Smith CrossExamination

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 1 of 185
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION
CASE NO. 12-20901-CR-WPD
UNITED STATES OF AMERICA,
.
.
Plaintiff,
. Fort Lauderdale, Florida
. July 1, 2013
v.
. 9:31 a.m.
.
CRAIG STANLEY TOLL,
.
.
Defendant.
.
. . . . . . . . . . . . . . . .
- - - - Transcript of Trial Proceedings had
before the Honorable William K. Dimitrouleas,
United States District Judge, and a jury.
- - - - DAY 6
- - - - APPEARANCES:
For the Plaintiff:
Lois Foster-Steers, Esq.
Kimberly A. Selmore, Esq.
Assistant U.S. Attorneys
99 N.E. 4th Street
Miami, Florida 33132
For the Defendant:
Richard A. Sharpstein, Esq.

Jacqueline M. Arango, Esq.
Ari Gerstin, Esq.
Akerman Senterfitt
One SE 3rd Avenue, 25th Floor
Miami, Florida 33131
Court Reporter:
Francine C. Salopek, RMR, CRR

Official Court Reporter
United States District Court
299 E. Broward Blvd., Room 205F
Fort Lauderdale, Florida 33301
(954)769-5657
- - - - Proceedings recorded by mechanical stenography, transcript
produced by computer.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657
MONDAY, JULY 1, 2013, 9:31 A.M.
(The Judge entered the courtroom)
THE COURT:
Counsel are present.
Anything to come before the Court before we bring the
All right.
Mr. Toll's present.
jury in?
MR. SHARPSTEIN:
MS. FOSTER-STEERS:
THE COURT:
10
We're back on the record.
No, your Honor.

No.
I guess we need to get Mr. Smith back in.
I had some hearing set for nine o'clock this morning.
11
I had it postponed for this afternoon.
12
starting up this afternoon until two.
13
start at 9:30.
So, we won't be
And then tomorrow we'll
14
Mr. Smith, you understand you're still under oath?
15
THE WITNESS:
16
THE COURT:
17
(The jury entered the courtroom)
18
THE COURT:
19
I do.
All right.
Let's bring in the jury.
Counsel concede the presence of the jury
and waive its polling?
20
MS. FOSTER-STEERS:
21
MR. SHARPSTEIN:
22
THE COURT:
Yes, your Honor.
Yes, your Honor.
And did everyone follow my admonition not
23
to discuss the case or allow it to be discussed in your
24
presence?
25
All right.
Tomorrow we're going to start at 9:30.

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think I said nine o'clock last week, but we'll start at 9:30
tomorrow.
at about 4:30, and then Wednesday we'll start at 10:30.
I'll remind you today and tomorrow about those start-up times.
I have to break a little bit early tomorrow night,
All right.
Ms. Foster-Steers, you may proceed.
MS. FOSTER-STEERS:
8
9
But
I think we're ready to resume.
Thank you, your Honor.
DIRECT EXAMINATION (CONTINUED)

BY MS. FOSTER-STEERS:
10
Q.
Mr. Smith, when we left off on Friday, we had talked about
11
a financial statement that was submitted to OPIC during the
12
period of time that you were negotiating with Cameron Alford
13
with respect to a $10 million loan.
14
A.
Yes.
15
Q.
And, in fact, sir --
Do you remember that?
16
(Discussion had off the record between counsel)
17
MS. FOSTER-STEERS:
18
May I approach the witness, your
Honor?
19
THE COURT:
Okay.
20
21
Q.
22
as Government's Exhibit C(4), which is an e-mail from Craig
23
Toll, dated January 28, 2010, to Lynn Tabernacki, attaching
24
consolidated unaudited September 30 financials.
25
that, sir?
I'm handing you back what has been admitted into evidence
Do you see

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4
SMITH - DIRECT/FOSTER-STEERS
1
A.
Yes.
Q.
Had you seen those financials, Mr. Smith, during your
negotiations with OPIC in that time period?
A.
I'm honestly not sure.
Q.
Well, these are financial statements, sir, for the period
ending September 30, 2009, and December 31, 2008.
that, sir?
A.
Yes.
Q.
And if we look at the loan agreement, sir, under the
Do you see
10
section called "Representations and Warranties," Section 303 --
11
I'm sorry -- 301(c), this particular section references a
12
financial statement which had been sent to OPIC for the period
13
ending September 30, 2009.
14
A.
Yes.
15
Q.
Okay.
16
Exhibit C(4)?
17
A.
They would appear to be.
18
Q.
Now, the financial statements that were submitted to OPIC,
19
Mr. Smith, they had to be complete and correct and fairly
20
present its financial condition -- when I say "its," I'm
21
talking about InnoVida -- as of the period then ended, correct,
22
sir?
23
A.
Yes.
24
Q.
Was it your understanding, Mr. Smith, that the financial
25
statements reflected in Exhibit C(4) were, in fact, the true,
Do you see that?
Were those, those same financials that we see in

(954)769-5657
5
1
correct, and complete financial statements for InnoVida for the
periods ending December 31, 2008, and September 30, 2009?
A.
That would be my understanding.
Q.
Okay.
submitted to OPIC were to have been done according to GAAP,
right --
Now, also, the financial statements that were
MR. SHARPSTEIN:
Q.
-- GAAP?
10
11
Objection.
MR. SHARPSTEIN:
This is repetitious from exactly what
we did on Friday.
THE COURT:
12
I'll allow some latitude.
13
14
Q.
15
GAAP, correct, sir?
16
A.
Yes.
17
Q.
All right.
18
clear.
They were supposed to have been submitted according to
And it's set out in the loan agreement very
We're looking now at Section 6.05, right?
19
"The parent company and the project company
20
shall... prepare its financial statements in
21
accordance with GAAP."
22
Do you see that?
23
A.
Yes.
24
Q.
Was it your understanding, Mr. Smith, back in the period
25
when you were negotiating with OPIC, that the financial

(954)769-5657
6
1
statements set forth in Government's Exhibit C(4) were, in
fact, prepared according to GAAP?
A.
That would be my understanding.
Q.
You dealt with Cameron Alford, correct, sir?
A.
Yes.
Q.
And you submitted -- or, rather, several different
financial statements were submitted to OPIC during your
negotiations with OPIC, correct, sir?
A.
It's -- I believe at least one set of financials were
10
submitted during our period of representation, perhaps more.
11
Q.
12
financial statements, correct, sir?
13
A.
That was a requirement of the loan agreement.
14
Q.
In fact, if we look at Section 6.06 of Government's
15
Exhibit C(7)(a), we see that InnoVida was required to submit
16
financial statements -- and let's look directly at this
17
section, 6.06(a)(i) -- "within 90 days after the end of each
18
fiscal quarter (other than the fourth fiscal quarter) of each
19
fiscal year, unaudited consolidated financial statements for
20
the parent company and a comparison between such financial
21
statements and the budget for such fiscal quarter, furnished
22
pursuant to 6.06(e), all certified by the chief financial
23
officer of the parent company as being complete and correct,
24
together with such officer's certificate."
25
Okay.
And even afterwards, InnoVida was required to submit
Do you see that?

(954)769-5657
7
1
A.
Yes.
Q.
So, did InnoVida, in fact, submit financial statements
pursuant to this particular section?
A.
Yes.
Q.
And what was your understanding of those financial
statements that were submitted pursuant to this section of the
loan agreement, Mr. Smith?
A.
is they were a set of unaudited financials that set forth a
10
balance sheet and an income statement for 2009, year-end of
11
2009 and the year-end of 2008.
12
Q.
13
that?
14
A.
Yes.
15
Q.
Are you familiar with this document?
16
A.
That appears to be the financial statements that were sent
17
during the term of our engagement.
18
Q.
Okay.
19
A.
Right.
20
Q.
And we see here that it's for the period ending
21
December 31, 2009, and December 31, 2008, right?
22
A.
Yes.
23
Q.
Now, did these financial statements meet the requirements
24
of the loan as negotiated between InnoVida by you and OPIC?
25
A.
The -- I would have to see them again, but my understanding
Let's look at Exhibit C(11), Bate ending '3055.
Do you see
For InnoVida, correct, sir?
I'm not in a position to answer that.

(954)769-5657
8
1
Q.
You're not in a position to answer that?
A.
No.
financials be true and correct in all respects.
position to know whether they are or are not.
Q.
Who would?
A.
Presumably the company.
Q.
Okay.
company and submit them to --
A.
I mean -- the requirements of the loan are that these

I'm not in a
Who would be?
But did you gather financial statements from the
I received these from the company, and I submitted them to
10
OPIC.
11
Q.
12
obtained from the company to OPIC, was it your understanding
13
that these financial statements met the requirements of the
14
loan agreement?
15
A.
It was.
16
Q.
In looking at Exhibit C(11) here, what does it say as the
17
cash and cash equivalents for the period ending December 31,
18
2009?
19
A.
$39,296,232.
20
Q.
Okay.
21
A.
$37,044,439.
22
Q.
Okay.
23
top, what did you think -- or did you even look at those two
24
words back in 2010?
25
A.
Okay.
And in submitting the financial statements that you
And for December 31, 2008?
Now, looking, sir, at the words "pro forma" at the
I assumed that it meant that it was a pro forma combination

(954)769-5657
9
1
of balance sheets for various members of the InnoVida group.
Q.
Okay.
A.
In this case, it was -- be an addition of all those numbers
together.
Q.
An addition of all those numbers?
6
7
10
Okay.
Now, the word "pro forma," sir, you said -- does it -does -- "pro forma" means that any information has been --
8
9
And what does "pro forma" mean to you?
MR. SHARPSTEIN:
Objection to the form of the
question, but to the line of questioning, which was done

extensively on Friday.
11
THE COURT:
Overruled.
12
13
Q.
14
information has been excluded?
15
A.
I'm not sure I understand the question.
16
Q.
Okay.
17
Bate Number ending '3055, can you tell whether or not any
18
information has been excluded?
19
A.
No.
20
Q.
Do you see, sir, anywhere here where there are any
21
disclosures, sir?
22
A.
23
some description of what's the components of this balance
24
sheet?
25
Q.
Mr. Smith, does the term "pro forma" to you mean that any
When we look at this balance sheet, Exhibit C(11),
I understand you're using the term "disclosure" to mean
Yes.
(954)769-5657
10
1
A.
Yeah, there's the word "unaudited pro forma."
Q.
I'm sorry?
A.
There's the word "unaudited pro forma."
disclosure.
Q.
understanding of the term "unaudited pro forma" back then?
A.
No.
Q.
Did you submit these forms, Mr. Smith, as being financial
statements that met the requirements of the agreement?
Okay.
That would be the
Did you explain to any member of OPIC your
10
A.
I submitted these financials as the ones provided by the
11
company in response to my request for financials that met the
12
requirements of the loan agreement.
13
Q.
14
that met the terms of the loan agreement, correct, sir?
15
A.
Yes.
16
Q.
Okay.
17
A.
Craig Toll.
18
Q.
Okay.
19
A.
These financial statements.
20
Q.
Okay.
21
what did you do with these statements?
22
A.
I forwarded them to OPIC.
23
Q.
And if we look at the combined statement, the operations,
24
from the same exhibit, C(11), Bate Number ending '3057,
25
combined statement of operations for the same period ending
Okay.
So, you did, in fact, request financial statements
And who did you make that request of?
And in response to your request, what was provided?
And those statements having been provided to you,

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11
1
December 31, 2009, and December 31, 2008, at the bottom, the
net income, how much is that?
A.
$15,605,029.
Q.
And for the period ending December 31, 2008, what is that
number?
A.
$6,615,640.
Q.
What do those figures mean to you, Mr. Smith?
A.
They represent the net income of the company on a combined
basis.
10
Q.
And do they show profits?
11
A.
Yes.
12
Q.
I want you to look at Government's Exhibit C(22).
13
now the consolidated balance sheet for the period ending
14
March 31, 2010.
15
This is
Have you seen that document before?
16
A.
I may have.
17
Q.
This is the front of Exhibit C(22), which is an e-mail
18
dated September 8, 2010, from Craig Toll.
19
I don't recall.
Are you cc'd on this e-mail, sir?
20
A.
I am.
21
Q.
This is now the same page I was showing you before, which
22
is the consolidated balance sheet for the period ending
23
March 31, 2010.
24
25
Had you seen that document, sir?

A.
If it was attached to that e-mail, I -- I probably saw it.

(954)769-5657
12
1
Q.
Okay.
Now, was this, sir, a financial statement that you
had requested from Craig Toll as -- that you requested from
Craig Toll?
A.
I don't recall.
Q.
Okay.
required to be provided according to Section 6.06 of the loan
agreement?
A.
Yes.
Q.
Okay.
Would this have been a financial statement that was
Now, just looking back at that statement, sir,
10
looking here (indicating), are there any disclosures made on
11
here as to the balance sheet?
12
A.
Other than the words "unaudited pro forma," no.
13
Q.
And the disclosure that you say are reflected in the words
14
"unaudited pro forma," what is that?
15
A.
16
balance sheet of the various companies in the InnoVida group.
17
Q.
18
InnoVida companies, was it your understanding that any
19
information had been omitted from this balance sheet?
20
21
Once again, my understanding was that this was a combined
And being the combined balance sheet of various other
MR. SHARPSTEIN:
question, vague.
22
THE COURT:
Overruled.
23
A.
Assuming I looked at this financial statement, I would have
24
assumed that there was no information excluded from it.
25
Q.
That there was no information excluded from it?

(954)769-5657
13
1
A.
That's right.
Q.
Okay.
A.
Why do I say which part of that?
Q.
Okay.
that you would have assumed that no information had been
excluded from this particular document?
A.
Well, there's no reference to any exclusion.
Q.
Sorry?
A.
There's no reference to any exclusion.
10
Q.
Okay.
11
had been information excluded from this balance sheet, would
12
you have expected that there would have been a reference to the
13
excluded information?
14
A.
Yes.
15
Q.
Do you see that here?
16
A.
No.
17
Q.
And looking now at Bate Number '1788 from Exhibit C(22),
18
this is a combined statement of operations for the period
19
March 31, 2010.
20
And why do you say that?
Why do you say, just looking at this balance sheet,
All right.
So, my question to you then, if there
Do you see here, sir, anywhere, any reference that any
21
information was excluded from this combined statement of
22
operations for the period ending March 31, 2010?
23
A.
No.
24
Q.
Would you have expected that if any information was
25
excluded, it would have been referred to here?

(954)769-5657
14
1
A.
Yes.
Q.
Why is that?
A.
(No response)
Q.
Why -- well, let me ask you this question.
In your dealings with InnoVida with other clients,
have you looked at financial statements?
A.
Yes.
Q.
Okay.
is it your experience that it is referenced on the documents?
And if a financial statement excludes information,
10
A.
Yes.
11
Q.
Okay.
12
A.
Otherwise, the information would be incomplete.
13
Q.
It would be incomplete?
14
A.
(No response)
15
Q.
Yes?
16
A.
Yes.
17
Q.
Would it be misleading?
18
A.
Yes, I believe it would be misleading.
19
Q.
And here, where there's no reference to any excluded
20
information, would this document be misleading?
21
A.
22
23
And why is that?
Pardon?
MR. SHARPSTEIN:
question.
24
THE COURT:
25
MS. FOSTER-STEERS:
Sustain.
Okay.

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15
1
Q.
I can show it to you -- is this another balance sheet,
Mr. Smith?
A.
Yes.
Q.
Sure.
Looking now at Exhibit C(26) -- and if you want the e-mail,
Can you show me the e-mail?
Q.
This is Exhibit C(26).
See?
And it's an e-mail dated
10
Tuesday, September 28, 2010.
11
A.
Yes.
12
Q.
And you are copied on this e-mail.
13
A.
Yes.
14
Q.
Attached to the e-mail is a consolidated balance sheet, and
15
it's Bate Number '2280 from the same exhibit.
16
Do you see that?
Do you see that, sir?
Had you seen that?
17
A.
I was copied on the e-mail.
18
Q.
Okay.
19
Mr. Smith, are there any references here to any information
20
excluded from this balance sheet?
21
A.
And with respect to this particular balance sheet,
No.
22
MR. SHARPSTEIN:
23
strike.
24
anything excluded.
25
I probably looked at it.
The -- I'm objecting and moving to
I don't understand the question "excluded," was
THE COURT:
He -Overruled.

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16
1
MR. SHARPSTEIN:
THE COURT:
It's confusing to the jury.
Overruled.
Q.
'2283, for the period ending June 30, 2010.
This is now the statement of operations, Bate Number ending
What is the net income reflected on this particular
statement of operations, Mr. Smith?
A.
$5,903,169.
Q.
Is that a profit for InnoVida?
10
A.
Yes.
11
Q.
And just looking on this particular page, are there any
12
references to any other information on this document, sir?
13
14
MR. SHARPSTEIN:
question.
THE COURT:
15
Overruled.
16
17
Q.
Do you see anything?
18
A.
Yeah, other than the reference to the fact that the balance
19
sheet is an unaudited pro forma -- excuse me -- income
20
statement, unaudited pro forma income statement.
21
Q.
22
term "unaudited pro forma" with anyone at OPIC?
23
A.
No.
24
Q.
In your mind, sir, the financial statements as submitted to
25
OPIC, did they comply with the Section 6.06 of the loan
Now, did you have any discussions, Mr. Smith, about the

(954)769-5657
17
1
agreement?
A.
Well, I think the answer to that question would be no.
Q.
No, they did not comply?
A.
Well, the definition of the term "financial statement" in
the loan agreement was the financial statement prepared in
accordance with GAAP.
GAAP requires the inclusion of a footnote disclosure.
these financial statements had that.
face they did not have that.
As I said previously, in my experience,

None of
It was evident on their
So, from that perspective, they
10
did not comply with GAAP.
11
Q.
Okay.
12
A.
Just to move this along, they would have fallen within the
13
representation of warranty set forth in the loan agreement that
14
they be -- fairly present the information set forth.
15
of the representation would have applied to what was provided.
16
Q.
What part of what representation, sir?
17
A.
The representation that the unaudited pro forma income
18
statement and balance sheet should have fairly presented the
19
information it purported to represent.
20
Q.
Okay.
21
A.
I don't know if they are or are not, but that was what they
22
were purported to be, and they on their face would have
23
appeared to have complied with that requirement.
24
Q.
25
That part
So, they were not.
I'm not following you, sir.

The representation and warranties provided that the
(954)769-5657
18
1
financial statements be prepared according to GAAP, correct?
A.
Yes.
Q.
Okay.
at you're saying did not comply with that particular section of
the loan agreement?
A.
financials, that they lacked footnote disclosure.
Q.
agreement?
And the financial statements that we've just looked
They were not, in my experience, be viewed as GAAP
Okay.
So, did they comply with the terms of the loan
10
A.
No.
11
Q.
Okay.
12
OPIC as being compliant with the loan agreement?
13
A.
14
company proposed to submit to fulfill that particular
15
condition.
16
footnote financial statements and were not prepared in
17
accordance with GAAP for that reason.
And did you submit these financial statements to
I submitted them as the company's -- the document the
18
I was aware that they did not contain un --
Frequently lenders waive conditions to funding, and I
19
assumed that the OPIC would make its own decision regarding
20
whether it would fund or not based on looking at those
21
financials.
22
Q.
23
with Cameron Alford?
24
statements should be made according to GAAP?
25
A.
Okay.
Well, wasn't this a term that you had negotiated

The section that says that the financial
Yes.
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1
Q.
Okay.
And you saw financial statements that you've just
told us on its face did not appear to be prepared according to
GAAP, right?
A.
prepared in accordance with GAAP.
Q.
statements that complied with the --
A.
to OPIC, had footnote disclosure.
It was evident on the face of the document that it wasn't
Okay.
Well, did you submit to OPIC any other financial
None of the financials that were submitted to the company,
10
Q.
None of them.
11
A.
That's right.
12
Q.
So, none of them complied with GAAP.
13
A.
That's right.
14
Q.
And none of them, therefore, complied with the terms of the
15
loan agreement, correct?
16
A.
From a technical perspective, that's accurate.
17
Q.
Okay.
18
about?
19
A.
20
every loan agreement contains numerous conditions to closing.
21
Every borrower submits a series of documents in an attempt to
22
establish that it's complied with the conditions to the extent
23
deemed satisfactory by the lender.
24
to waive any and all of those conditions.
25
instance, it's my understanding that OPIC waived the
When you say "technical," what are you talking
The -- the conditions to the loan agreement, there's --
The lender has the ability

In this particular

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1
requirement that the financials contained footnote disclosure.
Q.
Who made that waiver?
A.
I would presume it would be Lynn Tabernacki or someone at
OPIC.
Q.
And who communicated that waiver to you?
A.
The waiver was communicated to us by virtue of the fact
that the OPIC funded the initial tranche of the loan.
Q.
3.3 million, are you saying that that constituted a waiver by
10
OPIC as to whether or not the financial statements should be
11
made according to GAAP?
12
A.
13
disclosure clearly was waived by OPIC, because they didn't have
14
those.
15
Q.
They didn't have them.
16
A.
They didn't have any footnote disclosure, so....
17
Q.
Well, did you, Mr. Smith, ever disclose to OPIC or tell
18
them that the financial statements should have footnotes?
19
A.
No.
20
Q.
No.
You're -- okay.
So, by OPIC funding the -- that 3.2 --
The requirement that the financials contain footnote
21
Okay.
22
23
24
Q.
25
for the disclosures, is it your information (sic) that the
Mr. Smith, other than, as you just had told us, the waiver

