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

Filing 90

DECLARATION of DANA M. SESHENS in Support re: 79 MOTION for Summary Judgment.. 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 PART 1, # 4 Exhibit C PART 2, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Exhibit I, # 11 Exhibit J, # 12 Exhibit K, # 13 Exhibit L, # 14 Exhibit M, # 15 Exhibit N, # 16 Exhibit O, # 17 Exhibit P, # 18 Exhibit Q, # 19 Exhibit R, # 20 Exhibit S, # 21 Exhibit T, # 22 Exhibit U, # 23 Exhibit V, # 24 Exhibit W, # 25 Exhibit X, # 26 Exhibit Y, # 27 Exhibit Z, # 28 Exhibit AA)(Seshens, Dana)

EXHIBIT P

1

1

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

2

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
ADV. PRO. NO. 08-01789 (BRL)

3
4
5

-------------------------------x
SECURITIES INVESTOR PROTECTION
CORPORATION,

Videotaped

6
Plaintiff-Applicant,
7
8

v.
BERNARD L. MADOFF INVESTMENT
SECURITIES, LLC,

Rule 2004
Examination of:
MARK PESKIN
(Vol. I)

9
10

Defendant.
-------------------------------x
In Re:

11
BERNARD L. MADOFF,
12
13

Debtor.
-------------------------------x

14
15

TRANSCRIPT of testimony as taken by and before

16

MONIQUE VOUTHOURIS, Certified Court Reporter, RPR,

17

CRR and Notary Public of the States of New York and

18

New Jersey, at the offices of Baker & Hostetler,

19

LLP, 45 Rockefeller Plaza, New York, New York on

20

Thursday, July 29, 2010, commencing at 10:15 a.m.

21
22
23
24
25

BENDISH REPORTING, INC.
Litigation Support Services
877.404.2193
www.bendish.com

51

1

A.

It could have come from anywhere.

2

could have been from a redemption from the SSP

3

account.

4

Madoff account.

5

It

a property.

6

It could have been excess funds in the
It could have been from the sale of

Excess funds in general were

7

accumulated, and then a decision would have been

8

made, you know, let's double it up.

9
10
11
12
13

Q.

decision to double it up?
A.

It would have been the partners who

made that decision.
Q.

14

A.

15

partners.

16

And who played a role in that

Q.

All of them together?
All decisions are made by all the
It's a very unique organization.
It sounds like it.

I'm just trying

17

to get a better understanding of the decision-making

18

process of the double-ups.

19

So who determined when there was an

20

excess of funds?

21

A.

The individual partners knew their

22

own personal accounts.

23

wouldn't realize there were excesses.

24
25

When there was -- people

Arthur would be in charge to call up
the capital accounts.

He would know, and he would

52

1

say, hey, everybody has a little bit more money than

2

expected.

What do you want to do with it?

3

And this would be usually done either

4

at a management meeting or over a lunch or just

5

walking around the office.

6

I'd say it's a very unique office.

7

It's small enough that you can still talk to your

8

partners one-on-one either by walking down the hall

9

or making a quick phone call.

10

And decisions are made by the

11

partners.

12

want to come in, that's okay, also.

13

form a pool of money to be doubled up.

14

So you want to come in, great.

Q.

You don't

And they would

And did there come a time when

15

non-partners were invested in these double-up

16

accounts?

17

A.

18

Q.

Yes.
So who solicited or who spoke with

19

the non-partner investors to see if they wanted to

20

get -- to invest in a double-up?

21

MS. SESHENS:

22

You can answer.

23

Q.

Objection to the form.

24
25

A.

You can answer.
The -- that was -- non-partners could

be children of the partners.

It could be their

55

1

double-up entity, have different levels of

2

investment?

3
4

A.
Q.

5

A.

Yes.
Okay.

And how was that determined?

It's whatever that individual thought

6

they could afford to lock away, to lock up for a

7

period of time.

8

Q.

And that was based on -- on the

9

excess analysis?

10

A.

