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

Filing 167

DECLARATION of Regina Griffin in Support re: 162 FIFTH MOTION in Limine To Deem Statements By Sterling Stamos Employees In The Course Of And In Connection With Their Employment By Sterling Stamos As Admissions of The Sterling Defendants.. Document filed by Irving H. Picard. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2 - Filed Under Seal Pursuant to Protective Order, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15 -1, # 16 Exhibit 15 - 2)(Sheehan, David)

Exhibit 9

1

1

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

2

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

3
4
5

--------------------------------x

6

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

7
8

Videotaped
Deposition of:

Plaintiff,
v.

BASIL STAMOS, M.D.

9
SAUL B. KATZ, et al.,
10
Defendants.
11
--------------------------------x
12
13
14
15

TRANSCRIPT of testimony as taken by and before

16

LESLIE ROCKWOOD, RPR, CSR No. 3462, at the offices

17

of Shearman & Sterling, Four Embarcadero, Suite 3800,

18

San Francisco, California, on Tuesday, January 3, 2012,

19

commencing at 9:30 a.m.

20
21
22
23
24
25

PICARD v. KATZ, et al.

CONFIDENTIAL

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1

Haiti.

2
3

Q.

Could you tell me briefly what your

employment history was?

4

A.

Sure.

After I completed my residency at Cook

5

County, I stayed on as an attending physician at Cook

6

County Hospital, and then I transferred to San Francisco,

7

where I worked for the Department of Public Health for

8

ten years in a homeless clinic.

9

volunteer work overseas, and then returned worked, with

Then I did some

10

Sterling Stamos for three-and-a-half years heading up the

11

philanthropic division.

12

Q.

Could you tell me when that was?

13

A.

It was December of 2003 until roughly June,

14

July of 2007.

15
16

Q.

Were you involved with Sterling Stamos at any

time prior to December of 2003?

17

A.

No.

18

Q.

How did you come to be employed by Sterling

A.

My brother is the CEO and founder of Sterling

22

Q.

Your brother is?

23

A.

Peter Stamos.

24

Q.

And did he ask you to come to work there?

25

A.

Yes.

19

Stamos?

20
21

Stamos.

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1
2
3
4

Q.

And what position did you hold when you came

there in December of 2003?
A.

To head up the corporate philanthropy

division of Sterling Stamos.

5

Q.

What is the corporate philanthropy division

6

of Sterling Stamos?

What does it do or what did it do?

7

A.

We had made a commitment early on to

Right.

8

give a substantial proportion of our profits to

9

philanthropic causes, and that was my job.

10
11
12

Q.

What did you mean that was your job?

Could

you elaborate, please.
A.

Sure.

Essentially to find the appropriate --

13

appropriate places to put our capital to work in

14

humanitarian causes, and essentially we decided to focus

15

on infectious disease in the developing world.

16

implied frequent trips to places like Haiti, Dominican

17

Republic, Cambodia, predominantly Cambodia, developing

18

relationships with nonprofits in those areas, financially

19

supporting them, joining a couple of the boards that did

20

work in those areas, and then finding other people to

21

help support those programs.

22
23
24
25

Q.

So that

Did anybody else at Sterling Stamos assist

you in your day-to-day tasks?
A.

My younger brother, Chris Stamos, was also

involved.
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1
2

Q.

And what was Chris' position at Sterling

Stamos at that time?

3

A.

He was -- you know, to be honest with you, I

4

actually don't remember his official position, but he was

5

essentially working out of New York, mostly on the client

6

relations side of the company.

7
8

Q.

to be for Sterling Stamos?

9
10

A.

To work closely with the clients and to also

help me with philanthropic relationships.

11
12

What did you understand his responsibilities

Q.

Did you have an ownership interest in

Sterling Stamos?

13

A.

Yes.

14

Q.

Can you tell me when you acquired that

15

ownership interest?

16

A.

17

It

was in December of 2003.

18
19

I believe it was as soon as I started.

Q.

You didn't hold an ownership interest at any

time prior?

20

A.

I did, but it was a -- I'm trying to

21

remember.

I had initially made an investment, and then

22

was asked to withdraw my investment because I wasn't

23

working with the company.

24

the company full-time, I was able to buy a portion of the

25

company.

Once I started working with

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1
2

Q.

To be clear, when you say that you made an

investment with the company --

3

A.

Yes.

4

Q.

-- you were referring to Sterling Stamos and

5

not one of its investment funds?

