asking you to give a yes or no answer. And I'm
7 going to request that when I ask you a yes or no
8 question, that you answer with either a yes or no and
9 not provide me with a narrative. Can you do that for
10 me, sir?
11 A. So long as it's a complete answer, yes.
12 Q. I'd also like to establish some definitions.
13 Can we be clear that there is a difference between you
14 knowing that something is a fact and you surmising
15 that something is a fact? Are we clear that there is
16 a difference between those two things?
17 A. If you ask me the question that way, there
18 will be a difference, yes.
19 Q. Okay. And you understand that there is a
20 difference between facts which are demonstrably
21 provable to be true and beliefs. There is a
22 difference between facts and beliefs, you agree with
23 that?
24 A. I do.
25 Q. And you understand the difference between
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1 facts and beliefs, correct?
2 A. I do.
3 Q. All right. And in light of that exchange
4 that we just had, I'm going to ask you today that in
5 response to the questions that I'm asking you, that
6 you only testify as to facts that you personally know,
7 not things that you believe or that you surmise or
8 that you presume, or that you speculate about. Can we
9 have that understanding, sir?
10 A. To the extent that it allows me to fully and
11 accurately answer your questions, yes.
12 Q. Okay. But do you understand, I want to be
13 clear on the record, that when I ask you a question I
14 am asking you to testify as to your personal knowledge
15 and not your supposition, not your speculation, unless
16 that's what my question asks for. Are we clear on
17 that?
18 A. If you do not ask me to speculate, I will
19 not speculate.
20 Q. Okay. You should have received a packet of
21 potential exhibits from our firm, Rasco Klock, that we
22 intend to use at today's deposition. Do you have -- I
23 take it you have a computer in front of you. Do you
24 have access to those?
25 A. I do.
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1 Q. Do you have access to those documents, sir?
2 A. Yes. It's ten documents; is that correct?
3 Q. Well, it's 13 documents and they are Bates
4 stamped FJP 001 through FJP -- I'm sorry, yes, it's 1
5 through 10, that's correct.
6 A. I have them.
7 Q. All right. So Mr. Rothstein, the first
8 document which we'd like to mark as our Exhibit A --
9 since the trustee is using numbers we'll use letter --
10 is marked -- let me make sure at the bottom.
11 [The E-mails referred to were marked for
12 identification as Defendant's Exhibit A.]
13 BY MR. SHAWDE:
14 Q. Okay. At the bottom of the first document,
15 which is an e-mail, a series of e-mails, do you have
16 FJP 001?
17 A. I do, sir.
18 Q. Okay. The top portion of that, is that an
19 e-mail that you sent?
20 A. The top of this exhibit or the bottom
21 e-mail?
22 Q. The top. I'm going to go right through them
23 and I'm going to ask you for each one but I want to
24 establish them one by one. The top is an e-mail that
25 you sent, correct?
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1 A. On October 29th, 2009, at 10:30 a.m.
2 Q. Correct.
3 And you used the e-mail address
4 SRothstein@RRA-law.com; is that correct?
5 A. Correct.
6 Q. Are there any other e-mail addresses that
7 you had during 2008 and 2009 other than
8 SRothstein@RRA-law.com that you used to send or
9 receive e-mails?
10 A. To the best of my recollection, no.
11 Q. Now, when you sent an e-mail from your
12 BlackBerry during the time frame 2008 and 2009, what
13 e-mail address would that come from?
14 A. SRothstein@RRA-law.com.
15 Q. Okay. Looking down on this same FJP 001, at
16 the bottom of that page, there is another -- appears
17 to be another e-mail from you to Frank Preve and
18 George Levin sent on October 29, 2009 at 5:51 a.m.
19 Did you send that e-mail?
20 A. I did.
21 [The E-mail referred to was marked for
22 identification as Defendant's Exhibit B.]
23 BY MR. SHAWDE:
24 Q. Okay. Now, if you would, sir, let's turn to
25 the next page, which should be FJP 002.
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1 A. I have that.
2 Q. And is that an e-mail that you sent, sir?
3 A. It is, sir.
4 [The E-mail referred to was marked for
5 identification as Defendant's Exhibit C.]
6 BY MR. SHAWDE:
7 Q. Okay. Let's go to the next page which
8 should be marked FJP 003, and it appears to be an
9 e-mail from you dated Saturday, October 31st, 2009 to
10 GeorgeLevin@MSN.com. Is that an e-mail that you sent?
11 A. It is.
12 [The e-mail referred to was marked for
13 identification as Defendant's Exhibit D.]
14 BY MR. SHAWDE:
15 Q. All right. We are going to turn the page
16 again. The next document should be FJP 004. At the
17 top of that appears to be an e-mail sent from
18 SRothstein@RRA-law.com dated Saturday, September
19 (sic) 18th, 2009 at 12:17 p.m. Did you send that
20 e-mail, sir?
21 A. I did.
22 Q. And continuing down to the bottom, very
23 bottom of that same page, an e-mail dated 4/18/2009,
24 8:37 a.m. Did you send that e-mail, sir?
25 A. Yes.
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1 Q. Okay. Let's turn to Page FJP 005, which
2 we'll mark as our Exhibit E.
3 [The E-mail referred to was marked for
4 identification as Defendant's Exhibit E.]
5 BY MR. SHAWDE:
6 Q. At the bottom of FJP 0005 appears to be an
7 e-mail from you 9/22/2009 at 3:08 p.m. Did you send
8 that e-mail, sir?
9 A. I did.
10 [The E-mail referred to was marked for
11 identification as Defendant's Exhibit F.]
12 BY MR. SHAWDE:
13 Q. Turn to the next page. It's FJP 006. We
14 are going to mark that separately as Exhibit F, even
15 though these might be part of a contiguous e-mail
16 chain. But I just want you to acknowledge that the
17 e-mails that appear on these pages, that you sent
18 them. So in the middle of that page there appears to
19 be an e-mail from you dated September 22nd, 2009, at
20 14:33. Is that an e-mail that you sent, sir?
21 A. Yes.
22 Q. And all the way down to the bottom of FJP
23 006 appears to be an e-mail from you dated September
24 22nd 2, 2009 at 14:09. Did you send that e-mail, sir?
25 A. I did.
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1 Q. And turning to the very next page, which is
2 FJP 007, that appears to be a continuation of the
3 e-mail at the bottom of FJP 006; is that correct?
4 A. Yes.
5 Q. Okay. Let's turn to FJP 008. Which we will
6 mark as Exhibit G.
7 [The E-mail referred to was marked for
8 identification as Trustee's Exhibit G.]
9 BY MR. SUAREZ:
10 Q. The bottom half of that e-mail appears to be
11 an e-mail from you dated 4/27/2009 at 10:42 a.m. Is
12 that an e-mail that you sent?
13 A. Yes, sir.
14 Q. Turn the page, please, to FJP 009, which
15 we'll mark as Exhibit H?
16 [The E-mail referred to was marked for
17 identification as Trustee's Exhibit H.]
18 BY MR. SUAREZ:
19 Q. That appears to be an e-mail from you dated
20 Thursday, October 1st, 2009 at 2:41 p.m. Did you send
21 that e-mail, sir?
22 A. I did.
23 Q. Turn the page to FJP 010, which is the next
24 page that we'll mark as I.
25 [The E-mail referred to was marked for
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1 identification as Trustee's Exhibit I.]
2 BY MR. SUAREZ:
3 Q. There's an e-mail that appears to be from
4 you on the top portion of that sent on October 30th,
5 2009 at 4:34 p.m. which states, "skipping town means
6 not coming back ... and I am coming back." Did you
7 send that e-mail, sir?
8 A. I did.
9 Q. Turn the page, please, to FJ --
10 A. Sorry. I don't have any more pages.
11 Q. Okay. Going back to FJP 010, at the bottom
12 of that page FJP 010, which we've marked as Exhibit I,
13 there appears to be another e-mail sent from you to
14 Frank Preve and George Levin sent October 30, 2009,
15 10:40 a.m. It states, "On with my office and Adria."
16 Did you send that e-mail, sir?
17 A. I did, sir.
18 Q. All right. Now, did you send a letter that
19 you wrote in connection with your sentencing request
20 dated June 2nd, 2010 to Judge Cohn in connection with
21 your sentencing. Do you know the letter to which I'm
22 referring?
23 A. Yes.
24 Q. Do you happen to have that letter in your
25 computer with you?
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1 A. I do not.
2 Q. All right. Do you have a general
3 recollection of the substance of that letter that you
4 drafted and provided Judge Cohn?
5 A. Yes.
6 Q. Okay. We are going to mark that as exhibit
7 J.
8 [The Letter referred to was marked for
9 identification as Trustee's Exhibit J.]
10 BY MR. SUAREZ:
11 Q. Mr. Rothstein, when did you flee the United
12 States and go to Morocco?
13 A. Approximately October 27th, 28th of 2009. I
14 don't remember the exact date.
15 Q. Okay. But as of October 30th, 2009 you were
16 in Morocco; is that correct?
17 A. Yes.
18 Q. And when did you return from Morocco to the
19 United States?
20 A. The first week in November, 2009.
21 Q. Okay. Thank you.
22 Now, when you were in Morocco, is that when
23 you made the decision to tell the truth about what
24 happened with this fraud scheme?
