2011-12-20 Rothstein Scott AM

IN THE CIRCUIT COURT OF THE 17TH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA Case No.
09-062943 (07) _____________________________________________________ RAZORBACK FUNDING, LLC, et al., Plaintiffs, vs. SCOTT W. ROTHSTEIN, et al., Defendants. ____________________________________________________
DAY 7 - MORNING SESSION DEPOSITION OF SCOTT W. ROTHSTEIN
DATE TAKEN: TIME: PLACE:
December 20, 2011 8:36 a.m. - 12:05 p.m. 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
United Reporting, Inc. (954) 525- 2221
Page 1724 1 2 3 4 5 6 7 8 9 10 11 12 vs. 13 14 15 16 17 18 19 20 21 22 23 24 25 11-02604-RBR Stettin v. Maple Leaf Drilling Partners, et al 11-02605-RBR Stettin v. Don King Productions, Inc. United Reporting, Inc. (954) 525- 2221 10-03802-RBR Stettin v. Centurion Structured Growth, LLC, et al 11-02368-RBR Stettin v. TD Bank, N.A. 11-02288-RBR Stettin v. Fidelity Charitable Gift Fund 11-02473-RBR Stettin v. Regent Capital Partners, LLC, et al SCOTT W. ROTHSTEIN, TD BANK, N.A. and GIBRALTAR PRIVATE BANK AND TRUST COMPANY, Defendants. _____________________________________________________ 10-03767-RBR Stettin v. Gibraltar Private Bank & Trust Co. vs. SCOTT W. ROTHSTEIN, et al., Defendants. _____________________________________________________ Case No. 11-CV-61688-JIC/LSS AMY ADAMS, et. al, Plaintiffs, EDWARD J. MORSE and CAROL A. MORSE, and MORSE OPERATIONS, INC. Plaintiffs, IN THE CIRCUIT COURT OF THE 17TH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA ____________________________________________________ Case No. 10-24110 CACE(19)
Page 1725 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 GOLDSTEIN, TANEN & TRENCH, P.A. One Biscayne Tower, Suite 3700 Two South Biscayne Boulevard Miami, Florida 33131 By: SUSAN E. TRENCH, ESQUIRE By: SUSAN E. TRENCH, ESQUIRE United Reporting, Inc. (954) 525- 2221 BERGER SINGERMAN 350 East Las Olas Boulevard Suite 1000 Fort Lauderdale, Florida 33301 BY: CHARLES H. LICHTMAN,, ESQUIRE and GENOVESE, JOBLOVE & BATTISTA, P.A. 100 S.E. 2nd Street Suite 4400 Miami, Florida 33131 By: JOHN. H. GENOVESE, ESQUIRE DAVID C. CIMO, ESQUIRE THERESA M.B. VAN VLIET, ESQUIRE JESUS SUAREZ, ESQUIRE APPEARANCES FOR RAZORBACK: CONRAD & SCHERER, LLP 633 South Federal Highway Eighth Floor Fort Lauderdale, Florida 33302 By: WILLIAM R. SCHERER, ESQUIRE ERIC RAYMAN, ESQUIRE IVAN J. KOPAS, ESQUIRE and KOZYAK, TROPIN & THROCKMORTON, P.A. 2525 Ponce de Leon Boulevard Ninth Floor Coral Gables, Florida 33134 By: HARLEY S. TROPIN, ESQUIRE APPEARANCES FOR PLATINUM PARTNERS VALUE ARBITRAGE CENTURION STRUCTURED GROWTH, LLC: APPEARANCES FOR SCOTT ROTHSTEIN: LAW OFFICE OF MARC S. NURIK 1 East Broward Boulevard Suite 700 Fort Lauderdale, Florida 33301 BY: MARC S. NURIK, ESQUIRE APPEARANCES FOR THE CHAPTER 11 TRUSTEE, HERBERT STETTIN:
Page 1726 1 2 3 4 5 6 7 8 9 APPEARANCES FOR TD BANK: 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 GREENBERG TRAURIG, P.A. 401 E Las Olas Blvd Ste 2000 Fort Lauderdale, Florida 33301 By: HOLLY SKOLNICK, ESQUIRE DONNA EVANS, ESQUIRE MARK SCHNAPP, ESQUIRE APPEARANCES FOR RLI ZURICH INSURANCE COMPANY, COLUMBIA INC. & ZURICH INSURANCE: CLAUSIN MILLER One Chase Manhattan Plaza 39th Floor New York, New York 10005 BY: SCOTT L. SCHMOOKLER, ESQUIRE APPEARANCES FOR FEDERAL INSURANCE COMPANY: ALEX HOFRICHTER, P.A 1430 South Dixie Highway Suite 204 Coral Gables, Florida 331463127 By: ALEX HOFRICHTER, ESQUIRE APPEARANCES FOR MORSE: TRIPP SCOTT, P.A. 110 S.E. Sixth Street,15th Floor Fort Lauderdale, Florida 33301 By: GEORGE WALKER, ESQUIRE JOHN M. MULLIN, ESQUIRE AKERMAN, SENTERFITT One Southeast Third Avenue 25th Floor Miami, Florida 33131-1704 By: MICHAEL GOLDBERG, ESQUIRE APPEARANCES FOR LEVINSON'S JEWELERS: KOPELOWITZ OSTROW FERGUSON WEISELBERG KEECHL 200 SW 1st Ave Suite 1200 Fort Lauderdale, Florida 333012073 BY: JAN ATLAS, ESQUIRE APPEARANCES FOR THE COMMITTEE OF UNSECURED CREDITORS:
Page 1727 1 2 3 4 5 6 7 8 APPEARANCES FOR ST. PAUL FIRE & MARINE: 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MILLS PASKERT DIVERS P.A. 100 N Tampa St Ste 2010 Tampa, Florida 336025145 BY: JOHN A. BLACK, JR., ESQUIRE APPEARANCES FOR ROSANNE CARETSKY: Billing Cochran Lyles 515 E Las Olas Blvd Floor Six Fort Lauderdale, Florida 333012296 By: DAN GELBER, ESQUIRE APPEARANCES FOR PLATINUM & CENTURION: HARVEY WERBLOWSKY, ESQUIRE and CURTIS, MALLET-PREVOST, COLT & MOSLE, LLP 101 Park Avenue New York, NY 10178-0061 By: GABRIEL HERTZBERG, ESQUIRE ELIOT LAUER, ESQUIRE APPEARANCES FOR FEPICT, MS GROUP: NYSTROM, BECKMAN & PARIS One Marina Park Dr., 15th Flr. Boston, MA 02210 By: JACK SEIGAL, ESQUIRE APPEARANCES FOR EMESS CAPITAL, LLC: KLUGER KAPLAN SILVERMAN, KATZEN & LEVINE, PL 201 S Biscayne Blvd Fl 17 Miami, Florida 331314 BY: CASEY H. CUSICK, ESQUIRE LAW OFFICES OF ROBERTA DEUTSCH 2499 Glades Road Suite 110 Boca Raton, Floridan 33431 By: ROBERTA M. DEUTSCH, ESQUIRE APPEARANCES FOR CAROL MORSE, TED MORSE & MORSE OPERATIONS:
Page 1728 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 KOPELOWITZ OSTROW 200 SW 1st Ave Ste 1200 Fort Lauderdale, Florida 33301 By: BART A. HOUSTON, ESQUIRE APPEARANCES FOR THE US GOVERNMENT: 99 N.E. 4th Street Miami, Florida 33132 BY: LAWRENCE LAVECCHIO, ESQUIRE APPEARANCES FOR FRANK SPINOSA: SCHLESINGER AND COTZEN, P.L. 799 Brickell Plz Ste 700 Miami, Florida 33131 BY: MICHAEL J. SCHLESINGER, ESQUIRE and MICHAEL COTZEN, ESQUIRE and SAMUEL J. RABIN, ESQUIRE 799 Brickell Plaza Suite 606 Miami, Florida 33131 APPEARANCES FOR MICHAEL SZAFRANKSI: LYDECKER, DIAZ 1221 Brickell Avenue Floor 19 Miami, Florida 33131 BY: CHRISTOPHER G. BERGA, ESQUIRE MIGUEL J. CHAMORRO, ESQUIRE APPEARANCES FOR GIBRALTAR: STEARNS WEAVER MILLER, et al. 150 W Flagler St Ste 2200 Miami, Florida 331301545 BY: MARY BARZEE-FLORES, ESQ. MATTHEW DATES, ESQUIRE APPEARANCES FOR FRANK PREVE: PODHURST ORSEK 25 W Flagler St Ste 800 Miami, Florida 331301720 BY: RAMON A. RASCO, ESQUIRE APPEARANCES FOR LEVINSON PEARSON & ASSOCIATES, WATCH U-WANT, INC.:
Page 1729 1 2 3 DIRECT 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 NO. 227 228 229 NO. 224 225 226 PLATINUM and CENTURION'S EXHIBIT INDEX DESCRIPTION PAGE NO Adversary Complaint Adversary Complaint Email String 1784 1790 1802 NO. 223 CARETSKY'S EXHIBIT INDEX DESCRIPTION Email of April 22, 2009 PAGE NO 1731 Mr. Craig Mr. Lauer Mr. Schnapp CERTIFICATE OF OATH CETIFICATE OF REPORTER 1734 1829 FURTHER DIRECT 1730 INDEX CONTINUED DEPOSITION OF SCOTT W. ROTHSTEIN
TD BANK'S EXHIBIT INDEX DESCRIPTION PAGE NO Email of October 8, 2009 1861 Sentencing Statements 1865 June 4, 2010, Letter 1866
Page 1730 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY MR. CRAIG: Q A Q Good morning, Mr. Rothstein. Good morning, Mr. Craig. Uncle Bill didn't need to do any trickery or Thereupon, the following proceedings were had: MR. LAUER: Good morning.
Before we go, I guess Tucker has a few questions. FURTHER DIRECT EXAMINATION
perform any slight of hand to substitute the fake account balance statements into the envelopes because he had Ms. Caretsky to do it, correct? A I wasn't there. MR. CRAIG: under oath. Whereupon, SCOTT W. ROTHSTEIN, acknowledged having been duly sworn to tell the truth and testified upon his oath as follows: THE WITNESS: BY MR. CRAIG: Q Let me reask the question: Uncle Bill didn't I do. I would be guessing.
Could you place the witness
need to do any tricks or perform any slight of hand to substitute fake account balances into the show envelopes, because he had Ms. Caretsky to do it, United Reporting, Inc. (954) 525- 2221
Page 1731 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 correct? A with him. Q I do not know what he did. I would be guessing. And he didn't have to perform any tricks to I was not there
get Ms. Caretsky to hand the envelopes to you in front of the investor, did he? A Q Can you say that again, please? He didn't have to perform any tricks to get
Ms. Caretsky to hand the envelopes to you in front of the investors, did he? A He was not involved in having her hand the She always handed the envelope to me in
envelope to me.
front of the investor or to the investor. MR. CRAIG: Let me show you what's been
marked as Defendant's 223 for Identification. THE WITNESS: MR. CRAIG: Sure. I only have one.
(Thereupon, the document was marked as Caretsky's Exhibit 223 for Identification.) THE WITNESS: BY MR. CRAIG: Q Could you please tell me whether you recognize It's okay.
that exhibit? A Q I do not. Do you have any reason to doubt its United Reporting, Inc. (954) 525- 2221
Page 1732 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 authenticity? A Q I do not. Wouldn't you agree that your testimony is
totally inconsistent with this email where you tell Bill Brock he needs to use his magic to get the phony balances into the envelopes and get them to hand it to you? A Q A No, sir. What magic needed to be worked by Mr. Brock? I don't recall what was going on at this time.
I don't recall if we were having a problem with somebody or if it was prior to her being fully on board. don't recall. Q Could you read that email from you to I just
Mr. Brock dated April 22nd at 10:36, 2-0-9, out loud? A What time do they open? You are going to have to work magic to get our state cents (phonetic) in the envelope and get her to hand it to me. Q You have no recollection of that email
whatsoever? A Q I don't have specific recollection of it. Why would -- why would you have to tell
Mr. Brock that he had to work magic to get those statements into the envelope when you had Ms. Caretsky United Reporting, Inc. (954) 525- 2221
Page 1733 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 on board, so to speak? A There were certain periods of time during our
banking relationship that I was unsure what was actually going on at the bank. Okay. Telling Bill to work his
magic does not mean that he had to pull the wool over Ms. Caretsky's eyes. careful. But I don't know. So what you're asking me to It just meant that they had to be
do is guess, and I don't want to guess. Q That email is very specific. That email from
you to Mr. Brock, it says, you are going to have to work magic to get our statements in the envelope. A time. Q Why -- I -- let me ask a question. Why would he have to work magic to get those phony account balances into the envelope if Ms. Caretsky was on board at the time? A Here's the problem with your question: I And I don't know what was going on at the
don't -- without the emails on either side of this, I don't know what was going on at the bank at the time. It's possible that there were going to be problems at the bank. It was possible this was a
last-minute show that we were doing, and everything that I'm doing here is speculating. You're asking me to
Page 1734 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q BY MR. LAUER: Q Good morning, Mr. Rothstein. We have never met, have we? No, sir. Okay. I represent the Centurion, Platinum, I'm Eliot Lauer. guess. I understand the point you're trying to make, I
but I don't want to guess as to what was going on. can't tell you one way or the other. Q A Q speak? A I told you yesterday, 15 times, I don't
That email is dated April 22nd, 2009, correct? That's correct. Was Ms. Caretsky on board at that time, so to
remember what date she was on board. Q Was there a period of time before she came on
board that Mr. Brock needed to work magic, so to speak, and use slight of hand to get the phony balances into the envelopes? A There may have been. I don't recall
specifically. MR. CRAIG: further. DIRECT EXAMINATION Thank you. I have nothing
Level 3 hedge funds. The RRA law firm is in bankruptcy; you're United Reporting, Inc. (954) 525- 2221
Page 1735 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A aware of that? A Q I am sir. You are not in bankruptcy; you're aware of
that, as well, right? A Technically, I have not filed bankruptcy; but,
for all intents and purposes, I'm bankrupt. Q You may have no assets, but you have not filed
for bankruptcy, and no one has filed on an involuntary basis to have you placed in bankruptcy? A Q To my knowledge, no, sir. Mr. Herbert Stettin is the Trustee in the
bankruptcy for the RRA Law Firm, correct? A Q A Q Yes. He's not your -- he's not your trustee? No, sir. Okay. Are you familiar with the concept of in
pari delicto? A No, sir. I've heard the phrase before, but I don't recall; I haven't practiced law in a little bit. Q You may recall that it's a concept that, in
effect, says the trustee in bankruptcy stands in the shoes of the debtor. Are you familiar with that concept? Yes. United Reporting, Inc. (954) 525- 2221
Page 1736 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q Q All right. So, Mr. Stettin, as Trustee,
stands in the shoes of the law firm, but he does not stand in your shoes, does he? A I think you're asking me for a legal opinion.
To my knowledge, based upon what you just told me, sir, no, he does not. Q Now, you pleaded guilty and you admit to
having engaged in or orchestrated a massive Ponzi fraud along with other criminal activities, correct? A Q That's correct. Has anyone discussed with you why no
bankruptcy proceeding has been filed against you, personally? A Q No, sir. Now, the three hedge funds that I represent
over the course of the year, between April '08 and April '09, advanced, approximately, 444 -- $440 million in the aggregate to the various Banyan entities that were owned by George and Gayla Levin. You're familiar with that? I am. And over the course of their relationship with
the Banyan entities, which, in turn, had invested in your fictitious client settlements, the funds received back approximately $420 million, correct? United Reporting, Inc. (954) 525- 2221
Page 1737 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A That's what I have been told. I don't know
for certain. Q
I haven't seen the accounting.
But you know that, approximately, the three
hedge funds ended up losing about $20-odd million? A I thought it was closer to 18 million, but in
either direction, yes, that would be close to correct. Q All right. So on the net cash-in/cash-out
basis, the funds are victims of the scam that you perpetrated? ALL PRESENT: BY MR. LAUER: Q A Q A Q They lost -They lost money. Okay. That's an answer. Absolutely they did. Objection to form.
Yeah, they lost money.
Now, we've never met; but on Friday
December 16th, you testified at page 1138 that you have known some of the other lawyers in this case, correct? A I -- I have known -- yes, I do know some of
the lawyers in this case from prior to my coming back from Morocco, yes, sir. Q All right. You were an active, prominent
lawyer and businessman in the Fort Lauderdale, South Florida area, correct? A Well, pseudo-prominent, but yes. United Reporting, Inc. (954) 525- 2221
Page 1738 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Q A Q A Q A Q You were well known? I was. Did have you a lot of publicity? I did. You were seen about town? Yes, sir. You owned fancy restaurants? Yes, sir. All right. And you said that, in fact, you
knew some of these lawyers for two decades. Did you know Mr. Scherer? I knew of Mr. Scherer for two decades. I knew
him probably for a good ten years, plus. Q Okay. And tell us what interaction you had
with him or his law firm prior to you going to Morocco in October 2009. A Working backwards, I believe someone reminded
me during my testimony that our law firm had actually represented him or his law firm at one point in time in an action. I don't remember, specifically, who at the firm handled the case but someone did. Prior to that, I used to see Mr. Scherer hanging out with his group of friends at a restaurant called Jackson's 450. It was owned by a mutual friend
Page 1739 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of ours, Jack Jackson. From time to time we would sit, we'd would talk politics, talk cars, share a cocktail, nothing more than that. functions. Q Okay. And am I correct that, again, being Then I would see him at a lot of political
prior to you going to Morocco, Mr. Scherer was quoted in the media as saying positive things about you and your rise and the growth of your law firm? A Q A Prior to it exploding? Yes. I believe that's correct. I don't recall
specifically, but I believe you're correct. Q A Q Right, that he said positive things about you? I believe you're correct. Okay. And since he knew you and he was
practicing law in South Florida, as were you, you would have expected that he would know about your law firm and the success that your law firm was achieving in a few short years? A I think that Mr. Scherer had at least, to my
knowledge, the same perception that I put out there for everyone, that we were extremely successful and very successful in a very short period of time, yes. Q What was the nature of your law firm's United Reporting, Inc. (954) 525- 2221
Page 1740 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 representation of his firm? A Q I don't recall. Did it involve an ethical violation of one of
his partners? A Q That doesn't ring a bell, no, sir. Did it involve potential financing of
litigation? A Q I -- I don't know what you mean, sir. Are you ever asked to -- or was your firm ever
asked to provide financing, either before you went to Morocco -- before you went to Morocco, were you ever asked, or was your firm ever asked, to finance litigation that Mr. Scherer's firm had? A Q I do not recall that, sir. All right. Do you recall the Chiquito
litigation? A Q A Yes. Okay. What do you recall about it?
I recall the Cheetoh -- Cheetah -- Chiquito
was being sued for providing money that went to pay for arms that ended up killing a lot of innocent people. Q A Q Okay. And were you asked to finance that?
I don't recall that at all, sir, no. The Wikipedia entry for you states that your
local mentors were wealthy attorneys, Donald McClosky United Reporting, Inc. (954) 525- 2221
Page 1741 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and Bill Scherer; are you familiar with that? A That my Wikipedia? I have never seen my
Wikipedia entry.
I've seen a lot of media about me, but
I never seen the Wikipedia entry. Q Is it accurate to say that your local mentors
included Mr. Scherer that is the lawyer for the plaintiffs in the Razorback action? A Q A I didn't consider him a mentor, no, sir. Did you consider him a political mentor? He definitely piqued my curiosity and my
interest in politics, him and a significant number of his friends, yes. Q A Q Okay. I was. You were a prominent contributor mostly to You were active in politics?
Republican candidates? A Q With other people's money, sir, yes. But the public did not know it was with other
people's money? A Certain of the public knew it was other
people's money; certain did not. Q When you say "certain of the public," you mean
certain of your insiders knew? A Q They were part of the public, yes, sir. Is that how you define "public"? United Reporting, Inc. (954) 525- 2221
Page 1742 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A I define "public" as everybody. We are all
public, everyone. term. Q A It's --
"Public" is a very, very, general
If you want to differentiate for me between
insiders and outsiders, it may clarify the question. Q How about Herb Stettin, did you have any
interaction with Stettin before you went to Morocco? A To my recollection, I didn't even know who he
was, except to hear his name. Q And did you have any interaction with the law
firms or lawyers that are representing Mr. Stettin, the Singerman Law Firm, Mr. Lichtman? A I knew the Singerman Law Firm; I did not know
Mr. Lichtman, except to know who he was. Q A Do you know Mr. Singerman? I don't remember Mr. Singerman. I remember
meeting the Bergers. Q Did you know that several of the members of
the Singerman firm were equity owners in Gibraltar Bank? A Q I did know that, sir, yes. And you became an equity owner of the
Gibraltar Bank? A Q I did. Did you ever have shareholder meetings? United Reporting, Inc. (954) 525- 2221
Page 1743 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Q A Q No, sir. Okay. Now, you spent several -- you testified
that you spent several days with your counsel, Mr. Nurik, preparing for the interview by Mr. Lichtman and his team back in the summer. Do you recall that? Yes. Okay. Two days. And did you actually meet with
Mr. Lichtman? MR. LICHTMAN: Those two days? Objection to form.
BY MR. LAUER: Q right? A Yes. I just want to make sure I'm -- your Well, first you prepared with Mr. Nurik,
timing is correct. I met two days with Mr. Nurik; the government was present; and I met three days with Mr. Lichtman and a bunch of other lawyers that were with him. Q Okay. Did Mr. Lichtman, or anyone else, tell
you that in April 2009, after the -- the missed payments on or about April 13, that his law firm had been retained by my clients to advise them with respect to how to deal with the missed payments and Mr. Levin? MR. LICHTMAN: Objection.
Page 1744 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Okay. That April 13th, 2009, his law firm
was retained? that. BY MR. LAUER: Q
I didn't know that until you just said
Okay.
And did Mr. Lichtman or anyone tell you
that his law firm was representing the hedge funds in November 2009, at the time that you went to Morocco or after the time you went to Morocco but prior to -withdrawn. MR. LICHTMAN: MR. LAUER: Objection.
Sorry, what? Objection.
MR. LICHTMAN: MR. LAUER: BY MR. LAUER: Q
I withdraw the question.
Did anyone tell you that Mr. Lichtman's law
firm was representing the funds in early November at the time that you had returned from Morocco? MR. LICHTMAN: Objection.
I don't recall that, no, sir.
BY MR. LAUER: Q A Do you know that? To the best of my recollection, I'm hearing it
for the first time right now. Q Okay. Did you -- when you met with