6

A.

That's correct.

7

Q.

And who asked you to withdraw your

8

investment?

9

A.

Peter did.

10

Q.

And did he tell you why?

11

A.

Essentially because I was not working with

12

the firm, he didn't think it was proper.

13
14

Q.

What -- there came a time that you did

acquire an ownership interest.

15

A.

That's correct.

16

Q.

And again, that was around December of '03?

17

A.

I believe it was, yes.

18

Q.

And what ownership interest did you acquire?

19

A.

I think I had 2 percent ownership in the

20
21

company.
Q.

Can you describe for me what the ownership

22

structure was at that time when you acquired your

23

2 percent interest?

24

A.

Could you please elaborate.

25

Q.

Who were the other owners, if you know, and
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1
2
3

A.

Explain to me.

I'm sorry.

Which investment

managers?
Q.

Were any investment managers of Sterling

4

Stamos ever discussed at these meetings?

5

MR. DITCHFIELD:

6

MS. BIEBER:

7
8

Q.

Objection to the form.

Objection.

BY MS. GRIFFIN:

Did Sterling Stamos have

investment managers, to your knowledge?

9

A.

Yes.

10

Q.

Were any of them discussed at any of these

11

meetings that you went to?

12

A.

I don't recall.

13

Q.

Did you ever interact with investors of

14

Sterling Stamos?

15

A.

Yes.

16

Q.

And under what circumstances would you

17
18

interact with investors?
A.

It was usually after a meeting that my

19

brother had with a potential investor to talk about our

20

philanthropic endeavors.

21
22

Q.

Would you ever speak to any investors about

investing in Sterling Stamos?

23

A.

No.

24

Q.

If you could just give me us a moment, we're

25

going to show you a couple of documents.
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1

your friends and colleagues outside of Sterling Stamos?

2

A.

Yes.

3

Q.

And what would you generally discuss about

4

the firm?

5
6

A.
want to do.

7
8

Usually the nature of my work and what we

Q.

And when you say the nature of your work and

what we want to do, what are you referring to?

9

A.

From the very beginning, I saw this as a

10

wonderful opportunity to build capital and do some good

11

work around the world, and that's what drew me to it.

12

Plus also the possibility of working with my brothers,

13

which would be -- you know, it's a great opportunity.

14

Q.

Did you have an understanding about what

15

Peter -- Peter's objectives were with regard to Sterling

16

Stamos?

17

A.

I think he wanted to build a world-class

18

investment company that had a strong social conscience

19

and a strong philanthropic arm; that we would do

20

something that other firms didn't do, and that was to

21

give a substantial proportion of our profits to good

22

work.

23
24
25

Q.

And when you refer to a world-class

investment company -A.

Yeah.
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MS. GRIFFIN:

I'm guilty, too.

2

THE WITNESS:

We're having a nice

3
4
5

conversation.
Q.

BY MS. GRIFFIN:

Exactly.

Did you remain a

partner, still, even though you left?

6

A.

Yes.

7

Q.

Are you still a partner?

8

A.

I'm a silent equity holder.

9

Q.

Does -- did Peter still remain as CEO?

10

A.

Yes.

11

Q.

Did there come a time that you first learned

12

of the revelation of Madoff's fraud?

13

A.

Yes.

14

Q.

Can you tell me the circumstances under which

15
16

you heard of the revelation of the fraud?
A.

I don't recall who told me.

I don't know if

17

I saw it on the news or if I heard about it from the --

18

from people in the firm.

19
20
21
22
23
24
25

Q.

Were you in San Francisco when you heard

about it or were you in New York?
A.

Can you tell me what the date was?

And I can

tell you.
Q.

December 11, 2008.
MS. GRIFFIN:

And I'm pretty sure you'll

agree with me on that.
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1

years ago.

2
3

See the press release below."
Why were you sending this email to these

people?

4

A.

I recall there having been a press release

5

that confused Sterling Equities with Sterling Stamos

6

concerning Madoff securities, and I wanted my colleagues

7

to be clear of that mistake.

8
9

Q.

When you say a press release was confused, do

you know who issued that press release?

10

A.

Actually, let me back up.

Not a press

11

release.

12

got the names mixed up, and I wanted my colleagues to be

13

aware that that was a mistake.

14
15
16

There was something in the press initially that

Q.

Why did you want your colleagues to be aware

that that was a mistake?
A.

Right.