25 MR. SUAREZ: Object to the form.
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1 MR. SHAWDE: What's the matter with the
2 form?
3 THE WITNESS: Yes.
4 MR. SUAREZ: He answered it.
5 MR. SHAWDE: That doesn't cure any possible
6 objection you might later make, so what's the basis
7 for the objection?
8 MR. SUAREZ: He answered it. Don't worry
9 about.
10 MR. SHAWDE: So the objection is withdrawn?
11 MR. SUAREZ: No, he answered it, so
12 obviously he understood the form.
13 BY MR. SHAWDE:
14 Q. Okay. Now, when you made the decision in
15 Morocco to tell the truth about the fraud scheme, your
16 primary motivation for that decision was to make
17 things right regardless of how long you might end up
18 being incarcerated for, would that be correct?
19 A. Can you reask the question, please?
20 Q. When you decided to tell the truth when you
21 were in Morocco, your primary motivation for that
22 decision was to make things right regardless of how
23 much time you might end up being incarcerated for,
24 correct?
25 A. Yes.
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1 Q. When you decided to return and tell what you
2 contend is the truth, you did not know at that moment
3 in time for how long you would be sentenced, correct?
4 A. I agree with that statement, except for your
5 characterization as to what I contend to be the truth.
6 Q. Well, I understand.
7 A. Other than that, I agree with your
8 statement.
9 Q. Okay. And another motivation for your
10 cooperating with the government is that that
11 cooperation could potentially result in a reduced
12 sentence, correct?
13 A. Are you asking me what I was thinking when I
14 was in Morocco?
15 Q. Well, I'm asking you what -- when you
16 were -- made your decision to return from Morocco, was
17 it part of your decision-making process that you would
18 cooperate with the government and hopefully get an
19 eventual reduction in your sentence not knowing how
20 much you would be sentenced to? Was that part of your
21 decision-making process?
22 A. No.
23 Q. When did you have the first conversations
24 with the government about the possibility of a
25 reduction in sentence resulting from your cooperation?
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1 A. Is Mr. LaVecchio there?
2 Q. He is.
3 A. Mr. LaVecchio, you want me to answer the
4 question?
5 Q. Let me phrase it a different way.
6 MR. LAVECCHIO: Please.
7 BY MR. SHAWDE:
8 Q. Was it while you were in Morocco?
9 MR. LAVECCHIO: That's a good question.
10 That's a good question. That you can answer.
11 THE WITNESS: No.
12 BY MR. SHAWDE:
13 Q. Can you narrow it down to how long after you
14 returned from Morocco that you had your first
15 conversation with the government about cooperation?
16 MR. LAVECCHIO: I'd have to object on
17 privilege grounds.
18 MR. SHAWDE: And the nature of the
19 privilege, which privilege?
20 MR. LAVECCHIO: Government investigatory
21 privilege.
22 BY MR. SHAWDE:
23 Q. When you were in Morocco and made your
24 decision to return to the United States, had you
25 already decided to plead guilty to whatever charges
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1 might be brought against you in connection with the
2 fraud scheme?
3 A. Yes.
4 Q. The idea of selling fraudulent settlements
5 was completely your idea, correct?
6 A. Yes.
7 Q. And you cannot state the precise date when
8 your fraudulent scheme began, is that also correct?
9 A. Correct.
10 Q. You pitched the idea of selling settlements
11 to Mr. Preve and Mr. Levin, correct?
12 A. Time frame, please.
13 Q. Well, when you first pitched them to
14 Mr. Preve and Mr. Levin, regardless of what the time
15 frame was, when you first pitched them the idea you
16 pitched the idea as a real deal, correct?
17 A. To whom?
18 Q. To Mr. Preve and Mr. Levin.
19 A. The way you are asking the question, the
20 answer would be no, because I did not pitch it at the
21 same time to both of them.
22 Q. Okay. When you pitched the idea to
23 Mr. Levin, did you pitch it as a real deal?
24 A. Yes.
25 Q. When you pitched the idea to Mr. Preve for
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1 the first time, did you pitch it as a real deal?
2 A. Yes.
3 Q. At the time that you first solicited
4 Mr. Levin to invest in these settlement deals,
5 Mr. Levin did not know that these were false and
6 fictitious deals, correct?
7 A. Correct.
8 Q. Do you recall whether that was in
9 approximately 2007 when you first pitched the
10 settlement deals to Mr. Levin?
11 A. I do not remember the date, I only remember
12 the circumstances.
13 Q. Is there a document that would establish the
14 time frame where you first solicited Mr. Levin to
15 invest in these settlement deals since you cannot
16 recall exactly?
17 A. There should be an e-mail from me to George
18 basically saying here is your first deal.
19 Q. Okay. Any other document other than an
20 e-mail that would establish when you first solicited
21 Mr. Levin?
22 A. A flight manifest showing a flight by me and
23 Mr. Levin to Cape Coral, Florida.
24 Q. How about settlement documents, would they
25 reflect the approximate time frame when you first
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1 pitched Mr. Levin?
2 A. I don't know that they would be the most
3 accurate. The most accurate would be the flight
4 manifest for a trip that I took to Cape Coral, Florida
5 with Mr. Levin.
6 Q. Do you know who was in possession of the
7 flight manifest? Is that a document that you have
8 under your control per chance?
9 A. I do not have it, sir.
10 Q. Do you know who might have it?
11 A. The government, the trustee, Mr. Levin, or
12 Mark Lasix.
13 Q. Okay.
14 A. Or Whitney Education Group or Russell
15 Whitney.
16 Q. Now, in order to keep the fraud, that you
17 testified about in your direct examination, going, you
18 used money from investors, correct?
19 A. Yes.
20 Q. And in the letter you wrote to Judge Cohn
21 that we referred to previously, dated June 2nd, 2010,
22 you stated in numerous spots in that letter that you
23 stole money from innocent investors in order to keep
24 the fraud going, correct?
25 A. Define numerous, please.
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1 Q. More than one.
2 A. Yes.
3 Q. And in that letter you wrote to Judge Cohn
4 dated June 2nd, 2010, you also stated that you used
5 money that you stole to buy personal possessions and
6 invest in businesses, correct?
7 A. Yes.
8 Q. And in order to keep your fraud going you
9 had to make payments to investors who invested in the
10 business of purchasing the fictitious settlements,
11 correct?
12 A. Are you saying that that's in the letter or
13 are you asking me that in a separate question?
14 Q. No, separate question.
15 A. Yes.
16 Q. And the source of the payments that were
17 made to investors came from funds provided by other
18 private investors, correct?
19 A. For the most part, yes.
20 Q. Okay. And when you say "for the most part,"
21 can I see if I can get you to give an exception to the
22 rule that I stated at the beginning of the deposition
23 and give me your best guess as to what percentage was
24 from private investors, was it more than 50 percent,
25 was it 90 percent?
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1 A. It was more than 50 percent. Likely more
2 than 75 percent. That's my best guess --
3 Q. Okay.
4 A. -- as a rule violation.
5 Q. All right. And the money that you received
6 from investors, it was represented to the investors
7 that that money would be put in designated segregated
8 trust accounts, correct?
9 MR. SUAREZ: Objection, form.
10 THE WITNESS: As asked, the question as
11 asked, the answer is no.
12 BY MR. SHAWDE:
13 Q. Okay. You falsely informed potential
14 investors that their funds would be maintained in
15 designated trust accounts for the benefit of the
16 individual investor, correct?
17 MR. SUAREZ: Objection, form.
18 MR. SHAWDE: What's wrong before with the
19 form? Before you answer, Mr. Rothstein.
20 MR. SUAREZ: It's not correct.
21 MR. SHAWDE: That doesn't mean that --
22 MR. SUAREZ: You are assuming -- you are
23 asking -- it's got a false predicate. The investors'
24 money were not being held in trust accounts, they
25 were being paid out to plaintiffs.
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1 MR. SHAWDE: No, no, no, the question is,
2 you falsely informed potential investors that funds
3 would be maintained in designated trust accounts for
4 the benefit of the individual investor, correct?
5 MR. SUAREZ: No, he didn't. My objection
6 is to form. You want me to tell you why I'm
7 objecting to the form, I'll tell you why I'm
8 objecting to the form.
9 BY MR. SHAWDE:
10 Q. Did you falsely inform potential investors
11 that funds would be maintained in designated trust
12 accounts for the benefit of individual investors?
13 MR. SUAREZ: Objection, form.
14 THE WITNESS: Some investors, yes. If I'm
15 understanding what you mean by designated separate
16 trust accounts.
17 May I ask you a question?
18 BY MR. SHAWDE:
19 Q. No. I'm referring to Paragraph 15, Page 8
20 of the United States government's information.
21 Paragraph 15 reads in part, "Defendant, Rothstein,
22 falsely informed potential investors that funds were
23 maintained in designated trust accounts for the
24 benefit of the individual investor."
25 MR. SUAREZ: Objection, form.
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1 MR. SHAWDE: I didn't even ask the question
2 yet.
