2011-12-23 rothstein scott am

118
cf32f1c1-7919-474f-9b81-ecd48865401f (954) 525- 2221 United Reporting, Inc. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA FORT LAUDERDALE DIVISION Case No. 09-34791-RBR Chapter 11 _____________________________________________________ In Re: ROTHSTEIN ROSENFELDT ADLER, P.A. Herb Stettin, Chapter 11 Trustee, Plaintiff, vs. RL Pearson and Associates, Inc., a Florida Corporation, Defendants. _____________________________________________________ DEPOSITION OF SCOTT W. ROTHSTEIN Volume I of II Taken on behalf of the Chapter 11 Trustee DATE TAKEN: December 23, 2011 TIME: 8:32 a.m. - 10:30 a.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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Page 1: 2011-12-23 Rothstein Scott AM

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA FORT LAUDERDALE DIVISION Case No. 09-34791-RBR Chapter 11

_____________________________________________________

In Re: ROTHSTEIN ROSENFELDT ADLER, P.A.

Herb Stettin, Chapter 11 Trustee,

Plaintiff,

vs.

RL Pearson and Associates, Inc., a Florida Corporation,

Defendants._____________________________________________________

DEPOSITION OF SCOTT W. ROTHSTEIN

Volume I of II

Taken on behalf of the Chapter 11 Trustee

DATE TAKEN: December 23, 2011

TIME: 8:32 a.m. - 10:30 a.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

2 APPEARANCES FOR SCOTT ROTHSTEIN:

3 LAW OFFICE OF MARC S. NURIK 1 East Broward Boulevard

4 Suite 700 Fort Lauderdale, Florida 33301

5 BY: MARC S. NURIK, ESQUIRE

6APPEARANCES FOR THE CHAPTER 11 TRUSTEE,

7 HERBERT STETTIN:

8 BERGER SINGERMAN 350 East Las Olas Boulevard

9 Suite 1000 Fort Lauderdale, Florida 33301

10 BY: CHARLES H. LICHTMAN, ESQUIRE and

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

12 Suite 4400 Miami, Florida 33131

13 By: JOHN. H. GENOVESE, ESQUIRE DAVID C. CIMO, ESQUIRE

14 THERESA M.B. VAN VLIET, ESQUIRE JESUS SUAREZ, ESQUIRE

15

16 APPEARANCES FOR RAZORBACK:

17 CONRAD & SCHERER, LLP 633 South Federal Highway

18 Eighth Floor Fort Lauderdale, Florida 33302

19 By: WILLIAM R. SCHERER, ESQUIRE ERIC RAYMAN, ESQUIRE

20 IVAN J. KOPAS, ESQUIRE and

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

22 Ninth Floor Coral Gables, Florida 33134

23 By: HARLEY S. TROPIN, ESQUIRE

24

25

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1APPEARANCES FOR PLATINUM PARTNERS VALUE ARBITRAGE

2 CENTURION STRUCTURED GROWTH, LLC:

3 GOLDSTEIN, TANEN & TRENCH, P.A. One Biscayne Tower, Suite 3700

4 Two South Biscayne Boulevard Miami, Florida 33131

5 By: SUSAN E. TRENCH, ESQUIRE

6APPEARANCES FOR THE COMMITTEE OF

7 UNSECURED CREDITORS:

8 AKERMAN, SENTERFITT One Southeast Third Avenue

9 25th Floor Miami, Florida 33131-1704

10 By: MICHAEL GOLDBERG, ESQUIRE JONATHAN S. ROBBINS, ESQUIRE

11

12 APPEARANCES FOR TD BANK:

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

14 Fort Lauderdale, Florida 33301 By: HOLLY SKOLNICK, ESQUIRE

15 DONNA EVANS, ESQUIRE MARK SCHNAPP, ESQUIRE

16

17 APPEARANCES FOR RLI ZURICH INSURANCE COMPANY, COLUMBIA INC. & ZURICH INSURANCE:

18 CLAUSIN MILLER

19 One Chase Manhattan Plaza 39th Floor

20 New York, New York 10005 BY: SCOTT L. SCHMOOKLER, ESQUIRE

21

22

23

24

25

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1 APPEARANCES FOR FEDERAL INSURANCE COMPANY:

2 ALEX HOFRICHTER, P.A 1430 South Dixie Highway

3 Suite 204 Coral Gables, Florida 331463127

4 By: ALEX HOFRICHTER, ESQUIRE

5APPEARANCES FOR MORSES:

6 TRIPP SCOTT, P.A.

7 110 S.E. Sixth Street,15th Floor Fort Lauderdale, Florida 33301

8 By: GEORGE WALKER, ESQUIRE JOHN M. MULLIN, ESQUIRE

9 and LAW OFFICES OF ROBERTA DEUTSCH

10 2499 Glades Road Suite 110

11 Boca Raton, Florida 33431 By: ROBERTA M. DEUTSCH, ESQUIRE

12

13 APPEARANCES FOR EMESS CAPITAL, LLC:

14 KLUGER KAPLAN SILVERMAN, KATZEN & LEVINE, PL 201 S Biscayne Blvd Fl 17

15 Miami, Florida 33131 BY: CASEY H. CUSICK, ESQUIRE

16

17 APPEARANCES FOR ST. PAUL FIRE & MARINE:

18 MILLS PASKERT DIVERS P.A. 100 N Tampa St Ste 2010

19 Tampa, Florida 33602 BY: JAMES A. BLACK, JR., ESQUIRE

20

21 APPEARANCES FOR ROSANNE CARETSKY:

22 BILLING COCHRAN LYLES 515 E Las Olas Blvd

23 Floor Six Fort Lauderdale, Florida 333012296

24 By: DAN GELBER, ESQUIRE TUCKER CRAIG, ESQUIRE

25

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1 APPEARANCES FOR PLATINUM & CENTURION:

2 CURTIS, MALLET-PREVOST, COLT & MOSLE, LLP 101 Park Avenue

3 New York, NY 10178-0061 By: GABRIEL HERTZBERG, ESQUIRE

4 ELIOT LAUER, ESQUIRE

5APPEARANCES FOR MURRAY HUBERFELD, DAVID BODNER &

6 MARK NORDLICHT:

7 By: HARVEY WERBLOWSKY, ESQUIRE

8APPEARANCES FOR FEPICT, MS GROUP:

9 NYSTROM, BECKMAN & PARIS

10 One Marina Park Dr., 15th Flr. Boston, MA 02210

11 By: JACK SIEGAL, ESQUIRE

12APPEARANCES FOR MICHAEL SZAFRANKSI:

13 LYDECKER, DIAZ

14 1221 Brickell Avenue Floor 19

15 Miami, Florida 33131 BY: CHRISTOPHER G. BERGA, ESQUIRE

16 MIGUEL J. CHAMORRO, ESQUIRE

17APPEARANCES FOR GIBRALTAR:

18 STEARNS WEAVER MILLER, et al.

19 150 W Flagler St Ste 2200 Miami, Florida 331301545

20 BY: MARY BARZEE-FLORES, ESQ. MATTHEW DATES, ESQUIRE

21

22 APPEARANCES FOR FRANK PREVE:

23 PODHURST ORSEK 25 W Flagler St Ste 800

24 Miami, Florida 331301720 BY: RAMON A. RASCO, ESQUIRE

25

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1 APPEARANCES FOR LEVINSON PEARSON & ASSOCIATES, WATCH U-WANT, INC.:

2 KOPELOWITZ OSTROW

3 200 SW 1st Ave Ste 1200 Fort Lauderdale, Florida 33301

4 By: BART A. HOUSTON, ESQUIRE JAN ATLAS, ESQUIRE

5

6 APPEARANCES FOR THE US GOVERNMENT:

7 U.S. DEPARTMENT OF JUSTICE UNITED STATES ATTORNEY'S OFFICE

8 500 E. Broward Blvd., Ste. 700 Ft. Lauderdale, Florida 33394

9 BY: CYNTHIA STONE, ESQUIRE

10APPEARANCES FOR FRANK SPINOSA:

11 SCHLESINGER AND COTZEN, P.L.

12 799 Brickell Plz Ste 700 Miami, Florida 33131

13 BY: MICHAEL J. SCHLESINGER, ESQUIRE and MICHAEL COTZEN, ESQUIRE

14 and SAMUEL J. RABIN, ESQUIRE

15 799 Brickell Plaza Suite 606

16 Miami, Florida 33131

17

18

19

20

21

22

23

24

25

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1 INDEX

2 CONTINUED DEPOSITION OF SCOTT W. ROTHSTEIN

3 DIRECT

4 Mr. Lichtman

5 CERTIFICATE OF OATHCERTIFICATE OF REPORTER

6

7 TRUSTEE'S EXHIBIT INDEX

8 NO. DESCRIPTION PAGE NO1 April 14, 2009, Email 64

9 2 April 17, 2009, Email 663 April 29, 2009, Email 75

10 4 April 24, 2009, Email 775 April 30, 2009, Email 83

11 6 July 6, 2009, Email 857 July 22, 2009, Email 93

12 8 May 6, 2009, Email 989 May 13, 2009, Email 99

13

14

15

16

17

18

19

20

21

22

23

24

25

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1 Thereupon, the following proceedings were had:

2 MR. LICHTMAN: Let the record reflect

3 we're moving into the separate deposition

4 transcript that will be incorporated by

5 reference into what we call the big case.

6 This is in the adversary proceeding

7 pending in bankruptcy court, Herbert Stettin

8 versus RL Pearson and Associates, Inc. It's

9 case number 10-03710.

10 Just to be sure --

11 I've lost the witness.

12 MR. NURIK: No. He's just --

13 MR. LICHTMAN: You're still under oath.

14 You're still under oath, you know that, even

15 though you were --

16 THE WITNESS: Yes.

17 MR. LICHTMAN: -- technically sworn for

18 the other case?

19 THE WITNESS: Yes.

20 MR. LICHTMAN: Just re-swear him to be

21 sure.

22 Whereupon,

23 SCOTT W. ROTHSTEIN,

24 acknowledged having been duly sworn to tell the

25 truth and testified upon his oath as follows:

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1 THE WITNESS: I do.

2 MR. LICHTMAN: Okay. Let the record

3 reflect, also, that the Trustee has reached a

4 stipulation with Pearson's counsel that the

5 questions that I asked in the 2004 Exam

6 respecting your motivations for telling the

7 truth are deemed incorporated by reference to

8 this transcript so that we don't have to

9 repeat.

10 You agree, Mr. Ferguson?

11 MR. FERGUSON: Yes.

12 DIRECT EXAMINATION

13 BY MR. LICHTMAN:

14 Q Okay. Mr. Rothstein, we're going to be

15 very limited about time, so it's probably going to

16 be a pretty snappy presentation. I have what I see

17 to be about two hours and five minutes of

18 questioning with you. Okay?

19 A I'm ready to go.

20 Q Okay. You have repeatedly over the course

21 of the past two weeks referred to what has been

22 known as the Pearson/Boden sub-Ponzi or

23 Boden/Pearson sub-Ponzi.

24 A Correct.

25 Q Okay. For purposes of today, I'm going

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1 to, for the most part, try to refer to it as the

2 sub-Ponzi for brevity's purpose, okay?

3 A That's fine. I'll take that as

4 Pearson/Boden's sub-Ponzi.

5 Q Okay. I want to lay a foundation on some

6 facts before I get into some documents.

7 A Okay.

8 Q How did you meet David Boden?

9 A I met him -- he was the general counsel

10 for a client of mine, National Beverage.

11 Q And I assume that means that you did work

12 with him?

13 A Yes. I represented Nick Caporella and

14 National Beverage, and I met David Boden that way.

15 Q Approximately, what year?

16 A You'd have to go back and look at that.

17 It was litigation against Broward County, and I

18 don't remember the year.

19 Q What were the circumstances that led to

20 you hiring him to come work at RRA?

21 A I had a need for counsel to myself and

22 counsel to the law firm. David had a tremendous

23 amount of corporate practice protocol, governance.

24 I was looking to buy a lot of companies;

25 he had tremendous M&A experience, and he was a great

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1 guy.

2 Q When you say you were looking to buy a

3 bunch of companies, are you referring to what has

4 been known in many of the pleadings as the RRA

5 entities, entities such as Georgio and Q Task?

6 A Correct.

7 Q Okay. Bova, et cetera?

8 A Correct.

9 Q In terms of the work in-house, what kind

10 of work did you expect him to do in-house?

11 A Help within in-house manuals, help with

12 governance issues with regard to growing the firm,

13 mostly I wanted him to be a personal adviser to me

14 on financial matters.

15 Q Is it a fair statement that, indeed, from

16 the day that he joined the firm, the vast majority

17 of work that he did was for you, personally, as

18 opposed to legal work for clients in the firm?

19 A Yes. I figure it was about 80 percent to

20 me; 20 percent. We had to be careful having him do

21 legal work for clients because he wasn't licensed to

22 practice in the state. That's not to say he didn't

23 do the work, but...

