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

Filing 173

DECLARATION of DANA M. SESHENS in Support re: 164 Memorandum of Law in Opposition to Motion,,,,,,,,,. Document filed by Charles 15 Associates, Charles 15 LLC, Charles Sterling LLC, Charles Sterling Sub LLC, College Place Enterprises LLC, Coney Island Baseball Holding Company LLC, Estate of Leonard Schreier, FFB Aviation LLC, FS Company LLC, Fred Wilpon Family Trust, Arthur Friedman, Ruth Friedman, Iris J. Katz and Saul B. Katz Family Foundation, Inc., Judy and Fred Wilpon Family Foundation, Inc., Amy Beth Katz, David Katz, Dayle Katz, Gregory Katz, Howard Katz, Iris Katz, 157 J.E.S. LLC, Air Sterling LLC, BAS Aircraft LLC, Jason Bacher, Bon Mick Family Partners LP, Bon-Mick, Inc., Brooklyn Baseball Company LLC, C.D.S. Corp., Michael Katz, Saul B. Katz, Todd Katz, Katz 2002 Descendants' Trust, Heather Katz Knopf, Natalie Katz O'Brien, Mets II LLC, Mets Limited Partnership, Mets One LLC, Mets Partners, Inc., Minor 1 (REDACTED), Minor 2 (REDACTED), L. Thomas Osterman, Phyllis Rebell Osterman, Realty Associates Madoff II, Red Valley Partners, Robbinsville Park LLC, Ruskin Garden Apartments LLC, Saul B. Katz Family Trust, Michael Schreier, Deyva Schreier Arthur, See Holdco LLC, See Holdings I, See Holdings II, Sterling 10 LLC, Sterling 15C LLC, Sterling 20 LLC, Sterling Acquisitions LLC, Sterling American Advisors II LP, Sterling American Property III LP, Sterling American Property IV LP, Sterling American Property V LP, Sterling Brunswick Corporation, Sterling Brunswick Seven LLC, Sterling Dist Properties LLC, Sterling Equities, Sterling Equities Associates, Sterling Equities Investors, Sterling Heritage LLC, Sterling Internal V LLC, Sterling Jet II Ltd., Sterling Jet Ltd., Sterling Mets Associates, Sterling Mets Associates II, Sterling Mets LP, Sterling Pathogenesis Company, Sterling Third Associates, Sterling Thirty Venture LLC, Sterling Tracing LLC, Sterling Twenty Five LLC, Sterling VC IV LLC, Sterling VC V LLC, Edward M. Tepper, Elise C. Tepper, Jacqueline G. Tepper, Marvin B. Tepper, Valley Harbor Associates, Kimberly Wachtler, Philip Wachtler, Bruce N. Wilpon, Daniel Wilpon, Debra Wilpon, Fred Wilpon, Jeffrey Wilpon, Jessica Wilpon, Judith Wilpon, Richard Wilpon, Scott Wilpon, Valerie Wilpon, Wilpon 2002 Descendants' Trust, Robin Wilpon Wachtler. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G)(Seshens, Dana)

EXHIBIT B

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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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v.

Plaintiff,

Videotaped
Deposition of:
FRED WILPON

SAUL B. KATZ, et al.,
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 Tuesday,

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January 10, 2012, commencing at 9:28 a.m.

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PICARD v. KATZ, et al.

CONFIDENTIAL

FRED WILPON 1/10/12
46

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means.

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3

Q.
fund?

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5

Did you view Mr. Madoff as a hedge

A.

No.

I -- I thought he was our

broker.

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Q.

Okay.

Were either you or Mr. Katz,

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to your knowledge, hedge fund investors for -- at

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all?

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10
11

A.

I don't -- I don't -- I don't know

that.
Q.

Okay.

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MR. SHEEHAN:

I'm going to take a

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quick break here because I think I might be able to

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cut out some stuff.

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16

THE VIDEOGRAPHER:
record, the time is 10:27.

Going off the

This ends disk 1.

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(Recess taken.)