3 MR. SUAREZ: Okay, then I haven't objected
4 to the form.
5 BY MR. SHAWDE:
6 Q. Is that a true factual allegation that you
7 agree with?
8 MR. SUAREZ: Objection, form.
9 THE WITNESS: As you just stated it, it is
10 factually accurate. It would be more accurate if you
11 allowed me to ask you my question and you answered
12 me.
13 MR. SHAWDE: Okay.
14 THE WITNESS: So that I can make sure the
15 record is 100 percent factually accurate and clear.
16 MR. SHAWDE: Okay. What's your question?
17 THE WITNESS: When you say "designated
18 trust accounts," do you also mean segregated to a
19 specific investor?
20 MR. SHAWDE: I'm not going to answer that
21 question because I think it will become clear in some
22 of my other questions to you, so let's move on.
23 THE WITNESS: Let me just make sure my
24 answer is clear then. As stated in the government's
25 information, the answer is that that statement is
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1 correct with the following caveat. Different
2 investors were told different things about different
3 trust accounts.
4 BY MR. SHAWDE:
5 Q. Okay. Were some investors told that their
6 funds would not be maintained in designated trust
7 accounts for the benefit of that particular investor?
8 MR. SUAREZ: Objection, form.
9 THE WITNESS: The problem that I'm having,
10 sir, is your use of the word "designated" only
11 because of the hundreds of other questions I've been
12 asked about trust accounts. Because to me
13 "designated trust account" just means trust account
14 and every investor was told their money would be in a
15 trust account. Certain investors were told that they
16 would be in segregated trust accounts, just so the
17 record is clear.
18 BY MR. SHAWDE:
19 Q. Okay. Now, the trust accounts that were
20 used to continue the cycle of laundering the proceeds
21 received from new lenders and investors to pay prior
22 investors and lenders, correct?
23 MR. SUAREZ: Form.
24 THE WITNESS: Sorry, ask the question
25 again, please.
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1 BY MR. SHAWDE:
2 Q. Sure. In reality these trust accounts that
3 we just talked about in connection with Paragraph 15
4 of the government's indictment, right, in reality
5 those trust accounts were used to continue the cycle
6 of laundering the proceeds received from new lenders
7 and investors to pay prior investors and lenders,
8 correct?
9 MR. SUAREZ: Form.
10 THE WITNESS: Some of the trust accounts,
11 yes.
12 BY MR. SHAWDE:
13 Q. Okay. And in furtherance of your fraud, you
14 looted trust accounts to repay early investors,
15 correct?
16 A. Yes.
17 Q. And it was you who was the beneficiary of
18 your Ponzi scheme, correct?
19 MR. SUAREZ: Form.
20 THE WITNESS: Me and my co-conspirators and
21 a lot of other people, actually. Politicians, law
22 enforcement, all kinds of people.
23 BY MR. SHAWDE:
24 Q. You agree that the fraud was something that
25 you committed, correct?
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1 MR. SUAREZ: Form.
2 THE WITNESS: Me alone, no. Me with
3 co-conspirators, yes.
4 BY MR. SHAWDE:
5 Q. I didn't say you alone. You committed the
6 fraud, correct?
7 MR. SUAREZ: Form.
8 THE WITNESS: But you are asking me in a
9 fashion so that when you read it back it will sound
10 like I did this by myself and everyone here knows
11 that I didn't do this by myself. So I'm just making
12 sure the record is clear. I'm trying to stay concise
13 with what you asked.
14 BY MR. SHAWDE:
15 Q. You agree that the law firm RRA did not
16 commit the fraud, correct?
17 A. The law firm itself, no. The law firm did
18 not commit the fraud.
19 Q. Okay. Now, during the course of the Ponzi
20 scheme you lied extensibly to people about a lot of
21 different things, correct?
22 A. Yes.
23 Q. You lied to investors, correct?
24 A. Yes.
25 Q. And you lied to your law partners, correct?
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1 A. Some of them.
2 Q. You lied to family members, correct?
3 A. Yes.
4 Q. And you lied to charities that you
5 contributed money to, correct?
6 A. No.
7 Q. And why is that not a correct statement?
8 A. Because all I told charities was I was
9 giving them money to help them and I was giving them
10 money to help them.
11 Q. Okay.
12 A. I've already testified extensively about how
13 I did my charitable givings.
14 Q. You are here today, sir, and you are going
15 to testify again if I ask you questions about the
16 charities. So did you make contributions to charities
17 with money that was derived from the Ponzi scheme?
18 A. Yes.
19 Q. And you lied by arranging for the
20 impersonation of a judge, correct?
21 MR. SUAREZ: Form.
22 THE WITNESS: Can you fix that question?
23 I'm not sure I understand what you asking me.
24 BY MR. SHAWDE:
25 Q. You perpetrated a lie by having someone
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1 impersonate a judge, correct?
2 A. I did, along with that person, yes, and
3 several other people.
4 Q. And some of the charities that received some
5 of the money derived from your Ponzi scheme included
6 the Joe DiMaggio Children's Hospital, correct?
7 A. Joe DiMaggio, yes.
8 Q. And what does that hospital do? What's your
9 understanding of what that hospital does for children?
10 A. Takes care of sick children.
11 Q. Okay. And at the time you were giving Joe
12 DiMaggio's Children's Hospital Ponzi scheme money, you
13 knew that that hospital was taking care of sick
14 children and you were giving them dirty money,
15 correct?
16 MR. SUAREZ: Form.
17 THE WITNESS: I'm not sure I understand
18 what you are asking me. But almost all the money
19 that I gave to charity was money that my
20 co-conspirators and I stole. The purpose of me
21 giving the money to the children's hospital was to
22 help the children.
23 BY MR. SHAWDE:
24 Q. Yes, but at the time you gave that money to
25 the hospital you knew that you were giving the
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1 hospital money derived from the Ponzi scheme, correct?
2 A. Yes.
3 Q. All right. Those charities also include
4 certain Jewish organizations, correct?
5 A. Yes, sir.
6 Q. And what were those Jewish organizations
7 that received money derived from your Ponzi scheme?
8 A. Downtown Jewish Center, there were a bunch
9 of others I don't recall. Do you have list that will
10 refresh my recollection?
11 Q. Sure. Dan Marino Foundation, is that one of
12 the charities that you contributed money derived from
13 the Ponzi scheme to?
14 A. Yes, but I thought we were talking about the
15 Jewish charities, I'm sorry.
16 Q. Well, if you don't remember any more Jewish
17 charities, then we'll move on.
18 How about the Boys and Girls Club, did that
19 charity receive money derived from the Ponzi scheme?
20 A. Yes, Boys and Girl Club, and what you said
21 earlier, Dan Marino Foundation, that's correct.
22 Q. The Alonzo Mourning Foundation, did that
23 charity receive money derived from the Ponzi scheme?
24 A. Yes.
25 Q. Many of the charities that I just listed
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1 that you made donations to with your fraudulently
2 obtained money have been sued by the bankruptcy
3 trustee to force the return of that money you
4 contributed, correct?
5 MR. SUAREZ: Form.
6 THE WITNESS: Yes.
7 BY MR. SHAWDE:
8 Q. Many of the charities to which you donated
9 money that you fraudulently obtained were sent demand
10 letters by the bankruptcy trustee demanding the return
11 of the money you contributed, correct?
12 MR. SUAREZ: Object to the form.
13 MR. SHAWDE: What's the matter with the
14 form?
15 THE WITNESS: I do not know. I don't know
16 if they sent default letters or not.
17 MR. SHAWDE: Okay.
18 MR. SUAREZ: Fraudulently obtained, not
19 necessarily.
20 MR. SHAWDE: Well, he'll know that.
21 BY MR. SHAWDE:
22 Q. Mr. Rothstein, it's a fair statement to say
23 that you had control personally over the RRA trust
24 accounts, correct?
25 A. I was one of the people that had control,
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1 yes.
2 Q. Who else had control?
3 A. Stuart Rosenfeldt, Irene Stay, Bill Boockvor
4 to a limited extent, and Debra Villegas to a limited
5 extent.
6 Q. But when you --
7 A. David Boden to a limited extent.
8 Q. Sorry, I didn't mean to interrupt you, and I
9 apologize.
10 If Mr. Boden had come into your office and
11 attempted to override what you wanted to do with a
12 particular trust account, you can override what
13 Mr. Boden wanted to do, correct?
14 A. Yes.
15 Q. And for all the people that you listed, you
16 could override anything that they wanted to do with
17 these trust accounts, correct?
18 A. Technically Stuart could have stopped the
19 transfer I was making, but he was not going to.
20 Q. So as a practical matter, in light of
21 everything you just testified, it's fair to say that
22 you had control personally over the RRA trust
23 accounts, correct?
24 A. I think a better way to say it is I had
25 ultimate control.
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1 Q. Okay. And is it a fair statement to say
2 that you had ultimate control over the RRA operating
3 accounts? That's a correct statement?
4 A. Yes, sir.
5 Q. All right. Now, one of the reasons that you
6 came back from Morocco was to help people who were
7 victimized by your fraud, correct?
8 A. Yes.
9 Q. How is returning helping the charities that
10 you contributed to with fraudulently obtained money?
