Anwar et al v. Fairfield Greenwich Limited et al

Filing 787

DECLARATION of Savvas A. Foukas in Opposition re: #775 FIRST MOTION to Certify Class.. Document filed by PricewaterhouseCoopers Accountants Netherlands N.V., Pricewaterhousecoopers L.L.P.. (Attachments: #1 Exhibit A, #2 Exhibit B, #3 Exhibit C, #4 Exhibit D, #5 Exhibit E, #6 Exhibit F, #7 Exhibit G, #8 Exhibit H, #9 Exhibit I, #10 Exhibit J, #11 Exhibit K, #12 Exhibit L, #13 Exhibit M, #14 Exhibit N, #15 Exhibit O, #16 Exhibit P, #17 Exhibit Q, #18 Certificate of Service)(Maguire, William)

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Exhibit B Page 284 1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK 2 3 4 -------------------------------x PASHA S. ANWAR, et al., 5 6 7 Plaintiffs, vs. Civil Action No. 09-CV-0118(VM) FAIRFIELD GREENWICH LIMITED, et al. 8 9 Defendants. -------------------------------x 10 11 12 13 VIDEOTAPED DEPOSITION OF MARTIN BACH VOLUME 2 14 15 Phoenix, Arizona June 30, 2011 10:01 a.m. 16 17 18 19 20 21 Job Number: 39762 22 Reported by: 23 Janice Harrington, RPR, CRR, CLR 24 AZ Certified Court 25 Reporter No. 50844 TSG Reporting - Worldwide 877-702-9580 Page 369 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 TSG Martin Bach A. I know them. Q. And we represent PricewaterhouseCoopers Netherlands -A. Okay. Q. -- in this litigation. I want to start by asking you some questions about some of your testimony yesterday. Do you recall testifying that the reason why you decided -- or one of the reasons why you decided to invest in Greenwich Sentry was because they had a conservative approach and consistent returns? A. Yes. Q. And did the consistent returns continue after you made your initial investment in Greenwich Sentry? A. Yes. Q. And did those consistent returns continue during the course of your investments with Greenwich Sentry? A. Yes. Q. Over that period of time, you were pleased with those returns; is that fair to say? A. Yes. Q. And did you continue to invest in Reporting - Worldwide Page 370 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 Martin Bach Greenwich Sentry because you were receiving those consistent returns? A. Yes. MR. GLASSER: Objection to form. BY MS. PIERCE: Q. Did you maintain your investments in Greenwich Sentry because you were receiving those consistent returns? MR. GLASSER: Objection to form. THE WITNESS: Yes. BY MS. PIERCE: Q. Okay. Now I want to switch gears and talk to you about your investments in the real estate partnership in Santa Fe and your investment in Greenwich Options, the fund that you invested in prior to Greenwich Sentry. So prior to your decision to invest in the real estate partnership, did you review any audited financial statements for the partnership? MR. GLASSER: Objection to form. THE WITNESS: I don't remember that. That's way back all those investments. I did them going back to 1990, '91, you know, so I don't remember. I might have. 877-702-9580 TSG Reporting - Worldwide Page 371 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 TSG Martin Bach BY MS. PIERCE: Q. Do you recall if there was an auditor for the real estate partnership in those early years? MR. GLASSER: Objection to form. THE WITNESS: Yes. BY MS. PIERCE: Q. Do you recall who that was? A. It wasn't one of the big four, but it was -- it was a CPA firm in New York. Q. But you don't remember the name or do you remember the name? A. No, but I could find out, you know, if it's important. Q. Okay. Let's switch and talk about your investment in the Greenwich option fund. Prior to your decision to invest in that fund, do you know who audited the Greenwich Option fund? MR. GLASSER: Objection to form. THE WITNESS: I think -- I'm not sure. I think it was Ed Schechter. I'm not sure. BY MS. PIERCE: Q. Berkow, Schechter? A. Yes. Q. Did you ever receive audited financial Reporting - Worldwide 877-702-9580 Page 372 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 Martin Bach statements related to the Greenwich Option fund? MR. GLASSER: Objection to form. THE WITNESS: I don't remember. BY MS. PIERCE: Q. If you had received them, do you think you would have kept audited financial statements related to the Greenwich option fund? MR. GLASSER: Objection to form. THE WITNESS: Not -- not for 30 years. 