Well, looking at all these -- a

17

number of these emails, they were all related to the

18

nonprofit work that I had done, and I wanted to make sure

19

that my partners knew that we were solvent, that we were

20

doing well, and that they did not have to worry about

21

continued funding.

22

Q.

23

When you say your partners, I'm sorry, who

are you referring to?

24

A.

These are my philanthropic partners that I'm

25

involved with, yes.
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1
2

Q.

And when you say that "we were solvent, that

we were doing well," who were you referring to?

3

A.

The firm was doing well.

4

Q.

The firm being Sterling Stamos?

5

A.

Correct.

6

Q.

When you said in the email -- well, actually,

7

do you recall writing this email after having reviewed

8

it?

9

A.

I don't remember, no.

10

Q.

Do you have any reason to doubt that you sent

11

this email?

12

A.

13
14

I have -- sorry about that.
THE VIDEOGRAPHER:

Can you just slide it up?

Thanks.

15

THE WITNESS:

16

THE VIDEOGRAPHER:

17

THE WITNESS:

18

Q.

Better?
Thank you.

I have no reason to doubt.

BY MS. GRIFFIN:

19

email is December 13, 2008.

20

When -- the date of the
Did you still have an email

address with Sterling Stamos?

21

A.

Yes.

22

Q.

When you wrote "to my brother's credit, Peter

23

made this call many years ago," what did you mean by

24

that?

25

A.

I meant that he got us out of Sterling -- out
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1

Q.

And in the email you wrote:

"Dear Paul and

2

Ophelia, I wanted to share with you a recent press

3

release concerning the massive Madoff Securities, a

4

tilde, 50 billion scandal.

5

this is probably the greatest case of fraud in the

6

history of Wall Street.

7

correct call many years ago and Sterling Stamos is

8

totally in the clear."

9
10
11

In case you hadn't heard,

Fortunately, Peter made the

Why were you writing to Dr. Paul Farmer and
Ophelia Dahl about this?
A.

Again, for the same reasons.

These were

12

major philanthropic partners, and I wanted them to know

13

that Sterling Stamos was not Sterling Equities, which had

14

been released -- or not released, it had been in the

15

press before this press release came out.

16

Q.

Was Sterling -- was Sterling Stamos involved

17

in all of these not-for-profits that we've been

18

discussing in Trustee's 232 through 243?

19

A.

Yes.

We were donors.

20

Q.

Donors.

When you wrote "fortunately Peter

21

made the correct call many years ago and Sterling Stamos

22

is totally in the clear," for the record, what did you

23

mean by that?

24

MS. BIEBER:

Objection.

25

You can answer again.
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1

THE WITNESS:

That it was -- in my mind, it

2

was because we had withdrawn our funding from Madoff

3

Securities as a family.

4
5

Q.

BY MS. GRIFFIN:

That's what you meant by

"correct call"?

6

A.

Yes.

7

Q.

And when you say "Sterling Stamos is totally

8

in the clear," what did you mean by that?

9
10

A.

That Sterling Stamos is not Sterling Equities

as had been in the press.

11

Q.

12

important?

13

A.

And that was important -- again, why was that

They were --

14

MS. BIEBER:

15

You can answer again.

16

MS. GRIFFIN:

17

Objection.

To be clear on the record, we

are talking about a different exhibit altogether.

18

MS. BIEBER:

He's saying the answers are the

19

same so there's no reason for him to reiterate what the

20

answers are each time when he's told you they're the

21

same.

22

MS. GRIFFIN:

You can answer.

23

THE WITNESS:

Those are the same reasons why

24

I had sent the emails to other philanthropic partners.

25

These were major philanthropic partners.
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1
2

Q.

Did you have an email address at

SterlingStamos.com that was [e-mail]?

3

A.

Yes.

4

Q.

Do you still have that email address?

5

A.

Yes, I do.

6

Q.

Do you still use it?

7

A.

Yes.

8

Q.

Did you regularly use your Sterling Stamos

9

email address to communicate?

10

A.

I use both that one and another email, yes.

11

Q.

When you wrote "thought you guys might find

12

the following press release interesting," why did you

13

write that?

14

A.

Again, for the same reason as with the

15

previous emails.

These were two philanthropic partners

16

for Esperanza, a non-profit in the Dominican Republic

17

that we had funded.

18

Q.

And why would they find the press release on

19

Sterling Stamos Funds Not Invested in Madoff Securities

20

interesting?