11 MR. SUAREZ: Form.
12 THE WITNESS: Unfortunately my returning is
13 not helping the charities, it's helping the other
14 innocent victims of my crime, the people that lost
15 money.
16 BY MR. SHAWDE:
17 Q. Weren't the charities innocent victims?
18 A. They absolutely were. That's why I said
19 unfortunately.
20 Q. So was that part of your mental decision
21 making process to return, that you would hurt some
22 victims and -- innocent victims and not hurt other
23 innocent victims, did that enter into your thought
24 process in making your decision to return?
25 MR. SUAREZ: Object to the form.
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1 THE WITNESS: No. Actually, at the time
2 that I was thinking about returning, I never thought
3 that the trustee or anybody else would try to get
4 money back from the charities. I never thought about
5 it.
6 BY MR. SHAWDE:
7 Q. You've hurt a lot of people with your lies,
8 correct?
9 MR. SUAREZ: Form.
10 THE WITNESS: I certainly have.
11 MR. SHAWDE: What's the matter with the
12 form?
13 MR. SUAREZ: What do you mean by "hurt"?
14 BY MR. SHAWDE:
15 Q. Do you understand what we mean by "hurt"?
16 Mr. Rothstein, is there any doubt in your mind as to
17 what the word "hurt" means?
18 A. No.
19 Q. Now, another lie you perpetrated was that
20 during 2009, prior to the fraud scheme imploding, you
21 were the subject of an investigation by the Florida
22 Bar, correct? That's another lie that you
23 perpetrated?
24 A. I'm sorry, ask the question. There was
25 noise in the back. Hang on there was a noise in the
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1 background. Go ahead and repeat the question, please.
2 Q. Another lie you perpetrated was that during
3 2009, prior to the Ponzi scheme imploding, you were
4 the subject of an investigation by the Florida Bar,
5 correct?
6 A. Are you asking me if I used the Florida Bar
7 lie to assist me in perpetrating the fraud?
8 Q. Sure.
9 A. Yes.
10 Q. And you also lied that you were engaged in
11 numerous telephone calls with a Florida Bar
12 representative by the name of Adria Quintella as part
13 of this nonexistent Bar investigation, correct?
14 A. As to both questions that you just asked me,
15 I lied to some people about it and I told the truth
16 about it to some people.
17 Q. During the 2009 you never participated in a
18 phone call with Adria Quintella, correct?
19 A. During what year?
20 Q. 2009.
21 A. Actually, I did.
22 Q. And how many actual calls with the real
23 Adria Quintella did you have during the 2009?
24 A. Several.
25 Q. But there was never a Florida Bar
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1 investigation in 2009 in connection with you and your
2 trust accounts, correct?
3 A. I never said that the calls had anything to
4 do with that. That's not what you asked me. And the
5 answer to your question is there was never an
6 investigation.
7 Q. Okay. You just violated my yes and no rule,
8 Mr. Rothstein.
9 A. That's not bad, I've been going for 38
10 minutes and I've only violated it once.
11 Q. You were doing good. In fact, you arranged
12 for an associate at your law firm to impersonate Adria
13 Quintella and pretend that a Florida Bar investigation
14 of you was ongoing during a conference call, correct?
15 A. I'm not sure if she was an associates or a
16 partner at that time, but yes, a lawyer at my firm.
17 Q. And your purpose of inventing the
18 nonexistent Florida Bar investigation and arranging
19 for the impersonation of Adria Quintella was to
20 provide investors false information to perpetrate your
21 fraud, correct?
22 A. To some extent, yes.
23 Q. And the Adria that was the subject of the
24 lies that we just were talking about, that's the Adria
25 who you are referring to in all of the e-mails where
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1 the word Adria is mentioned that we went through
2 previously at the inception of your deposition,
3 correct?
4 A. Yes.
5 Q. Mr. Rothstein, would you please turn to FJP
6 004?
7 A. I see that.
8 Q. All right. All the way at the bottom of
9 that there is an e-mail that you testified that you
10 wrote at 8:37 a.m. Is that an e-mail you sent to
11 Mr. Preve?
12 A. Yes.
13 Q. And the first sentence of your 8:37 a.m.
14 e-mail states, "Just got done speaking to Adria," and
15 there's a bunch of other things after that. But that
16 statement "just got done speaking to Adria," that's a
17 lie, correct?
18 A. Yes.
19 Q. At the top of that same page is an e-mail
20 dated April 18th at 12:17 p.m. -- no, never mind.
21 Strike that.
22 Okay. If you would turn to Page FJP 006.
23 A. All right.
24 Q. All right. All the way down at the bottom
25 of FJP 006 is an e-mail from you dated September 22nd,
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1 2009, that states in part, "Adria was waiting for me
2 with two auditors and they were all over me about the
3 inconsistent funding and they are contemplating
4 shutting me down on the deal funding." That statement
5 is a lie, correct?
6 A. Literally it is a lie; Ponzi speak, it's the
7 truth.
8 Q. Okay. So how many e-mails in the course of
9 2008 and 2009, how many e-mails were exchanged in
10 connection with your fraud scheme? Millions?
11 MR. SUAREZ: Form.
12 THE WITNESS: Hundreds of thousands, at the
13 least.
14 BY MR. SHAWDE:
15 Q. Hundreds of thousands.
16 A. I believe someone once told me there was
17 over a million e-mails involved in the case, hundreds
18 of thousands for certain.
19 Q. So are all of those e-mails Ponzi speak?
20 A. Some are, some are not.
21 Q. So how do we know which ones are Ponzi speak
22 and which ones aren't? We don't know that, do we?
23 A. You can probably figure it out if you read
24 them all together. If you can't figure it out, you
25 can ask me and I can tell you.
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1 Q. So the ultimate decision maker on which of
2 these hundreds of thousands of e-mails are Ponzi speak
3 and which ones aren't is you, correct?
4 A. No. Actually, you can probably just ask
5 Mr. Preve, it would probably be a lot easier for you.
6 Q. But you are the one who would be able to
7 override him if he said that a particular e-mail was
8 not Ponzi speak, you would say that he was wrong and
9 we should believe you, correct?
10 A. No, you can do it yourself. Look at the
11 other e-mails he sent me, look at all the other things
12 he did and you can figure out if he knew that a lot of
13 these e-mails were Ponzi speak and that we were in the
14 middle of a massive fraud.
15 Q. Nice try.
16 A. We don't need very thick glasses to see
17 through this.
18 Q. So where do I go to, for example, on the
19 internet, is there some place I go to get a dictionary
20 on Ponzi speak so that I, with my very thick glasses,
21 being a slow Italian kid from New Jersey, can figure
22 out these e-mails are Ponzi speak and really what they
23 mean? Is there a dictionary I can go to find that
24 out?
25 A. I take it you are being facetious, but you
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1 could figure it out if you just look at of the e-mails
2 that Mr. Preve sent me where he's clearly engaging in
3 fraudulent and illegal conduct. And then read them in
4 context with these other e-mails, you'll see that if
5 you don't interpret them as Ponzi speak, they would
6 make no sense.
7 It makes no sense that Mr. Preve would send
8 me 25 million plus dollars of money without any paper
9 in deals that couldn't exist without paper, and you
10 think that there's a Bar investigation shutting down
11 our funding. It would make no sense even with thin
12 glasses.
13 Q. You didn't answer my question, which is
14 that, is there any place that I could go to find a
15 Lexicon on Ponzi speak? You keep using that term.
16 A. Me, your client, David Boden, Irene Stay,
17 Debra Villegas, you can ask all of us, Steve Caputi a
18 little bit, Stu Rosenfeldt a little bit.
19 Q. Well, by your own admission --
20 A. Steve Lippman, I checked.
21 Q. By your own admission, not all hundreds of
22 thousands of these e-mails, they are not all Ponzi
23 speak, right?
24 A. Nope.
25 Q. So who decides which ones are Ponzi speak
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1 and which ones aren't, you?
2 A. Ultimately a jury will decide which ones are
3 Ponzi speak and which ones are not based upon taking
4 everything in context.
5 (Thereupon, Mr. LaVecchio exited the room and Mr.
6 Kaplan entered the room.)
7 BY MR. SHAWDE:
8 Q. Let's return to FJP 006.
9 A. I have it.
10 Q. And in the middle of that FJP 006 is an
11 e-mail dated September 22nd, 2009 at 14:33 from you to
12 Mr. Preve. It says, "I will set up a conference call
13 with Adria and her boss in tally for tomorrow." That
14 was a lie, correct? You had no intention of --
15 A. Ponzi speak.
16 Q. It was a lie, Mr. Rothstein?
17 A. I had intention of setting up a conference
18 call, just not with the real Adria.
19 Q. Going back to the bottom of FJP 006, rolling
20 over into FJP 007. At the very top of FJP 007 you
21 state, "I should be able to call you in about
22 30 minutes when she leaves." You are referring to
23 fictitious Adria by the use of the word "she"; is that
24 correct?
