EFTA01177962.pdf
DEPOSITION of, SCOTT ROTHSTEIN - Vol. I
June 14, 2012
Page 1
1 IN THE CIRCUIT COURT OF THE
FIFTEENTH JUDICIAL CIRCUIT IN
2 AND FOR PALM BEACH COUNTY, FLORIDA
3 GENERAL JURISDICTION DIVISION
4
5 JEFFREY EPSTEIN,
6 Plaintiff,
7 vs. No. 502009CA040800XXXXMBAG
8 SCOTT ROTHSTEIN, individually,
and BRADLEY J. EDWARDS,
9 individually,
10 Defendants.
/
11
12
500 East Broward Boulevard,
13 Ft. Lauderdale, Florida
Thursday, June 14, 2012
14 9:14 a.m. - 12:37 p.m.
15
16
17 DEPOSITION
18 Of
19 SCOTT ROTHSTEIN
(Via Video Conference)
20
21 Taken on behalf of the Trustee
pursuant to a notice of taking deposition
22
_
-
-
23
24
25
EFTA01177962
Page 2
1 APPEARANCES:
2
LAW OFFICES OF TONJA HADDAD, P.A. by
3 Tonja Haddad, Esq.
Attorney for the Plaintiff.
4
5 ATTERBURY, GOLDBERGER & WEISS, P.A., by
Jack Goldberger, Esq.
6 Attorney for the Plaintiff.
7
SEARCY DENNEY SCAROLA ET AL, by
8 Jack Scarola, Esq.
Attorney for the Defendant, Brad Edwards.
9
10 MARC NURIK, P.A., by
Marc Nurik, Esq.
11 Attorney for Scott Rothstein.
(Appearing via Video Conference.)
12
13 U.S. ATTORNEY'S OFFICE, by
Laurence LaVecchio, Esq.
14 Attorney for the Department of Justice.
15
16
17
18
19
20
21
22
23
24
25
EFTA01177963
Page 3
1 INDEX
2
WITNESS DIRECT CROSS REDIRECT RECROSS
3
SCOTT ROTHSTEIN
4
(By Ms. Haddad) 5
5 (By Mr. Goldberger) 92
(By Mr. Scarola) 121
6
7
EXHIBITS
8
PLAINTIFF'S FOR IDENTIFICATION
9
10 1 64
2 69
11 3 72
12
13
14
15
16
17
18
19
20
21
22
23
24
25
EFTA01177964
Page 4
1 Thereupon:
2 SCOTT ROTHSTEIN,
3 was called as a witness and, having been duly sworn,
4 was examined and testified as follows:
5 THE WITNESS: I do.
6 MS. HADDAD: Good morning, Scott. How are
7 you?
8 THE WITNESS: Good morning, Tonja. How are
9 you?
10 MS. HADDAD: Fine, thank you. It's nice to
11 see you.
12 THE WITNESS: Good to see you, too.
13 MR. SCAROLA: Mr. Rothstein, I don't know
14 that you and I have met. I'm Jack Scarola, I'm
15 representing Brad Edwards and I know you know Brad
16 who's to my immediate left.
17 THE WITNESS: Hey, Brad, how are you?
18 Jack, good to see you.
19 MR. SCAROLA: Thank you.
20 MR. GOLDBERGER: Also present is another
21 Jack, Jack Goldberger, and I also represent Jeffrey
22 Epstein. To my right is Darryn Indyke --
23 THE WITNESS: Good morning, Jack.
24 MR. GOLDBERGER: How are you today?
25 And to my right is Darryn Indyke, who is
EFTA01177965
Page 5
1 Mr. Epstein's in-house counsel.
2 MR. INDYKE: Good morning.
3 THE WITNESS: Good morning, sir.
4 MR. NURIK: Good morning, everyone.
5 MR. GOLDBERGER: Hi, Marc, how are you?
6 MR. NURIK: Good You'll be seeing my
7 shoulder most of the day.
8 MR. GOLDBERGER: Okay.
9 DIRECT EXAMINATION
10 BY MS. HADDAD:
11 Q. Well, Scott, I know you've talked about this
12 probably more than you even care to, but I'd like to
13 start a little bit asking you about the scheme at your
14 firm and how and when it started and things of that
15 nature just very briefly because I know you've covered
16 it many times.
17 MR. SCAROLA: It has been covered and
18 protocol precludes asking questions that have already
19 been answered and covering areas that have already
20 been covered, so we do object.
21 MR. GOLDBERGER: Your objection is noted.
22 BY MS. HADDAD:
23 Q. When did this first start?
24 A. It started back in '05, '06. The question
25 is a little bit vague for me because it started in a
EFTA01177966
Page 6
1 different form than it ended because it started as
2 bridge loans and things of that nature, and then
3 morphed into the Ponzi scheme. But you are looking
4 back into the 2005 time frame for the very beginning.
5 Q. The 2005 time frame, that's when the bridge
6 loans started?
7 A. I can't be certain exactly what we were
8 doing. I need to see all the documents to tell you
9 what we were doing at what specific point in time.
10 Q. What made you decide to start doing this?
11 A. I started doing it out of greed and the need
12 to support the law firm, which was having significant
13 financial trouble at the time.
14 Q. And in 2005 had you moved over to 401 yet or
15 were you still in the building where Colonial Bank
16 was?
17 A. I don't remember.
18 Q. Do you recall approximately how many
19 attorneys you had working for you when it started?
20 A. I do not. Between five and ten, Tonja.
21 Q. Was it before you started acquiring
22 attorneys like you were acquiring cars and watches?
23 MR. SCAROLA: Object to the form of the
24 question, vague.
25 THE WITNESS: Yes.
EFTA01177967
Page 7
1 BY MS. HADDAD:
2 Q. Well, who were you partners with when it
3 first started?
4 A. Stu Rosenfeldt.
5 Q. Okay. Anyone else?
6 A. Susan Dolin, I believe. It was definitely
7 Stu Rosenfeldt, Michael Pancier, and Susan Dolin may
8 have been partners of ours at that time, I'm not
9 certain.
10 Q Because if memory serves me correctly, you
11 went from being in the One Financial Plaza Building to
12 the building across the street, it was Rothstein,
13 Rosenfeldt, Dolin and Pancier; is that correct?
14 A. Yes.
15 Q. And it was some time later that you moved
16 into the 401 Building, correct?
17 A. You are skipping one step. I went from One
18 Financial Plaza to Phillips, Eisinger, Koss, Kusnick,
19 Rothstein and Rosenfeldt. Then Stu Rosenfeldt and I
20 broke off and formed Rothstein Rosenfeldt. And then
21 Rothstein, Rosenfeldt, Dolin, Pancier over at the
22 Colonial Bank Building. And then we took the space in
23 the 401 Building and eventually moved over there and
24 that's when the real growth started.
25 Q. And when you say, "that's when the real
EFTA01177968
Page 8
1 growth started," do you mean both the scheme -- do you
2 mean the scheme and the firm or either one or both?
3 A. Both.
4 Q. Do you recall approximately when you took
5 the space in the 401 Building?
6 A. I do not.
7 Q. At the time everything imploded, how many
8 partners did you have at the firm, do you recall?
9 A. Are you saying partners and shareholders?
10 Because remember, we had both, two designations.
11 Q. I want to start with just attorneys that
12 had -- not in your firm name but named as "partner" on
13 the cards, for example.
14 A. I'd have to see a list of all the employees.
15 We had a bunch.
16 Q. Do you recall about how many attorneys you
17 had working there?
18 A. Approximately 70.
19 Q. In the year before, do you recall how many
20 you had?
21 A. I do not.
22 Q. So how many equity partners did you have or
23 shareholders? I'm not sure of the word that we are
24 using.
25 A. Actual shareholders, equity shareholders
EFTA01177969
Page 9
1 were two, me and Stu Rosenfeldt.
2 Q. And everyone else was just a partner for
3 title purposes?
4 A. There were shareholders for title purposes
5 and partners for title purposes.
6 Q. If someone was called a shareholder for
7 title purposes then, did they get to receive any of
8 the funds? Were they shareholders receiving money or
9 they were not considered shareholders in that sense?
10 MR. SCAROLA: Objection to the form of the
11 question.
12 THE WITNESS: What kind of funds are you
13 talking about?
14 BY MS. HADDAD:
15 Q. In general from the firm. When you say
16 equity shareholders, I understand that's you and Stu.
17 What I'm saying is, if you had someone else that was
18 named as a shareholder, why did you call them a
19 shareholder as opposed to a partner?
20 A. It was a title of prestige and achievement.
21 Q. So it was basically an ego thing, it had
22 nothing really to do with the finances or hierarchy of
23 the firm?
24 A. They got paid more generally, but it did not
25 have anything to do with distributions.
EFTA01177970
Page 10
1 Q. When you were hiring and bringing in all
2 these new attorneys, did everyone come in as a
3 partner?
4 A. No.
5 Q. How did you decide who came in as a partner
6 and who came in as an associate?
7 A. Depended upon their level of expertise,
8 practice, book of business. It was a decision Stuart
9 and I made together on a case-by-case basis.
10 Q. So you and Stu where the -- were in charge
11 of hiring?
12 A. Stuart and I tried to consult on every
13 hiring decision, yes.
14 Q. Did you guys also decide salaries?
15 A. I generally decided the salary and then let
16 Stu know what I was going to do. And he would say if
17 he thought it was okay or if he thought it was too
18 much or too little, but I generally had free reign in
19 that regard.
20 Q. Did someone's book of business directly
21 correlate to the salary that you would offer?
22 A. That is a very broad question because it
23 depends upon what other needs we had for that
24 individual.
25 Q. What do you mean by "what other needs"?
EFTA01177971
Page 11
1 A. Well, I'll give you a good example. My
2 lawyer, Mr. Nurik, his salary was directly related to
3 the fact that he was a great lawyer and had a solid
4 book of business.