24 Q And the firm paid for his services,

25 correct?

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1 He was technically an RRA employee,

2 received a paycheck from RRA?

3 A Yes.

4 Q Now, you also agree that he was not

5 employed by a law firm for a period of probably at

6 least ten years?

7 A That's correct.

8 Q All right. And he wasn't a Florida

9 lawyer; you just acknowledged that, right?

10 A New York only.

11 Q Okay. Why did you make him RRA's general

12 counsel?

13 A Because he turned out to be a fantastic

14 confidante. I could trust him. He was, within the

15 definitions as previously established over the last

16 nine days, a "player." He was exactly what I needed

17 to be counsel to me.

18 Q Okay. That --

19 A He was more like a conciliary than a

20 general counsel.

21 Q Well, is that the case -- no. I'm not

22 going to go there. I'm not going to talk about

23 Fredo.

24 MR. NURIK: No, it's Tom Hagen.

25 MR. LICHTMAN: Yeah, or Tom Hagen. Okay.

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1 THE WITNESS: Several Fredos.

2 BY MR. LICHTMAN:

3 Q In any event, I understand how that was

4 helpful to you.

5 What impact was that? What impact did

6 making him general counsel have on RRA, if any?

7 A In actuality, none.

8 Q Okay. Was the sub-Ponzi scheme Boden's

9 first involvement in illegal activity with you, when

10 he joined the firm?

11 A No.

12 Q What did he do before that?

13 A There were certain parts of the National

14 Beverage litigation that we had talked about where

15 we were, I would say, fudging facts to aid

16 Mr. Caporella.

17 And then there was something else that he

18 was involved in.

19 THE WITNESS: Mr. Lavecchio, can I get

20 into that?

21 MR. LAVECCHIO: Can I have one moment?

22 MR. LICHTMAN: Yes.

23 A And he, also -- on the legal side, he

24 assisted us with certain campaign issues.

25

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1 BY MR. LICHTMAN:

2 Q Campaign contributions?

3 A Various types of campaign issues.

4 Q Okay. With respect to the National

5 Beverage litigation, are you saying that he

6 knowingly fudged facts or allowed facts that were

7 untrue to be used in connection with that

8 litigation?

9 A Yes.

10 Q So we can go to the record and find what

11 those could possibly be?

12 A If you give me the record, I could

13 probably, more than likely, than not, point out for

14 you what was created by him and I or what was not.

15 Q Okay. And I'm leaving the political

16 issues alone for right now -- or campaign issues

17 alone for right now.

18 Prior to his being involved in the

19 sub-Ponzi, was he involved in any of your

20 organized-crime activity?

21 A He knew about it; he was not involved in

22 it.

23 Q How about money laundering?

24 A He assisted with bank issues that I had.

25 Q What do you mean by that?

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1 A When I was moving money and the like, he

2 assisted me. He knew what was going on. He knew I

3 was having issues with moving money. I discussed it

4 with him. It wasn't in depth, but I sought his

5 counsel.

6 Q If this transcript were part of the

7 previous eight-and-a-half days, I could leave that

8 alone; but because this is an independent

9 transcript, I need you just to delve down a little

10 bit so there's a clear record. Okay?

11 A Okay. When the first --

12 Q When you say "moving money," do you mean

13 that there was a large number accounts at TD Bank,

14 and money was transferred in and among and between

15 the various accounts to suit your purposes, to get

16 money whenever you needed it?

17 A Yes.

18 Q And Mr. Boden assisted you how with

19 respect to those transfers?

20 A Guided me or attempted to guide me on

21 avoiding BSA AML issues. We were never really able

22 to come up with a plan to avoid them, other than to

23 have Mr. Spinosa protect us, because -- just by the

24 sheer velocity.

25 I mean, we basically came to the

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1 conclusion, after studying what we studied, that we

2 were going to have to have protection inside the

3 bank because -- just as we had had with Gibraltar

4 Bank, because the high velocity was a dead giveaway:

5 the in and out of accounts, the way money was

6 moving.

7 Q Did he start doing that as soon as he

8 joined the firm and started assisting you?

9 A No. It was over a period of time. It was

10 like everybody else that started engaging in illegal

11 activity with us; it was over time as I was --

12 became more and more certain that he was open to

13 that sort of thing.

14 Q To be sure, the process of him assisting

15 you on these banking issues preceded the sub-Ponzi,

16 though, correct?

17 A Yes.

18 Q Okay. Did he have any involvement in any

19 of the settlement deals that you had been involved

20 with prior to the sub-Ponzi?

21 A Yes. That's how he created the sub-Ponzi.

22 He was assisting me with those deals.

23 Q Do you remember --

24 A Go ahead.

25 Q Do you remember any of the specific deals

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1 that he assisted you with?

2 A He is the one -- he brought Richard

3 Pearson to the table.

4 Q Okay. Before Pearson, did he assist you

5 with any actual Ponzi deals, any settlement deals?

6 A I don't remember, specifically, because I

7 remember him, for example, assisting -- well, he

8 brought Florescue in; but Florescue was after

9 Pearson, so I don't recall specific.

10 Q Okay. Did he assist you with any of the

11 documentation issues on any prior settlement deal?

12 A He started to. That's how he understood

13 what was -- what needed to be done for his

14 sub-Ponzi.

15 Q Yeah. I assume there had to be a

16 predicate for him to look up one day and all of a

17 sudden become involved in a running a sub-Ponzi; is

18 that a fair statements?

19 A Well, he had gotten involved in,

20 originally, what he thought were legitimate deals,

21 or at least I thought he thought they were

22 legitimate deals; I don't know what was in his head.

23 And as time went on, like with many of the

24 people who ultimately became involved with the Ponzi

25 scheme, he figured out what was going on and then

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1 ultimately developed his own sub-Ponzi with

2 Mr. Pearson.

3 Q Well, indeed, if he was your right hand

4 inside the firm, he would have had access to more

5 data than probably anybody else; is that a fair

6 statement?

7 A I would think the only people that would

8 have had more access to data would have been Debra

9 Villegas, Irene Stay and Stu Rosenfeldt.

10 Q Is it a fair statement --

11 A And myself.

12 Q -- though, in terms of the paperwork, he

13 would have been able to see that there was just a

14 series of blacked-out documents, that there were no

15 real supporting documents to establish that the

16 actual plaintiffs existed in any of the lawsuits?

17 A Well, here's the thing: David and I had

18 conversations early on where he's asking me why

19 aren't any of these cases coming up on conflict

20 searches or why aren't there any files anywhere,

21 that type of questioning.

22 Q And this preceded the sub-Ponzi, correct?

23 A That preceded the sub-Ponzi.

24 Q Okay. Was he involved in any other

25 money-laundering activities?

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1 A He may have been. I don't specifically

2 recall at this moment.

3 Q Any public-corruption issues? Just

4 generally, without getting into the privileged

5 matter.

6 A He knew certain things that were going on.

7 He knew about my ties to law enforcement.

8 Q Okay. Howard Gruverman, was he involved

9 in any illegal activities that you might have

10 engaged in with Howard Gruverman?

11 A Yes.

12 Q Which ones?

13 A There were a couple of instances where

14 Howard was taking kickbacks into -- from insurance

15 companies that were doing business with Edify.

16 There was actually one time where Howard

17 was being investigated for -- I don't remember the

18 exact circumstances, but David knew what was going

19 on. David and I had met on a pretty regular basis

20 with Mr. Gruverman to discuss his problems.

21 He also knew of Mr. Gruverman's

22 involvement in campaign issues inside his own

23 company.

24 Q How about Albert Peter, was he involved in

25 any of the illegal activities that you described

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1 earlier on?

2 A I don't recall, specifically, whether he

3 was or not. He may have been.

4 Q Ron Pecou?

5 A I don't recall him having anything to do

6 with Ron Pecou.

7 Q Okay. You have testified about the

8 Rothstein rock-star lifestyle.

9 A Yes.

10 Q To what extent did Boden participate in

11 that?

12 A He participated pretty much at every

13 level. He flew with me to games on private planes.

14 He had access to all of our firm's tickets at all

15 venues.

16 Q Whether it was sports, concerts and the

17 like?

18 A All of it.

19 Q Okay.

20 A He participated with some of the events

21 more than I did. I mean, he would go to the hockey

22 games, go to the basketball games. He went to all

23 the football games, brought his family with him. He

24 traveled with us.

25 He had an open tab, wide open, at Bova --

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1 all the Bova restaurants.

2 He was heavily involved down at the

3 Versace mansion and spent a lot of time partying

4 down there, without having to pay anything.

5 He had access to our firm -- to my

6 limousine. He had access to our limousine service,

7 which he utilized frequently, both for himself, and

8 escorts, and with his family.

9 Q You're saying he used escorts with his

10 family?

11 A No, no.

12 Q With his --

13 A That didn't come out right.

14 Q Let's make sure there is some commas in

15 there.

16 A He used the limo service with -- by

17 himself and for -- with friends of his, with his

18 family, comma -- big comma -- and with escorts.

19 Q Approximately how many times with the

20 escorts?

21 A The limos and the escorts or just the

22 escorts?

23 Q Just the escorts.

24 A A dozen.

25 Q You paid for them?

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1 A Yes.

2 Q Okay. With regard to the house that he

3 rented from you on Castilla Isle --

4 A Oh, yeah, I forgot about that.

5 Q That was previously owned by Rickie

6 Williams, right?

7 A Yes.

8 Q Describe that transaction. How did that

9 work?

10 A David wanted to -- was looking to move. I

11 was moving out of 2308 to move on to Isla Bahia, and

12 he always said he would love to be able to buy that

13 house, rent the house, whatever.

14 And I rented it to him for drastically

15 under market. I think I rented it to him for

16 $10,000 a month; and I don't know which months he

17 paid and didn't -- you'd have to take a look at the

18 records -- and we had discussion about it.

19 And, you know, he kept saying to me: Are

20 you sure. You're not asking for a lot of money for

21 it, you know. Thank you.

22 I said, It's good for you. I said, You

23 know you have got to have that perception of having

24 a lot of money. The more money you're perceived to

25 have, the more money we will be able to generate.

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1 So it became a tool to him, also, because

2 he could use the house for entertaining and the

3 like. It was prestigious on Seven Isles in Las

4 Olas.

5 Q Why do you think that $10,000 a month was

6 under market value for rental?

7 A Because the real estate agents that we had

8 talked to previously, Kim and I, about -- before we

9 decided to let the Bodens rent it, they told us we

10 could get more than double that.

11 Q Did he also receive cash, you know, like

12 some of the other people that you have talked about

13 over the course of the last eight, nine days?

14 A Yes.

15 Q Do you know approximately how much?

16 A I do not.

17 Q Was it a regular payment, like whenever he

18 wanted cash, he could come and get it from you?

19 A It wasn't like an open piggy bank, but

20 yeah, he had access to cash when he needed it.

21 Q He closed a number of deals for you on the

22 Rothstein entities?

23 A He closed a large percentage of them.

24 Q Right.

25 At the time that he closed, for instance,

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1 Bova, did he know what the source of funds was?

2 A Mr. Lichtman, you have to go back and look

3 and see what level his involvement is, because I

4 don't want to guess. I would be guessing.

5 Q Well, how about Casa Casaurina, because

6 that was closer to the end, do you recall that?

7 A Yes.

8 Q Okay. Did he know what the source of

9 funds was for Casa Casuarina?

10 A Yes. You also have to understand that he

11 knew what the firm's finances were. I mean, he was

12 one of the people that had access to the billing

13 records and, you know, would discuss financial

14 issues with me.

15 You know, it's pretty apparent how much

16 money is coming in from legitimate law office

17 services, and then there's got to be someplace the

18 other money is coming in.

19 And he, of all people, knew that many of

20 our business enterprises at that point in time were

21 losing money or they were in the very early, you

22 know, stage where you had to -- where you are still

23 investing huge sums of money to try to get them off

24 the ground. The restaurants weren't making money.

25 The Q Task wasn't at the stage where it was making

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1 money. We were still investing. It was like that a

2 for a lot of our businesses.

3 So he knew there was not only money not

4 coming from the law offices -- from the law office,

5 but that -- also that the businesses I was buying

6 were still in their early incubation stage so they

7 weren't throwing off -- many of them were not

8 throwing of any money.

9 Q Would you agree or disagree with the

10 statement that Mr. Boden knew each time that he

11 closed one of those business transactions for you,

12 that the money was obtained from illegal

13 transactions?

14 A He should have known, yes.

15 We didn't discuss it. We didn't say, hey,

16 this is illegal money going into these transactions;

17 but from the information he had before him, he would

18 have had to have been lying not to know that it had

19 to be coming from someplace other than legitimate

20 activity.

21 And then, of course, once he was running

22 the sub-Ponzi, from the day you determined that

23 sub-Ponzi started, every deal after that, he would

24 have known there was illegitimate money coming to

25 the firm.

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1 Q So to boil it down, then, what facts did

2 you know of that would indicate that Boden knew that

3 the settlement transactions you were working on

4 prior to the sub-Ponzi, Boden would have known those

5 were illegal?