25 A. Yes.
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1 Q. And again, this was another lie because
2 there was no person, Adria, and therefore there was no
3 Adria in your office, correct?
4 A. It was an e-mail meant to be used for
5 Mr. Preve to help us get funds.
6 Q. Mr. Rothstein, you are violating the rule.
7 That was a lie, correct?
8 A. It was a lie, but not a lie to Mr. Preve.
9 Q. Turn to Page FJP 010, the very next page.
10 Now, at the bottom of that page is an e-mail
11 that was sent on October 30th, 2009, at 10:40 a.m.,
12 and that's an e-mail that you sent, correct?
13 A. Yes.
14 Q. And it says, "On with my office and Adria."
15 That was a lie, correct, sir?
16 A. For George, not for Frank.
17 Q. That's not what I asked you. I asked you if
18 it was a lie. There was -- you were not in your
19 office, you were not on a call with your office and
20 Adria, correct?
21 A. That's correct.
22 Q. All right. And, in fact, by this time you
23 were already in Morocco, correct?
24 A. I was.
25 Q. Turn the page, please, to FJP 008.
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1 A. Okay.
2 Q. All right. The bottom half of that page --
3 give me a second please. Sorry. Strike that.
4 Mr. Rothstein, would you turn your attention,
5 please, to FJP 001.
6 A. Got it.
7 Q. At the very bottom is an e-mail from you to
8 Mr. Preve and Mr. Levin sent on October 29th, 2009,
9 correct?
10 A. Yes.
11 Q. And in the middle of that e-mail, in part
12 you state, "Flew to London yesterday and am here now
13 to meet with a banker friend who is helping fund while
14 I deal with the breach." That statement was a lie,
15 correct?
16 A. Correct.
17 Q. And, in fact, when you sent this e-mail on
18 October 29, 2009, you were already in Morocco, you had
19 already fled the country, correct?
20 A. Correct.
21 Q. Okay. Now, if you'll go back to FJP 008,
22 sir.
23 A. Okay.
24 Q. All right. At the bottom half of that page
25 is an e-mail dated 4/27/2009 at 10:42 a.m. Was that
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1 e-mail written by you?
2 A. Yes.
3 Q. Was that e-mail sent by you to Mr. Preve?
4 A. I don't see where it has the who I sent it
5 to on here.
6 Q. Okay. Are you able to testify today --
7 A. Although -- hang on. Although, he's -- it
8 looks like he's responding to it, so it looks like it
9 went to Mr. Preve and Mr. Levin.
10 Q. All right. Now, you state in the middle of
11 that e-mail, "Now the ball is in their court. I
12 proved that we have their money." That statement that
13 "I proved that we have their money," that was a lie,
14 correct?
15 A. Wait, wait, when you say "open quote, close
16 quote," you are asking that to say that that's
17 something I said, you are not saying it says open
18 quote, right?
19 Q. That's correct.
20 A. Because that open quote, close quote thing
21 has meaning and there are no quotes there.
22 Q. That's correct. I'm doing that for the
23 court reporter's benefit so that in the transcript it
24 will reveal that this a quotation from the e-mail
25 itself.
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1 So that statement that you made, "I proved
2 that we have their money," that's a falsehood,
3 correct?
4 A. Well, I made them think we had their money,
5 so I did prove it to them even though we didn't have
6 their money.
7 Q. Okay. Do you have -- turn your attention to
8 FJP 009.
9 A. Yes.
10 Q. All right. It's an e-mail dated
11 October 1st, 2009 at 2:41 p.m. that is sent to an
12 e-mail recipient Mike@onyxcapitalmanagement.com. Who
13 is Mike@onyxcapitalmanagement.com?
14 A. Michael Szafranski.
15 Q. And is Michael Szafranski the independent
16 verifier?
17 A. He was one of the independent verifiers.
18 Q. Okay. Now, even though this e-mail is sent
19 to Mr. Szafranski it starts out by saying, "Dear
20 Mr. Preve." Did you draft this e-mail?
21 A. I did.
22 Q. And down at the bottom it states, "I
23 verified 29 plaintiffs for settlement BUSV-1 and 29
24 plaintiffs for BUSV-2." That statement is false,
25 correct?
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1 A. Well, Mike wasn't really an independent
2 verifier, so yes, he was far from independent.
3 Q. Well, I know --
4 A. So that statement is false.
5 Q. That's not what I asked you.
6 Is the sentence that, "I verified 29
7 plaintiffs for settlement BUSV-1 and 29 plaintiffs for
8 BUSV-2," is that a false statement?
9 A. Yes.
10 Q. Okay. So this is an e-mail that, even
11 though you are sending it to Mr. Szafranski, it says
12 "Dear Mr. Preve." So isn't it true that you drafted
13 the contents of this e-mail and sent it to
14 Mr. Szafranski so that Mr. Szafranski could then copy
15 the content that you drafted and put that content in a
16 separate e-mail from Mr. Szafranski to Mr. Preve,
17 correct?
18 MR. SUAREZ: Form.
19 THE WITNESS: Upon Mr. Preve's instructions
20 to me, that's the part you left out.
21 BY MR. SHAWDE:
22 Q. The answer to my question is yes?
23 A. No, the answer to your question is Mr. Preve
24 did not like the manner in which Mr. Szafranski was
25 writing these letters, especially when it came to
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1 these deals because they were very sophisticated
2 investors.
3 Q. No, Mr. Rothstein, I'm going to interrupt
4 you because --
5 A. Please don't interrupt me.
6 Q. You are not -- you are going off on a
7 narrative that has nothing to do with my question.
8 My question was, did you draft the content
9 of this e-mail so that Szafranski could put it in his
10 own e-mail to Preve? That's my question. Yes or no?
11 MR. SUAREZ: Are you instructing him to
12 give incomplete answers, inaccurate answers?
13 MR. SHAWDE: Yes or no?
14 THE WITNESS: I can't answer yes or no.
15 MR. SHAWDE: Okay.
16 THE WITNESS: Because the record would be
17 unclear and you'd be tricking the jury and that's not
18 right.
19 MR. SHAWDE: Oh, it's not right. Well, we
20 don't want to do that.
21 THE WITNESS: Mr. Preve instructed me to
22 write this so he can have a nice, clean letter for
23 Mr. Szafranski, who didn't word his letters too well.
24 MR. SHAWDE: All right. Mr. Rothstein, I'm
25 going to caution you against providing narratives and
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1 self-serving testimony that are not in response to the
2 specific question I asked you. Please do not do that,
3 sir.
4 MR. SUAREZ: Mr. Rothstein, I appreciate
5 the full and complete answers.
6 BY MR. SHAWDE:
7 Q. Do you know whether Mr. Szafranski forwarded
8 this e-mail that you drafted in a separate e-mail to
9 Mr. Preve?
10 A. Yes.
11 Q. Meaning Mr. Szafranski did forward in a
12 separate e-mail to Mr. Preve the content of your
13 e-mail to Mr. Szafranski dated October 1st, 2009,
14 correct?
15 A. Yes.
16 Q. Mr. Rothstein, are there people in the room
17 with you?
18 A. Yes.
19 Q. Are you able to disclose who those people
20 are, sir?
21 A. Yes.
22 Q. Who are they?
23 A. An IRS CID Agent named Taryn and my lawyer,
24 Marc Nurik.
25 Q. Okay.
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1 A. Hold on Taryn is saying that I didn't say
2 her last name, that's because I don't like to massacre
3 it.
4 Would you like to say it.
5 Q. She doesn't need to say it. I don't need
6 her last name. Thank you.
7 Now, isn't it true, sir, that you never said
8 to Mr. Preve that the entire Bar investigation was a
9 scam?
10 A. That I never said those words, correct, I
11 never said the entire Bar thing is a scam.
12 Q. And isn't it also true that you told
13 Mr. Preve that attorneys Bates and Koppel, who were
14 allegedly referring cases to you, had verified
15 everything perfectly? Isn't it true that you told
16 Mr. Preve that?
17 A. I told Mr. Preve that they were flawless in
18 their presentation of what we needed for due
19 diligence.
20 Q. And that was a lie, correct?
21 A. No, they were flawless, which are some of
22 best actors I had all day that day.
23 Q. But you testified previously, did you not,
24 that Mr. Preve -- you told Mr. Preve that those two
25 attorneys had verified everything perfectly, correct?
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1 A. Yes. I told Mr. Preve that all the
2 information that I gave to Bates and Koppel to verify
3 they verified perfectly. Would you like me to
4 explain?
5 Q. So in your e-mail dated September 30th,
6 2009 -- let me go back and get it for you.
7 Mr. Rothstein, do you recall sending
8 Mr. Preve an e-mail on September 30th, 2009 that
9 states, and I have the e-mail in front of me,
10 unfortunately you do not, but I'm going ask you if
11 this refreshes your recollection. The e-mail that I
12 have in front of me from your e-mail address dated
13 September 30, 2009, 3:02 p.m., states, "Defense
14 counsel is barking and plaintiffs are here in mass."
15 Do you recall sending that e-mail and making that
16 statement to Mr. Preve on September 30, 2009?
17 A. I need to see the e-mails before it and
18 after to know. If you are representing to me that
19 that is an e-mail I sent, I'm sure I sent it. I don't
20 have an independent recollection of sending it. I
21 sent a lot of e-mails like that to Mr. Preve.