5 Q. Yes.
6 A. David Boden, on the other hand, was, as I
7 previously testified, I don't know if you've had a
8 chance to read the testimony, but David Boden was not
9 only the general counsel to the law firm but he was
10 also -- acted as my consigliere in a significant
11 number of illegal operations and he was compensated
12 significantly for that, if that helps you understand
13 the difference.
14 Q. It does.
15 So, for example, when you were hiring former
16 judges, let's use that as an example, Pedro and Julio,
17 clearly they don't have a book of business coming in
18 because they haven't had clients, but they may carry
19 some sort of prestige or give some legitimacy, if you
20 will, to the firm. How would you decide the salary
21 for someone like that?
22 A. Stu and I would discuss it. It was more a
23 market issue than anything else, how much are judges
24 coming off the bench getting, how much business do we
25 think they can generate.
EFTA01177972
Page 12
1 Q. Would you need to look at someone's book of
2 business if they were coming in just solely to be a
3 rainmaker for the firm prior to hiring them?
4 A. I discussed it with them. There were not
5 many people that I recall that I actually looked at
6 their numbers. Once David Boden was working for me I
7 had him check people's numbers, but I rarely looked. I
8 took most people's words for what they were
9 generating.
10 Q. My recollection is, you were always looking
11 to bring in more people, to hire more people, some of
12 us were somehow able to resist you while others were
13 not. How would you decide who you were looking at to
14 bring into your firm?
15 A. We were trying to develop, on the legitimate
16 side of the law firm, we were trying to develop real
17 talent, real practice groups. I mean, Brad is a
18 perfect example, great lawyer, got a great reputation.
19 You know, it was our hope that, you know, he was going
20 to be one of the people to actually in some ways
21 rescue the firm because he had a practice group that
22 could generate substantial income. You know, on the
23 legitimate side that's what we were trying to do, we
24 were trying to find the best and the brightest.
25 Q. Okay. With respect to bringing people that
EFTA01177973
Page 13
1 you thought could bring a book of business, you just
2 said Brad, for example, that he had a legitimate
3 practice group with a good book of business. How did
4 you know that?
5 A. Everyone in the tort world that I had spoke
6 to spoke extremely highly of Brad, not only people I
7 already had working for me but other people that knew
8 him. He was very -- came very highly recommended to
9 us.
10 Q. Like who, for example?
11 A. We wanted him in there. We were trying to
12 develop a significant tort group and we thought that
13 he'd be a great part of it.
14 Q. Who besides Russ told you that about Brad?
15 A. It would have been other people in the tort
16 group. I don't want to guess, Tonja, as to which
17 other people told me, but it was -- well more than
18 Russ.
19 Q. Was it people within --
20 A. Might have been people in politics that I
21 talked to that knew him because we had significant
22 input at the gubernatorial level with regard to tort
23 reform and the like, and there were people there who
24 knew who Brad was. It was more than one person that
25 told us that.
EFTA01177974
Page 14
1 Q. Okay. When you were looking at people to
2 bring in to the firm to legitimize, as you said. Your
3 firm had a very unique area of practice and had a very
4 unique environment to which to work. How did you know
5 or how did you come to decide what people may or may
6 not fit into that?
7 A. Okay. Hang on one second. I think you just
8 accidentally misstated my testimony.
9 I was not bringing the people in to
10 legitimize the law firm. I was bringing them in to
11 the legitimate side of the law firm. The bulk of the
12 law firm, despite the lack of financial success, was a
13 large group of very honest, hard working lawyers
14 trying to do their best in difficult economic
15 conditions. There were some that were obviously not
16 legitimate. And the way I decided to bring people in,
17 again, it's really everything I just told you. Are
18 you looking for how I brought people into the Ponzi
19 scheme?
20 Q. No, right now I'm just asking about the firm
21 because, as I said, it's a very unique way in which to
22 practice and a very unique workplace environment with
23 politics and restaurants and parties at your home and
24 things of that nature. I'm asking, personality wise,
25 other than the book of business, how did you decide on
EFTA01177975
Page 15
1 people that would be a good fit?
2 A. I looked for people that were outgoing, that
3 had the type of personality. On the legitimate side
4 of the business, people that had charisma that were --
5 that could go out and hustle and try to develop a book
6 of business if they didn't have it. And as one of the
7 50 percent of the shareholders of the firm I was
8 trying to hire people I wanted to work with.
9 Q. Okay. When you would see people from whom
10 you would offer jobs, for example, as you mentioned
11 earlier with Brad and his practice, if somebody stated
12 that people told you that he was a good lawyer, did
13 you need to see him in action, so to speak, prior to
14 your deciding to hire them or would you just take
15 people at their word for it?
16 A. Some of people I saw in action; he wasn't
17 one of them. Steve Osber is an excellent example of
18 that. I hired Steve after he was beating the living
19 daylights out of me on the other side of a case. And
20 I certainly would ask around about the people. But
21 the people that I trusted -- see, I can't remember. I
22 think Gary Farmer was working for me before Brad, and
23 if I'm not mistaken he would have been one of the
24 people that I went to with regard to Brad because we
25 were really developing that whole tort group around
EFTA01177976
Page 16
1 that time with Farmer and Fistos and Jaffe and
2 Mr. Edwards.
3 Q. Do you know where Mr. Edwards was working
4 when you first learned of him?
5 A. I don't recall whether he was working for
6 someone or had his own practice, I don't recall.
7 Q. When did you first learn about Brad?
8 A. I don't remember the time frame.
9 Q. Do you recall when you first met with him
10 regarding a job?
11 A. No. The easiest way to figure that out is
12 to go look at his personnel file, it will have the
13 notes saying when he met with me the first time.
14 Q. You don't have any recollection of your
15 first meeting with him?
16 A. No. As you know, I was hiring people left
17 and right and I was also unfortunately very busy doing
18 things I shouldn't have been doing, so I don't have a
19 specific recollection of when I hired him. I barely
20 have a specific recollection of when I hired me.
21 Q. But you did, in fact, meet with him?
22 A. I'm certain I met with him before I hired
23 him. I can't imagine -- although I did hire people
24 without meeting them. I did hire people based on
25 other people's word, if they were people within the
EFTA01177977
Page 17
1 firm that I trusted. Because I always said, I had a
2 very simple, you lie or die by what you are telling
3 me. If you are telling me this guy is good and he's
4 not good, that's on you, it's going to hurt your
5 income. So I used to tell my partner, people that
6 were recommending people to me, don't sell me a bill
7 of goods just to get somebody in here because if you
8 do that it's going to come back on you, it's going to
9 affect your income and your ability to grow in the
10 firm. So with that admonishment, I might have very
11 well hired someone sight unseen based upon what
12 someone else told me.
13 Q. But you did meet with Brad you say before he
14 came in to work?
15 A. Now that I'm saying it out loud, I think I
16 did but really I'm guessing. I don't have a specific
17 recollection of meeting him.
18 Q. Do you recall if you knew that he had worked
19 as an assistant state attorney for a few years prior
20 to doing tort litigation?
21 A. I don't recall that one way or the other.
22 Q. So you wouldn't have asked Howard Scheinberg
23 or anybody about him before he came to work there?
24 A. I can't say that I wouldn't have asked
25 because, like I said, I might have asked. But
EFTA01177978
Page 18
1 unfortunately, you are taking a little tiny spot out
2 of a very, very busy time period in my life and in the
3 life of the firm, so I can't tell you one way or the
4 other.
5 Q. I know you had a lot going on, I'm just
6 trying to see if you remember anything specific about
7 this.
8 Do you recall what salary you had offered
9 Brad to come join the firm?
10 A. I do not. You have to just try to
11 differentiate that what I knew then is a lot different
12 than what I know now so ...
13 Q. Meaning?
14 A. Obviously meaning that at the point in time
15 that I was hiring him or maybe a year after, I would
16 be able to tell you what I was paying him, but now
17 it's insignificant. I don't remember how much I was
18 paying him.
19 Q. Did you learn about his book of business or
20 know what kind of cases he was bringing in prior to
21 hiring him?
22 A. I do know that he -- I discussed either with
23 Russ, well, I know with Russ, and perhaps some other
24 people, I knew about the Epstein case.
25 Q. What did you know about it?
EFTA01177979
Page 19
1 A. I knew that it was a significant case of
2 potentially significant value against an extremely
3 collectible pedophile, for lack of a better word.
4 Q. So was that case your primary motive in
5 bringing Brad into the firm?
6 A. I doubt it. I mean, I can't tell you one
7 way or the other, but I doubt that I would bring him
8 in just for one case because what if the case fails,
9 then I'm stuck with a lawyer who can't do anything,
10 you know.
11 I'm not saying, Brad, that you couldn't do
12 anything, I'm just saying that if I only relied on one
13 case, then if I bring a lawyer in for one case and one
14 case only, what do I do with him when the case is
15 over.
16 Q. How did you know that this case would be a
17 collectible case then?
18 MR. SCAROLA: I'm going to object to the
19 form of the question because it misstated the prior
20 testimony. The prior testimony was not that it was a
21 collectible case but that it was a case against a
22 "extremely collectible pedophile."
23 BY MS. HADDAD:
24 Q. What made you think that this case had any
25 financial value?
EFTA01177980
Page 20
1 A. Epstein was a billionaire.
2 Q Okay. Did you know anything about the
3 legitimacy or illegitimacy of the claims prior to
4 knowing he was a billionaire?
5 A. I knew what I was told. I didn't check it
6 out myself, but I trusted the people that told me.
7 Q. And who told you?
8 A. The only person I remember discussing it
9 with, as I sit here today, is Russ Adler. But if
10 Farmer and Jaffe and those guys were with me at the
11 time, I likely would have discussed it with them as
12 well.
13 4. So were you aware of this case before you
14 made an offer to Brad to join the firm?
15 A. Yes.
16 4. You said you didn't -- I don't want to
17 misquote you. You said you heard about it from other
18 people, but you didn't do anything to know that
19 personally. Was that before you made the offer of
20 employment?