6 A There were no plaintiffs; there were no

7 defendants.

8 Q And you say that he knew that?

9 A He knew that.

10 Q Okay.

11 A The paperwork was turning around without

12 the appearance of any plaintiffs or defendants.

13 Literally, we would get a deal. It would be

14 papered; and within hours it would have plaintiff's

15 and defendant's signature on it and be ready for

16 funding.

17 There were no conflict searches. There

18 were no files anywhere. No one ever saw any clients

19 coming in and out. If you look at the sheer number

20 of cases that we were settling, you would think you

21 would see somebody wandering in and out of the

22 offices. There was nobody.

23 He had access to our financials. There

24 was no money ever coming in from any legitimate big

25 defendants sending millions of dollars to us.

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1 Q Okay.

2 A That's probably a good start. I'm sure

3 that there's more.

4 Q All right. Now, how did you meet Richard

5 Pearson?

6 A Through David Boden.

7 Q Do you know how?

8 A Although, I think I had met him to say

9 hello previously.

10 Q Do you know how Boden met Pearson?

11 A I'm not sure. I think he met him down at

12 Bova, actually.

13 Q Was RRA paying for Mr. Pearson's suite --

14 I think it was 1870 in the 401 building -- or was

15 Pearson paying that himself?

16 A I think he was paying it himself.

17 Q All right. Do you know --

18 A I don't recall paying that.

19 Q Do you know what the circumstances were of

20 Pearson being located in the same building as you?

21 A I do not.

22 Q All right. Was Pearson's sub-Ponzi

23 involvement the first illegal activity that he had

24 engaged in with you?

25 A Pearson?

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1 Q Yes.

2 ALL PRESENT: Objection.

3 A To the best of my recollection, yes.

4 BY MR. LICHTMAN:

5 Q Okay. So to be sure, he did not engage in

6 any of the other types of activity that we talked

7 about over the preceding days, such as money

8 laundering or banking issues or public corruption or

9 any of those type of claims?

10 A With me?

11 Q Yes.

12 A No.

13 Q With somebody else that you know?

14 A I knew Richard Pearson, after talking to

15 David Boden, before I started doing business with

16 him, to be a player. I knew that he had had a --

17 from speaking to him, tax issues and the like.

18 He came from what he had described as a

19 very wealthy family out of Canada, and I later

20 learned things that he had done that were illegal;

21 but that was after he became involved with the

22 Ponzi.

23 Q So the record is clear, what do you mean

24 by "player"?

25 A He was a -- he was a wheeler-and-dealer.

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1 He was involved in illegal activity. He was -- it's

2 that phrase I used in the early days of the

3 deposition, it was --

4 Q I know, but this is a separate transcript.

5 A Yes.

6 Greed before morality, okay, and he was --

7 he was in that genre.

8 Q Okay. You made a conclusory statement

9 that you knew he was involved in illegal activity.

10 What facts do you know of that support that

11 statement?

12 A Boden told me. That's how I know -- and I

13 trusted Boden.

14 Q Okay. Did Boden tell you, specifically,

15 what he knew that Pearson was doing?

16 ALL PRESENT: Objection.

17 A He told me that Richard Pearson was a

18 master of the other peoples' money, the OPM deals;

19 that he was very good at convincing people that they

20 should invest in things and give him large

21 percentages of ownership with him putting nothing

22 in.

23 That's the type of thing David would

24 discuss with me.

25

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1 BY MR. LICHTMAN:

2 Q As a quick aside, there's an investor in

3 the RRA -- excuse me -- in your Ponzi whose name was

4 "OP Monies." Do you know if the name "OP Monies"

5 comes from "Other People's Money"?

6 I just heard you say "other people's

7 money."

8 A It must have. I don't even know who that

9 is.

10 Q Okay. Was Pearson involved, to any

11 extent, in what you have called your rock-star

12 lifestyle?

13 A To a limited extent. He had his own

14 rock-star lifestyle.

15 Q What did he do with you --

16 MR. HOUSTON: Objection.

17 BY MR. LICHTMAN:

18 Q -- in terms of this rock-star lifestyle.

19 A He went to certain sporting events with

20 us. I had gotten him concert tickets a couple of

21 times. He never went to the Heat games.

22 He didn't travel with us. He went to the

23 strip clubs with us, and he ate at Bova for free on

24 a multitude of occasions, but I can't tell you how

25 many times.

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1 Whenever he ate with Boden, he was eating

2 for free.

3 Q After you start -- after he started the

4 sub-Ponzi, was he involved in any other type of

5 illegal activity with you?

6 MR. HOUSTON: Objection.

7 A Directly with me, no. He may have been

8 involved in stuff with Boden. He was really tied to

9 Boden, not to me.

10 BY MR. LICHTMAN:

11 Q Okay. I'm going to give you a list of

12 names and tell me if any of these people were

13 involved in the sub-Ponzi. And if you say yes, tell

14 me what their function was, as briefly as you can.

15 A To my knowledge.

16 Q To your knowledge, yes.

17 A Because it was literally a separate whole

18 thing, but...

19 Q Curtis Renie?

20 A Yes.

21 Q What was his role?

22 A Well, he had created the fake website, and

23 Mr. Boden used that fake website from time to time.

24 Q How do you know that?

25 A Because I had given him access to my

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1 office to use it -- or Deb had to give him access to

2 my office to use it.

3 Q Okay.

4 A It was the only place he could be access.

5 Q How do you know he actually used it?

6 A Because I had to show him how to use it,

7 and he had told me he used it.

8 Q Okay. Bill Corte?

9 A The same answer, Bill was involved at that

10 level.

11 Q Irene Stay?

12 A And also Curtis -- there are times when

13 David needed balances changed, and I was the one who

14 had -- he had -- David would have to tell me, for

15 example, in the -- I don't know -- there were all

16 kinds of Argen --- Exito, all kinds of different

17 company names.

18 Most of their investors were, the

19 Pearson/Boden investors, used separate companies for

20 each investment. So we would constantly have to go

21 in and segregate accounts and change balances.

22 So David would tell me what the balances

23 needed to be, and I would have Curtis or Bill change

24 the balance.

25 Q Okay. Irene Stay?

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1 A Yeah. Irene had to have known because she

2 was moving his money; and he would send her emails

3 and Pearson would send her emails, or be copied on

4 the emails, telling her the payments needed to go

5 out and the like.

6 Q When you say "moving money," meaning

7 moving money the same way that Irene Stay did with

8 respect to the settlement transactions that you were

9 working on?

10 MR. HOUSTON: Objection.

11 A Yes. David would -- there would be

12 email -- there's email traffic, Mr. Lichtman, where

13 Pearson or Boden or both of them are cc'ing one

14 another or the like and saying these are the

15 payments that are due today. And that email would

16 eventually be forwarded to Irene Stay.

17 Irene would then have to move money from

18 one of our other main feeder accounts into whatever

19 account the money needed to go out from and then

20 send the money out for the Boden-Pearson sub-Ponzi.

21 Q Is it a fair statement that what you just

22 described in the preceding answer is what would have

23 been meant by the term "moving money"?

24 A Yes.

25 Q Okay. And what accounts did those

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1 typically involve?

2 A It was a TD bank account, so I don't know

3 which specific accounts. It would be from 0923 into

4 various trust accounts and then out again.

5 Q The myriad of TD Bank accounts, correct?

6 A Yes. Somewhere between 22 and 28

7 accounts, yes.

8 Q How about Debra Villegas?

9 A Debra was heavily involved with Boden

10 because she did all his paperwork.

11 Q You mean documenting the transactions?

12 A Yes.

13 Q To the same extent that she assisted you

14 on transactions that you affected with other

15 settlements?

16 A Yes.

17 Q Okay. Caputi, Steve Caputi, did he have

18 any involvement in the sub-Ponzi?

19 A I don't recall whether he did or not. I

20 don't think so.

21 Q Andrew Barnet?

22 A Barnet brought in investors; but as I sit

23 here today, still, Mr. Lichtman, I really don't

24 think that Barnet knew with was going on, you know.

25 He may have, because he was so close to

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1 Boden. He was constantly in Boden's office; and, of

2 course, if he was observant, he was seeing no

3 clients, no files, no conflict searches.

4 You know, that conflict search is a huge

5 red flag for any lawyer anywhere near this, because

6 you know, as a lawyer, no new case comes in -- you

7 have got to send the plaintiff's name. I don't care

8 how confidential any of this is.

9 First of all, two important keys: The

10 confidentiality one runs to everyone in the law

11 firm, all the lawyers and all the staff,

12 attorney-client privilege. So there's no reason for

13 them not to know who these people are, and the only

14 way to do a conflict search is to send the

15 plaintiff's name and the defendant's name to the

16 entire firm. It was never done.

17 Q Was Andrew Barnet -- excuse me -- an

18 employee of RRA?

19 A Yes, he was.

20 Q In what capacity?

21 A He was my director of corporate

22 development or something. We gave him some fancy

23 title.

24 Q Is he a lawyer?

25 A No.

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1 Q Was he paid a fee for any transactions

2 that he brought to the table on the sub-Ponzi?

3 A From me or RRA, you'd have to check the

4 records. I believe he was. But my understanding

5 from speaking to David Boden and Pearson was that he

6 was paid finder's fees by them.

7 Q Did he bring investors to you for any

8 other deals besides the sub-Ponzi deals?

9 A He tried to. I don't remember whether we

10 ever actually closed the deals or not.

11 Q What was the time period that you recall,

12 in number of months, roughly, that he tried to bring

13 you or Boden deals?

14 A It wasn't very long. It was several

15 months. He was only employed by us six, seven,

16 eight months.

17 Q How was it that he came to know that

18 settlement deals even existed within your office?

19 A I told him about it, and Boden told him

20 about it. He saw us doing the deals. He spent a

21 lot of time with David Boden. Boden was heavily

22 involved in papering deals.

23 Q What did you tell him about the deals?

24 A I don't recall whether I told him anything

25 one way or the other.

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1 Again, I was very busy with the other

2 Ponzi, the main Ponzi. His interaction was with

3 Boden.

4 I mean, but you literally -- I mean you

5 have been in our offices. You have got to be blind

6 to know that these -- it's just nothing there

7 supporting this.

8 Q Okay. Do you know if he knew whether or

9 not the settlements were real?

10 A I'm sorry?

11 Q Do you know whether or not Barnet knew the

12 settlements were real?

13 A I don't -- I don't think he knew that they

14 were fake.

15 Q Okay. Spinosa, was he involved at all in

16 the sub-Ponzi?

17 A Not directly, no.

18 Q Does that suggest indirectly?

19 A Well, he was protecting the RRA bank

20 accounts from scrutiny, so to that extent, yes.

21 Q Do you have personal knowledge --

22 A But he didn't -- he had no direct

23 knowledge, to my knowledge, of interaction with

24 Boden and Pearson.

25 Q Meaning to your personal knowledge, did he

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1 have direct communications with Boden about what

2 Boden was doing in the sub-Ponzi?

3 A I have no recollection of that.

4 Q Do you know whether or not Spinosa was

5 asked to execute any lock letter for sub-Ponzi

6 deals?

7 A He may have been. You would have to check

8 the lock letters. I don't recall one way or the

9 other.

10 Q Okay. How about Ms. Caretsky, did she

11 have any involvement, to the best of your knowledge,

12 in the sub-Ponzi?

13 A No, sir.

14 Q No, sir, meaning you don't know or no, she

15 did not?

16 A To my knowledge -- you said "to my

17 knowledge." To my knowledge, she did not know.

18 Q Okay. Mr. Preve, did he?

19 A You know, I don't know -- remember one way

20 or the other if I discussed it with him. It was

21 unimportant to my dealing with him, because it was

22 just a separate source of funding.

23 Q Let me ask you this. You can see I have a

24 large stack of documents. From a time perspective,

25 I'm not going able to get through them all, so I'm

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1 going to ask you about some of the documents --

2 A Go right ahead.

3 Q -- without putting them into the record.

4 I have an email from April 4, 2009, the

5 subject of which is "G380." It's from you to

6 Richard Pearson, and it says to Mr. Pearson: Here's

7 your first case for funding. More to follow today

8 as I review what I pulled from prior funding source,

9 Banyan.

10 Do you recall anything like that?

11 MR. HOUSTON: Objection.

12 A It's certainly possible, but that doesn't

13 mean that Banyan knew because I could have been

14 lying to Pearson about it.

15 BY MR. LICHTMAN:

16 Q Indeed, did you pull funding transactions

17 from Banyan to give to Pearson?

18 A I didn't need to pull anything from

19 anywhere because it was all made up anyways. It

20 didn't need to really be pulled. I would just say,

21 okay, I'm pulling it from here.

22 Q Okay. Do you recall whether or not Banyan

23 or Frank Preve had any involvement in the sub-Ponzi?

24 A I don't recall specifically. You'd have

25 to check the email traffic.