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1
information contained in the financial statements submitted to
OPIC contained true and accurate information --
A.
It was my understanding, yes.
MR. SHARPSTEIN:
Objection to the repetitious line of
questioning on a direct line of questioning with their own
witness.
THE COURT:
Overruled.
Q.
Did you hear the question?
10
A.
Can you repeat the question?
11
Q.
Yes.
12
Other than the waiver of the disclosure that the
13
financial statements not contain any footnotes, was it your
14
understanding that the information in the financial statements
15
were true, accurate, and complete?
16
MR. SHARPSTEIN:
That's the fifth time that question
17
has been asked, your Honor.
18
THE COURT:
19
A.
Overruled.
Yes.
20
21
Move to strike.
MS. FOSTER-STEERS:
May I have just one second, your
Honor?
22
THE COURT:
23
24
MS. FOSTER-STEERS:
25
Okay.
I have no further questions, your
Honor.
(954)769-5657
22
1
THE COURT:
Cross-examination.
MR. SHARPSTEIN:
May it please the Court.
CROSS-EXAMINATION
3
4
BY MR. SHARPSTEIN:
Q.
Good morning, Mr. Smith.
A.
Good morning.
Q.
I think you told the jury on Friday that you've been a
lawyer for 32 years with Shutts & Bowen.
A.
That's true.
10
Q.
That's -- and for those 32 years, have you done the same
11
type of work?
12
A.
Yes.
13
Q.
So, you've been involved in commercial transactions for
14
three decades.
15
A.
That's true.
16
Q.
And you've represented many companies in very serious and
17
large transactions, isn't that right?
18
A.
That's true.
19
Q.
As you did here with InnoVida, you represented a client in
20
negotiating with another party a contract, correct?
21
A.
Yes.
22
Q.
I mean that's something you do every day.
23
for 30 years plus, right?
24
A.
Yes.
25
Q.
And just so the jury understands, when there's -- you're a
You've done it

(954)769-5657
23
SMITH - CROSS/SHARPSTEIN
1
lawyer for one party, there's a lawyer for the other side, as
well, is there not?
A.
Yes.
Q.
That would be Mr. Cameron Alford in this case, right?
A.
Yes.
Q.
He's a lawyer that works for OPIC, just like you work for
your client, to negotiate terms in a contract, right?
A.
Yes.
Q.
And either party, as Ms. -- the prosecutor has asked you,
10
either party can object to particular clauses or parts of a
11
contract, correct?
12
A.
Yes.
13
Q.
Either party, through their lawyer, can complain about, we
14
don't want this, we don't want that, and then you come to a
15
meeting of the minds, correct?
16
A.
Yes.
17
Q.
And when there's a meeting of the minds, there's a signed
18
contract, both parties sign, both parties agree, correct?
19
A.
Yes.
20
Q.
And if, in fact, along the way a party decides that one of
21
the parts of the contract, one clause wasn't complied with,
22
that party can say, we're not going through with this.
23
A.
That's -- that's true.
24
Q.
And that happens all the time, does it not?
25
A.
Yes.
(954)769-5657
Right?
24
1
Q.
If during the course of negotiations or discussions one
party sees something and says, that's not what we agreed to,
they don't have to go with the contract, right?
A.
That's true.
Q.
I think you were trying to tell that to the prosecutor a
couple of times here, that they, OPIC, could have objected to
financial statements or things of that nature, if they believed
they didn't comport with the contract, right?
A.
That's true.
10
Q.
So, let's go back now.
11
things the prosecutor talked to you about.
12
And I'll focus you on some of the
And here InnoVida was your client, correct?
13
A.
Yes.
14
Q.
And InnoVida came -- and, by the way, Shutts & Bowen is a
15
law firm -- one of the oldest law firms in Florida, isn't it?
16
A.
We were found in 1910.
17
Q.
1910, over a hundred years ago.
18
A.
Yes.
19
Q.
And it's a well-established firm with many well-established
20
lawyers that have done some of the most serious work in all of
21
Florida over these years, correct?
22
A.
That's true.
23
Q.
And so, this client, InnoVida, came to you through -- I
24
think you said it was your partner, Harold Patricoff.
25
A.
Right?
That's true.
(954)769-5657
25
1
Q.
Sometimes known as Ed Patricoff?
A.
Yes.
Q.
And Ed Patricoff brought you Mr. Osorio through a referral
that he got from former President Bill Clinton, correct?
A.
That's my understanding.
Q.
Patricoff came to you and said, former President Clinton
referred me a client, I'm gonna refer them to you, they have
some dealings, they're gonna be dealing with OPIC, right?
A.
10
11
MS. FOSTER-STEERS:
Calls for hearsay, your Honor.
Objection.
12
THE COURT:
13
MS. FOSTER-STEERS:
14
MR. SHARPSTEIN:
I'm sorry?
Calls for hearsay.
Just following up.
15
that asked about Patricoff.
16
THE COURT:
She's the one
I'll allow it for the fact it was said,
17
not for the truth of the matter asserted.
18
BY MR. SHARPSTEIN:
19
Q.
Excuse me.
20
And so, you got the client, you met, you talked to
21
Mr. Osorio, correct?
22
A.
Yes, I spoke with Mr. Osorio.
23
Q.
I mean I think you said it was a phone call or something at
24
first.
25
A.
There was an early call, I believe Mr. Osorio was on the

(954)769-5657
26
1
phone.
Q.
from him what type of business InnoVida was?
A.
the business to me.
Q.
that time, when it came to you, in 2009, that it was a business
that was selling, for lack of a better term, factories in a
box, isn't that right?
And during that course, did you discover from him or learn
I don't recall whether it was him or Mr. Toll who described
Eventually you learned that InnoVida was a business that at
10
A.
Essentially, yes.
11
Q.
And so the jury understands that, the company was selling
12
joint venture interests in building factories that produced
13
these panels to build low-income housing, correct?
14
A.
15
other than with respect to the Haiti Project, I have no
16
knowledge of that.
17
Q.
18
something that was said a lot around InnoVida.
19
A.
Yes.
20
Q.
And you knew that at that particular point in time, that
21
the money that was made by InnoVida was being made by selling
22
these joint ventureships, correct?
23
A.
24
they raised revenue specifically.
25
fabricated home business and generated revenues from that
That -- the exact nature of how they operate the business,
Okay.
But you learned about "factory in a box."
That was
I wasn't -- I didn't ask nor get any details regarding how

I knew they were in the

(954)769-5657
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1
business.
Whether it was in a joint venture or some other
form, I don't know.
Q.
but....
We'll get to a couple of issues on that down the road,
So, when you got the file that you were told, you knew
that InnoVida had already been approved by OPIC for a loan, and
you were gonna negotiate the terms of the loan, the contract,
correct?
A.
That's correct.
10
Q.
So, by the time you already got it, InnoVida already had
11
approval from Ms. Tabernacki for the loan pending the execution
12
of the contract.
13
A.
That was my understanding.
14
Q.
This happens a lot in commercial loan transactions, doesn't
15
it?
16
A.
Yes.
17
Q.
A lender, whether it be a bank or a private equity company,
18
will meet with someone, take preliminary information, approve
19
the loan, and then execute a contract.
20
A.
Yes.
21
Q.
It's typical.
22
A.
Yes.
23
Q.
There's nothing unusual about that here.
24
A.
No.
25
Q.
And eventually you sat with Mr. Toll, who provided you
(954)769-5657
28
1
information, correct?
A.
telephone and e-mail.
Q.
Telephone and e-mail.
A.
Yeah.
Q.
And he -- you needed information, he provided you
information, correct?
A.
That's correct.
Q.
If you had an issue with something you saw, you asked him,
I communicated with Mr. Toll almost exclusively by
10
he provided it to you, correct?
11
A.
That's correct.
12
Q.
And then if you had -- and you communicated with OPIC
13
through Mr. Alford and Ms. Tabernacki.
14
A.
Yes.
15
Q.
Who was your major contact at -- there?
16
A.
Principally Cameron Alford.
17
Q.
Who was the lawyer.
18
A.
Right.
19
Q.
Representing them.
20
A.
Yes.
21
Q.
I mean you assumed, for the purpose of this, he worked for
22
a large government agency, that he was a competent, qualified
23
lawyer, correct?
24
A.
Yes.
25
Q.
You knew that OPIC was in the business of giving out large
Was it Alford?
Correct?

(954)769-5657
29
1
commercial loans to multinational companies, American companies
doing business overseas, and they were in the business of
giving out large loans, correct?
A.
Yes.
Q.
I'm sure you assumed Mr. Alford was a very competent
lawyer.
A.
Yes.
Q.
Anything during the course of your relationship with him
give you any other reason to believe anything otherwise?
10
A.
No.
11
Q.
The prosecutor asked you a lot of questions about financial
12
statements that were attached.
13
the financial statements as a matter of course are provided by
14
companies to lenders on a regular basis, correct?
15
A.
Yes.
16
Q.
And there was a term in this contract that required
17
financial statements to be produced, correct?
18
A.
Yes.
19
Q.
You particularly negotiated the fact in the agreement that
20
these financial statements would be -- that the company had
21
provided unaudited financial statements, isn't that right?
22
A.
Yes.
23
Q.
As a matter of fact, that became an issue, because
24
initially you became aware of the fact that OPIC required
25
audited financial statements, correct?
So, just to clarify this point,

(954)769-5657
30
1
A.
Yes.
Q.
And they specifically waived that requirement with you,
isn't that right?
A.
That's not entirely accurate.
Q.
Well, what it -- tell the jury what --
A.
They agreed to postpone the date on which the audited
financial statements were required to be produced.
Q.
Postponed.
A.
Yes.
10
Q.
In the future.
11
A.
Yes.
12
Q.
So, they didn't require audited financials before the loan
13
was funded.
14
A.
No.
15
Q.
They understood, to the best of your belief, that they were
16
getting unaudited financial statements, correct?
17
A.
Yes.
18
Q.
And, again, the jury's heard a lot about these terms, but
19
audited financials are audited by an independent CPA firm or
20
financial firm that looks at behind the information on the
21
financials to verify it, correct?
22
A.
Yes.
23
Q.
And these were clearly not audited financials, correct?
24
A.
That's correct.
25
Q.
And the companies -- and OPIC specifically postponed that

(954)769-5657
31
1
requirement to a date in the future.
I believe it was
August 31, 2009, correct?
A.
Yes.
Q.
Ten -- I'm sorry -- 2010.
A.
I don't recall the precise date, but they were postponed.
Q.
And the -- when the prosecutor showed you what I'll put up
as C(4), I think you told her on a number of occasions here
that the words in the corner of all of the financials that
we've seen say "unaudited pro forma," correct?
Correct?
10
A.
That's correct.
11
Q.
I mean -- and you said to the prosecutor on a number of
12
occasions that that's a disclosure to someone that's looking at
13
this, right?
14
A.
Yes.
15
Q.
Because anybody -- a lawyer involved in a transaction, a
16
commercial transaction, that would look at that would see
17
clearly that that's a disclosure that these financials are
18
unaudited and pro forma, right?
19
A.
Yes.
20
Q.
And you said to the prosecutor when she read the
21
requirement in the contract that these comport -- that the
22
financial -- the definition of "financial statements" requires
23
that the financials presented comport with GAAP remember those
24
questions?
25
A.
Yes.
(954)769-5657
32
1
Q.
occasions that clearly on their face these did not comply with
GAAP, correct?
A.
That's correct.
Q.
Because anybody that's been -- not anybody -- a qualified,
competent lawyer, or individual lender, that's been involved in
these transactions would know by looking at this and seeing
unaudited pro forma, it doesn't comply with GAAP, right?
A.
Yes.
10
Q.
Did anybody -- did Mr. Alford or Ms. Tabernacki at any time
11
communicate to you, these are unacceptable, we want GAAP
12
financials, we're not gonna accept these unaudited pro forma
13
financials?
14
A.
No.
15
Q.
Was it ever --
16
A.
Well, I take -- let me restate that.
17
second disbursement of the loan, one of the reasons that OPIC
18
refused to grant the second disbursement was that the audited
19
financial statements had not been completed.
20
Q.
The audit hadn't been done.
21
A.
Right.
22
Q.
That's way down the road here, though.
23
A.
In September.
24
Q.
September.
25
And I think you've told the jury now on a number of
With respect to the
But here, we're looking at the initial disbursement,

(954)769-5657
33
1
because I believe that's what the prosecutor was asking you
about.
A.
She asked me about all of them, but --
Q.
Well, we're going -- here, we're -- this is C(4), so these
are the financials that were submitted, I think you said,
before you even got involved.
A.
That's correct.
Q.
So, you hadn't really seen these, but I'm -- you saw later
ones that I'll get to.
10
The question is, this deals with the initial
11
disbursement.
This was before OPIC even provided the
12
$3.3 million.
13
A.
That's correct.
14
Q.
So, again, you said something -- "pro forma" means a
15
combination of companies, that this was the combination of the
16
balance sheets of all of the InnoVida companies, correct?
17
A.
That's correct.
18
Q.
There were a number of companies in different parts of the
19
world that owned all these factories, right?
20
A.
There were a large number of InnoVida subsidiaries.
21
Q.
And so, you're saying that they presented this unaudited
22
pro forma by adding all the balance sheets together of all the
23
different companies?
24
A.
25
given the words "pro forma" in this situation.
That would be the ordinary interpretation I would have

(954)769-5657
34
1
Q.
And you said something to the jury that might not be
meaningful to them, or to me, which is that they eliminated all
intercompany transfers, right?
A.
Right.
Q.
What does that mean?
A.
Well, if one subsidiary owed money to another subsidiary,
when you added it all together, ordinarily those intercompany
transactions would be deleted.
was owed a hundred million dollars from company B, and
You wouldn't -- if company A
10
company B was owed a hundred million dollars from company A,
11
you wouldn't put $200,000,000 of receivables, because you'd be
12
double-counting in that situation.
13
Q.
14
conversations with Mr. Alford or Ms. Tabernacki about the
15
financial statements themselves?
16
A.
No.
17
Q.
Now, while we're on this, I have here -- that's my messy
18
orange highlighting there -- but under "current assets, cash
19
and cash equivalents," 35 million-plus dollars.
20
that?
21
A.
Yes.
22
Q.
I mean that indicates that this company has in the bank
23
somewhere cash in that amount.
24
came from?
25
A.
Okay.
Do you ever remember having any specific
Do you see
Do you know where that number
No.
(954)769-5657
35
1
Q.
And that would be significant on this balance -- on this
asset sheet.
relation to the total current assets of the company, correct?
A.
Yes.
Q.
Another thing, if you look at the final page of -- which is
'3031 on the Bates Number of this, the -- Ms. -- the prosecutor
asked you about revenues of this company.
"unaudited pro forma," factories -- "revenues from factories,"
$30,000,000 plus.
That's the substantial amount of money in
Again, under
See that?
10
A.
Yes.
11
Q.
And so, that's revenues from the sale of factories?
12
A.
I don't know precisely what it was.
13
Q.
Well, what you can tell from this, though, if we look a
14
little closer, is finished goods, go over here, zero.
15
that?
16
A.
Yes.
17
Q.
So, anybody, any lender, anybody looking at this, and
18
particularly OPIC, would look at this company and see that they
19
haven't made a penny selling the goods of the company by the
20
end of September of '09, correct?
21
A.
That's correct.
22
Q.
And that's not -- that's very fundamental.
23
OPIC would have an understanding -- or the lender, OPIC, would
24
have an understanding that the company hadn't made any money
25
selling any goods at that time, correct?
See
I mean that

(954)769-5657
36
1
A.
That's correct.
Q.
Now, if you even look further down the road -- this is
C(11), April 23rd, the prosecutor showed you -- I'm just trying
to show this to give it context -- now, we're in April.
so that the jury understands, C(4) was sent from Craig Toll to
Lynn Tabernacki January 28, 2010.
Just
Now, we're in April of 2010.
And if you take a look at the revenue page, which is
'3057, the revenue page on the financials, you see the
revenues, still unaudited pro forma, factories 40,000 -- 40 --
10
$40,000,000, see that?
11
A.
Yes.
12
Q.
And finished goods, zero.
13
A.
Yes.
14
Q.
So, OPIC would know -- well, Mr. Alford, Ms. Tabernacki
15
would know that by the end of the year in '09, the company
16
hasn't made a nickel selling panels, right?
17
A.
Yes.
18
Q.
And OPIC went -- you said that OPIC inevitably funded the
19
loan, correct?
20
A.
Yes.
21
Q.
They approved it, correct?
22
A.
Yes.
23
Q.
During the course of your negotiations, did you gather an
24
understanding from your negotiations with Mr. Alford and
25
Ms. Tabernacki that OPIC was under pressure to fund this loan
Right?
Excuse me.

(954)769-5657
37
1
quickly?
A.
have mentioned that they were anxious to close the loan.
Q.
something down there at the time, correct?
A.
That was one of -- yes.
Q.
I mean they -- things moved along relatively quickly here
through the loan process prior to it being funded, correct?
A.
10
11
I believe I might have either -- probably Mr. Alford might
Because they wanted to get the money into Haiti and to do
Relatively speaking.
MR. SHARPSTEIN:
Excuse me, your Honor.
I'm just
looking for a particular page.

THE COURT:
12
Okay.
13
BY MR. SHARPSTEIN:
14
Q.
15
contract.
16
page 6 of the contract, but what is '1649 for the record here,
17
it's this litigation section.
18
The prosecutor showed you C(7), C(7), and that's the actual
And showed you a section on -- it's actually on
These are warranties, I think, acknowledgments from
19
the company that -- and you took a look at it -- that
20
litigation, "no action, suit, or other legal or arbitral
21
proceeding" -- that's arbitration, correct?
22
A.
That's correct.
23
Q.
-- "or investigation is pending."
24
25
So, let's stop here.
The prosecutor asked you -- this
is in the spring of 2010, and there was -- to the best of your

(954)769-5657
38
1
knowledge, there was no litigation pending against the company
at that time when you were signing this agreement, isn't that
right?
A.
To my knowledge.
Q.
There was litigation later, isn't that right?
A.
It is my understanding that litigation arose subsequently.
Q.
But this requirement in the contract doesn't require no --
doesn't require the company to notify as to any litigation that
might come up in the future, does it?
10
A.
Unless the litigation's been threatened.
11
Q.
And actually the jury saw, but I don't think the prosecutor
12
asked you any questions about, you got involved in the time
13
period when there was a default -- a notice of default sent by
14
the OPIC against the company, correct?
15
A.
I believe I received a copy of that.
16
Q.
And you got involved in some discussions with OPIC at the
17
time, isn't that right?
18
A.
We had some discussions, yes.
19
Q.
Actually, you, Ms. Tabernacki, and maybe Mr. Toll sat down
20
and talked to them about lawsuits that had been filed in the
21
fall of 2010 against the company, isn't that right?
22
A.
I don't recall the details of that conversation.
23
Q.
This is January 5, 2011.
24
phone with Ms. Tabernacki?
25
Do you remember a meeting on the
If you don't....
(954)769-5657
39
1
A.
I recall we had some conversations.
I don't recall the
dates.
Q.
fall of 2010, correct?
A.
Q.
Now, you told the jury about a discussion you had with OPIC
about postponing the unaudited financial requirements, correct?
A.
Yes.
Q.
You also had a negotiation with them as to how you would
But you do remember that those lawsuits were filed in the
10
define the project to be as it was known in the contract,
11
correct?
12
A.
Yes.
13
Q.
Because there was issues that arose in regard to the
14
difficulties in Haiti as to executing the project exactly as
15
the way it had been envisioned, correct?
16
A.
Yes.
17
Q.
There was a problem -- there were a lot of problems in
18
Haiti that happened after January that made it very -- well,
19
that affected this particular project, correct?
20
A.
21
notified the definition of the term "project."
22
Q.
23
it couldn't build homes right away because of land issues.
24
you become aware of that?
25
A.
I don't know about the problems in Haiti.
I know that we
You didn't go to Haiti, but there was some discussion about

Did
I understood there was some difficulty in obtaining a site

(954)769-5657
40
1
for the factory.
Q.
had negotiated a lease for land to build a factory, but there
were issues there that had occurred, correct?
A.
build the factory.
Q.
redefining what the project was, correct?
A.
Yes.
10
Q.
Originally, it talked about they must build a factory and
11
build a certain amount of homes, correct?
12
A.
I would need to look at the precise language.
13
Q.
Well, more than what it was.
14
is, what inevitably was negotiated, what inevitably was in C(7)
15
on page 7 of the contract, '1680 Bate stamped, defining
16
"project."
And there couldn't -- it was very difficult to buy -- they
I was aware there was issues with obtaining a parcel to
So, you actually negotiated a -- with them specifically
17
Let's take a look at what it
Here, "project" means "the development,
18
construction, and operation of a manufacturing
19
facility to be owned and operated by the project
20
company, dedicated to the production of composite
21
structural panels to be used for rapid deployment,
22
energy efficient homes, and other structures in the
23
project company."
24
25