30 years ago I would have kept it. BY MS. PIERCE: Q. Is your answer the same for the real estate partnership, if I ask the same question? A. Yes. You know, I have a little house. I can't keep all these papers, all these prospectuses. Q. I live in New York. I understand the space issues. Okay. Let's return to your investment in Greenwich Sentry. A. Uh-huh. Q. What did you understand your role to be with respect to the Greenwich Sentry fund? MR. GLASSER: Objection to form. THE WITNESS: I was a partner. BY MS. PIERCE: 877-702-9580 TSG Reporting - Worldwide 877-702-9580 23 (Pages 369 to 372) Page 373 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 TSG Martin Bach Q. And officially would you say you were a limited partner? A. Yes, yeah. I had nothing to do with the operation at all, you know. Q. Do you know approximately how many other limited partners were in Greenwich Sentry fund? MR. GLASSER: Objection to form. THE WITNESS: About 10. BY MS. PIERCE: Q. Beside your friend Mr. Centro, do you know any of the other investors? A. Say the question again. I'm sorry. Q. Let me rephrase. A. Did you say Greenwich? Q. Greenwich Sentry. A. Oh, okay. I get mixed up with Greenwich Options at the time. Q. Okay. For the record, let me just start over, and right now we're just talking about the Greenwich Sentry fund. A. Okay. Q. Okay. So what did you understand your role to be in relation to the Greenwich Sentry fund? MR. GLASSER: Objection to form. Reporting - Worldwide Page 374 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 Martin Bach THE WITNESS: A limited partner. BY MS. PIERCE: Q. And do you know approximately how many other limited partners there were in the Greenwich Sentry fund? MR. GLASSER: Objection to form. THE WITNESS: No, no. BY MS. PIERCE: Q. I recall you testifying yesterday that your friend Mr. Centro also invested in Greenwich Sentry? A. Yes, ma'am. Q. Besides Mr. Centro, do you know any of the other investors or the -- any other limited partners in Greenwich Sentry? MR. GLASSER: Objection to form. THE WITNESS: No. BY MS. PIERCE: Q. Did you ever attend any meetings in your capacity as a limited partner in Greenwich Sentry? MR. GLASSER: Objection to form. THE WITNESS: No. BY MS. PIERCE: Q. Okay. Prior to your decision to invest 877-702-9580 TSG Reporting - Worldwide Page 375 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 TSG 877-702-9580 Page 376 Martin Bach in Greenwich Sentry -A. Uh-huh. Q. Strike that. Do you recall when you first received an audited financial statement for Greenwich Sentry? MR. GLASSER: Objection to form. THE WITNESS: Yes. I believe it was in 2003 or 2004. Maybe 2002 also. I'm not sure. BY MS. PIERCE: Q. Did you receive any audited financial statements before your decision to invest in Greenwich Sentry? MR. GLASSER: Objection to form. THE WITNESS: No. BY MS. PIERCE: Q. Do you know who audited Greenwich Sentry at the time you decided to invest? MR. GLASSER: Objection to form. THE WITNESS: I believe it was Berkow, Schechter BY MS. PIERCE: Q. How did you know that Berkow, Schechter audited Greenwich Sentry at that time? A. Well, I spoke to Mr. Schechter a few Martin Bach times when I had -- we discussed tax questions up and back, you know, and I believe he told me he did the audit there. He was their accountant. Q. Do you recall in any of those conversations if you asked to review the financial statements for Greenwich Sentry? MR. GLASSER: Objection to form. BY MS. PIERCE: Q. If you asked -- let me rephrase that. Do you recall if you ever asked Mr. Schechter prior to your investment in Greenwich Sentry to review financial statements for the fund? A. No, no. Q. Your first decision to invest in Greenwich Sentry was when? A. In February 2002. Q. And then you -- did you make subsequent investments in 2002? A. Yes, ma'am. Q. How many? A. Five more. Q. Well, how about just in 2002? A. I made -- I made one more in 2002. Q. Is it possible that you made two more in Reporting - Worldwide Reporting - Worldwide 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 877-702-9580 TSG 877-702-9580 24 (Pages 373 to 376) Page 377 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 Page 378 Martin Bach 2002? A. It's possible. It's possible. Yeah. Q. So it's possible that you made three investments in 2002 in Greenwich Sentry? A. If you say so. I don't remember. I made six altogether, you know. MS. PIERCE: Okay. Could I see the addendum to interrogatories? THE WITNESS: What am I looking for? MR. GLASSER: I'll grab it. I think actually it's right there. BY MS. PIERCE: Q. If you could take a look at Exhibit 27. MR. GLASSER: There you go. THE WITNESS: 27. I got it there, yeah. BY MS. PIERCE: Q. Okay. And right there on the front page. A. Uh-huh. Q. In the first answer. A. Okay. I'm looking. Q. Is that a list of your