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1 Q Did you ever discuss anything about the

2 sub-Ponzi with Preve, to the best of your

3 recollection?

4 A I don't have a specific recollection of

5 discussing it with him, we were so busy running

6 around.

7 Q Okay. John Harris, did he have

8 involvement in the sub-Ponzi?

9 A No.

10 Q Szafranski?

11 A No. Because Boden, strangely enough, was

12 acting as their own verifier. I don't recall them

13 ever using Szafranski to verify. You'd have to

14 check the email traffic.

15 Q I'll get to the verification in a moment.

16 How about the funds?

17 A The hedge funds?

18 Q Yes.

19 A No.

20 Q Bob Kagan?

21 A No. Bob didn't know anything.

22 Q Andrew Glass.

23 A Who's that?

24 Q GNV Asset Management, LLC.

25 A I couldn't even tell you who that is.

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1 Q Is there anybody else that you can think

2 of that would have assisted Pearson and/or Boden in

3 the sub-Ponzi?

4 A David Boden's secretary.

5 Q Her name?

6 A I think it was Patricia something, but I

7 don't recall.

8 Q Do you have reason to believe that she

9 knew that Boden was involved in illegal activity?

10 A I would be guessing, but just from the

11 circumstance that I've described over the last nine

12 days, she would have to be blind not to know

13 something was going on. But I don't know one way or

14 the other.

15 Q Patricia, was that her name?

16 A I think so.

17 Just look at the email traffic between him

18 and whoever he sent the deals to.

19 Q Was Barry Florescue -- Florescue,

20 F-L-O-E-S-C-U-E, for the record -- an innocent

21 investors?

22 A My understanding is that Florescue came in

23 through Barnet to the Boden/Pearson group.

24 Q Okay.

25 MR. SCHERER: Was he innocent investor?

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1 You didn't get the answer.

2 MR. LICHTMAN: I was asking him the

3 follow-up.

4 MR. SCHERER: Thank you.

5 BY MR. LICHTMAN:

6 Q Was he an innocent investor?

7 A Yes.

8 Q Okay. And why do you say that?

9 A Because I helped fool him; I never told

10 him what was going on.

11 Q All right. How about Dan and Beatrice

12 Brayer?

13 A I don't know who that is.

14 Q All right. How did the sub-Ponzi get

15 started?

16 MR. HOUSTON: Objection.

17 A Originally, Boden/Pearson, or at least

18 Pearson, believed these were real deals. I know

19 that because -- at least I believe he believed that

20 because I convinced him of it. He did very limited

21 due diligence. It was very easy to convince him.

22 BY MR. LICHTMAN:

23 Q What due diligence did he do or not do?

24 A To my knowledge, all he did was talk to me

25 and talk to Boden, looked at some deal documents.

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1 It was probably -- other than the people who

2 directly knew about, Mr. Lichtman, he did the least

3 due diligence of anybody.

4 Q When you say "deal documents," do you mean

5 the standard package of blacked-out documents?

6 A Blacked-out document.

7 Q Did he ask to see any other files?

8 You have to answer audibly.

9 A He may have. He may have. I don't have

10 any specific recollection of him doing any real due

11 diligence, other than sitting and talking to me.

12 Q And did he also talk to Boden?

13 A Yes.

14 Q And to the best of your knowledge, when he

15 talked to Boden, did he talk with him about due

16 diligence issues?

17 MR. HOUSTON: Objection.

18 A Some, but Boden did not come back to me

19 very frequently asking me anything. He may have

20 sent me some emails asking me some specific

21 information, but it was, again, very limited due

22 diligence.

23 BY MR. LICHTMAN:

24 Q To be sure, do you view Boden as your

25 co-conspirator?

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1 A Do I view -- yes, absolutely I do.

2 Q And you spoke to Boden frequently during

3 the course of the time that he worked with you at

4 RRA, right?

5 A Every day.

6 Q Okay. At least once a day, if not a

7 running dialogue, would be that a fair statement?

8 A Yes.

9 Q You used the term "verifier" a few minutes

10 ago with respect to Boden. What did you mean by

11 that?

12 A Szafranski was the third-party verifier,

13 the person who was supposed to be completely

14 independent coming in and verifying the existence of

15 the plaintiff, existence of the defendant, actual

16 signatures on documents, account balances and wires

17 in and out.

18 Q In connection with the sub-Ponzi, do you

19 know what Boden's role was as a verifier, if any?

20 MR. HOUSTON: Objection.

21 A Boden was, to my knowledge, the main,

22 quote, unquote, third-party verifier for all the

23 Boden/Pearson materials, which never made any sense

24 to me.

25 Q Tell me why that didn't make sense to you.

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1 A Because he's not independent. He was not

2 an independent third-party verifier. He was the guy

3 selling the deals. He sold the deals.

4 It would be like me selling the deal to

5 Mr. Damson; and then, when Damson wanted to know if

6 the deal was real, I'm the one who looked and told

7 him it was real.

8 Q Indeed, isn't it correct that Boden knew

9 -- that Boden had access to the TD Bank accounts?

10 A The real TD Bank accounts?

11 Q The real TD Bank accounts.

12 MR. HOUSTON: Objection.

13 A He didn't have access to online. He had

14 access to the statements from Irene.

15 BY MR. LICHTMAN:

16 Q Yes. So he would have had access to

17 understand what dollars were in each account at any

18 point in time, correct?

19 A He needed to have access to that to help

20 me with all the other businesses we were doing. He

21 needed to know what real money was there.

22 Q As an example, when Bova needed money

23 regularly in the course of its operations, he had to

24 know where to get the money to help fund the Bova

25 operations, right?

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1 A Sure. And you'll see lots of

2 correspondence with me copied directly between me,

3 him and Irene.

4 Q And Boden had access and knew of the trust

5 account defalcations, correct?

6 MR. HOUSTON: Objection.

7 A Yes. You could see it.

8 BY MR. LICHTMAN:

9 Q When you say "you could see it," what did

10 you mean?

11 A Well, you see all these accounts with no

12 money in them; and then, all of a sudden, you see

13 money go from one trust account, flying into the

14 other one, and then flying right out to an investor.

15 Q Let me rephrase that last question.

16 To the best of your knowledge, what did

17 David Boden know about the trust accounts and the

18 money within them?

19 A He knew that we had accounts that were

20 supposed to have large sums in them that had nothing

21 in them, that were then -- upon the need to fund a

22 Ponzi payment, that suddenly money would be moved

23 from one trust account into that specific,

24 supposedly segregated trust account and then right

25 out to the investor.

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1 Q And how do you know he knew that?

2 A Because he actually had to do that himself

3 with Irene. He was the one who handled those

4 transactions as time went on.

5 Q Okay. And within the description that you

6 just gave in your last answers, then, also tell me

7 what you know that he knew respecting the flow of

8 money in and out of TD Bank accounts?

9 MR. HOUSTON: Objection.

10 MR. LICHTMAN: Basis?

11 MR. HOUSTON: Hearsay.

12 A To the best of my knowledge, he could see

13 the sums coming in and out.

14 BY MR. LICHTMAN:

15 Q How do you know?

16 A Because he would talk to Irene about it.

17 Q How do you know?

18 A Because Irene told me. He told me. I was

19 there when they talked, and I was copied on a lot of

20 emails.

21 Q So Boden told you this, then?

22 A Boden told me. Irene told me, and you can

23 see it from the email traffic.

24 Q Okay. You have already described Boden's

25 use of the fake website, correct?

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1 MR. HOUSTON: Objection.

2 A Yes.

3 BY MR. LICHTMAN:

4 A Boden told you that he used the fake

5 website, and you observed him using the fake

6 website, correct?

7 MR. HOUSTON: Objection.

8 A Yes.

9 BY MR. LICHTMAN:

10 Q Okay. Tell me your knowledge as to how --

11 I think you have covered it, but just so the record

12 is clear, how do you know that Boden knew there was

13 no real plaintiffs?

14 MR. HOUSTON: Objection.

15 A He didn't see any. He never talked to

16 anyone. There were no conflict searches. There

17 were no files. There were no people. There was

18 nobody to sign anything.

19 BY MR. LICHTMAN:

20 Q To be sure, you used the attorney-client

21 privilege with respect to all business inside the

22 office attached to Boden, didn't you?

23 A Yes.

24 Q Okay. So you indicated, with respect to

25 Mr. Pearson, that you believed that when the

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1 sub-Ponzi started, he thought that the settlements

2 were real?

3 MR. HOUSTON: Objection.

4 BY MR. LICHTMAN:

5 Q Is that what you said?

6 A When the sub-Ponzi started -- you're

7 asking me about Pearson?

8 Q Pearson.

9 A Pearson. To the best of my knowledge,

10 Pearson thought they were real.

11 Q Is there a point in time that that

12 changed?

13 MR. HOUSTON: Objection.

14 MR. LICHTMAN: What is the basis?

15 MR. HOUSTON: Could be from hearsay. If

16 he's going to testify that it was from

17 conversations, it's hearsay.

18 MR. LICHTMAN: Okay.

19 MR. HOUSTON: And I'm still not clear what

20 "sub-Ponzi" means.

21 BY MR. LICHTMAN:

22 Q Well, just to make it crystal clear,

23 Scott, Mr. Rothstein, please, what is your

24 understanding of what a "sub-Ponzi" means?

25 A The sub-Ponzi was, as David Boden and

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1 Richard Pearson did more deals with us, eventually

2 they broke off from me. They were bringing in their

3 own investors; I was not involved, to any great

4 extent, in doing the presentation to these

5 investors. They picked it. They papered it. They

6 closed it. It was running completely separate.

7 My involvement was to give them the

8 original numbers: The deal is, 800, 200, four

9 months; 700, 300, six months, whatever it might be.

10 Other than that, they would -- everything

11 else, ultimately, was handled by them.

12 They got to a point where they used Deb

13 separately for the papering and for the signatures.

14 That's what I mean by "sub-Ponzi."

15 Q Did --

16 A And they even added things to it that

17 weren't part of my original scheme, so...

18 Q Did they ask your permission to engage in

19 those transactions?

20 A The additional things they did?

21 Q No, no, no, just any of the sub-Ponzi

22 transactions, did they say, we would like to do

23 these? How did that come about?

24 A They just started doing them. They kept

25 asking me for deals, and I would send them. Any

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1 source of money was good to me.

2 Q Indeed, they were most active in the time

3 frame of starting around late April of 2009, all the

4 way through the end of when the entire fraud was

5 exploding in the country; is that right?

6 MR. HOUSTON: Objection.

7 A To the best of my recollection, yes.

8 BY MR. LICHTMAN:

9 Q And it was in April that you had the issue

10 with the funds arise that you had an even more

11 critical need to bring in cash; is that correct?

12 MR. HOUSTON: Objection.

13 A Correct.

14 BY MR. LICHTMAN:

15 Q So the extent that the sub-Ponzi went in

16 business, that was a good thing for you because it

17 enabled you to keep cash flow coming in that you

18 were able to use for the purposes of the Ponzi,

19 right?

20 A Correct.

21 MR. HOUSTON: Objection.

22 BY MR. LICHTMAN:

23 Q Just to be clear, so I don't have a

24 problem with the record, describe for me, if you

25 would, the relationship, in time, of how the

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1 sub-Ponzi impacted on your conducting the Ponzi

2 scheme.

3 MR. HOUSTON: Objection.

4 A It provided a sizeable amount of

5 additional funds that I utilized to pay old

6 investors. It enabled me to keep the Ponzi scheme

7 alive, especially while we were going and seeking

8 new sources of much more significant funding.

9 BY MR. LICHTMAN:

10 Q Was there a point in time that you came to

11 believe that Mr. Pearson knew that the settlement

12 deals that he was selling in the sub-Ponzi were not

13 legitimate?

14 A Yes.

15 MR. HOUSTON: Objection.

16 MR. LICHTMAN: What is the basis?

17 A There are a lot of --

18 MR. LICHTMAN: Hold on.

19 What is the basis of the objection?

20 MR. HOUSTON: You're leading this witness.

21 You're giving speeches, you're giving

22 arguments, and then you're asking him to say

23 yes. That's your -- he's your witness.

24 MR. LICHTMAN: I asked him if there were

25 facts that he knew of about that.

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1 MR. HOUSTON: The objection stands.

2 BY MR. LICHTMAN:

3 Q Okay.

4 A Yes.

5 Q What facts do you know of that existed to

6 establish that Pearson came to learn that the

7 settlements he was selling as the sub-Ponzi were not

8 legitimate transactions?

9 MR. HOUSTON: Objection.

10 A Several things in no particular order.

11 Boden told me that he told him.

12 He would regularly ask me where the

13 plaintiffs and defendants were. I would say, talk

14 to Boden.

15 There were no plaintiffs and defendants

16 coming in and out of our offices, and Pearson was in

17 our offices frequently.

18 There came a point in time when he wanted

19 to see a plaintiff sign documents.

20 Q "He" being Pearson?

21 A Pearson.

22 Q What did you say?

23 A I said, that's impossible, talk to Boden.

24 Q Do you remember which transaction that

25 was?