A.
Yes.
(954)769-5657
41
1
Q.
So, there was discussion about how the company would be
involved in building other structures, not just the homes,
isn't that right?
A.
Yes.
Q.
I mean that was something that was very specifically
discussed with OPIC to their understanding and negotiated to
the extent that that section was changed from their original
vision of what OPIC -- of what InnoVida would do, correct?
A.
I would need to see the original language to tell you
10
exactly what was changed.
11
Q.
12
about, well, the -- for example -- and then I'll get to a
13
question -- it said in the definition of "financial statement"
14
that GAAP statements required, that financial statements made
15
in accordance with Generally Accepted Accounting Principles
16
were required.
17
GAAP statements.
Okay.
18
And the prosecutor asked you quite a few questions
And these that they got, OPIC got, were not
And then she asked you, that would violate some
19
form -- that would not comply with the contract, correct?
20
you remember those questions?
21
A.
Yes.
22
Q.
So, if, in fact, the other side gets something that they
23
don't think complies with the contract, they can refuse to lend
24
the money, correct?
25
A.
Yes.
(954)769-5657
Do
42
1
Q.
They can, through their lawyer -- it happens all the time,
doesn't it?
A.
Yes.
Q.
Well, not every single time, but a lot of times in
commercial transactions a lender, a bank, an equity company
says, hey, you didn't give us -- we're not satisfied with these
statements, we're not funding your loan, right?
A.
It does happen.
Q.
Did they do that here?
10
A.
No.
11
Q.
They, getting everything they had in front of them, as it
12
was, decided to fund the loan, right?
13
A.
Yes.
14
MR. SHARPSTEIN:
Excuse me for one second, your Honor.
15
16
MR. SHARPSTEIN:
17
THE COURT:
18
MS. FOSTER-STEERS:
That's all I have, your Honor.
Redirect?
19
Yes, your Honor.
REDIRECT EXAMINATION
20
21
Q.
22
audited financial statements that were to be submitted to OPIC.
23
Do you remember that question?
24
A.
Yes.
25
Q.
Okay.
Mr. Smith, Mr. Sharpstein asked you about the delayed
Can you tell the members of the jury why it was that
(954)769-5657
43
SMITH - REDIRECT/FOSTER-STEERS
1
the audited financial statements were gonna be delayed?
A.
I'm sorry, can you repeat the question?
Q.
Do you know why it was that the audited financial
statements were delayed?
A.
auditors and that the scope and time to require the audit would
require more time than OPIC originally requested.
Q.
remember that?
Mr. Toll told me that there was a delay in engaging the
So, the new date was gonna be August 31, 2010.
I don't remember it, but there was a new date.
Do you
10
A.
11
look at the loan agreement to see it.
12
Q.
13
process of being retained by InnoVida?
14
A.
15
don't recall now the name of the firm.
16
Q.
Okay.
17
A.
Yes.
18
Q.
Okay.
19
was --
20
A.
That sounds correct.
21
Q.
Now, do you know if Ernst & Young had been provided with
22
financial statements by InnoVida?
23
A.
I don't know.
24
Q.
Mr. Sharpstein also asked you, Mr. Smith, about the
25
litigation section of the loan agreement.
Okay.
I'd have to
Did he tell you who had been retained or was in the
I understood it was one of the major accounting firms.
Are you familiar with Ernst & Young?
Do you know whether or not that was the company that
I just want you to

(954)769-5657
44
1
direct your attention to this particular section, sir --
Section 6.08, which says "notice of default and other matters."
Do you see that?
A.
Q.
Yes.
"The borrower shall notify OPIC immediately
of the commencement of any legal or arbitral
proceedings against the parent company that
involve claims that either individually or in the
aggregate at any given time exceed the equivalent
10
of $500,000."
11
12
A.
Yes.
13
Q.
Okay.
14
the fall of 2009, right?
You're aware of the litigation that was brought in
15
MS. SELMORE:
16
17
Q.
2010, I'm sorry.
18
A.
Yes.
19
Q.
And in response to a question by Mr. Sharpstein, you were
20
sitting down with OPIC in January, 2011, to talk about that
21
litigation, correct?
22
A.
23
with OPIC.
24
Q.
25
notification of any pending litigation to OPIC in the fall of
Ten.
As I mentioned, I don't recall the exact dates that I spoke
Okay.
But did OPIC -- did InnoVida provide immediate

(954)769-5657
45
1
2010?
A.
I don't know.
(Discussion had off the record)
3
4
Q.
in terms of the notification of any pending litigation, were
you approached by anyone at InnoVida and told about this
pending litigation in the fall of 2010?
A.
No.
10
Q.
And with respect to the Ernst & Young retainer by InnoVida,
11
do you know whether or not any financial statements provided to
12
Ernst & Young were the same as those provided to OPIC through
13
you?
14
A.
I don't know.
15
Q.
Would you expect that there would be?
16
A.
I'm sorry?
17
Q.
Would you expect that there would be?
18
A.
Yes.
19
Q.
Okay.
Now, did you -- with respect to the OPIC matter, Mr. Smith,
20
MS. FOSTER-STEERS:
21
THE COURT:
22
MR. SHARPSTEIN:
23
24
25
No further questions, your Honor.
Thank you, sir.
You may --
Could I just ask one question based
on a question she asked, your Honor?

THE COURT:
You should have objected being beyond the
scope, but I'll allow it this one time.
I'll allow it this one

(954)769-5657
46
time.
RECROSS-EXAMINATION
BY MR. SHARPSTEIN:
Q.
things have happened in your law practice in the last few years
that makes you forget or it's incapable to remember certain
things about these transactions, correct?
A.
Yes.
Q.
Do you remember you gave an interview to the -- in December
Mr. Smith, I assume that you're -- this is -- a lot of
10
of 2012, you gave an interview to the prosecutor and to the
11
FBI.
12
A.
Yes.
13
Q.
Remember during the course of that statement telling them
14
that in or around the fall of 2010, several lawsuits were filed
15
against Osorio and InnoVida, which alleged certain conduct,
16
that both Osorio and Toll told you that the lawsuits and the
17
allegations were filed and that their allegations were false?
18
19
MS. FOSTER-STEERS:
20
THE COURT:
Objection.
Hearsay, your Honor.
Overruled.
21
A.
I'm sorry, what was the question?
22
Q.
Do you remember telling the FBI and the prosecutor when you
23
were interviewed that in the fall of 2010, you were alerted to
24
the lawsuits by both Osorio and Toll, who told you they were
25
false?
(954)769-5657
47
A.
I don't recall the precise order of which I heard about the
lawsuit.
MR. SHARPSTEIN:
THE COURT:
MS. FOSTER-STEERS:
THE COURT:
That's all I have.
Anything further, Ms. Foster-Steers?

No, your Honor.
Thank you, sir.
You may step down.
You're excused.
THE WITNESS:
(Witness excused)
10
THE COURT:
Thank you.
All right, members of the jury, we're
11
going to take a 15-minute recess.
Remember my admonition not
12
13
presence.
14
15 minutes.
We'll see you back in the jury room in about
15
COURTROOM SECURITY OFFICER:
16
(The jury exited the courtroom)
17
THE COURT:
18
Please rise for the jury.
And if there's nothing else to come before
the Court, we'll be in recess for 15 minutes.
19
(The Judge exited the courtroom)
20
(Recess taken at 10:47 a.m. until 11:10 a.m.)
21
22
THE COURT:
23
Counsel is present.
24
25
Be seated.
Mr. Toll's present.
jury in?
(954)769-5657
48
MS. FOSTER-STEERS:
THE COURT:
MR. SHARPSTEIN:
THE COURT:
THE COURT:
No, your Honor.
Ready, Mr. Sharpstein?

Yes, your Honor.
All right.
Let's bring in the jury.
MR. SHARPSTEIN:
MS. FOSTER-STEERS:
10
THE COURT:
Yes, your Honor.

Yes, your Honor.
11
12
presence?
13
All right.
14
MS. FOSTER-STEERS:
15
The government may call its next witness.

The United States calls Mark
Hobson.
16
THE COURT REPORTER:
Please raise your right hand.
17
(MARK HOBSON, GOVERNMENT'S WITNESS, WAS SWORN)
18
THE COURT REPORTER:
Please have a seat.
Please get
19
right in front of the microphone, state your full name for the
20
record, spelling your last name.

THE WITNESS:
21
22
Mark Hobson, H-O-B-S-O-N.

DIRECT EXAMINATION
23
24
Q.
Mr. Hobson, are you employed?
25
A.
Yes, I am.
(954)769-5657
49
HOBSON - DIRECT/FOSTER-STEERS
1
Q.
Where do you work, sir?
A.
I work at a firm, Devine, Goodman, Rasco,
Watts-Fitzgerald & Goodman (sic).
Q.
And what is your occupation, Mr. Hobson?
A.
I'm a business lawyer.
Q.
How long have you been a lawyer?
A.
I was admitted to the bar in '94.
Q.
1994?
What law school did you go to?
10
A.
I went to Florida State University.
11
Q.
Now, after leaving law school, where did you work?
12
A.
After, I went to Belgium, got a master's of law in
13
international law.
14
in D.C. for the ABA.
15
Florida bar, worked for a friend for a few months, and then I
16
went to Brazil for almost five years.
17
Q.
Okay.
18
A.
And I came back, and I worked for Shutts & Bowen for almost
19
12 years.
20
Q.
Okay.
21
A.
I believe it was October, 1999.
22
Q.
Did you work in a particular division?
23
A.
I was in the corporate department.
24
Q.
What did you do, sir?
25
A.
I did various, you know, business, legal matters, start-up
And I came back, I did some pro bono work

And I came back to Florida, took the
And when you came back, did you work?
When did you begin working at Shutts & Bowen?

(954)769-5657
50
1
companies to filings with the SEC.
secured lending matters.
Q.
Security-related matters?
A.
Secured lending matters.
Q.
Secured lending matters.
And I also did a lot of
If you could just speak up a little bit --
A.
Sure.
Q.
-- because your voice trails off at the end of your
responses.
10
Mr. Hobson, did you work with an individual by the
11
name of Alfred Smith?
12
A.
Yes.
13
Q.
All right.
14
work on a legal matter involving a company by the name of
15
InnoVida?
16
A.
Yes.
17
Q.
Can you tell the members of the jury how it is that you
18
came to work on that particular matter?
19
A.
20
in March of that year, 2010 --
21
Q.
Yes.
22
A.
-- and then in August of 2010.
23
much got called in when Al went on vacation.
24
Q.
25
March, 2010?
He was one of my bosses.

And in August, 2010, did you have occasion to
Well, I actually worked on it in two separate occasions --
And both times I pretty
What did you do with respect to the InnoVida matter in

(954)769-5657
51
1
A.
I helped prepare some of the underlying loan documentation
and helped organize some entities and get their registered
agents.
Q.
Okay.
A.
The only person I really worked with would have been Craig
Toll.
Q.
on the matter involving InnoVida?
A.
Did you work with anyone at InnoVida?
And did you work with him in March, 2010, when you worked
I don't recall specifically.
I may have corresponded via
10
e-mail a couple times.
11
Q.
12
on the same matter -- or, rather, a matter related to InnoVida,
13
correct?
14
A.
Correct.
15
Q.
And what was that matter, sir?
16
A.
That was in connection with a loan from OPIC.
17
Q.
What did you have to do?
18
A.
I recall that I helped prepare some documentation for a
19
second withdraw under the loan agreement.
20
Q.
Second disbursement?
21
A.
Yes.
22
Q.
Okay.
23
doing what you had to do in August, 2010?
24
A.
25
there's also a conference call one time with the OPIC people
Okay.
Now, when it came to August, 2010, you again worked
Did you work or -- work with anyone from InnoVida in
Well, I corresponded with Craig, and I believe we --

(954)769-5657
52
1
and Craig and Claudio Osorio.
Q.
ahead or go forward with that second disbursement?
A.
things had to be submitted to show that they were at that
stage.
Q.
Okay.
A.
I believe it was a form of -- of an affidavit of sorts that
simply had disbursement requests.
Okay.
Yes.
Okay.
Now, did you have to gather documents in order to go
I recall to get the second disbursement certain
Do you recall what those things were?
I forget the exact title.
10
Q.
Did you -- or, rather, who did you obtain the
11
information from?
12
A.
13
with Craig Toll.
14
Q.
Had you ever met Mr. Toll in person?
15
A.
I'm not sure that I did.
16
was I believe the CFO with CHS Electronics.
17
him on a couple occasions back in 1999, 2000, but I didn't meet
18
him in 2010 --
19
Q.
Okay.
20
A.
-- personally.
21
Q.
Okay.
22
A.
It was primarily by e-mail.
23
the phone a couple times.
24
Q.
25
was that information provided, Mr. Hobson?
Well, Al Smith was on vacation, so I was working mostly
Okay.
When I started Shutts & Bowen, he

So, I dealt with
So, how did you communicate with Mr. Toll?

And I think I spoke to him on
Now, when you requested information from Mr. Toll,

(954)769-5657
53
1
A.
I believe it was, yes.
Q.
I'm gonna show you what has been admitted into evidence as
Government's Exhibit C(18) and ask you whether or not you
recognize these documents?
5
6
MS. FOSTER-STEERS:
your Honor?
THE COURT:
(Pause)
And may I approach the witness,
All right.
10
Q.
Are you familiar with those documents, Mr. Hobson?
11
A.
Yes, I'm familiar with the e-mail I sent to Cameron Alford
12
with OPIC.
13
Q.
Okay.
14
A.
He is the in-house lawyer -- one of the in-house lawyers
15
with OPIC.
16
Q.
17
Mr. Alford from OPIC?
18
A.
No.
19
Q.
C(18), Bate Number ending '0402, this is an e-mail from you
20
to Cameron Alford.
21
A.
I do.
22
Q.
Okay.
23
A.
Correct.
24
Q.
And below there is another e-mail from you sent Wednesday,
25
August 4th.
Okay.
Who was Cameron Alford?
Did you deal with any other lawyers besides
Do you see that?
And copied is Craig Toll and Alfred Smith, right?
Do you see that?

(954)769-5657
54
1
A.
Yes, I do.
Q.
Okay.
A.
(No response)
Q.
Were these the documents attached to this particular
e-mail?
A.
(No response)
Q.
The list?
A.
Yes, I see the list.
Q.
Okay.
And then there's a list of items, right?
My question to you is, were these documents
10
attached -- the list that we see here, were those the
11
attachments to the e-mail, C(18)?
12
A.
That's my understanding, correct.
13
Q.
Okay.
14
A.
With the exception of, in my follow-up e-mail where I said
15
one of the attachments was a mistake.
16
my follow-up e-mail.
17
Q.
18
a financial statement from InnoVida?
19
A.
20
requirements.
21
Q.
22
from Craig Toll?
23
A.
I would have had to have.
24
Q.
Because did you get any information from anyone else at
25
InnoVida, Mr. Hobson?
Okay.
So, I corrected that in
Now, attached to your e-mail, Mr. Hobson, was there
I believe so.
All right.
I believe that was one of their
And did you obtain this financial statement

(954)769-5657
55
1
A.
Well, the only one I dealt with was Craig, and then we had
the one conference call with the OPIC, and that was when
Claudio was involved, as well.
Q.
Okay.
A.
But --
Q.
Did you get any documents from Claudio Osorio?
A.
No, not personally.
Q.
Okay.
progress report on the Haiti Project, correct?
Looking at Bate Number ending '0410, this is a
10
A.
Correct.
11
Q.
Okay.
12
A.
That is the date on this document.
13
Q.
Okay.
14
this?
15
A.
16
Project.
17
Q.
Okay.
18
A.
Yes.
19
Q.
And looking now at Bate Number ending '0430, this is an
20
invoice dated April 30, 2010, right?
21
A.
Correct.
22
Q.
And July 16, 2010, Bate Number ending '0431, right?
23
A.
Correct.
24
Q.
And another invoice dated August 3, 2010, Bate Number
25
ending '0432, right?
And the date on the report is August 4, 2010, right?
And looking now at Bate Number '000429, what is
It appears to be a bank reconciliation for the Haiti
Provided to you by Mr. Toll, right?

It would had to have been provided by him.

(954)769-5657
56
1
A.
Correct.
Q.
And then an e-mail at the top from Claudio Osorio -- well,
at the very, very top is the name "Craig Toll," right?
A.
At the very, very top left-hand corner, yes.
Q.
Yes.
And it says e-mail dated Wednesday, August 4, 2010,
from Claudio Osorio to Craig Toll, right?
A.
Correct.
Q.
And in the body of the e-mail, it has from "Lisa Gutierrez
10
Brito (emergency relief station head for WV)."
11
Do you know anything about this e-mail, Mr. Hobson?
12
A.
Not really the specifics.
13
Q.
Okay.
14
Mr. Toll again, correct?
15
A.
16
I did.
17
Q.
18
disbursement request, right?
19
A.
Yes.
20
Q.
Okay.
21
were they in support of the second disbursement request?
22
A.
Yes.
23
Q.
For $6.7 million, right?
24
A.
I believe so, yes.
25
Q.
Signed by Craig Toll, right?
But this is an e-mail that you obtained from
I honestly don't recall it, but it (sic) very possible that
Okay.
And then this is the August 2, 2010, second
And the documents that we have looked at, they --

(954)769-5657
57
1
A.
It -- it appears to be his signature.
Q.
Who did you provide these documents to, Mr. Hobson?
A.
The documents I provided to OPIC.
her last name Ziegler?
Q.
Tabernacki, is that --
A.
Tabernacki.
7
8
9
10
11
12
13
And, also, Cameron Alford.
MS. FOSTER-STEERS:
THE COURT:
Cross-examination.
MR. SHARPSTEIN:
I have no questions of the witness,
your Honor.
THE COURT:
Thank you, sir.
15
(Witness excused)
16
THE COURT:
17
MS. SELMORE:
20
21
22
23
24
25
You may step down.
You're excused.
THE WITNESS:
19
Honor.
14
18
I believe Lynn -- was
Thank you.

Your Honor, the United States will call
Gabby Fudally.
THE COURT REPORTER:
Please raise your right hand to
be sworn.
(GABRIELA FUDALLY, GOVERNMENT'S WITNESS, WAS SWORN)
THE COURT REPORTER:
Please sit down.
Please state
your full name for the record, spelling your last name.
THE WITNESS:
Gabriela Fudally, F, as in "Frank," U-D,
as in "David," A-L-L-Y.
(954)769-5657
58
THE COURT REPORTER:
THE WITNESS:
First name?
Gabriela, G-A-B-R-I-E-L-A.
DIRECT EXAMINATION
3
4
BY MS. SELMORE:
Q.
Good morning, Ms. Fudally.
A.
Good morning.
Q.
Are you employed, ma'am?
A.
Yes.
Q.
How are you employed?
10
A.
By Wells Fargo.
11
Q.
And what do you do for Wells Fargo?
12
A.
I am a market support consultant.
13
Q.
And what does a market support consultant do?
14
A.
We are -- I am in charge of 14 stores in Broward County,
15
and we make sure that they are operationally sound, they comply
16
with policies and procedures, we -- a support service, and we
17
mitigate all losses and risks for the branch.
18
Q.
And how long have you been performing that function?
19
A.
This is my 27th year with Wells Fargo.
20
Q.
Now, at some point in time did you work for Wachovia?
21
A.
I did.
22
Q.
When did you stop working for Wachovia?
23
A.
July of 2011 is when we converted, so....
24
Q.
And when you say "we converted," what do you mean?
25
A.
Wachovia converted to -- well, Wells Fargo bought Wachovia.

(954)769-5657
59
FUDALLY - DIRECT/SELMORE
1
Q.
So, Wells Fargo took you on as their employee.
A.
Absolutely, yes.
Q.
Now, during that 27 years of working with Wachovia, are you
familiar with what their bank statements look like?
A.
Yes.
Q.
Ms. Fudally, I'd like to show you a document that has
previously been introduced as Government's Exhibit C(9).
A.
Okay.
Q.
Based on your experience, too, in working with Wachovia,
10
does that appear to be a Wachovia Bank statement?
11
A.
Yes, it does.
12
Q.
And I also show you a document that has been introduced
13
into evidence, Government's Exhibit C(42).
14
A.
Yes, I do.
15
Q.
Does that appear to be a Wachovia Bank statement?
16
A.
Yes, it does.
17
Q.
Now, I've highlighted a line here for August 11, 2011, and
18
it says "funds transfer advice," and there's a number.
19
see that?
20
A.
Yes, I do.
21
Q.
What does that line mean?
22
A.
That is an incoming wire transfer with an advice number.
23
That's a transaction number.
24
Q.
And if you could, speak directly into the microphone.
25
A.
Sorry.
Do you see that?

(954)769-5657
Do you
60
1
Q.
identification purposes?
A.
Yes, it was.
Q.
And different wires, are they assigned different numbers?
A.
Yes.
assigned.
Q.
introduced as Government's Exhibit C(20).
document?
10
A.
That number, is it used -- or was it used in Wachovia for
I'd also like to show you a document that has been

Do you see that
Yes.
11
12
There -- that advice number is systematically
Thank you.
Q.
Now -- I'm sorry, it got too big.
13
Now, Ms. Fudally, this appears to be a -- what we
14
commonly call a "screen shot."
Are you familiar with that
15
term?
16
A.
Yes.
17
Q.
And what do I mean by "screen shot"?
18
A.
That is, if you have a computer screen, somebody hit the
19
"print" button, and it prints whatever is on your computer
20
screen.
21
Q.
Is this a bank statement like we've looked at previously?
22
A.
No, it's not.
23
Q.
Now, on this particular screen shot, what is the account
24
number for this particular account?
25
A.
'8744.
(954)769-5657
61
1
Q.
And what is the date of the transaction purportedly
reflected there?
A.
It looks like August-11-2010 (sic).
Q.
And next to that, we see that terminology, "funds transfer
advice," and a number.
A.
Yes, I do.
Q.
And, again, what is that terminology?
represent?
A.
That is an incoming wire transfer with the advice number.
10
Q.
And what is the number that is reflected there?
11
A.
That's 2010081100051248.
12
Q.
And what is the amount of the wire transport -- transfer
13
reflected on this document?
14
A.
$2.5 million.
15
Q.
Now, Mrs. Podalski (sic), I'd like to direct your attention
16
back to -- Fudally, I apologize -- direct your attention back
17
to a bank statement.
18
statement?
19
A.
7-31-2010 through 8-31-2010.
20
Q.
And, again, what is the account number?
21
A.
You're gonna have to make that bigger, but it's two,
22
followed by four zeros, 21398744.
23
Q.
Now, what is the date?
24
A.
August 11th.
25
Q.
And how much is the wire indicated on this particular
Do you see that?
What does it
And for what period is this bank

(954)769-5657
62
1
statement?
A.
That is 500,000.
Q.
Now, does the wire transfer screen shot contain the same
advice number as indicated on the statement I introduced as
Government's C(42)?
A.
Yes.
Q.
Would you like to see them up close?
A.
Yes.
I saw that one.