Mr. Lichtman, did you discuss the hedge funds with him? United Reporting, Inc. (954) 525- 2221
Page 1745 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 form? MR. LICHTMAN: MR. LAUER: BY MR. LAUER: Q You may answer. MR. LICHTMAN: Let me put a standing It's work product. A MR. LICHTMAN: Objection to form.
My recollection is that the hedge funds came
up, but I don't recall them being a focal point. BY MR. LAUER: Q Did you discuss the hedge funds during the
three days that you were with Mr. Lichtman? MR. LICHTMAN: MR. LAUER: Objection.
What is the objection to
That's not a form objection.
objection on the record as to every question that pertains to the injunction as to work product. So that should be in the record. We
don't waive that. THE WITNESS: Okay. Can you ask the I got caught
question again, sir?
I'm sorry.
up in the lawyer stuff. MR. LAUER: I would ask the court
reporter to ask the question again. (Whereupon, the question was read back by the court reporter as recorded above.) United Reporting, Inc. (954) 525- 2221
Page 1746 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Q A I'm certain that they came up. I don't recall
what we discussed. BY MR. LAUER: Q Okay. Now, you may recall that when Mr.
Scherer began examining you in this process last week, that when objections were made to the leading nature of some of his questions, Mr. Scherer said that he was adverse to you because he was suing you for $180 million. Do you remember that? I do. Okay. Now, do you also recall from your days
as an active lawyer, that, again, generally, when a witness is being examined by an adverse counsel, that's considered cross-examination? A Q I recall that, yes, sir. And, generally, during cross-examination, a
witness should not be communicating with anyone, including his own counsel, about the subject matter of the examination. Are you familiar with that rule? In the middle of the examination, you are
talking about? MR. SCHERER: Excuse me.
Objection to the form of that question. United Reporting, Inc. (954) 525- 2221
Page 1747 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A me -BY MR. LAUER: Q Are you familiar with the general rule that MR. LAUER: MR. SCHERER: THE WITNESS: Okay. Misstates the law. All right. Are you asking
during the period of cross-examination, including breaks, including the evenings, including mornings and breakfast meetings, that while the witness is in the process of being cross-examined, he should not be talking about the substance of his examination with anyone, including his own counsel? MR. SCHERER: Object to form.
The substance, yes, that's my understanding.
BY MR. LAUER: Q Okay. Now, since Mr. Scherer began
questioning you on Monday, December 12 -A Q Yes, sir. -- have you had any discussions with your
lawyer about the subject matter of your testimony? MR. MR. NURIK: Objection. Instruct the
witness not to answer. MR. LAUER:
Privileged.
It's not privileged. That's my response,
MR. MR. NURIK: counsel.
Page 1748 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LAUER: discussed. discussions. MR. MR. NURIK: contained content. No. Your question I'm not asking what you
I'm asking you whether you had any
If you want to rephrase
the question, then we'll entertain it. BY MR. LAUER: Q Did you have discussions with Mr. Nurik at any
time after Mr. Scherer began examining you on December 12th? A I had discussions with him -MR. MR. NURIK: BY MR. LAUER: Q Was the subject matter of the discussions, in That's it.
whole or in part, your -- the subject matter of your testimony or proposed testimony? MR. MR. NURIK: Objection. Privileged.
Instruct the witness not to answer, proposed. BY MR. LAUER: Q You're going to follow your counsel's
instruction? A Q I am. Now, at the same time, Mr. Scherer has taken
the position that he's not really adverse to you but rather he has a common interest with you. United Reporting, Inc. (954) 525- 2221
Page 1749 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q Are you familiar with that position? No, sir. Do you know that some months ago, on behalf of
the funds, we subpoenaed information from your counsel, Mr. Nurik, particularly in connection with communications he had with Mr. Scherer? A In order to answer that question, I would need
to discuss conversations I had with Mr. Nurik; and I'm going to invoke the attorney-client privilege. I'm not
going to discuss conversations that I had with Mr. Nurik or the substance of those conversations. Q I am not asking whether you solicited advice I'm asking factually,
or whether he gave you advice.
are you aware of the fact that we subpoenaed Mr. Nurik with respect to documents or information concerning his communications with Mr. Scherer? A My recollection is, is that there was some I don't know who issued it. And do you recall that your response,
subpoena issued. Q Okay.
the counsel for the plaintiffs and your counsel took the position that you were not adverse to the Razorback plaintiffs but rather you had a common interest in this case vis-a-vis the hedge funds? A Q No, sir. I was not involved in that.
Are you aware that they have taken the United Reporting, Inc. (954) 525- 2221
Page 1750 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 know. Q A That's very noble. I'm not being rude to you. There is no reason position that you have a common interest? A Q A No, sir. Okay. This the first you're hearing about it? I recall
I don't know what the response was.
speaking to Mr. Nurik about -- just about a subpoena, but I don't recall ever discussing what the response was. Q I am no longer asking what you discussed; I'm
asking you if you now are aware of the fact that the Razorback plaintiffs' counsel and your counsel take the position that you have a common interest in this case vis-a-vis the New York hedge funds? A Until you just said that to me, I did not know
that was the position they took. Q A Do you agree with that? I think that I have a common interest with
anyone who is attempting to get money back from innocent -- for innocent investors. Anyone that is
trying to get money for innocent investors, I believe I have a common interest with them. How far that common interest goes, I don't
to be rude to me. United Reporting, Inc. (954) 525- 2221
Page 1751 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ALL PRESENT: MR. LAUER: MR. SCHERER: that you were. Objection. I wasn't being rude to you. I think the record reflects
Move to strike that snide It don't think we need to
comment, frankly. do that.
We haven't been doing that for a
week and a half. BY MR. LAUER: Q Now, are you aware that plaintiffs' counsel in
the Razorback case has filed a motion to expedite the distribution of these transcripts to the media? A I just heard that the other day, that someone
wanted to distribute it; I didn't hear who. Q And as an active and indispensable participant
in this process, you are aware that during the course of your testimony, you have actually had to cover, or did cover, some indelicate matters concerning various individuals, including testimony on allegedly indelicate matters concerning some of my clients, right? A Q Unfortunately, yes, sir, that is true. Okay. So I would like to -- I would like to
try to delicately revisit these indelicate matters to make sure that your recollection on these matters is -is what you want it to be. At page 310 of the transcript, you testified United Reporting, Inc. (954) 525- 2221
Page 1752 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Q that you and Ari Glass went to the Bahamas; do you recall that? A Q Yes. And then you said at line 21, I'm reading part And I'll a range, quote, unquote,
of your answer:
entertainment for us for the trip. Do you recall giving that testimony? Yes, sir. Okay. And by your use of the entertainment in
quotes, I take it you were suggesting that the entertainment was female? A Q Yes, sir. And then you went on to say: When we arrived We got two
in the Bahamas, we checked into a hotel. rooms. We had a guest with us. Do you recall that testimony? Yes, sir.
Again, is it fair for -- to take away from
your reference to the guest, that the suggestion here was the guest was female? A Q The guest was female, yes. Now, am I correct that this particular female
guest was your female friend? A Q She was. All right. And, in fact, her name is Ali
Page 1753 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Hecht (phonetic)? A Q Correct. And you brought her with you to the Bahamas
with Mr. Glass, correct? A Q I did. And at that -- on that occasion, if anyone
spent time with that female guest, it was you? A With that female guest, I am the one who spent
time with her, yes. Q Correct. And if we ask Ms. Hecht whether
anyone else spent time with Mr. Glass, would she say that Mr. Glass engaged in these delicate activities while he was in the Bahamas? A Q She would have no way of knowing. Now, you also said at page 851, while you were
in the Bahamas, you used a pretty strong word, you mentioned "tax fraud"; do you remember that? A Q Yes. And were you commenting on what Mr. Glass --
the purpose of Mr. Glass's trip to the Bahamas in connection with one of the funds being a so-called off-shore hedge fund; do you remember that? A I was commenting about what I was told the
purpose was and then what actually happened, yes, sir. Q All right. You were told the purpose was he
Page 1754 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A had to authorize a transaction from the Bahamas, right? A deals. I was told that we were supposed to review Not we; he. Because they were my deals being
sent, that he was supposed to reviewed deals in the Bahamas, make a determination whether or not they were accepted, and then transmit his -- the result of his decision. Q All right. And do you have any personal
knowledge of whether Mr. Glass did or did not transmit a formal authorization for the transaction from his hotel room in the Bahamas? A I was standing next to him when he transmitted I assume that was the authorization
something to them.
because the money appeared shortly thereafter. Q Okay. And are you familiar with the technical
aspects that would or would not satisfy the IRS requirements for off-shore trading in connection with the hedge fund investment? A Q No, sir. So is it fair to say that perhaps your use of
the words "tax fraud" might have been a bit strong? ALL PRESENT: Objection to form.
In the way -- in my mind, it was a description
of what occurred, only because I expected him to be doing this review. I'm just telling you what I am
Page 1755 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A thinking. fraud. BY MR. LAUER: Q A Q But you don't know? I don't know the IRS code, no, sir. Exactly. So for all you know, that was Okay. So, in my mind, it appeared to be tax
compliant with the technical requirements for offshore trading? ALL PRESENT: Objection.
That's totally possible.
BY MR. LAUER: Q During the course of your testimony over these Sometimes,
several days, you have used expressions.
informally, you've talked about people being "players," or some people being "players, in part" and "sometime players." Do you recall, generally, that you have used those expressions? A Q Yes, sir. All right. And I think as the deposition
progressed, would it be fair to say that you -- I think you have clarified, and I just want to clarify again, that the fact that you considered someone a player does not necessarily mean that that person was engaged in illegal or criminal activity? United Reporting, Inc. (954) 525- 2221
Page 1756 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Q A Q That's correct. You also said at a different point in time in
your testimony that Ari Glass went to a strip club with you, and I'm quoting you, I think, and he was serviced there. Do you remember that? Yes, sir. All right. Now, Mr. Glass denies ever going
to a strip club with you, Mr. Rothstein; and is it possible that you are mistaken as to whether you personally went to a strip club with Mr. Glass? ALL PRESENT: Objection.
I'm not mistaken, no, sir.
BY MR. LAUER: Q Okay. Did any third person accompany you and
Mr. Glass on this -- to a strip club in -- I'll leave it there. A I believe there were people there that I knew
when we got there, but I don't recall anyone actually going with us, because I believe we were driving in a two-seater car. Q All right. Can you identify the name of any
individual who could testify that they were with you and Mr. Glass at a strip club? A Yeah. Ovadia Levy was there. United Reporting, Inc. (954) 525- 2221 He had some
Page 1757 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A other people with him. I think he was there almost
every night, so that would not have been unusual. Jeff Schulman was there. He was waiting If
tables the evening that we were there, I believe. I'm not mistaken, there may have been other people there. Q And what would Mr. Levy or Mr. Schulman
testify to, if they were called to testify about what you say they observed in that strip club? A anything. I don't think they would say they observed Mr. Schulman was waiting tables up in a
restaurant section of Solid Gold, and Mr. Levy was otherwise occupied. Q I'm being delicate.
I appreciate that or, at least, Mr. Levy
appreciates it. Now -And just so you know, because I can't tell
you, and I want to make sure this is clear, I -Q A Go ahead. -- the way it works in that particular
establishment is you pay the girl and then they take you into a back area that's curtained off. I did not go in there with Mr. Glass to see him get serviced, so I can only assume, based upon the money that I gave and the fact that he did go with the United Reporting, Inc. (954) 525- 2221
Page 1758 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 girl. So I can't tell you for certain what happened
back in there. Q Nor are you able to identify anyone, other
than yourself, that can testify to that? A Generally, when you're in a strip club, you're Your focal point is
not looking for witnesses, so no. elsewhere. Q A Q Are you sure -I'm being delicate. All right.
You also testified about an escort
with Mr. Simony; do you recall that? A Q I do. Now, is this in connection with an occasion
when Mr. Simony slept over your house? A Q 2009? A I don't recall the time frame, but I do recall That sounds Correct. And do you recall that that was in the fall of
him being at my home in the fall of 2009. approximately correct. Q
And do you recall that you and Mr. Simony went
to a football game? A I don't have a specific recollection, but
that's certainly possible. Q Therefore, it would have been in the fall of United Reporting, Inc. (954) 525- 2221
Page 1759 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2009? A Q I'm not doubting that was in the fall of 2009. Do you recall that after the football game,
you went to your home? A Q Excuse me. I do recall that. Yes, sir.
And when the two of you arrived, am I correct
that there were two women in your house waiting for you? A No. There were no women there waiting for me.
I actually called them and had them meet us there. Q Okay. And one of the two women who came was
your friend Ali Hecht? A Q A Q Correct. And she had a friend? Correct. And am I correct that you and -- you drank --
the four of you drank and talked for a while? A Q Yes. All right. And then you and Ms. Hecht went
into a hot tub in your house? A Q No. We went swimming. And that Jack and Ms. Hecht's
Okay.
accompaniment did not go swimming? A Q That's correct. And that you and Ms. Hecht came back shortly
afterwards, and that shortly after the two of you came United Reporting, Inc. (954) 525- 2221
Page 1760 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you? A I called? Q You don't have to say the place. United Reporting, Inc. (954) 525- 2221 I'm asking Is it okay for me to say the name of the place A outside. back from swimming, the two women left the home. Do you recall that? No. What happened was we were all sitting Jack stayed
Ms. Hecht and I went swimming.
there, talking to that female; and eventually they left. That was not the female I was talking about Jack being with. Q Okay. You did not personally see Mr. Simony
have an indelicate relationship with that female, did you? A With that female, no; but I heard him having
an indelicate relationship with another woman that I sent to his room. Q A When was that? After the two women left. He was trying to make headway, to put it delicately, with Ms. Hecht's friend; he was unsuccessful. He went upstairs to my guest room. I
called an escort for him and sent her there, and then I heard them having an indelicate visit, delicately. Q Okay. And who would testify to that besides
Page 1761 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q BY MR. LAUER: Q Mr. Rothstein, you were asked about a June 2, you the name of the human being that you say would testify to what you have just said, other than yourself. A There may actually -- you have to check the
video records from my home, but there may be actually a record -- I don't know if they still exist -- of the female entering my home and then leaving my home. Q they? A Q Not to my knowledge, no, sir. So you have no reason to believe that, in No one has shown you those video records, have
fact, there are such video records? A other. MR. LAUER: Exactly. Exactly. I don't know whether they exist one way or the
We need to take a two-minute break so we can get one of our colleagues in. (Whereupon, a recess was had.)
2010, letter that you wrote the sentencing judge. Do you remember that? Yes, sir. All right. And in that letter, you referred
to so-called false exculpatory emails that you had sent your closest co-conspirators. United Reporting, Inc. (954) 525- 2221
Page 1762 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A list. BY MR. LAUER: Q And by the time that they were put on that A Q To some of them, yes, sir. And am I correct that you did not send any
false exculpatory emails to any of my clients? A I did not consider your clients to be
co-conspirators. Q Okay. And in fact, in connection with the
forfeiture and restitution process, to victims of your activities, my clients are listed as victims worthy of receiving their proportion and share of the assets that are recovered by the amounts that's governed. Are you familiar with -MR. CIMO: Object to form.
I recall seeing their name on a restitution
list as victims entitled to participate in the restitution, you had already been in a cooperating mode with the U.S. Government, right? ALL PRESENT: BY MR. LAUER: Q I'm not asking you for what you said; I'm just Objection to form.
asking you time-wise you had already been cooperating with the government? A Correct. United Reporting, Inc. (954) 525- 2221
Page 1763 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Q And you were debriefed by the government? Correct. All right. And it was following that, your
cooperation and your debriefing, that the government prepared and approved the final report as to restitution listing the victims? MR. CIMO: Objection to form. I have no idea when or
I would be guessing.
how they prepared that. BY MR. LAUER: Q Okay. Now, you became somewhat of an expert, Is
if you will, in the operation of a Ponzi scheme. that fair to say? A Q A you said. Q Can you ask that again? You became -- you -I'm sorry.
For some reason I didn't hear what
You developed an expertise in implementing,
managing, and understanding the psyche of players and individuals involved in your Ponzi scheme? A Q Unfortunately, yes, sir. All right. And, in fact, you implemented what
some would describe as a brilliant series of maneuvers in order to carry out your scheme for so long involving so many people. United Reporting, Inc. (954) 525- 2221
Page 1764 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A abhorrent. Q right? A Q A Q Because, in fact, the money was not there, Was not in the accounts? No, sir. It was a fraud. Criminally sophisticated, yes. Morally,
And the clients weren't there, right? That's right. And the settlements that were being sold at a
discount did not exist? A Q They were all phony, sir. And would you agree with me, therefore, that
no -- no intelligent adult would knowingly invest in such a scheme? A Q I would not agree with that, sir. If you had told Mr. Von Allmen that he was
investing in a Ponzi scheme and that the settlements do not exist, would you have expected him to invest with you? A Q Mr. Von Allmen specifically, absolutely not. And if you had told Mr. Discala that the
settlements do not exist, the money is not in the account, I am lying to you, but you should still invest with me, would he invest with you? A Q No, sir, not to my belief. And do you believe that any intelligent adult United Reporting, Inc. (954) 525- 2221
Page 1765 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A would invest with you knowing that the settlements do not exist and the accounts do not exist and that you have essentially bribed bankers and lawyers to create fraudulent documents? MR. CIMO: Yes, sir. UNKNOWN SPEAKER: BY MR. LAUER: Q A You believe there are? They did. So, yes, sir. That is the Join. Objection to form.
unfortunate truth. Q Now, you've testified about your opinion as to
what different individuals might do under different circumstances if they knew -- if they had known that you were engaged in fraudulent activity. that? A Q I do, sir. And then later on in your testimony I think Do you remember
you clarified for the record that you wanted to make a distinction between your opinion of people's character, what they might do on the one hand, and your actual knowledge of what people in fact knew on the other. Do you remember that? Correct. In December of 2008, do you recall that the United Reporting, Inc. (954) 525- 2221