21 A. I made the offer of employment based upon
22 what other people had told me about Brad.
23 Q. About Brad and his book of business or just
24 Brad and his legal skills?
25 A. Okay. When I say Brad, I mean Brad and his
EFTA01177981
Page 21
1 book of business and his legal skills.
2 Q. Okay.
3 A. And his ability to generate business in the
4 future.
5 Q. You stated that you believed that you first
6 heard about these cases from Russ and then perhaps
7 from Brad. Once Brad was at the firm, did you keep up
8 with these cases, these Epstein cases?
9 MR. SCAROLA: Excuse me, I'm going to
10 object to the form of the question. It is an
11 inaccurate reflection of the prior testimony. It has
12 no predicate. There was no reference about having
13 heard about these cases from Brad. The names
14 mentioned were Adler, possibly Farmer, possibly
15 Jaffe.
16 BY MS. HADDAD:
17 Q. Once Brad started working at the firm,
18 you've already testified you already knew about these
19 Epstein cases, correct?
20 A. Yes.
21 Q. How did you keep abreast of these cases?
22 A. I didn't.
23 Q. You didn't know anything about them?
24 A. I didn't say I didn't know anything. I said
25 I didn't keep track of it.
EFTA01177982
Page 22
1 Q. You didn't keep track of it?
2 A. I did not keep track of it. From time to
3 time Russ and the other guys in the tort group would
4 tell me what was going on in certain cases, but until
5 I made a decision to utilize that file for an illegal
6 purpose related to something illegal that I was doing
7 along with my co-conspirators, I just assumed my
8 lawyers were going to work the case and eventually it
9 would hopefully work out well for the law firm.
10 Q. At your firm, when e-mails would go out to
11 attorneys at RRA or all attorneys at RRA, were you
12 part of that e-mail group?
13 A. You are talking about all staff?
14 Q. No, all it says is attorneys at RRA.
15 A. It's the e-mail group "attorneys"?
16 Q. Yes.
17 A. Yes, I'm a part of that e-mail group.
18 Q. And I appreciate that you were very busy and
19 may not have read all of them, but you did receive
20 those e-mails when they would go around?
21 A. Yes, and I tried my best to read them.
22 Q. Okay. At what point did you decide to use
23 this case to further your Ponzi scheme?
24 A. I don't remember the date, but I can give
25 you the circumstances, if you'd like.
EFTA01177983
Page 23
1 Q. Please do.
2 A. The Ponzi scheme was running very low on
3 capital. My co-conspirators and I needed to find a
4 new feeder fund, new investment sources. We had a
5 couple of very large, significantly wealthy potential
6 investors out there. I was looking for something that
7 would have been very attractive. We had had a lot of
8 inquiry during the due diligence period with these
9 people that were doing due diligence on the putative
10 cases that we were selling. And when I thought about
11 the Epstein case, realizing that it was a substantial
12 actual file in the office, I came up with the idea
13 that if I created a fake confidential settlement
14 circling around -- based upon this actual case, they
15 would be able to increase the level of due diligence
16 that I was able to offer to my potential investors.
17 Q. How did you know this was a substantial file
18 in your office at that time?
19 A. Again, through the people I spoke to in the
20 office.
21 Q. Such as who?
22 A. Again, same people, Adler, Farmer, Jaffe,
23 Fistos.
24 Q. You never spoke to Brad about this case?
25 A. I didn't say that, but I had a lot more
EFTA01177984
Page 24
1 interaction --
2 Sorry, Tonja, I didn't mean to speak over
3 you.
4 If you talk to the people in the firm, if
5 they are honest with you, they'll tell you my
6 interaction was far more significant with Russ Adler,
7 probably more so because he was a co-conspirator of
8 mine. My interaction with Russ was far greater by
9 many, many percents over my interaction with Brad, and
10 then you go down the line. I had more interaction
11 with Mr. Farmer than I did with Mr. Fistos, more
12 interaction with Jaffe than I did with Mr. Edwards,
13 and so on.
14 Q. Russ was the head of your tort group, right?
15 A. Yes.
16 Q. So these cases fell under the tort group; is
17 that correct?
18 A. Yes, it fell under the fell under Russ'
19 purview ultimately, yes.
20 Q. And Brad was a partner at your firm during
21 the time these cases were there, correct?
22 A. I believe that was his title. He was either
23 partner or shareholder. I don't think we had made him
24 a shareholder yet.
25 Q. But he wasn't coming in as an associate,
EFTA01177985
Page 25
1 correct?
2 A. To the best of my recollection, no.
3 Q. So you stated that you learned this case
4 was -- I don't want to misquote you and listen to a
5 long speaking objection, but what did you call this
6 case?
7 MR. SCAROLA: Who wants the quote?
8 THE WITNESS: It was a substantial case
9 with a what I perceived to be a highly collectible
10 pedophile as a defendant.
11 BY MS. HADDAD:
12 Q. Right. How did you know at the time when
13 you said these investors wanted to investigate and you
14 said you were going to create a fake settlement, how
15 did you know that this case was the case that you
16 could use?
17 A. From talking to all the people that I just
18 said, Adler, Fistos, Jaffe, Farmer, Mr. Edwards, to
19 the extent that I spoke to him about it.
20 Q. Did you speak with Mr. Edwards about the
21 case?
22 A. I don't have a specific recollection one way
23 or the other. I remember speaking to him at least
24 briefly the day or the day of or the day before the
25 actual investor's due diligence was going on as to
EFTA01177986
Page 26
1 what was going on. And I may have spoke to him, I
2 know I spoke to Russ, but I may have spoke to him as
3 well within a couple of days just prior to this due
4 diligence because I was trying to at least get some
5 information in my head that I could use when I was
6 creating this story for the investors.
7 Q. Scott, what's Q-task?
8 A. Q-task is a web based software system that I
9 had invested $7 million in.
10 Q. And what was the purpose of this internet
11 system?
12 A. To be able to communicate in a secure
13 fashion and in a unique group fashion about specific
14 files.
15 Q. So forgive me, we all know I'm not good with
16 the computer. That was something that would be useful
17 within a law firm, why?
18 A. Because it allowed you to create groups and
19 have both general and private chats, organize data in
20 a very unique fashion. That was, at least to our way
21 of thinking, would have been very, very helpful in the
22 law firm setting with multiple practice groups.
23 Q. Did you belong to any groups on Q-task?
24 A. I'm certain that I did. I don't remember
25 which groups I belonged to. I never got into the full
EFTA01177987
Page 27
1 use of it. I tried to, but again, I was very busy
2 doing other things. But I know that Mr. Adler's group
3 used it extensively.
4 Q. Because it was your firm and, as you said,
5 you invested $7 million in it, did you have the
6 ability to access a group if you wanted to?
7 A. Yes. And if I couldn't, I could get Russ to
8 give me access.
9 Q. So you didn't necessarily have to be invited
10 into the Q-task group for you to be able to utilize or
11 view the communications within it?
12 A. No, that's not true. I actually had to be
13 invited, that's what I was telling Russ to do, is to
14 have me invited.
15 Q. But I'm saying, the lawyers wouldn't have to
16 personally invite you, you can get someone within your
17 firm to give you access maybe without the lawyers
18 knowing?
19 A. No, I think it might have had a, quote,
20 unquote, confidential, super secret viewing
21 capability, but I don't recall it having that, and I'd
22 have no need to utilize that. Just invite me into the
23 group and let me see what's going on.
24 Q. Okay. I know that you are or were a very
25 hands-on person within certain of the practice groups
EFTA01177988
Page 28
1 and with that, with the Q-task and the e-mails, did
2 someone assist you with reviewing everything and
3 letting you know what was going on within the groups?
4 MR. SCAROLA: Excuse me, I'm going to
5 object to counsel's testimony. Object to the form of
6 the question as leading.
7 THE WITNESS: I really don't even
8 understand the question.
9 Can you try to rephrase it for me, Tonja?
10 BY MS. HADDAD:
11 Q. Of course, I would.
12 Did you keep abreast of everything that was
13 going on in every practice group or was someone
14 through Q-task and e-mails, for example, or was
15 someone giving you information keeping you posted on
16 what was going on within the practice?
17 A. Well, as part of the tort group I had a
18 pretty good idea of what was going on there all the
19 time just because of the significant amount of
20 interaction, both legitimate and otherwise, that I had
21 with Russ Adler, so I was probably more up-to-date on
22 that group than any group other than the labor and
23 employment group, again, because I had such
24 significant interaction with Stu Rosenfeldt, both
25 legitimately and illegitimately, so I knew what was
EFTA01177989
Page 29
1 going on in that group.
2 I tried, as best as I could, given my time
3 constraints, to stay on top of what was going on, you
4 know, throughout the firm. But I relied on other
5 people like Debra Villegas and Irene Stay and David
6 Boden, Les Stracker to the lesser extent, to monitor
7 what was going on in the different practice groups and
8 keep me up to speed.
9 Q. Was there audio and video surveillance
10 throughout the entire firm or only within your office?
11 A. No, through the entire office, not in the
12 individual offices.
13 Hang on. Not in the individual offices but
14 throughout the general office space.
15 Q. So in 2009 how many floors did you have?
16 A. Three, I think.
17 Q. And do you recall approximately how many
18 attorneys you had working there at that time?
19 A. Approximately 70.
20 Q. And when you say "not the individual offices
21 but the other areas," do you mean -- would that
22 include conference rooms?
23 A. I didn't have surveillance in the conference
24 rooms.
25 Q. So can you please tell me exactly where you
EFTA01177990
Page 30
1 had audio and/or video surveillance? We'll start with
2 audio.
3 A. I don't have a specific recollection of
4 every place I had video and audio, but it was in -- I
5 had it set up so that in all of the common areas,
6 including our shareholder's lounge, we had -- I had
7 audio and video capabilities.
8 Q. When you say "capabilities," does that mean
9 you didn't always turn it on or you just turned it on
10 when you felt like it?