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1 A He asked multiple times. It wasn't just

2 one time.

3 He asked for copies of documentation that

4 we could not provide him, wire documents and the

5 like, more detailed stuff.

6 He wanted to have access to online stuff,

7 since he was providing us with a lot of investors.

8 I would not give it to him.

9 And he was working so closely with Boden,

10 that's what led me to believe that he was involved

11 in all of this. There may be more stuff. I would

12 have to really sit and go through all the emails.

13 Q Is there a point in time that you can

14 focus on that, in your mind, related to the issue of

15 Pearson knowing the settlements were false?

16 A Just prior to a large influx of deals with

17 the Argentinean guys, okay, he asked me about them

18 doing due diligence.

19 Q "He" being who?

20 A Pearson. We were in my office, and --

21 Q What did he ask you, specifically?

22 A He asked --

23 MR. HOUSTON: Objection.

24 A He said that these guys may want to do

25 some significant due diligence, and he wanted to

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1 know how to handle it.

2 I said, listen, I'll talk to them briefly.

3 I said, but you have got to do this with Boden. And

4 I made a comment to him, I said: Rich, you know

5 what's going on. Do the best you can with what you

6 can. Don't put yourself too far out there, okay,

7 because a lot of this stuff you're asking for, we

8 can't provide. Talk to Boden.

9 I pushed almost all of it off on Boden.

10 It was their deal. I tried to stay

11 removed; and if you look at the email traffic, other

12 than trying to push them along to close deals when I

13 needed cash, I was uninvolved -- a lot of emails

14 trying to push them, trying to twist them to get

15 them to fund, other than that, I tried to stay away

16 from it.

17 Q Why were you uninvolved, because,

18 typically, what I've come to learn over listening to

19 you over the last eight days is you like to be

20 involved and you like to make sure that you handle

21 things yourself, manipulate it to your liking.

22 MR. HOUSTON: Objection.

23 A Boden had proved himself an excellent

24 confidante. He was running this without a hitch.

25 Other than sometimes slow funding, he was running it

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1 without a hitch. People weren't asking a lot of

2 questions.

3 As a matter of fact, there were times that

4 he appeared, to me, to be doing a better job than I

5 was because he wasn't having near the number of

6 due-diligence hiccups that I was having with my

7 feeder funds.

8 BY MR. LICHTMAN:

9 Q So --

10 A He and Pearson ran a very smooth

11 operation.

12 Q Okay. Is what you're suggesting that you

13 felt comfortable with what they were doing, in terms

14 of how they were operating their sub Ponzi?

15 MR. HOUSTON: Objection.

16 BY MR. LICHTMAN:

17 Q How did you feel about them operating the

18 sub-Ponzi?

19 MR. HOUSTON: Same objection.

20 A I felt very comfortable. I mean, look, if

21 I didn't feel comfortable, I would not have them

22 doing this. Okay.

23 MR. LICHTMAN: I assume you're doing a

24 cross-examination?

25 MR. HOUSTON: No.

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1 MR. FERGUSON: I am.

2 MR. HOUSTON: He is. I am doing the

3 objections, evidentiary objections.

4 MR. LICHTMAN: I see how that works.

5 MR. HOUSTON: You saw it yesterday, too.

6 A He -- he -- I forget what I was saying.

7 Oh, now I remember.

8 He -- them, Boden and Pearson, were doing

9 an excellent job. I didn't need to be involved.

10 You have got to understand, this is --

11 this was an extremely complicated scheme. Okay. My

12 involvement with them, compared to what I normally

13 had to do to sell one of these deals, was minuscule.

14 I barely had to get involved on any of the selling,

15 and I was minimally involved in due diligence.

16 There is no way on God's green earth that

17 Pearson didn't know what was going on. It's not

18 possible. Boden couldn't have done this by himself.

19 He was handling all those deals. The mechanics call

20 for levels of knowledge that must have existed for

21 these people to get sold. All you have to do is

22 look at the traffic.

23 The problem that you are going to have

24 with questioning me, Mr. Lichtman, just so you're

25 clear, they had their own Ponzi scheme going on. I

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1 just took the cash. I wrote the deal out, the

2 terms, gave it to them, they fund it.

3 But they had no access, other than through

4 me, to due-diligence material, unless they were

5 creating it. So they had to have been lying to all

6 these people because there was nothing real to show

7 them.

8 There were instances where investors,

9 innocent investors are saying that they met with

10 plaintiffs. They didn't meet with plaintiffs

11 through me, so they had to have been by -- if -- by

12 powers of deduction, it had to have been through

13 Boden and Pearson. That's why I was comfortable.

14 That's how I knew.

15 MR. HOUSTON: Motion to strike,

16 unresponsive.

17 BY MR. LICHTMAN:

18 Q Are you familiar with how Pearson and

19 Boden made money on the sub-Ponzi?

20 A They --

21 MR. HOUSTON: Objection.

22 A I am.

23 MR. LICHTMAN: What's the objection?

24 MR. HOUSTON: Hearsay.

25 A They had --

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1 BY MR. LICHTMAN:

2 Q Are you personally familiar as to how they

3 made money on the sub-Ponzi?

4 A Yes.

5 MR. HOUSTON: Same objection.

6 BY MR. LICHTMAN:

7 Q And tell me what the basis of your

8 knowledge is.

9 A Email traffic and speaking to Mr. Boden

10 and to Mr. Person.

11 Q And what is it that you learned?

12 MR. HOUSTON: Same objection.

13 A Pearson was charging a finder's fee, some

14 sort of commission structure; and then they created

15 this whole big lie about some plaintiffs finder's

16 fee thing where the plaintiff was agreeing to pay

17 them a finder's fee -- of course, there is no real

18 plaintiff, so I don't know how they're agreeing to

19 that.

20 And on top of that, you have them creating

21 all these false letters saying the plaintiff agreed

22 to this finder's fee.

23 And what they were really doing was, if I

24 gave them a deal, for example, that was $700,000

25 fund, $300,000 ROI, over a specific period of

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1 months, when they sold the deal to their investor,

2 they would bump it, for example, for $800,000 fund,

3 300,000 ROI. The 100 additional they would take.

4 BY MR. LICHTMAN:

5 Q Okay. And to be sure, you learned that

6 from Mr. Pearson; is that what your testimony was?

7 MR. HOUSTON: Objection.

8 A Mr. Pearson and Mr. Boden.

9 And I actually discovered it -- there was

10 email traffic. There was an email where Rich was

11 asking me for certain amount of money, and then told

12 me that he needed a certain amount of it for Boden.

13 And I went and asked Boden what the heck this money

14 was for.

15 BY MR. LICHTMAN:

16 Q Because of the time, I'm going to kind of

17 go through some documents and not introduce them all

18 in.

19 But I have an email from Scott to -- from

20 you, excuse me, to Pearson, dated April 4th, 2009;

21 and it talks about Pearson reviewing deals, advising

22 as to funding schedules.

23 And then it says, let's meet on Monday to

24 discuss how best to handle. At that time you can

25 have David verify our incoming wires for you.

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1 Do you know what that -- what you meant

2 when you wrote to Mr. Pearson that David would

3 verify incoming wires to you?

4 MR. HOUSTON: Objection.

5 A David was going to tell him the money was

6 there.

7 BY MR. LICHTMAN:

8 Q And what was the source of the money

9 supposed to be, putative defendants?

10 A Yes.

11 MR. HOUSTON: Objection.

12 BY MR. LICHTMAN:

13 Q And what putative defendants were there?

14 MR. HOUSTON: Objection.

15 A None.

16 BY MR. LICHTMAN:

17 Q And what payments were there?

18 A None.

19 MR. HOUSTON: Objection.

20 MR. LICHTMAN: If you would like, you can

21 have a standing objection to every question in

22 the deposition.

23 MR. HOUSTON: I prefer to make them.

24 MR. LICHTMAN: Okay.

25 MR. HOUSTON: I'm making them very simply

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1 and short. If you want to know the basis, I'll

2 be glad to tell you.

3 BY MR. LICHTMAN:

4 Q Were there payments coming in from

5 defendants on any of these cases?

6 A No.

7 MR. HOUSTON: Objection.

8 BY MR. LICHTMAN:

9 Q There's an email that references, quote,

10 "G deals." What were "G deals"?

11 A "G deals" were George Levin deals.

12 Q And then you had deals that you labeled

13 "RL deals." What were those?

14 A RL Pearson deals.

15 Q There was a point in time that you sent to

16 Mr. Pearson a private placement memorandum from

17 Banyan that had been all marked up; do you remember

18 that?

19 A I do.

20 Q What was the purpose of you doing that?

21 A They were going to do their own PPM.

22 "They" meaning Boden and Pearson.

23 Q And why did you send to them a version

24 that was used by Levin or --

25 A So they --

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1 Q -- Preve, excuse me?

2 A So they could expedite the process.

3 Q Did Levin and/or Preve know that you were

4 sending that PPM to Pearson?

5 A I don't know one way or the other.

6 MR. LICHTMAN: I will mark as Exhibit 1 --

7 MR. HOUSTON: Chuck, you didn't provide me

8 any exhibits for this. Do you have a copy for

9 me to look at?

10 MR. LICHTMAN: Actually, we did. We

11 emailed to you guys all the exhibits that you

12 had.

13 MR. HOUSTON: I didn't get them, so if you

14 do you have a copy, or I can just look over

15 your shoulder? I got --

16 MR. LICHTMAN: You waited until this

17 moment to say that you didn't get an email that

18 you had?

19 MR. HOUSTON: This is the first time you

20 have introduced exhibits. I'm just asking to

21 look over your shoulder. Is that unreasonable?

22 MR. LICHTMAN: Well, I have a work product

23 on it. I'll show you this exhibit first.

24 MR. HOUSTON: Thank you.

25 MR. LICHTMAN: And the record should

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1 reflect that we have an email trail that shows

2 that we sent these exhibits.

3 MR. HOUSTON: Thank you.

4 (Thereupon, the document was

5 marked as Trustee's Exhibit No. 1 for

6 Identification.)

7 BY MR. LICHTMAN:

8 Q I showing you what's been marked as

9 Exhibit 1. It's from you to Pearson with a copy to

10 Boden, dated April 14th, 2009; subject: "G 401."

11 Do you see that?

12 A I do.

13 Q The first sentence is: This is a deal

14 that is pending funding.

15 Do you know what you meant by that?

16 A I was telling them it was a deal I had

17 sent to Levin that was pending funding that they

18 could have.

19 Q The second line says, please redact

20 whatever you think is necessary for our protection.

21 What did you mean by that?

22 A To the best of my recollection, once I

23 realized that Pearson was involved, I was sending

24 unredacted deals, which you have to take a look at

25 the email traffic to be certain; which is one of the

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1 ways I knew he had to have known what was going on.

2 Because you see the plaintiffs' names and you see

3 the defendants' names, it doesn't take a rocket

4 scientist to figure out there is no real people.

5 Q Well, how is that? If you see a name on a

6 document, how is someone supposed to understand that

7 there are no real people involved?

8 A Run the name; they don't exist. The

9 defendant, they don't exist. There is no real

10 connection between the people.

11 Q Were you directing -- you say, please

12 redact. Was that a comment to Pearson or was that a

13 comment to Boden?

14 MR. HOUSTON: Objection.

15 A It was to both of them.

16 BY MR. LICHTMAN:

17 Q Okay.

18 A I wanted them -- they were running their

19 own deals. I wanted them to take off whatever they

20 needed to take off to protect us, don't leave on

21 stuff that is going to hurt us.

22 Q To the best of your recollection, did

23 either party verify the existence of the plaintiff

24 or defendant? Attempt to?

25 A To my knowledge, no.

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1 Q Okay. I am showing you what's being

2 marked as Exhibit 2. It's an email from you to

3 Boden and Pearson. It talks about the questions for

4 New York.

5 (Thereupon, the document was

6 marked as Trustee's Exhibit No. 2 for

7 Identification.)

8 MR. HOUSTON: What is the date of that?

9 MR. LICHTMAN: That's April 17, 2009.

10 BY MR. LICHTMAN:

11 Q There's a sentence that says, these are

12 now ready to go to New York. On the second page is

13 a series of questions and answers, apparently.

14 Are you familiar with this document?

15 MR. HOUSTON: Objection.

16 A I recall seeing it at some point in time.

17 BY MR. LICHTMAN:

18 Q Take a look at the second page.

19 A Okay.

20 Q Do you remember that page?

21 A I remember seeing it.

22 MR. HOUSTON: Objection.

23 BY MR. LICHTMAN:

24 Q Do you know who drafted that?

25 A Mr. Boden and Mr. Pearson.

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1 Q Did Mr. Pearson ask you if he could ever

2 sit with a plaintiff?

3 A He did.

4 Q And what did you tell him?

5 MR. HOUSTON: Objection.

6 A No.

7 BY MR. LICHTMAN:

8 Q Did you -- what did he say when you said

9 no?