Page 1766 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A A Madoff Ponzi scheme was disclosed? A Q Yes, sir. All right. And Bernie Madoff was an icon on And the news
Wall Street.
He had been head of NASDAQ.
that he had been running what was reported at the time to be a $60 billion Ponzi scheme was startling, was it not? A Q Yes, sir. And that revelation was coming after the
revelation that Marc Dreier, a prominent lawyer, had defrauded clients and investors. Do you remember that? I don't remember which came first, but I
remember them both being in the news, yes. Q And December 2008 was finishing up a horrific
year on Wall Street, which saw the collapse of Bear Stearns and Lehman Brothers. Do you remember that? Yes, sir. There were massive hedge funds redemptions? I recall discussing that with Mr. Preve but I
don't recall following the hedge funds specifically. Q There was massive confusion and uncertainty on
Wall Street. A That I recall. United Reporting, Inc. (954) 525- 2221
Page 1767 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A A Q And particularly in the wake of those
spectacular revelations about Dreier and Madoff, investors and businessmen alike engaged in additional due diligence concerning their various business operations, did they not? MR. CIMO: Objection to form.
I have no idea what anyone was doing, except
the people that I was doing business with. BY MR. LAUER: Q And my clients were people that were doing
business with Banyan and relying on your settlements as collateral; were they not? MR. CIMO: They were. Objection to form.
BY MR. LAUER: Q And they approached you in December to do
additional due diligence? MR. CIMO: Objection. Form.
That's the time frame, yes, sir.
BY MR. LAUER: Q And including in that additional due diligence
was a site visit to one of the banks that you were using, right? A Q Yes, sir. All right. And in addition, the visit by
Page 1768 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A A Mr. Jedwab and Mr. Glass to speak live and extemporaneously with some of the lawyers that you had represented were referring cases to your law firm, right? A Q Correct. And will you agree that the fact that an
investor or lender does a due diligence does not mean the lender or investor knows that the subject of the due diligence is committing fraud? MR. CIMO: Objection to form.
I wouldn't be able to tell you what they were
thinking one way or the other. BY MR. LAUER: Q I'm asking you generally. MR. CIMO: Objection. Form.
Just because they are doing due diligence
doesn't mean they believe there's fraud, no, sir. BY MR. LAUER: Q Correct. In fact, the purpose of due
diligence is to eliminate what auditors call fraud risk? MR. CIMO: Objection. Form.
That's correct. MR. LAUER: MR. CIMO: What's the objection? Objection is asking him to
speculate.
No foundation for his testimony. United Reporting, Inc. (954) 525- 2221
Page 1769 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A He's not an auditor. MR. LAUER: MR. CIMO: BY MR. LAUER: Q Many of the investors in this case, including He's not an accountant.
Anything else? That's it.
the individuals and entities that are suing my clients, claim to have performed due diligence, correct? A Q Yes, sir. All right. And my clients performed due
diligence, correct? MR. CIMO: Yes. MR. LAUER: Now, with Mr. Scherer's Objection to form.
stipulation, I would like to have incorporated in the transcript, so we don't have to redo -ask you question and answer, page -- the testimony that you gave during the 2004 examination, starting at page 151, line 17, when you said -- when you were asked, "What was Mr. Adler's' role," through page 158, line 10, when you were asked, "And Russ was responsible for delivering the cash? "Answer: Yes."
Does everybody agree to that? MR. SCHERER: I agree on behalf of my
Page 1770 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 clients to that stipulation. And I would like to use this opportunity to clean up what I asked for the stipulation, that the qualification questions at the beginning of the 2004 exam concerning why Mr. Rothstein came back and those questions also be put into this transcript, and I reread the transcript and understand that the court reporter has appended to the back of this transcript, or intends to, those what I call qualifying questions. So I agree to what you want to do, and I would like to make sure that no one objects to what I suggested at the beginning of my examination, which would have been Monday afternoon, concerning those initial questions that Mr. Lichtman asked. MR. LICHTMAN: I think that counsel for
the Trustee, that we had already reached that stipulation, because when that was proffered for the record, nobody from the gallery said anything to the contrary when asked -- I think it was twice. But notwithstanding Trustee, as to his Rule 2004 Exam, has no objection to the United Reporting, Inc. (954) 525- 2221
Page 1771 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A stipulation that you offered, Mr. Lauer. MR. LAUER: MR. CIMO: Okay. And the Trustee has no
objection with regard to the litigation pending in the adversary case. MR. LAUER: BY MR. LAUER: Q Now, at the time that they came down to meet Okay.
with these referring lawyers, the funds had about 175 to $180 million invested through Banyan in what has been revealed as your scheme, correct? A Q Correct. And do you know that a significant portion of
that money was actually the personal money of the fund managers? MR. CIMO: Object to the form.
I did not know that.
BY MR. LAUER: Q A Do you know that now? Now that you just told me, assuming that
you're telling me the truth, which I am -MR. CIMO: Yes. Objection to form.
BY MR. LAUER: Q You can assume -- you can assume that. United Reporting, Inc. (954) 525- 2221
Page 1772 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A other. BY MR. LAUER: Q funds? A Q documents? A Q No, sir. Did you look up the PPM's which describe the Did I, no, sir. Did you look up their publicly-filed Did you do due diligence about the hedge Haven't you read the -- haven't you read the papers in the Razorback case? A Q managers? A I don't recall reading those specific I may have read some pages from them. Have you read --
What do you mean "the papers"? Have you read the depositions of the fund
depositions. But -Q
Did you know at the time that you were
interacting with the hedge funds that the fund managers had their personal funds in the hedge fund? MR. CIMO: Objection to form.
I don't recall knowing that one way or the
general partners' role in the hedge funds? A No, sir. MR. CIMO: Objection to form.
Page 1773 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. LAUER: MR. CIMO: What's the objection? Assumes facts not in evidence. It
It assumes the PPM is public record. assumes he's ever heard of PPM. knows what a PPM is. Speculation. BY MR. LAUER: Q
It assumes he
Lack of foundation.
Now, when Brian and Ari met with these three
law firms, they did not choose those lawyers, did they? A Q A Q No, sir. You chose them, right? Along with my partners, yes, sir. Okay. And you did not tell them that these
were the only three lawyers referring cases to your law firm, right? A Q That's correct, sir. All right. These were examples of lawyers who
were referring cases to your law firm? A Q Correct, sir. You testified that when you went to some of
these offices you thought they were a bit modest, so to speak. A testimony. Q Did you tell Mr. Adler after you attended United Reporting, Inc. (954) 525- 2221 Do you remember that testimony? They were, sir, yes. And I do recall the
Page 1774 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 these visits that you thought he needed to get you one or more additional lawyers who had more impressive offices? A Q A Q I don't recall doing that. Do you recall doing it? I don't recall doing it, no, sir. Okay. You thought in the end that I may have.
notwithstanding the modest nature of their offices that the presentations were credible, correct? A I wasn't thrilled with the presentations but I More from the standpoint I
thought that they went well.
of the lack of questions that were being asked. thought that my guys, meaning the lawyers, did a credible job. And I was extremely pleased that
questions that I was afraid were going to be asked, weren't asked. So that's where my mindset is as those complete... Q And these lawyers were telling Brian and Ari
to their faces that they referred cases to your law firm. A Q They were members of the Bar, correct? They were, sir. All right. And they were, to your knowledge,
being bribed to misrepresent material facts to individuals doing due diligence, correct? United Reporting, Inc. (954) 525- 2221
Page 1775 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Q To my knowledge, yes, sir. Okay. So in effect, these members of the Bar
were actively engaged in felonious activity, correct? A Q To my understanding, yes, sir. And as an expert in felonious activity, do you
think it reasonable for someone to -- someone to assume that when he or she talks to a member of a Bar in his office about referring cases to a prominent law firm that the member of the Bar is engaged in a felony? MR. CIMO: Objection to form.
In this day and age, I think the whole reason
that you go talk to them and meet face to face is to make sure they're not engaged in a felony. I, unfortunately, was not the first lawyer to engage in a felony and likely, unfortunately, I won't be the last. BY MR. LAUER: Q You were convinced that Brian, who you've
described several times as a straight-shooter, was convinced that in fact these lawyers were referring multi-cases to your law firm? MR. CIMO: BY MR. LAUER: Q A Correct? When we left those meetings, I was convinced United Reporting, Inc. (954) 525- 2221 Objection to form.
Page 1776 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A that they believed what those lawyers told them, yes, sir. Q These meetings occurred at the very end of
December, 2008, right? A Q To the best of my recollection. And about ten days before the enhanced due
diligence trip by Ari and Brian to meet with the referring lawyers, you had accompanied Jack Simony on a due diligence trip to TD Bank. Do you remember that? Which visit was that? Was that the one where
we went to Deerfield or -Q A Q A Q Correct. I recall that, yes, sir. And that was about December 17th, 2008? I don't remember the date. And do you recall that that was shortly after
the Madoff and Dreier matters were disclosed? A Q Yes, sir. All right. And then Jack -- Jack had arranged
to trace the steps of -- prior to Jack going with you to the Deerfield branch, had Mike Szafranski been reviewing screen shots or what he thought was an active screen account of your escrow accounts at TD Bank? A Sometimes yes. Sometimes no.
Page 1777 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Q All right. And to your knowledge, was
Szafranski representing to the funds and to the fund managers that he was observing wires coming into the accounts from the settling defendants, correct? A Q To my knowledge, yes, sir. And he was observing the funds sitting in the
accounts waiting to be disbursed at the appropriate time in accordance with the settlement agreements, correct? A Q To my knowledge, that's correct, sir. And now Simony was coming down to do a
double-check to visit the actual branch of TD Bank to see the accounts, correct? MR. CIMO: Objection to form. He
I would be assuming it was a double-check.
came down and we did go to the bank. BY MR. LAUER: Q All right. And why did you go to the -- why
did he want to go to the bank? A I would be assuming. MR. CIMO: Objection. You want me to assume?
I mean, there's a purpose behind it but I'm He may have had all
guessing as to what his purpose is. kinds of purposes. BY MR. LAUER: Q Did he --
Page 1778 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A My purpose was to get him there to show him
the fake balances. Q Correct. And originally, you were planning to visit the Weston branch? A Q A Q That's the branch we always visited, yes, sir. And -Almost always. And shortly before making arrangements to
visit that branch, Mr. Simony was instructed by his colleagues in New York to have you take -- have you take him to a different branch. Do you remember that? MR. CIMO: Objection to form.
I don't recall why we changed direction, but I
remember distinctly changing plans. BY MR. LAUER: Q All right. And did you have at the time any
relationship with individuals within the Deerfield branch? A Q No, sir. Did you make arrangements to visit the
Deerfield branch with Mr. Simony? A Q I did. All right. And could you describe what
Page 1779 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 happened at the Deerfield branch? A My memory is not clear as to whether or not we
utilized someone at the branch or whether or not we had Mr. Caputi playing that banker. So I can't be specific. I remember him
I know that he was shown phony balances.
attempting to engage in a longer conversation with whoever it was we were meeting with and me attempting to cut him off. And I also remember us having to rush to
get him to the airport because he was leaving right after that. But my memory is not clear and I do not want to mislead you at all. So I can't tell you who it was I don't have a specific
that he met with at that bank.
recollection as I sit here today. Q A Q But "he" is Mr. Simony? Yes, sir. And Mr. Simony at the Deerfield branch was
given phony account balances? A Q Yes, sir. And those balances, albeit phony, showed
significant funds on account in various accounts that you controlled? A Q A Correct, sir. Do you have the exhibits before you? I don't -- no. I don't have the exhibits.
Page 1780 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 did. Q Okay. I'm showing you exhibit -- we'll come A A Q I'm sorry. Q While we're waiting for the exhibits, we'll
just use the time because time is short. A Q Sure. You testified at page 909 that you thought Ari
Glass was prepared to deceive his partners with respect to side deals. A Q Do you remember that?
That was my belief, yes, sir. Now, the only side deal, so-called side deal
that Ari Glass did, was one with Dr. Rosenblat the Intracoastal. Do you remember that? That's the one I recall, yes, sir. All right. And in fact, Intracoastal only did
one settlement for about 950 -- they invested $950,000. Do you remember that? I do not. I do not remember how many they
back to Intracoastal. A Q Okay. I'm showing you Exhibit 133. There's a series of emails concerning the enhanced due diligence trip of Brian and Ari. Do you remember seeing this? United Reporting, Inc. (954) 525- 2221
Page 1781 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A All these emails between the internal guys at
the three funds I saw subsequent to my return from Morocco. The email at the end, which is the one I wrote to Jack Simony with a copy to Mr. Preve, I recall drafting. Q Okay. And what you originally wanted them to
do was basically ask very structured questions to law firms that you were giving them, correct? A Q Yes, sir. And, in fact, they would ask the law firms
whether they referred cases to your law firm, right? A Yes. I wanted them to say that they referred
cases to our law firm and they were happy with our representation. Q But that very structured, written
communication would not enable the fund executives to probe as to the nature of the cases, right? A It would enable them to probe as much as I
wanted them to probe at that time. Q A Q A Q Okay. And they --
They were not happy with that, apparently. They wanted to probe more? Brian certainly did, yes. Well, and he was the one in charge of the due United Reporting, Inc. (954) 525- 2221
Page 1782 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 diligence, right? A I don't know exactly who was in charge. He
certainly seemed to be taking the lead but what was going on behind the scenes, I don't know. Q At any point in time did anyone, to your
knowledge, limit or try to limit Brian's due diligence activities? A Q A That's an interesting question. Just answer it. I'm going to. The conversations that I was having with Mr. Simony and Mr. Nordlicht, led me to believe that they were trying to appease him. But what was going on For all I
behind the scenes, that I can't tell you.
know, they were trying to play me, as we learned later on Ari was not really as angry as he was -- at least from what I'm hearing here today as he appeared to be to me. So I can't tell you behind-the-scenes what was
going on. The appearance to me was Jack was trying to just get past it, just get past. people are crazy. past this. Q But Brian was not limited. No one shut Brian Mr. Nordlicht, these
Just deal with them and we'll get
down in your presence to prevent him from asking United Reporting, Inc. (954) 525- 2221
Page 1783 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 A me. Q You'll acknowledge that there was a lot of whatever questions he wanted to ask? A Q In my presence, no, sir. All right. And no one told you that they had
shut him down outside of your presence? A Well, Jack used to tell me all the time that He told me don't worry Whether he
he's got Brian under control.
about it, we've got him under control. actually did or not, I have no idea. Q
Well, he certainly was not able, under your
view of life, to prevent Brian from coming down and doing the freestyle due diligence, was he? A Q A He wasn't in a position to do that? He didn't, right? Brian came down, correct? I have no idea what Jack
Brian did come down.
told him one way or the other. Q A Right. You don't? I can only tell you what Jack told
I do not.
good cop, bad cop going on? MR. CIMO: Objection to form.
I don't know whether it was or not. Now, it certainly appears that there was, but,
again, I would be guessing and I do not want to guess.
Page 1784 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Q BY MR. LAUER: Q And is it fair to say that just as not
everything you told the funds was 100 percent, you now know that not everything they told you about what their intentions were was 100 percent? A Q It certainly appears that way, sir. Okay. (Thereupon, the document was marked as Platinum and Centurion's Exhibit 224 for Identification.) BY MR. LAUER: Q I'm handing you Exhibit 224, which is the
Trustees' Complaint against Intracoastal. Have you seen this before? No, sir. Okay. Okay. See the chart? MR. MR. NURIK: talking about now? THE WITNESS: BY MR. LAUER: Q A Q Page 5. Yes, sir. And that lists one transaction, does it not? United Reporting, Inc. (954) 525- 2221 Page 5? Which page are you Take a look at the chart.
Page 1785 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 A A That was a payout of about $1,299,000? A Q May, 2009? A Q A Q It says here March to June. March to June 2009? Yes. And that represented a transaction in which That's what that chart represents, yes, sir. All right. And the payout ran from March to
$950,000 was invested in or about January of 2009. Do you remember that? I don't remember the specific transaction.
There were too many to remember individual ones unless it really sticks out in my head, like the $11 million Regent transaction. Q When you look at this transaction, does
this -- when you look at this document, 223, does that refresh your recollection that there was a single transaction in Intracoastal and no other? A Q It does not. Is it fair to assume that if there had been
other transactions, the Trustee would have included such transactions in its adversary complaint? MR. CIMO: Objection to form.
I don't know what they would have done.
Page 1786 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A BY MR. LAUER: Q Can you -- as you sit here now, are you able
to testify definitively that in fact there was an additional transaction or there were additional transactions -A Q A Q No, sir. -- with Intracoastal? Can not say one way or the other. Now, do you know that, in fact, Intracoastal
was intended to be done for the benefit of Mr. Glass's partners? MR. CIMO: Objection. Form.
I didn't know that one way or the other.
BY MR. LAUER: Q Do you now know it? MR. CIMO: No. Objection to form.
I was -- the way Ari had described it to
me, it always seemed to me like it needed to be kept quite, that it was -- that that was the whole reason he had Dr. Rosenblat involved, that it was going to be done this way and it was going to be Rosenblat's to run with and he was going to help him get geared up and he would benefit from it and Rosenblat would benefit and ultimately I would benefit. We did a whole lot of dog and pony shows, I United Reporting, Inc. (954) 525- 2221
Page 1787 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A don't remember specifically what became of them. that was not my understanding. BY MR. LAUER: Q Have you come to learn that Intracoastal was, So
in fact, intended for the benefit not only of Mr. Glass but also Nordlicht, Bodner and Huberfeld? MR. CIMO: No. Objection. Form.
I never knew that.
BY MR. LAUER: Q Now, you mentioned the Regent transaction, the
$11 million funding by Regent? A Q Yes. And that occurred in the first of January in
2009, right? A I don't recall the specific date but the
papers would say specifically -- exactly when it occurred, as would the emails. Q And, in fact, Regent occurred less than a week
after Brian and Ari completed their enhanced due diligence visits to the referring lawyers? MR. CIMO: BY MR. LAUER: Q A Do you remember that? I don't have a specific recollection of it, Objection to form.
no, but, again, all this would be established by emails United Reporting, Inc. (954) 525- 2221
Page 1788 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A and paperwork. Q All right. Do you now know who were the