11 A. I turned it on when I felt like it, when I
12 felt like seeing what was going on. I sometimes left
13 the screen up because I had four computer screens on
14 my desk, I sometimes left the screen on with the video
15 of the reception area and some other general areas.
16 But unless I wanted to see what was going on or listen
17 to what was going on, I didn't turn it on. It would
18 have been too distracting.
19 Q. Did the attorneys know that this
20 surveillance existed?
21 A. You can see it in the -- it wasn't hidden,
22 you can see it. There were globes up in the ceiling
23 all over the office.
24 Q. Did you have -- you said -- you didn't
25 answer this, you said you didn't recall. Did you have
EFTA01177991
Page 31
1 any surveillance in the conference rooms?
2 A No
3 Q. Other than the common areas you just went
4 over, in the hallways and the reception -- did you
5 have it in the hallways, is that a common -- do you
6 deem that a common area?
7 A. All the hallways pretty much with the
8 exception of a few blind spots, I can see all the
9 hallways.
10 Q. And this was on all three floors?
11 A. Yeah. For some reason I think we might
12 have taken some space on a fourth floor, but I could
13 be mistaken. But yes, on the three floors that we
14 actively had a significant amount of space on, I tried
15 to have surveillance on all the common areas of all
16 that space.
17 Q. And what floor was Mr. Edwards' office on?
18 A. I don't recall.
19 Q. Did you have the tort group all together or
20 was it divided up?
21 A. Except for Adler, Adler was on with -- near
22 me, down the hall from me. The rest of the group was
23 all together. I think they were on -- let's see.
24 There were people up on 22. I was on 16. He must
25 have been on the other floor that we were building
EFTA01177992
Page 32
1 out, because I remember building out space and I
2 remember Jaffe and all those guys moving into that
3 space.
4 Q. If you were building up that space, do you
5 recall when you put the surveillance in there?
6 A. It would have been while they were building
7 it out or shortly thereafter.
8 Q. During 2009 it seems that you hired lots of
9 former law enforcement people to work at the firm.
10 Why were they people you wanted to hire?
11 A. Severalfold. I had a significant amount of
12 illegal activity going on with various law enforcement
13 agencies throughout South Florida and hiring people
14 from former law enforcement assisted me in engendering
15 support and camaraderie with the law enforcement that
16 I was actually utilizing in illegal activities.
17 Q. So you are saying --
18 A. Secondarily, I wanted to have a very strong
19 investigative team, ultimately, to do both legitimate
20 and illegitimate things for the law firm, and hiring
21 former law enforcement was the best way to do that. I
22 was hoping to actually ultimately create a group. Ken
23 Jenne and I had talked about that extensively.
24 Q. Why did you hire Ken Jenne?
25 A. Prior to Ken going to prison, he and I were
EFTA01177993
Page 33
1 very friendly and he was extremely friendly with
2 someone that was very close to me, Grant Smith.
3 During the time that he was down in FDC Miami, I went
4 down to visit him. And after speaking to him and
5 after speaking to Grant, I told him, because he was
6 talking to me about how many people had turned on him
7 and abandoned him. And I told him that when he got
8 out of jail that he had no worries, that I would give
9 him a job.
10 Q. And what --
11 A. And that was the primary reason -- that was
12 my primary reason for hiring him.
13 Q. What was it you were hiring him to do
14 exactly?
15 A. Ultimate the goal was to head up on
16 investigative arm within RRA, within the RRA entities.
17 Q. Well, while he was there, since that didn't
18 happen, what was his obligation to the firm
19 day-to-day?
20 A. He handled firm security issues and he did
21 handle overseeing certain investigative things. We
22 had an alcohol and beverage group that was forming and
23 he was overseeing that. He was helping me find new
24 people to staff it, that kind of thing.
25 Q. Did you have a lot of interaction --
EFTA01177994
Page 34
1 A. He had had significant -- as you know, he
2 also had significant political connections and
3 everyone who is not living under a rock knows I was
4 doing everything I could to garner significant
5 political power.
6 Q. I think many people miss your parties.
7 But, with respect to Mr. Jenne and his
8 political connections, were you hiring him to utilize
9 him with respect to any of the police department
10 investigations? You had stated earlier you had
11 dealings with police departments. I don't want --
12 again, I don't want to put words in your mouth. You
13 said you had dealings going on with various police
14 agencies?
15 A. I had -- I mean, we had a criminal defense
16 section in the law firm, so we had legitimate dealings
17 with law enforcement. But I also had significant
18 illegitimate things with law enforcement that had
19 nothing to do with Ken Jenne.
20 Q. And how about with respect to former FBI
21 agents you were hiring?
22 A. They were all people that were operating in
23 a legitimate fashion within the law firm.
24 Q. In what role was that?
25 A. The investigative roles and the alcohol
EFTA01177995
Page 35
1 beverage roles and anything else Ken or other staff
2 could think of to have them do.
3 Q. Let's talk about the investigative roles for
4 a minute.
5 What kind of investigations were these teams
6 running?
7 A. I do not know. You have to speak to lawyers
8 that were actually utilizing them. I put it out there
9 and Ken put it out there, that they were available to
10 lawyers in the firm for use like in-house
11 investigators. And what people did with them
12 ultimately was up to them.
13 Q. Were they on salary or were their costs and
14 fees associated with utilizing them within a specific
15 practice group?
16 A. They were all on salary with me. The
17 ultimate goal was to have it as a separate entity that
18 could bill the law firm and have the clients at least
19 defray some of the cost. I don't recall whether or
20 not we ever got to that level or not.
21 Q. With all that in-house police action, why
22 did you have police security surrounding you all the
23 time?
24 A. I guess the best answer was I was paranoid,
25 but I mean -- that's the simple answer to it. You
EFTA01177996
Page 36
1 know, having -- there were mixed reasons. For
2 example, I -- are you talking about my Fort Lauderdale
3 police detail?
4 Q. Yes. You had it at the office and at your
5 home, correct?
6 A. Yeah. There's a myriad of facts that
7 motivated me to do that. One was that I really wanted
8 the security for the office. Two was, I was paranoid
9 and this is in no particular order. Three was the
10 Melissa Lewis murder that shook the entire law firm
11 and shook me terribly. I didn't want that to ever
12 have to happen again. And four was, I wanted -- the
13 more law enforcement you have around, the
14 more legitimacy it adds to you and your appearance to
15 the community. So there were a multitude of reasons.
16 I mean, I hired certain law enforcement to
17 work for me that were just friends of mine that
18 were -- that needed additional money, so I wanted to
19 make sure that they had money, both guys that did the
20 illegal stuff for me and guys that didn't do anything
21 illegal for me.
22 Q. Let's go back to the Epstein case and when
23 you decided to utilize it -- to use for the investors
24 for your Ponzi scheme.
25 Do you recall approximately when it was that
EFTA01177997
Page 37
1 these investors were coming that you decided to use
2 the files?
3 A. My best recollection it was in 2009,
4 sometimes after April of 2009, but I don't have a
5 specific recollection beyond that.
6 Q. What makes you think it was after April of
7 2009?
8 A. Because, to the best of my recollection, the
9 Clockwork Group came in towards the middle of 2009.
10 When I say Clockwork, that's an umbrella term that I
11 use to mean the Von Allmen, AJ Discala, and other
12 investors that came in through that feeder fund.
13 Q. So that was around April 2009?
14 A. No, it was after, to the best of my
15 recollection. I mean, you can tell because all you
16 have to do is look and see when the first, very first
17 Clockwork investment is. Actually, you can pinpoint
18 it even closer. Look for the very first settlement
19 deal that we did that was related to the Epstein case,
20 within 60 days prior to that would have been when I
21 was meeting with those due diligence people, 30 to
22 60 days before that.
23 Q. So when you decided to use that case, take
24 me through exactly what you did to familiarize
25 yourself with that case.
EFTA01177998
Page 38
1 A. I talked to Russ Adler. I may have talked
2 to some of the other lawyers. I flipped through
3 certain boxes in the file.
4 Q. How did you get the boxes?
5 A. I asked someone to bring them to me.
6 Q. Do you know where those files were stored?
7 A. I do not.
8 Q. So you flipped -- sorry, please continue.
9 Flipped through some files?
10 A. I flipped through some files. I had the
11 files in my office. The day that the investor group
12 came in, I actually had Ken Jenne and some others
13 actually bring me some more of the boxes actually into
14 my office while the investors were there. I already
15 had some of the boxes with me.
16 Q. You say "Ken Jenne and others," who were the
17 others to whom you are referencing?
18 A. I don't specifically recall who carried them
19 in. I was very focused on my investors at that time.
20 Q. Were any of the lawyers present with you
21 when you were meeting with these investors?
22 A. During the actual meeting with them, no. I
23 recall that some of the lawyers may have met some of
24 the investors, but I don't recall who.
25 Q. Do you recall approximately when that
EFTA01177999
Page 39
1 happened?
2 A. No, it's the same dates that I was giving
3 you before.
4 Q. Okay. So you had, to further your Ponzi
5 scheme, you had to familiarize yourself with this case
6 so that you could speak intelligently with the
7 investors; is that correct?
8 A. Well, sort of because most of what I told
9 the investors was all things that I was creating as I
10 went.
About this particular case, the Epstein
12 case?
