Irving H. Picard v. Saul B. Katz et al

Filing 116

DECLARATION of David J. Sheehan in Opposition re: 80 MOTION to Strike THE EXPERT REPORTS AND TESTIMONY OF STEVE POMERANTZ AND HARRISON J. GOLDIN.. Document filed by Irving H. Picard. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4)(Sheehan, David)

Exhibit 3

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C O N F I D E N T I A L

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
11-CV-03605(JSR)(HBP)

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IRVING H. PICARD, Trustee for
the Liquidation of Bernard L.
Madoff Investment Securities LLC,

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Videotaped
Deposition of:

Plaintiff,
v.

MICHAEL KATZ

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SAUL B. KATZ, et al.,
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Defendants.
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TRANSCRIPT of testimony as taken by and before

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NANCY C. BENDISH, Certified Court Reporter, RMR, CRR

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and Notary Public of the States of New York and New

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Jersey, at the offices of Baker & Hostetler, 45

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Rockefeller Plaza, New York, New York on Friday,

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December 9, 2011, commencing at 9:38 a.m.

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PICARD v. KATZ, et al.

CONFIDENTIAL

MICHAEL KATZ 12/9/11
227

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Q.

Did you offer other opportunities for

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your employees to invest in Madoff other than the

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401(k) plan?

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A.

Say that again, please.

Offer

employees?
Q.

Did you offer your employees any

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other opportunities to invest in Madoff beside the

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401(k) plan?

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A.

I think there was some senior people

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who were able to open up accounts in Bernie Madoff.

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I don't recall who, but I think there were a couple

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people.

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Q.

And why were those senior people

allowed to open accounts with Madoff?

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A.

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able to put in.

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Q.

They had a minimum that they were

Did any employees invest in Madoff

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through any of the double-up accounts; do you

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recall?

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A.

I believe there might have been one

or two.
Q.

And what was your understanding as to

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your responsibilities as a trustee when you created

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the 401(k) plan?

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A.

My responsibility as a trustee was to
BENDISH REPORTING, INC.
877.404.2193

PICARD v. KATZ, et al.

CONFIDENTIAL

MICHAEL KATZ 12/9/11
228

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make sure that their monies were protected as

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well -- protected in a manner that as if it was my

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money, or better.

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Q.

Do you have any other understanding

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as to any other responsibilities that you had as a

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trustee?

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A.
Q.

No.
And to what extent was Madoff

involved in the creation of the plan?
A.
Q.
A.
Q.

In the creation of the plan?
Um-hum.
I don't believe anything.
Was Madoff involved in the drafting

of the description of the Madoff option of the plan?
A.
Q.

I don't know that.
Did you have any discussions with

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Madoff concerning offering the Madoff investment as

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an option in the 401(k) plan?

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A.
Q.
A.
Q.
A.
Q.

I did not.
Did Arthur?
I don't know.
Did Saul?
I do not know.
Did Sterling receive in any way any

benefit by opening a retirement plan with -- by
BENDISH REPORTING, INC.
877.404.2193

PICARD v. KATZ, et al.

CONFIDENTIAL

MICHAEL KATZ 12/9/11
230

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Q.

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A.

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Q.

And how do you know that?

Because the returns were very

similar.

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Okay.

And when you said that your

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understanding is -- that your knowledge is that he

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did not charge any fees, what is that understanding

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based on?

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something.

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Actually, let me back up, let me clarify

When we were discussing earlier the

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fees that Madoff charges with handling your

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accounts, is it your understanding that the fees

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that he charges is limited to commissions?

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A.

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Q.

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A.

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Q.

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A.

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Q.

That's it.
Period?
Period.
Okay, all right.

Thank you.

All right, thank you.
I think that cleared it up.

All

right.

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So, with respect to the 401(k)

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account it was treated -- he treated it just like

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any other account that you had with him?

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A.
Q.

That's correct.
What steps did you and Mr. Friedman

take in the creation of the plan?

The first steps.

BENDISH REPORTING, INC.
877.404.2193

PICARD v. KATZ, et al.

CONFIDENTIAL

MICHAEL KATZ 12/9/11
244

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A.

Not if Arthur Friedman took the

responsibility, no.
Q.

And do you know if Arthur insured

that the description was accurate?
A.

I believe he did.

But I'm not -- I

have no direct knowledge of that.
Q.

When you opened -- when you created

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the 401(k) plan with Arthur in 1997, did you or

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Arthur conduct any diligence with respect to the

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Madoff investment option?
A.

Our due diligence for that was 15 or

20 years of experience dealing with Madoff.
Q.

So did you -- did you do anything or

did you just rely on your prior experience?
A.

We relied on our prior 15 years'

experience.
Q.

But you took no independent action

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after creation of the 401(k) plan with respect to

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the Madoff option?

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A.
Q.

No new initiative, no.
Okay.

And what initiatives had you

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taken up until that point concerning the Madoff

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investment options?

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A.

Well, we had done quite a few things,

some of which, if you'd like me to mention, I will.
BENDISH REPORTING, INC.
877.404.2193