22 Q. Well, unfortunately I don't think other than
23 showing it to you on the camera, I don't think there's
24 a way of showing it to you. But, all right, we'll
25 move along.
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1 A. All I'm saying to you, sir, is I have no
2 reason to believe that I didn't send it. I just can't
3 tell you what it's about and for certain that I sent
4 it without seeing it.
5 Q. Okay. But as of September 30, 2009, there
6 were no defense counsel who were barking and there
7 were no plaintiffs who were in the mass knocking at
8 your door, correct?
9 A. No, that was my method of telling Frank I
10 needed money now.
11 Q. So this is another one of your Ponzi speak
12 e-mails that only you know the true meaning of,
13 correct?
14 A. Me and Frank.
15 Q. So just so we are clear, Mr. Rothstein, at
16 the time that you first pitched these settlement deals
17 to Mr. Preve, Mr. Preve did not know the settlement
18 deals were fictitious, correct?
19 A. Correct.
20 Q. All right. And, in fact, you never had a
21 direct conversation with any one in which you
22 specifically disclosed that the settlement deals were
23 fictitious, correct?
24 A. Yes, I did.
25 Q. Do you recall your deposition being taken on
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1 December 19th, 2011?
2 A. I do.
3 Q. And do you remember during that deposition
4 being asked the question, "Did you happen to have any
5 specific conversation with Szafranski discussing the
6 fictitious nature of the settlements?
7 Answer, "You are going to have to clarify
8 that question for me. I don't understand what you are
9 asking me."
10 Question, "Yes. I mean, did you ever sit
11 down and talk with Mike and say, you know, this is
12 what's going on?"
13 Answer, "I never had that conversation with
14 anybody in that nature."
15 Do you remember giving that testimony?
16 A. Yes, that's not the same as what you asked
17 me. You are trying to impeach me with something that
18 doesn't impeach me.
19 Q. That's one man's opinion and you can have
20 your opinion.
21 In fact, there's not at a single e-mail that
22 specifically states that there was a fraud being
23 perpetrated that uses that language?
24 A. I did not use the word "fraud" in my e-mails
25 to convey what we were doing.
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1 Q. In fact, you never would have put that in an
2 e-mail, correct?
3 A. I did not put that in e-mails. You are
4 trying to twist my words because if you read my entire
5 transcript, as far as Mr. Szafranski is concerned,
6 then you know very well that I testified that I told
7 Mr. Szafranski directly that there were no Plaintiffs.
8 Q. That's not what I asked you. I asked you if
9 there was an e-mail of all these thousands of e-mails,
10 is there any e-mail that uses the terminology we are
11 using a fraud, we are engaged in a fraud? The answer
12 to that is there are none, correct?
13 A. I did not use the word "fraud" in discussing
14 the Ponzi scheme with my co-conspirators.
15 Q. Is there any document in existence that you
16 are aware of that states, using the word "fraud," that
17 a fraud is being committed? Is there any document
18 that you are aware of that states that, an e-mail, a
19 letter, a Christmas card to somebody, the fraud is
20 going great?
21 A. No, no, but there, actually, I think are
22 some e-mails that Frank wrote to me where he's using
23 language to that effect.
24 Q. No, Mr. Rothstein, not language to that --
25 A. Not that the fraud is going great --
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1 MR. NURIK: Don't interrupt the witness
2 please.
3 BY MR. SHAWDE:
4 Q. Not language to that effect. The answer is,
5 are there any, yes or no, are there any documents that
6 you are aware of in which the terminology and the
7 exact word "fraud" is used and explained that there is
8 a fraud being perpetrated, yes or no?
9 A. No. There may be some from Mr. Preve to me,
10 I don't have a specific recollection one way or the
11 other. He tended to write to me very loosely.
12 Q. Okay. Now, isn't it also true that as of
13 December 4, 2007, as you sit here today, you cannot
14 say with certainty whether Mr. Preve knew that a fraud
15 was being perpetrated, correct, December 4, 2007?
16 A. As of what?
17 Q. December 4, 2007.
18 A. I don't remember one way or the other. I
19 need to see the documents around that date to tell you
20 for certain.
21 Q. As of May 2008, Mr. Preve did not know a
22 fraud was being perpetrated, correct?
23 A. I don't recall the date exactly, but I
24 believe by May 2008 he did know. But I need to see
25 all the documents to be certain, I do not wish to
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1 guess.
2 Q. When you were deposed in December of 2011,
3 did you review any documents in preparation for that
4 deposition?
5 A. My testimony during those 10 days was that I
6 didn't review documents specifically in preparation
7 for that deposition, but that I had been reviewing
8 hundreds of thousands of documents over the last --
9 over that past two and a half years, since my
10 cooperation with the government began.
11 Q. What documents do you have access to? I
12 understand we are not going to spend the next, you
13 know, two hours listing all the documents, but tell me
14 generally what documents you have access to.
15 MR. NURIK: Mr. LaVecchio, do you want to
16 interpose any objections at this point?
17 MR. KAPLAN: Would you repeat the question?
18 MR. SHAWDE: The question is, Mr. Rothstein
19 just testified that prior to his December 2011
20 deposition he had access to certain documents which he
21 reviewed over a period of time and that helped him
22 provide him with his testimony in December of 2011.
23 Is that an accurate characterization,
24 Mr. Rothstein, of your testimony?
25 THE WITNESS: Yes.
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1 MR. SHAWDE: So I am asking him, what
2 documents he has had access to that he is referring
3 to, in general?
4 MR. KAPLAN: He can just generally what
5 documents he has.
6 THE WITNESS: E-mails, bank records.
7 BY MR. SHAWDE:
8 Q. Okay. Now, you've testified there are
9 hundreds of thousands of e-mails that were exchanged
10 in connection --
11 A. Hold on.
12 Q. Sorry?
13 A. Hold on. I'm sorry, I'm not done, I
14 apologize.
15 Q. No problem.
16 A. Some files, some deal documents, some
17 complaints, some news articles. I'm certain that
18 there's others, I just can remember at this moment.
19 Q. Okay. Of the e-mails that you say you
20 reviewed and have had access to, you've previously
21 testified there were hundreds of thousands of e-mails
22 that were exchanged in connection with this fraud
23 scheme, correct?
24 A. I testified that there were hundreds of
25 thousands of e-mails involved in this entire
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1 conspiracy.
2 Q. Right. Do you have access to all of those
3 hundreds of thousands or, for example, do you only
4 have access to 5,000?
5 MR. KAPLAN: Object to what he has access
6 to.
7 THE WITNESS: I actually don't know, I'm
8 not done reviewing.
9 MR. SHAWDE: So is the government's position
10 that the number of e-mails that Mr. Rothstein has had
11 access to is somehow off limits?
12 MR. KAPLAN: I just said what he has access
13 to and what he doesn't have access to is something
14 that is off limits. I can't tell you what number, I
15 don't know if he can tell you what number.
16 MR. SHAWDE: Well, can I ask him if he
17 knows what number he has?
18 MR. KAPLAN: You can ask him.
19 BY MR. SHAWDE:
20 Q. Mr. Rothstein, do you have an answer of
21 approximately how many e-mails you have reviewed up to
22 this point in time?
23 (Thereupon, Mr. LaVecchio entered the room.)
24 THE WITNESS: I do not know, I'd be
25 guessing.
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1 BY MR. SHAWDE:
2 Q. Okay. I want you to guess. Is it less than
3 20,000?
4 MR. SUAREZ: On this question you want him
5 to guess?
6 MR. SHAWDE: That's what I said, I want him
7 to guess.
8 MR. SUAREZ: All right. Just making sure.
9 MR. SHAWDE: Am I speaking loud enough for
10 you?
11 MR. SUAREZ: No, I got it. English is my
12 second language, I'm a little slow --
13 THE WITNESS: I can't even render a good
14 guess. It's a lot, I don't know, a lot.
15 BY MR. SHAWDE:
16 Q. I'm sorry. Were you finished, I didn't mean
17 to interrupt you.
18 A. I'm all good, go ahead.
19 Q. So it's certainly not hundreds of thousands,
20 correct, that you've reviewed up to this point?
21 A. Of e-mails?
22 Q. Yes.
23 A. I do not -- listen, I do not want to guess.
24 I've been reviewing documents for coming up on six
25 months it will be three years. I sometimes sit for
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1 hours a day reviewing documents. Actually, I
2 frequently sit for hours a day reviewing documents. I
3 can't tell you how many I reviewed.
4 Q. Okay, fair point.
5 A. I reviewed thousands of pages of bank
6 records. I can't tell you, I can't guesstimate it for
7 you.
8 Q. All right. Now, isn't it true that you
9 cannot specifically say when Mr. Preve knew what was
10 going on?
11 (Thereupon, Mr. Kaplan exited the room.)
12 THE WITNESS: If you show me, I can give
13 you an indicator so you could tell. Look at the
14 first time he sent me a fake balance statement and
15 you know he knows there was a fraud going on.
16 BY MR. SHAWDE:
17 Q. Mr. Rothstein, the question is yes or no.
18 Can you state today with certainty when Mr. Preve
19 specifically knew what was going on, yes or no?
