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ae4ce89d-3faf-467b-9ab5-e73

(954) 525- 2221United Reporting, Inc.

IN THE CIRCUIT COURT OF THE 17TH

JUDICIAL CIRCUIT IN AND FOR

BROWARD COUNTY, FLORIDA

Case No. 09-062943 (07)

_____________________________________________________

RAZORBACK FUNDING, LLC, et al.,

Plaintiffs,

vs.

SCOTT W. ROTHSTEIN, et al.,

Defendants.

____________________________________________________

DAY 3 - MORNING SESSION

DEPOSITION OF SCOTT W. ROTHSTEIN

DATE TAKEN: December 14, 2011TIME: 8:30 a.m. - 12:02 p.m.

PLACE: James Lawrence King Federal

Justice Building

99 N.E. Fourth Street

Courtroom 11-3

Miami, Florida 33128

Examination of the witness taken before:Michele L. Savoy, Registered Professional Reporter

United Reporting, Inc.

1218 S.E. Third Avenue

Fort Lauderdale, Florida 33316

(954) 525-2221


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1 IN THE CIRCUIT COURT OF THE 17THJUDICIAL CIRCUIT IN AND FOR

2 BROWARD COUNTY, FLORIDA

3 ____________________________________________________

4 Case No. 10-24110 CACE (19)

5 EDWARD J. MORSE and CAROL A. MORSE,and MORSE OPERATIONS, INC.

6Plaintiffs,

7vs.

8

9 SCOTT W. ROTHSTEIN, et al.,

10 Defendants.

11 _____________________________________________________

12 Case No. 11-CV-61688-JIC/LSS

13 AMY ADAMS, et. al,

14 Plaintiffs,

15 vs.

16 SCOTT W. ROTHSTEIN, TD BANK, N.A. and GIBRALTARPRIVATE BANK AND TRUST COMPANY,

17Defendants.

18 _____________________________________________________

19 10-03767-RBR Stettin v. Gibraltar PrivateBank & Trust Co.

2011-03802-RBR Stettin v. Fidelity Gift Fund

2111-02368-RBR Stettin v. TD Bank, N.A.

22

23

24

25


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Page 435

1 APPEARANCE FOR SCOTT ROTHSTEIN:

2 LAW OFFICE OF MARC S. NURIK1 East Broward Boulevard

3 Suite 700Fort Lauderdale, Florida 33301

4 BY: MARC S. NURIK, ESQUIRE

5 APPEARANCE FOR THE TRUSTEE:

6 BERGER SINGERMAN350 East Las Olas Boulevard

7 Suite 1000Fort Lauderdale, Florida 33301

8 BY: CHARLES H. LICHTMAN, ESQUIRE

9 APPEARANCES FOR THE TRUSTEE:

10 GENOVESE, JOBLOVE & BATTISTA, P.A.100 S.E. 2nd Street

11 Suite 4400Miami, Florida 33131

12 By: JOHN. H. GENOVESE, ESQUIREDAVID C. CIMO, ESQUIRE

13 THERESA M.B. VAN VLIET, ESQUIRE

14 APPEARANCES FOR RAZORBACK:

15 CONRAD & SCHERER, LLP633 South Federal Highway

16 Eighth FloorFort Lauderdale, Florida 33302

17 By: WILLIAM R. SCHERER, ESQUIREREID A. COCALIS, ESQUIRE

18 IVAN J. KOPAS, ESQUIRE

19 KOZYAK, TROPIN & THROCKMORTON, P.A.2525 Ponce de Leon Boulevard

20 Ninth FloorCoral Gables, Florida 33134

21 By: ADAM MOSKOWITZ, ESQUIRE

22

23

24

25


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Page 436

1 APPEARANCE FOR PLATINUM PARTNERS VALUE ARBITRAGECENTURION STRUCTURED GROWTH, LLC:

2GOLDSTEIN, TANEN & TRENCH, P.A.

3 One Biscayne Tower, Suite 3700Two South Biscayne Boulevard

4 Miami, Florida 33131By: SUSAN E. TRENCH, ESQUIRE

5

6 APPEARANCE FOR LEVINSON'S JEWELERS:

7 KOPELOWITZ OSTROW FERGUSON WEISELBERG KEECHL200 SW 1st Ave

8 Suite 1200Fort Lauderdale, Florida 33301-2073

9 BY: JAN ATLAS, ESQUIRE

10 APPEARANCE FOR THE COMMITTEE OF UNSECURED:

11 AKERMAN, SENTERFITTOne Southeast Third Avenue

12 25th FloorMiami, Florida 33131-1704

13 By: MICHAEL GOLDBERG, ESQUIRE

14 APPEARANCE FOR T.D. BANK:

15 GREENBERG TRAURIG, P.A.401 E Las Olas Blvd Ste 2000

16 Fort Lauderdale, Florida 33301By: DONNA M. EVANS, ESQUIRE

17APPEARANCE FOR RLI ZURICH INSURANCE COMPANY,

18 COLUMBIA INC. & ZURICH INSURANCE:

19 CLAUSIN MILLEROne Chase Manhattan Plaza

20 39th FloorNew York, New York 10005

21 BY: SCOTT L. SCHMOOKLER, ESQUIRE

22 APPEARANCE FOR FEDERAL INSURANCE COMPANY:

23 Alex Hofrichter, P.A1430 South Dixie Highway

24 Suite 204Coral Gables, Florida 33146-3127

25 By: ALEX HOFRICHTER, ESQUIRE


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1 APPEARANCES FOR MORSE:

2 TRIPP SCOTT, P.A.110 S.E. Sixth Street,15th Floor

3 Fort Lauderdale, Florida 33301By: GEORGE WALKER, ESQUIRE

4 JOHN M. MULLIN, ESQUIRE

5 APPEARANCE FOR EMESS CAPITAL, LLC:

6 Kluger Kaplan SilvermanKatzen & Levine PL

7 201 S Biscayne Blvd Fl 17Miami, Florida 33131

8 BY: CASEY CUSICK, ESQUIRE

9 APPEARANCE FOR ST. PAUL FIRE & MARINE:

10 Mills Paskert Divers P A100 N Tampa St Ste 2010

11 Tampa, Florida 33602-5145JOHN A. BLACK, JR., ESQUIRE

12

13 APPEARANCE FOR ROSEANNE CARETSKY:

14 Billing Cochran Lyles515 E Las Olas Blvd

15 Floor SixFort Lauderdale, Florida 33301-2296

16 By: W. TUCKER CRAIG, ESQUIRE

17

18

19

20

21

22

23

24

25


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Page 438

1 INDEX

2 CONTINUED DEPOSITION OF SCOTT W. ROTHSTEIN

3CONT. DIRECT

4 MR. Lichtman 439

5 CERTIFICATE OF OATH 613CETIFICATE OF REPORTER 614

6

7 TRUSTEE'S EXHIBITS INDEX

8 NO. DESCRIPTION PAGE NO65 Scott_RothsteinFBI 113444 518

9 66 Trustee_Coquina 000104-107 52067 TD Bank Letter 524

10 68 Scott_RothsteinFBI_009340 53069 Scott_RothsteinFBI_10886 531

11 70 Debra_VillegasFBI_002821 53371 Debra_VillegasFBI_002821 534

12 72 Scott_RothsteinFBI_033338 54073 Trustee/Spinosa 000001 541

13 74 Debra_VillegasFBI_007191 54475 Scott_RothsteinFBI_039753 547

14 76 TD Bank Letter 54877 TD/Razor 001257 549

15 78 Trustee_Coquina Multiple Docs 55279 Trustee_Coquina 000063-64 557

16 80 TD/Razor 001241-1242 55881 TD/Razor 000268-270 563

17 82 TD/Razor Multiple Docs 56483 Trustee_TD 000258 and 260 568

18 84 Trustee_TD 000319-321 57385 TD/Razor 000080-81 574

19 86 Trustee/Spinosa 000333 and 347 57787 TD/Razor Multiple Docs 579

20 88 TD/Razor 000046 58289 TD/Razor 000364 and 112 588

21 90 Trustee/Spinosa 000837 590

22

23

24

25


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Page 439

1 Thereupon, the following proceedings were had:

2 CONTINUED DIRECT EXAMINATION

3 BY MR. LICHTMAN:

4 Q Good morning, Mr. Rothstein. How are you

5 today?

6 A Good morning. I'm well. Thank you.

7 Q You realize you're still under oath,

8 correct?

9 A I do.

10 Q And to pick up from the point of

11 yesterday, Mr. Nurik is not with you and you consent

12 to proceeding in his absence until he gets here

13 today, correct?