Yes, it does.
10
Q.
And is it possible for two wires for different amounts to
11
have the same wire transfer advice number?
12
A.
No, it's not.
13
Q.
At our direction, did you conduct an investigation within
14
your system of records to determine the correct amount for the
15
wire transfer advice number 2010081100051248?
16
A.
Yes.
17
Q.
And what was the true amount of that wire?
18
A.
It's the ones on our official bank records, which is the
19
500,000.
20
Q.
And that would be the amount of $500,000?
21
A.
Um-hum, yes.
22
Q.
Based on what you discovered in your records as to the true
23
amount of the funds transfer advice wire ending in '1248, does
24
this document -- is it true?
25
A.
No.
I -- I mean I can't even testify to the -- this

(954)769-5657
63
1
document, because it's not our official bank records.
That is
something somebody would see on a personal account on their
personal online screen.
Q.
Well, was the wire ending in '1248 for $2.5 million?
A.
According to this document, but not -- that's not our
official bank records.
Q.
advice number in the amount of $2.5 million.
A.
So, Wachovia did not receive a wire with that transfer
No.
10
MS. SELMORE:
11
THE COURT:
12
13
MR. SHARPSTEIN:
Cross-examination.
I just need
14
to get something here.
15
K(1).
16
17
MS. SELMORE:
18
19
20
of documents.
Mr. Sharpstein, we've got several boxes
Do you want a specific document?
MR. SHARPSTEIN:
K(1)(j), K(1)(j), it's labeled
separately.
21
Excuse me.
22
23
MS. SELMORE:
24
25
introduce K(1)(j).
MS. HA:
I apologize, your Honor.
No objection, your Honor.
We'd move to
Here.
That's not --

(954)769-5657
64
1
2
(Government's Exhibit Number K(1)(j) marked for

identification)
THE COURT:
MR. SHARPSTEIN:
We would move -- if the government is
moving it, then we'll just not object.

MS. SELMORE:
6
7
You're moving in K(1)(j), Ms. Selmore?
We can move it as a joint movement with
stipulation, no objection, your Honor.
THE COURT:
(Government's Exhibit K(1)(j) admitted into evidence)
10
K(1)(j) will be received.
CROSS-EXAMINATION
11
BY MR. SHARPSTEIN:
12
Q.
The -- good afternoon -- I'm sorry.
13
MR. SHARPSTEIN:
14
BY MR. SHARPSTEIN:
15
Q.
Good morning.
16
A.
Good morning.
17
Q.
What was your last name, I'm sorry?
18
A.
Fudally.
19
Q.
Ms. Fudally.
20
Now, as part of -- you're here as a custodian or as an
21
employee of Wachovia, former -- Wells Fargo, formerly Wachovia.
22
And you provided documents to the government, isn't that
23
correct?
24
A.
Yes.
25
Q.
You provided a number of documents to the jury -FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657
65
FUDALLY - CROSS/SHARPSTEIN
1
A.
Okay.
Q.
-- upon request, upon subpoena, correct?
A.
Yes.
Q.
And I'm gonna show you what's now in evidence as --
MR. SHARPSTEIN:
THE COURT:
BY MR. SHARPSTEIN:
Q.
May I approach, your Honor?
Yes.
-- K(1)(j).
9
10
BY MR. SHARPSTEIN:
11
Q.
12
government, correct?
13
A.
14
them; our bank did.
15
Q.
16
Wachovia?
17
A.
18
see the documents.
19
documents.
20
Q.
Take a look through the documents.
21
A.
Oh, I'm sorry.
22
Q.
I believe what it's going to represent to you -- and I'll
23
cut to the quick --
24
A.
Okay.
25
Q.
-- is you provided a series of accounts that were owned and
Those are a series of bank records that you provided to the
Okay.
I mean the bank did.
I didn't personally provide
Well, do those appear to be official bank records of
I mean this -- yeah, they appear -- they're not -- I don't

I just see statements that these are the

(954)769-5657
66
1
operated by InnoVida, including the signature cards for the
accounts, the authorized signatures --
A.
Um-hum.
Q.
-- on the accounts, correct?
A.
It looks that way.
Um-hum.
Q.
your attention to things one at a time.
A.
Okay.
10
Q.
At the bottom, there are Bates Numbers, you see in the
11
bottom right-hand corner, stamped "GJW"?
12
numbers?
13
A.
Yes.
14
Q.
There's one GJWB, four zeros, 15.
15
of that one.
These are corporate resolutions.
The -- for example, why don't you -- I'm gonna -- I'll call
16
You see those
Why don't you grab hold
Now, so the jury understands, when someone opens an
17
account with the bank, there's a signature card that's placed
18
in the record that authorizes certain people to sign on the
19
account, correct?
20
A.
Correct.
21
Q.
That would be to make transactions such as checks, right?
22
A.
Yes.
23
Q.
Wire transfers, correct?
24
A.
Yes.
25
Q.
You would need someone who's authorized on the account to

(954)769-5657
67
1
make a wire transfer, correct?
A.
Yes.
Q.
So, you've shown the jury -- or I'm gonna just focus your
attention just briefly here to a page from C(9) that the
prosecutor sent -- showed you.
the screen.
This one you have to look on
This is an account number that ends in '44.
A.
Yes.
Q.
And that's where you looked at the wire transfer, and you
10
discussed certain things that she asked you.
11
Now, if you look at K(1)(j), that page that I referred
12
you to, does this appear to be the signature card for that '44
13
account number?
14
A.
Yes.
15
Q.
And if you look closely -- we'll zero in for the jury --
16
the authorized signators or depositors on this account are
17
Claudio Osorio, Amarilis Moran-Osorio, and Elba Gamboa.
18
see that?
19
A.
Yes, I do.
20
Q.
There's nobody else listed here on this account, correct?
21
A.
Correct.
22
Q.
So, one of those individuals would be authorized to make
23
that transfer you referred to, a wire -- would be authorized to
24
make a wire transfer on that '44 account, correct?
25
A.
Yes.
(954)769-5657
Do you
68
1
Q.
Take a look at -- there are several other accounts in
there, are there not?
it, you see there are several accounts --
A.
Um-hum.
Q.
-- for InnoVida under different company names, correct?
A.
Yes.
Q.
I'm gonna show you two pages of it, which are GJWB19 and
18.
but you have them there in front of you.
In K(1)(j)?
If you just pull those out.
10
If you just thumb through
I'll show them on the screen,
Here's an account that's -- let's zero back so the
11
jury understands.
12
1-7-2009, another InnoVida account, two numbers that end in '70
13
and '89.
14
Here's -- this is -- the date on this is
Do you see that?
15
A.
Yes.
16
Q.
And if you look down here, there are signators -- Claudio
17
Osorio, Craig Toll, Amarilis Osorio, and Elba Gamboa.
18
see that?
19
A.
Yes.
20
Q.
Now, turn to 18 that was right in front of it.
21
appears to be an updated signator depositor authorization on
22
those two accounts (indicating), dated 2-9-09.
23
that?
24
A.
Yes, I do.
25
Q.
And the people on the account are Claudio Osorio, Amarilis
Do you
This
Do you see

(954)769-5657
69
1
Osorio, Herb Margolis, and Elba Gamboa.
A.
Yes.
Q.
So that would replace the one right before it, correct?
A.
That's correct.
Q.
Because it has a date later in time.
A.
That's correct.
Q.
So, as of 2-9-09, these four people are the authorized
people on that account.
A.
That's correct.
10
Q.
If you turn -- if you could pull the documents from there
11
labeled 6 through 9.
MR. SHARPSTEIN:
12
Do you see that?
I'm putting it up for the jury's
13
benefit.
14
BY MR. SHARPSTEIN:
15
Q.
16
Southeast, LLC."
17
let's zero in so we can just see it -- it looks like May 20,
18
2010.
19
A.
Okay.
20
Q.
And the authorized signators on this account -- and it ends
21
in a '91 under "InnoVida Southeast" -- are Claudio Osorio,
22
Amarilis Osorio, Elba Gamboa, and a gentleman by the name of
23
Horacio Alvarez, correct?
24
A.
That's correct.
25
Q.
Those are the authorized signators on that account as of
Here we have another Wachovia account under "InnoVida

And here the date is -- on this, 06, is 5 --

(954)769-5657
70
1
May 20, 2010, correct?
A.
Yes.
Q.
Behind it, if you look, there are other cards from prior
dates, 2-9-09.
in the account.
2010, correct?
A.
Yes.
Q.
That's the latest one in there.
A.
Yes.
10
Q.
So, the one before it, which is 2-9-09, the same date that
11
we just looked at, the updated card on the '44, correct?
12
A.
Yes.
13
Q.
Has Claudio Osorio, Amarilis Osorio, Herb Margolis, and
14
Elba Gamboa.
15
A.
(No response)
16
Q.
Do you see that?
17
A.
Yes.
18
Q.
And there's one back here now, which is 12-9-08 (sic).
19
A.
12-20 (sic).
20
Q.
Which, if you look down, has -- it's the same account, the
21
'91, but it's a previous card where previously there was Herb
22
Margolis, Claudio Osorio, Amarilis Osorio, Elba Gamboa, and
23
Craig Toll.
24
A.
Yes.
25
Q.
But now go back to '07, Mr. Toll is taken off as of 2-9-09.
Now, these were -- these came before.
They're
But the one May 20th is the one as of May 20,
Do you see that?

(954)769-5657
71
1
Do you see that?
A.
Um-hum, yes, I do.
Q.
And definitely not on there on the latest one, 5-20-10,
correct?
A.
Correct.
Q.
That's Osorio, Osorio, Claudio and Amarilis, Elba Gamboa,
and Horacio Alvarez, correct?
A.
Yes.
MR. SHARPSTEIN:
9
10
THE COURT:
11
(Pause)
12
BY MR. SHARPSTEIN:
13
Q.
14
sorry.
Excuse me for a second.
All right.
Take a look at 16 through 21.

I apologize.
15
Actually, 17 through 21, I'm
Just 17 through 21.
Here's another account.
This one ends in '4270.
This
16
is InnoVida Services, Inc., also dated 5-20-10.
Do you see
17
that?
18
A.
Yes.
19
Q.
And we'll scan down to the signature card.
20
Osorio, Amarilis Osorio, Elba Gamboa, and Horacio Alvarez
21
again.
22
A.
Yes.
23
Q.
So, these are the authorized depositors, signators, the
24
people that are authorized to make transactions on that account
25
as of May 20, 2010, correct?
This is Claudio
Do you see that?

(954)769-5657
72
1
A.
Correct.
Q.
And if you scan down to the prior cards, back in June --
this is 20, these are prior cards on that account, correct?
The one that -- I'm sorry -- '70, the one we were just looking
at.
A.
I'm sorry, which one were you referring to?
Q.
I'm referring to the account number -- it was the same
account number we just looked at on 17.
A.
Right, but which -- I'm sorry -- which exhibit are you
10
pointing to right now?
11
Q.
This is a prior card from back in '08, 6-3-08.
12
A.
Number 20, yes, that's correct.
13
Q.
Twenty.
14
A.
Yes.
15
Q.
And in '08, on that account, it was Claudio Osorio, Craig
16
Toll, and Elba Gamboa, correct?
17
A.
Yes.
18
Q.
But, again, 17, 5-20-10, Mr. Toll is not on that account,
19
correct?
20
A.
Correct.
MR. SHARPSTEIN:
21
22
Nineteen?
I apologize
to the jury.
23
24
BY MR. SHARPSTEIN:
25
Q.
Just before -- I just have one or two more questions.

(954)769-5657
73
1
2
We looked at -- take out 14 and 15 out of your package

there.
We already looked at one of them.
I showed you before, this was '44, the InnoVida
Holdings account that that wire that you talked to the
prosecutor about came from, '44.
signator, which was Osorio, Amarilis Osorio, and Elba Gamboa.
And, again, we looked at the
There's an updated one on 3-10-2011.
And the account
is labeled "InnoVida Holdings," '44, the "Haiti Project
account."
10
A.
Correct.
11
Q.
Do you see that?
12
A.
Yes.
13
Q.
That was the Haiti Project account?
14
A.
Yes.
15
Q.
And there's a gentleman by the name of Mark Meland,
16
receiver.
17
A.
Yes.
18
Q.
Do you know who Mr. Meland is?
19
A.
Do I know him?
20
Q.
Or when the receiver took over this account, or anything
21
about that?
22
A.
23
3-10-2011, so I would imagine on that date.
24
Q.
25
"Haiti Project account," is the InnoVida Holdings, LLC '44 that
Do you see that?
No.
I don't know him personally.
Okay.
I mean the card was dated
But nevertheless, this '44, which was labeled the

(954)769-5657
74
1
we just talked about with the signature power of Osorio,
Osorio, and Gamboa, right?
A.
Don't -- Number 15, the one that's dated 11-9-2009, yes.
Q.
Yes.
And that's the account that those transfers came from,
the wire transfers the prosecutor asked you about, right?
A.
incoming wires, that was deposits.
Q.
Incoming into that account.
10
A.
Right.
11
Q.
Okay.
12
A.
Yes.
She was -- okay, just to be clear, she was asking me about
Not outgoing, deposits into that account.
13
MR. SHARPSTEIN:
14
THE COURT:
Redirect?
15
16
BY MS. SELMORE:
17
Q.
18
the signatory on the account, correct?
19
A.
That's correct.
20
Q.
And I'd like to ask you one additional question, as to
21
Government's Exhibit C(42), directing you back to that incoming
22
wire on 8-11-2010, if you go with me, on the third line down --
23
A.
Um-hum.
24
Q.
-- it says "ORG."
25
A.
That's the originator.
And, Ms. Fudally, for incoming wire, it's irrelevant who's
What does that mean?

(954)769-5657
75
FUDALLY - REDIRECT/SELMORE
1
Q.
And what is written there?
A.
Artie Rabin.
Q.
So, does that mean Artie Rabin sent $500,000 to the account
ending '8744 on August 11, 2010?
A.
Yes.
Q.
Thank you.
MS. SELMORE:
THE COURT:
No further questions, your Honor.
Thank you, ma'am.
You're excused.
10
THE WITNESS:
11
I can leave this here?
12
THE COURT:
13
(Witness excused)
14
THE COURT:
Thank you.
Yes.
15
going to go ahead and recess for lunch.
16
starting at one o'clock.
17
done by two.
18
19
You may step down.
I've got some hearings
I'm going to estimate they should be
So, I'm going to ask you to come back at two.
So, have a nice lunch.
We'll see you back at
two o'clock.
20
21
THE COURT:
22
the Court, we'll be in recess until two o'clock on this case,
23
one o'clock on other matters.
24
25
(Luncheon recess taken at 12:00 p.m.)

- - - - FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657
76
MONDAY, JULY 1, 2013, 2:03 P.M.
MR. SHARPSTEIN:
THE COURT:
Your Honor.
All right.
Mr. Toll's present.
jury in?
MR. SHARPSTEIN:
MS. FOSTER-STEERS:
10
No, your Honor.

Not from the government, your
Honor.
11
MR. SHARPSTEIN:
12
THE COURT:
We got to wait for my court security
All right.
If we have all the jurors, let's bring in
13
14
15
No, your Honor.
officer.
the jury.
16
17
18
THE COURT:
19
20
MS. FOSTER-STEERS:
21
MR. SHARPSTEIN:
22
THE COURT:
Yes, your Honor.
Yes, your Honor.
23
24
presence?
25
A JUROR:
Yes.

(954)769-5657
77
THE COURT:
Ms. Foster-Steers, you may call your next witness.
MS. FOSTER-STEERS:
All right.
I think we're ready to resume.
Your Honor, at this time, the
government calls Cameron Alford.
(The witness entered the courtroom)
THE COURT REPORTER:
(CAMERON S. ALFORD, GOVERNMENT'S WITNESS, WAS SWORN)
8
9
10
THE COURT REPORTER:
Please sit down.
Please get in
front of the microphone, state your full name for the record,
spelling your last name.
11
12
THE WITNESS:
Cameron Scott Alford, last name
A-L-F-O-R-D.
13
DIRECT EXAMINATION
14
15
Q.
16
Good afternoon, Mr. Alford.

Mr. Alford, are you employed?
17
A.
I am.
18
Q.
Where do you work, sir?
19
A.
I work at the Overseas Private Investment Corporation.
20
Q.
Is that referred to sometimes as OPIC?
21
A.
Correct.
22
Q.
Okay.
23
A.
Since August of 2007.
24
Q.
What do you do?
25
A.
I'm in the legal affairs department.
How long have you worked for OPIC?
I'm an assistant

(954)769-5657
78
ALFORD - DIRECT/FOSTER-STEERS
1
general counsel working on our transactions.
Q.
Assistant general counsel?
A.
Correct.
Q.
Now, can you tell the members of the jury, what law school
did you graduate from?
A.
George Washington University.
Q.
When was that?
A.
2001.
Q.
And what did you do after law school?
10
A.
I worked for a law firm, a number of offices in
11
Washington, D.C., London, and New York.
12
Q.
13
really low.
14
A.
Sorry.
15
Q.
Okay?
Okay.
16
You're gonna have to speak up, because your voice is
So everybody has to hear.
Okay.
So, you worked for a law firm in
17
Washington, D.C.
Doing what?
18
A.
I was doing structured finance work.
19
Q.
And what is structured finance work?
20
A.
It's a little bit more complicated than just straight
21
lending.
22
enterprises to structure financial arrangements that would meet
23
their needs.
24
Q.
Okay.
25
A.
Until February of 2007.
So, I was working with large banks or corporate
How long did you work for that law firm?

(954)769-5657
79
1
Q.
February of 2007?
A.
Correct.
Q.
And did you leave that law firm to then go to OPIC?
A.
Yes.
and then went to OPIC after that.
Q.
I left the law firm, and then was looking for a job,
Okay.
All right.
Now, as assistant general counsel with OPIC, would you
tell the members of the jury what it is that you do.
A.
10
Sure.
So, I am -- as I said before, I work on our
11
transactions.
12
government.
13
around the world.
14
into project teams that have both a finance officer as well as
15
then someone from legal affairs.
16
I'm the legal affairs member of the project team.
17
Q.
18
project team that you work in?
19
A.
20
Okay.
So, we are an agency of the United States
And we do promotion of financing and development

And for those transactions, we are organized
So, for those transactions,
What do you do as a -- what do you do in that
Sure.
So, I do things in the beginning of a transaction,
21
such as helping with due diligence, where we're investigating a
22
project and thinking whether or not it's something that OPIC
23
wants to pursue.
24
negotiation, documentation with the other side, and then
25
implementing the project through its life cycle, so whether
Also, then, if we do progress, get into the

(954)769-5657
80
1
that's waivers or amendments or whatever the case may be.
Q.
of a company called InnoVida.
A.
I am.
Q.
How is it that you're familiar with the name InnoVida?
A.
So, I was a member of a project team where we were looking
to finance a project sponsored by InnoVida, and then worked on
that project over the course of 2009 through 2011.
Q.
Okay.
Okay.
Now, I wanted to direct your attention to the name

Are you familiar with that name?
When -- so -- did you begin working on the project
10
in 2009?
11
A.
So, I was assigned to the project in December of 2009.
12
Q.
Okay.
13
particular project?
14
A.
15
side.
16
finance side will request from legal affairs an attorney be
17
assigned to the project.
18
work on a volunteer basis.
19
And how is it that you came to be assigned to that
So, projects typically come into OPIC through the finance

And then once a project is sufficiently far along, the
And then within legal affairs, we
So, this project was put out for bid, and I
20
volunteered to do it.
21
and particularly the development angle in Haiti, a place I
22
hadn't worked before, and wanted to do that.
23
Q.
24
project team?
25
A.
Okay.
It seemed like an interesting project,
Now, who were you assigned to work with in that
Lynn Tabernacki.
(954)769-5657
81
1
Q.
And Ms. Tabernacki's position at OPIC was what?
A.
I confess I don't know her exact title, but she's in the
small/medium enterprise finance department.
Q.
Okay.
A.
Correct.
Q.
All right.
2009, what was the project that you were assigned to work with
for InnoVida?
A.
So, both of you worked on the project.
Would you tell the members of the jury, in
So, the project as presented to us was for the construction
10
of a factory in Haiti, which would manufacture composite panels
11
that then could be used for the manufacture of housing,
12
low-income housing in Haiti.
13
Q.
14
business?
15
A.
I'm sorry, could you repeat the question?
16
Q.
What was your understanding of what InnoVida's business
17
was?
18
A.
19
then could be used for the construction of anything from
20
low-income housing to office buildings.
21
Q.
22
the country of Haiti?
23
A.
Correct.
24
Q.
Now, when you first began working on that project,
25
Mr. Alford, tell the members of the jury what you did.
Okay.
And what was your understanding of InnoVida's
InnoVida's business was to make these composite panels that
And the project that you were assigned to work on involved