It was -- I don't know what the

11

excess analysis is, but it was based upon that

12

person's understanding of what their needs were,

13

short-term, long-term.

14
15
16

And based upon that, you can say I
can put away X dollars for a longer period of time.
Q.

Well, what I mean by the excess

17

analysis is what you were referring to earlier, that

18

you said that there were excess funds that were then

19

pooled.

20

A.

Right, okay.

I don't know if it was

21

a formal analysis versus a thought process that went

22

through each person's mind.

23

Q.

So Mr. Friedman would notify the

24

partners and executives that they had excess funds,

25

and those funds could or could not have been used to

56

1

invest in the Sterling --

2
3

A.

Correct.

It was up to the individual

partner to make that decision.

4

Q.

And when you said locked, locked up,

5

you used the term "locked up," what did you mean by

6

that?

7

A.

The nature of a double-up account is

8

that you would take money and put it into a pooled

9

account, and then you would borrow money and also

10

put it in the pool account.

11

And that borrowed money had a term,

12

three years usually.

13

to break the loan because we would fix the rate on

14

the loan.

15

means you're breaking the rate lock, you're pulling

16

funds out that have been set aside and given a

17

certain rate for a three-year period.

18

So you didn't necessarily want

And if you -- if you want to come out, it

Depending upon where interest rates

19

are in the market, you could either make money or

20

lose money doing that.

21

Q.

I see.

22

Equities Funding?

23

A.

Now, what is SEF, Sterling

Sterling Equities Funding is -- call

24

it the internal bank of the firm.

Rather than each

25

partner borrowing money from banks, it borrows its

95

1

in connection with Sterling's Madoff investments?

2
3

MS. SESHENS:
A.

Objection to the form.

He's an investor.

He's a direct

4

investor, an indirect investor through business

5

entities.

6

On a day-to-day basis he didn't do

7

anything.

8

Friedman.

9

That was Arthur who did that, Arthur

He would perhaps talk to Mr. Madoff

10

from time to time.

11

role that he had.

12

Q.

But I don't know of any other

What was your understanding of Mr. --

13

Mr. Fred Wilpon's role with respect to Sterling's

14

Madoff investments?

15

A.

Same as -- as Saul Katz's role.

He

16

is a direct investor and an indirect investor, as we

17

call it, through business entities.

18

And he spoke from time to time with

19

Mr. Madoff.

20

an infrequent basis.

21

administrative responsibilities were the

22

responsibility of Arthur Friedman.

23

Q.

I would say that -- I would put it on
And that all the clerical

What was Mr. Katz's criteria for

24

determining whether a Sterling employee could open

25

an account with Madoff?

177

1
2
3

A.

Up to Total - Bernie Madoff --

"Total - Bernard Madoff."
Q.

All right.

So you don't recall

4

receiving a hell sheet that breaks down the totals

5

by securities investment?

6

A.

If I did, I just don't recall.

I do

7

have schedules that have these investments on it,

8

but I never saw it in this format.

9

Q.

10
11
12
13

Okay.

A.

I don't think I've ever seen it in

this format.
Q.

Okay.

All right.

Thank you,

Mr. Peskin.

14

A.

15

You're welcome.
MR. BOHORQUEZ:

16

Tab 10.

17

believe.

18

Q.

Why don't we do

If you can mark that as Exhibit 6, I

You will be receiving a copy of that

19

at some point, so you can review it to your heart's

20

delight.

21

(Exhibit MP-6 marked for

22

identification.)

23

A.

24
25

Q.

Thank you.
All right.

Mr. Peskin, I've handed

you what's been marked as Exhibit 6.

It's a

178

1

Sterling Equities Partners analysis of liquidity for

2

Citibank.

3

A.

4
5

Q.

8

Please take a moment to review the

document, and let me know when you're ready.

6
7

Yup, yes.

A.

I'm generally -- generally familiar

with the document, yes.
Q.

9

A.

Did you prepare this

document?

10

Okay, good.

I don't prepare any documents of this

11

nature.