14 A I consent to proceeding in his absence so

15 long as -- since I've already met with you,

16 Mr. Lichtman, I'm comfortable speaking to you

17 without him being here, but I'm not comfortable with

18 being questioned by anybody else until he arrives.

19 Q But you're okay with me questioning you?

20 A Yes.

21 Q Okay. I can't help myself on this first

22 question; I want to start the day off on the right

23 foot.

24 You realize that your fist mistake in what

25 you did was that you were Republican and I assume


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Page 440

1 you realized if you were Democrat, then the good

2 side of your brain would have kicked in and none of

3 this would have happened to you? Do you concede

4 that?

5 A That's -- I --

6 MR. SCHERER: I would object to the form

7 of that question.

8 THE WITNESS: Thank you, Bill.

9 MR. SCHERER: Because it is ridiculous.

10 It assumes facts that have never been in

11 evidence, that would never go into evidence,

12 and it suspends reality. As a matter of fact,

13 the only reason he's where he is now is because

14 he wrote a big check to Alex Sink.

15 MR. LICHTMAN: That's it, right?

16 THE WITNESS: I'm just going to refrain

17 for comment for fear that someone else may end

18 up in jail.

19 MR. LICHTMAN: The record should reflect

20 that everybody is laughing, so now we will

21 actually get serious and get started.

22 BY MR. LICHTMAN:

23 Q I want to start off with Frank Spinosa.

24 A Okay.

25 Q Yesterday, in the questioning by


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Page 441

1 Mr. Scherer, you referenced that there was a point

2 in time that he received an envelope from you at the

3 Bova restaurant. I think that you said that it

4 contained between $50- and $75,000 cash?

5 A That's correct.

6 Q Okay. What I want to do, actually, is

7 work backwards, because I think that you said that

8 but didn't attribute it to a time frame. So what I

9 really want to do is start kind of at the beginning

10 of the process of the relationship with Spinosa and

11 history, and then work our way up to that cash

12 payment.

13 A All right.

14 Q About how long into the point in time that

15 you were conducting your banking arrangements at TD

16 Bank was it before you started working with

17 Mr. Spinosa?

18 A When you say working, you mean both

19 legitimately and illegitimately.

20 Q Let's start with legitimately.

21 A Almost -- to the best of my recollection,

22 it was almost at the beginning. I'm fairly certain

23 that was -- our first contact, as I said yesterday,

24 was John Tolomer, who was Mr. Spinosa's boss. I

25 have a vague recollection of Mr. Spinosa possibly


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Page 442

1 even being at that first meeting with us, that first

2 dinner meeting. It's vague, so don't hold me to

3 that.

4 But very shortly after our decision to

5 start banking with TD, Mr. Spinosa was injected into

6 the equation.

7 Q Okay. You have used the term "player"

8 repeatedly through the course of your deposition so

9 far, and I take it to mean that "player" refers to

10 somebody, a third party, that would be interested in

11 some kind of inducement to go along with whatever it

12 was that you needed?

13 ALL PRESENT: Object to form. Predicate.

14 BY MR. LICHTMAN:

15 Q So, what I would like to do, is have you

16 tell me, in your mind, what does the term "player"

17 mean?

18 A The word "player" was utilized with me and

19 several of the other people that were

20 co-conspirators in the Ponzi scheme for the purpose

21 of identifying someone who we believed, at least at

22 some level, would be interested in earning money,

23 having a better lifestyle, in exchange for doing

24 things that were illegal.

25 Q Who would the other people be that you


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Page 443

1 referenced just now?

2 A Regularly, when I talked to Frank, when we

3 were having conversations over the phone, he or I

4 would say, don't worry he's a player.

5 Q Frank Preve?

6 A Frank Preve.

7 Q Who else?

8 A That conversation was had with Mr. Boden

9 and I when we were talking; we would say, he is a

10 player, don't worry about it.

11 Szafranski, not so much; from time to

12 time, but he was a little more -- I think you'll see

13 him described as "milk toast" in the emails. He

14 didn't really speak that way.

15 When I had conversations with Steve

16 Caputi, we used the word "player." When I had

17 conversations with Stu or Steve Lippman, probably

18 more towards Russ Adler's side, when he was

19 introducing Rossi and Herskowitz in, I would have

20 asked him if they were players, those people.

21 Q So "player" was a common term that was

22 used among those that were working with you?

23 A Sure. I think it was a common: "player."

24 I remember using the word with Mr. Morse,

25 Ted Morse, when I was discussing things with him. I


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1 said, can we trust these people, especially when I

2 had him go to Bank of America and we had some

3 conversations outside Bova in the Caputi

4 check-hiding mess that we got our ourselves into.

5 When Ted was telling me he was going to go

6 speak to someone, the normal conversation would be,

7 is this guy a player, can we trust him.

8 Q Okay. Now, a few answers ago you said

9 that a player would get involved for purposes of

10 earning money; I think those two words you used

11 exactly. Was there anything else, besides earning

12 money, that were typical inducements that you used?

13 A Yes. I think I said earning money and

14 bettering their lifestyle.

15 Q Can you give me examples of "bettering

16 their lifestyle"?

17 A Sure. It's what we were talking about the

18 last two days, which is what we -- what we referred

19 to as living the rock-star lifestyle --

20 Q Yes.

21 A -- and that is, they would have access to

22 all of our tickets to all sporting events. We had a

23 box on the 50-yard line at Dolphin Stadium. Suite.

24 We had excellent seats at the Arena and, naturally,

25 a box at the Bank Atlantic Center. We had floor


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1 seats for the Miami Heat. We always had tickets

2 available for the Marlins and for the New York

3 Yankees. So with regard to sporting events, if

4 there was an event, they went on our dime.

5 Dinners for all the people that were

6 closely involved with us at Bova, 99 percent of the

7 time they were comped. Their drink tabs were picked

8 up. Trips to Ultimate Cigars, Moe Sohail's place,

9 put on my tab, boxes of cigars, lighters and the

10 like.

11 Trips down to -- after I got involved with

12 Casa Casuarina with Peter Loftin, at the Versace

13 mansion. People would be comped down at the Versace

14 mansion. People wanted to go to concerts; we were

15 always able to get them tickets through brokers, the

16 first three rows.

17 They flew on chartered planes with us to

18 sporting events outside the state. I took people to

19 the Super Bowl that were involved in the Ponzi

20 scheme. I took people to the BCS game, national

21 championship.

22 You name it, we were doing it. If it --

23 it pertained to that rock-star lifestyle, things

24 that people could not ordinarily do, $1,000 a plate

25 charity cigar smokers, that type of stuff.


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1 Q Okay.

2 A That's the type of thing we would do to

3 keep the people in the game.

4 Q Now let me focus on Mr. Spinosa.

5 A Sure.

6 Q Was there a point in time where you

7 thought that he would be a player?

8 A Well, I don't remember the time that I

9 thought he would be, but there had to be, because he

10 became one.

11 The one thing I do need to clarify, since

12 you're going to try to get into time frames --

13 Q Yes.

14 A -- is that it's not an on-off switch when

15 someone becomes involved in a criminal enterprise of

16 this magnitude, even at the small levels, that

17 certain people were involved, and at the major

18 levels, other people were involved. It's a gradual

19 thing.

20 People see what's going on. They get a

21 feel for what's going on, and they gradually become

22 involved.

23 Q So, with respect to Mr. Spinosa, I think

24 what I'm hearing you say is that there was no on-off

25 switch as it pertained to Mr. Spinosa?


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1 A I can tell you that the only people --

2 actually, the only person that I can think of off

3 the top of my head that there was an on-off switch

4 with, was Steve Caputi. Because I had known Steve

5 fore close to two decades, and I trusted him

6 implicitly.

7 So, Steve would be someone that I could go

8 to, as I did, and say, listen, Steve, I need you to

9 pretend to be a banker for me. This is what is

10 going on. This is what I need to you do. It would

11 just be a very easy conversation; as opposed to a

12 lot of the other people who, over time, like

13 Szafranski -- you can judge, Mr. Lichtman, as

14 someone is going on, as you'll see from through

15 going through all the emails, that someone is

16 interested: They see the red flags and ignore them.

17 Q What was there with respect to Mr. Spinosa

18 that told you that he was interested or red flags,

19 as you mentioned, so that you believed he would be a

20 player?

21 A We immediately started off with an

22 extremely high velocity of transactions in our

23 accounts, and he didn't flinch, except to tell me

24 that if we had any problems, when I inquired of him

25 as to whether there were any problems with what we


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Page 448

1 were doing, don't worry about it; we'll take care of

2 it.