(954)769-5657
82
1
A.
So, we had started the diligence phase of the project.
So,
looking at the information that had been submitted to us, Lynn
was undertaking on the credit underwriting side, seeing whether
or not it was a worthwhile credit to finance.
to do work on the legal side, trying to understand their
business and how they operate, how they're organized, the
relationship with joint ventures, and just the overall
structure of the company.
Q.
I was beginning
Now, are you aware, sir, that in January, 2010, there was
10
an earthquake in Haiti?
11
A.
Of course.
12
Q.
And what, if anything, did you do with respect to that
13
project that you had been working on for InnoVida -- involving
14
InnoVida, rather?
15
A.
16
Sure.
So, the housing need in Haiti was great before the
17
earthquake, which, again, was one of the reasons I was
18
interested in doing the project.
19
had wanted to move very quickly to try and get this project up
20
and running, because it would help fill this critical need,
21
again, critical pre-earthquake and certainly critical
22
post-earthquake.
23
Q.
24
loan move forward?
25
A.
So, what happened then?
But then post-earthquake, we
After the earthquake, how did the
Sure.
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So, we had done a site visit to InnoVida's factory
here in south Florida.
Q.
When you say "we," who are you talking about?
A.
Lynn and myself, Lynn Tabernacki.
Q.
Did you travel to Miami?
A.
We did.
Q.
Did you meet with anyone?
A.
We did.
InnoVida, met with Mr. Toll, the CFO, were introduced to others
We met with Mr. Osorio, the president and CEO of
10
in the office who I don't recall their names, but had toured
11
that and the factory site.
12
Q.
Do you see Mr. Toll in the courtroom today?
13
A.
I do.
14
Q.
Can you point him out and identify something that he's
15
wearing?
16
A.
He's wearing a blue suit and a maroon tie (indicating).
17
Q.
How long was your visit when you came down to Miami?
18
A.
I believe it was for just the day.
19
Q.
And what did you visit?
20
A.
The actual factory site.
21
Q.
What did you see?
22
A.
So, the front of the building is where the general offices
23
were, as well as a conference room, where we had spent most of
24
the day.
25
floor, where they had a number of tables that manufacture these
Tell us.
The back of the building was the actual factory

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composite panels.
Q.
Okay.
A.
Yes.
Q.
By whom, do you remember?
A.
Mr. Osorio and Mr. Toll.
Q.
Now, after that visit to Miami in January, 2010, how did
you come away feeling from that meeting?
A.
out whether the company that has approached you for a project
10
is a real entity in doing what they say that they're doing and
11
what they can do.
12
Miami, having seen their offices, having seen the actual
13
production of panels, was that InnoVida was a company that was
14
doing what they said they could do.
15
Q.
16
fact, can you tell the members of the jury, how soon after the
17
earthquake was your visit to Miami?
18
A.
19
within a week.
20
Q.
21
What happened?
22
A.
23
then to move the project through our process, at that point,
24
which would include our credit underwriting process as well as
25
our policy process.
Were you given a tour?
I -- one of the purposes of diligence is to try and figure
And so, my initial feeling coming back from
Now, after your visit in Miami, in January, 2010 -- in
I don't recall.
Do you remember?
It was -- number of days, may have been
I don't recall.
So, after your visit to Miami, Mr. Alford, what did you do?
So, Lynn and I went back to Washington, and we continued

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And once we obtained approval for that, then executed
what we referred to as a commitment letter, which sets out the
basic parameters of a financing transaction.
Q.
and then the policy process.
A.
Correct.
Q.
Can you tell the members of the jury, what's involved in
the credit underwriting process?
A.
10
You said you had a credit underwriting policy -- process,
Sure.
So, credit underwriting process is trying to determine
11
whether the entity that you're financing is worthwhile, that
12
they would be good for the loan, if you will, not dissimilar to
13
a bank underwriting me for a credit card or a home loan or
14
anything like that.
15
Q.
So, what do you look at in making that evaluation?
16
A.
Sure.
17
So, we're looking at the entities themselves, their
18
operating history, their size in terms of assets, looking at
19
their revenues, looking at the overall financial condition of
20
the proposed borrower.
21
Q.
Were you involved in that?
22
A.
I'm involved as a member of the project team and certainly
23
involved in the formulation of the credit paper and the
24
approval process.
25
made by Lynn on the finance side.
But the actual underwriting decisions are

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Q.
Now, what documents would you review in evaluating a
company, or in this case, InnoVida, as a potential borrower
from OPIC?
A.
again, going to structure, as I was saying before, trying to
get an understanding of the company and how it's organized, who
owns what, certainly the financial condition of the company, so
we can be looking at the financial statements, their operating
history.
Well, I think we would evaluate a number of things, right,
10
Q.
Mr. Alford, I'm gonna show you what has been introduced
11
into evidence as Government's Exhibit C(4).
12
with this e-mail?
13
A.
(No response)
14
Q.
Well, let me strike the question and direct your attention,
15
Mr. Alford.
16
that?
17
A.
I do.
18
Q.
And it's from Craig Toll to Lynn Tabernacki, right?
19
A.
Correct.
20
Q.
And attached to the e-mail are several documents.
21
see that?
22
A.
Yes.
23
Q.
Were these documents, Mr. Alford, used in evaluating
24
InnoVida as a potential borrower of OPIC's money?
25
A.
Are you familiar
The e-mail is dated January 28, 2010.
Do you see
Yes.
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1
Q.
Would you tell the members of the jury, how so?
A.
Well, so this sets out the -- one aspect of the financial
condition of the company, so showing its assets and liabilities
and seeing that there's a significant amount of cash and cash
equivalents for assets, for example.
Q.
Okay.
A.
Financial statements and financial condition of a company
is massively important to OPIC in how we analyze any entity.
Q.
Why is it massively important to OPIC?
10
A.
It -- because it's -- it's a linchpin upon which we make a
11
decision whether or not to lend to the entity, or the
12
conditions under which we'd lend.
13
give an unsecured loan.
14
financially healthy, it would be a secured loan.
15
would the loan be?
16
only secured for 50 percent?
17
I say it's massively important.
18
Q.
19
exhibit, C(4), Bate Number ending '3029, the figures
20
represented here, what was the -- what were those figures
21
represented as?
22
A.
23
condition --
24
25
Okay.
How important is this document?
So, whether or not we would
Or if the company wasn't as

How secured
Would it be fully secured, over secured,

It would depend.
So, that's why
Now, with respect to -- and let's focus on this
So, these figures were represented as the financial
MR. SHARPSTEIN:
question, would call for hearsay, I believe.

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2
THE COURT:
He can testify to what his interpretation
of it was.
Overruled.
Q.
Go ahead, sir.
A.
Could you please ask the question again?
Q.
Sure.
Looking at this particular page, Bate Number ending
'3029, what were these -- or was this document in particular
10
represented to be?
11
A.
12
of InnoVida Holdings.
13
Q.
Okay.
14
A.
As of two periods.
15
and then showing a comparison to the period ending December 31,
16
2008.
17
Q.
18
figures represented true and accurate and complete figures
19
related to InnoVida?
So, this document is representing the financial condition
As of period ending September 30, 2009,
And was it your understanding, Mr. Alford, that these
20
21
As of what date?
MR. SHARPSTEIN:
question.
22
THE COURT:
Overruled.
23
A.
Yes.
24
Q.
Had they not been complete, what would happen?
25
A.
We would have sought for complete financial statements.

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Q.
And in this particular circumstances (sic), was this the
only document -- or, rather, was this document submitted on
January 28, 2010, the document submitted to OPIC as true and
correct figures of InnoVida?
A.
Can you restate the question, please?
Q.
I'll go on to the next page.
A.
Okay.
Q.
Which is gonna be Bate Number 0003031 from the same
exhibit, C(4).
Sorry.
And looking here, this is the combined
10
statement of operations.
Do you see that?
11
A.
I do.
12
Q.
And at the bottom, Mr. Alford, is net income, right?
13
A.
Correct.
14
Q.
And there's a figure of $9,574,152 for the period ending
15
September 30, 2009, right?
16
A.
Correct.
17
Q.
What was your understanding of what this particular figure
18
represented?
19
A.
20
earned for the year ending September 30, 2009.
21
Q.
22
December 31, 2008, the figure of $6,615,640, what was your
23
understanding of that particular number?
24
A.
25
date.
So, this figure represented the profit that InnoVida had
And for the period ending September -- I'm sorry --
Again, that that's the profit of InnoVida as of that end

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Q.
That particular date, right (indicating)?
A.
Correct.
Q.
Now, you did, in fact, move forward with a loan with
InnoVida, correct?
A.
Yes.
Q.
Do you recall the date of the loan -- the loan agreement,
rather?
A.
recall the specific date.
I do not.
I believe it was March of 2010, but I don't
10
Q.
I'm gonna show you what has been introduced as Government's
11
Exhibit 7A.
12
Holdings, LLC, InnoVida Innorez, Limited, and Overseas Private
13
Investment Corporation."
14
entered into between OPIC and InnoVida?
15
A.
Yes.
16
Q.
Now, can you tell the members of the jury, who did you work
17
with in coming to this final loan agreement?
18
with?
19
A.
20
negotiation between our side and the other side, InnoVida in
21
this case.
22
against their attorneys at Shutts & Bowen.
23
have collective conversations that would include the business
24
people, because certainly on the legal side, we don't decide
25
the business points.
It has "loan agreement between InnoVida
Is this the loan agreement that was
Who did you work
So, the loan agreement, like any loan agreement, a
So, on the legal side, I would often negotiate

Sometimes we would
That's up to Lynn and then the business

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folks at InnoVida.
Q.
Who in Shutts & Bowen did you work with?
A.
Alfred Smith.
Q.
Now, Mr. Alford, just directing your attention to Bate
Number ending '1648 of Exhibit 7A, it talks about financial
condition.
A.
I do.
Q.
Then it references:
Do you see that?
"The parent company's unaudited financial
10
statements, dated September 30, 2009, which have been
11
furnished to OPIC, and any other financial statements
12
that have been furnished to OPIC pursuant to
13
Section 6.06, are complete and correct and fairly
14
present its financial condition and results of its
15
operations for the period then ended."
16
What does that section, Mr. Alford, mean?
17
A.
So, what we're asking is, in this case, InnoVida Holdings
18
to represent that the financial statements they've shown us --
19
the document that was previously up -- is completely and
20
accurately reflecting the financial condition of the company.
21
Q.
22
Was it important to OPIC to see InnoVida's financial condition
23
as of September 30, 2009?
24
A.
Yes.
25
Q.
Okay.
Why is it important to see InnoVida's -- or let me ask you.
Why so?
Why was it important?

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A.
understanding the financial condition of the company is
extremely important to OPIC to know what it is that we're
financing and the health of the company that we're financing to
help ensure repayment.
Q.
you about the three words, "unaudited pro forma," that we see
at the top of the page.
A.
I do.
10
Q.
Do those words mean anything to you?
11
A.
Mostly that they're the unaudited financial statements of
12
the company.
13
Q.
Okay.
14
A.
Which I -- most entities prepare, unaudited financial
15
statements.
16
Q.
17
financial statements," what are you talking about?
18
A.
19
Well, as -- as I think I stated before, the --
Now, I want to take you back to Exhibit C(4).
And just ask
Do you see that?
And when you say "most companies prepare unaudited
Sure.
So, management of an entity would prepare financial
20
statements to show the financial health of a company on an
21
ongoing basis.
22
not checked by an external party.
23
right, companies then are audited by external auditors, who
24
look at those financial statements, as well.
25
Q.
Right?
Those are unaudited, meaning they're

And then on an annual basis,
Now, with respect to an unaudited financial statement, is

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it your understanding that an unaudited financial statement
should contain accurate information?
A.
Yes.
Q.
Why so?
A.
Why would it otherwise?
Q.
Is it something -- unaudited financial statement, are those
statements used by OPIC?
A.
Absolutely.
Q.
Are they relied upon by OPIC?
10
A.
Absolutely.
11
Q.
Now, the two words "pro forma" here, did those two words
12
mean anything to you?
13
A.
Meaning in the form of.
14
Q.
And when you say "in the form of," did -- back in 2010, did
15
those words mean anything to you?
16
A.
Not that I recall, no.
17
Q.
Okay.
18
Smith?
19
A.
20
Q.
Did you believe, sir, that the financial statements
21
provided to you back in 2010 -- and, in particular,
22
Exhibit C(4) -- did you believe that those particular financial
23
statements met the requirements of the loan agreement?
24
A.
Yes.
25
Q.
Okay.
Were those two words ever discussed with Alfred
Why did you think that?

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A.
Those were what were furnished to us, and based on the
representation that we looked at before, that the company was
certifying that those financial statements were --
4
5
MR. SHARPSTEIN:
Objection.
Objection.
Move to
strike.
THE COURT:
Overruled.
Q.
Go ahead, sir.
A.
That those financial statements were a complete, fair, and
10
accurate -- I don't remember the specific wording -- reflection
11
of the financial condition of the company.
12
Q.
13
were not the only financial statements that OPIC received from
14
InnoVida, right?
15
A.
Correct.
16
Q.
In fact, your loan agreement calls for, in
17
Section 6.06(a)(1):
Now, the financial statements that we see in Exhibit C(4)
18
"Within 90 days after the end of each fiscal
19
quarter (other than the fourth fiscal quarter) of each
20
fiscal year, unaudited consolidated financial
21
statements for the parent company and a comparison
22
between such financial statements and the budget for
23
such fiscal quarter furnished pursuant to 6.06, all
24
certified by the chief financial officer of the parent
25
company as being complete and correct, together with

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such officer's certificate."
Would you tell the members of the jury what that
particular section of the loan agreement meant?
A.
Sure.
So, that means that every quarter, so within -- we'll
say in this case at the end of March, right, within 90 days of
that, the parent company needs to submit to us a copy of their
consolidated financial statements, again unaudited, but
prepared internally by management, and that that's certified by
10
the CFO as being complete and correct.
11
Q.
12
the financial statements being provided to you were, in fact,
13
complete and correct?
14
A.
15
this section.
16
Q.
17
'0750.
18
A.
Yes.
19
Q.
And here, it reads:
20
Did you receive certifications from anyone at InnoVida that
I don't recall specifically pursuant to this -- pursuant to
Just look at what -- from Exhibit C(13), Bate Number ending

Are you familiar with this document?
"I, Craig Toll, the chief financial officer of
21
InnoVida Innorez, Limited, a company organized and
22
existing under the laws of the Cayman Islands (the
23
borrower), do hereby certify that:
24
"A, I am familiar with the terms of the loan agreement
25
between, among others, the borrower and Overseas
One" -- or rather,

(954)769-5657
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1
Private Investment Corporation (OPIC), dated as of
March 9, 2010 (as amended, 'the loan agreement')...
"and, B, I have read the covenants, representations,
warranties, and agreements of the borrower contained
in the loan agreement and have been represented by
counsel in connection with the loan agreement; C, I
have made or caused to be made such examination or
investigation as is necessary to enable me to express
an informed opinion as to the matters set forth
10
below."
11
"And pursuant to Section 5.05 of the loan
12
agreement do hereby certify that:
13
representations and warranties set forth in
14
Article III of the loan agreement are true and correct
15
in all material respects on the date hereof as if made
16
on the date hereof, and no event of default, and no
17
event or condition which with lapse of time or the
18
giving of notice, or both, would constitute an event
19
of default exists on the date hereof."
20
One, the
How important was this closing certificate,
21
Mr. Alford?
22
A.
23
disbursement of an OPIC loan, that the borrower makes these
24
certifications.
25
Q.
It is important.
Okay.
This is a condition that we have for any
And in this particular certification, is Craig Toll

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signing on behalf of InnoVida Innorez?
Right?
A.
Correct.
Q.
And InnoVida Innorez was one of the borrowers under the
loan agreement, right?
A.
Correct.
Q.
And pursuant to this certification, Mr. Toll is certifying
that the information -- the representation and warranties are
true and correct in all material respects, right?
A.
Correct.
10
Q.
Now, going back to subsequent financial statements, looking
11
at Exhibit C(11), do you recall that this financial statement
12
was also one provided by InnoVida to OPIC?
13
A.
14
consistent with financial statements that were furnished to
15
OPIC.
16
Q.
17
statement, again, the words "unaudited pro forma."
18
that?
19
A.
I do.
20
Q.
And just looking on this page, are there any disclosures on
21
this page, Mr. Alford?
22
A.
Meaning other than --
23
Q.
Are there any footnotes?
24
A.
No.
25
Q.
Are there any other notations on this page?
I don't recall this one specifically, but it looks
Okay.
Now, at the top of this particular financial

Do you see

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A.
No, not that I see.
Q.
Again, Mr. Alford, what was your understanding of the
financial statements that were being provided to OPIC pursuant
to the loan agreement?
A.
financial condition of the company.
Q.
The actual financial condition of the company.
A.
Correct.
Q.
Looking now at Exhibit C(22), this is now a balance sheet
That those financial statements are reflecting the
10
ending now March 31, 2010.
Are there any footnotes anywhere on
11
this document?
12
A.
No.
13
Q.
And looking at Bate Number ending 001788, which is now the
14
combined statement of operations for InnoVida Holdings, LLC,
15
any footnotes, any notations on this particular document?
16
A.
No.
17
Q.
This is for the period ending March 31, 2010, right?
18
A.
Correct.
19
Q.
So, looking at this particular statement, would you tell
20
the members of the jury, what are you thinking when you see
21
this statement?
22
A.
23
quarter of 2010.
24
Q.
25
fact, a good risk for OPIC's monies?
That the company is still making a profit in the first
Are you thinking then, Mr. Alford, that InnoVida is, in

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A.
take on OPIC debt and repay it.
Q.
Mr. Alford, what is the process by which a loan is approved at
OPIC?
A.
It's a profitable company and looks to have the ability to
Okay.
Would you explain to the members of the jury,
Sure.
So, a -- when a prospective borrower comes to OPIC,
and they present what their project is, they will file an
application asking for exactly how much they're seeking for a
10
loan and what the proceeds of the loan would be used for.
11
Q.
Um-hum.
12
A.
Then the project team would undertake with the borrower to
13
look at the project, try and understand it, as I said before,
14
trying to understand the company, what the proceeds would be
15
used for, the financial condition of the company, and do that
16
credit underwriting and legal underwriting, and present it for
17
approval to -- the approval process will vary slightly on the
18
size of the loan.
19
a commitment.
20
with the borrower, which, again, must be approved within OPIC.
21
And then, finally, a disbursement.
22
Q.
23
from OPIC was $10 million.
24
A.
Correct.
25
Q.
All right.
And then once approved, then take it through
And then after that, negotiate a loan agreement
The amount of money that InnoVida was seeking to obtain

Now, who approves a loan up to that $10 million

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185
100
mark?
A.
small/medium enterprise finance, and then the director of
credit policy.
Q.
Above that mark, does the approval process differ?
A.
It does.
the process, so similar in terms of underwriting and
presentation of a credit paper.
what we call our investment committee, which is chaired by our
So, at that time, approval was with the vice president for
The credit approval would be the first part of
But then it would move on to
10
president and CEO, which approves that.
And then, again, if
11
the loan is beyond a certain size, then it also goes to our
12
board of directors for approval.
13
Q.
14
monies come from to fund that loan?
15
A.
16
loan.
17
Q.
18
OPIC with respect to disclosures to be made on the financial
19
statements of InnoVida?
20
A.
21
delivery of audited financial statements, but no other waiver
22
that I'm aware of.
23
Q.
24
there are going to be any, that's addressed in Section 9.06,
25
right?
Now, a loan of up to that $10 million mark, where do the
So, in this case, we're using what we refer to as a direct

So, we draw from the U.S. Treasury to finance that loan.
To your knowledge, Mr. Alford, were there any waivers by
There was a waiver in connection with the timing of the
Okay.
In fact, your loan agreement calls for waivers, if

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101
A.
Correct.
Q.
And we're looking at Bate Number ending '1670, again, from
Exhibit 7A.
A.
only in writing, signed by the parties, so OPIC and the two
borrowers.
Q.
to the disclosures to be made in the financial statements
submitted by InnoVida?
And what does it say here about waivers?
It says that the provisions of the agreements may be waived
What -- do you know of any waivers in writing with respect
10
A.
Again, other than with respect to the timing of delivery of
11
audited financial statements, no, I'm not aware of any.
12
Q.
13
financial statements now of InnoVida.
Let's talk about the unaudited -- sorry -- the audited
14
You said there was a waiver, right?
15
A.
Correct.
16
Q.
And what did that waiver pertain to?
17
A.
The waiver had to do with when those audited financial
18
statements were due to OPIC.
19
Q.
20
OPIC?
MR. SHARPSTEIN:
21
22
How important were the audited financial statements to
question.
23
THE COURT:
Overruled.
24
A.
Could you repeat the question, please?
25
Q.
Sure.
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185
102
Were the audited financial statements important to
OPIC?
A.
requirements, we require audited financial statements, again,
an external party who's auditing and vouching for the financial
statements.
Q.
monies are disbursed?
A.
No, not always.
10
Q.
What circumstances are they not required?
11
A.
It may be that the entities don't have enough operating
12
history, that then would warrant audited financial statements.
13
Q.
14
that there was an extension of the audited financial statements
15
to the date?
16
A.
17
was having its financial statements audited, and that given
18
it's worldwide operations, there were issues of coordinating, I
19
believe even a holiday with respect to one of their -- one of
20
their subsidiaries.
21
longer than expected.
22
that time.
23
Q.
24
a later date, right?
25
A.
Sure.
As in any OPIC transaction, as you saw from the
Now, are audited financial statements required before any
In this particular circumstance, do you know why it was
My recollection is that it was the first time that InnoVida
And so, it was just taking longer -And so, we granted a waiver to extend
So, you were expecting the audited financial statements at
Correct.
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103
Q.
Now, did you ever get any information with respect to the
company that InnoVida had engaged its services for that audited
financial statement?
A.
Yes.
Q.
Who was that?
A.
I don't recall.
Q.
Is the name Ernst & Young familiar to you?
A.
It is.
Q.
What was your understanding of who -- what Ernst & Young
10
was gonna be doing?
11
A.
12
financial statements.
13
Q.
14
InnoVida?
15
A.
16
Q.
Now, the first disbursement, do you recall how much that
17
was for?
18
A.
I believe 3.3 million.
19
Q.
And would you tell the members of the jury, how was that
20
money to be spent by InnoVida?
21
A.
22
materials necessary to make panels at its factory in the U.S.,
23
to then be shipped to Haiti for the construction of low-income
24
housing.
25
Q.
So, Ernst & Young was to perform the audit of the company's
Okay.
Did OPIC ever get audited financial statements from
That money was to be used to purchase the supplies and
The initial request, do you recall how much that was?