10 MR. HOUSTON: Objection.

11 A Why.

12 BY MR. LICHTMAN:

13 Q And then what did you say?

14 MR. HOUSTON: Objection.

15 A Talk to Boden.

16 BY MR. LICHTMAN:

17 Q And that would be the conversation that

18 you referenced earlier?

19 A Yes.

20 Q Did he ever ask to see a hard file of any

21 of these cases?

22 MR. HOUSTON: Objection.

23 A Yes.

24 BY MR. LICHTMAN:

25 Q And what did you say?

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1 A No.

2 MR. HOUSTON: Objection.

3 BY MR. LICHTMAN:

4 Q And what did you say to him after that?

5 MR. HOUSTON: Objection.

6 A Talk to Boden.

7 BY MR. LICHTMAN:

8 Q Okay. Do you know if -- did Pearson talk

9 to you about the questions that are located on page

10 two of this exhibit?

11 MR. HOUSTON: Objection.

12 A No. I remember talking to David about it.

13 I may have actually had some input into some of

14 these answers; but, ultimately, it was compiled by

15 and completed by Mr. Boden.

16 BY MR. LICHTMAN:

17 Q Did you say anything to Mr. Pearson about

18 the answers on this page?

19 MR. HOUSTON: Objection.

20 MR. LICHTMAN: What is that objection?

21 MR. HOUSTON: Hearsay.

22 MR. LICHTMAN: What did he say to him.

23 Okay.

24 A Not that I recall one way or the other.

25

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1 BY MR. LICHTMAN:

2 Q All right. I have a document that is --

3 is authored by a Nabil Rhazi; do you know who he is?

4 A Wait a second. I don't remember whether

5 it was right at this time, but at some point in time

6 I told Pearson -- I don't remember whether it was

7 this script or another script. We were downstairs

8 at Bova. We were both a little tipsy, but I was

9 furious because I had just heard through Boden that

10 Pearson had represented to investors that we had

11 some big four or six, something like that,

12 accounting firm doing audits.

13 And I told Pearson directly, stick to the

14 script, don't -- you don't need that to sell this

15 product, don't do that because we have no way of

16 substantiating it.

17 MR. HOUSTON: Objection and move to

18 strike, nonresponsive.

19 BY MR. LICHTMAN:

20 Q When you say "stay to the script," and the

21 answer that you just gave, it seems as if your

22 memory was jogged. Does that pertain to the second

23 page of Exhibit 2?

24 MR. HOUSTON: Objection.

25 A Yes. I don't know if it is specifically

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1 this page, but it did jog my memory as to the fact

2 that -- what would have been responsive to a number

3 of the questions you had asked me previously is what

4 I just stated, and that is the conversation that I

5 had with Mr. Pearson about sticking to the script

6 and to not exaggerate what was already exaggerated.

7 Q Well, this email says, ready to go to New

8 York. What was New York?

9 MR. HOUSTON: Objection.

10 A There were a couple of different funding

11 sources they were looking at in New York. There was

12 something through Merrill Lynch, some guy named Paul

13 Smith, I think.

14 Again, I don't specifically recall. It

15 was their own little Ponzi scheme, sub-Ponzi. I

16 tried to stay uninvolved, except to guide and to

17 assist, as need be, as little as possible.

18 BY MR. LICHTMAN:

19 Q What was your understanding as to what

20 these questions meant, then? Was that the script?

21 MR. HOUSTON: Objection.

22 A They're due diligence questions that are

23 being asked by an investor.

24 BY MR. LICHTMAN:

25 Q Are those questions that you typically

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1 encountered?

2 A Yes.

3 Q And with respect to the answers, what is

4 the relationship of the answers that are typed here,

5 to the questions?

6 MR. HOUSTON: Objection.

7 A They're the same answers we tried to give

8 consistently to all the investors.

9 BY MR. LICHTMAN:

10 Q Including outside the sub-Ponzi, correct?

11 A Sure. From -- I'm meaning to my prior

12 groups of investors.

13 Q Is there anything that you can see, for

14 instance, in the first question, the answer to the

15 first question, that is true or untrue?

16 MR. HOUSTON: Objection.

17 BY MR. LICHTMAN:

18 Q Strike that.

19 Is there anything that you can see in the

20 answer to the first question there, "who negotiates

21 the purchase discount," that is inaccurate?

22 MR. HOUSTON: Objection.

23 A The whole thing is inaccurate. There's

24 not a plaintiff.

25

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1 BY MR. LICHTMAN:

2 Q And the -- let's jump down to the third

3 question: "Who controls the settlement escrow

4 account?"

5 MR. HOUSTON: Objection.

6 MR. LICHTMAN: And what would that

7 objection be?

8 MR. HOUSTON: Chuck, this entire email is

9 hearsay. I am objecting to the entire email.

10 Anything you ask from that email is hearsay.

11 MR. LICHTMAN: Then I am taking a standing

12 objection on hearsay.

13 MR. HOUSTON: On this email, I'll be glad

14 to do that; but on everything else, I'll assert

15 them separately.

16 BY MR. LICHTMAN:

17 Q As to this question here, "who controls

18 the settlement escrow account," the answer, you see

19 that?

20 A Yes.

21 Q Do you know whether or not that's true or

22 false?

23 A It can't be true. There was no plaintiff.

24 There was no plaintiff trust account. We commingled

25 everything.

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1 Q Boden knew that, right?

2 A Yes.

3 Q Boden, to the best of your recollection,

4 drafted this, right?

5 A To the best of my recollection, yes. I

6 added information or gave them information, but he

7 drafted the document.

8 Q Okay. Okay. Keep going.

9 I was asking you about a Nabil Rhazi; do

10 you know who he is?

11 MR. LICHTMAN: For the record, it's Nabil

12 N-A-B-I-L, last name is R-H-A-Z-I.

13 A He was one of Pearson's salespeople.

14 BY MR. LICHTMAN:

15 Q Did you ever work with -- when you say

16 "salespeople," salespeople doing what, to the best

17 of your knowledge?

18 A Selling Ponzi deals.

19 Q How do you know that?

20 A I watched him do it.

21 Q Who did you see him do it with?

22 A I don't recall who the investors were.

23 They asked me to come down once to Pearson's

24 office -- a couple of times, to answer a couple of

25 quick questions, do a meet-and-greet; and Nabil

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1 Rhazi was there pushing the settlement.

2 Q And to the best of your recollection, is

3 there any tie to Exhibit 2 and to what you observed

4 when you went and saw the potential sale to

5 investors?

6 MR. HOUSTON: Objection.

7 A I don't recall one way or the other.

8 BY MR. LICHTMAN:

9 Q How about in terms of the questions and

10 answers?

11 MR. HOUSTON: Objection.

12 A It was always the same thing over and over

13 again, Mr. Lichtman, so it's not jogging my memory.

14 That was consistent throughout my Ponzi scheme and

15 the sub-Ponzi, with the additions that David and

16 Mr. Pearson kept adding to the thing.

17 BY MR. LICHTMAN:

18 Q Do you know anything about, quote, a gold

19 guy?

20 A A what?

21 Q A gold, capital "G," Gold?

22 A It's not ringing a bell for me.

23 Q All right. Are you aware that there were

24 two accounts opened up at TD Bank regarding Pearson?

25 A Say that again.

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1 Q That there were two accounts opened up at

2 TD Bank regarding the Pearson transactions?

3 A I remember accounts. I don't remember how

4 many that we opened for Pearson transactions.

5 MR. LICHTMAN: I have an email,

6 April 29th, 2009. I'll mark this as Exhibit 3.

7 (Thereupon, the document was

8 marked as Trustee's Exhibit No. 3 for

9 Identification.)

10 BY MR. LICHTMAN:

11 Q Showing you an email dated April 29th,

12 2009, it's from you to Bill Brock at the top and

13 Irene Stay regarding new accounts needed.

14 Do you see that?

15 A I do.

16 Q If you go to the second page, there's a

17 notation. This is on the Bill Brock portion of the

18 email. It says, please open the following trust

19 accounts.

20 It says Richard Pearson signors will be

21 Scott W. Rothstein, David J. Boden, checks to

22 require dual signatures.

23 Do you see that?

24 A I do.

25 Q Do you see underneath it, it says, RL

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1 Pearson signors will be Scott W. Rothstein and

2 Stuart A. Rosenfeldt, checks to require dual

3 signatures?

4 A Yes.

5 Q Okay. Why were there different

6 signatories to the Pearson versus the RL Pearson

7 accounts?

8 MR. HOUSTON: Objection.

9 A I don't recall.

10 BY MR. LICHTMAN:

11 Q Do you know why Rosenfeldt would be on the

12 RL Pearson account at all?

13 MR. HOUSTON: Objection.

14 A I don't remember whether this is one of

15 the deals or was one of the deals where Rosenfeldt

16 actually came in and helped sell the investor. It

17 happened a few times.

18 The whole thing is a little mysterious to

19 me, because, remember, we did wires. This dual

20 signature thing is crazy because we weren't using

21 checks and we weren't using signatures, so it sounds

22 like just more of a scam.

23 Q Well, even if you were doing wires, you

24 would still need an account, wouldn't you?

25 A Oh, no, no, the accounts are real. I'm

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1 just -- the whole "requires dual signature," that

2 sounds like something that was being told to

3 investors as a sales technique because we don't

4 require signatures.

5 Q Could anyone besides yourself or Scott or

6 Stuart execute wire transfers on the RL Pearson

7 account, to the best of your knowledge?

8 A Yes.

9 Q Who?

10 A Irene.

11 Q How do you know that?

12 A She did all the wire transfers.

13 Q So if there was an account that was in

14 RRA's name, she was authorized to execute wire

15 transfers on it, right?

16 A Yes.

17 Q Even if she wasn't a signatory?

18 A Yes.

19 Q Okay. So this doesn't refresh your

20 recollection at all as to why there were different

21 names on the accounts?

22 A It does not.

23 MR. LICHTMAN: Okay. Let me show you what

24 is next marked as Exhibit 4.

25 (Thereupon, the document was

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1 marked as Trustee's Exhibit No. 4 for

2 Identification.).

3 BY MR. LICHTMAN:

4 Q This is an email from you to Pearson and

5 Boden, dated April 24, 2009. Do you see that?

6 A I do.

7 Q Can you identify it?

8 A Yes. These are the deals I created.

9 Q When you say "created," what do you mean?

10 A Made them up.

11 Q So there were no -- obviously there were

12 no plaintiffs in these deals, right?

13 A No plaintiffs, no defendants, no money.

14 Q Did you --

15 A Other than stolen money.

16 Q How did you come up with the numbers?

17 A I made them up, based upon how much money

18 we needed in house.

19 Q Did you have any discussions, to the best

20 of your recollection, with Boden regarding how you

21 formulated this exhibit?

22 MR. HOUSTON: Objection.

23 A No.

24 BY MR. LICHTMAN:

25 Q Take a look at the second page.

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1 A Got it.

2 Q You see a transaction there starting with

3 "fund 890K"?

4 A I do.

5 Q What did that mean?

6 A It means fund $890,000.

7 Q What does the "ROI 400K" mean?

8 A That means that's their return on

9 investment, $400,000.

10 Q And what was the time -- and when it says

11 "pay over five months," what does that mean?

12 A That means that they're going to get equal

13 payments over five months.

14 Q In terms of how you operated the Ponzi,

15 what was the relevance to putting out into the

16 marketplace in a deal on April 24th that you wanted

17 to fund under those terms?

18 A It reflected amounts of money that I

19 needed at the time.

20 We were starved for cash at this time, and

21 I put as many deals out as I possibly could hoping

22 they would grab any of them.

23 Q Now, in terms of trying to sell these

24 deals, what was it that the investor was being told

25 in terms of, for instance, this deal: Fund 890,000

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1 ROI 400K, paid over five months.

2 MR. HOUSTON: Objection.

3 A Boden and Pearson were selling it. I

4 wasn't involved in the sale.

5 BY MR. LICHTMAN:

6 Q Had you been selling it yourself to a

7 typical investor, what is it that the investor

8 themself would have been told?

9 MR. HOUSTON: Objection.

10 A We would have come up with what we call

11 the "magic number," how much the total case was

12 selling for. We would have explained what type of

13 case it was.

14 As you can see, we made it up as we went

15 along. None of these say sexual harassment, whistle

16 blower, other employment. We kept it as vague so we

17 could create it as we went.

18 We would sell the entire deal. You're

19 talking about a fairly detailed process of

20 explaining this is how much money the plaintiff is

21 willing to take, that she is willing to take a

22 $400,000 discount. Paid the money back from the

23 defendant. We had already funded the money into our

24 account over five months.

25 Q You understand I'm making a record now?

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1 A I do.

2 Q Okay. So with respect to --

3 A I didn't think you had lost your mind.

4 Q I may have, but that's a different issue.

5 With respect to an investor, then, when an

6 investor was going to be getting into a deal, using

7 this one as an example, 809K, what does that tell

8 that you the investor had expected about that

9 figure, from your experience?