3 Q When you say he didn't flinch, you had

4 this high velocity of transactions, can you go into

5 a little bit more detail?

6 A Sure. Well, I have the experience of

7 dealing with Gibraltar Bank, which was very high

8 intensity from certain individuals down. There's

9 scrutiny. So I knew at that stage what to look for.

10 With regard to Mr. Spinosa, I mean, there

11 should have been, in my eyes, red flags, just by

12 shear volume, overdrawing accounts from the

13 beginning of the relationship. It became evident to

14 me that I could continue to take it steps further,

15 because every time I asked him if there was a

16 problem -- and in the beginning of the relationship,

17 Mr. Lichtman, I asked him frequently: any problems

18 with what's going on, any problems with the wire

19 transfers?

20 Q What did he say?

21 A He said absolutely not, and if there were,

22 don't worry about it, I'll handle it.

23 Q So how did you respond in terms of -- I'll

24 use the term inducements, to determine that he was a

25 player and so that you could keep this going with


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1 him?

2 A I started inviting him to events.

3 Q What kind of events?

4 A Political functions at my home that were

5 fairly expensive events, expensive dinners, sporting

6 events.

7 Q Dinners at Bova?

8 A Yes.

9 Q Do you recall any of the sporting events

10 that you took him to?

11 A I don't.

12 I remember him coming to Dolphins' games,

13 but I don't recall any other specifics. I may have

14 given him tickets to a Heat game, but I don't

15 remember off the top of my head.

16 Q And would you, say, give, meaning that

17 they literally were gifted; he did not have to pay

18 you for them?

19 A No. He never paid me for anything.

20 Q Do you have any knowledge as to whether he

21 reported any of these things to the bank?

22 A He didn't report it.

23 Q How do you know?

24 A Because I had a conversation with him at

25 one point in time when -- it was around the time


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1 that I had given something -- we were joking around

2 about something I had given to a politician, and I

3 don't remember who it was; but I remember laughing

4 with him about the fact that you could give -- there

5 were certain people in town who you couldn't do

6 anything with, and there were certain people you

7 could sign over your property to and they wouldn't

8 flinch.

9 Q Did you give me the laundry list of the

10 inducements that you recall Mr. Spinosa receiving

11 from you?

12 A Yeah. He received concert tickets from

13 me.

14 Q Do you recall which concerts?

15 A No, I don't. I don't; but, again, if he

16 calls and asks for concert tickets, it's never:

17 Well, we should do it? It's always yes.

18 Q Is that typically how it would work: If

19 he wanted concert tickets, he would call you --

20 A Yes.

21 Q -- as opposed to you calling him?

22 A If I thought it was something he would be

23 interested in, I would call him; otherwise, he would

24 contact me.

25 Q From your recollection, what --


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Page 451

1 COURT REPORTER: I'm sorry. I'm getting

2 thrown off track by some whispering. Could you

3 repeat your question again?

4 BY MR. LICHTMAN:

5 Q From the quality -- from your

6 recollection, what were the quality of the tickets

7 that you typically procured from Mr. Spinosa?

8 A First three rows.

9 Q Did you get those from brokers?

10 A Always through brokers, yes.

11 Q Do you recall the brokers that you used?

12 A No, but it is in our financial records.

13 Q Okay. What other --

14 A It should be -- excuse me. It should be

15 on our American Express bill.

16 Q Okay. What other inducements do you

17 specifically recall --

18 A I specifically --

19 Q -- with respect to Mr. Spinosa?

20 A -- recall attending Dolphin games. I have

21 a vague recollection of giving him --

22 Q Let me take them one by one.

23 The Dolphin games, you mentioned before

24 that you had a box at the Dolphin -- at the -- I'll

25 call it Joe Robbie stadium?


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1 A That's correct.

2 Q Was he a regular visitor at the Dolphin

3 games?

4 A Call him a semi-regular visitor. He

5 certainly wasn't as frequent as Mr. Harris.

6 Mr. Harris came to just about every game, but he was

7 a regular visitor.

8 Q Okay. And, again, that was for free?

9 A Yes.

10 Q Okay.

11 A The box, food and drink, yes.

12 Q Parking?

13 A Parking.

14 Q What else?

15 A He asked -- I think it was just once --

16 for Heat tickets and we gave him our floor seats to

17 the Heat tickets.

18 Q Were there other sporting events that you

19 recall him going to?

20 A You know, I don't remember if he did. I

21 don't remember. I don't have a recollection of him

22 traveling with us anywhere.

23 Q Meaning to sporting events?

24 A Yeah, away to sporting events.

25 He came to a number of our -- actually, he


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1 came to probably the bulk of our political events,

2 when we had John McCain at the home, Charlie Crist,

3 Senator Leiberman. I believe he was there for Alex

4 Sink.

5 Q Did he --

6 A There were events down in Miami. I

7 remember we had John Henson and somebody else down

8 at the Havana Club. John McCain might have been at

9 that, also. Spinosa attended that.

10 Q Do you recall him traveling on private

11 jets with you anywhere?

12 A I don't have a specific recollection of

13 it. I don't -- I don't think he did, but the

14 easiest way to check that, instead of relying on my

15 memory, is just to just check the manifests. I

16 don't think that they did.

17 Q Okay. And how about dinners, what do you

18 recall with respect to him having free dinners

19 from --

20 A I recall him eating dinner on more than

21 several occasions with me at Bova. I recall him

22 eating at Capital Grill, both for lunch and dinner,

23 with me, on my tab.

24 Q Versace mansion?

25 A I don't recall whether he was one of the


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1 takers for the Casa Casuarina. Probably.

2 There was a dinner at a restaurant in

3 Miami called Barton G that we went to. It was a

4 guys' dinner. He attended that.

5 Q Who else was there?

6 A It would --

7 Q Same --

8 A It would -- no. It would have been a

9 dinner where my -- where I was taking my friends.

10 What I generally did with guys like

11 Harris, Spinosa, is I took them -- if I was going

12 with my general group of friends out some place, I

13 would invite them from time to time.

14 Q The guys that you mentioned a couple of

15 days ago, that group of friends?

16 A Yes.

17 Q Okay.

18 A Yes.

19 Oh, he attended -- he attended boys

20 gatherings at Solid Gold with us, as well --

21 Q All right.

22 A -- usually on Wednesday nights.

23 Q By the way, do you recall approximately

24 how much the concert tickets typically cost per

25 seat?


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1 A It varied anywhere from $500 to $600 a

2 seat into the thousands of dollars per seat,

3 depending upon the ticket, how close to the actual

4 concert date we were getting them, whether the

5 concert was sold out or not, whether I was getting

6 back-stage passes along with the tickets.

7 Q All right. And with respect to the

8 political events, you mentioned McCain, Crist,

9 Leiberman, Alex Sink, was it typical that when we

10 attended those events, he had his picture taken with

11 the candidates or politician?

12 A I don't know if it was typical, but it

13 should have occurred on several occasions because he

14 wanted to have his picture taken so he could put it

15 on his office wall, so I am sure I arranged for it

16 to happen on at least one or two occasions.

17 Q Did he attend the Schwarzenegger events?

18 A I don't believe he did. That was a very,

19 very, close group. I think I only invited 25 or 30

20 people to that because it was a lunch at my home for

21 him, and I don't recall him being there.

22 Q Did he attend any of the events that you

23 helped host or participated in at the Levinsons'?

24 A I don't have an independent recollection

25 as to whether or not he -- he did or not. Really,


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1 the easiest way to check for a Levinsons' event is

2 to go look at the pictures because, as you know,

3 they took a lot of pictures of a lot of the people

4 that were there.

5 Q Did he ever travel with you to New York or

6 other locations?

7 A I don't think that he did, no.

8 Q So, how did it work with respect to these

9 inducements and him being a player in terms of

10 getting something that you needed?

11 A The way it works is this -- and you'll see

12 that this is consistent with almost everybody I was

13 working with or began to work with. You start by

14 asking them to do little things, watching our

15 account, for example.

16 Q Okay. As you give the example, let's use

17 Spinosa, so --

18 A Okay. This is Spinosa. I mean, this --

19 Q Yeah.

20 A It really doesn't vary from person to

21 person. It's a feel thing. You don't walk up,

22 contrary to what appears to be popular belief, you

23 do not say to someone: Hey, I am committing a fraud

24 and would you like to help me, I'll pay you some

25 money.


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1 I mean, you just stay away from that.

2 You'll find in the emails that Mr. Preve was

3 probably more open than most about what was going

4 on; Mr. Spinosa, not so much.