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THE VIDEOGRAPHER:

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record.

The time is 10:39.

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BY MR. SHEEHAN:

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Q.

We are back on the

This is disk number 2.

I want to go back to an answer you

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gave just before we broke.

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that's why we take breaks -- she reminds me of

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things I miss.

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one of them was, and something I did want to ask

All right?

My colleague here --

So there you go.

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And

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with regard to Mr. Madoff and how his business

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operated that would have spawned this comment?

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4

A.
Q.

None.

None that I know of.

Okay.

Was there, at or about this

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time, we're going to talk more about this later, but

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do you recall any conversations about Mr. Madoff

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registering as an investment adviser?

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9
10
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A.

I believe he told us he was

registering as an investment adviser when the -- I
think the law changed?
Q.
A.
Q.
A.

Um-hum.
Or a new law came in?
Right.
And I think he told us he was -- he

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was, in addition to being a broker-dealer, whatever,

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NASDAQ and whatever you have to be as a

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broker-dealer, he was -- he was registered as an

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investment adviser.

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Q.

Okay.

20

Do you see this?

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Do you see that?

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A.

I want to take a look at D.

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Q.

It says, "Net Madoff balances."

Yes.
Okay.

What does anything -- if

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anything, does that mean to you, that entry in the

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minutes?
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2

A.
Q.

No.
And the personal friends who had

3

invested with Mr. Madoff that you've spoken of but

4

haven't named, but I'm not asking you for their

5

names, would you consider any of them to be

6

investment advisers?

7

A.

8

Q.

Not -- not personal friends that

I can recall.

9

No.

10
11
12

Did Mr. Levitt actually invest with

Mr. Madoff?
A.
Q.

I don't know.
Okay.

Did you know whether

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Mr. Levitt ever -- you know, I know you've spoken of

14

his high opinion of Mr. Madoff, but do you know if

15

he ever did an analysis of Mr. Madoff's investment

16

strategy?

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A.

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Q.

No, I couldn't tell you that.
Okay.

Other than what you've just

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described for us, Howard Squadron, Arthur Levitt and

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your friends, was there any other due diligence that

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you did with regard to investing in Mr. Madoff?

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23
24
25

A.

Well, it wasn't something that was

static.
Q.
A.

Right.
It started, I'd say '75, heard a lot
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about it.

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investments with the individuals, partners made some

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investments with Madoff.

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a constant kind of thing, that we were constantly

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hearing, thinking, you know, observing how Bernie

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Madoff performed, how others performed, and so it

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was -- it was a sort of, if I may use, it was a

8

motion picture, you know, in terms of a learning

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process.

10

Q.

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In '85 we decided to make some

And as time went on it was

Right.

A.

And there was a time when, I don't

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know the year, but the stock market went down

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significantly.

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investments came through that.

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when some Florida investors were sanctioned or

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something by the SEC.

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lawyers at Squadron at the time, he was the

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former -- I think he was the former head of the SEC

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in New York.

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And it was, Bernie Madoff was -- his
There was a time

Ike Sorkin was one of the

Something -- someone we knew.
And I remember being at their offices

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that day and describing what happened, that the SEC

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came and -- and did an analysis of that particular

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situation.

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particular situation.

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people in Florida, and they said that the Madoff

I don't know how far they went, but that
And they sanctioned the two

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operation was perfectly fine.
Q.

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A.

Okay.
I don't know whether those were the

words.
Q.

No, I understand.

your understanding of it?
A.
Q.

That's my...
Yeah, exactly.

The -- just a moment

here, I lost my train of thought.

I was listening

to you there and I lost it, you know.
A.
Q.
A.
Q.
A.

Join the club.
First one to admit that.
Join the club.
But -- exactly.
That's why when you're asking me

things like years, I say -Q.
A.
Q.

I understand completely.
What did I have for lunch yesterday?
I've had that experience as well.

20

MR. WISE:

21

MR. SHEEHAN:

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I assume that's

Q.

Those senior moments.
Indeed.

The -- but let me try to get back

23

into the context of it.