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initial request, the very first request.
A.
I don't, no.
Q.
Okay.
Five million.
A.
It may have been, yes.
Q.
Now -- well, let me ask you this question.
whether or not there was a reduction in the amount of money
being sought by InnoVida from that first request to an amended
request?
Is the amount five million familiar to you?
10
A.
11
did come in at a higher amount, and we did have discussion
12
about that.
13
not comfortable that the amount could be used towards the
14
construction of the factory at that time.
15
reduced to just go towards the shipment of panels.
16
Q.
Shipment of panels to build houses, homes, right?
17
A.
Correct.
18
Q.
Now, were you aware, Mr. Alford, of any issues with respect
19
to eminent domain in Haiti?
20
A.
Yes.
21
Q.
Would you tell the members of the jury, what were those
22
issues?
23
A.
24
25
There was.
Do you know
There was a discussion with the company.
It
Primarily centered around the fact that we were
And so, it was
There are land issues in Haiti.
Sure.
So, issues in Haiti with respect to having title to
property, as well as the ability of the government to come in

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and take property.
It's a problem actually not unique to
Haiti, and OPIC often faces it in developing countries in which
it works.
Q.
any impact upon the loan agreement entered into between OPIC
and InnoVida?
A.
the company, InnoVida, for the construction of this factory.
And certainly we would have to settle any land issues about the
Now, the question of eminent domain in Haiti, did that have
It did, in that what OPIC was looking to do was to finance
10
site of the factory itself, whether it was to be leased,
11
whether it was to be bought, the land, that is, was to be
12
bought, where the factory would be -- would be placed.
13
Q.
14
to ship panels to Miami, was there an issue with respect to
15
eminent domain as it related to that particular objective of
16
the project?
17
A.
18
the panels would go to Haiti.
19
as the offtakers, or the NGOs, and the other entities, right,
20
which would take the panels from InnoVida and then try and
21
deploy them in the way that made the most sense to get the
22
houses in place for the people of Haiti.
23
Q.
24
an issue for InnoVida, or would that be an issue with respect
25
to the nongovernmental organizations?
But with respect to the panels and that first disbursement
No, in that the -- right, we would finance the panels, and

And then the -- what we refer to
So, with respect to the issue of eminent domain, was that
The offtakers as you

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say.
A.
Sure.
Principally an issue for the offtakers.
Q.
Why do you say that?
A.
Because when they're purchasing the panels for the
construction of the homes, and they then have the panels,
right, it is those offtakers that need to identify the sites
where they can put them, which then gets into the land issues
about whether there's sufficient title, whether there's the
10
risk of eminent domain from the government, depending on the
11
area, and then how that NGO, or the offtaker, then either sells
12
or donates the houses to the families that would occupy them.
13
Q.
14
it had contracts for offtakers, as you say?
15
A.
16
that we were financing was the construction of a factory to
17
build things.
18
to be able to repay the loan was if somebody bought the things
19
that they built.
20
was part of the security package and assigned to OPIC.
21
Q.
22
producing panels, right?
23
A.
Um-hum, yes.
24
Q.
Were the NGOs, the nongovernment organizations, also
25
important with respect to InnoVida shipping the panels from
Now, how important was it that InnoVida show to OPIC that
It was important to OPIC.
I mean that was -- the project
Obviously, the only way that InnoVida was going
And so, it was important.
Which is why it
Well, you talked about the factory and the factory in Haiti

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Miami to Haiti?
A.
Sure.
It was important to know that there was a use for the
things that we were financing.
Q.
And that use would come from where?
A.
Come from the offtakers, or NGOs, whoever they would be,
who would purchase the panels and then deploy the homes.
Q.
Now, is World Vision an -- what you call an offtaker?
A.
Yes.
10
Q.
Were you aware, sir, in the time that you were dealing with
11
InnoVida of any relationship between World Vision and InnoVida?
12
A.
Yes.
13
Q.
Okay.
14
was.
15
A.
Would you tell the members of the jury what that
Sure.
16
We -- one of the things that we required as proof in
17
connection with our disbursements was evidence of these
18
contracts for the off-tank arrangements.
19
furnished to OPIC was a statement saying that World Vision
20
would purchase -- I don't recall the specific number, but some
21
number of panels for use in Haiti.
22
Q.
You actually saw a document from InnoVida?
23
A.
Yes.
24
And one of the things
25
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Q.
a document that you saw?
A.
It is.
Q.
And what did you think of this particular e-mail and the
contract that -- well, let me ask, what did you think of this
particular e-mail when you got it?
A.
finding offtakers in Haiti.
Looking at Exhibit C(18), Bate Number ending '0484, is this
That it was showing that InnoVida was getting traction in
10
Q.
Now, with respect to assignments, okay, explain to the
11
members of the jury, did InnoVida -- if InnoVida acquired a
12
contract for an offtaker, what role would OPIC have with
13
respect to that particular contract?
14
A.
Right.
15
So, we had required that -- we were assigned rights in
16
those project agreements.
17
looking towards is the payment right, so that if -- if there
18
was trouble with InnoVida's ability to pay, and there was still
19
a payable from that offtaker, that we could take that directly.
20
Q.
21
was this a possible contract where OPIC would be assigned
22
rights?
23
A.
24
contract we'd expect to see.
25
Q.
Okay.
And principally there what we're
So, when you saw this particular e-mail, Mr. Alford,
It is an agreement.
I would -- not usually the form of
Why do you say that?

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A.
Well, usually a contract is, uhm, like our loan agreement,
setting out the specifics, not just with respect to the number,
but also the representations the parties are making or what
their agreements are in covenants and what the defaults are.
Q.
And did you receive any such documentation?
A.
With respect to World Vision?
Q.
Now, Mr. Alford, are you familiar, also, with a company by
the name of Royal Caribbean Cruise Lines?
A.
I am.
10
Q.
Would you tell the members of the jury how it is that
11
you're familiar with that.
12
A.
Sure.
13
So, InnoVida had also, uhm, had an agreement with
14
Royal Caribbean to build something for Royal Caribbean, not in
15
and around -- or I believe on the north shore of Haiti.
16
project wasn't specifically part of the OPIC financing, as it
17
didn't entail housing, which is what we were principally
18
looking to do.
19
and so certainly aware of it.
20
21
But we would receive updates on the project,
MS. FOSTER-STEERS:
May I have just a moment, your
Honor?
22
THE COURT:
23
24
MS. FOSTER-STEERS:
25
That
All right.
Honor.
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THE COURT:
Cross-examination.
2
3
4
CROSS-EXAMINATION
BY MR. SHARPSTEIN:
Q.
Good afternoon --
MR. SHARPSTEIN:
BY MR. SHARPSTEIN:
Q.
Good afternoon, Mr. Alford.
8
9
Now, so the jury understands, you're a lawyer,

correct?
10
A.
Correct.
11
Q.
And you were a lawyer for OPIC in 2009?
12
started?
13
A.
2007 is when I started.
14
Q.
2007.
15
A.
Correct.
16
Q.
And you graduated law school in '01, is that it?
17
A.
Correct.
18
Q.
And then I think you said you worked for a large law firm
19
in D.C.
20
A.
A -- multiple offices, but starting in D.C., correct.
21
Q.
What was the name of that firm?
22
A.
Jones Day.
23
Q.
Jones Day?
24
A.
Yes.
25
Q.
One of the biggest law firms in the world.
Is that when you

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ALFORD - CROSS/SHARPSTEIN
A.
Correct.
Q.
Has offices all around the world.
A.
That it does.
Q.
And you worked in their structured finance group?
A.
It was termed "lending and structured finance," yes.
focused on the structured finance piece, but that was the name
of the group.
Q.
and banks around the world, correct?
Sophisticated lending transactions, involved with entities
10
A.
Correct.
11
Q.
And how long did you do that kind of work?
12
A.
From graduation until February of 2007.
13
Q.
So, that's about six years?
14
A.
Not quite.
15
Q.
Five or six years?
16
A.
Correct.
17
Q.
So, were you working on sophisticated transactions?
18
A.
I was.
19
Q.
What type of work were you doing?
20
A.
I was doing, uhm, a lot of derivatives work.
21
Q.
What -- the jury may not understand -- I don't -- what's
22
derivative work?
23
A.
24
25
Sure.
So, you may be familiar with swaps, where you're
trying to -FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER

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112
Q.
Not really.
A.
Sure.
Why don't you break it down a little.
Where you're trying to cover certain risks, it might
be that you have a currency mismatch, where you've taken a loan
that you owe in dollars, but you earn your revenue in Japanese
yen.
you'll exchange the yen you receive for the dollars you need to
pay the loan.
Q.
And so, you enter into an agreement with a bank where
So, I take it that over that five years at Jones Day, you
10
looked at a lot of financial statements from companies,
11
correct?
12
A.
No, not particularly.
13
Q.
No?
14
A.
No.
15
Q.
What was your work?
16
what was your physical job in the course of these deals you
17
worked on at Jones Day?
18
A.
19
whether it was as the derivative transaction or other
20
obligations that were usually put together with newly formed
21
entities.
22
manufacturing entities.
23
Q.
24
to see what type of business they were, correct?
25
A.
What did you look at when you were --
So, we were -- I was structuring the specific transactions,
I rarely dealt with operating entities or
So, you were looking into operating manufacturing entities
No.
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Q.
Well, what did you do?
A.
(No response)
Q.
What kind of due diligence were you involved in then, in
regard to the derivative swaps that you've been talking about?
A.
sophisticated banks, uhm, the level of diligence would often
rely largely on the representations that the banks were making.
Q.
you didn't look behind it, you just took it for what it was,
So, with respect to, say, a transaction against two
Well, are you saying you took a representation of a bank,
10
and you did nothing more, is that it?
11
A.
12
correct.
13
Q.
14
was your job there in 2007 when you first arrived?
15
A.
16
counsel, to assist on the transactions that we do.
17
Q.
18
documents and things like that, to determine whether or not the
19
government, OPIC, should loan money to a particular company,
20
right?
21
A.
Part of my job, absolutely.
22
Q.
And the determining whether or not a company -- and the
23
prosecutor used this word -- was a good risk, right?
24
A.
Yes.
25
Q.
And -- by the way, let's tie this up, and then come back to
For my small piece of the transaction, that was my role,
So, you -- eventually, you come to work for OPIC, and what
My job then, as is what it is today, as assistant general
To look at a particular transaction, to look behind

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the beginning.
But OPIC loaned 3.3 million to InnoVida, and
InnoVida paid interest on that loan, did it not?
A.
I believe so, yes.
Q.
You believe so or you know?
A.
As far as I'm aware, they made their interest payments.
believe the September one was late, but it was ultimately paid.
Q.
in June of 2010, correct?
A.
Again, I believe that's correct, yes.
10
Q.
Well, did you -- didn't you make a statement to the FBI on
11
October 4, 2011?
12
A.
I don't recall the specific date.
13
Q.
Do you remember giving an interview telephonically, with
14
your lawyer there, to the prosecutor and the FBI agent?
15
A.
I do.
16
Q.
And you remember specifically telling them that OPIC was
17
paid by InnoVida 70,000 in June, 70,000 in September, and
18
70,000 in November of 2010, right?
19
A.
20
interview.
21
Q.
22
here today?
23
A.
Yes.
24
Q.
So, what are you saying?
25
A.
As far as I'm aware, they did make the payments.
Well, you know that they made interest payments of $70,000
I do not specifically recall saying that as part of the
Well, have you looked at the file when you came to testify
Did they pay or didn't they pay?

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Q.
So, they weren't -- that was -- they were up to date on
their loans through November of 2010, right?
A.
Yes.
Q.
And then you called it off in January of 2011, right?
You -- the default.
A.
OPIC, correct.
Q.
Okay.
8
9
So, let's go back to the beginning.
Now, you said in December of 2009, you were assigned

this file because it had already gotten through finance and was
10
ready to go?
11
A.
No.
12
Q.
What did you say?
13
A.
Sure.
14
I just wrote down some words here.
So, when a project comes to our finance team, and
15
they've evaluated it and think that they will take it forward
16
through the diligence process, through the underwriting
17
process, then they ask for a lawyer to be assigned.
18
was the point at which I was assigned.
19
Q.
20
This was initially when OPIC came to you, through Mr. Osorio
21
and met with OPIC and was discussing building homes in Haiti
22
even before the earthquake, right?
23
A.
Correct.
24
Q.
So, in December, '09, you're looking into that project as a
25
lawyer?
So that
We see in December of 2009, a hurricane hadn't occurred.

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A.
Correct.
Q.
And I believe that ended up with, in middle of December,
Ms. Tabernacki, or you, writing a letter to the company asking
for a $20,000 retainer, which was never executed, correct?
A.
I don't recall.
Q.
You don't recall that?
A.
I don't, no.
Q.
Have you discussed that recently or anything, to refresh
your recollection?
10
A.
No.
11
Q.
And then what happened was the heart -- the earthquake hit,
12
the horrible disaster in Haiti.
13
OPIC in a big way, right?
14
A.
What do you mean by that?
15
Q.
Well, didn't -- wasn't there a trip to Haiti with
16
President Clinton and Wesley Clark and the president of Haiti,
17
and a big push that InnoVida was gonna go there and build
18
houses?
19
A.
That was my understanding, yes.
20
Q.
And as a matter of fact, president -- the former
21
President Clinton was backing this company InnoVida, isn't that
22
right?
23
A.
24
Initiative.
25
backing from the ex-president.
And you -- InnoVida came to
I'm aware that InnoVida had been part of the Clinton Global
But I don't know that there was any specific

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117
Q.
Well, we're gonna get to that in a minute, but you went to
the meeting down in Miami, you said, right?
A.
Meeting with the company, yes.
Q.
In an office building, in a conference room in an office,
right?
A.
Correct.
Q.
There were a lot of pictures of Mr. Osorio around with
president -- former President Clinton, the current
President Obama, right?
10
A.
There were many pictures of Mr. Osorio with various
11
celebrities and politicians, but I don't recall specific
12
persons.
13
Q.
Well, he -- sorry.
14
If I've interrupted you, just tell me.
But during the course of that meeting, you were there
15
all day with Ms. Tabernacki, weren't you?
16
A.
Yes.
17
Q.
That was on January 21, 2010, right?
18
A.
I believe so.
19
Q.
And at that time, you hadn't received any financial
20
statements from the company, correct?
21
A.
I don't recall whether we had received it before.
22
Q.
Let me just -- well, you don't recall.
23
a minute.
24
25
And you were there all day.
I'll get to that in
Mr. Osorio put on
somewhat of a presentation for you, isn't that right?

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A.
He made a presentation about InnoVida, correct.
Q.
Do you remember who else was with him?
mentioned Mr. Toll.
A.
Yeah, Mr. Toll.
Q.
And his wife, Amarilis, who was leading the tour at the
factory, isn't that right?
A.
meeting.
the tour.
I recall meeting Amarilis.
I know you
She was in and out of the
I don't remember her being there all day or leading
10
Q.
Well, part of the discussion was Mr. Osorio's connections
11
with the Clintons, right?
12
A.
I don't recall that specifically.
13
Q.
Remember him telling you that they had met with Bill
14
Clinton just that prior Tuesday and were directly involved in
15
setting up, financing for the NGO to build the houses, to buy
16
the houses?
17
A.
18
that InnoVida was involved with the big push and a number of
19
organizations going down to Haiti to make a difference.
20
don't specifically recall the reference to --
21
Q.
22
something, Hillary Clinton, the Secretary of State, responds
23
immediately?
24
A.
No.
25
Q.
He told you that Wesley Clark, a former general of the
I remember that it was part of the overall conversation
Do you remember him telling you that when he wanted

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United States, was offering military support to bring down in
cargo -- military cargo planes some of the paraphernalia to
build the factory and to ship the panels.
A.
Again, I don't recall that specifically.
Q.
Well, you go there on the 21st, and there was significant
pressure on you from people in the government to move this loan
and get something going down in Haiti, isn't that right?
A.
There was --
Were we being directed to do something specifically?
10
Q.
Any -- go ahead, finish your answer.
11
A.
I'm sorry.
12
No.
There was an imperative to move quickly, because we
13
had a project that could be responsive to a specific need.
But
14
in terms of any direct pressure, no.
15
Q.
And so, you moved quickly, didn't you?
16
A.
We did.
17
Q.
I mean you've been at OPIC for a while now.
18
it generally take for an OPIC loan to get processed of this
19
size, $10 million?
20
A.
It could take many months, up to a year, sometimes longer.
21
Q.
This one took about five days?
22
A.
I believe two weeks from the time of the earthquake until
23
the commitment letter.
24
had come in before the earthquake.
25
Q.
How long does
And, of course, recall that the project
In December of '09, for ten minutes, is that right?

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A.
(No response)
Q.
I withdraw that.
You go down there, you visit, you look at the place,
January 21st of 2010.
commitment letter that you were talking about?
A.
Correct.
Q.
January 26, 2010.
8
9
And in evidence is C(5).
This is the
So, OPIC has committed to make this loan to the

borrower, Claudio Osorio, who acknowledges and agrees to his
10
obligations hereunder, five days after the meeting, right?
11
A.
Assuming the 21st date is correct, yes.
12
Q.
And it's -- this is in evidence, Exhibit 5, C(5).
13
there's Mr. Osorio signing for InnoVida, right?
14
A.
Correct.
15
Q.
And, in fact, C(4), which the prosecutor has shown you, the
16
first time that you get any financials from the company,
17
January 28th, two days later, right?
18
A.
That was what was on the prior e-mail, yes.
19
Q.
Let's take a look at C(4).
20
see the whole -- this is January 28th, two days later, after
21
the commitment is already signed, and it's to -- it's from
22
Craig Toll to Lynn Tabernacki, cc Osorio, press release and
23
financials.
24
25
And
This is -- back it up so we can
"Please let me know" -- this is Craig Toll to

Ms. Tabernacki -- "Please let me know when the press
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release is issued."
So, you were already ready to issue a press release on
this, correct?
A.
Q.
With respect to the commitment, correct.

"I also attach our consolidated unaudited
September 30th financials.
I would be pleased to
answer any questions you have on them.
from Mr. Toll.
Now, is -- did you get these financials, the ones that
Regards,"
10
the prosecutor showed you that were attached hereto?
11
A.
I did receive them and then become aware of them, yes.
12
Q.
Well, you became aware of them.
13
the lawyer?
14
A.
Lynn would have forwarded them on, yes.
15
Q.
Did you look at them?
16
A.
Yes.
17
Q.
Did you read them?
18
A.
Yes.
19
Q.
And other than that, what did you do?
20
A.
Nothing.
21
Q.
You were aware that InnoVida was a large group of companies
22
from around the world, correct?
23
A.
24
group of companies, yes.
25
Q.
Did they come to you as
That InnoVida Holdings was the parent company of a large
And so, the InnoVida -- what -- this comes to you as a

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financial statement.
And it says here:
"InnoVida group of
companies combined balance sheets."
A.
the InnoVida group of companies.
Q.
what?
this something you look at all the time, financial statements
from companies?
A.
Not that I personally look at all the time, no.
10
Q.
But I thought your job was to look at this, to review the
11
financial health of the company.
12
else's?
13
A.
That's part of OPIC's job.
14
Q.
OPIC.
15
A.
So, that's on the finance side particularly, so that would
16
be Lynn Tabernacki.
17
Q.
Finance side.
18
A.
Correct.
19
Q.
Lynn.
20
A.
Um-hum.
21
Q.
Not you.
22
A.
Correct.
23
Q.
Well -- so, what -- unaudited to you, you understood that
24
meant that it was their own financial statement.
25
A.
What did that mean to you?
Mean that it's representing the overall financial health of
Health.
It says the "combined balance sheet."
It means
What does that mean to laypeople that don't do -- is
Was that your job or somebody
Who at OPIC?
Prepared by management.
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Q.
Not audited by a bigger company, right?
A.
Correct.
Q.
And what did "pro forma" mean to you?
A.
As I stated before, I don't think it meant anything to me.
Q.
Nothing.
So, at the time, you didn't look at it, right?
A.
(No response)
Q.
It didn't mean anything to you.
A.
No, "pro forma" did not mean anything to me.
10
Q.
Did you ask any questions about it?
11
A.
12
Q.
Did you call Mr. Toll to ask him what it meant?
13
A.
No.
14
Q.
See, on the e-mail here, it says:
15
"I would be pleased to answer any questions you
16
have on them.
17
Regards, Craig Toll."
So, did you call to ask any questions?
18
A.
Did I call with respect to questions on the financial
19
statements?
20
Q.
Yeah.
21
A.
No.
22
Q.
So, it really wasn't your job to review this financial
23
statement.
24
A.
Correct.
25
Q.
Like ask questions like the cash and cash equivalents of
That was Lynn Tabernacki's job.