12

the document.

13

Q.

14
15

I have an accounting group that prepares

Did you direct the accounting group

to prepare this document?
A.

It would be automatically prepared on

16

a monthly and quarterly basis by partnership

17

accounting.

18
19
20

Q.

And why was it prepared automatically

on a -- what did you say, quarterly and monthly?
A.

It was required by the bank as part

21

of our compliance with the line of debt that we had

22

with them, Citibank being one of the banks

23

participating in our line.

24

Q.

25

with Citibank?

And what line of debt did you have

179

1
2
3

A.

This is the SEF lines of credit that

we spoke of before.
Q.

Okay.

Did you have any credit

4

facilities with Citibank that had a Madoff account

5

as collateral?

6
7

A.
Q.

I don't think we did.
Okay.

8

A.

9

that was B of A.

10

Q.

11

A.

12

Q.

13

A.

No,

Bank of America?
Yeah, yeah.

to Exhibit 6 --

14

I don't think -- as collateral?

15
16

Q.

19
20
21
22
23

Thank you.

So if we go back

Yeah.
-- under "Liquidity," there is

included a Madoff securities and SSP Capital?

17
18

Okay.

A.
Q.

Correct.
"SSP Capital" refers to Sterling

Stamos?
A.
Q.

Correct.
Why did you need to include Madoff in

this liquidity analysis?
A.

Well, I spoke about it before, that

24

the lines of credit required us to have so much

25

liquidity available if the line was called to be

180

1

paid back.

2
3

Q.
SEF?

4
5

This is the line of credit for the

A.

We're only talking about SEF now.

Q.

6

Right.

A.

There were several banks in the --

7

call it a syndicate of banks that gave us this

8

credit.

9

Citibank -- in this particular case,

10

Citibank asked us to please present in their -- with

11

their definition of liquidity -- with their

12

definition of liquidity a statement as to where we

13

were on a monthly basis or quarterly basis.

14

remember whether it was monthly or quarterly.

15

This indicates June 30th.

I can't

I know

16

that's a quarter.

17

or July.

18

negotiated.

19

form of accounting.

20

as to what their definition of compliance is.

21

I can't remember if there's a May

But this is very formulaic, is very
So this doesn't necessarily follow a
It is what Citibank agreed on

So Madoff was considered liquid

22

because it's a brokerage account.

You would call up

23

your broker and say I need my money back, and they

24

would sell securities and readily give it back to

25

you with short notice.

It took time to clear

181

1

through the process.

2

But the banks knew that Madoff was a

3

liquid -- you know, a liquid, you know, account and

4

near an equivalent, cash equivalent, because it was

5

short-term notice and easily liquidatable.

6

SSP capital, certain accounts within

7

certain fund investments that we had were more

8

liquid than others.

9
10

I'm not quite sure what the others
were, but we had other brokerage accounts.

11

Q.

12

A.

Like Prudential or -It was Maxim, it was Long Island

13

Investors, it was a whole bunch of other typical

14

brokerage accounts, no different than the Madoff

15

account, that we would call upon in need of cash if

16

we were in need of cash.

17

basis.

18

Q.

So that was the liquidity

And let me back up to one thing you

19

mentioned, and we can get two more questions in

20

before --

21

A.

22
23
24
25

Q.

Sure.
-- we have to change the tape.
What was your understanding of how

long -- let me back up.
What did Madoff represent to Sterling

182

1

as to how long it would take to liquidate funds --

2
3
4
5
6
7

MS. SESHENS:
Q.
A.

Objection to the form.

-- from Sterling's accounts?
It's hard to say what he represented

because I never had a conversation with him.
Q.
A.

What was your understanding?
From my understanding was that if you

8

needed money and you couldn't wait until he was out

9

of the market, as you used that term, you can always

10

call upon him to liquidate an account.

11

It was a

brokerage, after all.

12

He didn't want to necessarily do that

13

because he had a concept of how to invest and how to

14

go in and come out of the market, and he liked to do

15

that on a uniform basis with all of his accounts --

16

at least all of our accounts.