13 A. Yes, from an investor -- you have to
14 understand how the inner working of the Ponzi scheme
15 were crafted but --
16 Q. Please tell me then.
17 A. I'm telling you -- hang on. From an
18 investor's standpoint, the investor is simply looking
19 for is the case believable. And once they get past
20 that, is it of such case -- excuse me, is it of such a
21 nature that it is possible to be generating a
22 significant amount of settlement dollars. And then
23 after that, their concern is simply on the due
24 diligence side of making sure we actually have the
25 money, that the documents pass -- the documents
EFTA01178000
Page 40
1 unrelated to this case, documents related to the
2 settlements. Other than proving the existence of the
3 case, there's very little an investor, at least from
4 my end, investigates into the actual case. It was
5 more after having the
June 14, 2012
Page 1
1 IN THE CIRCUIT COURT OF THE
FIFTEENTH JUDICIAL CIRCUIT IN
2 AND FOR PALM BEACH COUNTY, FLORIDA
3 GENERAL JURISDICTION DIVISION
4
5 JEFFREY EPSTEIN,
6 Plaintiff,
7 vs. No. 502009CA040800XXXXMBAG
8 SCOTT ROTHSTEIN, individually,
and BRADLEY J. EDWARDS,
9 individually,
10 Defendants.
/
11
12
500 East Broward Boulevard,
13 Ft. Lauderdale, Florida
Thursday, June 14, 2012
14 9:14 a.m. - 12:37 p.m.
15
16
17 DEPOSITION
18 Of
19 SCOTT ROTHSTEIN
(Via Video Conference)
20
21 Taken on behalf of the Trustee
pursuant to a notice of taking deposition
22
_
-
-
23
24
25
EFTA01177962
Page 2
1 APPEARANCES:
2
LAW OFFICES OF TONJA HADDAD, P.A. by
3 Tonja Haddad, Esq.
Attorney for the Plaintiff.
4
5 ATTERBURY, GOLDBERGER & WEISS, P.A., by
Jack Goldberger, Esq.
6 Attorney for the Plaintiff.
7
SEARCY DENNEY SCAROLA ET AL, by
8 Jack Scarola, Esq.
Attorney for the Defendant, Brad Edwards.
9
10 MARC NURIK, P.A., by
Marc Nurik, Esq.
11 Attorney for Scott Rothstein.
(Appearing via Video Conference.)
12
13 U.S. ATTORNEY'S OFFICE, by
Laurence LaVecchio, Esq.
14 Attorney for the Department of Justice.
15
16
17
18
19
20
21
22
23
24
25
EFTA01177963
Page 3
1 INDEX
2
WITNESS DIRECT CROSS REDIRECT RECROSS
3
SCOTT ROTHSTEIN
4
(By Ms. Haddad) 5
5 (By Mr. Goldberger) 92
(By Mr. Scarola) 121
6
7
EXHIBITS
8
PLAINTIFF'S FOR IDENTIFICATION
9
10 1 64
2 69
11 3 72
12
13
14
15
16
17
18
19
20
21
22
23
24
25
EFTA01177964
Page 4
1 Thereupon:
2 SCOTT ROTHSTEIN,
3 was called as a witness and, having been duly sworn,
4 was examined and testified as follows:
5 THE WITNESS: I do.
6 MS. HADDAD: Good morning, Scott. How are
7 you?
8 THE WITNESS: Good morning, Tonja. How are
9 you?
10 MS. HADDAD: Fine, thank you. It's nice to
11 see you.
12 THE WITNESS: Good to see you, too.
13 MR. SCAROLA: Mr. Rothstein, I don't know
14 that you and I have met. I'm Jack Scarola, I'm
15 representing Brad Edwards and I know you know Brad
16 who's to my immediate left.
17 THE WITNESS: Hey, Brad, how are you?
18 Jack, good to see you.
19 MR. SCAROLA: Thank you.
20 MR. GOLDBERGER: Also present is another
21 Jack, Jack Goldberger, and I also represent Jeffrey
22 Epstein. To my right is Darryn Indyke --
23 THE WITNESS: Good morning, Jack.
24 MR. GOLDBERGER: How are you today?
25 And to my right is Darryn Indyke, who is
EFTA01177965
Page 5
1 Mr. Epstein's in-house counsel.
2 MR. INDYKE: Good morning.
3 THE WITNESS: Good morning, sir.
4 MR. NURIK: Good morning, everyone.
5 MR. GOLDBERGER: Hi, Marc, how are you?
6 MR. NURIK: Good You'll be seeing my
7 shoulder most of the day.
8 MR. GOLDBERGER: Okay.
9 DIRECT EXAMINATION
10 BY MS. HADDAD:
11 Q. Well, Scott, I know you've talked about this
12 probably more than you even care to, but I'd like to
13 start a little bit asking you about the scheme at your
14 firm and how and when it started and things of that
15 nature just very briefly because I know you've covered
16 it many times.
17 MR. SCAROLA: It has been covered and
18 protocol precludes asking questions that have already
19 been answered and covering areas that have already
20 been covered, so we do object.
21 MR. GOLDBERGER: Your objection is noted.
22 BY MS. HADDAD:
23 Q. When did this first start?
24 A. It started back in '05, '06. The question
25 is a little bit vague for me because it started in a
EFTA01177966
Page 6
1 different form than it ended because it started as
2 bridge loans and things of that nature, and then
3 morphed into the Ponzi scheme. But you are looking
4 back into the 2005 time frame for the very beginning.
5 Q. The 2005 time frame, that's when the bridge
6 loans started?
7 A. I can't be certain exactly what we were
8 doing. I need to see all the documents to tell you
9 what we were doing at what specific point in time.
10 Q. What made you decide to start doing this?
11 A. I started doing it out of greed and the need
12 to support the law firm, which was having significant
13 financial trouble at the time.
14 Q. And in 2005 had you moved over to 401 yet or
15 were you still in the building where Colonial Bank
16 was?
17 A. I don't remember.
18 Q. Do you recall approximately how many
19 attorneys you had working for you when it started?
20 A. I do not. Between five and ten, Tonja.
21 Q. Was it before you started acquiring
22 attorneys like you were acquiring cars and watches?
23 MR. SCAROLA: Object to the form of the
24 question, vague.
25 THE WITNESS: Yes.
EFTA01177967
Page 7
1 BY MS. HADDAD:
2 Q. Well, who were you partners with when it
3 first started?
4 A. Stu Rosenfeldt.
5 Q. Okay. Anyone else?
6 A. Susan Dolin, I believe. It was definitely
7 Stu Rosenfeldt, Michael Pancier, and Susan Dolin may
8 have been partners of ours at that time, I'm not
9 certain.
10 Q Because if memory serves me correctly, you
11 went from being in the One Financial Plaza Building to
12 the building across the street, it was Rothstein,
13 Rosenfeldt, Dolin and Pancier; is that correct?
14 A. Yes.
15 Q. And it was some time later that you moved
16 into the 401 Building, correct?
17 A. You are skipping one step. I went from One
18 Financial Plaza to Phillips, Eisinger, Koss, Kusnick,
19 Rothstein and Rosenfeldt. Then Stu Rosenfeldt and I
20 broke off and formed Rothstein Rosenfeldt. And then
21 Rothstein, Rosenfeldt, Dolin, Pancier over at the
22 Colonial Bank Building. And then we took the space in
23 the 401 Building and eventually moved over there and
24 that's when the real growth started.
25 Q. And when you say, "that's when the real
EFTA01177968
Page 8
1 growth started," do you mean both the scheme -- do you
2 mean the scheme and the firm or either one or both?
3 A. Both.
4 Q. Do you recall approximately when you took
5 the space in the 401 Building?
6 A. I do not.
7 Q. At the time everything imploded, how many
8 partners did you have at the firm, do you recall?
9 A. Are you saying partners and shareholders?
10 Because remember, we had both, two designations.
11 Q. I want to start with just attorneys that
12 had -- not in your firm name but named as "partner" on
13 the cards, for example.
14 A. I'd have to see a list of all the employees.
15 We had a bunch.
16 Q. Do you recall about how many attorneys you
17 had working there?
18 A. Approximately 70.
19 Q. In the year before, do you recall how many
20 you had?
21 A. I do not.
22 Q. So how many equity partners did you have or
23 shareholders? I'm not sure of the word that we are
24 using.
25 A. Actual shareholders, equity shareholders
EFTA01177969
Page 9
1 were two, me and Stu Rosenfeldt.
2 Q. And everyone else was just a partner for
3 title purposes?
4 A. There were shareholders for title purposes
5 and partners for title purposes.
6 Q. If someone was called a shareholder for
7 title purposes then, did they get to receive any of
8 the funds? Were they shareholders receiving money or
9 they were not considered shareholders in that sense?
10 MR. SCAROLA: Objection to the form of the
11 question.
12 THE WITNESS: What kind of funds are you
13 talking about?
14 BY MS. HADDAD:
15 Q. In general from the firm. When you say
16 equity shareholders, I understand that's you and Stu.
17 What I'm saying is, if you had someone else that was
18 named as a shareholder, why did you call them a
19 shareholder as opposed to a partner?
20 A. It was a title of prestige and achievement.
21 Q. So it was basically an ego thing, it had
22 nothing really to do with the finances or hierarchy of
23 the firm?
24 A. They got paid more generally, but it did not
25 have anything to do with distributions.
EFTA01177970
Page 10
1 Q. When you were hiring and bringing in all
2 these new attorneys, did everyone come in as a
3 partner?
4 A. No.
5 Q. How did you decide who came in as a partner
6 and who came in as an associate?
7 A. Depended upon their level of expertise,
8 practice, book of business. It was a decision Stuart
9 and I made together on a case-by-case basis.
10 Q. So you and Stu where the -- were in charge
11 of hiring?
12 A. Stuart and I tried to consult on every
13 hiring decision, yes.
14 Q. Did you guys also decide salaries?
15 A. I generally decided the salary and then let
16 Stu know what I was going to do. And he would say if
17 he thought it was okay or if he thought it was too
18 much or too little, but I generally had free reign in
19 that regard.
20 Q. Did someone's book of business directly
21 correlate to the salary that you would offer?
22 A. That is a very broad question because it
23 depends upon what other needs we had for that
24 individual.
25 Q. What do you mean by "what other needs"?
EFTA01177971
Page 11
1 A. Well, I'll give you a good example. My
2 lawyer, Mr. Nurik, his salary was directly related to
3 the fact that he was a great lawyer and had a solid
4 book of business.