The -- let me jump-start it

24

in a different direction.

25

where I want to go.

This might get me back to

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investigation materials with you?

2

A.

3
4

Not that I know of.

Q.

Did you ever discuss with any bank

representative what the investigation entailed?

5

A.

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I -- I have not.

Q.

Okay.

7

MR. SHEEHAN:

I want to take two

8

minutes and just look at these, and I think we're

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close to being done.

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MR. WISE:

11

MR. SHEEHAN:

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THE VIDEOGRAPHER:

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Sure.
Okay, thanks.
Going off the

record, the time is 3:33.

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(Recess taken.)

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THE VIDEOGRAPHER:

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record.

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BY MR. SHEEHAN:

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Q.

We are back on the

The time is 3:49.

Mr. Wilpon, I have a few questions

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here, and I want to start back in 1992, in terms

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of -- and I think you testified about it a little

21

bit earlier today -- some investigation that took

22

place down in -- down in Florida.

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that?

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25

A.
Q.

Do you remember

Yes.
Okay.

Let's just start with that.

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What do you recall about what occurred in 1992

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involving some investors or advisers down in

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Florida?

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A.

5

that it was 1992.

6
7

Q.
A.

8

Q.

Oh, okay.

Fine.

But I do recall my testimony earlier

today --

9

I -- I don't recall, Mr. Sheehan,

10
11
12

A.
Q.
A.

Yes.
-- about that incident.
Yup.
What I recall is that just by

13

coincidence I happened to be in Howard Squadron's

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office, or the offices of Squadron.

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recollection is that Mr. Sorkin was there.

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a -- he was a partner of -- of Squadron.

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know how this came about, but he -- I think he was

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representing Mr. Madoff at the time.

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And my
He was

I don't

And the issue -- there was some

20

publicity about it, I know, about the two

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accountants.

22

were going to sanction -- the SEC were going to

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sanction the accountants, but they did not find

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anything wrong at all with Mr. Madoff, or

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Mr. Madoff's firm.

And the publicity then was that they

And Ike Sorkin told me that.
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said something, he used some words, clean bill of

2

health or something like that, with respect to that.

3

And I remember that the newspapers reported and --

4

that they had sent the money back.

5

Q.

6
7
8

A.

Okay.
That Bernie Madoff had sent the money

back.
Q.

Using that as a point in time,

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whether it's '92 or some other year, using that as a

10

point in time, did there come a time after that when

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you became aware of any other SEC investigation of

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Mr. Madoff?

13

A.

Now, I'm -- I would answer yes, but

14

I'm going to give you a qualification, that I'm not

15

sure I remember when -- when I knew of this versus

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what I've read afterwards.

17

publicity that's been about this.

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that Madoff was, I thought the word "regularly,"

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maybe regularly like everybody else, but regularly

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was -- was, I'm going to use the word "monitored," I

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don't know if that's the right word, by the -- by

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certain regulatory bodies, like NASDAQ or the SEC or

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other government agencies.

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25

Q.

Because there's so much
But I did know

When you said that -- is that an

assumption on your part, that that happened on a
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regular basis?

2

A.

3

That was my assumption.

Q.

Did you have any personal knowledge

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that investigations by the SEC were taking place

5

after the one that you testified to here earlier

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today?

7

A.

My recollection is that -- that I was

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told that.

9

told that a number of times, that -- that Bernie

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Madoff was cleared with the SEC.

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12

Q.

15
16
17
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Do you -- you have no recollection of

who that was that told you that?

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14

I can't tell you who told me, but I was

A.
time.

I know Ike Sorkin said it that one

I don't remember who else.
Q.

Okay.

Do you remember when that

would have transpired that somebody told you that?
A.
Q.

I really don't.
Okay.

The -- we talked a little bit

19

earlier today, still in the context of the SEC,

20

about Mr. Madoff registering as an investment

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adviser.

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25

A.
Q.

Do you recall that?
Yes.
All right.

Do you recall whether or

not he registered because the SEC made him register?
A.

My recollection is that -- that there
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