participants in the Regent transaction? A I can only tell you what my understanding was
of who it was. Q You can tell me your understanding at the
time, right? A Q A Yes. What was your understanding at the time? That Murray was involved in it. That was initially. Jack Simony.
Frank Preve.
Later on, as is evidenced by email traffic, I learned that Mr. Nordlicht knew about it. recall anything further at this moment. Q Do you now know that the participants in I don't
Regent in addition to Mr. Preve through his company SFS, were Mr. and Mrs. Nordlicht, Mr. and Mrs. Bodner, and Mr. and Mrs. Huberfeld? MR. CIMO: Objection. Form.
I seem to recall seeing some documents that
indicated that but I don't have a recollection one way or the other. BY MR. LAUER: Q And in the documents that you have seen, did
you come to learn that Mr. Simony was not a participant United Reporting, Inc. (954) 525- 2221
Page 1789 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A financially that was in the Regent transaction? MR. CIMO: No. Objection to form. It was always my
I never knew that.
understanding from Frank that Jack was participating in some way. BY MR. LAUER: Q A Q A Take a look at Exhibit 46. Do you have it?
I -- not unless you just gave it to me. No. I don't have any exhibits with me. THE WITNESS: Excuse me, sir. It's
10:00.
Can we take a quick break so I can use
the rest room? MR. LAUER: THE WITNESS: MR. LAUER: can take a break. (Thereupon, a recess was taken.) BY MR. LAUER: Q Showing you Exhibit 46, Mr. Rothstein, you This is an Whatever. It's your show. No, it's your show, but we
were shown this on your direct examination.
email dated December 1, 2008, from Preve to you. Do you see it? Just give me one second. Okay. United Reporting, Inc. (954) 525- 2221
Page 1790 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Q Q You see the reference to the $3 million
licensing fees; Jack and the 11 million pending transaction. Do you see that? I do. And this is on December 1, 2008? Correct. And to best of your recollection, is the
$11 million pending transaction the transaction that later became known as Regent? A Q Yes. So now I'm showing you Exhibit 225, which is
the Trustee's complaint against Regent Capital Partners. Do you see that? (Thereupon, the document was marked as Platinum and Centurion's Exhibit 225 for Identification.) A Q I do. And Regent Capital Partners is the entity that
did that $11 million transaction, correct? A Q Yes, sir. Now, if you would turn to the first page of
225; do you have that? A Q The first page. The top page, you see who is sued? United Reporting, Inc. (954) 525- 2221
Page 1791 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Q A Q A Q I do. The Trustee sued Regent Capital Partners,
that's the entity that invested the 11 million, right? A Q Yes. And it also sued Mr. and Ms. Huberfeld,
Mr. and Ms. Bodner -- I'm sorry, the Bodner Family Foundation and Mr. and Ms. Do you see that? Yes. And it sued SFS Capital, which is Mr. Preve's Nordlicht.
company, right? A Q Correct. And the Trustee has brought this lawsuit in
order to recover payments that were made to Regent and to the individuals and SFS Capital. Do you see that? That's what it appears to be, yes, sir. The Trustee has not named or sought to recover
funds from Mr. Simony with respect to Regent Capital. Do you see that? I do. Regent Capital, are you aware of any
proceeding by the Trustee to recover funds from Mr. Simony concerning Regent Capital? A Not to my knowledge. I don't know one way or
Page 1792 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A the other. Q And is it fair to conclude that you have no
personal knowledge that Mr. Simony ever received any money from Regent Capital? A Q I don't know one way or the other. By the way, if you look at the chart in
Exhibit A, which is attached to the adversary complaint, Exhibit 225 -A Q Okay. -- you'll see that there is a list of six
payments to Regent Capital Partners, the first being January 7, 2009, right? A Q A Q A Q Correct. And the second on January 8, 2009? Correct. Yes, sir.
The third, February 9, 2009? Yes, sir. All right. Now, if you add up the first three
payments, it's over $7 million, right? A Q Yes, sir. And the 11 million was invested in the
beginning of January 2009. Do you remember that? I don't remember the specific date, but the
paperwork would show that clearly. United Reporting, Inc. (954) 525- 2221
Page 1793 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q Q So, in fact, I'm correct that the 11 million
was invested in the beginning of January, 2009; within a month, 7 million of the 11 million had been returned to the investors, correct? A Q That's correct. And, in fact, within 60 days, almost the
entire 11 million had been returned? A Q A Q That's what this chart shows, yes, sir. Do you have any reason to challenge the chart? No, sir. Okay. And, in fact, what this chart shows is
that the very last payment to Regent was made May 7, 2009. Do you see that? I do, sir. No further payments to Regent after May of
2009, right? A Q That's what this chart shows, yes, sir. Now, at Page 1189 of the transcript of your
deposition, you were asked the following question by Mr. Scherer at line seven: Question: Well, let me ask you this. Who, in
doing due diligence, would ever invest without the positive reference of a fund that was primarily funding the investment for 18 months? Wouldn't that be
Page 1794 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 absolutely critical to any kind of diligence? And there was an objection to form. And then you gave this answer. Answer: Yes. Based on my experience in
running a Ponzi scheme for four or five years, the only people that ever invested without doing that type of diligence -- meaning talking to the fund -- were people who were in the know about the fact that we were committing a fraud. "People that were in the know about the fact that we were in the act of committing a fraud," did you give that answer in response to be given that question the other day at page 1189 of the transcript? A Q I did. Now, would you apply that to -- do you know
that Mr. Von Allmen invested $47 million of his and his own family's money in May and June of 2009? A I don't know the dates. I know they invested,
in total, over -- I believe over $100 million. Q Do you know that the first bulk of the -- the
bulk of the investment was made through the introduction of Barry Bekkedam through the Banyon income fund? A To my knowledge, there was always a lot of
dispute who was actually responsible for getting that. So you're asking me to guess as to what really went on; United Reporting, Inc. (954) 525- 2221
Page 1795 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I can only tell you what my understanding was. Q Well, putting aside whether Bekkedam deserved
the credit, was Bekkedam involved, or claiming to be involved, in making the introduction between Von Allmen and Preve and Levin in connection with the initial investments? A Q At some level, yes. These were the initial investments, as
distinct from the so-called Clockwork, Discala, Razorback and D3 Capital investments in October? A Q Yes, that's correct. So with respect to the earlier investments,
the investments that were made in the Banyan income fund, am I correct that approximately $47 million was invested by Von Allmen and his family in or about May or June of 2009? A I don't know the dates. They did invest
through various sources.
I can't tell you for certain
without seeing all the financial charts. Q Do you know that Mr. Von Allmen made those
investments, that is the $47 million, and he did not have any contact with the funds? MR. SCHERER: question. A No. He was being told by Mr. Preve and Mr. United Reporting, Inc. (954) 525- 2221 Object to form of the
Page 1796 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Levin that everything was current, and he was being told by me. So I can only surmise that they took our word for it and checked up on it later, but we did tell him we were current because we understood the funds were going to tell him we were current. BY MR. LAUER: Q But he did not have any contact with the
funds; do you know that? A I have no way of knowing one way or the other. MR. SCHERER: BY MR. LAUER: Q Do you know that he has testified in this case Objection to form.
that he did not have any contact with the funds? A I never read his testimony. MR. SCHERER: BY MR. LAUER: Q And do you know that Mr. Bekkedam had no Objection to form.
contact with the funds? MR. SCHERER: Objection to form.
I don't think Mr. Bekkedam would have given a
hoot one way or other. BY MR. LAUER: Q Is that an agreement, that you know that
Bekkedam did not contact the funds? United Reporting, Inc. (954) 525- 2221
Page 1797 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A I don't think Mr. Bekkedam could have cared
less if I was printing the cash in my garage and handing it out. So long as he got his money from Nova Bank and
his loans from for Mr. Levin, I don't think they gave a hoot, could care less about his clients. That is my impression. It was my impression
then, and it remains my impression today. Q In fact, your testimony or your -- at page
1189, the only type of people who would invest without contacting the funds -- without the positive reference of the fund, would be people who were in the know about the fact that you were committing a fraud, would that apply to the -- Mr. Szafranski's investors, none of whom ever contacted the funds? A I think it would apply to everybody, but
different people were sold different bills of goods. So perhaps when I gave the answer, I overreached; but everyone always asked us -- perhaps a better way to state more clearly what I was trying to get at is, nobody was going to investing -- no legitimate investor, anyway, was going to invest without at least inquiring if we were current, perhaps asking for permission to contact past investors, whatever it would be. Mr. Szafranski's investors were being sold a United Reporting, Inc. (954) 525- 2221
Page 1798 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A whole other different bill of goods by Mr. Szafranski. Q But it is a fact that not one of
Mr. Szafranski's investors ever contacted the funds; do you know that for a fact? A Q I don't know that one way or the other. Has anyone ever told you that -- that any of
Mr. Szafranski's investors ever contacted the funds? A other. Q At page 348 of the transcript, you testified I don't recall being told that one way or the
that you only became aware that the funds took a write-down of their Rothstein-related investment after the crash. Do you remember that testimony? I became aware that they took the
write-down -- to the best of my recollection, I became aware that it was in April '09 -- write-down -- after I returned from Morocco. recollection. Q Okay. So your best recollection when you gave That's the best of my
testimony on direct was that until you came back from Morocco, you had not been informed that, with respect -in April, or shortly after April of '09, the funds took a write-down of their Rothstein-related investment? A No, that's not -United Reporting, Inc. (954) 525- 2221
Page 1799 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Q A Is that your testimony? That is not my testimony. No? My testimony is that that's to the best of my
recollection as I sit here today. It's certainly possible that somewhere buried in the hundreds of thousands of emails that I was advised something contrary to that. independent recollection of it. it. I recall a lot of threats about defaulting us, but I don't recall anyone specifically saying that they took a write-down. You'd have to check the email I don't have an
I don't recall hearing
traffic to be certain one way or the other. Q Well, in fact, on or about June 30th, 2009,
Mr. Levin sent you an email entitled, in bold letters, "the story is now out of the bag"? A Q A Q I'd have to see the email. You don't remember that? I do not. And in that email, Mr. Levin informed you that
Platinum is in the process of writing down their investment in Banyan. Do you remember that? I'd have to see the email. United Reporting, Inc. (954) 525- 2221
Page 1800 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Q Q Now, you've testified that the fund managers
told you in -A Does it say anywhere in the email that they I'm curious because you're
actually did write it down? not showing me the email. Q
You have testified -- you testified that you
had conversations with the fund managers after the payment was missed in mid-April where you say the fund manager said they would give you a credit rating with future investors. Do you remember that testimony? That is correct. All right. And, in fact, shortly after you
claimed you were told that, you were informed by Mr. Levin that, in fact, at least one of your perspective investors, Mr. Bekkedam and his group, were now aware of the fact that the fund was writing down the investment. Do you remember that? There's a lot to your question. First of all, you say I claim this. If you look at the email traffic between me and Mr. Preve, you'll clearly see that we were going back and forth making certain that the funds were going to give us a positive credit rating. Q And that was -United Reporting, Inc. (954) 525- 2221
Page 1801 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A That's clear -That was important to you? Hang on. Let me finish.
That was clear from the emails. Additionally, you're not showing me the email, for whatever reason, Levin saying to me -- they're on the cusp of doing something and doing it -- let me finish, please -- are two completely different things. Number three, Levin telling me that something is going on and then Mr. Preve contradicting it, another completely different factor. happened or not. I don't know if it
You have to show me the email string.
And as far as Bekkedam goes, if you want to get into a whole conversation about what Bekkedam knew and didn't know and what I think he was doing and his purposes, we can certainly do that. But Barry -- Barry
couldn't have cared less one way or the other. Q I'm going to show you the emails, but this is
about your sworn testimony and your honest recollection; it's not about the emails. We can all read the emails.
So before we get to the emails, all right, am I correct that you believed that it was important to you that with respect to future investors, that if the fund were contacted by them, that they would get a positive credit rating? United Reporting, Inc. (954) 525- 2221
Page 1802 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Q Correct. All right. And do you recall being informed
by Mr. Levin, in or about June of 2009, which is shortly after you had your meetings with the fund managers, that, in fact, the funds were now known to be writing down their investment? A I recall -MR. SCHERER: Objection.
I recall being told that they were threatening I recall being told that I recall
to write down the investment.
Mr. Glass was on the cusp of calling the SCC.
being told a lot of things that made us extremely concerned about our relationship with the funds. I also recall being told by Mr. Simony and Mr. Nordlicht that they were going to give us a positive credit reference, and that it was in no one's interest to have this all blow up. BY MR. LAUER: Q I'll show you what we'll -- what is marked as
Exhibit 226, which is a composite of four pieces of paper, many several emails. (Thereupon, the document was marked as Platinum and Centurion's Exhibit 226 for Identification.) MR. LAUER: Mr. Hertzberg corrects me:
Page 1803 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q A Q A Q It's one string of emails. BY MR. LAUER: Q You see the top document, it's dated June 30,
2009, from Preve to you? A Q I do. Go to the second page. Do you see that's an email from George Levin to you dated June 11, 2009? A Yes. Give me a chance to read it. I would ask that there be no discussion. I'm sorry? Go ahead. Okay. Do you see that Mr. Levin, in bold, has said: Do you see that? I'm just reading.
The story is now out of the bag. A I do.
That's why it's not in reference to
what you're saying it's in reference to. Q question? A Q I see the words "the story is now out of bag." And did you get this email from Mr. Levin on Do you see that? Do you see that is the
or about June 30th, 2009? A Q I did. All right. And he goes on to say, this is
Page 1804 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Q what Frank and I have been concerned about. Do you see that? I see that. And Frank is Mr. Preve, right? Yes. And the next sentence, the good news is
Platinum -- and that's referring to my client, the Platinum fund, correct? A The good news is Platinum has or is in the
process of writing down their investment in Banyan. Q A read it. Q A Q And Platinum is my client, the hedge fund? Yes. And you know when you write down an Did you read that? You read that, right? I just
It's sitting right in front of me.
investment, you are writing it down because it's impaired. A Do you know what that means? No. Actually, I'm really confused now because
George is saying this is good news. Q Do you know -MR. SCHERER: BY MR. LAUER: Q The question, Mr. Rothstein -MR. SCHERER: Let him answer. Objection.
Page 1805 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A impaired." Okay. BY MR. LAUER: Q A The funds lent money -Why don't you let me finish my answer? United Reporting, Inc. (954) 525- 2221 They weren't -- hang on. BY MR. LAUER: Q The question is, do you know. MR. SCHERER: BY MR. LAUER: Q The question is: MR. SCHERER: MR. MR. NURIK: Do you know what it means -Let him answer. Objection.
Let him finish his answer. If you want to finish
your answer, finish your answer. THE WITNESS: I'm so confused by what's If
going on right now; everyone is yelling. you guys could calm down. BY MR. LAUER: Q We are calm. Do you know -- the question is:
Do you know
what it means when a write-down takes place? MR. SCHERER: BY MR. LAUER: Q Did you know that the asset is impaired? MR. SCHERER: Objection, form. Objection, form.
I don't know what you mean "asset is
Page 1806 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Q Q A Q Because you're not being responsive. Because you don't like my answer. I have no problem with your -- with your
testimony, when it's responsive. A Q You mean when it fits your needs. When it's responsive. We can take -Just let me answer the question. I'm not -- I'm not here for your speech. I'm
here for you to answer our questions. My question is: Do you understand that when
an investment is impaired, it calls for a write-down? A I understand -MR. SCHERER: Object to the form.
I understand that when an investment is
impaired, one of the things that can occur is a write-down. I also understand, now, in reading this, that you're trying to twist what it says because it says, has or in the process of it; and it's my knowledge, to the best of my knowledge, that we later took the position, based upon having people call the hedge funds, that they had not written it down; or if they had written it down, sir, that they were going to lie for us. believe they did. United Reporting, Inc. (954) 525- 2221 Which I
Page 1807 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A MR. CRAIG: non-responsive. MR. LAUER: BY MR. LAUER: Q Well, do you know -UNKNOWN SPEAKER: Move to strike on the Totally non-responsive. Objection. Move to strike,
basis that it's not helpful. MR. LAUER: THE WITNESS: It's non-responsive. It's exactly responsive.
If you want the jury to know the truth about what was occurring, as opposed to just twisting the words. Ask me a question, I'll give you an answer. I have been nothing but a gentleman with you here today, and for some reason, you keep wanting to go cut me off. BY MR. LAUER: Q Do you know that, in fact, the Platinum fund Please don't.
had written down the investment as of the end of April 30, 2009? MR. SCHERER: Objection, form.
I know that now.
BY MR. LAUER: Q All right. United Reporting, Inc. (954) 525- 2221
Page 1808 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Back then, I either knew that they were I
thinking about it, okay, or weren't going to do it. don't know. My only concern was that the investor -excuse me, that the hedge funds, Mr. Nordlicht,
specifically, and/or Mr. Simony, as evidenced by email traffic back and forth between us, between Mr. Preve and I, were going to lie for us and say that we were a good investment. And I believe the email traffic further
goes on to state that they did, in fact, do that. Q And not withstanding your non-responsive
testimony, the fact is that Mr. Bekkedam wrote Mr. Levin earlier in this email string. A Q Yes. George, below is an email for a guy who works Quote, Platinum is the
for me that I received today.
group that I heard earlier in the day had -- and these are within his quotes -- written down. It's in the past tense; is that right? -- written down their fund for losses or anticipated losses through Rothstein, close quote. Have I read that quickly? That -- you have, but you need to understand
what was going on -Q Have I read that -United Reporting, Inc. (954) 525- 2221
Page 1809 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 want. A Q -- at that moment, please. The question is, have I read that correctly? MR. NURIK: MR. SCHERER: MR. MR. NURIK: MR. LAUER: that -MR. SCHERER: Streitfeld -MR. NURIK: MR. SCHERER: second. MR. NURIK: question. Hold on, Bill. You can put on the record whatever you Don't interrupt me. Let me speak. Allow him to finish the Allow him to finish --- on the phone in just a We are going to get Judge Excuse me, counsel. Objection to form. Counsel, please.
The question is, have I read