investments? A. Yes, I made three in 2002. Q. And prior to making those three investments in 2002, is it correct that you did not TSG Reporting - Worldwide 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 877-702-9580 TSG Martin Bach receive an audited financial statement for Greenwich Sentry? MR. GLASSER: Objection to form. THE WITNESS: That's correct. BY MS. PIERCE: Q. Okay. Prior to your decision to invest in Greenwich Sentry, did you receive anything from PricewaterhouseCoopers related to Greenwich Sentry fund? A. No. Q. Is your question -- or is your answer the same with respect to PricewaterhouseCoopers Netherlands? A. Yes, uh-huh. Q. Did you know prior to your investment in Greenwich Sentry that PricewaterhouseCoopers Netherlands did not audit the Greenwich Sentry fund at that time? A. Sure. Q. Before your decision to invest in Greenwich Sentry, did you have any contact with PricewaterhouseCoopers Netherlands with respect to that investment? A. No. Reporting - Worldwide Page 379 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 Martin Bach Q. So you didn't contact anyone at PricewaterhouseCoopers Netherlands? A. No. Q. You did not speak to anyone from PricewaterhouseCoopers Netherlands? A. No. Q. You didn't request any materials from PricewaterhouseCoopers Netherlands? A. No. Q. And you never received any materials from PricewaterhouseCoopers Netherlands? A. Correct. Q. Did you know at that -- at the time prior to your first investment in Greenwich Sentry who audited Madoff? MR. GLASSER: Objection to form. THE WITNESS: No. BY MS. PIERCE: Q. Did you think for any reason that it was PricewaterhouseCoopers Netherlands? MR. GLASSER: Objection to form. THE WITNESS: I didn't think no such thing, but I assumed it was one of the big four considering the size of -- of Madoff. TSG Reporting - Worldwide 877-702-9580 Page 380 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 Martin Bach BY MS. PIERCE: Q. But you know now that it was not one of the big four; is that correct? A. That's correct. Q. Did you know who audited Fairfield Greenwich Group before you invested in Greenwich Sentry? MR. GLASSER: Objection to form. THE WITNESS: I think I said that before. I think it -- I thought it was Berkow, you know, Berkow, Schechter. BY MS. PIERCE: Q. You don't have any reason to think it was PricewaterhouseCoopers Netherlands, do you? A. That's correct. Q. With respect to your subsequent investments -A. Uh-huh. Q. -- would your answers be the same as to PricewaterhouseCoopers Netherlands? MR. GLASSER: Objection to form. I think it would make sense to go through the specific investments. BY MS. PIERCE: 877-702-9580 TSG Reporting - Worldwide 877-702-9580 25 (Pages 377 to 380) Page 397 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 TSG Page 398 Martin Bach received -- you received these audited financial statements for the Greenwich Sentry investment in the mail? A. Sure. Q. Did most of the materials -- or strike that. When you received materials related to the Greenwich Sentry fund -- no, strike that. Did you ever specifically request any of the audited financial statements for Greenwich Sentry fund directly from Fairfield Group? MR. GLASSER: Objection to form. THE WITNESS: No. BY MS. PIERCE: Q. Did you contact the Fairfield Group after you learned about the Madoff fraud to discuss any of the financial statements? MR. GLASSER: Objection to form. THE WITNESS: I called -- when I spoke to Jeffrey Tucker after December 11th, one of the questions I asked him, this is probably related to Price Waterhouse. I said, "Jeffrey, did you ever receive a certified statement from Madoff Investment Trust?" And he said, "No." That's when my head Reporting - Worldwide 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 877-702-9580 TSG Page 399 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 TSG Martin Bach THE WITNESS: I assume so. BY MS. PIERCE: Q. It was not out of the ordinary to you that you were being sent audited financial statements for Greenwich Sentry? A. That's correct. Q. Did you expect to receive one every year? And let me rephrase. Did you expect to receive an audited financial statement for Greenwich Sentry every year? A. That's correct. Q. Did you expect Fairfield Greenwich Group to provide those to you as a part of their services? MR. GLASSER: Objection to form. THE WITNESS: Yes. MS. PIERCE: Just one second. I think those are all the questions that I have. Thanks very much. THE WITNESS: Okay. Thank you, dear. MR. DECKINGER: We can go off the record for a second. THE