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35 million, where is that?
right, you didn't ask anything.
Did you ask that?
Or -- oh, that's
You just read it.
But I think you said -- you told the jury that you
looked at this, and it looks like they have some good financial
health.
A.
That they are an entity with substantial assets, yes.
Q.
Because I think you said you looked at the bottom line
here, on the third page of this, under the September 30th, and
you looked at that bottom line of net income, almost a ten --
Right?
10
nine-and-a-half million dollar profit, right?
11
A.
Yes.
12
Q.
But what if the company -- you said the company made
13
panels, right?
14
A.
Correct.
15
Q.
Did somebody tell you they were making a lot of money from
16
selling the panels?
17
A.
I don't understand the question.
18
Q.
Well, they told you it was a company that at the time was
19
selling factories, the interests in building these factories
20
around the world, right?
21
A.
22
yes.
23
Q.
24
panels?
25
A.
That they built factories that manufactured the panels,
And did anybody tell you they weren't really selling many
I don't recall.
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125
Q.
Well, take a look at the -- this revenue section, where it
says "furnished goods" -- "finished goods" -- I'm sorry.
you see that?
A.
Yes.
Q.
I mean you take a look at it.
of an accountant's eye to see that they made zero from selling
any kind of panels, right?
A.
Correct.
Q.
So, you had this information right there.
Do
It really doesn't take much
Did you want to
10
look behind it or investigate that at all or ask any questions?
11
A.
I don't recall.
12
Q.
So, I guess, as far as you're concerned, this was not your
13
job, the financial statement had nothing to do with you.
14
was Lynn's job, right?
15
A.
16
involved on all aspects.
17
assessments and decisions, yes, on the financial side, that's
18
ultimately Lynn's call.
19
Q.
Was there a press releases that was issued?
20
A.
I believe so.
21
Q.
That OPIC was partnering up with InnoVida to build houses
22
in Haiti.
23
A.
(No response)
24
Q.
Right?
25
A.
I don't recall the specific contents.
That
Again, as a project team member, right, it's my job to be

But in terms of ultimately making

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126
Q.
I didn't see it.
I don't know.
So the jury understands, after the commitment, which
was signed January 26, 2010, then you get involved in the file
to negotiate the actual loan agreement with Shutts & Bowen,
right?
A.
Correct.
Q.
And you dealt with Al Smith at Shutts & Bowen, right?
A.
Correct.
Q.
So that any questions you had, you went to him, right?
10
A.
Yes.
11
Q.
Did you ask him anything at all about the unaudited
12
pro forma financial statements?
13
A.
14
Q.
There was an issue that arose as far as the audited
15
16
company had not had audited financial statements, right?
17
A.
Yes.
18
Q.
Because they were relatively young, hadn't made a nickel
19
selling panels, so they told you they hadn't had anybody audit
20
their financials yet, right?
21
A.
Correct.
22
Q.
But OPIC was willing to stick their neck out and give them
23
their money as a loan, right?
24
A.
OPIC was willing to distribute the loan, yes.
25
Q.
Which, again, because I don't think the jury heard this
You were aware of the fact that this

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enough, they got paid their interest on, right?
$210,000 from
the company, right?
A.
Yes.
Q.
The negotiations also -- and so, to finish off this on the
audited, there was an extension of the time that OPIC was
willing to afford the company to have audited financials,
right?
A.
Correct.
Q.
They -- you were told, through Mr. Smith, that the company
10
was hiring Ernst & Young, right?
11
A.
12
communications were not directly from me through Mr. Smith.
13
certainly had joint communications.
14
phone with Mr. Toll and Mr. Osorio and Mr. Smith.
15
Q.
16
and Mr. Osorio.
17
Young, right?
18
A.
Correct.
19
Q.
That there were some issues and problems that arose along
20
the way.
21
It was something OPIC was willing to do, right?
22
A.
Correct.
23
Q.
And there were issues with the project, the definition of
24
the project, that dealt with the conditions in Haiti, isn't
25
that right?
I don't know that it was through Mr. Smith.
All
We
Lynn and I would be on the
So, from time to time, you were on the phone with Mr. Toll
And you learned that they had hired Ernst &
So, you extended the time for the audited financial.

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128
A.
What do you mean?
Q.
Well, there were some serious political and legal issues in
regard to Haiti after the earthquake, isn't that right?
it dealt with building anything on property.
A.
Yes.
Q.
I mean you talked to Ms. -- the prosecutor here, about the
eminent domain issue.
A.
Um-hum.
Q.
Just so the jury understands, that deals with no one really
When
10
knew who owned the land, right?
11
A.
Correct.
12
Q.
So, how were we gonna build houses or a factory on
13
something if people didn't know they were gonna own it, right?
14
A.
Correct.
15
Q.
And the NGOs, like the Clinton Initiative, World Vision,
16
all had problems.
17
build a house, they had problems.
18
of the governmental and legal issues, right?
19
A.
That's my understanding, yes.
20
Q.
So, along the way, you learned that OPIC -- I mean --
21
excuse me -- that InnoVida partnered up with Royal Caribbean
22
and built a school, right?
23
A.
Yes.
24
Q.
I mean you knew that, right?
25
A.
Yes.
Even though their good intention was to

They couldn't do it because

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129
Q.
They built a school.
While we're waiting and having
problems, we're gonna put a school up, which they did, right?
A.
Yes.
Q.
I mean, and InnoVida built other things in Haiti, didn't
they?
A.
things.
Q.
Nothing else?
A.
I don't recall.
10
Q.
Do you remember an office building that they built, some
11
bungalows?
12
A.
No.
13
Q.
Shelters?
I only recall the school.
14
They may have built other
I don't recall, no.
No?
Nothing.
Did you know what was going on down there?
15
A.
(No response)
16
Q.
You, yourself, keep any tabs --
17
A.
With respect to --
18
Q.
Did you keep any kind of communication with anybody down
19
there?
20
A.
21
Sure.
So, as part of the U.S. government, we frequently
22
reach out to the embassy to get an understanding of the
23
situation on the ground.
24
Q.
25
from InnoVida with pictures of structures they were working on,
And you learned in the course of that -- you got reports

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130
right?
A.
Correct.
Q.
So, because of these issues, even before you started in the
loan documents, because problems were already anticipated by
March when the loan was signed, the agreement, you and
Mr. Smith worked on changing the definition of what the project
was, isn't that right?
A.
The definition of "project" did change, correct.
Q.
It expanded a bit, correct?
10
A.
I believe that's correct, yes.
11
Q.
Because they knew they were gonna have problems building
12
the houses, right?
13
A.
No, I don't believe that was the basis for it.
14
Q.
You put in the words "other structures" into the terms,
15
right?
16
A.
We did.
17
Q.
Other structures like schools?
18
A.
Other structures relating to whatever the home community
19
environment would be.
20
example.
21
Q.
22
school, right?
23
A.
Correct.
24
Q.
Supermarket, where the people shop.
25
supermarket they built?
Like the Royal Caribbean one.
So, it could have been school, for
A school, where the kids who lived in the home go to the
Were you aware of a

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131
A.
I don't recall, no.
Q.
But you and Mr. Smith redefined "project" to expand it,
correct?
A.
To include other structures relating to the housing, yes.
Q.
Well, originally, it was that they were gonna build a
factory there right away, right?
A.
Yes.
Q.
But then between January, the commitment, and March, it
became readily apparent that was not gonna be so easy, right?
10
A.
(No response)
11
Q.
Remember that?
12
A.
Until you get the factory in place, that's correct.
13
Q.
So, you allowed in the definition of "project" that they
14
would ship panels over there, right?
15
A.
Correct.
16
Q.
From their Miami factory.
17
A.
Yes.
18
Q.
Which they did, right?
19
A.
I believe so.
20
Q.
There were warehouses full of the panels there, were they
21
not?
22
A.
I don't know.
23
Q.
And when they couldn't build the houses, they built a
24
supermarket, a school, other things, right?
25
A.
I don't know.
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132
Q.
And were in the process of building about 90 houses, right?
A.
Again, I don't know.
Q.
When you, OPIC, pulled the plug and didn't fund the rest of
the loan.
A.
Upon the default letter, yes.
Q.
The default letter that you wrote.
Did you write that letter?
A.
OPIC issued, yes.
Q.
Because the default having something to do with some -- a
10
lawsuit that the company was involved in, correct?
11
A.
12
one of which included failure to notify us of lawsuits,
13
correct.
14
Q.
I believe the default letter referenced a number of things,
Well, it notified about -MR. SHARPSTEIN:
15
Get the default letter.
16
BY MR. SHARPSTEIN:
17
Q.
-- it notified about not reporting lawsuits, right?
18
A.
If we could bring it up, please.
19
Q.
We can bring it up.
20
21
C(44).
page.
22
It's in evidence.
C(44) is in evidence.
I'll show you the first
Written February 8, 2011.

"Ladies and gentlemen" -- did you write this letter?
23
Can't remember who signed -- let's see.
24
James C. Polan, vice president, SMEF.
25
A.
It was signed by
What is that?
Small and Medium Enterprise Finance, one of our financing

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133
groups.
Q.
go in here, it says:
And the grounds for the default are on page 2 of 44.
If we
"(a), the parent company is in default of the
covenant set forth in 6.06... which requires the
parent company to deliver to OPIC, within 90 days of
the end of each fiscal year, the audited consolidated
financial statements for the parent company."
Right?
10
A.
11
Q.
Correct.
"And failed to notify OPIC of the
12
commencement of any legal or arbitral
13
proceedings."
14
And that there were lawsuits filed in August and
15
September.
16
A.
For those two reasons, correct.
17
Q.
It wasn't defaulted because they hadn't paid their loan, is
18
that right?
19
A.
20
agreement, but, correct.
21
Q.
They were current in their loan, weren't they?
22
A.
Correct.
23
24
25
That was why it was defaulted.
Failure to pay is one of many defaults in the loan
THE COURT:
Mr. Sharpstein, is this a good spot to
take a break?
MR. SHARPSTEIN:
Yes, your Honor.

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134
THE COURT:
going to take a 15-minute recess.
Remember my admonition not
presence.
15 minutes.
And we'll see you back in the jury room in
THE COURT:
9
10
Mr. Alford, during the break in your
testimony, you're not allowed to discuss your testimony with

anyone.
11
Do you understand?
12
THE WITNESS:
13
THE COURT:
14
THE WITNESS:
15
THE COURT:
16
I do.
And we'll see you back in 15 minutes.

Thank you.
the Court, we'll be in recess for 15 minutes.
17
18
(Recess taken at 3:34 p.m. until 3:56 p.m.)
19
20
THE COURT:
Please be seated.
21
All right.
22
23
24
25
Mr. Toll's present.
jury in?
MS. FOSTER-STEERS:
No, your Honor.

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135
MR. SHARPSTEIN:
No, your Honor.
THE COURT:
Mr. Alford back on the stand.
All right.
I guess we need to get
(The witness entered the courtroom)
THE COURT:
And, Mr. Alford, do you understand you're
still under oath?
THE WITNESS:
THE COURT:
10
11
THE COURT:
Yes.
All right.
Let's bring the jury in.
12
MS. FOSTER-STEERS:
13
MR. SHARPSTEIN:
14
THE COURT:
Yes, your Honor.
Yes, your Honor.
15
16
presence?
17
All right, Mr. Sharpstein, you may continue.
18
MR. SHARPSTEIN:
19
I have no more questions for the
witness, your Honor.
20
THE COURT:
Redirect.
21
22
23
Q.
24
letter, dated January 21, 2010.
25
A.
Mr. Alford, Mr. Sharpstein asked you about the commitment
Yes.
The 26th, I believe, but, yes.

(954)769-5657
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136
ALFORD - REDIRECT/FOSTER-STEERS
Q.
Now, can you explain to the members of the jury what a
commitment letter is?
A.
Sure.
So, it's a letter sending out OPIC's commitment to
finance a project, subject to a number of conditions, one of
which is continuing due diligence on the project itself.
Q.
been a loan or loan agreements entered into between OPIC and
InnoVida?
Okay.
Now, does a commitment letter mean that there has
10
A.
No.
11
Q.
Would financial statements be required before the issuance
12
of a commitment letter?
13
A.
14
underwriting before issuance of a commitment letter, but
15
certainly required before issuance of -- or signature on the
16
loan agreement.
17
Q.
18
received by OPIC before the loan agreement is actually signed,
19
right?
20
A.
It's one of the conditions to disbursement --
21
Q.
Yes.
22
A.
-- itself.
23
situation where a loan agreement is executed, but, again, the
24
condition to disbursement would be receipt of financial
25
statements.
Generally, financial statements would be part of the
So, it must be done -- the financial statements must be
So, it is generally the case.
There may be a

(954)769-5657
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137
Q.
gives out or disburses its money, right?
A.
Correct.
Q.
Now, Mr. Sharpstein also asked you whether or not you
questioned Mr. Smith about the unaudited financial statements
that you received from InnoVida.
question?
A.
I do.
Q.
Why didn't you question Mr. Smith?
10
A.
Mr. Smith wouldn't be the appropriate person for questions.
11
Q.
Who would be?
12
A.
Mr. Toll.
13
Q.
Now, Mr. Sharpstein also asked you about the default
14
letter.
15
A.
Correct.
16
Q.
And, in fact, the default letter that he put on the screen
17
showed that there were two reasons why OPIC defaulted on the
18
loan, right?
19
A.
Yes.
20
Q.
All right.
21
lawsuit -- to notify OPIC of a lawsuit, right?
22
A.
Correct.
23
Q.
Can you explain that to the members of the jury?
24
A.
Sure.
25
So, it's a condition before OPIC actually sends out or
Do you remember that
One was the failure to notify them of a
So, our loan agreement with InnoVida, like with all of

(954)769-5657
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138
OPIC's loan agreements, requires that the company give us
notice of certain events.
against the company.
if it's litigation above a certain amount.
case, there was a -- was a threshold, and the litigation was
above that amount.
lawsuits.
Q.
pursuant to the terms of the loan agreement?
One of those events is litigation
Uhm, there may be certain thresholds that

I believe in this
The company did not inform us of the
We had learned of them separately.
So, was that grounds for issuing a default to InnoVida
10
A.
Yes.
The loan agreement sets out a number of grounds for
11
default, any one of which can result in acceleration of the
12
loan.
13
Q.
14
financial statements, was that another reason for the default?
15
A.
16
agreement as amended, correct.
17
Q.
18
from InnoVida, right?
19
A.
Correct.
20
Q.
Now, Mr. Sharpstein also asked you about the building of a
21
school by Royal Caribbean Cruise Lines.
22
questions?
23
A.
Yes.
24
Q.
And he asked you about the term "structures" being included
25
in the project, the definition of project.
And that would be one.
And the unaudited financial -- sorry -- the audited
Failure to deliver them on the time required in the loan
Because OPIC never received audited financial statements
Do you remember those
Do you remember

(954)769-5657
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139
that?
A.
I do.
Q.
Now, are you aware -- or are you familiar with a progress
report submitted to OPIC by InnoVida?
A.
(No response)
Q.
The progress reports.
A.
In connection with the disbursement request, yes.
Q.
I'm looking at Exhibit C(18).
A.
(No response)
10
Q.
Do you see that?
11
A.
Yes.
12
Q.
Is this a progress report?
13
A.
Oh, yes, it is, sorry.
14
Q.
Okay.
15
relationship with "World Vision, a well-known aid
16
organization," right?
17
A.
(No response)
18
Q.
Correct?
19
A.
Yes, yes.
20
Q.
And it goes on further that the World Vision had already
21
"purchased 2,800 transitional shelters from another supplier."
22
Is this a progress report?
And in the second paragraph, it references a
Now, did you look at this back then?
23
A.
I did, yes.
24
Q.
Okay.
25
forth here that the contract with World Vision related to
And would World Vision having -- or it being set

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140
transitional shelters, would that have been something that
would have been approved by OPIC with respect to this
particular loan?
A.
(No response)
Q.
Do you understand my question?
A.
Could you ask it again, please?
Q.
Sure.
8
9
We're looking at World Vision.

transitional shelters, right?
We're looking at
The monies that OPIC was going
10
to be loaning to InnoVida, those were -- monies were to be used
11
to do shelters, right?
12
A.
Correct.
13
Q.
And then further on down, it talks about:
Houses?
Homes?
14
"We have recently been awarded, through our
15
partner, DRC Emergency Services, a contract to build
16
80 dwellings and four common area rooms for an UN
17
agency."
18
Do you see that?
19
A.
I do.
20
Q.
Now, isn't it true, Mr. Alford, that InnoVida represented
21
that the monies disbursed to it in the first disbursement were
22
used with respect to that World Food contract, right, according
23
to them -- and we're looking at Bate Number '0429 -- and with
24
respect to that purported World Vision contract?
25
A.
Correct.
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141
Q.
No reference to the Royal Caribbean Cruise Lines, right?
A.
Correct.
Q.
No reference to a school being built for Royal Caribbean
Cruise Lines.
A.
Correct.
MS. FOSTER-STEERS:
6
7
8
9
Honor.
THE COURT:
Thank you, sir.
You may step down.
You're excused.
10
THE WITNESS:
11
(Witness excused)
12
THE COURT:
13
MS. FOSTER-STEERS:
14
The United States calls Tim LaMacchia.
15
THE COURT REPORTER:
16
17
Thank you.

Yes, your Honor.
(TIM LA MACCHIA, GOVERNMENT'S WITNESS, WAS SWORN)

THE COURT REPORTER:
Please sit down.
Please stay
18
close to the microphone, state your full name for the record,
19
spelling your last name.
20
THE WITNESS:
Tim LaMacchia, L-A-M-A-C-C-H-I-A.
21
MS. FOSTER-STEERS:
Your Honor, at this time, pursuant
22
to Federal Rule of Evidence 902(11), the United States would
23
move into evidence Exhibits B(1) through B(27).
24
25
MR. SHARPSTEIN:
Your Honor, the -- could we just
approach sidebar briefly?

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142
THE COURT:
Okay.
(At the bench out of the hearing of the jury)
MR. SHARPSTEIN:
We just have one issue here.
We were
told -- before the weekend, we were given a list of about six
or seven witnesses who would be next.
And they -- remember, they didn't give us a set of exhibits.
So, we've been pulling exhibits as the witnesses went.
didn't pull his, because we didn't think he was coming.
we're gonna have to look at these exhibits just to -- you know,
He wasn't one of them.
10
we haven't reviewed them.
11
this, but it just kind of took us by surprise.
12
other people we lined up.
13
MR. GERSTIN:
We
So,
I don't want -- I don't like to do

And we had
We pulled exhibits all weekend.
And if I could just add, the issue with
14
these exhibits is that they're in native format.
15
spreadsheets that are attached, and they're not easy to just
16
print.
17
THE COURT:
18
them one at a time.
Just go one at a time.
There are
Just introduce
19
MS. FOSTER-STEERS:
Okay.
20
(The foregoing proceedings were had at sidebar)

DIRECT EXAMINATION
21
22
23
Q.
Mr. LaMacchia, are you employed, sir?
24
A.
Yes.
25
Q.
Can you tell the members of the jury where it is that

(954)769-5657
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143
LA MACCHIA - DIRECT/FOSTER-STEERS
you're employed?
A.
I'm a partner with Ernst & Young.
Q.
And what is the business of Ernst & Young?
A.
It's an auditing firm, CPA firm.
Q.
An auditing firm?
A.
Yes.
Q.
Okay.
Young?
A.
Since May of 2002.
10
Q.
And would you tell the members of the jury what it is that
11
you do for Ernst & Young?
12
A.
13
statements.
14
Q.
15
the members of the jury what an "audit" is.
16
A.
17
the basis to express an opinion on financial statements as to
18
whether they comply with Generally Accepted Accounting
19
Principles.
20
Q.
21
that you at Ernst & Young conduct an audit.
22
A.
23
process, where you develop the plan, the tests that you're
24
going to conduct, the scopes of the tests that you're going to
25
use.
Sir, how long have you been employed with Ernst &
I'm an audit partner, and I express opinions on financial
When you say you're an "audit partner" -- well, explain to
An "audit" is a process of tests, inquiries to formulate
And how do you conduct an audit?
Each audit is different.
Explain to them how it is
Uhm, it starts with a planning
And then you conduct a lot of tests, you ask a lot of

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144
questions, you get representations from management, and you
take in all the evidence, and then ultimately you express an
opinion on the financials.
Q.
tell the members of the jury whether or not you hold any
licenses?
A.
Florida.
Q.
How long have you had license as a CPA?
10
A.
Since 1986, I believe.
11
Q.
And where did you -- you have a degree, right?
12
A.
Yes, from Florida International University.
13
Q.
Okay.
14
A.
Yes.
15
Q.
And what is your degree in, sir?
16
A.
Bachelor of accounting.
17
Q.
Do you have any other degrees?
18
A.
No.
19
Q.
And where did you get that degree -- when, when?
20
A.
That was in 1985.
21
Q.
Now, after graduating from FIU, where did you work?
22
A.
I began in January of '86 at Arthur Andersen, another CPA
23
firm.
24
Q.
Was that in Miami?
25
A.
Yes.
We're gonna come back to that, Mr. LaMacchia.
But can you
I'm a CPA, or certified public accountant, in the state of
FIU?