Allow him to finish the answer. If you want to move to strike it, you want to say whatever you want to say so you have the record, you can do that; but don't interrupt the witness. MR. LAUER: MR. NURIK: MR. LAUER: Mr. Nurik -You just interrupted me, sir. We can continue this in
Page 1810 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A court, right? You were five minutes late. under time constraints. We're are
There is no
opportunity for filibuster. BY MR. LAUER: Q Mr. Rothstein -MR. NURIK: This is not filibustering.
Do not interrupt me. Q -- have I read it correctly that, in fact, Mr.
Bekkedam -- that, in fact, Mr. Bekkedam states in the past tense, that Platinum, quote, has written down their fund for losses or anticipated losses through Rothstein? MR. SCHERER: Object to form.
Mr. Bekkedam did not want anyone having He was always
anything to do with the hedge funds.
trying to make himself look like the white knight and everybody else to look like evil incarnate. the way he sold his products. pitched himself. It's all part and parcel of all the various lies that he was telling during the course of this whole scam to try to get money out of George, both for his bank and for his own personal pockets. You need to understand what was going on with him and his fake lawyer due diligence guy, Mr. Rovin, United Reporting, Inc. (954) 525- 2221 That was
That was the way he
Page 1811 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 George: both of whom allowed $25 million in paper -- in their clients' money to be paid into this Ponzi scheme without a shred of paper or even a as tiny little bit of an audit. So taking what he said, that he is writing to I heard that the -- earlier today that Platinum
has written down their fund, means absolutely nothing. He would have said the sky is falling and that Humpty-Dumpty can't be put back together if it was going to benefit his pocket. BY MR. LAUER: Q Have I read correctly, Mr. Rothstein, that in That's my answer.
this email from Bekkedam to Mr. Levin, he says in the past tense, that Platinum has written down their fund for losses or anticipated losses from Rothstein? A That's what I -MR. SCHERER: BY MR. LAUER: Q All right. And, in fact, Mr. Levin then took Object to form.
that and wrote to you, the story is now out of the bag, right? A I can't tell you what anyone was thinking. And in reading this, that is certainly what he wrote; and it's become even more of a mystery to me when I am sitting here, reading it again, because then he United Reporting, Inc. (954) 525- 2221
Page 1812 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 starts saying, the good news is Platinum has or is in the process of writing down their investment with Banyan; which, to me, is totally contrary to the spin they're trying to put on it. So now I'm even more confused. MR. CRAIG: Non-responsive. BY MR. LAUER: Q And when you got the email from Mr. Levin Objection. Move to strike.
saying that the story is now out of the bag, that, in fact, Platinum was writing down their Rothstein-related investment, did you email Mr. Nordlicht, or anyone else at the fund, to say, what is going on here? A emails. I have no idea. You'd have to show me the
I don't recall specifically. My only concern was that, at the end of the
day, they would lie for us.
That was my concern. I didn't want
They didn't want this to blow. it to blow up.
I had been assured by Mr. Simony and
Mr. Nordlicht that they would not let it blow up. Q And yet -- and yet, Mr. Bekkedam, whose
talents for due diligence are not praised by you, somehow found out that the Platinum fund was actually writing down their investment. A That's what it appears in here. United Reporting, Inc. (954) 525- 2221
Page 1813 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 called. What his purpose is and whether it actually occurred, I have no idea. There is so many rumors on
the street all the time -- you remember that there were rumors about me going years back that I was running a Ponzi scheme. Q People kept investing.
And when you got this story out of the bag
from Levin, did you email Mr. Levin or Preve asking them to check with the funds to find out what was going on with this write-down or proposed write-down? A There are close to a million emails involved You would have to show me the email
in this case. traffic.
I don't have a specific recollection one way
or the other. I may have written to them. I may have
I may have made one of my infamous calls where I don't
I got on the phone screaming at somebody. recall, specifically, one way or the other.
Again, the end result was the end result: They gave us a positive reference and people invested. Q Other than Mr. Discala, not a single person
connected with any of these investors had any contact with the fund -A Q A That's your statement. -- prior to the investment? That's your statement. I don't know that to
Page 1814 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q be true. And it's directly contrary to what your client has told me. Q Now, did you learn that the funds, in fact, in
their April 30 letter, had taken the 20-percent write-down? A Q Say this again. Did you learn that the fund had taken a
20-percent write-down in their April 2009 letter? A Could you provide a time frame for me, and
what letter are you talking about? Q A investors. Q A You've never seen the letter to investors? I didn't say I never saw it. Please don't A letter to their investors. I don't recall ever seeing the letter to their
twist my words. I said I don't recall seeing the letter. Okay. When you got the Levin email forwarding
Bekkedam's information, did you speak with Mr. Von Allmen about checking this out? A I don't recall one way or the other. I was
corresponding, in brief, with Mr. Allmen -- by Mr. Von Allmen by email. I had a conversations with Mr. Von
Allmen, but I don't specifically recollect one way or United Reporting, Inc. (954) 525- 2221
Page 1815 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 focus. the other whether I did or didn't. I had a primary concern, and that was my All of this other thing was -- it was extraneous
to me, as opposed to the main goal of what we were doing was to get money into a floundering Ponzi scheme. Q When Mr. Discala came on the scene and began
to speak with you in September and October about the so-called Razorback and D3 Capital deals, did you discuss with him the fact that the funds had taken a write-down or were reported to have a taken a write-down of their investment? A Q A other. Q A other. Q Clay McDaniels? I may have. I don't recall one way or the I don't recall one way or the other. Did you ever hear the name Clay Daniels? I may have. I don't recall one way or the
It's certainly possible. When you talked to Von Allmen, did he tell you
that he had some indirect connection with the funds through earlier investments? A I don't recall one way or the other. It's
certainly possible. Q In all of the two years that you have had to
review files and emails, are you able to identify a United Reporting, Inc. (954) 525- 2221
Page 1816 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q A calls. single email in which, following Mr. Levin's email of June 30th, "the story is now out of the bag," where you emailed anyone asking for follow-up information about what Bekkedam had said to Levin? A I don't recall. The only thing I really recall is some telephone calls, but I don't recall sending an email. I may have. Now you recall telephone calls? No, it's not that now I recall telephone I recall speaking to Mr. Preve -- it may have
been before this; it may have been after this -- about making sure that we were getting a positive reference. Whether it was related to this email, I can't tell you one way or the other. Q Did you speak with Preve about the fact that
now you were told by Levin that the cat -- the story is now out of the bag? A It would have been in my nature to have that
conversation, but I can't tell you one way or the other. I don't have a specific recollection, sir. Q A Q Do you know how many investors Platinum has? I have no idea. Do you know how many people were informed by
Platinum of the write-down? United Reporting, Inc. (954) 525- 2221
Page 1817 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q I have no idea. Did Mr. Discala, when he was doing what you
claim to be due diligence, did he tell you that he had spoken to any of the investors in the funds? A have. Q Do you have any specific recollection of To the investors, I don't recall that. He may
Discala telling you that he spoke to anyone who was an investor in one or more of the hedge funds? A I don't have any specific recollection, but
I've got to tell you, sitting here now, with you telling me that all these people knew that all this money that was supposed to be in trust accounts had been written down, I'm shocked no one called the police. This money is supposed to be locked up in trust accounts, so I'm kind of shocked -- actually, more than kind of shocked. Q Okay. I would like to show you Exhibit 62, if
I can find it. Showing you Exhibit 62, you were shown this on direct examination, as an email from you to Mr. Preve, October 15, 2009. A Q A Just give me one second to read it. Sure. Okay. United Reporting, Inc. (954) 525- 2221
Page 1818 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A sir. Q All right. And now I've shown you, a few Q Now, October 15 is about the time that you're
talking with Mr. Discala about what became the D3 Capital deal? A I don't recall the time frame of discussing
D3, but I was engaged in conversation with Mr. Discala and various other people associated with his funds. Q Okay. You see number two, "need to send
something so I can send something to Jack"? A Q I see that. He's a key figure now, acting as a go-between
for the new hedge fund investors and Centurion Platinum? A Q right? A Q Yes. And you had given testimony on direct that you I see that. All right. Now, this is October 15, 2009,
thought that if Jack had received payment, he had been paid in the SFS deal, which is the Regent deal, right? A That's to the best of my recollection, yes,
moments ago, that the Regent deal, the last payment from the Regent deal was in the spring of 2009. Do you remember that? That's correct. United Reporting, Inc. (954) 525- 2221
Page 1819 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Okay. So that was a number of months before
October 15th, 2009? A Q That's what this says, yes, sir. So is it possible that you thought he might
have been paid, but, in fact, he was never paid? A That's certainly possible. I don't recall
whether he was paid or not.
It's very possible that I
thought that he was and he wasn't. I really -- as I sit here today, I still believe the hedge fund was paid something because he did, in fact, to my knowledge, lie for us. So he either
did it without any compensation, after having received compensation or because he expected compensation in the future -- or he was trying to cover himself. know which it is. Q A Q told? A As far as everything in the world or as far as But you don't know? I do not know. All right. And you only know what you were I don't
this specific conversation? Q A Q This -That's kind of a broad question. This email from Preve to you, this is
October 15, right? United Reporting, Inc. (954) 525- 2221
Page 1820 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it? correctly? A You have read this correctly. I don't know what -- you're discerning from Are you asking me to discern what I thought this A Q A A Q Yes. And he goes on to say in paragraph two, they
are deeply suspicious. I assume he is referring to new investors? That's what I assumed when I read this, that
that's what Mr. Preve was saying. Q The new investors are deeply suspicious that
no one from Plat is calling them back. And "Plat" is Platinum? Yes, sir. All right. And he is saying here that as of
October 15, 2009, no one from Platinum is calling back the new investors? Have I read -- have I discerned that
meant? Q No. I'm asking you of I'm reading it
correctly but "Plat" is Platinum, so it's not an exact reading. Is the gist of what Preve telling you is as of October 15, 2009, the new investors, that is Discala's group of people, are deeply suspicious that no one from United Reporting, Inc. (954) 525- 2221
Page 1821 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q Platinum is calling them back? A The gist of what this is, to me, and what it
was to me, was this is Frank trying to make sure that I pay Jack, and this is the best way to do it. Q A Okay. Whether -- whether you --
Whether or not they're actually calling him
back, I don't know. Unfortunately, or fortunately, every one was manipulating everybody by this point this time. And to
me, I read this, you have got to pay Jack because Jack is going to be the one that is going to lie for us, so pay him. Q Let's focus on the second part, okay, which is
Preve is telling you that Discala's group of investors -- this is October 15th, 2009 -- are deeply suspicious that no one from Platinum is calling them back. Do you see that? I do. And you were having direct communication with
Discala at that time, correct? A Q I was. All right. And did you say to Discala, Preve
tells me that you guys are suspicious or you guys are peeved that no one from Platinum is calling you back, I United Reporting, Inc. (954) 525- 2221
Page 1822 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 will take care of it, or something to that effect? A other. I don't recall AJ being deeply suspicious. That's not my recollection of how I got along with AJ, and I think my emails would -- my email traffic with him bears that out, that we were -- we had a good working relationship and he was trying to get the deals funded. Q Did AJ tell you that he had only a single I may have. I don't recollect one way or the
25-minute meeting with anyone from the funds prior to you going to Morocco? A He didn't tell me the length of time of the
meeting, no, sir. Q But you know that he had only one meeting with
Mr. Simony? A I don't know how many meetings he had. I know
he met with people from the funds or spoke to people from the funds. Q "People" is plural; Mr. Discala has testified
under oath that he spoke and met with only one individual prior to you going to Morocco, and that is Mr. Simony. A To my understanding. MR. SCHERER: question. United Reporting, Inc. (954) 525- 2221 Object to form of the
Page 1823 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY MR. LAUER: Q Did he -- did he tell you that he spoke to
someone other than Mr. Simony prior to you going to Morocco? A the other. Q And other than his conversation with I don't have a recollection to that one way or
Mr. Simony, did he tell you that he spoke with anyone other than Simony? A Q I don't recall him saying that. And when you got this email from Preve, did
you have any email communication with Preve concerning getting the Platinum people to call AJ's investors back? A I may have; I may not have. I may have
called; I may not have. recollection. Q
I don't have a specific
In all of the emails that you have reviewed --
you want to put that on the record? A Q I'm sorry? In all of the emails that you have reviewed,
have you seen any email from you to Preve or from Preve to you on or about October 15, until the time you went to Morocco, concerning the fact that he was telling you that the Platinum people were not calling the new investors back? United Reporting, Inc. (954) 525- 2221
Page 1824 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q I don't recall. When you got Preve's email saying that the new
investors were deeply suspicious that Platinum was not calling them back, did you forward the email to anyone at the funds demanding that they clarify this and demanding that they speak to the new investors? A Q I don't recall. And yet, after October 15, you continued to
release funds to the Banyon collection accounts which, in turn, continued to release money in repayment to the funds? A Q That sounds correct. All right. In fact, the funds were repaid on
October 20, October 22, October 26? A other. Q You testified that Frank Preve -- this is your The records would bear that out one way or the
testimony -- that Mr. Preve knew that you were engaged in fraudulent activity, correct? A Q Yes, sir. And you have also testified that, as you sit
here today, it's not clear to you whether Mr. Levin was personally aware of the fraudulent activity? A Q Correct. And then you testified that Preve personally United Reporting, Inc. (954) 525- 2221
Page 1825 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 made a fair amount of money through his dealings with you? A Q Correct. Now, Levin, independent of whatever dealings
he had with you, was a wealthy man, right? A Q Yes. And he had significant real estate assets, as
well as other assets? A Q Yes. He might have had a net worth in excess of
$100 million or more? A Q He might have, yes. And Preve, acted purportedly on behalf of Mr.
Levin -- Levin's funds in your scheme, correct? A Q That doesn't sound correct to me, no. Did Preve invest funds of Mr. Levin in
purchasing settlements purportedly from your clients? A I can only tell you what my impression was. I
can't tell you what was going on behind the scenes, so I can't answer that question with any accuracy. Q Was it your impression that Levin's money was
being used to buy investments? A Q Yes. And was it your impression that Mr. Levin,
with respect to some investors or lenders, such as the United Reporting, Inc. (954) 525- 2221
Page 1826 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 at risk. sir. Q And you testified that you believed that you hedge funds, had personally guaranteed his assets -- had guaranteed loans that were being made by his Banyan entities? A I did learn that at some point in time, yes,
had one or more deals with Preve where he was getting money that was not, in fact, going to Levin? A Q That's my understanding, sir. Is it fair to say, then, that in substance, in
your view, Mr. Preve, having put Mr. Levin's net worth at risk through these guarantees and investing Mr. Levin's funds in these fictitious investments, was acting for himself and not for Levin's ultimate benefit? A question. You say Mr. Preve putting Mr. Levin's assets I don't know that to be the case. My There are a couple of issues with your
understanding is that Levin wanted to guarantee what was going on; but, again, I don't know what was going on behind -- behind the scenes, and I don't want to guess. Q So you -- in other words, you don't know
whether or not Levin knew or not? A testimony. No. I think that's consistent with my
I don't know -- even as I sit here right United Reporting, Inc. (954) 525- 2221
Page 1827 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 yes. Q All right. You commented a couple of times on yes. Q All right. In fact, he, then, would have been now, sir, I can't tell you with any certainty one way or the other, exactly how much he knew and at what points in time or what was going on behind the scenes. Q Correct. So if Levin did not now that you were engaged in a fraud but his assets were put at risk by virtue of these guarantees, and Preve, in turn, knew that you were engaged in a fraud, then Preve was not acting for Mr. Levin's benefit? A Given that hypothetical, the answer would be
acting contrary to Mr. Levin's true interest? A Given that hypothetical, the answer would be
Mr. Von Allmen and you thought he did wonderful due diligence; do you remember that? A Q A I recall something to that effect, yes, sir. Okay. So at any point in time --
I thought that his group, as a whole, did
better due diligence than most, yes. Q Okay. So at any point in time, did anyone of
Mr. Von Allmen's group ask to speak to any attorney who referred you business? United Reporting, Inc. (954) 525- 2221
Page 1828 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q I don't recall. All right. Did you arrange at any time, any
meeting with anyone of Mr. Von Allmen's group to speak with referring attorneys? A Q I don't recall. Now, Mr. Levin was a local guy, was he not? You testified that you met him
He lived near you?
outside your house on one occasion? A No. No. You said "Mr. Levin"; you mean
Mr. Von Allmen. Q A Q A Q I apologize. That's okay. I apologize. Mr. Von Allmen.
He was my neighbor. He was your neighbor. At any point in time when Mr. Von Allmen was
considering making these investments and ultimately did investments, did Von Allmen say to you, in words or in substance, so, Scott, which of the local guys are referring you all these cases? A other. Q And you never introduced him to any referring He may have. I don't recall one way or the
attorney, did you? A I don't recall -- excuse me. United Reporting, Inc. (954) 525- 2221
Page 1829 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY MR. SCHNAPP: United Reporting, Inc. (954) 525- 2221 I don't recall introducing him to any referring attorneys, no, sir. Q And you never introduced Discala to any
referring attorney, did you? A I don't recall doing that. I may have. I
don't recall. Q A And they never asked, did they? I'd have to see all their email due diligence
to tell you that one way or the other. I recall getting a lot of questions, detailed questions, from any number of their lawyers at different points in time, so I can't recall specifically what they asked me. Q They did ask a lot of detailed questions. But did you ever introduce any of their
lawyers to any referring attorney? A I don't recall doing that, sir, no. MR. LAUER: at this time. THE WITNESS: minutes? MR. LAUER: four hours. I am adjourning. We have Can we take a couple of I have no further questions
Don't worry.