VIDEOGRAPHER: Going off the record. The time is 12:24 p.m. (Recessed from 12:24 p.m. to 12:31 p.m.) Reporting - Worldwide 877-702-9580 Martin Bach started to swim a little bit. If -- if Greenwich who had millions of dollars invested with Madoff never got a certified report from anybody, or he invested the money with, that's when my head started to spin and I started to wonder how did Price Waterhouse certify the financial statements of -- of Greenwich when then no -- no certified audit was in their possession? I couldn't figure it out. That's when I first started to get very suspicious. BY MS. PIERCE: Q. Prior to that conversation with Jeffrey Tucker during the -- the six years that you invested in Greenwich Sentry, you never asked a similar question of Jeffrey Tucker is what you just described; is that correct? A. I just assumed that he got it. Stupidly assumed. Q. When I was asking you earlier about your receipt of audited finan- -- your receipt of audited financial statements related to Greenwich Sentry, did you receive those as a routine part of your relationship with Greenwich Sentry fund? MR. GLASSER: Objection, form. Reporting - Worldwide 877-702-9580 Page 400 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 TSG Martin Bach THE VIDEOGRAPHER: Going on the record, the time is 12:31 p.m. EXAMINATION BY MR. TRESSLER: Q. Good afternoon, Mr. Bach. My name is David Tressler. A. Hi. Q. I'm with the law firm of Kirkland & Ellis in Chicago, and I represent Price Waterhouse -PricewaterhouseCoopers Canada. A. Okay. Q. And I may refer to it as PwC Canada. A. Okay. Q. Or PricewaterhouseCoopers Canada, if that's okay with you. A. Okay. Q. Mr. Bach, we are down to the homestretch. I have 18 minutes so I'm going to be as quick as I can. A. Thank you. Q. But the end is in sight. MR. GLASSER: But just still give me a chance in case I need to lodge an objection. MR. TRESSLER: Yes, absolutely. Reporting - Worldwide 877-702-9580 30 (Pages 397 to 400) Page 401 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 TSG Martin Bach THE WITNESS: Okay. BY MR. TRESSLER: Q. You talked with counsel, Mr. Bach, earlier and confirmed that you didn't receive any audited financial statements for Greenwich Sentry prior to making your three 2002 investments in Greenwich Sentry, correct? MR. GLASSER: Objection to form. THE WITNESS: Correct. BY MR. TRESSLER: Q. And since you didn't seek audited financial statements for Greenwich Sentry prior to making your investments with Greenwich Sentry, not knowing what the audit report said about Greenwich Sentry's financial statements didn't stop you from making your investment with Greenwich Sentry, did it? MR. GLASSER: Objection to form. THE WITNESS: That's correct. BY MR. TRESSLER: Q. You said earlier that you didn't receive anything from PricewaterhouseCoopers prior to investing in Greenwich Sentry? A. Correct. Q. And is that also true for Reporting - Worldwide 877-702-9580 Page 402 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 TSG Martin Bach PricewaterhouseCoopers Canada? A. Correct. Q. And you knew that PricewaterhouseCoopers Canada isn't -- was not the auditor of Greenwich Sentry prior to making your investment, correct? MR. GLASSER: Objection to the form. THE WITNESS: Right. BY MR. TRESSLER: Q. And you had no contact or communication of any kind with PricewaterhouseCoopers Canada with respect to your investment in Greenwich Sentry before deciding to invest? A. Correct. MR. GLASSER: And just to clarify, we're talking about his first initial investment? MR. TRESSLER: Correct. When he decided to invest. I think I said decided to invest, but I was referring to 2002. THE WITNESS: Uh-huh, correct. BY MR. TRESSLER: Q. And so you didn't have any -- strike that. After you invested in Greenwich Sentry, you didn't speak or have any communication with Reporting - Worldwide 877-702-9580 Page 403 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 Martin Bach anyone from PricewaterhouseCoopers Canada -A. Correct. Q. -- did you? You didn't meet with anyone from PricewaterhouseCoopers Canada? A. Correct. Q. And you didn't call or try to contact anyone from PricewaterhouseCoopers Canada? A. Correct. Q. From the time that you first invested until today, correct? A. That's correct. Q. And you never requested any materials directly from PricewaterhouseCoopers Canada with regard to your investment in Greenwich Sentry, correct? MR. GLASSER: Objection, form. THE WITNESS: Correct. BY MR. TRESSLER: Q. And after you learned that PricewaterhouseCoopers became