10 MR. HOUSTON: Objection.

11 A That the investor would have to wire

12 $890,000 to us, to a specific account, usually 0923,

13 and that the investor could expect to get his or her

14 890K plus $400,000 out to them over five months?

15 BY MR. LICHTMAN:

16 Q And the investor would have affected this

17 transaction with an understanding there was a

18 legitimate plaintiff and putative defendant?

19 A Yes.

20 MR. HOUSTON: Objection.

21 A Unless it was a -- not an innocent

22 investor and all of -- to my recollection, all the

23 Pearson and Boden's investors were all innocent

24 investors -- they were told a whole myriad of lies

25 to get them to invest. That's how you got them to

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1 invest, including the things that I told you a

2 moment ago when my memory was jogged, that Pearson

3 had created, I guess, to add impetus to the sale,

4 that we were being audited by big 4 accounting

5 firms.

6 He also told investors, by the way, that

7 he had 24-hour access to our online banking.

8 Q How do you know that?

9 A Because I saw it in an email traffic.

10 Q Did he talk to you about that, also?

11 MR. HOUSTON: Objection.

12 A I don't recall whether he did or David

13 did.

14 BY MR. LICHTMAN:

15 Q What was the shelf life when you had one

16 of these deals out there, you know, in terms of how

17 long you perceived it being good for?

18 MR. HOUSTON: Objection.

19 A Well, that's one of the interesting

20 things. It's one of the, quote, unquote, tells, as

21 to it whether this is real or not.

22 I sent an email out saying immediate

23 funding, and then some of these things get funded

24 months down the road. So from my perspective, the

25 deals were always open because I would take money

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1 from any source.

2 MR. LICHTMAN: I'm going to show you

3 what's next marked as Exhibit 5.

4 (Thereupon, the document was

5 marked as Trustee's Exhibit No. 5 for

6 Identification.)

7 BY MR. LICHTMAN:

8 Q Keep that one open to that page that I

9 showed you.

10 A Okay. Got it.

11 Q This is an email from Richard Pearson to

12 you and Boden dated April 30, 2009. Do you recall

13 this document?

14 MR. HOUSTON: Objection,

15 mischaracterization of the exhibit.

16 A Yes.

17 BY MR. LICHTMAN:

18 Q What is your understanding of what this

19 document is?

20 MR. HOUSTON: Objection.

21 A It's a calculation that either Pearson or

22 Boden did on percentages. It was sample deals that

23 he was -- they were putting together.

24 BY MR. LICHTMAN:

25 Q So these were not deals you were putting

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1 together?

2 A No, sir.

3 Q Was it customary, when you put deals out

4 to -- whether it was Szafranski or anybody else,

5 that you would put percentages next to the offer.

6 You'll see like subsection one down at the bottom of

7 the page.

8 MR. HOUSTON: Objection.

9 BY MR. LICHTMAN:

10 Q It say 4M, seven months, 2.95 M,

11 36 percent?

12 A I never did that.

13 Q That wasn't part of your practice as you

14 affected the Ponzi scheme, right?

15 A These must be deals that were created by

16 Boden and Pearson sent to me. They were making

17 these up. This is not my deals. Unless you can

18 show me email traffic showing that this came to me,

19 it looks like they created it and sent it to me for

20 my approval.

21 Q The emails from Pearson to you and Boden,

22 do you notice that?

23 A Yes.

24 MR. LICHTMAN: Okay. Now I'm a going to

25 show you Exhibit 6.

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1 (Thereupon, the document was

2 marked as Trustee's Exhibit No. 6 for

3 Identification.).

4 BY MR. LICHTMAN:

5 Q Exhibit 6 is from Boden to you with a copy

6 to Mr. Pearson, July 6, 2009. Do you see that?

7 A I do.

8 Q Okay. The top portion of the email says,

9 deal number five below was sold as follows: fund

10 990K, ROI 300K, fee 100K.

11 Do you see that?

12 A I do.

13 Q Now, if you look at page -- they're not

14 numbered, but it's the third page in.

15 A I'm there.

16 Q It says, fund 890K, ROI 400K.

17 Do you have any understanding what the

18 difference between numbers is that is at the top as

19 to how the deal was sold and the deal, as it was

20 initially portrayed on the April 24th memo that is

21 incorporated as deal five?

22 MR. HOUSTON: Objection.

23 A I do.

24 BY MR. LICHTMAN:

25 Q What is your understanding?

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1 A This is the whole scheme that Boden and

2 Pearson came up with to steal additional money from

3 the innocent investors.

4 And this takes it to a completely new

5 level, by the way, because they not only were

6 bumping the funding, but they were reducing the

7 return on investment in these deals.

8 Q And how do you know that?

9 A Then they were instructing me how to paper

10 it, or instructing someone how to paper it; and it

11 looks like telling someone that there was going to

12 be a letter to Pearson giving him 110,000.

13 Q And how do you know that?

14 A Because this is the way that they wrote it

15 to me.

16 Q Did you have discussions with Boden about

17 this?

18 MR. HOUSTON: Objection.

19 A Early on, when they first started doing

20 it -- I don't remember if this is when they first

21 started doing it. Early on, I had a concern with

22 Boden. I sat down and talked to him and said, you

23 know you're taking an additional risk in doing

24 this -- when I realized what they were doing -- I

25 said, because you're changing the terms of the deal.

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1 BY MR. LICHTMAN:

2 Q And why would that be additional risk?

3 A Because it created other red flags if

4 people were looking through paperwork.

5 You have got to remember something: It's

6 by even sending me this email -- not that we were

7 bashful about sending emails, but we tried to be

8 careful -- we're taking -- I'm sending him deals

9 that purportedly really exist; and then he's

10 changing the entire term of the deal.

11 Now, it's one thing -- take it step one --

12 he changes the funding amount. Okay. Well, someone

13 could make the argument: Well, he's just bumping it

14 so he could create a greater commission, you know.

15 But then he is reducing the amount of

16 money that is going to the plaintiff. Well, if it

17 was a real plaintiff, what plaintiff in their right

18 mind -- now the plaintiff is giving up their money,

19 too, when you know you don't have a plaintiff.

20 And the other question that I said, I

21 said, who is talking to this plaintiff to negotiate.

22 You'll see that there is email traffic

23 from Mr. Boden to various investors and the like,

24 where he actually says, stand by, I'm negotiating

25 terms with the plaintiff.

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1 MR. HOUSTON: Objection, motion to strike.

2 BY MR. LICHTMAN:

3 Q Okay. So that -- oh, what did Mr. Boden

4 say to you in response?

5 MR. HOUSTON: Objection.

6 A That he's got it under control, and he

7 did. I mean, his deals -- Mr. Lichtman, his deals

8 and Pearson's deals went through nice and smooth.

9 BY MR. LICHTMAN:

10 Q Did you discuss this with Pearson, as

11 well?

12 MR. HOUSTON: Objection.

13 A The only conversations that I remember

14 having with Pearson was basically scolding him --

15 BY MR. LICHTMAN:

16 Q About this issue.

17 A Not this -- about this issue, no.

18 Q Okay. Did you discuss with Boden what it

19 meant on the third page in?

20 A No, that's not true. That is not

21 accurate.

22 There was a time when he was -- he started

23 changing the deals even more, and I said to him, I

24 said --

25 Q You said to who?

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1 A To Pearson.

2 I have told him, why don't you just

3 increase your finder's fee instead of screwing

4 around with the deal terms; and they -- again, it

5 was basically, we've got it under control.

6 Q Is that what he said, as well? Pearson

7 said, we have it under control?

8 MR. HOUSTON: Objection.

9 A Not using those exact words, but we have

10 got it, we're good.

11 BY MR. LICHTMAN:

12 Q All right. It says on page three, letter

13 to RLP, 110K.

14 What did you understand that to mean?

15 MR. HOUSTON: Objection.

16 A That there would be a plaintiff's finder's

17 fee letter; but I wasn't creating those letters, so

18 I guess that's just the way they notated how much

19 Pearson would be getting.

20 BY MR. LICHTMAN:

21 Q How did you come to learn that?

22 MR. HOUSTON: Objection.

23 A I discovered it in an email. I hadn't

24 seen that letter. I ran across it accidentally.

25 First I ran across the email saying that I think

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1 $45,000 or some amount of money was going to Boden,

2 and I confronted Boden about it. Not that I cared,

3 I just wanted to know if he was getting additional

4 money from someplace. I kind of always had the

5 feeling he was.

6 And then, you have got to remember, if you

7 look at this, it's from David Boden to David Boden

8 and to Scott Rothstein. These are their deals that

9 they're papering. By July 6, 2009, they were doing

10 all their own paper with Deb.

11 Q You note that it also a copies

12 Mr. Pearson?

13 MR. HOUSTON: Objection.

14 A Yes.

15 So this letter to RLP is not something I'm

16 creating for him. It's something that they

17 completely came up with, that whole fake plaintiff

18 letter thing, and that they worked out with Deb. I

19 wasn't involved in that.

20 BY MR. LICHTMAN:

21 Q I want to make sure I understand what you

22 are telling me.

23 So if they are reducing the return on

24 investment, what they're basically saying is that

25 somehow they changed the terms of what the putative

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1 plaintiff was going to take, correct?

2 A Yes, if you're assuming that the deal was

3 real --

4 Q Okay.

5 A -- that the plaintiff has agreed to give

6 up even more money.

7 Q Now, you have Exhibit 4 before you?

8 A I do.

9 Q Okay. Keep it back to where it was

10 folded.

11 A Yes, sir.

12 Q We looked at that deal before, fund

13 890,000?

14 A Yes, sir.

15 Q The return of 400,000?

16 A Yes, sir.

17 Q You see that the deal that is marked there

18 as allegedly existing is a deal on April 24th, 2009,

19 that that first deal of 890,000 and each of the next

20 three underneath it are the identical deals that

21 comprise deal five that was being sold in July 6th,

22 2009?

23 MR. HOUSTON: Objection.

24 A That's correct.

25 BY MR. LICHTMAN:

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1 Q If these were real deals, in fact, then

2 they would have been opened around April 24th and

3 closed shortly thereafter, correct?

4 A Yes. They should have, actually, almost

5 been done being paid for.

6 Q Yet here you are in July 6th, 2009, and

7 Pearson and Boden are selling the identical deals

8 from two-and-a-half months earlier?

9 A Yes, but when you're running a fraudulent

10 investment scheme, "immediate" means whenever you

11 can get the money.

12 Q Did you have any discussions with Boden or

13 Pearson about the fact that they were selling the

14 same deals now that you had offered two-and-a-half

15 months earlier?

16 MR. HOUSTON: Objection.

17 A No. I did not. I couldn't have cared

18 less.

19 BY MR. LICHTMAN:

20 Q You acknowledge that they're the same

21 deals?

22 MR. HOUSTON: Objection.

23 A Yes, they are.

24 BY MR. LICHTMAN:

25 Q Now, keep that document open right to

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1 where you have it.

2 A Okay.

3 Q One second.

4 Showing you Exhibit 7, it's an email from

5 Boden to Boden and yourself dated July 22, 2009.

6 That's at the top entry.

7 (Thereupon, the document was

8 marked as Trustee's Exhibit No. 7 for

9 Identification.).

10 A Yes.

11 BY MR. LICHTMAN:

12 Q There's some other emails that predate

13 that, as well.

14 A Okay.

15 Q Do you recall this document?

16 A Yes.

17 Q Okay. You'll see that at the top of the

18 email, it says it is deal five below.

19 You see that?

20 A I do.

21 Q You have Exhibit 4 in front of you?

22 A I do.

23 Q You still have that page open?

24 A I do.

25 Q Do you see that -- is that the same deal

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1 five that was offered before?

2 MR. HOUSTON: Objection.

3 A Yes.

4 BY MR. LICHTMAN:

5 Q Okay. You see Exhibit 6, it talks about

6 deal five?

7 A Yes.

8 Q Those numbers are the same as between deal

9 four -- excuse me, document four -- Exhibit 4 and

10 Exhibit 6, right?

11 MR. HOUSTON: Objection.

12 A That's correct.

13 BY MR. LICHTMAN:

14 Q Now, you see in Exhibit 7, it says: Deal

15 was funded to 990,000.

16 A Correct.

17 MR. HOUSTON: Objection.

18 BY MR. LICHTMAN:

19 Q Is your understanding of what the 100,000

20 is there --

21 MR. HOUSTON: Objection.

22 BY MR. LICHTMAN:

23 Q -- the 100,000 difference?

24 A Money that Pearson and Boden were stealing

25 from the investment.

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1 Q How do you know that?

2 A Because they tell the -- I'm preparing the

3 deal at 890.

4 If this was a real deal, they are then

5 lying to their investor and saying the deal needs to

6 be funded at 990.

7 At the same time, if this was a real

8 plaintiff, they would have contacted the plaintiff

9 and negotiated the plaintiff to give up money on the

10 other side on the ROI.

11 Q Of course, that couldn't happen because

12 there was no real plaintiff?