21

MS. BIEBER:

Objection.

22

You can answer.

23

THE WITNESS:

For the same reason as with the

24

previous emails, they were recipients of our donations,

25

and I did not want them to be confused by the previous
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news release of Sterling Equities versus Sterling Stamos.

2
3

Q.

BY MS. GRIFFIN:

If you could look at

Trustee's 239.

4

A.

That's okay.

I have no problems.

5

Q.

It's something to be proud of, actually.

6

A.

Not really.

7

Q.

Mr. Stamos -- well, for the record, Trustee's

Okay.

8

Exhibit 239 is an email.

9

emails, but maybe you can correct me about this.

10

It looks like the string is two
The top

is from Rajesh Gupta.

11

A.

Uh-huh.

12

Q.

Email address [e-mail], sent

13

Sunday, December 14, 2008 at 2:36 p.m. to Basil Stamos,

14

subject:

"Re:

15
16

My man."

In the second -- do you recall receiving this
email from Rajesh Gupta?

17

A.

Yes, I do.

18

Q.

And who is Rajesh Gupta?

19

A.

He is a friend and a colleague.

20

Q.

When you say "colleague," in what sense do

21
22
23
24
25

you mean?
A.

He worked at the World Health Organization

and with Partners in Health.
Q.

In the second paragraph, he wrote:

"First

the cash buyout and now dodging the Madoff bullet.
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1

A.

[e-mail]?

2

Q.

Yes.

3

A.

Yes, it is.

4

Q.

Okay.

5

Do you have any reason to doubt that

you sent that link in the email chain?

6

A.

No.

7

Q.

Does this appear to be a response from Chris

9

A.

Yes.

10

Q.

-- to your email?

8

Hest --

You can put that aside.

11

We're going to go straight to Trustee 243.

12

Have you had a chance to review Trustee's Exhibit 243?

13

A.

14

Yes.
MS. GRIFFIN:

For the record, Trustee's 243

15

is an email from Basil Stamos sent Friday, December 19,

16

2008 at 11:57 a.m., [e-mail], Bates range

17

SSMT01195993.

18

Q.

Do you recognize Trustee's 243?

19

A.

Yes, I do.

20

Q.

Do you recall sending this email?

21

A.

No.

22

Q.

How do you recognize Trustee's 243?

23

A.

I know the recipient of this email.

24

Q.

And who is he?

25

A.

Dr. Bill Housworth, he's the executive
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director of the Angkor Hospital for children.

2
3

Q.

In -- do you have any reason to doubt that

you sent this email?

4

A.

I do not.

5

Q.

At the bottom underneath your signature it

6

says:

"P.S., I don't know if you've been following the

7

whole Madoff scandal on Wall Street, but it's extremely

8

interesting from our perspective.

9

all the cast of characters.

My brother Peter knows

Fortunately, he stayed far

10

away from it all and has instructed others to do the same

11

for years.

12

counseled me out of it.

13
14

I was actually in the fund in 2002, but Peter
Missed by that much."

When you wrote "it's extremely interesting
from our perspective," who is the "our"?

15

A.

I'm referring to Sterling Stamos.

16

Q.

And when you say "my brother Peter knows all

17

the cast of characters," what did you mean by "the cast

18

of characters"?

19
20
21

A.

Meaning that he knows Bernie Madoff and Fred

Wilpon and Saul Katz.
Q.

"Fortunately, he stayed away from it all and

22

has instructed others to do the same for years."

23

record, can you tell me what you meant by that?

24

A.

That he had advised his family.

25

Q.

"He" being?
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1

A.

Peter had advised his family and his -- I'm

2

assuming I meant some investors to not invest in Bernie

3

Madoff.

4
5

Q.

And do you know what others you were

referring to?

6

A.

No.

No.

7

Q.

Do you know how Peter instructed others to

8

stay away?

9

A.

I do not.

10

Q.

Do you know what's your basis for

11

understanding that he had instructed others to do the

12

same?

13
14

A.

why I and my family had pulled out.

15
16

I'm assuming it had been for the same reasons

Q.

Well, how did you come to know that he had

instructed others to do the same for years?

17

A.

Because Peter had told me that he had advised

19

Q.

Who had he advised?

20

A.

I don't know.

21

Q.

Do you remember when those conversations with

22

Peter took place?

23

A.

I do not.

24

Q.

What did Peter tell you in those

18

25

others.

conversations?
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