5 So, it was very limited conversation:

6 What's going on with my account, any problems?

7 No, don't worry. Any problems, I'll

8 handle. You just continue to do your business.

9 We're good to go.

10 He was constantly saying things, if I took

11 him out for drinks, we were having an exceptionally

12 good night, I would say something to Mr. Spinosa

13 like, having a great time?

14 Yep, yep, yep.

15 I -- and he would always say something

16 like, I don't know how to thank you.

17 I always said, yeah, you know how to thank

18 me, just take care of me. You're taking great care

19 of me, just continue to take care of me.

20 Q That would be consistent with what you

21 said to Ms. Caretsky in the parking lot?

22 A Yeah. But -- I was very big on saying

23 things like, just do the right thing. That was one

24 of my favorite phrases: Just do the right thing,

25 okay, make sure you take care of me, do the right


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1 thing.

2 I never had anyone turn around and say,

3 well, what is the right thing?

4 The people I was dealing with -- for the

5 most part, I can't think of anyone who didn't. All

6 were going along with what we were doing.

7 I think the turning with Mr. Spinosa was

8 when I sent him that lock letter -- that thing that

9 became known as the lock letter; and, you know,

10 Mr. Preve and I had talked about it before, because

11 we had gotten a request -- I had gotten a request, I

12 think, through one of the Szafranski plaintiffs, if

13 I'm not mistaken, and I sent him that letter. I

14 said, hey, can you do this?

15 And Preve and I had -- the conversations

16 we had had was Preve had been banking on, he said, I

17 don't know if he's going to be able to do that and

18 that's a really big bank.

19 And I sent it to him and he said, sure,

20 just send it to me and I'll sign it.

21 Q It was that simple?

22 A I may be making it more complicated than

23 it actually was.

24 Q Okay. Is there anything that you can tie

25 in time to the point where you gave him the envelope


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1 at Bova -- to an event?

2 A No, sir. It was early on. I generally

3 gave money once a person -- I have got to break it

4 down for you.

5 With Mr. Spinosa, I gave him money, okay,

6 once we were already going.

7 Q When you say "already going," what do you

8 mean by that?

9 A It would have been around the time that he

10 had first started doing the lock letters. Okay?

11 Likely before I had to have him draft the actual

12 letter, probably around the time -- and I'm just

13 giving you my best guesstimate, okay -- around the

14 time that he was simply signing off on the letters.

15 It was clear, at that point in time, that he was in,

16 and I had the belief that he would take the money.

17 Q Locked in, no pun intended?

18 A No pun intended, locked in, yes.

19 Q Was there ever a point in time that you

20 asked him to do something that you could think of

21 where he said, no, I can't do that, that's pushing

22 it too far?

23 A No, sir.

24 Q And how long did this process of

25 inducements with Mr. Spinosa continue?


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1 A I would be guessing.

2 Q Did it go all the way to the point in time

3 where the Ponzi collapsed?

4 A You mean how long did I continue to do

5 illegal activity with him?

6 Q Yes.

7 A Until the Ponzi collapsed.

8 Q And that would be reflected by the wire

9 transfer that they sent to Morocco for you, correct?

10 ALL PRESENT: Objection to form,

11 predicate.

12 MS. EVANS: Objection.

13 A Yes.

14 BY MR. LICHTMAN:

15 Q Mr. Spinosa approved the wire transfer

16 that you asked for that was sent to Morocco at the

17 time that you left the country, correct?

18 A He did. He assisted.

19 ALL PRESENT: Objection to form, assumes

20 facts not in evidence.

21 BY MR. LICHTMAN:

22 Q Okay. You can answer.

23 A With regard to the wire transfer,

24 Mr. Spinosa approved it; and he was also -- if you

25 look at the emails, he was the one who assisted me


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1 in expediting it. I actually sent him an email -- I

2 believe we saw it yesterday -- asking him to make

3 sure this went right through.

4 Q You would agree that your departure to

5 Morocco was, in fact, the end of the Ponzi, correct?

6 A Yes.

7 Q With respect to Ms. Caretsky, how was it

8 that you determined that she would be a player?

9 A I asked Mr. Spinosa if she could be

10 trusted and if she was a player.

11 Q Do you recall approximately when that was?

12 A It would have been just prior -- if you

13 got -- you can do this all by documents. You don't

14 even need my testimony for it.

15 Go look at the first time she gives me

16 that letter to go on top of the fake bank

17 statements. The first time that she does that --

18 Q The screen shot, you mean?

19 A Yes.

20 The first time she does that, that would

21 have been just after the time that I asked

22 Mr. Spinosa if I could trust her.

23 Q Is your testimony that you used the term

24 "player" with Mr. Spinosa, as well as it pertained

25 to Ms. Caretsky?


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1 A I don't want to mislead you. I do not

2 have a specific recollection. It's simply the way I

3 spoke.

4 I did say to business people that I was

5 dealing with: Can I trust her?

6 Okay. Once someone was involved in the

7 criminal enterprise and I asked, can I trust them,

8 it wasn't can I trust them to safeguard my money.

9 It was, can I trust them to do the right thing by

10 us.

11 Q So, effectively that's what you asked

12 Mr. Spinosa about Ms. Caretsky?

13 A Yes.

14 Q What kind of inducements did she receive,

15 besides the envelope that you recall in the parking

16 lot?

17 A From me, nothing, other than the envelope.

18 Q Are there others at RRA or that were

19 involved in the Ponzi with you that provided

20 inducements her?

21 A It's my recollection that she did go to

22 dinner or lunch with several of the other people

23 from the firm, but I don't have a specific

24 recollection of it.

25 Q Was there a point in time that you felt it


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1 was appropriate to give her the envelope?

2 A Yes, but I don't recall when it was.

3 Q She kept the envelope, right?

4 A She did, yes.

5 Q Is there anybody besides you that knew

6 about you giving the cash to Spinosa?

7 A To my knowledge, no.

8 Q Is there anybody that you knew that you

9 gave cash to Caretsky?

10 A To my knowledge, no.

11 Q Was it your practice to give gifts or

12 inducements to people for a particular occasion or a

13 piece of illegal activity, or was it to keep people

14 happy? Tell me how that actually worked.

15 A You want me to discuss my gift giving?

16 Q Well, I'm talking about --

17 A Very broad topic.

18 Q -- yes.

19 A I gave gifts to people that I loved and

20 cared about that were doing nothing for me.

21 Q I am thinking more along in terms of the

22 inducements as it pertained to the Ponzi, as opposed

23 to actual gifts.

24 A Okay. Okay. It was my general

25 practice -- by "general," I mean a very frequent


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1 occasion -- that anyone that I sought to influence

2 in any way, anyone that was doing things for me with

3 regard to the Ponzi scheme and any of its tentacles

4 or anyone who I thought in the future I would need

5 to do something for me, would receive gifts and all

6 the other things that went with it that we were just

7 talking about.

8 Q Would maybe the phrase "money before

9 morality" sound applicable to what you were doing?

10 A Yes. I think that it was my phase at some

11 point in time. It was greed before morality, yes.

12 Q Okay.

13 A Greed before morality, yes.

14 Q In your opinion, and based on the activity

15 that you conducted in the Ponzi scheme, if Spinosa

16 and Caretsky did not cooperate with you from the

17 beginning, what would have happened to the Ponzi?

18 A It would have collapsed.

19 MS. EVANS: Objection.

20 BY MR. LICHTMAN:

21 Q And tell me why you say that.

22 A Well, let's deal with Spinosa first.

23 Spinosa and Caretsky I think you can put, I guess,

24 in the same package.

25 We were being basically told by our main


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1 feeder fund, at that point in time, that we needed

2 to have a big bank. It's not like we had a lot of

3 options. We went to the bank that we had at least

4 some connection to through Mr. Tolomer or through

5 Mr. Lippman.

6 Had they not agreed -- once we started

7 banking with them, I mean, you know, it was -- it

8 was a calculated risk. Once we started banking with

9 them, they were either going to blow the Ponzi up --

10 more specifically Mr. Spinosa, than anybody else --

11 or they were going to go along with it.

12 Q And I think your testimony as to

13 Mr. Spinosa was, from the very beginning, once you

14 started with overdrafts and this velocity of flow of

15 money, he had no objection to that?

16 A That's correct. Let me just add this to

17 that, just so you can understand. Normally,

18 before -- except with a guy like Caputi, before I

19 started trying to get someone to engage in the

20 illegal activity, they had already be introduced to

21 the lifestyle.