17

But if you needed the money, you

18

called upon him.

19

Arthur ever did it or whether he did do it.

20

necessary, you called upon him to do it.

21

I don't know how often -- if
But if

We, at least I, especially at the

22

Mets, tried to stagger our requests for when he was

23

out of the market so he wouldn't have to,

24

quote/unquote, liquidate an account.

25

But I assumed it was like any other

183

1

brokerage account because we got brokerage

2

statements.

3

Q.

What was your understanding as to how

4

long it would take from when you made a request to

5

liquidate funds to when the funds could actually be

6

provided from the Madoff account?

7

A.

Again, it's not because I know

8

specifically, but I know when I ask my broker to

9

sell something, sell a share of, you know, JPMorgan

10

stock, just, you know, you put in the order, it's

11

sold moments later via, you know, computers.

12

Three or four days later, it clears.

13

It's available in your account three or four days

14

later.

15

I don't know what it was in 2004.

16

think the process has been sped up.

17

understanding is within the week, certainly your

18

money is available to you.

19

Q.

Okay.

But my

So just to clarify, you were

20

referencing discussions or your experiences with

21

your own personal broker.

22
23

A.
Q.

Is that right?

Correct.
Okay.

And that would -- in your

24

experience, it would take typically three or four

25

days from when you requested to withdraw funds?

I

186

1

broker who had a great reputation.

2

me am I worried that I had $181 million in JPMorgan.

3
4
5
6

It's like asking

I mean, I'm giving it to Citibank.
They're not concerned.
Q.

So that was my follow-up question.

Did Citibank ever raise any questions about the --

7

A.

No.

To the contrary, I think they

8

were very secure knowing that the money was in a --

9

a liquid asset.

10

If you also look at the right-hand --

11

excuse me, the left-hand column, "Fleet margin,

12

Fleet margin, Fleet margin," I mean, all of these

13

Fleet, which is now B of A, was exceedingly secure.

14

They gave us loans supported, collateralized by

15

Madoff.

16

That's how I understand first --

17

understood Madoff or got comfortable with Madoff,

18

because these double-up loans you talk about, it

19

took me, like, three seconds -- exaggeration -- ten

20

minutes to negotiate them because B of A was so

21

comfortable using Madoff.

22

It wasn't a matter of marking to

23

market.

It wasn't a matter of understanding the

24

collateral.

25

in Madoff.

Oh, Madoff.

Okay, fine, yeah, put it

It's going to be liquid.

187

1
2

Q.

And why was BOA so comfortable with

Madoff?

3

A.

B of A, I have to -- you have to ask

4

them.

I mean, they had other clients with Madoff.

5

They had other -- I believe other loans, tri-party

6

agreement type loans with Madoff.

7
8

If it was good enough for them, it
was sort of good enough for me.

9
10

Q.

And then last question on this

document --

11

(Comments off the record.)

12

MR. BOHORQUEZ:

13

break.

We'll change tapes.

14
15

Why don't we take a

THE VIDEOGRAPHER:
record.

The time is 2:46.

Going off the

This ends tape number 3.

16

(Brief recess.)

17

THE VIDEOGRAPHER:

18

record.

19
20

The time is 3:02.

We are back on the

This is tape number 4.

MR. BOHORQUEZ:

This is Exhibit

No. 7.

21

(Exhibit MP-7 marked for

22

identification.)

23

BY MR. BOHORQUEZ:

24
25

Q.

Actually, I'm going to ask you one

more question on that and then we'll move on.

234

1

Did you play any role or do you play

2

any role in terms of identifying new investment

3

opportunities for Sterling?

4

A.

5

Q.

No, no.
Okay.

That was done by Saul.
Anyone -- is there anyone

6

other than Saul involved in identifying new

7

investment opportunities for Sterling?

8

A.

9

Q.

10

A.