5 Q. Yes.
6 A. David Boden, on the other hand, was, as I
7 previously testified, I don't know if you've had a
8 chance to read the testimony, but David Boden was not
9 only the general counsel to the law firm but he was
10 also -- acted as my consigliere in a significant
11 number of illegal operations and he was compensated
12 significantly for that, if that helps you understand
13 the difference.
14 Q. It does.
15 So, for example, when you were hiring former
16 judges, let's use that as an example, Pedro and Julio,
17 clearly they don't have a book of business coming in
18 because they haven't had clients, but they may carry
19 some sort of prestige or give some legitimacy, if you
20 will, to the firm. How would you decide the salary
21 for someone like that?
22 A. Stu and I would discuss it. It was more a
23 market issue than anything else, how much are judges
24 coming off the bench getting, how much business do we
25 think they can generate.
EFTA01177972
Page 12
1 Q. Would you need to look at someone's book of
2 business if they were coming in just solely to be a
3 rainmaker for the firm prior to hiring them?
4 A. I discussed it with them. There were not
5 many people that I recall that I actually looked at
6 their numbers. Once David Boden was working for me I
7 had him check people's numbers, but I rarely looked. I
8 took most people's words for what they were
9 generating.
10 Q. My recollection is, you were always looking
11 to bring in more people, to hire more people, some of
12 us were somehow able to resist you while others were
13 not. How would you decide who you were looking at to
14 bring into your firm?
15 A. We were trying to develop, on the legitimate
16 side of the law firm, we were trying to develop real
17 talent, real practice groups. I mean, Brad is a
18 perfect example, great lawyer, got a great reputation.
19 You know, it was our hope that, you know, he was going
20 to be one of the people to actually in some ways
21 rescue the firm because he had a practice group that
22 could generate substantial income. You know, on the
23 legitimate side that's what we were trying to do, we
24 were trying to find the best and the brightest.
25 Q. Okay. With respect to bringing people that
EFTA01177973
Page 13
1 you thought could bring a book of business, you just
2 said Brad, for example, that he had a legitimate
3 practice group with a good book of business. How did
4 you know that?
5 A. Everyone in the tort world that I had spoke
6 to spoke extremely highly of Brad, not only people I
7 already had working for me but other people that knew
8 him. He was very -- came very highly recommended to
9 us.
10 Q. Like who, for example?
11 A. We wanted him in there. We were trying to
12 develop a significant tort group and we thought that
13 he'd be a great part of it.
14 Q. Who besides Russ told you that about Brad?
15 A. It would have been other people in the tort
16 group. I don't want to guess, Tonja, as to which
17 other people told me, but it was -- well more than
18 Russ.
19 Q. Was it people within --
20 A. Might have been people in politics that I
21 talked to that knew him because we had significant
22 input at the gubernatorial level with regard to tort
23 reform and the like, and there were people there who
24 knew who Brad was. It was more than one person that
25 told us that.
EFTA01177974
Page 14
1 Q. Okay. When you were looking at people to
2 bring in to the firm to legitimize, as you said. Your
3 firm had a very unique area of practice and had a very
4 unique environment to which to work. How did you know
5 or how did you come to decide what people may or may
6 not fit into that?
7 A. Okay. Hang on one second. I think you just
8 accidentally misstated my testimony.
9 I was not bringing the people in to
10 legitimize the law firm. I was bringing them in to
11 the legitimate side of the law firm. The bulk of the
12 law firm, despite the lack of financial success, was a
13 large group of very honest, hard working lawyers
14 trying to do their best in difficult economic
15 conditions. There were some that were obviously not
16 legitimate. And the way I decided to bring people in,
17 again, it's really everything I just told you. Are
18 you looking for how I brought people into the Ponzi
19 scheme?
20 Q. No, right now I'm just asking about the firm
21 because, as I said, it's a very unique way in which to
22 practice and a very unique workplace environment with
23 politics and restaurants and parties at your home and
24 things of that nature. I'm asking, personality wise,
25 other than the book of business, how did you decide on
EFTA01177975
Page 15
1 people that would be a good fit?
2 A. I looked for people that were outgoing, that
3 had the type of personality. On the legitimate side
4 of the business, people that had charisma that were --
5 that could go out and hustle and try to develop a book
6 of business if they didn't have it. And as one of the
7 50 percent of the shareholders of the firm I was
8 trying to hire people I wanted to work with.
9 Q. Okay. When you would see people from whom
10 you would offer jobs, for example, as you mentioned
11 earlier with Brad and his practice, if somebody stated
12 that people told you that he was a good lawyer, did
13 you need to see him in action, so to speak, prior to
14 your deciding to hire them or would you just take
15 people at their word for it?
16 A. Some of people I saw in action; he wasn't
17 one of them. Steve Osber is an excellent example of
18 that. I hired Steve after he was beating the living
19 daylights out of me on the other side of a case. And
20 I certainly would ask around about the people. But
21 the people that I trusted -- see, I can't remember. I
22 think Gary Farmer was working for me before Brad, and
23 if I'm not mistaken he would have been one of the
24 people that I went to with regard to Brad because we
25 were really developing that whole tort group around
EFTA01177976
Page 16
1 that time with Farmer and Fistos and Jaffe and
2 Mr. Edwards.
3 Q. Do you know where Mr. Edwards was working
4 when you first learned of him?
5 A. I don't recall whether he was working for
6 someone or had his own practice, I don't recall.
7 Q. When did you first learn about Brad?
8 A. I don't remember the time frame.
9 Q. Do you recall when you first met with him
10 regarding a job?
11 A. No. The easiest way to figure that out is
12 to go look at his personnel file, it will have the
13 notes saying when he met with me the first time.
14 Q. You don't have any recollection of your
15 first meeting with him?
16 A. No. As you know, I was hiring people left
17 and right and I was also unfortunately very busy doing
18 things I shouldn't have been doing, so I don't have a
19 specific recollection of when I hired him. I barely
20 have a specific recollection of when I hired me.
21 Q. But you did, in fact, meet with him?
22 A. I'm certain I met with him before I hired
23 him. I can't imagine -- although I did hire people
24 without meeting them. I did hire people based on
25 other people's word, if they were people within the
EFTA01177977
Page 17
1 firm that I trusted. Because I always said, I had a
2 very simple, you lie or die by what you are telling
3 me. If you are telling me this guy is good and he's
4 not good, that's on you, it's going to hurt your
5 income. So I used to tell my partner, people that
6 were recommending people to me, don't sell me a bill
7 of goods just to get somebody in here because if you
8 do that it's going to come back on you, it's going to
9 affect your income and your ability to grow in the
10 firm. So with that admonishment, I might have very
11 well hired someone sight unseen based upon what
12 someone else told me.
13 Q. But you did meet with Brad you say before he
14 came in to work?
15 A. Now that I'm saying it out loud, I think I
16 did but really I'm guessing. I don't have a specific
17 recollection of meeting him.
18 Q. Do you recall if you knew that he had worked
19 as an assistant state attorney for a few years prior
20 to doing tort litigation?
21 A. I don't recall that one way or the other.
22 Q. So you wouldn't have asked Howard Scheinberg
23 or anybody about him before he came to work there?
24 A. I can't say that I wouldn't have asked
25 because, like I said, I might have asked. But
EFTA01177978
Page 18
1 unfortunately, you are taking a little tiny spot out
2 of a very, very busy time period in my life and in the
3 life of the firm, so I can't tell you one way or the
4 other.
5 Q. I know you had a lot going on, I'm just
6 trying to see if you remember anything specific about
7 this.
8 Do you recall what salary you had offered
9 Brad to come join the firm?
10 A. I do not. You have to just try to
11 differentiate that what I knew then is a lot different
12 than what I know now so ...
13 Q. Meaning?
14 A. Obviously meaning that at the point in time
15 that I was hiring him or maybe a year after, I would
16 be able to tell you what I was paying him, but now
17 it's insignificant. I don't remember how much I was
18 paying him.
19 Q. Did you learn about his book of business or
20 know what kind of cases he was bringing in prior to
21 hiring him?
22 A. I do know that he -- I discussed either with
23 Russ, well, I know with Russ, and perhaps some other
24 people, I knew about the Epstein case.
25 Q. What did you know about it?
EFTA01177979
Page 19
1 A. I knew that it was a significant case of
2 potentially significant value against an extremely
3 collectible pedophile, for lack of a better word.
4 Q. So was that case your primary motive in
5 bringing Brad into the firm?
6 A. I doubt it. I mean, I can't tell you one
7 way or the other, but I doubt that I would bring him
8 in just for one case because what if the case fails,
9 then I'm stuck with a lawyer who can't do anything,
10 you know.
11 I'm not saying, Brad, that you couldn't do
12 anything, I'm just saying that if I only relied on one
13 case, then if I bring a lawyer in for one case and one
14 case only, what do I do with him when the case is
15 over.
16 Q. How did you know that this case would be a
17 collectible case then?
18 MR. SCAROLA: I'm going to object to the
19 form of the question because it misstated the prior
20 testimony. The prior testimony was not that it was a
21 collectible case but that it was a case against a
22 "extremely collectible pedophile."
23 BY MS. HADDAD:
24 Q. What made you think that this case had any
25 financial value?
EFTA01177980
Page 20
1 A. Epstein was a billionaire.
2 Q Okay. Did you know anything about the
3 legitimacy or illegitimacy of the claims prior to
4 knowing he was a billionaire?
5 A. I knew what I was told. I didn't check it
6 out myself, but I trusted the people that told me.
7 Q. And who told you?
8 A. The only person I remember discussing it
9 with, as I sit here today, is Russ Adler. But if
10 Farmer and Jaffe and those guys were with me at the
11 time, I likely would have discussed it with them as
12 well.
13 4. So were you aware of this case before you
14 made an offer to Brad to join the firm?
15 A. Yes.
16 4. You said you didn't -- I don't want to
17 misquote you. You said you heard about it from other
18 people, but you didn't do anything to know that
19 personally. Was that before you made the offer of
20 employment?
21 A. I made the offer of employment based upon
22 what other people had told me about Brad.