(Whereupon, a recess was had.) DIRECT EXAMINATION
Page 1830 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Good morning, Mr. Rothstein. My name is Mark
Schnapp, and I am an attorney with Greenberg Traurig representing TD Bank, and with me is Donna Evans, my partner, who is also going to be asking you some questions. A Q Okay? Good morning to you both. You testified that -- quite a bit, and I don't
want to you repeat all your testimony; but you did testify about a "rock-star lifestyle"; is that right? A Q Correct. And that rock-star lifestyle was something
that you were going to try to achieve as a result of the your fraud; is that right? A Q It was something that I was achieving, yes. Okay. And it was important for you to better
your lifestyle; is that fair? A I, unfortunately, had a huge ego, and I As people
couldn't get enough of just about anything. said -- I believe I testified yesterday -- I unfortunately spent money like I hated it. Q Right.
You testified you had a huge ego; do
you not have a huge ego now? A Q My ego, now, is nearly nonexistent. Sir, so, is it fair to say that you chose to
do illegal things to improve your lifestyle? United Reporting, Inc. (954) 525- 2221
Page 1831 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q Agreed, yes. Okay. And in doing so, you made a number of For example, you
decisions to lie about various things.
lied to your investors that there were actual settlements available for sale? A Q investors? A Q I did, sir. You lied to Debra Villegas when you told her To some, yes, sir. You gave phony bank statements to some
that you were being threatened by the mob and that's why she needed to help you; is that true? A Q I did, sir. And you -- it's fair to say that during the
bulk of the time that you were committing this Ponzi, your day involved a lot of lying, isn't that true? A Q A Q A Q Yes, sir. And that's how you got a better lifestyle? That's one of the ways, sir, yes. And, in fact, now you're in jail, right? I am. And you're also trying to improve your
lifestyle, correct? A Q I don't understand your question, sir. Are you trying to get out of jail? United Reporting, Inc. (954) 525- 2221
Page 1832 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q A Q Yes, sir. And you're using your same techniques, lying
to other people, in order to accomplish that; isn't that true? A Q A Morocco. Q So you became a truthful person all of a No, sir. When did you stop lying? The moment I decided to come back from
sudden; is that right? A I don't think you become a truthful person all I think you make a conscious decision to
of a sudden.
change, which is what I did. People do change. You made a conscious decision to take activity
which could put you in the witness protection so that you would never have to face and deal with many of these people that you lied to? MR. LAVECCHIO: to rephrase it? BY MR. SCHNAPP: Q You are in witness protection so you don't Objection. Do you want
have to face a number of the people that you lied to; isn't that true? MR. LAVECCHIO: Objection, privilege.
Page 1833 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY MR. SCHNAPP: Q We were just talking about the funds, right,
and you lied to the funds; isn't that true? A Q Yes, sir. And you lied to -- you lied to the funds. In
fact, you told them that you couldn't make tabs on some of deals that they had financed; isn't that true? A Q At certain points in time, sir, absolutely. And why, if a deal was fully funded by a
company, then the proceeds were in your trust account, would there be any problem in you paying those trust account funds to the purchaser of the settlement? A There shouldn't have been. That's why I was
surprised nobody called the police. Q So you're saying that, basically, if the hedge
funds had called the police, questioning your failure to release, quote, fully-funded settlements, that would have been the end of it? A Correct. That would have been the end of it,
if anyone did that. If TD Bank had called the police based upon all those monies moving around -MR. SCHNAPP: responsive. questions. Move to strike as not
You're going to answer my Okay? United Reporting, Inc. (954) 525- 2221
Page 1834 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. CRAIG: BY MR. SCHNAPP: Q Now, when you told the funds that you had a Join.
Bar problem, why would your Bar problem preclude you from paying out money on old settlements? A Q That's the story I created. But why would that even, you know, make sense?
Why would your Bar problem preclude you paying out money on a fully-funded settlement where you were holding proceeds that were due to a plaintiff? A Q That's the story I created. I understand that's the story, but why? Why
would it even make sense? A I didn't say it made sense. I said that's the
story I created. Q Okay. So you created an unbelievable story,
and nobody challenged you? A Believability is in the receiver, not with me.
I created a story that suited my needs at the time. People choose to believe or not to believe or look the other way. Q And, in fact, as you were seeking to bring in
new investors, did you tell those new investors that, hey, I have a Bar problem; I may never be able to pay you? United Reporting, Inc. (954) 525- 2221
Page 1835 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q No, sir. Now, the funds, when they were -- you cut
deals with the funds, right, to try to get rid of them? A Q I cut deals with them? Did you cut deals with the funds at some point
on a pay-out schedule? A I think that would have been Mr. Preve and I
talking about the payment schedule back and forth. Ultimately the deal would have been between Mr. Preve and them but, ultimately, payments from me. Q Now, the funds, rather, were lenders to
Banyan; is that right? A Q A payments. Q funds? A I believe I did technically, because I was Did you have any financial obligation to the Correct. Why would you be making payments? I controlled all the money. I made all the
holding, allegedly trust funds, that ultimately were to be paid to them. So I believe, in the whole mechanism
of the transaction, that I did; but I wasn't in privity with them, no. Q I wasn't the direct borrower.
And was Mr. Preve concerned that you were
not -- you were not paying the funds? United Reporting, Inc. (954) 525- 2221
Page 1836 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A Q Sure. Yes.
Did you also tell Mr. Preve that in order to
release more money, they would have to inject more money into the Ponzi scheme? A Q Yes. Right. That's the way a Ponzi scheme works. In fact, there are documents that say
that if -- if you, the funds, want your money, you have to put back in the 70 percent of what I'm paying you, right? A said that. Q And you also recall emails where people I recall several people writing emails that
involved with the funds, where you told them that you had a new investor that is coming in and you will use that new investor's fund to pay them out? A says that. I recall seeing an email from Mr. Preve that I may have written one, as well; I don't
specifically recall. Q And isn't it a fact, sir, that those are the
classic red flags of a Ponzi scheme, in that, one, you tried to have people roll their money back in the deal; and, two, you were going to tell them that they were going to be paid out with new investor money. Isn't that true? To me, those -- that appeared to be a red flag United Reporting, Inc. (954) 525- 2221
Page 1837 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 of a Ponzi scheme, yes, sir. Q Well, is there any reason in a deal where you
sold a structured settlement and had the proceeds of a structured settlement in your trust account, that you would need new people's money to pay out old investors? A To my way of thinking, no, it made no sense in
line with the structure that I was selling as a investment. Q That made no sense to me.
And didn't anybody ask you, Scott Rothstein,
why is it that you're paying me out with new money? What happened to the money that you are holding in your trust account that is already locked? A The only time I was ever asked that, I told
them that was being held up by the Bar; but other than that, people didn't really seem interested one way or the other. Q And people were interested, particularly the
funds, in getting new investor money to pay them out; isn't that true? A Q It appeared that way to me, sir, yes. And that would be consistent with a Ponzi
scheme, new investor money to pay out old investors? A My way of thinking, absolutely so. ALL PRESENT: Objection to form.
Page 1838 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY MR. SCHNAPP: Q Sir, did any of the funds -- when I say
"funds," I mean the individuals involved with the funds -- ever go -A You're talking about -- I'm sorry. Just so
I -- you're talking about Centurion Platinum Level 3, right? Q A Q Yes. Okay. Did any of the funds ever offer to go to the
Florida Bar? A Q Ask to go? A Only because, to me, offer is like they're Offer to go or ask to go, sir? Well, let's say -- either way. You pick it.
doing something to try to help. I recall someone asking to go but I don't know whether that -- as I'm sitting here right now, I think that was emails between Preve and Levin and I. I'm not
sure that the hedge funds actually ever asked to go to the Bar. They may have asked to speak to someone from
the Bar, but I don't recall. Q And if the hedge funds went to the Bar, they
would have learned that your story was all made up? A Yes, sir. If anyone had gone, absolutely,
Page 1839 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A have. they would have learned it was all made up. Q And you indicated you also had someone named
Adria posing as a -- or someone posing as Adria from the Florida Bar. A I had someone in the office pretend to be
someone from the Bar on an occasion, yes, sir. Q Okay. So I'm trying to understand why a
person who has purchased a fully funded settlement, where those proceeds are in a bank, would it be accepting of an argument that the Florida Bar had frozen those funds. Why in the world would the Florida Bar
freeze funds from a fully funded deal? ALL PRESENT: Objection. Form.
I don't know of any reason that they would That was the story I came up with, and as I said,
people either believed it, chose to believe it, or looked the other way. If you're asking me if I thought it was a believable story, no, I didn't. were too many holes in it. BY MR. SCHNAPP: Q And did you feel at this time when you made up I believed that there
this story that the funds were looking the other way? ALL PRESENT: Objection.
It's my opinion that certain people at the United Reporting, Inc. (954) 525- 2221
Page 1840 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A A fund were looking the other way. BY MR. SCHNAPP: Q Which people? ALL PRESENT: Objection.
I believe -- it's my opinion -- that Jack
Simony was looking the other way, that Mr. Nordlicht was looking the other way, and I'm on the fence still about Mr. Glass. BY MR. SCHNAPP: Q other way? ALL PRESENT: Objection. And why would Mr. Nordlicht be looking the
It is my opinion that Mr. Nordlicht simply He wasn't interested in blowing He wasn't interested in seeing me
wanted his money back. up whatever this was. go to jail.
He was interested in getting the money back
for his investors. BY MR. SCHNAPP: Q Did Mr. Nordlicht ever speak to you about
going to jail? A Specifically using the word "jail," no, sir. ALL PRESENT: BY MR. SCHNAPP: Q But there were concerns raised that Ari Glass Objection to form.
might going to the SCC, correct? United Reporting, Inc. (954) 525- 2221
Page 1841 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A That's what I was told. And that was told to you by Mr. Nordlicht? It was told to me by Mr. Nordlicht, by
Mr. Simony and Mr. Preve. Q And they were threatening you with going to
public authorities in an effort to try to get money back from you; is that right? A They weren't really threatening me. What they
did was, what it appears to me now, is they had Ari acting as the lunatic and he was ranting about going to the authorities to apply pressure to us, yes. Q That's the email we saw or in the posit that
Ari Glass is a psychopath; is that correct? A Q That's one of them, yes. So you think Mr. Nordlicht was trying to
induce you to pay him with the threat of going -- of Ari going to the SCC? A Q As I sit here today, yes. Were you aware that Mr. Nordlicht testified,
in fact, that that was a little fib that he had made up in order to induce you to make a payment? A Q I was not aware of that. Were you aware -- and sir, when you made your
payment arrangements with Mr. Nordlicht to pay out his fund, what is the source of money for the payouts to his United Reporting, Inc. (954) 525- 2221
Page 1842 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A him, too? ALL PRESENT: Object to the form. A fund? A Ponzi funds, other Ponzi funds. New
investors' money, mostly Mr. Scherer's clients. Q And, in fact, Mr. Nordlicht knew that there
were other new investor funds that were being used to pay him out; isn't that true? ALL PRESENT: Object to the form.
To my knowledge, yes.
BY MR. SCHNAPP: Q A Q And you -That's my opinion. Go ahead. You mentioned Jack Simony. Is that true for
It's my opinion that -- yes, that the whole
reason that they were giving us a positive credit reference and the like was for the purpose to allow us to get new money in so they could be paid, and I believe that's born out by Mr. Preve's email to me -- excuse me, Mr. Preve's email to Mr. Nordlicht and Mr. Simony, where he specifically says, basically, that we're on the cusp of getting new investors in, that that's who is going to be calling you for the reference, and that you're giving us a positive reference will enable you to get out of United Reporting, Inc. (954) 525- 2221
Page 1843 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 "Guido"? A That was a name that I gave him early on. It the, quote/unquote, investment quickly. BY MR. SCHNAPP: Q Did you discuss the fact that you did not want
them to disclose the fact that your trust funds had been frozen? A Yes, I discussed with them the fact that I did
not want them to discuss anything about this other than a positive credit reference. Q Okay. And they were prepared to lie to new
investors; is that correct? A Q Yes. And that would be Mr. Nordlicht and
Mr. Simony? A Q A Q Yes. Anybody else? Again, I'm on the fence about Mr. Glass. What about Mr. Preve? By the way, why did you ever call Mr. Preve
was shortly after him coming to a dinner with me at Runway 84. And I decided that I was going to give him
the name "Guido." Q Runway 84 has some mob clientele there; is
that right? United Reporting, Inc. (954) 525- 2221
Page 1844 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Mob clientele? Is that what it's known for? Actually, I think it's known for its food,
but, yes, that's certainly something that's there. Q Right. And so -- and Mr. Preve, you also
called him 3Gs, right? A Q A Q Yes. 3Gs.
What did that mean? Guido, Guido, Guido. And in your -- when -- and in your
communications with Mr. Preve, you called yourself "Hoooooesie"; is that right? A That was actually a name that either Mr. Levin
or Mr. Preve -- someone gave me that name early on in this. THE REPORTER: for me, please. MR. SCHNAPP: THE WITNESS: H-O-O-O-O-O-E-S-I-E. I don't think it's ever Can you spell the nickname
consistent with the number of O's. BY MR. SCHNAPP: Q Yes. You don't seem to be consistent with the I granted you that.
number of O's. A
It was originally Robin Hood from the Bronx. The joke between Mr. Preve and I was that I United Reporting, Inc. (954) 525- 2221
Page 1845 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 was stealing from the rich to give to the richer. Q And that's the same type of joke you used with
Mr. Damson; isn't that right? A emails. I don't recall. You'd have to show me the
There was a lot of tongue-in-check with He and I joked around frequently, so it's
Mr. Damson.
very possible that I did, yes. Q Now, when the funds were having the
problems -- the funds I think in December '08 told you that they were going to be pulling out or lowering their commitment; is that right? A I don't know that the funds told me that
directly but that was certainly the message I was getting from them and certainly the message I was getting through Mr. Preve. Q But you didn't want the funds to come down to
do due diligence, did you? A I didn't want anyone doing due diligence if
they didn't have to, no, sir. Q Okay. In fact, you even wrote to -- why were
you communicating with Mr. Preve about your concerns about the funds doing due diligence? A Well, Mr. Preve was in on it, to start with. And number two, he was running -- I'll say running interference for me. We were trying to put our
Page 1846 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A heads together as to best handle all of this. coming down the pike. Q Well, you told Mr. Preve, for example, on It was
12/26 of '08, that, "Hey, Guido, we should probably speak before we get on the conference call. The idiots
at Centurion want me to now allow Brian to come down and do all the same things Mike does and does it -- and the same thing that Jack did. down for these assholes." What were you discussing there? I was discussing all of the various due I'm tired of pulling my pants
diligence that they were trying to do that I didn't want them to do. Q Well, let me ask you a question. The funds -They had
why are the funds doing due diligence now?
been doing business with you for quite some time at this point; is that true? A I don't know the specific reason. It was
allegedly because they were going to reinvest -- invest additional funds with us. specifics. Q A Q And -I was not privy to that. Did Mr. Preve give you guidance as to how to But I don't know the
deal with the funds? United Reporting, Inc. (954) 525- 2221
Page 1847 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A have it. Sure. Yes. I remember an email -- you should
There's an email in there where he told me,
when I was all aggravated about Brian Jedwab, he told me we just need to marginalize him. Q that? A He had some suggestions and it was basically Try to answer his questions as best as Okay. And what -- how were you going to do
to ignore him. possible. Q
So let me make sure I understand something.
That when the fund -- when you -- did cut some sort of deal with the funds -- with the funds not -- or the funds were not going to tell the new people that there was a problem, weren't you committing a fraud on the new investors? A Q Yes. And in committing that fraud on the new
investors, there would be a lack of disclosure of the fact that you had this, albeit fictitious, Bar problem but that was not going to be disclosed? A Q That's correct. We were trying to hide that.
And were it a real deal, that would be a
pretty significant thing to disclose to a new investor; wouldn't it be? A I agree. United Reporting, Inc. (954) 525- 2221
Page 1848 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q Their funding source supposedly had all his That would be a
money tied up by the Florida Bar.
fairly significant risk to a new investor; would it not? A Yes. As a matter of fact, I think there's
email traffic where we're specifically discussing that fact and that we need to make sure we keep a lid on it. Q A Q Well -That would be between Mr. Preve and I. All right. So just in a small group, we have
Mr. Nordlicht, Mr. Simony, Mr. Preve, and Mr. Levin, who were all involved in the Ponzi scheme; is that right? MR. CIMO: No. Object to form.
You threw Mr. Levin in.
As I sit here today, as I've testified over and over again, I still just don't know the extent of Mr. Levin's involvement. BY MR. SCHNAPP: Q Well, Mr. Levin had been thrown out of a bank You knew that, right? You were --
for check kiting. with your deals? A
Mr. Levin had been thrown out of a bank for
check kiting? Q Do you recall in the beginning of your deals
you were using checks? A In the -- are you saying -- I'm sorry. United Reporting, Inc. (954) 525- 2221 I
Page 1849 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 think I know what you're talking about. Are you talking
about how I was paying Mr. Levin early on? Q A Q Yeah, with checks. Yes. And were you -- did you become aware that
Mr. Levin's bank thought he was kiting checks and threw him out? A Q I don't actually recall ever knowing that, no. Did Mr. Levin ever raise with you the fact
that a bank had expressed to him concern about check kiting? A He may have but I don't have a specific
recollection of it. I hated the words "check kiting" because we were doing it so much and I think it would stick out in my mind if he said it. he did. Q Did you -- what suggestions did Mr. Preve give But it's certainly possible that
to you in order to fend off the funds? A Q A At what point in time? Well, let's -Are we talking about the enhanced due
diligence times, Mr. Schnapp? Q Let's go from the December time frame on, when That's
the enhanced due diligence was taking place. United Reporting, Inc. (954) 525- 2221
Page 1850 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A when Mr. Jedwab came down and it was around the same time the Dreier matter broke, if I'm not mistaken. A Q came down. Yes, Dreier, Madoff, Petters. Right. And then, in fact, that's why they
They were concerned as to whether or not
they might be in a Ponzi scheme as well; isn't that right? MR. SCHLESINGER: Objection to form.
It is my opinion that that is one of the
reasons they came down, but I don't know for certain as to what was going on in the back of their minds. BY MR. SCHNAPP: Q Now, let me ask you a question about the deals