Within the firm?
Yes.
Well, any partner could -- or

11

anybody, I guess I should say, including me, if I

12

had the opportunity, could bring forth an investment

13

as a -- an idea as a potential investment.

14

In a sense, Saul brought forth the

15

idea -- Saul and David brought forth the idea of

16

creating Sterling Stamos Partners.

17

So on that level, anybody could bring

18

that forward.

If it was an investment in a specific

19

fund or a stock, that would be basically Saul's.

20

Saul -- Saul and -- no, just Saul basically, you

21

know.

22

an idea, but it was basically Saul who made the

23

decision.

Arthur might have an idea, Michael might have

24

Q.

25

Sterling's --

Now, in terms of diversifying

235

1
2
3
4
5
6
7

A.
Q.
A.
Q.

Right.
-- non-real estate investments -Right.
-- and creating Sterling Stamos as a

vehicle -A.
Q.

Right.
-- as part of that diversification,

8

was part of that rationale to have less money

9

invested in Madoff?

10
11

MS. SESHENS:
A.

Objection to the form.

That was a consequence.

The

12

rationale was to create a new source of revenue,

13

both as a limited partner and as a general partner.

14

The consequence of doing that -- of

15

doing that was you had less money being diverted --

16

diverted to Madoff.

17

Stamos fund to start building assets under

18

management.

19

It was now going to a Sterling

We -- "we," the firm, its friends and

20

family -- were the seed capital of Sterling Stamos

21

Partners.

22
23
24
25

Q.

Now, when you say that less money was

being invested in -- as a consequence -A.
Q.

Correct.
-- of this diversification in

236

1

creating Sterling Stamos, less money was being

2

invested in Madoff --

3
4

A.
Q.

Right.
-- do you mean that money was being

5

moved from the Madoff investments into Sterling

6

Stamos?

7

A.

No.

I said money wasn't being

8

diverted to Stamos for investment.

9

to SSP for investment.

10

It was now going

Monies were being reinvested in

11

Madoff if it was necessary.

12

went to Madoff.

13

Q.

14
15
16

A.

All doubled-up things

Right.
Or double-up investments went to

Madoff.
You're asking if we took money out of

17

Madoff to put into SSP?

If we saw an opportunity in

18

SSP, and we had excess funds in Madoff, we might

19

then say all right, you know, we could have put it

20

into a new doubled-up account.

21

into the Sterling Stamos endowment fund because we

22

need seed capital for that to get a track record

23

going so they can then market that fund to other

24

individuals or companies or endowments or

25

foundations, whoever was the potential investor.

No.

Let's put it

237

1

So, again, we acted as the seed

2

capital, along with maybe, you know, Peter Stamos to

3

create a track -- you know, you have to invest money

4

before you can create a track record.

5

the money, a year goes by or six months go by, and

6

you say, oh, this money is making money.

7

invested money is making money.

So you invest

This

8

And, so, they can go out to the

9

public and say, you know, we have a 15 percent

10

return on the money in this fund.

11

invest?

12

Q.

Would you like to

And if you wanted to determine what

13

money was withdrawn from Sterling's Madoff accounts

14

and then invested in Sterling Stamos, how would you

15

go about determining that?

16
17
18
19
20
21

A.

How would I determine it?

I thought

you would already have such information.
Q.
A.

What's that?
I thought you would already have such

information.
Q.

I might, but I'm not answering any

22

questions today.

23

A.

24
25

Q.

Okay.
I'm asking you:

know, how would you do it?

If you wanted to

243

1

A.

There's Sterling Stamos, our general

2

partner investment.

3

Sterling Stamos to account for our general

4

partnership investment.

5

that.

6

We get information from

We own now 25 percent of

When it comes to our limited partner

7

investments, we get K-1s and whatever financial

8

statements, as any other -- if you invested in

9

Sterling Stamos, you'd get the exact same

10

information as I get in Sterling Stamos and as the

11

firm Sterling -- as the partnership group that may

12

own an investment in Sterling Stamos will get,

13

correct.

14

Q.

15

A.