23 Q. About Brad and his book of business or just
24 Brad and his legal skills?
25 A. Okay. When I say Brad, I mean Brad and his
EFTA01177981
Page 21
1 book of business and his legal skills.
2 Q. Okay.
3 A. And his ability to generate business in the
4 future.
5 Q. You stated that you believed that you first
6 heard about these cases from Russ and then perhaps
7 from Brad. Once Brad was at the firm, did you keep up
8 with these cases, these Epstein cases?
9 MR. SCAROLA: Excuse me, I'm going to
10 object to the form of the question. It is an
11 inaccurate reflection of the prior testimony. It has
12 no predicate. There was no reference about having
13 heard about these cases from Brad. The names
14 mentioned were Adler, possibly Farmer, possibly
15 Jaffe.
16 BY MS. HADDAD:
17 Q. Once Brad started working at the firm,
18 you've already testified you already knew about these
19 Epstein cases, correct?
20 A. Yes.
21 Q. How did you keep abreast of these cases?
22 A. I didn't.
23 Q. You didn't know anything about them?
24 A. I didn't say I didn't know anything. I said
25 I didn't keep track of it.
EFTA01177982
Page 22
1 Q. You didn't keep track of it?
2 A. I did not keep track of it. From time to
3 time Russ and the other guys in the tort group would
4 tell me what was going on in certain cases, but until
5 I made a decision to utilize that file for an illegal
6 purpose related to something illegal that I was doing
7 along with my co-conspirators, I just assumed my
8 lawyers were going to work the case and eventually it
9 would hopefully work out well for the law firm.
10 Q. At your firm, when e-mails would go out to
11 attorneys at RRA or all attorneys at RRA, were you
12 part of that e-mail group?
13 A. You are talking about all staff?
14 Q. No, all it says is attorneys at RRA.
15 A. It's the e-mail group "attorneys"?
16 Q. Yes.
17 A. Yes, I'm a part of that e-mail group.
18 Q. And I appreciate that you were very busy and
19 may not have read all of them, but you did receive
20 those e-mails when they would go around?
21 A. Yes, and I tried my best to read them.
22 Q. Okay. At what point did you decide to use
23 this case to further your Ponzi scheme?
24 A. I don't remember the date, but I can give
25 you the circumstances, if you'd like.
EFTA01177983
Page 23
1 Q. Please do.
2 A. The Ponzi scheme was running very low on
3 capital. My co-conspirators and I needed to find a
4 new feeder fund, new investment sources. We had a
5 couple of very large, significantly wealthy potential
6 investors out there. I was looking for something that
7 would have been very attractive. We had had a lot of
8 inquiry during the due diligence period with these
9 people that were doing due diligence on the putative
10 cases that we were selling. And when I thought about
11 the Epstein case, realizing that it was a substantial
12 actual file in the office, I came up with the idea
13 that if I created a fake confidential settlement
14 circling around -- based upon this actual case, they
15 would be able to increase the level of due diligence
16 that I was able to offer to my potential investors.
17 Q. How did you know this was a substantial file
18 in your office at that time?
19 A. Again, through the people I spoke to in the
20 office.
21 Q. Such as who?
22 A. Again, same people, Adler, Farmer, Jaffe,
23 Fistos.
24 Q. You never spoke to Brad about this case?
25 A. I didn't say that, but I had a lot more
EFTA01177984
Page 24
1 interaction --
2 Sorry, Tonja, I didn't mean to speak over
3 you.
4 If you talk to the people in the firm, if
5 they are honest with you, they'll tell you my
6 interaction was far more significant with Russ Adler,
7 probably more so because he was a co-conspirator of
8 mine. My interaction with Russ was far greater by
9 many, many percents over my interaction with Brad, and
10 then you go down the line. I had more interaction
11 with Mr. Farmer than I did with Mr. Fistos, more
12 interaction with Jaffe than I did with Mr. Edwards,
13 and so on.
14 Q. Russ was the head of your tort group, right?
15 A. Yes.
16 Q. So these cases fell under the tort group; is
17 that correct?
18 A. Yes, it fell under the fell under Russ'
19 purview ultimately, yes.
20 Q. And Brad was a partner at your firm during
21 the time these cases were there, correct?
22 A. I believe that was his title. He was either
23 partner or shareholder. I don't think we had made him
24 a shareholder yet.
25 Q. But he wasn't coming in as an associate,
EFTA01177985
Page 25
1 correct?
2 A. To the best of my recollection, no.
3 Q. So you stated that you learned this case
4 was -- I don't want to misquote you and listen to a
5 long speaking objection, but what did you call this
6 case?
7 MR. SCAROLA: Who wants the quote?
8 THE WITNESS: It was a substantial case
9 with a what I perceived to be a highly collectible
10 pedophile as a defendant.
11 BY MS. HADDAD:
12 Q. Right. How did you know at the time when
13 you said these investors wanted to investigate and you
14 said you were going to create a fake settlement, how
15 did you know that this case was the case that you
16 could use?
17 A. From talking to all the people that I just
18 said, Adler, Fistos, Jaffe, Farmer, Mr. Edwards, to
19 the extent that I spoke to him about it.
20 Q. Did you speak with Mr. Edwards about the
21 case?
22 A. I don't have a specific recollection one way
23 or the other. I remember speaking to him at least
24 briefly the day or the day of or the day before the
25 actual investor's due diligence was going on as to
EFTA01177986
Page 26
1 what was going on. And I may have spoke to him, I
2 know I spoke to Russ, but I may have spoke to him as
3 well within a couple of days just prior to this due
4 diligence because I was trying to at least get some
5 information in my head that I could use when I was
6 creating this story for the investors.
7 Q. Scott, what's Q-task?
8 A. Q-task is a web based software system that I
9 had invested $7 million in.
10 Q. And what was the purpose of this internet
11 system?
12 A. To be able to communicate in a secure
13 fashion and in a unique group fashion about specific
14 files.
15 Q. So forgive me, we all know I'm not good with
16 the computer. That was something that would be useful
17 within a law firm, why?
18 A. Because it allowed you to create groups and
19 have both general and private chats, organize data in
20 a very unique fashion. That was, at least to our way
21 of thinking, would have been very, very helpful in the
22 law firm setting with multiple practice groups.
23 Q. Did you belong to any groups on Q-task?
24 A. I'm certain that I did. I don't remember
25 which groups I belonged to. I never got into the full
EFTA01177987
Page 27
1 use of it. I tried to, but again, I was very busy
2 doing other things. But I know that Mr. Adler's group
3 used it extensively.
4 Q. Because it was your firm and, as you said,
5 you invested $7 million in it, did you have the
6 ability to access a group if you wanted to?
7 A. Yes. And if I couldn't, I could get Russ to
8 give me access.
9 Q. So you didn't necessarily have to be invited
10 into the Q-task group for you to be able to utilize or
11 view the communications within it?
12 A. No, that's not true. I actually had to be
13 invited, that's what I was telling Russ to do, is to
14 have me invited.
15 Q. But I'm saying, the lawyers wouldn't have to
16 personally invite you, you can get someone within your
17 firm to give you access maybe without the lawyers
18 knowing?
19 A. No, I think it might have had a, quote,
20 unquote, confidential, super secret viewing
21 capability, but I don't recall it having that, and I'd
22 have no need to utilize that. Just invite me into the
23 group and let me see what's going on.
24 Q. Okay. I know that you are or were a very
25 hands-on person within certain of the practice groups
EFTA01177988
Page 28
1 and with that, with the Q-task and the e-mails, did
2 someone assist you with reviewing everything and
3 letting you know what was going on within the groups?
4 MR. SCAROLA: Excuse me, I'm going to
5 object to counsel's testimony. Object to the form of
6 the question as leading.
7 THE WITNESS: I really don't even
8 understand the question.
9 Can you try to rephrase it for me, Tonja?
10 BY MS. HADDAD:
11 Q. Of course, I would.
12 Did you keep abreast of everything that was
13 going on in every practice group or was someone
14 through Q-task and e-mails, for example, or was
15 someone giving you information keeping you posted on
16 what was going on within the practice?
17 A. Well, as part of the tort group I had a
18 pretty good idea of what was going on there all the
19 time just because of the significant amount of
20 interaction, both legitimate and otherwise, that I had
21 with Russ Adler, so I was probably more up-to-date on
22 that group than any group other than the labor and
23 employment group, again, because I had such
24 significant interaction with Stu Rosenfeldt, both
25 legitimately and illegitimately, so I knew what was
EFTA01177989
Page 29
1 going on in that group.
2 I tried, as best as I could, given my time
3 constraints, to stay on top of what was going on, you
4 know, throughout the firm. But I relied on other
5 people like Debra Villegas and Irene Stay and David
6 Boden, Les Stracker to the lesser extent, to monitor
7 what was going on in the different practice groups and
8 keep me up to speed.
9 Q. Was there audio and video surveillance
10 throughout the entire firm or only within your office?
11 A. No, through the entire office, not in the
12 individual offices.
13 Hang on. Not in the individual offices but
14 throughout the general office space.
15 Q. So in 2009 how many floors did you have?
16 A. Three, I think.
17 Q. And do you recall approximately how many
18 attorneys you had working there at that time?
19 A. Approximately 70.
20 Q. And when you say "not the individual offices
21 but the other areas," do you mean -- would that
22 include conference rooms?
23 A. I didn't have surveillance in the conference
24 rooms.
25 Q. So can you please tell me exactly where you
EFTA01177990
Page 30
1 had audio and/or video surveillance? We'll start with
2 audio.
3 A. I don't have a specific recollection of
4 every place I had video and audio, but it was in -- I
5 had it set up so that in all of the common areas,
6 including our shareholder's lounge, we had -- I had
7 audio and video capabilities.
8 Q. When you say "capabilities," does that mean
9 you didn't always turn it on or you just turned it on
10 when you felt like it?