20 A. When he sent me the fake balance statement
21 telling me what the balance should be in an account,
22 by that date he absolutely knew that there was a major
23 fraud going on. On the date that he sent me the fake
24 audit statement to attach to a letter I was sending to
25 Mr. Weintraub and told me to scribble on it to make it
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1 look like I had worked on it, he absolutely knew that
2 there was fraud going on.
3 On the date that he called Mr. Harris at
4 Gibraltar Bank and Mr. Harris told him the money that
5 he was looking for in the account was not there, he
6 absolutely that there was a fraud going on. Same as
7 to Mr. Spinosa, on the date that he contacted
8 Mr. Spinosa and Mr. Spinosa told him those tens of
9 millions of dollars were not in my account, he knew
10 there was a fraud going on.
11 On the date that Mr. Preve prepared a fake
12 opinion letter for me to have me put on one of my
13 other lawyer's letterhead so we can use it to solicit
14 investors, he knew that there was a fraud going on.
15 On the date that he funded the very first deal with me
16 without a piece of paper, knowing that that was an
17 absolute impossibility in this type of investment, he
18 knew that there was a fraud going on.
19 On the date that he wrote me the e-mail
20 telling me to stop buying useless businesses and that
21 if I'd stop wasting all the money buying useless bars
22 and restaurants we'd have money to funds these deals,
23 he knew that there was a fraud going on. On the first
24 date that he stole investor money, he knew that there
25 was a fraud going on. On the date that he directed me
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1 to pay off George Levin's mortgage of $5 million on
2 the building at the Galleria, across the street from
3 the Galleria, he knew that there was a fraud going on.
4 On the date that he told me to lie to the
5 hedge funds, okay, excuse me, on the date that he told
6 me that we should get the hedge funds to lie about
7 whether or not we were a good investment, he knew
8 there was a fraud going on. That's the best I can
9 recall at this minute, I'm sure there's more.
10 Q. Yet when you were deposed on December 19th
11 of 2011, you were asked the question, "When
12 specifically did Preve know what was going on?" And
13 you answered, "I can't tell you specifically." That
14 was your answer then, correct?
15 A. That was my answer then. I have a lot more
16 information now.
17 MR. NURIK: Sorry, to interrupt, but we
18 might have to go out for a bit. We are getting a
19 signal that the video is going to end in 10 minutes,
20 so we might have to fix that and try to extend it.
21 THE WITNESS: Keep asking questions.
22 MR. LAVECCHIO: Yeah, wait and see if it
23 happens.
24 THE WITNESS: It's going to happen. Go
25 ahead, Larry.
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1 MR. LAVECCHIO: Let me make a call. You
2 keep going, see if I can stop it.
3 BY MR. SHAWDE:
4 Q. On a scale of 1 to 10, Mr. Rothstein, you
5 would rate yourself a 10 at manipulating people during
6 the Ponzi scheme time period, correct?
7 A. Yes.
8 Q. You've had meetings with bankruptcy trustee,
9 Mr. Stettin, and his counsel, correct?
10 A. Yes.
11 Q. When were those meetings?
12 A. In August of 2011.
13 Q. How long were the August 2011 meetings?
14 A. It took place over three days. I don't
15 recall how many hours a day.
16 Q. Who was present during those three-day
17 meetings?
18 A. Me; my lawyer, Mr. Nurik; Mr. Lichtman;
19 Mr. LaVecchio; IRS and FBI agents; someone that I keep
20 referring to as a boring forensics guy.
21 Q. On the boring forensics guy, was he -- do
22 you know whether he was a boring forensics guy who was
23 in the trustee's camp or the IRS's camp or the FBI's
24 camp?
25 MR. SUAREZ: Mr. Pollack.
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1 THE WITNESS: No, it was with the trustee.
2 MR. SHAWDE: Sorry.
3 THE WITNESS: Mr. Cimo was there;
4 Mr. Singerman was there; Mr. Genovese was there.
5 There may have been others, I don't recall at this
6 moment.
7 MR. SHAWDE: And I assume you were asked --
8 MR. SUAREZ: Mr. Shawde, there's an order
9 from Judge Cohn regarding the confidentiality of that
10 interview and I just caution the parties and I think
11 there's been an instruction before about being
12 respectful of Judge Cohn's order and making sure that
13 none of the testimony is in way violative -- one of
14 those words that exists in Spanish and not in
15 English -- that no one violates the order from Judge
16 Cohn.
17 BY MR. SHAWDE:
18 Q. Do you have that order with you?
19 MR. SUAREZ: I don't have it with me, no.
20 BY MR. SHAWDE:
21 Q. You discussed, in general terms you
22 discussed the Ponzi scheme, correct, that was the
23 whole reason you were there?
24 A. Yes.
25 Q. Was the meeting tape recorded?
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1 A. No.
2 Q. Was a court reporter present?
3 A. No.
4 Q. Did people take notes?
5 A. I assume so.
6 Q. Do you have a specific recollection of them
7 taking notes?
8 A. I remember some of them taking notes from
9 time to time. I can't tell you which of them was
10 taking notes and which were not.
11 Q. Did you take notes?
12 A. No, sir.
13 Q. Did you discuss Mr. Preve during that
14 meeting?
15 MR. NURIK: I'm going instruct my client
16 not to answer that question because right now I am
17 concerned it would be in violation of Judge Cohn's
18 order.
19 BY MR. SHAWDE:
20 Q. Did you discuss SFS during that meeting?
21 MR. NURIK: Same instruction.
22 BY MR. SHAWDE:
23 Q. Did you discuss Preve and Associates during
24 that meeting?
25 MR. NURIK: Same instruction.
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1 BY MR. SHAWDE:
2 Q. Mr. Rothstein, if this particular litigation
3 matter eventually gets tried in front of a jury, would
4 you personally object to being made available by
5 videotape to testify to that jury?
6 MR. LAVECCHIO: I'm going to interpose an
7 objection at this point. There are security issues.
8 MR. SHAWDE: The question is would he have
9 an objection.
10 Mr. Rothstein, you can answer.
11 MR. NURIK: Mr. LaVecchio, is there a
12 problem with him answering?
13 MR. LAVECCHIO: No, he can answer that
14 question.
15 THE WITNESS: So long as my safety could be
16 guaranteed, I would have no problem testifying.
17 BY MR. SHAWDE:
18 Q. Okay. When you were practicing law were you
19 a trial lawyer?
20 A. I was.
21 Q. So in the course and scope of your practice
22 as a trial lawyer, if you were taking a case to trial,
23 is it your view that it was important for the jury, if
24 it was a jury trial, to be able to see the witnesses
25 who are testifying in order to judge the demeanor and
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1 candor of their testimony?
2 A. In most circumstances, depended upon the
3 witness.
4 Q. And in a case where it is solely and
5 completely up to a jury who was telling the truth as
6 to certain allegations, under those circumstances
7 would it be criminal for the jury to be able to see
8 the witnesses who are testifying --
9 MR. SUAREZ: Mr. Shawde, is this another
10 instance --
11 MR. SHAWDE: -- as to those allegations?
12 MR. SUAREZ: -- where you want him to
13 disregard your previous instruction not to speculate?
14 MR. SHAWDE: You can answer my question if
15 you understand my question.
16 MR. SUAREZ: I just want to make sure I
17 understood it.
18 THE WITNESS: Really depends upon the case
19 and the witness.
20 BY MR. SHAWDE:
21 Q. Okay. In a case where it's a he said/she
22 said, no other evidence, case boils down to the
23 statement of one witness versus the statement of
24 another witness. The first witness testifies as to X,
25 the other witness testifies as to not X, that's what
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1 the case hinges on. Under those circumstances, in
2 your view and when you used to practice law, under
3 those circumstances would it be imperative for the
4 jury to be able to judge the demeanor and candor of
5 the witnesses by seeing them testify?
6 MR. SUAREZ: Same objection.
7 THE WITNESS: If your question is that it's
8 a case where there's no e-mails, no other documents,
9 no bank records, no wire transfers, and no other
10 witnesses to testify to the information, then my
11 answer would be yes.
12 BY MR. SHAWDE:
13 Q. Okay. Now, you would agree, would you not,
14 that there are differences between allegations that
15 can be demonstrably proven to be false by referring to
16 other documents, there's a difference between those
17 types of allegations, and allegations that are
18 disputed which depend solely on the belief of a person
19 who's testifying. You understand the difference and
20 acknowledge the difference between those two types of
21 allegations, correct?
22 MR. SUAREZ: Form.
23 THE WITNESS: Sorry, I don't understand
24 what you are asking me.
25 BY MR. SHAWDE:
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1 Q. All right. Let me rephrase it.
2 You would agree that there's a difference
3 between allegations that are capable of being proven
4 true or false by reference to documents, those types
5 of allegations are different materially, than
6 allegations which are provable solely by reference to
7 a person's testimony?
8 MR. SUAREZ: Form.
9 THE WITNESS: I'm not sure I understand.
10 I'm still not sure I understand your question.
11 There's a difference between all different types of
12 proof, maybe you can restate it. I mean, I'm not
13 sure what you are doing. Are you asking me to be an
14 expert on trial lawyering? I haven't tried a case in
15 a while but --
16 BY MR SHAWDE:
17 Q. You've been sentenced to 50 years in prison,
18 correct?