Okay.
It's thoroughly confusing.

It took

16

me quite a while to understand it, a lot of

17

hand-holding before I understood it completely.

18
19
20
21

Q.

I think you've done a pretty good job

of explaining the overview.
A.
Q.

I appreciate that.

Okay.
Are you aware if there was any

22

conscious efforts to withdraw money from Madoff and

23

move it into Sterling Stamos?

24
25

MS. SESHENS:
A.

Objection to the form.

Conscious effort?

No.

The conscious

244

1

effort was to build up SSP to a point where it

2

had to have -- it had substance.

3

It wasn't just, you know, 10 or 15 or

4

$20 million under -- assets under management, AUM;

5

that it had billions of dollars under management.

6

And we were a real fund, you know, to be reckoned

7

with.

8

And Sterling Stamos -- Sterling

9

Stamos, the entity, that job was to market those

10

funds and to help create a track -- and to create

11

the track record.

12

So they had all the investment people

13

and all of the -- you know, the -- the advisors unto

14

themselves.

15

had nothing to do with that from a day-to-day

16

transaction basis.

17

Saul was a member of their board of directors.

18

Q.

We -- I say "we," Sterling Equities --

Although, I had mentioned that

But Madoff, along with any of the

19

other sources of liquidity, was one of the areas

20

from which you would draw funds to build up Sterling

21

Stamos?

22
23

MS. SESHENS:
A.

Objection to the form.

As I -- as I said, if there was

24

excess funds available.

And from there, for any

25

other investment that we had, we would -- we would

245

1

perhaps put it into SSP.

2

I can't say for certain if we ever

3

closed an account on purpose at Madoff so we can

4

transfer those funds dollar for dollar into SSP.

5

Q.

And if you don't know, who -- who

6

would know if the Madoff account was closed for the

7

purpose of transferring money to Sterling Stamos?

8
9
10

A.

You can talk to Saul or Arthur.

I

would go back and look at the transaction registers
to see if we ever saw such a transaction.

11

But remember, it's a two-step

12

process.

13

to put it into SEF.

14

bits and then put it into SSP.

15

You have to withdraw the funds.

You have

You have to accumulate various

Things happen in between.

Partners

16

pay their bills, their mortgages.

17

employee.

18

it's a -- it's a fungible dollar.

19

say, at least I don't ever remember a dollar from

20

SSP coming directly and going -- excuse me -- Madoff

21

and directly going into SSP.

22

I get paid, as an

And, you know -- and, so, it's -- again,
I don't -- can't

How would I do that, know that?

I

23

would go back into the transaction registers and --

24

and look.

25

Q.

And who maintains the transaction

345

1

look like.

2

outstanding already with Bank of America, so it just

3

wouldn't have dawned upon me to insist or demand or

4

ask to go to another bank.

5

Q.

We had deals with -- we had loans

Do you know any diligence -- of any

6

diligence that Bank of America did of Madoff before

7

entering into any of these double-up loans with

8

Sterling?

9

A.

10
11

No.

You would have to ask them.

I

don't know.
Q.

Well, did Bank of America ever ask

12

you questions about Madoff as the quality of the

13

collateral in the Madoff accounts?

14

A.

No.

They would get statements.

15

Remember that we had -- by the time I got to

16

Sterling Equities in 2003 there were a number of

17

these doubled-up and collateral-type loans.

18

were very familiar with Mr. Madoff.

19

clients investing with Mr. Madoff.

20

monthly statements, so they knew what the quality of

21

the collateral was.

22

stocks or the Treasuries or the Fidelity account.

23

You know, they were very satisfied.

24

dollar-for-dollar loan for every dollar we invested

25

with him.

They

They had other
And they got

It was those, you know, the

They gave us a

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near an equivalent, cash equivalent,
4 because it was

near equivalent, cash equivalent,
because it was

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Fleet margin, Fleet margin," I mean,
12 all of these

Fleet margin, Fleet margin," I mean,
all of these--

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Grammitcal Error

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