22 It was not, do something illegal for me,

23 and then I'll make things nice for you. It was, I

24 had already started making things really nice for

25 them, and that was my methodology of softening them


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1 up so that they would be ready to do something

2 illegal, if that makes sense to you.

3 Q Do you recall how often your accounts were

4 overdrawn at TD Bank?

5 A I really paid very little attention to it

6 because Mr. Spinosa was taking care of it, but I

7 would gather to say, from a technical standpoint,

8 between, you know, uncollected items and checks just

9 flying all over the place, wires doing the same

10 thing, that it was overdrawn, I suspect, hundreds of

11 times.

12 Q What was the bank's reaction to your

13 overdrafts?

14 A I don't know what the bank's reaction was

15 because Mr. Spinosa was running interference for me.

16 Q What was Mr. Spinosa's reaction to the

17 overdrafts?

18 A Don't worry about it; I've got it.

19 Q You understood, at this time, that he was

20 also the senior vice president -- the regional vice

21 president for TD Bank?

22 A Yes.

23 Q What did Mr. Spinosa understand your

24 business to be?

25 A I don't think he understood what my


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1 business was, other than owning a law firm and being

2 an investor into is a lot of different businesses

3 and all kinds of what probably he would describe as

4 crazy business deals.

5 Q Did he ever ask you about the nature of

6 RRA's law practice?

7 A We did discuss that from time to time when

8 he was trying to send clients to us, and I guess he

9 was being questioned, I don't know; but it wasn't a

10 major focal point of our conversation.

11 Q What kind of clients did he try to send

12 you?

13 A I don't recall. I think they were

14 business clients. I think more than anything, he

15 was trying to make sure that TD Bank did business

16 with Steve Lippman on the commercial side.

17 Q Did Mr. Spinosa, to the best of your

18 knowledge, or anyone else from TD Bank, perform any

19 due diligence on RRA?

20 A I have no idea.

21 Q Did he ever -- okay. Do you know if they

22 ever performed any due diligence on you?

23 A I have no idea.

24 Q Did they ask you for any information as

25 you opened the accounts, any financial information


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1 or other information about the firm?

2 A I don't recall them asking me directly.

3 They may have asked Irene, and she would have

4 furnished the little bit that we allowed to go out;

5 but I don't have a specific recollection of them

6 asking me anything in depth about anything.

7 Q If they had asked you for that type of

8 information, isn't that the type of issue that Irene

9 would have said to you: Scott, you should be aware

10 that TD Bank is asking for the following

11 information?

12 A She certainly would have.

13 Q And you just said the limited information

14 that you would have allowed out; what did you mean

15 by that?

16 A The best way to judge that is to look what

17 I do with Gibraltar Bank. I was not big on

18 furnishing information. I would have given just

19 scant information in little dribs and drabs and hope

20 they would go away.

21 Q And regardless, your recollection is that

22 they didn't ask for any information?

23 A As I sit here today, Mr. Lichtman, I have

24 no recollection of them asking me for anything.

25 Q Okay. Did anyone from the bank ever come


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1 to RRA to perform any kind of inspection of records?

2 A No, sir, not to my knowledge.

3 Q While the Ponzi scheme was being

4 perpetrated, describe for me the changes in the

5 banking structure required to run the Ponzi scheme

6 at TD Bank?

7 MS. EVANS: Objection to form.

8 A We had to have numerous trust accounts.

9 At the point in time we were doing business with TD

10 Bank, it coincided with a lot of our investors that

11 were coming in asking for segregated trust accounts.

12 Back when we were dealing with Gibraltar,

13 it was more just a few account. We ended up

14 having -- I believe the number that was told to me

15 yesterday was 22 trust accounts. So it was a

16 drastic difference from the way we did business

17 before.

18 Q When you increased up to 22 trust

19 accounts, what did you explain to the bank was the

20 reason why you were expanding the number of trust

21 accounts?

22 A They never asked me. I explained nothing

23 to them.

24 Q Did they ever send you any letters or any

25 emails asking you for an explanation?


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1 A To my knowledge, I never received nothing

2 from them.

3 Q Did Mr. Spinosa ever raise the issue with

4 you?

5 A Absolutely not.

6 Q Caretsky?

7 A No, sir.

8 Q Any internal bank examiners or other

9 personnel at TD Bank?

10 A To me, no, sir.

11 Q Okay. What was the reaction of the bank,

12 from your observation, as to the hundreds of

13 millions, if not billions of dollars that flew

14 through the RRA trust accounts at TD Bank?

15 A There was no reaction at all, as far as I

16 could see.

17 Q Nobody ever questioned you about what the

18 purpose was behind all this money going through the

19 funds?

20 A No, sir. As a matter of fact, Mr. Spinosa

21 seemed thrilled by it. So...

22 Q What did you mean by that, when you say

23 he --

24 A He would say, yeah, yeah, we have got all

25 this money in, yeah, yeah. That's great. Keep it


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1 coming.

2 Nothing more than that. It was always --

3 Frank Spinosa was great that way. He always was

4 very peppy, really on top of things, as far as

5 protecting us. That's -- that's just the way he

6 was.

7 Q What's your understanding as to why he was

8 pleased about the velocity of -- and amount of funds

9 flowing through the account?

10 A From speaking to him, I understood that it

11 made him look good with the bank because we were a

12 very large depositor of, though it was very fast

13 deposits, in and out. It was still moving a

14 tremendous amount of money in and out of the bank.

15 Q Did he ever suggest to you that his rise

16 to the position of senior vice president for the

17 southeast region had any relation to the amount of

18 deposits that were you making?

19 ALL PRESENT: Object to form.

20 A No. No. I don't recall him suggesting

21 anything, anything of that nature.

22 BY MR. LICHTMAN:

23 Q Did Mr. Spinosa or Ms. Caretsky ever ask

24 you to make a charitable contribution to anyone --

25 A I don't --


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1 Q -- to any entity?

2 A Yes. I don't remember Mr. Spinosa ever

3 asking me, but I do remember either Ms. Caretsky or

4 Ms. Kerstetter asking me to contribute money to

5 something, and we did; I don't remember how much or

6 what entity it was.

7 Q I just thought of something. There was a

8 point in time where Ms. Caretsky, I think she

9 adopted a baby; is that right?

10 A Sure.

11 Q Yeah. Did you give her a present for

12 that?

13 A We did. I don't remember what it was.

14 Q Do you recall if it was a material

15 present?

16 A It should have been. I mean, I just don't

17 recall one way or the other.

18 Q Okay. Was your understanding that the

19 operating and trust accounts at TD Bank were

20 comingled during the Ponzi scheme, in terms of how

21 money switched around from your accounts?

22 A Absolutely. Yes.

23 Q Did anyone at the bank ever question you

24 about that?

25 A No, sir.


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1 Q Did they ever send you any documents

2 asking you to give them information about those

3 transactions?

4 A To my recollection, no, sir.

5 Q With respect to the overdrafts, did the

6 bank charge you a fee for those overdrafts?

7 A No. Irene handled that, and unless it got

8 out of hand, she wouldn't have contacted me, like

9 what was happening with Gibraltar and us having to

10 reverse that twenty-something-thousand dollars in

11 charges.

12 I do recall a series of emails where

13 Spinosa was trying to make sure we weren't getting

14 charged for certain things, but I don't know what

15 the outcome of that was.

16 Q How is it that that issue popped up; do

17 you recall?

18 A I do not recall.

19 Q When there were overdrafts, do you recall

20 if Spinosa mentioned to you that there were going to

21 be suspicious activity reports at the bank that they

22 would have to deal with?

23 A No. The entire time that I did business

24 with Mr. Spinosa, he never told me that we were

25 going to have any SARs. He always -- don't worry


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1 about it. I'm handling everything. Just go do your

2 business.

3 Q And is it correct to say, then, that you

4 never learned about there being any suspicious

5 activity reports while TD was your banker?

6 A That is correct.

7 Q How about any other kind of reports that

8 would have seemed to indicate that the bank had

9 flagged your conduct, such as money laundering

10 reports; did you ever hear about any of those?

11 A No, sir.

12 Q Were you ever requested to provide

13 information about transactions that gave rise to the

14 deposits?

15 A No, sir.

16 Q Do you know what the bank's understanding

17 was of where the funds came from to bring the

18 accounts into compliance once there were overdrafts?

19 MS. EVANS: Objection to form.

20 A The only conversations I had ever had with

21 Frank about where the money was coming from was not

22 in response to covering overdrafts. It was just in

23 general pertaining to our business model. It was

24 investors.

25 BY MR. LICHTMAN:


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1 Q Okay. And I'm going to get to that.