the auditor for Greenwich Sentry, you didn't think that PwC audited Madoff, did you? MR. GLASSER: Objection to form. THE REPORTER: Madoff? TSG Reporting - Worldwide 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 877-702-9580 TSG Page 404 Martin Bach MR. TRESSLER: Madoff. THE REPORTER: Oh, Madoff. MR. TRESSLER: Madoff. THE WITNESS: I didn't know who audited. BY MR. TRESSLER: Q. You didn't know who audited Madoff, did you? A. I just was told it was a large fund like I said before. Billions of dollars. I couldn't have done it with three people, you know, so. Q. And you testified earlier that you found out after the Madoff Ponzi scheme was revealed that it was a small accounting firm? A. Yeah, smaller than my firm actually, yeah. Q. You went through with the counsel for -with counsel for PricewaterhouseCoopers Netherlands the audit reports that you had prior to making your particular investments, and I think you referred to Exhibit 27 which listed the six dates on which you made an investment in Greenwich Sentry? A. That's correct. MR. GLASSER: Objection to form. BY MR. TRESSLER: Reporting - Worldwide 877-702-9580 31 (Pages 401 to 404) Page 545 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 Martin Bach Q. The handwritten notes that we've been talking about. A. Yeah, go ahead. Q. The ones that you took today. A. Yes, ma'am. Q. You -- you see at the top there you wrote the word "Citco"? A. Yes, ma'am. Q. Why did you write that? A. Because I couldn't remember how to say it all the time. I wanted to remember that when you asked -- when I talked about it, I said Citco. I keep forgetting that name. I called it city yesterday then somebody corrected me so I just put it down for my memory, that's all. Q. So would it be correct that you just wrote that down so that you could remember how to spell it or pronounce it? A. Yes, yes, that's all. Q. So is there any connection between the word Citco at the top and these other words that you've written here underneath the word Citco? A. No. The rest of it had to do with the -the Price Waterhouse audit I wanted -- in case they TSG Reporting - Worldwide Page 546 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 Martin Bach ask me certain questions. Everything else here from audit program to capital where there's a line relates to the Price Waterhouse audit. Q. Okay. What about the -- below the line it says there are no certified reports from Madoff. A. Yes. Q. What did they relate to? A. Because I didn't get -- when I spoke to Mr. Tucker, he told me he never got a certified report from Madoff. So this is a point that I wanted to bring up in case I had a question about why I was so angry and everything. MS. IZQUIERDO: I have no further questions. THE WITNESS: That was it. MR. DECKINGER: I think -- strike that. MR. DIVINE: Give me one second, I apologize. FURTHER EXAMINATION BY MR. DIVINE: Q. Mr. Bach, just one or two quick questions. A. Sure. Q. The sentence you wrote here, "No 877-702-9580 TSG Reporting - Worldwide Page 547 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 TSG Martin Bach certified report for Madoff," Bach Exhibit number 43. Do you recall which point in the morning you wrote that down? A. What time I did it? Q. Well, I asked a question. There were a bunch of people in the room asking questions. Do you recall who was asking you questions at the time? A. I might not have had any questions at the time. I might have just been writing these things down in case I'm asked questions. Q. Okay. And these are specific things that you wanted to make sure that you brought up today; is that correct? A. Absolutely. Q. You wanted everybody to know at this point; is that correct? A. Yes. I mean, there's a lot of other things I would have liked to bring up today, you know. Q. I understand. I understand. A. Believe me. Q. You came here and you specifically wanted to get that on the record; is that right? A. Yes. Reporting - Worldwide 877-702-9580 Page 548 1 2 3 4 5 6 7 8 9 10 11 12 Martin Bach MR. DIVINE: Okay. That's all I have. MR. DECKINGER: Anybody else? All right. I think we're done. Thank you. THE VIDEOGRAPHER: This concludes the deposition of Martin Bach. We are off the record at 4:48 p.m. (Whereupon, at 4:48 p.m. the deposition concluded.) ____________________ MARTIN BACH Subscribed and sworn to before me this day of 2011 13 14 15 ________________________ 16 17 18 19 20 21 22 23 24 25 877-702-9580 TSG Reporting - Worldwide 877-702-9580 67 (Pages 545 to 548)

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