themselves, okay. You were selling structured settlements; is that what they were called by you? A Q No. Well, because they weren't structured
settlements, right? A Q Correct. And you explained to everybody here what the
difference between what you were selling and a structured settlement was? A Q Correct. Well, I'm asking you to explain the United Reporting, Inc. (954) 525- 2221
Page 1851 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in-house. Q And, therefore, your -- what you were selling difference. A Q Oh. I thought you said "you explained it." Could you explain to the people
I misspoke.
in this room what the difference is between a structured settlement and what it is that you were selling? A A structured settlement is the sale of a
interest in future funds, meaning someone has, for example, an annuity, from a personal injury settlement. They're going to be paid out for the next ten years. structured settlement company, like Peachtree and the like, might buy that settlement, okay, today, at a discounted rate, and they would receive the future payments over time. I was selling an interest in funds already A
really was a fairly low risk investment? A I set it up to give the appearance of
nearly -- with no risk. Q No risk. And in fact, it was even a less risky deal than those settlements that we see advertised being purchased by either Wentworth or Peachtree, right? A Yes, to the extent that we had the money
allegedly in-house, that's correct. United Reporting, Inc. (954) 525- 2221
Page 1852 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 A A Q There's no disposition risk and there's no
funding risk; you have all the money? A Q That's the way we sold it, yes, sir. Okay. Now, you're familiar with the
relationship between risk and reward, are you not? A Q I certainly am. Why is there -- if an investment is a no-risk
investment, why were the returns so high? MR.CIMO: Object to the form.
Because that's the way I structured it, to
appeal to my investor's greed. BY MR. SCHNAPP: Q Well, to appeal to your investor's greed. So,
in other words, is it fair to state, Mr. Rothstein, that in your view, that you -- what you were marketing was a no-risk investment with a very high yield? A Q No to low risk, ridiculously high yield. Okay. And so why is it that 100 percent of
the settlement, plaintiffs, if they were real, would be selling 100 percent of their settlements? understand my question? ALL PRESENT: Object to form. Do you
I don't think I -- are you saying that if this
was real, why would everyone sell?
Page 1853 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY MR. SCHNAPP: Q A Q Let me try a different way. Sure. The way you set up these settlements -- well,
before I ask that, by the way, the structured settlements you're talking about, those are settlements that had to be approved by a court, right? A Correct. And that was one of the major
differences. Q And so what you wanted to do was set up a --
part of your scheme, you needed something that was an out-of-court settlement that would not have to be approved by a court and, therefore, you would have to be limited in the types of structured settlements you could sell? A Q In the types of settlements I would sell, yes. Okay. And that was because of the concern
that other -- that many types of settlements actually do require a court approval, correct? A Yes. I set it up so there would be a
limitation on people's ability to discover what we were doing. Q Okay. Now, let's sort of look at the deals
themselves.
In the deals themselves people were
buying -- supposedly, selling settlements that had United Reporting, Inc. (954) 525- 2221
Page 1854 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A fairly high monthly payouts, right? A Q Yes. Sometimes a million dollars, sometimes
$700,000, but -- right? A Q Correct. Why would all those people sell 100 percent of
their settlements? A I actually set up the -ALL PRESENT: Object to form.
I actually set up the structure when I was
selling it, when people asked me that question -actually both me and Mr. Preve -- there is email traffic to this effect where we're telling people that not every plaintiff takes it. it. BY MR. SCHNAPP: Q But you used to have lists that you would send A lot of them do, but some reject
out, either by you or Mr. Szafranski, listing all these different deals and every one of them had plaintiffs selling 100 percent of their settlements; isn't that true? A Q A question. Yes. And didn't anyone ever -I'm sorry, I think I misunderstood your Are you saying the plaintiffs selling United Reporting, Inc. (954) 525- 2221
Page 1855 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A 100 percent of their settlement, or 100 percent of the plaintiffs selling their settlements. Q down. The deals that I have seen in this case appear that every plaintiff is selling 100 percent of his or her settlement at a discount. A Q Correct. And it appears that there was never anyone who I was actually saying -- well, let me break it
sold, say, 50 percent of their settlement of, you know, like payments due three or four months out. A Q A Q Correct. Right? Correct. Did anyone ever ask you why are all these
people selling 100 percent of their settlements? A They may have. I don't have a specific
recollection.
They asked questions about the
settlements, why these people would be selling it. Q You would agree that would be a red flag,
wouldn't it? ALL PRESENT: Objection.
In my way of thinking, yes.
BY MR. SCHNAPP: Q And you would agree that it would be a red United Reporting, Inc. (954) 525- 2221
Page 1856 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A flag that some people would be selling payments that were due to them in as little as 30 days? another red flag, wouldn't it? ALL PRESENT: Objection. That would be
To my way of thinking, yes.
BY MR. SCHNAPP: Q And, by the way, why did you switch from
abused women to whistleblowers? A It was more related to the wanting to give the Also, the
appearance to have more variety of the cases.
size of the potential settlements that we could sell, they seemed to be -- appear more believable on the whistleblower range. The whistleblower -- we were also very low on cash at the time, and using whistleblower-type actions allowed us to have multiple plaintiffs in the same case. Q Now, on some of the transactions, with
Coquina, for example, you had included a promissory note from your law firm; isn't that true? A I think on almost every transaction, if I'm
not mistaken, we included a promissory note in the package unless someone told us they didn't want it. Q Now, why would you include a promissory note
from your law firm on these deals? A We started out these things with promissory United Reporting, Inc. (954) 525- 2221
Page 1857 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 notes, and for some reason, that I can't quite figure, they always stuck. Because we were never borrowing So I'm not
money, once these deals were going on. really sure.
I think people thought it was an added
level of protection but I'm not sure. Q How can a law firm enter into a promissory
note with a third-party, other than your client? A Q Banyan? A Q Banyan? A As I told you, when the deal packets first Were we, no. So why were you giving promissory notes to Well, we could borrow money. Were you borrowing money from this -- like
started with Mr. Preve, they were only promissory notes -- I mean with Mr. Preve and Mr. Levin -- they were only promissory notes. And when it expanded into what I'll call the full deal packet, the promissory notes just stuck. Q What about the defense agreements that you
came up with? A Someone asked for that. Someone asked for
that somewhere along the line and -Q Well, the Coquina group had settlements that
had defense agreements in them; is that right? United Reporting, Inc. (954) 525- 2221
Page 1858 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q Yes. That sounds correct.
And how were you going to defend Coquina in an
action against your client? A Q A I have no idea. But you agreed to it? As you'll see from the development of the
packages and all of the things that I provided, I pretty much agreed to anything that would have allowed us to get money into the Ponzi scheme. Q Okay. And none of the lawyers in Coquina
asked, hey, how can you -- how can you be defending us in a dispute with your own client, right? A Actually, they're the ones I believe that
asked me for that agreement. Q A Oh, they asked you for an agreement like that? Either Coquina or some investor just prior to You can tell
them asked me for the defense agreement.
just -- you have to look at the packages, Mr. Schnapp, and then see where that defense agreement pops up and then you can figure out which investor first asked for it. Q And you know that such an agreement is
unethical, don't you? A Q It appears unethical to me, yes, sir. And the Coquina group, for example, they United Reporting, Inc. (954) 525- 2221
Page 1859 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 had -- Mr. Damson was a lawyer. A Q A Q To my knowledge, yes, that's what I was told. Mr. Klein was a lawyer? That's what I was told, yes, sir. And there were other people in their group who
were lawyers? A Q A Q right? A Q Yes, sir. And they didn't ask a single question about Who were the other people, sir? Mr. Wallace. I don't recall meeting Mr. Wallace. But you knew there were at least two lawyers,
the ethics of you representing them? A Under this defense agreement, I don't recall
them asking one way or the other. Q later. A Q Okay. You used to call Mr. Damson "Wild Rocky"; is We're going to go through some deal docs
that correct? A I might have said "Wild Rocky" on occasion but
I generally called him "Rocky." Q correct? United Reporting, Inc. (954) 525- 2221 Now, Mr. Damson's full name is Barry Damson,
Page 1860 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 he? A Q He got as close as I allowed him to. Well, he got -- he got as close as suggesting A Q Yes. And you chose to call him Rocky. And that was
short for Rockefeller, correct? A Q right? A Q Correct. And Mr. Damson's a former governor of the Correct. And he would call you Rothschild; is that
American Stock Exchange; is he not? A Q Yes, sir. Mr. Damson's established himself in the oil
business, right? A Q Yes, sir. And Mr. Damson got very close to you, didn't
at one point that he would create a fund; is that right? A I don't recall specifically, but it's
certainly possible that that's something he suggested. I do recall conversations with somebody from the Coquina group about creating a fund, yes. Q And did you also -- and you wrote to him using And he even called you Rothschild,
the words "Rocky." right?
Page 1861 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sir? A Yes. Just give me one moment, I'll read it. United Reporting, Inc. (954) 525- 2221 A Q A Q Yes. Okay. Why was that done?
On my part? Well, on your part; and to the extent you know
why he wrote that, tell us that. A On my part, I tried to be as familiar as
possible with investors to keep them close to me, let them believe that they had a strong relationship with me. People like to do business with people they So whatever I needed
consider friends that they like.
to do to continue to lure these people in, that is what I was doing at that time. As far as why he called me Rothschild, he may have been doing the exact same thing to me, because he liked the deals. I can't tell you one way or the other. He may have
He may have had a true affection for me. been utilizing the same technique. MR. SCHNAPP: document.
I'm going to mark a
Give me a moment.
(Thereupon, the document was marked as TD Bank's Exhibit 227 for Identification.) BY MR. SCHNAPP: Q Do you have that document in front of you,
Page 1862 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q A Q Is that 227? Yes, sir. All right. So, that's an example of a
document where you refer to Mr. Damson as "Wild Rocky"; is that right? A Q It is. And what were you communicating to Wild Rocky
in that email? A I was just trying to find out if he was going
to invest in any of the upcoming deals. Q And he told you that he is considering putting
together a fund? A Q A Q That's what the email says, yes, sir. Did Mr. Damson ever create such a fund? I don't know whether he did or not, sir. Now, we talked -- Mr. Damson and you became
very close; is that correct? A You are going to have to measure that for me. Sort of. I mean, I liked
Did I consider him a friend? him. Okay.
But he served a very important purpose to And I was stealing his money.
me at that point in time. So... Q serving? A
What was the very important purpose he was
He was injecting money in that I was going to United Reporting, Inc. (954) 525- 2221
Page 1863 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not. A use to pay back old investors. Q And is it fair to state that Mr. Damson was
ignoring the very red flags we've been talking about before? ALL PRESENT: Objection. Form.
I don't know whether he was ignoring them or I think that some of -- let me just answer, and
then maybe it will help you along. Damson always seemed more -- he always seemed more inquisitive than a lot of our other investors. He asked a lot of questions. He was the one
who wanted to see a plaintiff actually go through this. I had to go through a significantly greater effort to fool him than to fool certain other investors. BY MR. SCHNAPP: Q later. A Q Sure. But it's fair to say that Mr. Damson got deals We'll cover that in a little greater length
that were always 100 percent funded with no risk? A Q 100 percent funded? In other words, by the defendant was -- the
money was always supposed to be in your trust account, 100 percent funded? A Every single deal that I sold, to my United Reporting, Inc. (954) 525- 2221
Page 1864 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A recollection, was sold that same way. already had the money in-house. selling point. Q And there were points, in fact, where That it was we
That was the big
Mr. Damson was advised that you would be kicking back money if he took certain deals, right? A Yes. As the Ponzi scheme was getting ready to
implode, in the last months, maybe even a little bit longer, in order to lure additional investors in, to pique their curiosity and their interest, we started adding kickers to everything. Q Yes, sir.
Why would it be ethical for a lawyer
representing a plaintiff to be kicking back some money to somebody who is funding? A Q I never said it was ethical. Oh. So you provided an unethical inducement
to Mr. Damson; is that true? MR. SCHERER: Objection to form. I think that what I
An unethical inducement?
wanted to do was give the appearance of -- during the course of this entire -- which we now know was an unethical business, I think that giving people what they appeared -- what appeared to them to be kickers and under-the-table payments made them more interested, for whatever reason. United Reporting, Inc. (954) 525- 2221
Page 1865 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY MR. SCHNAPP: Q And, you're aware, sir, are you not, that
Mr. Damson's lawyers filed a pleading at your sentencing that was adverse to you; is that right? A Q A I seem to recall that. It was kind of a blur.
Well, let me show you 228, okay? Sure. (Thereupon, the document was marked as
TD Bank's Exhibit 228 for Identification.) THE WITNESS: MR. NURIK: THE WITNESS: wrong pleading. MR. SCHNAPP: I did. Sorry. Thanks. This is the wrong. I believe you gave me the
You're right.
So we will give you the other pleading. BY MR. SCHNAPP: Q While I'm looking for that, Mr. Scherer did
write you a letter, right, a positive letter? A He wrote me a letter? I don't think he wrote
to me, no, sir. Q He wrote you a letter -- to the sentencing
judge; did he not? A Q That's my recollection, yes, sir. Okay. And Mr. Scherer wrote that he believed United Reporting, Inc. (954) 525- 2221
Page 1866 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A help. Q A Well -I believe I made it clear from the moment I you; is that right? A Could you show me the letter and then I can
tell you for certain? Q Sure. THE WITNESS: Thanks. (Thereupon, the document was marked as TD Bank's Exhibit 229 for Identification.) BY MR. SCHNAPP: Q Is it fair to state, Mr. Rothstein, that Go ahead and toss it.
you've been cooperating with Mr. Scherer? A I think that's a fair statement. That I've
been attempting to help people that I believe were innocent investors, yes. fair statement. Q Is it also a fair statement that you were not I think that's more than a
cooperating with Mr. Mandel, the attorney who was representing Coquina at that time? He wrote a negative letter. I don't recall him actually even asking for my
came back that I was willing to help anyone who was an innocent investor or representing an innocent investor. United Reporting, Inc. (954) 525- 2221
Page 1867 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. NURIK: Well, in the anticipation of That's still my position right here today. Q Okay. So let me just -- I'm going to remark
228, the right document that says, "Sentencing Statements of Victims, Coquina Investments and Emess Capital." (Thereupon, the document was marked as TD Bank's Exhibit 228 for Identification.) MR. SCHNAPP: I asked you not to discuss
that with your lawyer while there's a pending question. Do you recognize that? MR. NURIK: For the record, there are
attorney-client issues that I'm going to discuss with him. BY MR. SCHNAPP: Q My question is simply, does he recognize that?
your questions that I expect you'll ask to move this along, I'm going to discuss with him the attorney-client issues. A To answer your question, I actually -- I don't
recall seeing this. BY MR. SCHNAPP: Q Mr. Rothstein, you knew that Mr. Mandel, United Reporting, Inc. (954) 525- 2221
Page 1868 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Coquina's lawyers, were telling the judge that you were not being cooperative with them; is that right? A Q I'm sorry. Say that again. I was reading.
You knew that Mr. Mandel, Coquina's lawyer,
were not -- were telling the judge that you were not being cooperative? A I -- I seem to have a recollection of it but I
really don't -- I don't specifically recall that, no. Q And now in order to try to cut your sentence,
you're trying to help Mr. Damson; isn't that right? You're afraid of them going back in and challenging anything further; isn't that true? A At this stage, in what I've been through, I
really don't have any fear of anyone doing anything at this stage. I'm going to tell the truth about I'm going to tell everything I know
everything I know.
and hope that the people that have the power to be fair with me are fair with me. hope for at this moment. Q Did you also write emails to Mr. Damson about That's the best that I can
what it was like to -- or -- what Mr. Damson was teasing you about, having been from the Bronx? A Q I recall him teasing me about that, yeah. Did you also write emails to Barry Damson
calling him King Barry and his wife Queen Joan? United Reporting, Inc. (954) 525- 2221
Page 1869 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q A Yes. Well, why were you doing that? They are terms of familiarity that I It's the way I
frequently used with a lot of people. spoke. Q
I only have a few more questions before the
break, but let me ask you, was there a time when Mr. Damson had asked for insurance? A Yeah. I remember specifically him bringing up
the issue of insurance, yes, sir. Q And you were never able to provide him with
that insurance; isn't that right? A Q A I was never able to, no, sir. And he never pressed you on it? No. He did press me on it.
As a matter of fact, I remember a series of emails where he was driving Mike Szafranski crazy to make sure that I sent him a copy of an insurance policy that we were looking at. Q Okay. But you actually never came through
with the insurance that Mr. Damson was asking you for? A I never came through with any insurance policy
for anybody. MR. SCHNAPP: Okay. Just one moment.
Given the timing, I'm going to take a United Reporting, Inc. (954) 525- 2221
Page 1870 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 break now. THE WITNESS: MR. SCHNAPP: Sure. Thanks.
(Thereupon a recess was had.) -
Page 1871 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 ______________________________ Michele L. Savoy, RPR Notary Public - State of Florida My Commission No. EE 113173 Expires August 6, 2015 I, Michele L. Savoy, Shorthand Reporter do hereby certify that I was authorized to and did report the foregoing proceedings and that the transcript is a true record. Dated this 20th day of December, 2011. THE STATE OF FLORIDA, ) COUNTY OF BROWARD. ) C E R T I F I C A T E
Page 1872 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 United Reporting, Inc. (954) 525- 2221 ___________________________________ Michele L. Savoy, RPR Notary Public - State of Florida My Commission No. EE 113173 Expires August 6, 2015 I, Michele L. Savoy, Shorthand Reporter, do hereby certify that I was authorized to and did report said deposition in stenotype; and that the foregoing pages, numbered from 1723 to 1872, inclusive, are a true and correct transcription of my shorthand notes of said deposition. I further certify that I am not an attorney or counsel of any of the parties, nor am I a relative or employee of any attorney or counsel or party connected with the action, nor am I financially interested in the action. The foregoing certification of this transcript does not apply to any reproduction of the same by any means unless under the direct control and/or direction of the certifying reporter. Dated this 20th day of December, 2011. C E R T I F I C A T E THE STATE OF FLORIDA, ) COUNTY OF BROWARD. )