2 When you say the general business model

3 investors, there was a point in time where you

4 described for him what you were doing, correct?

5 A Not criminally.

6 Q With the investors?

7 A Yes, from a settlement standpoint --

8 Q Settlement standpoint?

9 A -- I explained to him what the business

10 model was, not the Ponzi model.

11 Q I'm going to get to that.

12 A Okay.

13 Q Did the bank ever ask you to sign any loan

14 agreements of any nature with respect to overdrafts?

15 A No, sir.

16 Q Indeed, did RRA -- was it a borrower of

17 the bank in any capacity?

18 A No, sir.

19 Q Were you a borrower of the bank in any

20 capacity?

21 A No, sir.

22 Q Did anyone from the bank's compliance

23 department ever reach out to you about any of the

24 operations of RRA?

25 A No, sir.


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1 Q Did anyone from the bank's compliance

2 department reach out to you with respect to the

3 settlement business?

4 A No, sir.

5 Q Did you ever have any discussions with

6 anyone from TD Bank about, sort of like, in quotes,

7 know-your-customer, end quote, obligations or

8 issues?

9 A Except for the conversation that I had

10 with Frank where we were talking about settlement

11 business, and that was more just in passing, I don't

12 recall anyone asking any questions to know my

13 business at all.

14 Q Okay. So now let's talk about your

15 conversations with Mr. Spinosa about the settlement

16 process. Do you recall approximately when you had

17 that conversation?

18 A No, sir.

19 Q Do you recall why you had the

20 conversation?

21 A It does not stick out in my head as to

22 why, which leads me to surmise that it was simply a

23 conversation we were having. It wasn't like he

24 needed to know the information. It was just a

25 conversation.


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1 Q What is it that you recall explaining to

2 him about the settlement process?

3 A I explained to him that we were selling

4 prefunded settlements, the same thing I would have

5 explained to a -- to a potential investor.

6 As a matter of fact, you know what time

7 frame -- I guess you could lock it in -- it was

8 pre-the in-office meeting Mr. Damson, Ms. Kathleen

9 White, myself and Mr. Spinosa. It was before that

10 because I did want him to understand what was going

11 on.

12 Q That would have been Coquina?

13 A Coquina, yes.

14 Q Did you have any discussions with him

15 about the money that was being deposited into RRA

16 trust accounts being investor money?

17 A I may have, from time to time. You should

18 be able to find emails where I say we have a big

19 investment coming or money from a big investor or we

20 are courting a big investor.

21 Q Do you recall what questions, if any, he

22 asked you about the investments?

23 A The only thing he ever inquired of me,

24 Mr. Lichtman, was how much money is coming.

25 Q Why do you -- what -- from your working


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1 with him, what was it that you perceived was

2 important when he asked that question?

3 A The more money, the better. He's a

4 banker.

5 Q And tell me how that correlates to benefit

6 to him or the bank?

7 A As I understood it from speaking to him,

8 the bigger the money flowing through the bank, the

9 better it made it look for him because he was

10 responsible for bringing in a very large customer of

11 the bank.

12 Q Did he ever comment to you the impact of

13 the sheer dollars at the bank having any relation to

14 how he was perceived at the bank?

15 ALL PRESENT: Object to form.

16 A Only in the positive. I don't even

17 remember specific conversations, but he was always

18 very, very complimentary on how we dealt with him,

19 and I was always complimentary as how he dealt with

20 us --

21 BY MR. LICHTMAN:

22 Q Did he ever say to you, for instance, that

23 you made him a star?

24 A I don't think he used those words. It was

25 pretty clear from seeing us together that they


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1 appreciated, you know, what we were doing.

2 Q You mentioned, I think it was yesterday,

3 that Mr. Harris at Gibraltar wanted to come work for

4 you. Was that the same situation with respect to

5 Mr. Spinosa?

6 A Yes, sir.

7 Q Did you have any specific discussions with

8 him about that?

9 A Yes, sir.

10 Q What was it that you said to him?

11 A I told him at the appropriate point in

12 time, if he wanted to leave the bank, there would be

13 a position for him, an extremely high-paying

14 position, involved on the business side outside the

15 law firm. I actually told him along with Mr.

16 Harris.

17 Q How far into the banking relationship with

18 TD were you before you said that; do you recall?

19 A I don't want to guess. It wouldn't have

20 been that far in, because our relationship grew we

21 were pretty fast. So I don't want to guess.

22 Q Would be a fair statement you weren't in a

23 position at that time to identify a particular

24 position, just that there would be a position?

25 A No. It was at the time when he realized


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1 that I could hire anyone for any position and pay

2 them a lot of money, just because of the shear

3 magnitude of the funds that I had access to.

4 Q And he saw what was going through the

5 account, to the best of your understanding, correct?

6 A To the best of my knowledge, sure.

7 Q How do you know that?

8 A He -- he was regularly approving wires for

9 us, approving movement of money, watching, looking

10 at deposits. We discussed deposits. That's what

11 his business was.

12 Q How often would you say you spoke to him

13 on a weekly basis?

14 A A few times every week.

15 Q Okay. Did Mr. Spinosa ever work with

16 Mr. Harris on anything related to your banking

17 relations?

18 A To the best of my knowledge, no.

19 Q Did they ever meet?

20 A Yes.

21 Q I assume that would have been probably at

22 some of your political events?

23 A Actually, I think the very first time they

24 met was at Bova. We were sitting downstairs

25 outside, in our -- the place where we smoked cigars


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1 out in front of the restaurant; and the only thing

2 that I recall is making a comment, oh, my two

3 favorite money people are here. That's all.

4 They were together. I don't know that

5 they actually liked each other. I know Mr. Harris

6 felt threatened by Mr. Spinosa, but I remember them

7 meeting.

8 Q With respect to large deposits, did you

9 ever have issues on getting those large deposits

10 cleared quickly?

11 A I had instances where they were not

12 cleared.

13 Q And then what happened?

14 A And then I contacted Mr. Spinosa, who did

15 whatever it made -- needed to be done to make sure

16 it cleared immediately.

17 So, I mean, let me make sure I'm answering

18 your question clearly.

19 Ultimately, I never had an issue. Every

20 issue that came up, that arose, was handled by

21 Mr. Spinosa.

22 Q Did he ever question a need for why you

23 had this immediate availability of deposits?

24 A No, sir.

25 Q Is that the case, even on huge amounts


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1 that were deposited?

2 A I don't -- I don't recall him ever asking

3 me what the money was for. Any time that I told him

4 what money was for, I volunteered it in advance of

5 ever being asked any question; but, again, it was

6 always: It's for a real estate deal, it's for --

7 it's from a big investor.

8 It would have just been in an email. You

9 can tell what I was telling him because it would

10 have been in the emails; other than that, nothing.

11 Q I spent just a couple of moments yesterday

12 talking about the issue of the accounts. Were they

13 all named, or were they numbered; do you recall?

14 You know, like, for instance, you

15 mentioned that one of your patterns, you might have

16 had like an employment case trust account, and --

17 A No, no, it wasn't like that.

18 These were all -- I want to say that we

19 had an internal name for them. I think they were

20 numbered. There should be a chart somewhere,

21 Mr. Lichtman, that says, RRA Sochet or RRA IS; I

22 just don't remember how we were doing it, but

23 internally --

24 Q Yeah, that's internally, right?

25 A Yeah, that's internally.


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1 I don't recall ever naming the accounts

2 for TD Bank. I have no specific recollection of it;

3 and I remember even sending emails to Irene,

4 saying -- and to Bill, saying, just send Sochet the

5 money from whatever account -- this I do know

6 because I remember seeing the email -- just send it

7 from whatever account we normally send it from.

8 Q So, as an example --

9 A It wasn't that easily identified, so I

10 doubt they had names on them.

11 Q For example, like with Sochet, where there

12 was lock letters, correct?

13 A Mhm-mhm.

14 Q Okay.

15 A Yes.

16 Q There was no account that was actually

17 titled Sochet Trust Account at the bank?

18 A Oh, I don't think so. You have to look at

19 the bank records, but I don't recall doing that.

20 It's possible Irene did, but I don't recall ever

21 doing it.

22 Q Who at RRA had access to TD Bank account

23 information, besides you?

24 A TD Bank?

25 Q TD Bank.


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1 A Okay. Except for me, Debra Villegas, when

2 she needed it; Irene Stay; Bill Brock; Stu

3 Rosenfeldt; David Boden, at various points in time;

4 Russ Adler, with regard to the personal injury

5 funds. But I believe most of those were still going

6 into Gibraltar.