13 A That's correct.

14 Q Do you know who Marcelo is?

15 A I do.

16 Q Who is Marcelo?

17 A He was one of the Argentinean fellows that

18 they were doing business with.

19 Q So the same deal that you had offered up

20 on April 24th was then resold, again, pursuant to

21 Exhibit 6, on July 6, correct?

22 MR. HOUSTON: Objection.

23 A Yes.

24 BY MR. LICHTMAN:

25 Q And then it was resold a second time on

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1 July 22nd as represented by Exhibit 7, correct?

2 MR. HOUSTON: Objection.

3 A I'd have to see the deal paperwork to make

4 certain; but, yes, that's what it certainly appears

5 to be.

6 BY MR. LICHTMAN:

7 Q Okay. You'll see that pages starting --

8 go to page four of Exhibit 7.

9 A Yes, sir.

10 Q That's a cut-and-paste or a copy of the

11 contents of Exhibit 4, correct?

12 A Yes.

13 MR. HOUSTON: Objection.

14 BY MR. LICHTMAN:

15 Q Including, if you go to the third to last

16 page --

17 A Yes, sir.

18 Q -- that's the same language that we showed

19 you before as to Exhibit 4, correct?

20 MR. HOUSTON: Objection.

21 A That's correct. It's exactly the same.

22 BY MR. LICHTMAN:

23 Q Okay. Put those away.

24 I'm going back in time a little bit now,

25 and I'm going to do this -- I got still a lot of

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1 stuff I need to cover.

2 On May 6, 2009, you indicated to Boden

3 that you were -- in an email to him -- tired of

4 Rich's promises that never seem to happen, and you

5 say he's starting off just as the hedge-fund guys

6 ended: Leaving me in a very bad position with

7 client.

8 A Yes.

9 Q Do you have --

10 MR. HOUSTON: Objection.

11 BY MR. LICHTMAN:

12 Q Did you have issues with Richard Pearson

13 around May 6th?

14 A I remember having continuing issues with

15 Pearson.

16 He really loved the deals. He was making

17 a lot of money. He wanted to take deals, but he

18 would promise funding and then not deliver.

19 Q What did you mean when you wrote: He is

20 starting off just as the hedge-fund guys ended,

21 leaving me in a very bad position with clients?

22 MR. HOUSTON: Objection.

23 A That what the hedge funds did was they

24 kept telling me they were going to fund and then it

25 never funded.

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1 The client thing is just nonsense because

2 there are no clients. That was the impetus I always

3 used with everybody.

4 BY MR. LICHTMAN:

5 Q When you say -- you also wrote: Let's

6 talk about the bank issue. I learned something late

7 night that gives me pause.

8 Do you know what you meant there?

9 MR. HOUSTON: Objection.

10 A I don't recall.

11 MR. LICHTMAN: You know, I'm just for the

12 sake of it, going to try to get as many of

13 these marked as exhibits and deal with the time

14 problem.

15 I'm going to mark this as Exhibit 8.

16 (Thereupon, the document was

17 marked as Trustee's Exhibit 8 for

18 Identification.).

19 MR. FERGUSON: Chuck, is that the email

20 you were just using, the July 6th email?

21 MR. LICHTMAN: Yeah.

22 MR. NURIK: If you want to mark the whole

23 thing as a composite and put it in front of

24 him...

25 MR. LICHTMAN: Pardon?

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1 MR. NURIK: If you want to mark the whole

2 thing as a composite, he may be able to take a

3 look at it and speed it up for you.

4 BY MR. LICHTMAN:

5 Q Ask you to take a look at that last

6 sentence: Let's talk about this bank issue.

7 Does that refresh your recollection?

8 MR. HOUSTON: Objection.

9 A I would be guessing. I don't want to

10 guess, Mr. Lichtman.

11 BY MR. LICHTMAN:

12 Q Okay. Nor do I want you to.

13 A Got it.

14 Q Showing you Exhibit 9, it's an email from

15 you to Boden dated May 13th, 2009, and it

16 incorporates an email down below from Boden to you

17 and to himself.

18 (Thereupon, the document was

19 marked as Trustee's Exhibit No. 9 for

20 Identification.).

21 BY MR. LICHTMAN:

22 Q You see that bottom portion?

23 A I do.

24 Q It says: Here are the questions and my

25 answers.

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1 I'd ask you to take a look at this

2 document, if you would.

3 A I remember this.

4 Q What is it you recall about the document?

5 MR. HOUSTON: Objection.

6 MR. LICHTMAN: Hearsay, I assume?

7 MR. HOUSTON: Obviously.

8 MR. LICHTMAN: All right.

9 A It's questions from investors that Boden

10 and Pearson were working with, Armoyan Verege and

11 Barry Ward.

12 I don't know if Barry was a lawyer

13 involved with Verege or what it was, because he was

14 involved with Verege.

15 Q If you would take a look at the fourth

16 page in --

17 A Yes, sir.

18 Q -- the dotted line across the top of it,

19 and then there's questions with answers.

20 A Yes.

21 Q Do you know who drafted that?

22 A It would have been either David or -- no,

23 it would have to be either David Pearson, Ward, or

24 Armoyan. It wasn't me.

25 Q Take a look at page three.

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1 A It looks -- actually, I'm reading it.

2 It looks like David responding to someone

3 else's questions.

4 Q Take a look at page three.

5 A Yes, sir.

6 Q There's an email from Barry Ward. Do you

7 know who Barry Ward is?

8 A He was associated with Verege. I don't

9 remember whether he was an investment counsel or a

10 part of his investment or his lawyer, but he was

11 involved with him.

12 Q All right. As you take a look through

13 that portion, through the email, does that give you

14 any -- does that refresh your recollection?

15 A Yes, he was --

16 MR. HOUSTON: Objection.

17 A Yes. It's the guy who was assisting

18 Verege Armoyan with due diligence.

19 BY MR. LICHTMAN:

20 Q And who is Armoyan?

21 A Armoyan was a large investor that Pearson

22 brought to the table.

23 Q You had some issues with Armoyan, didn't

24 you, some problems with Armoyan?

25 A I did.

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1 Q What were those problems that you had, if

2 you can recall?

3 A Out of all the people that Pearson brought

4 to the table, he was the most voracious with regard

5 to due diligence.

6 And, ultimately, Boden got me in a trick

7 box with him where I ended up having to provide this

8 guy with mortgages on properties I owned, all kinds

9 of stuff. I was starving for the funds for the

10 Ponzi scheme, so I was willing to give him anything

11 and everything to get the guy to fund.

12 Q Okay.

13 A It was always something else. I mean,

14 Boden was constantly drafting and redrafting

15 documents.

16 Q How did it come to pass, then, that you

17 agreed?

18 It was a mortgage on one of the properties

19 on Castilla Isle, wasn't it?

20 A I thought it was my empty property across

21 from Isla Bahia, from third. I think was the big

22 empty lot on the water. I could be mistaken.

23 Q How did it come to pass that he understood

24 that you had properties to possibly mortgage; do you

25 know?

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1 A Boden told him, and then I confirmed it,

2 and they did all kinds of title searches.

3 Q What role did Pearson have in you

4 providing that mortgage, if any?

5 A Just asking me to do it.

6 Q And you did it because you needed to get

7 the money in?

8 A I needed the money.

9 Pearson was also telling me that he was

10 investing in this deal. So there would have been

11 additional capital, but I don't recall him investing

12 in it.

13 Q Do you recall if Pearson invested in any

14 of the deals.

15 A As I sit here today, I have no knowledge

16 of him ever actually putting a penny into the deals.

17 Q Did he tell you that he did?

18 A Yes.

19 MR. HOUSTON: Objection.

20 BY MR. LICHTMAN:

21 Q Did Boden tell you that Pearson had

22 invested?

23 MR. HOUSTON: Objection.

24 A I don't remember whether he told me he did

25 or didn't.

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1 Pearson kept telling me he was going to

2 invest, that he was putting money in with other

3 investors; but, again, as I sit here today, I

4 haven't seen any proof of him investing one penny.

5 Q Did Boden ever invest in any of your

6 deals?

7 A To my knowledge, no, sir.

8 Q Did you ever ask him to?

9 A No. I -- I don't recall ever asking Boden

10 to invest.

11 Q Did he ever ask to?

12 A I don't recall him ever asking me to

13 invest.

14 MR. LICHTMAN: Showing you Exhibit 10 --

15 we're going to take a two-minute break so they

16 can switch court reporters.

17 (Thereupon, a recess was taken.)

18 - - - - -

19

20

21

22

23

24

25

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1 C E R T I F I C A T E

2

3 THE STATE OF FLORIDA, ) COUNTY OF BROWARD. )

4

5 I, Michele L. Savoy, Shorthand Reporter do

6 hereby certify that I was authorized to and did

7 report the foregoing proceedings and that the

8 transcript is a true record.

9 Dated this 23rd day of December, 2011.

10

11 ______________________________

12 Michele L. Savoy, RPR Notary Public - State of Florida

13 My Commission No. EE 113173 Expires August 6, 2015

14

15

16

17

18

19

20

21

22

23

24

25

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1 C E R T I F I C A T E

2 THE STATE OF FLORIDA, ) COUNTY OF BROWARD. )

3

4 I, Michele L. Savoy, Shorthand Reporter, do

5 hereby certify that I was authorized to and did

6 report said deposition in stenotype; and that the

7 foregoing pages, numbered from 1 to 106, inclusive,

8 are a true and correct transcription of my shorthand

9 notes of said deposition.

10 I further certify that I am not an attorney or

11 counsel of any of the parties, nor am I a relative

12 or employee of any attorney or counsel or party

13 connected with the action, nor am I financially

14 interested in the action.

15 The foregoing certification of this transcript

16 does not apply to any reproduction of the same by

17 any means unless under the direct control and/or

18 direction of the certifying reporter.

19 Dated this 23rd day of December, 2011.

20

21 ___________________________________

22 Michele L. Savoy, RPR Notary Public - State of Florida

23 My Commission No. EE 113173 Expires August 6, 2015

24

25

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6:8bob 40:20,21boca 4:11boden 9:22,23 10:8

10:14 15:18 20:1025:10 26:2,4 27:627:10 28:15 29:1229:13,14 31:1,8,931:23 32:19 33:1334:9 35:1 36:5,1336:19,21,21 37:337:24 38:1,240:11 41:2,9,2342:17,25 43:12,1543:18,24 44:2,1044:21,23 45:8,946:4,17 47:21,2248:4,12,22 49:2553:11,14,23 54:955:3,8,9,23 57:857:18 58:13,1959:9 60:8,12,1362:22 64:10 65:1366:3,25 67:1568:6,15 69:9 73:173:3 75:21 78:578:20 80:3 83:1283:22 84:16,2185:5 86:1,16,2287:23 88:3,1890:1,2,7,7 92:7,1293:5,5 94:24 97:299:15,16 100:9102:6,14 103:1,21104:5,9

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box 102:7brayer 42:12break 104:15brevitys 10:2brickell 5:14 6:12

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mark 3:15 5:6 63:675:6 98:15,2299:1

marked 62:17 64:564:8 66:2,6 75:877:24 78:1 83:3,585:2 91:17 93:898:13,17 99:19

market 22:15 23:6marketplace 79:16mary 5:20master 29:18material 58:4materials 44:23matter 19:5 56:3matters 11:14matthew 5:20mean 14:25 15:12

15:25 20:21 24:1128:23 34:11 37:437:4 39:13 43:444:10 46:10 50:1456:20 64:21 78:979:5,7,11 88:789:14 97:19102:13

meaning 33:6 37:2538:14 62:22 71:11

means 10:11 49:2049:24 79:6,8,1292:10 106:17

meant 33:23 61:164:15 70:20 88:1998:8

mechanics 57:19meet 10:8 27:4

58:10 60:23meetandgreet

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michele 1:23 105:5105:12 106:4,22

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mills 4:18mind 54:14 81:3

87:18mine 10:10minimally 57:15minuscule 57:13minutes 9:17 44:9mischaracterizati...

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95:19office 2:3 6:7 24:16

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82:7op 30:4,4open 16:12 20:25

20:25 23:19 75:1882:25 83:8 92:2593:23

opened 74:24 75:175:4 92:2

operated 79:14

operating 56:14,17operation 56:11operations 45:23,25opm 29:18opposed 11:18order 53:10organizedcrime

14:20original 50:8,17originally 17:20

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66:20 68:9,1869:23 70:1 75:1678:25 83:8 84:785:13,14 88:1989:12 93:23 96:896:16 100:16,25101:4

pages 96:7 106:7paid 11:24 21:25

22:17 36:1,6 80:180:22 92:5

paper 86:9,10 90:10papered 26:14 50:5papering 36:22

50:13 90:9paperwork 18:12

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20:20particular 53:10parties 106:11partners 3:1parts 13:13party 65:23 106:12partying 21:3paskert 4:18pass 102:16,23

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patricia 41:6,15paul 4:17 70:12pause 98:7pay 21:4 52:5 59:16

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