2011-12-20 Rothstein Scott AM

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2011-12-20 Rothstein Scott AM

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IN THE CIRCUIT COURT OF THE 17TH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA Case No.

DAY 7 - MORNING SESSION DEPOSITION OF SCOTT W. ROTHSTEIN

DATE TAKEN: TIME: PLACE:

United Reporting, Inc. (954) 525- 2221

United Reporting, Inc. (954) 525- 2221

Could you place the witness

United Reporting, Inc. (954) 525- 2221

that, as well, right? A Technically, I have not filed bankruptcy; but,

Page 1736 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q Q All right. So, Mr. Stettin, as Trustee,

Page 1737 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A That's what I have been told. I don't know

I haven't seen the accounting.

But you know that, approximately, the three

Yeah, they lost money.

Now, we've never met; but on Friday

United Reporting, Inc. (954) 525- 2221

litigation? A Q A Yes. Okay. What do you recall about it?

I recall the Cheetoh -- Cheetah -- Chiquito

I've seen a lot of media about me, but

people's money? A Certain of the public knew it was other

Page 1742 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A I define "public" as everybody. We are all

public, everyone. term. Q A It's --

"Public" is a very, very, general

If you want to differentiate for me between

Mr. Lichtman? MR. LICHTMAN: Those two days? Objection to form.

United Reporting, Inc. (954) 525- 2221

was retained? that. BY MR. LAUER: Q

I didn't know that until you just said

And did Mr. Lichtman or anyone tell you

Sorry, what? Objection.

MR. LICHTMAN: MR. LAUER: BY MR. LAUER: Q

I withdraw the question.

Did anyone tell you that Mr. Lichtman's law

I don't recall that, no, sir.

My recollection is that the hedge funds came

What is the objection to

That's not a form objection.

question again, sir?

up in the lawyer stuff. MR. LAUER: I would ask the court

talking about? MR. SCHERER: Excuse me.

The substance, yes, that's my understanding.

BY MR. LAUER: Q Okay. Now, since Mr. Scherer began

witness not to answer. MR. LAUER:

It's not privileged. That's my response,

MR. MR. NURIK: counsel.

United Reporting, Inc. (954) 525- 2221

I'm asking you whether you had any

If you want to rephrase

or whether he gave you advice.

subpoena issued. Q Okay.

I don't know what the response was.

to be rude to me. United Reporting, Inc. (954) 525- 2221

Move to strike that snide It don't think we need to

comment, frankly. do that.

We haven't been doing that for a

Again, is it fair for -- to take away from

United Reporting, Inc. (954) 525- 2221

United Reporting, Inc. (954) 525- 2221

In the way -- in my mind, it was a description

United Reporting, Inc. (954) 525- 2221

That's totally possible.

several days, you have used expressions.

I'm not mistaken, no, sir.

I appreciate that or, at least, Mr. Levy

back in there. Q Nor are you able to identify anyone, other