19 A. Yes, sir.
20 Q. How old are you now?
21 A. 50.
22 Q. So if you served your entire 50-year
23 sentence, you believe you'll die in prison, correct?
24 A. Correct.
25 Q. You believe that your only chance of not
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1 dying in prison is to come forward and allegedly tell
2 the truth to the government and hope that that results
3 in successful criminal prosecution such as the
4 government would recommend a reduction in your
5 sentence, correct?
6 MR. SUAREZ: Form.
7 THE WITNESS: That's not correct. If I
8 allegedly tell the truth I will die in here.
9 BY MR. SHAWDE:
10 Q. Well, that assumes that people would find
11 out that you weren't telling the truth, right?
12 MR. SUAREZ: Form.
13 THE WITNESS: I don't think you are giving
14 Mr. Kaplan and Mr. LaVecchio and Mr. Schwartz and
15 others enough credit --
16 MR. SHAWDE: Well, would you answer my
17 question?
18 THE WITNESS: -- if I'm lying.
19 No, I can't really because you are asking
20 me --
21 BY MR. SHAWDE:
22 Q. So it's hypothetically possible,
23 Mr. Rothstein, that you could state certain things as
24 being true that are, in fact, not true, but as long as
25 somebody doesn't find out that they are not true you
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1 might benefit from that, correct?
2 MR. SUAREZ: Form.
3 BY MR. SHAWDE:
4 Q. That's a hypothetical possibility?
5 MR. SUAREZ: Form.
6 THE WITNESS: I don't believe that, no,
7 sir. This case is too document intensive.
8 Unfortunately for me and unfortunately for people
9 like your client, the bulk of my testimony, the bulk
10 of it is supported by a significant inculpatory
11 e-mail and other documentation.
12 BY RM. SHAWDE:
13 Q. That's your opinion, correct?
14 A. That is a fact.
15 Q. That's a fact, okay.
16 We are going to take a short break?
17 MR. LAVECCHIO: I would suggest that you go
18 a little bit longer and make sure this video thing is
19 going to stay up.
20 MR. SHAWDE: We need to take a break in
21 order to make a decision to go longer.
22 [Short recess taken.]
23 BY MR. SHAWDE:
24 Q. Mr. Rothstein, in the course of perpetrating
25 this fraud, you utilized phony lawsuits to perpetrate
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1 the fraud, correct?
2 A. Yes, sir.
3 Q. You used phony court orders to perpetrate
4 the fraud, correct?
5 A. Certain points in time, yes, sir.
6 Q. You used phony settlement agreements to
7 perpetrate the fraud, correct?
8 A. Yes, sir.
9 Q. Phony promissory notes were used to
10 perpetrate the fraud, correct?
11 A. Yes, sir.
12 Q. You used forged e-mails to perpetrate the
13 fraud, correct?
14 A. Yes, sir.
15 Q. You used phony case file documents to
16 perpetrate the fraud, correct?
17 A. "Phony case file documents," you mean actual
18 like litigation type documents?
19 Q. Yes.
20 A. Minimally.
21 Q. You used phony bank web sites to perpetrate
22 your fraud, correct?
23 A. Yes.
24 Q. I used phony bank statements to perpetrate
25 your fraud, yes?
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1 A. I did, I did all of this with
2 co-conspirators, but yes.
3 Q. You used phony opinion letters to perpetrate
4 your fraud; is that correct?
5 A. The opinion letters were all drafted by
6 other people involved in the fraud, but yes, I
7 ultimately utilized them with co-conspirators to
8 perpetrate the fraud.
9 Q. And you used phony audit letters to
10 perpetrate the fraud, correct?
11 A. It would be the same answer. The audit
12 letters were generally prepared by other
13 co-conspirators then forwarded to sometimes other
14 co-conspirators to utilize, sometimes utilized by
15 other.
16 Q. Fake legal bills were used by you to
17 perpetrate the fraud, correct?
18 A. Yes, sir.
19 Q. Phony court case bonds were used to
20 perpetrate the fraud, correct?
21 A. Court case what? I'm sorry, I couldn't hear
22 the last word.
23 Q. Bonds.
24 A. Yes.
25 Q. Fake law enforcement investigations were
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1 used to perpetrate the fraud, correct?
2 A. Yes, using real law enforcement people, but
3 yes, they were fake investigations.
4 Q. Fictitious loans were used to perpetrate the
5 fraud, correct?
6 A. I don't know what you mean by "fictitious
7 loans." You mean back when we were doing the bridge
8 loans?
9 Q. Correct.
10 A. Yes.
11 Q. Your Ponzi scheme branched out into money
12 laundering, correct?
13 A. Yes.
14 Q. Extortion?
15 A. Yes.
16 Q. Public corruption?
17 A. Yes.
18 Q. Physical violence?
19 MR. NURIK: Larry, you want to interpose an
20 objection?
21 MR. LAVECCHIO: No. You previously
22 testified to that fact, it's just I don't wish you to
23 add any further details at this point.
24 THE WITNESS: Yes.
25 BY MR. SHAWDE:
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1 Q. And these crimes were committed on your
2 behalf, correct?
3 A. Not all of them, no, sir.
4 Q. Money laundering was committed on your
5 behalf, correct?
6 A. On behalf of me and my co-conspirators.
7 Q. Extortion was committed on your behalf,
8 correct?
9 A. On behalf of me and my co-conspirators.
10 Q. Physical violence on your behalf, correct?
11 MR. NURIK: Larry, I think --
12 Mr. LaVecchio?
13 THE WITNESS: Actual -- sorry.
14 MR. NURIK: Mr. LaVecchio.
15 MR. LAVECCHIO: On your behalf and on
16 behalf of co-conspirators I would say I'd have no
17 objection to that answer.
18 THE WITNESS: That would be the answer.
19 BY MR. SHAWDE:
20 Q. You fooled a lot of people in perpetrating
21 your fraud, correct?
22 A. I did.
23 Q. And you were a very good salesman at fooling
24 people, correct?
25 A. I was.
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1 Q. You manipulated people in order to get what
2 you wanted in terms of money and other toys, correct?
3 A. Certain people, yes, sir.
4 Q. And you were very good at manipulating those
5 people, correct?
6 A. I was.
7 Q. Okay, I think we are finished. Thank you
8 very much.
9 A. Thank you, sir.
10 [Thereupon, the taking of the deposition was
11 concluded at 4:06 p.m.]
12
13
14
15
16
SCOTT ROTHSTEIN
17 Sworn to and subscribed
before me this day
18 of , 2012.
Notary Public, State
19 of Florida at Large.
20
21
22
23
24
25
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1 CERTIFICATE
2 STATE OF FLORIDA )
COUNTY OF MIAMI-DADE )
3
I, Pearlyck Martin, a Notary Public in and
4 for the State of Florida at Large, do hereby certify
that, pursuant to a Notice of Taking Deposition in the
5 above-entitled cause, SCOTT ROTHSTEIN was by me first
duly cautioned and sworn to testify the whole truth,
6 and upon being carefully examined testified as is
hereinabove shown, and the testimony of said witness
7 was reduced to typewriting under my personal
supervision and that the said Video Conference
8 deposition constitutes a true record of the testimony
given by the witness.
9
I further certify that the said Video
10 Conference deposition was taken at the time and place
specified hereinabove and that I am neither of counsel
11 nor solicitor to either of the parties in said suit
nor interested in the event of the cause.
12
WITNESS my hand and official seal in the
13 City of Miami, County of Dade, State of Florida, this
day of June 18, 2012.
14
15
16
____________________________
17 Pearlyck Martin
18
19
20
21
22
23
24
25
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1
FRIEDMAN, LOMBARDI & OLSON
2 Suite 924, Biscayne Building
19 West Flagler Street
3 Miami, Florida 33130
Telephone (305) 371-6677
4
June 19, 2012
5
RE: ROTHSTEIN ROSENFELDT ADLER, P.A.
6
SCOTT ROTHSTEIN C/O MARC NURIK
7 One East Broward Boulevard, Seventh Floor
Ft. Lauderdale, Florida 33301
8
Dear SCOTT ROTHSTEIN:
9
With reference to the deposition of yourself
10 taken on June 13, 2012, in connection with the
above-captioned case, please be advised that the
11 transcript of the deposition has been completed and is
awaiting signature.
12
Please arrange to stop by our office for the
13 purpose of reading and signing the deposition. Our
office hours are 9:00 a.m. to 4:00 p.m., Monday
14 through Friday. Please telephone in advance.
15 You may, however, read a copy of the
transcript, provided by any of the attorneys connected
16 with the case, denoting any corrections by page and
line number on a separate sheet of paper. This
17 correction page must be signed by you and notarized
and returned to us for filing with the original.
18
If this has not been taken care of, however,
19 within the next 30 days, or by the time of trial,
whichever comes first, I shall then conclude that the
20 reading, subscribing and notice of filing have been
waived and shall then proceed to deliver the original
21 of the transcript to ordering attorney without further
notice.
22
23
24 _______________________________
Pearlyck Martin
25
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