11 A. I turned it on when I felt like it, when I
12 felt like seeing what was going on. I sometimes left
13 the screen up because I had four computer screens on
14 my desk, I sometimes left the screen on with the video
15 of the reception area and some other general areas.
16 But unless I wanted to see what was going on or listen
17 to what was going on, I didn't turn it on. It would
18 have been too distracting.
19 Q. Did the attorneys know that this
20 surveillance existed?
21 A. You can see it in the -- it wasn't hidden,
22 you can see it. There were globes up in the ceiling
23 all over the office.
24 Q. Did you have -- you said -- you didn't
25 answer this, you said you didn't recall. Did you have
EFTA01177991
Page 31
1 any surveillance in the conference rooms?
2 A No
3 Q. Other than the common areas you just went
4 over, in the hallways and the reception -- did you
5 have it in the hallways, is that a common -- do you
6 deem that a common area?
7 A. All the hallways pretty much with the
8 exception of a few blind spots, I can see all the
9 hallways.
10 Q. And this was on all three floors?
11 A. Yeah. For some reason I think we might
12 have taken some space on a fourth floor, but I could
13 be mistaken. But yes, on the three floors that we
14 actively had a significant amount of space on, I tried
15 to have surveillance on all the common areas of all
16 that space.
17 Q. And what floor was Mr. Edwards' office on?
18 A. I don't recall.
19 Q. Did you have the tort group all together or
20 was it divided up?
21 A. Except for Adler, Adler was on with -- near
22 me, down the hall from me. The rest of the group was
23 all together. I think they were on -- let's see.
24 There were people up on 22. I was on 16. He must
25 have been on the other floor that we were building
EFTA01177992
Page 32
1 out, because I remember building out space and I
2 remember Jaffe and all those guys moving into that
3 space.
4 Q. If you were building up that space, do you
5 recall when you put the surveillance in there?
6 A. It would have been while they were building
7 it out or shortly thereafter.
8 Q. During 2009 it seems that you hired lots of
9 former law enforcement people to work at the firm.
10 Why were they people you wanted to hire?
11 A. Severalfold. I had a significant amount of
12 illegal activity going on with various law enforcement
13 agencies throughout South Florida and hiring people
14 from former law enforcement assisted me in engendering
15 support and camaraderie with the law enforcement that
16 I was actually utilizing in illegal activities.
17 Q. So you are saying --
18 A. Secondarily, I wanted to have a very strong
19 investigative team, ultimately, to do both legitimate
20 and illegitimate things for the law firm, and hiring
21 former law enforcement was the best way to do that. I
22 was hoping to actually ultimately create a group. Ken
23 Jenne and I had talked about that extensively.
24 Q. Why did you hire Ken Jenne?
25 A. Prior to Ken going to prison, he and I were
EFTA01177993
Page 33
1 very friendly and he was extremely friendly with
2 someone that was very close to me, Grant Smith.
3 During the time that he was down in FDC Miami, I went
4 down to visit him. And after speaking to him and
5 after speaking to Grant, I told him, because he was
6 talking to me about how many people had turned on him
7 and abandoned him. And I told him that when he got
8 out of jail that he had no worries, that I would give
9 him a job.
10 Q. And what --
11 A. And that was the primary reason -- that was
12 my primary reason for hiring him.
13 Q. What was it you were hiring him to do
14 exactly?
15 A. Ultimate the goal was to head up on
16 investigative arm within RRA, within the RRA entities.
17 Q. Well, while he was there, since that didn't
18 happen, what was his obligation to the firm
19 day-to-day?
20 A. He handled firm security issues and he did
21 handle overseeing certain investigative things. We
22 had an alcohol and beverage group that was forming and
23 he was overseeing that. He was helping me find new
24 people to staff it, that kind of thing.
25 Q. Did you have a lot of interaction --
EFTA01177994
Page 34
1 A. He had had significant -- as you know, he
2 also had significant political connections and
3 everyone who is not living under a rock knows I was
4 doing everything I could to garner significant
5 political power.
6 Q. I think many people miss your parties.
7 But, with respect to Mr. Jenne and his
8 political connections, were you hiring him to utilize
9 him with respect to any of the police department
10 investigations? You had stated earlier you had
11 dealings with police departments. I don't want --
12 again, I don't want to put words in your mouth. You
13 said you had dealings going on with various police
14 agencies?
15 A. I had -- I mean, we had a criminal defense
16 section in the law firm, so we had legitimate dealings
17 with law enforcement. But I also had significant
18 illegitimate things with law enforcement that had
19 nothing to do with Ken Jenne.
20 Q. And how about with respect to former FBI
21 agents you were hiring?
22 A. They were all people that were operating in
23 a legitimate fashion within the law firm.
24 Q. In what role was that?
25 A. The investigative roles and the alcohol
EFTA01177995
Page 35
1 beverage roles and anything else Ken or other staff
2 could think of to have them do.
3 Q. Let's talk about the investigative roles for
4 a minute.
5 What kind of investigations were these teams
6 running?
7 A. I do not know. You have to speak to lawyers
8 that were actually utilizing them. I put it out there
9 and Ken put it out there, that they were available to
10 lawyers in the firm for use like in-house
11 investigators. And what people did with them
12 ultimately was up to them.
13 Q. Were they on salary or were their costs and
14 fees associated with utilizing them within a specific
15 practice group?
16 A. They were all on salary with me. The
17 ultimate goal was to have it as a separate entity that
18 could bill the law firm and have the clients at least
19 defray some of the cost. I don't recall whether or
20 not we ever got to that level or not.
21 Q. With all that in-house police action, why
22 did you have police security surrounding you all the
23 time?
24 A. I guess the best answer was I was paranoid,
25 but I mean -- that's the simple answer to it. You
EFTA01177996
Page 36
1 know, having -- there were mixed reasons. For
2 example, I -- are you talking about my Fort Lauderdale
3 police detail?
4 Q. Yes. You had it at the office and at your
5 home, correct?
6 A. Yeah. There's a myriad of facts that
7 motivated me to do that. One was that I really wanted
8 the security for the office. Two was, I was paranoid
9 and this is in no particular order. Three was the
10 Melissa Lewis murder that shook the entire law firm
11 and shook me terribly. I didn't want that to ever
12 have to happen again. And four was, I wanted -- the
13 more law enforcement you have around, the
14 more legitimacy it adds to you and your appearance to
15 the community. So there were a multitude of reasons.
16 I mean, I hired certain law enforcement to
17 work for me that were just friends of mine that
18 were -- that needed additional money, so I wanted to
19 make sure that they had money, both guys that did the
20 illegal stuff for me and guys that didn't do anything
21 illegal for me.
22 Q. Let's go back to the Epstein case and when
23 you decided to utilize it -- to use for the investors
24 for your Ponzi scheme.
25 Do you recall approximately when it was that
EFTA01177997
Page 37
1 these investors were coming that you decided to use
2 the files?
3 A. My best recollection it was in 2009,
4 sometimes after April of 2009, but I don't have a
5 specific recollection beyond that.
6 Q. What makes you think it was after April of
7 2009?
8 A. Because, to the best of my recollection, the
9 Clockwork Group came in towards the middle of 2009.
10 When I say Clockwork, that's an umbrella term that I
11 use to mean the Von Allmen, AJ Discala, and other
12 investors that came in through that feeder fund.
13 Q. So that was around April 2009?
14 A. No, it was after, to the best of my
15 recollection. I mean, you can tell because all you
16 have to do is look and see when the first, very first
17 Clockwork investment is. Actually, you can pinpoint
18 it even closer. Look for the very first settlement
19 deal that we did that was related to the Epstein case,
20 within 60 days prior to that would have been when I
21 was meeting with those due diligence people, 30 to
22 60 days before that.
23 Q. So when you decided to use that case, take
24 me through exactly what you did to familiarize
25 yourself with that case.
EFTA01177998
Page 38
1 A. I talked to Russ Adler. I may have talked
2 to some of the other lawyers. I flipped through
3 certain boxes in the file.
4 Q. How did you get the boxes?
5 A. I asked someone to bring them to me.
6 Q. Do you know where those files were stored?
7 A. I do not.
8 Q. So you flipped -- sorry, please continue.
9 Flipped through some files?
10 A. I flipped through some files. I had the
11 files in my office. The day that the investor group
12 came in, I actually had Ken Jenne and some others
13 actually bring me some more of the boxes actually into
14 my office while the investors were there. I already
15 had some of the boxes with me.
16 Q. You say "Ken Jenne and others," who were the
17 others to whom you are referencing?
18 A. I don't specifically recall who carried them
19 in. I was very focused on my investors at that time.
20 Q. Were any of the lawyers present with you
21 when you were meeting with these investors?
22 A. During the actual meeting with them, no. I
23 recall that some of the lawyers may have met some of
24 the investors, but I don't recall who.
25 Q. Do you recall approximately when that
EFTA01177999
Page 39
1 happened?
2 A. No, it's the same dates that I was giving
3 you before.
4 Q. Okay. So you had, to further your Ponzi
5 scheme, you had to familiarize yourself with this case
6 so that you could speak intelligently with the
7 investors; is that correct?
8 A. Well, sort of because most of what I told
9 the investors was all things that I was creating as I
10 went.
About this particular case, the Epstein
12 case?
13 A. Yes, from an investor -- you have to
14 understand how the inner working of the Ponzi scheme
15 were crafted but --
16 Q. Please tell me then.
17 A. I'm telling you -- hang on. From an
18 investor's standpoint, the investor is simply looking
19 for is the case believable. And once they get past
20 that, is it of such case -- excuse me, is it of such a
21 nature that it is possible to be generating a
22 significant amount of settlement dollars. And then
23 after that, their concern is simply on the due
24 diligence side of making sure we actually have the
25 money, that the documents pass -- the documents
EFTA01178000
Page 40
1 unrelated to this case, documents related to the
2 settlements. Other than proving the existence of the
3 case, there's very little an investor, at least from
4 my end, investigates into the actual case. It was
5 more after having the