7 I think that's pretty much it.

8 The IT people may have had access, but it

9 wasn't authorized access. I always had the feeling

10 that they had access, but...

11 Q Tell me what you mean by might have had

12 access, meaning they would have actually seen

13 account balances?

14 A Yes. Well, Curtis Renie -- and I don't

15 know this for certain, I just always had it in the

16 back of my head, because they were so good at what

17 they did for us, on both the legal and illegal side

18 of computerized banking, that -- I used to talk to

19 Irene and to Debra about it: Do you think they're

20 looking at our bank balances?

21 We would kind of just slough it off.

22 But the people I knew: Irene, Bill, Stu,

23 Boden, at certain points in time, and Adler, at

24 certain points in time.

25 Q When you say --


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1 A Also, Les Striker had access from a

2 reporting standpoint, because he was taking care of

3 monitoring what attorneys were doing.

4 Q Does that mean that Les --

5 A Not online banking.

6 Q Does that mean that Les knew there were

7 trust account defalcations?

8 A I don't believe he did.

9 Q Okay. Which lawyers knew about the trust

10 account defalcations?

11 A I can only tell you to my knowledge.

12 Q That's all I am asking for is your

13 personal knowledge.

14 A Stu Rosenfeldt, David Boden and Russ

15 Adler, to a limited extent.

16 Q Wouldn't you agree that if you know one,

17 that is one too many.

18 A The only reason I'm asking it that way --

19 answering it that way -- the answer to your question

20 is yes, but the only reason I'm answering it that

21 way is you said "the trust account defalcations" --

22 Q Yes.

23 A -- and to me, "the" is the shear magnitude

24 of it.

25 Q Okay.


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1 A Russ and I had discussed trust account

2 issues, specifically pertaining to personal injury

3 accounts, and I said -- always would tell him just,

4 the checks are coming, just wait, okay, Irene is

5 taking care of things. And that's the way the

6 conversations would go.

7 So your question, yes, one is too many.

8 What he actually knew, the extent of it, I don't

9 know.

10 Rosenfeldt I can tell you for certain.

11 David Boden I can tell you for certain, and myself I

12 can tell you for certain.

13 Q And when you mentioned Stu and David and

14 yourself, that pertains to the Ponzi-related trust

15 problems, correct?

16 A Sure. Well, Stu had access to the TD Bank

17 records. David Boden had the ability to sign on to

18 TD Bank utilizing my password, so I am assuming they

19 looked.

20 Q And in fact --

21 A I didn't sit with Stu and David and say,

22 go look and see what we're doing. I am assuming

23 that curiosity would have them log on from time to

24 time.

25 Q And as we'll get to in a couple of days,


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1 Boden and Pearson had their own subPonzi that were

2 utilizing TD accounts, as well?

3 A That's correct.

4 Q Yesterday you said that Irene was

5 responsible for the trust accounting functions as it

6 pertained to the handling of the money in the Ponzi.

7 What was --

8 A Ninety to 95 percent of the time, yes.

9 Q Right.

10 What was Debra Villegas', you know,

11 defined role? What was she actually doing?

12 A For the Ponzi scheme?

13 Q Yes.

14 A Paperwork.

15 Q Okay. Meaning documenting the settlement

16 deals?

17 A Putting together the settlement packets,

18 eventually coming up with plaintiff and defendant

19 names. She helped create the phony wire sheets that

20 Curtis Renie and Bill Corte eventually added to our

21 online -- our fake online TD Banking system,

22 preparing the folders for people's review, helping

23 David Boden with his subPonzi, preparing fake bank

24 statements for me.

25 Q Let's describe -- have you describe with


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1 particularity, to the extent you can remember,

2 conversations with Spinosa as to the need for the

3 lock letters; do you recall what you said to him?

4 A I have investors that need these lock

5 letters. Can you do it?

6 Yes, send it over to me.

7 Q Did you describe what the purpose of the

8 lock letter would be before you sent over the actual

9 paper document?

10 A My recollection is, as I just said, the

11 accounts need to be so that the money could only go

12 out to one place, and then I would have sent him the

13 letter. The letter, I think, was the best

14 description, if I'm recalling correctly, what we

15 were trying to do.

16 Q Did he ever question you as to what the

17 purpose would be for him signing that letter?

18 A Not to my knowledge, no.

19 Q Did you ever have any understanding that

20 there was actual -- actually a banking procedure

21 that constituted a lock-letter process.

22 A Not to my knowledge, no.

23 Q Did you ever discuss that with Spinosa?

24 A Not to my recollection.

25 Q Did he ever say to you, you know, there is


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1 no such procedure as a lock-letter process at TD

2 Bank?

3 A Not when we were first -- I don't mean to

4 laugh.

5 Not when we were first discussing it, but

6 at some point in time, he had told me -- I had asked

7 him about -- Caretsky or Kerstetter, one of them,

8 questioned him about the lock letters, and he and I

9 were kidding around about the fact that you can't

10 lock the accounts because I have treasury direct; I

11 could move the money anytime I wanted just by

12 signing onto Treasury Direct and moving it. That

13 would have been the extent of the conversation.

14 Q Was there a point in time where, in your

15 state of mind, you concluded that Spinosa knew that

16 you were involved in illegal activity?

17 A Yes.

18 Q How is that?

19 A Everything I was doing appeared illegal.

20 Q Give me specifics for the record, please.

21 A Just the shear volatility of the money

22 that is moving and the fact that it is going around

23 in little circles -- not little circles, big

24 circles. Money is -- it doesn't take a rocket

25 scientist to lay out all my finances and see that


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1 money was flying out of Commerce Bank, flying to

2 Gibraltar Bank.

3 One of the key things that I think was a

4 huge red flag is he was locking accounts that had

5 not much in them. They never had any money in them

6 until the very day the payment was going out. So,

7 if I have lock account number one to Ira Sochet,

8 there is nothing in it: $100, $200, whatever it

9 might be. The day -- then on -- suddenly, on a day,

10 $5 million goes into that account, and minutes

11 later, $5 million goes out of that account.

12 Q Okay. What about his role in meeting with

13 investors?

14 A Now you're talking later down the road.

15 Q Yes, I understand.

16 A Okay. I just want to make sure. I'm

17 trying to get it --

18 Q What I am focused on, as I'm asking this

19 series of questions, is that would have made clear

20 to you Mr. Spinosa's understanding that there was

21 illegal activity going on.

22 A Okay. I'm just going to go in any order

23 then.

24 The fact that when I was having a

25 telephone call with Barry Damson and Mel Klein --


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1 Kathleen White may have been on that call -- I sent

2 him the questions that were going to be asked, but

3 more importantly, I sent him the answers.

4 Q As you covered with Mr. Scherer yesterday?

5 A Yes. And --

6 Q Okay.

7 A -- he didn't even balk at that: This is

8 the question that is going to be asked. These are

9 the answers I want you to give, don't say anything

10 else, end of call. We'll be done.

11 When we were having the meeting, I gave

12 him brief prep. I mean, he was -- he pretty much

13 knew the routine already, but I told him, this is

14 where we need to be accountwise, balance-numberwise.

15 You have got to make sure that these people are

16 comfortable. When they leave, they need to feel

17 150 percent secure in my banking relationship with

18 you so that they can feel secure in their

19 relationship with me.

20 Q Okay. When it came to these meetings, did

21 he ever fail to attend any meetings that you

22 requested?

23 A No, sir.

24 Q Were there meetings, ever, that you had a

25 substitute for a TD banker present?


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1 A When I had to substitute?

2 Q Yeah. Let me be more specific.

3 As I recall, there was a meeting that

4 Steve Caputi attended where he acted as if he was a

5 TD banker?

6 A Oh, I thought you meant substituting for

7 someone like Mr. Spinosa.

8 Q No. That's why I wanted to reclarify my

9 question.

10 There was a meeting that Mr. Caputi

11 attended and he acted as a TD banker; is that

12 correct?

13 A Yeah. There were several meetings where

14 he played a bank officer.

15 Q Do you recall the name of the bank officer

16 that he played?

17 A He played two. He played Ricardo Mejia at

18 the Weston branch, and Mr. Garces, I believe, at the

19 Deerfield Beach -- at the Deerfield Beach branch.

20 Q When he played Mr. Mejia, what were the

21 circumstance of him playing that role, for lack of a

22 better phrase?

23 A It's twofold -- well, actually, it's

24 several-fold.

25 I had meetings coming up with investors


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1 that required the ability to have a banker there to

2 answer questions, not simply to just give a bank

3 statement. Out of all the people that I did this

4 illegal business with, Steve Caputi was up there in

5 the top three to five people that I trusted

6 implicitly.

7 So I asked him to come in and play the

8 banker. I gave him very specific instructions as to

9 what to discuss, what not to discuss, how to play

10 off.

11 Q How did he get in the room?

12 A Ms. Caretsky or Ms. Kerstetter let him in.

13 He arrived there early, usually with Uncle Bill.

14 Q Had they met Caputi beforehand?

15 A No. No, sir.

16 Q When I say "they," let me be clear:

17 Caretsky or Kerstetter, had they met Caputi

18 beforehand?

19 A Through me and to my knowledge, no.

20 Q Okay. And to be sure, the investors

21 hadn't met Caputi, correct?

22 A The investors, no. The only person who

23 had met Caputi was our independent verifier,

24 Mr. Szafranski.

25 Q Do you recall what you said to Kerstetter


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1 or Caretsky as to why you needed somebody in the

2 room or why you needed a conference room?

3 A I have clients coming and I have to have a

4 meeting. I need a conference room.

5 Q Did they question that at all?

6 A No, no, they were very accommodating.

7 Q By that point in time, had they already

8 been involved, though, in the screen-shot process

9 that you described yesterday with Mr. Scherer?

10 A You know, I don't want to guess as to

11 that, Mr. Lichtman. I don't recall the time frames

12 of when all that was going on. We had, literally,

13 thousands of things going on all at the same time,

14 and I can't quite place it in line. I need to sit

15 down and do a time line for you.

16 Q Do you recall who was in the room with

17 Mr. Caputi when he played Mr. Mejia in the Weston

18 branch?

19 A I don't recall which of the people -- if

20 you ask them, I'm sure they'll tell you that they

21 meet with banker who they found out later to be

22 Mr. Caputi.

23 Actually, I can tell you, the easiest way

24 to do it, any time anyone says that they met with

25 Ricardo Mejia, it was Caputi. Because I never had a


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1 meeting with any investors with the real Ricardo

2 Mejia.

3 Q So is it a fair statement that Mr. Caputi

4 played Mr. Mejia more than once?

5 A I believe it was two or three times, yes.

6 Q Always in the Weston branch?

7 A Mejia was Weston branch, yes.

8 Q Did Caputi have Mejia's business card?

9 A He took it. I told him when he got to the

10 bank, make sure you get one of the cards; and I

11 remember joking around with him because he

12 originally picked up a female's card. I said make

13 sure this time it's a male's card and make sure you

14 have a stack of them so it looks like you're taking

15 out a stack to hand the card to the people that come

16 in.

17 Q Did Spinosa know that Caputi was going to

18 the Weston branch for a meeting?

19 A For a meeting, yes, but not for the

20 purpose of the meeting.

21 Q Did you tell Spinosa, Caretsky or

22 Kerstetter, that Caputi was a lawyer at RRA?

23 A No, sir.

24 Q Did they ever ask you why, given the RRA

25 offices are in downtown Fort Lauderdale, you needed


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1 to use their conference room?

2 A No, sir. I had carte blanche at the --

3 carte blanche at the TD branches.

4 Q What did you mean by that?

5 A What is that expression, mi casa es su

6 casa, their house is my house? I was a big

7 depositor. I took very good care of the people

8 there. It appeared to me that anything I wanted to

9 do, they would allow me to do, and that's what I

10 did.

11 Q Well, on that note, did they ever tell you

12 that you were a, quote, VIP, end quote, customer?

13 A Yes.

14 Q Who told you that?

15 A I saw it in emails, and they introduced

16 me -- I remember Ms. Caretsky introducing me to

17 people at the bank saying, this is Mr. Rothstein;

18 he's one of the bank's largest customers.

19 Q Do you recall at what branch that

20 occurred?

21 A That occurred at the Weston branch, and

22 then there was an email saying VIP, large customer,

23 that went up to the Deerfield Branch when we were

24 doing the show up there.

25 Q We have heard that your picture was


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1 circulated around so that when you went into the

2 bank, people would know who you were. Do you know

3 if that's true?

4 A I heard that. I don't know if it was

5 true.

6 Q Do you recall who you heard that from?

7 A I heard it from Mr. Brock.

8 Q All right. I know that we're now getting

9 to the point of some double hearsay, possibly, but

10 do you know where Brock heard it?

11 A Do I know?

12 MR. SCHERER: Object to the form of the

13 question.

14 Ask him so we can use it.

15 BY MR. LICHTMAN:

16 Q Do you know where Brock heard it from?

17 A It became --

18 Q How he learned it?

19 A I don't know how he learned it. He had to

20 have learned it -- actually, he would have learned

21 it from Ms. Caretsky because that's who his main

22 point of contact -- or Ms. Kerstetter. But...

23 Q Would i be a fair statement, if I just

24 asked real quick --

25 A Sure.


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1 Q -- that Brock didn't deal with

2 Mr. Spinosa; you dealt with Spinosa, right?

3 A I was the main contact with Spinosa.

4 Unless there was an emergency, they -- no one else

5 contacted Spinosa.

6 Q Okay.

7 A But what I was saying with regard to the

8 picture, just so you have a clear picture of what

9 was going on, once it became known in the firm that

10 my picture was being circulated, they kept joking

11 around that there was going to be like an

12 employee-of-the-month-type picture that you are

13 going to walk in the bank, and they were going to

14 take down the founder of the TD Bank and put my

15 picture up, and it was going to be in all the

16 branches. That was the big joke around the firm.

17 Q And when you say "the firm," you mean RRA?

18 A Yes.

19 Q So, that was, it sounds like, common

20 knowledge?

21 A It was common knowledge, yes.

22 Q All right. With respect to when

23 Mr. Caputi played Mr. Garces, do you recall the

24 circumstances behind that occurrence?

25 A Yes. I believe I discussed it yesterday.


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1 I do.

2 Q Is there anything more to add to that

3 testimony because I don't want to be repetitive.

4 A No, sir.

5 Q Okay. One thing I don't think that you

6 answered was, did Mr. Caputi also have Mr. Garces'

7 business card?

8 A Yes.

9 Q And, again, he got there because of

10 Caretsky and Kerstetter --

11 ALL PRESENT: Form.

12 BY MR. LICHTMAN:

13 Q -- correct? He was allowed access to the

14 room through Kerstetter or Caretsky; is that your

15 understanding?

16 A To my knowledge, I told Spinosa, and the

17 people at my firm, Bill Brock and Irene Stay,

18 because we were changing locations, if you recall

19 from yesterday, from Weston, up to Deerfield; and I

20 said, do whatever you need to do to get the

21 Deerfield Branch ready.

22 Q Okay. Do you recall, did Blandin Wright

23 ever prepare any documents for TD at all?

24 A I believe he did. I just don't recall

25 what it was.


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1 Do you have anything you can show me, sir?

2 Q No. I am looking.

3 A I recall him preparing something, but he

4 was preparing a lot of documents for us for

5 different things. He prepared financial statements

6 for something else. I don't know what he prepared

7 for TD Bank.

8 Q Were you ever told what percentage of TD

9 Bank's branch business at Weston was attributable to

10 RRA?

11 A I was not directly told, no, sir.

12 Q With respect to Ms. Caretsky, how many

13 times did you meet her?

14 A A dozen, two dozen, I don't have a -- I

15 don't have a specific recollection.

16 Q But it would be safe to say at least 12

17 and probably less than 24?

18 A Yeah, I think that would be safe to say.

19 Q Do you recall the general nature of

20 reasons why you met her?

21 A On nearly every occasion, it would have

22 been for the purposes of doing the show.

23 Q And these meetings would have occurred at

24 RRA offices or TD Bank or --

25 A I don't have independent recollection of


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1 meeting her at RRA. It would have occurred at the

2 Weston branch.

3 And now that I'm really trying to put a

4 number on it, I think it would be a dozen or less

5 times that I actually had face-to-face contact with

6 her; but, again, I'm really guessing.

7 Q Okay. So, you said before, 12 to 24, now

8 you're down to a dozen or less. What is it stands

9 out as to why you -- why you're a little hesitant on

10 that number?

11 A What I said -- when I was just describing

12 to you the reasons for me having face-to-face

13 meetings with her --

14 Q Yes.

15 A -- and I realized that the only time I

16 really had any face-to-face meetings with her were

17 pertaining to doing the show; there weren't more

18 than a dozen of those, that I recall, so it would

19 have been right around that number or a few less.

20 Q What did she do with respect to your

21 settlement business that justified your belief that

22 she was a player?

23 ALL PRESENT: Form.

24 BY MR. LICHTMAN:

25 Q Did you understand the question?

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