(954)769-5657
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145
Q.
Yes.
A.
Began as a staff accountant conducting audits.
Q.
And how long did you stay at Arthur Andersen?
A.
Until May of 2002.
Q.
And is that when you began with Ernst & Young?
A.
Yes.
Q.
Now, you told me that you were a staff accountant at Arthur
Andersen.
Andersen?
No.
And what did you do, sir?
Did you remain a staff accountant at Arthur
10
A.
I progressed through the ranks and made partner at
11
Arthur Andersen.
12
Q.
13
Andersen?
14
A.
1998, I believe.
15
Q.
And when you -- well, when you left from Arthur Andersen to
16
go to Ernst & Young, what was your position when you began at
17
Ernst & Young?
18
A.
I began at Ernst & Young as a partner.
19
Q.
An auditing partner?
20
A.
Yes.
21
Q.
Okay.
22
anybody?
23
A.
24
conducting the detailed audit work.
25
Q.
Okay.
Yes.
So, when is it that you made partner at Arthur
Now, as an auditing partner, do you supervise
I supervise the engagement team that would be
Now, you're gonna have to explain to the members of the

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146
jury what an "engagement team" is.
A.
are seniors that supervise the staff people.
that supervise the seniors.
supervise the managers.
supervise all the above.
Q.
big -- or, rather, how many people would be in an engagement
team?
Typically, they're staff people just out of college.
There
There's managers
And there's senior managers that
And then I, the partner, would
So, your engagement team -- I mean how big a team -- how
10
A.
11
but generally a minimum of four or five and as many as 20 or
12
30.
13
Q.
14
audit is, explain to the members of the jury, when an
15
individual comes to Arthur Andersen -- sorry -- not Arthur
16
Andersen -- but Ernst & Young, to have the company conduct an
17
audit, take us step-by-step the process that is taken.
18
A.
Can you clarify for me?
19
Q.
Sure.
20
It depends.
Varies greatly depending on size of the job,
Now, going back to what you told us in terms of what an
Somebody comes to Ernst & Young to have Ernst & Young
21
conduct an audit and then to issue an opinion, right?
Take the
22
members of the jury step-by-step through that process.
What is
23
involved?
24
A.
25
And, again, you know, the audit does consist of several phases.
There's a lot involved.
And each audit is very different.

(954)769-5657
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The beginning phase would be the planning phase, where you're
designing -- understanding the business first, and then
designing and developing your scopes, you know, what level of
testing you're going to be conducting; then actually laying out
your test plans to conduct those tests; conducting those tests,
and then ultimately drawing conclusions regarding those tests.
Q.
need from the client?
A.
Now, in order to do that planning, what information do you
Quite a bit of information.
Uhm, you know, tough to recant
10
all of it here, but a lot of access to the company records, a
11
lot of interviews, discussion back and forth about the business
12
of the company, access to the general ledgers, the detailed
13
accounting records, access to personnel within the
14
organization, and then access to the -- some of the vendors and
15
customers the company does business with.
16
Q.
Okay.
17
A.
But, again, in -- that's some of the things, but you
18
need -- the audit can encompass a lot more than that, as well.
19
Q.
20
you need a lot of information from the company?
21
A.
Yes.
22
Q.
And you use that information then to determine the scope,
23
you said, right?
24
A.
Yes.
25
Q.
Okay.
So, is it correct to say, then, that at a planning stage,
Explain to the members of the jury what the scope

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is.
A.
company does; you test some of the transactions.
develop a scope to figure out which of the transactions you're
going to test.
determining what is meaningful or material to a user of the
amount might be, and then from that, you develop your testing
scope, how much you're going to test.
In an audit, you don't test every single transaction that a

So, you
You -- part of developing that scope is
So, you determine what that number or
10
Q.
And once you've determined how much you're gonna test, what
11
happens after that?
12
A.
Then you design your tests and can conduct those tests.
13
Q.
And is the scope is determined by the members of the
14
engagement team that you talked about?
15
A.
Yes.
16
Q.
Okay.
17
right?
18
A.
(No response)
19
Q.
Or the client.
20
A.
Yeah, in part from information from the company and part
21
from firm standards, but, yes.
22
Q.
23
then you draw your conclusions, right?
24
A.
Yes.
25
Q.
Okay.
Based upon the information provided by the company,
And then, finally, we come to -- you conduct the tests, and
To issue an opinion?
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149
A.
Yes.
Q.
Okay.
engagement team does not get information from the company, what
happens?
A.
putting it on a list, and getting information, and then
re-requesting information on a list and adding it, more
information as the audit goes on, and following up on the
information you didn't get.
Now, if along the way, the audit -- or, rather, the
Well, there's a constant process of requesting information,
And it's just an ongoing process,
10
ongoing part of an audit.
11
Q.
12
conducted?
13
A.
(No response)
14
Q.
How long does it take?
15
A.
It varies -- varies greatly.
16
deadlines, where the audit has to be done within a particular
17
time horizon, and others don't.
18
Q.
19
a company by the name of InnoVida.
Okay.
Is there any set period of time that an audit is
Some companies have
Now, Mr. LaMacchia, I want you to direct your attention to
20
Okay.
Are you familiar with that company?
21
A.
Yes.
22
Q.
Would you tell the members of the jury how it is that
23
you're familiar with the company InnoVida.
24
A.
25
InnoVida in -- I think it was nine -- 2008, I believe,
I began auditing InnoVida, uhm, attempting audit of

(954)769-5657
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150
2008-2009, around that time horizon.
Q.
2008?
A.
and asking me if I was interested in conducting an audit of the
company.
Q.
Who did you get that call from?
A.
Craig Toll.
Q.
Was it by telephone that you got the contact?
10
A.
Yes.
11
Q.
All right.
12
A.
Yes.
13
Q.
Okay.
14
Mr. Toll.
15
A.
16
partner role on an engagement of ours, on a job of ours called
17
Far and Wide Travel, and Craig was the CFO of Far and Wide
18
Travel.
19
Q.
And when was this?
20
A.
That would have been shortly after my coming over in May of
21
2002, so sometime maybe in the year after that, I would
22
imagine, somewhere in that time horizon.
23
Q.
So, in or around 2003?
24
A.
Yeah, 2002-2003.
25
Q.
All right.
And how is it that you came to be auditing InnoVida in
I got a call from the company describing the company to me
Had you known Mr. Toll before?
Tell the members of the jury how it is that you knew
When I became a partner at Ernst & Young, I assumed the
Do you remember?
Had you actually met Mr. Toll?

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A.
In that time horizon, yes.
Q.
Mr. Toll was employed by a company called Far and Wide, is
that what you said?
A.
Far and Wide Travel, yes.
Q.
Do you know what the business of Far and Wide was?
A.
Yes.
Q.
And do you know what Mr. Toll's position was at Far and
Wide?
A.
He was chief financial officer.
10
Q.
Now, did you have to deal directly with Mr. Toll in your
11
relationship with Far and Wide?
12
A.
Yes.
13
Q.
How often?
14
A.
I don't recall.
15
don't recall in terms of frequency.
16
interacted a lot.
17
Q.
Do you know Mr. Toll's background professionally?
18
A.
Limited.
19
Touche.
20
beyond that, I don't.
21
Q.
22
of Deloitte & Touche?
23
A.
24
Young.
25
Q.
It was an accumulation of travel agencies.
We dealt with each other a lot, but I

But we definitely
I know he had some involvement with Deloitte &
And then also was involved with CHS, I believe.
And
Can you tell the members of the jury what is the business
They're a CPA audit firm, like Arthur Andersen and Ernst &
Do you know what Mr. Toll's position was at Deloitte &

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152
Touche?
A.
I believe Craig was a partner.
Q.
An audit partner, do you know?
A.
I don't.
Q.
All right.
involved with CHS?
A.
Yes.
Q.
Do you know what the business of CHS was?
A.
I believe it was computer distribution.
10
Q.
Do you know what his position was at CHS?
11
A.
I believe CFO.
12
Q.
Do you know whether or not Mr. Toll held any licenses,
13
Mr. LaMacchia?
14
A.
I do not.
15
Q.
Now, when you were contacted by Mr. Toll in 2008, what
16
request did he make of you?
17
A.
18
an audit of InnoVida.
19
Q.
Did he provide you with any information?
20
A.
I think at the time he directed me to a website.
21
Q.
Okay.
22
A.
And then I think there was information subsequently
23
provided.
24
Q.
25
after that?
And you said that you also knew that he was
The request was asking me if I was interested in conducting
Do you recall what type of information was provided to you

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A.
You know, I mean initially, it was a website that described
the company, and then after that, as we were gathering
information on the company, it was all kinds of information,
leading towards the audit, and then there was a lot of
information back and forth.
Q.
Okay.
A.
It's hard to distinguish between all that.
Q.
Well, let me ask you this question.
or not Ernst & Young was going to be conducting an audit for
In determining whether
10
InnoVida, was information requested of the company?
11
A.
Yes.
12
Q.
And did you request information of Craig Toll?
13
A.
We did.
14
Q.
Mr. Toll's position at InnoVida, do you know what that was,
15
sir?
16
A.
Chief financial officer.
17
18
MS. FOSTER-STEERS:
May I approach the witness, your
Honor?
19
THE COURT:
Okay.
20
21
Q.
22
Exhibit B(1) for identification.
Mr. LaMacchia, I am handing you what has been marked as
23
Do you recognize that, sir?
(Government's Exhibit B(1) marked for identification)
24
A.
Yes.
25
Q.
Okay.
What is it?
(954)769-5657
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154
A.
It's a memo from Craig to me with some information on the
company.
Q.
Okay.
A.
Background information on the company.
Q.
Now, is that memo made by somebody in the company -- in
Ernst & Young?
A.
That's a memo from Craig to me.
Q.
All right.
memo that is kept by Ernst & Young in the normal course of
Well, let me ask you this question.
Is that a
10
business for Ernst & Young?
11
A.
12
retain, but it was information -- it was information gathering
13
process -- part of the information gathering process for us.
14
Q.
15
would that be in the kept in the normal course of business of
16
Ernst & Young?
17
A.
This particular?
18
Q.
Yes.
19
A.
I -- yeah, I believe this was a part of our papers
20
ultimately.
21
Q.
22
23
Wouldn't necessarily be something we would necessarily
And would that record -- here, what is in Exhibit B(1),
Okay.
MS. FOSTER-STEERS:
government would move to introduce Exhibit B(1) into evidence.
24
MR. SHARPSTEIN:
25
THE COURT:
No objection.
B(1) will be received.

(954)769-5657
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155
(Government's Exhibit B(1) admitted into evidence)
Q.
Now --
Q.
what I just showed you.
A.
(No response)
Q.
This is a memo to you, Tim LaMacchia, from Craig Toll,
Now, Mr. LaMacchia, I am going to direct your attention to

And what is this?
10
right?
11
A.
Yes.
12
Q.
And it's dated September 3, 2008, right?
13
A.
Yes.
14
Q.
And in the first paragraph, Mr. LaMacchia, it says:
15
"I have put together some information that I hope
16
will help your new client acceptance process."
17
At this point in time, had InnoVida been accepted as a
18
client of Ernst & Young?
19
A.
20
specific memory of the timing of acceptance, but from the
21
context of the memo, I would say no.
22
Q.
23
From the context of the memo, I would say no.
Okay.
I don't have
Now, in the third paragraph, it says:
"We are in the process of implementing Microsoft
24
dynamics navigation ERP software, which will be
25
critical to bring SOX compliant and getting good data

(954)769-5657
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for the many international operations that are
inherent in our model."
Do you know what is being referred to there?
A.
Yes.
It's referring to a software platform being SOX
compliant, "SOX" is Sarbanes-Oxley.
internal control that public companies have to adhere to.
it's talking about a pending implementation or an in-process
implementation of that software platform.
Q.
It's a law regarding

So,
Did you have an understanding, Mr. LaMacchia, at this point
10
in time, what the business of InnoVida was?
11
A.
Cursory, light, a light understanding.
12
Q.
What was that understanding, Mr. LaMacchia?
13
A.
Making -- building -- producing materials to allow
14
construction of homes in remote areas, if that -- yeah.
15
Q.
16
in order to make your evaluation as to whether or not you were
17
going to accept them as a client?
18
A.
19
owners and the executive officers, and we looked at the
20
business.
21
information.
22
Q.
23
So, what information would you be requesting from InnoVida
The client acceptance, we looked at the principals, the
Then we looked at some degree of financial
Okay.
All right.
Now, on the second page of Exhibit B(1),
24
in the first full paragraph, right, is that an explanation of
25
how it is that InnoVida makes its money?

(954)769-5657
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157
A.
Yes.
It's a long paragraph.
It's a description of I
think -- let me just read it for a second.

(Pause)
3
4
A.
the cash flows of the company.
Q.
Okay.
A.
Relative to these -- these factories.
Q.
Okay.
A.
Relative to the company's factories.
10
Q.
Now, directing your attention to the next paragraph, where
11
it says:
12
Yeah, it looks like a description of the business flows or
"Obviously, there are several accounting and tax
13
issues raised by our business, and we need the
14
expertise of your firm to present them in an
15
appropriate manner that serves our shareholders (sic)
16
both now and in the future."
17
What was your understanding of that particular
18
paragraph, Mr. LaMacchia?
19
A.
20
memory of it, but I do know upfront we were -- we were -- both
21
Craig and my firm were working on two issues.
22
consolidation, whether different aspects of the business should
23
be consolidated.
24
whether revenues should be recognized for given transactions.
25
Q.
I know -- relative to the paragraph, I don't have a great
One was
And the other was revenue recognition,
Okay.
(954)769-5657
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MS. FOSTER-STEERS:
government would move to introduce Exhibit B(2), pursuant to
the certification, into evidence.
MR. SHARPSTEIN:
MS. FOSTER-STEERS:
Pursuant to what?
B(2), pursuant to the
certification, Federal Rule of Evidence 902(11).

MR. SHARPSTEIN:
I understand it's certified, but
10
there's a witness on that could say it was kept in the normal
11
course.
But we don't have an objection.
12
THE COURT:
13
Okay.
14
15
Q.
16
B(2).
17
A.
I do.
18
Q.
Do you know who Lewis Carness was?
19
A.
He worked for Craig in some -- I think he might have been
20
the controller, but not positive about that.
21
Q.
All right.
22
A.
Of InnoVida.
23
Q.
Now --
24
A.
Oh, controller.
25
Q.
Here it says:
Mr. LaMacchia, I'm gonna put Exhibit B(2) here -- this is

This is now October 6, 2008.
Do you see that?

(954)769-5657
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159
"Here are the files again.
I think you might
have had a problem because the files are in Excel
2007."
Do you know whether or not Mr. Lewis Carness provided
information to Ernst & Young for this audit that InnoVida
wanted to get done?
A.
Yes.
Lewis sent us information periodically.
MS. FOSTER-STEERS:
10
government would move to admit Exhibit B(3), pursuant to the
11
certification, into evidence.
12
13
MR. SHARPSTEIN:
14
THE COURT:
15
No objection.
16
17
Q.
18
dated October 6, 2008, sent to you, Tim LaMacchia, right?
19
A.
Yes.
20
Q.
Okay.
21
answers."
22
companies.
23
A.
Yes.
24
Q.
Now, did you have an understanding of how many subsidiaries
25
InnoVida had?
Now, Mr. LaMacchia, this is an e-mail from Lewis Carness,
And it lists -- or, rather, it says:
"Here are your
And there is information regarding several different

Do you see that?

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185
160
A.
I asked the questions -- you know, asked the question and
gotten answers to that.
levels of ownership, so it -- subsidiary has an accounting
definition to it -- or, yeah, has an accounting definition to
it.
times, yeah.
Q.
submitted that, Mr. LaMacchia?
A.
It would have come from a combination of Craig and Lewis.
10
Q.
Now, on the page ending Bate Number '0059, which is the
11
next page, which is a preceding e-mail to the one October 6,
12
2008, it says here:
I think there were many different
But I got the corporate structure from the company several
And the corporate structure that was submitted to you, who
13
"Hello Lewis, please clarify the domicile
14
(city/state/country) for each of the entities listed
15
on the consolidation spreadsheets.
16
we contact the appropriate local office associates for
17
each respective entity."
18
We want to ensure
19
A.
Yes.
20
Q.
Now, when we look at Bate Number ending '00058, are these
21
the answers being provided by Mr. Carness to you?
22
A.
It appears so.
23
Q.
Yes.
24
A.
Yes.
25
Q.
I can hand it to you if you want -- if you'd like.
Is that all part of the same e-mail?

(954)769-5657
185
161
A.
No, it looks -- it's good.
Those are the responses to my
question.
Q.
that?
A.
Yes.
Q.
And it says -- it's a Cayman Island company, books and
records located in Ras al -- I can't pronounce that -- in the
UAE.
A.
I do.
10
Q.
Then InnoVida Holdings (Cayman), Cayman Island company,
11
this is designated in Canada, and it goes on to talk about it
12
being a Cayman Island company, right?
13
A.
I do.
14
Q.
Then the next one is InnoVida Holdings, Inc., Florida
15
company, books and supporting documents, located on Lincoln
16
Road in Miami Beach.
17
A.
Yes.
18
Q.
Innorez GMBH, Germany, German company, books and records in
19
the City of Marl, Germany, right?
20
A.
Yes.
21
Q.
And then it talks about InnoVida German -- (Cayman), Cayman
22
Island company, books and records located in Canada (near
23
Montreal); however, many bank records and transaction support
24
can be accessed from the Miami office.
25
A.
Now, it talks about InnoVida Holdings (Cayman).
Do you see
Do you see that?
Do you see that?
Do you see that?
Yes.
(954)769-5657
185
162
Q.
Now, did -- or do you know whether or not Ernst & Young
reached out to these various entities in order to get any
information from these entities, sir?
A.
Only one I recall specifically would be the UAE.
Q.
And why is it that you recall that one?
A.
I just do recall reaching out to my colleagues in whatever
part of the world that was, to interact with the company's
employees or that subsidiary's employees at that location.
Q.
And with respect to the other entities, did you get
10
information from InnoVida Holdings?
11
A.
12
the Lincoln Road company, whose books and records were
13
maintained at Lincoln Road.
14
think we got information -- or asked questions and received
15
responses back from Craig and Lewis.
16
Q.
Okay.
17
A.
If I recall, a couple of them had -- maybe weren't
18
currently operating -- or at the time weren't operating
19
anymore.
20
Q.
21
to ask you just to read across.
22
tiny, Mr. LaMacchia.
23
For InnoVida Holdings, definitely.
So, that -- that was
And then for the other entities, I
Now, look for me at same exhibit, Exhibit B(3).
I'm going
And I know it's very, very
But I'll bring it in focus for you.
Reading from left to right, at the top, it says
24
"InnoVida group of companies combined balance sheets."
25
see that, sir?

(954)769-5657
Do you
185
163
A.
I do.
Q.
Okay.
covers (sic)?
A.
It's as of December 31, 2006.
Q.
And then just reading across, the next box says "combined
InnoVida group of companies," right?
A.
Yes.
Q.
And it says "consolidation elimination," right?
A.
Yes.
10
Q.
Then it has "combined group 1, consolidation elimination."
11
And what is the period that these balance sheets
The next one is InnoVida (Delaware), right?
12
A.
Yes.
13
Q.
InnoVida Holdings (Cayman) Canada -- CAN, rather; InnoVida
14
Holdings (Cayman) RAK; InnoVida Germany Limited; Innorez;
15
combined group 2, consolidation elimination; the next box over
16
is InnoVida Holdings, LLC, InnoVida Holdings (Florida),
17
InnoVida GMBH -- that's the last box, right?
18
A.
Yes.
19
Q.
Now, when it talks about the combined balance sheets, what
20
is your understanding of that, sir?
21
A.
22
reflected out to the right.
23
Q.
All these entities reading from left to right, right?
24
A.
Yeah.
25
entries and all those different columns.
That's the combination of all those entities that were
And the elimination entries and consolidation

(954)769-5657
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164
Q.
All right.
And can you just tell us, Mr. LaMacchia, for
the period ending December 31, 2006, what is the cash and cash
equivalents noted here?
A.
as of December 31, 2006.
That's an "as of" figure, so it's not a period ended.
It's
It's $300,428.
THE COURT REPORTER:
THE COURT:
I'm sorry.
Mr. LaMacchia, you need to get closer to
the microphone.
A.
$300,428.
10
Q.
And the current assets of the combined group of companies
11
is how much?
12
A.
$1,475,274.
13
Q.
And if we look at the next page, what is gonna be Bate
14
Number B(3) attachment 000002, this is now the combined
15
statement of operations, right?
16
A.
(No response)
17
Q.
Right, Mr. LaMacchia?
18
A.
Yeah, combined statement of operations, yes.
19
Q.
What is a "combined statement of operations,"
20
Mr. LaMacchia?
21
A.
22
operating statements out to the right, plus all the elimination
23
and consolidation entries that are out to the right.
24
Q.
25
you dizzy with this -- are these the same companies that we saw
Again, it's the mathematical sum of the individual
And, again, are we looking at -- and I'll try not to make

(954)769-5657
185
165
on the previous page?
A.
them from the prior page.
Q.
December 31, 2006, right?
A.
ended -- so it's for the year-ended December 3, 2006, as
opposed to the balance sheets as of December 31, 2006.
Q.
I'd have to compare one by one, but I recognize several of
Now -- and for the same period of time, right, sir?
This is a statement of operations, so it's for a period
Okay.
Now, looking at the bottom of the page, where it has
10
"net income," then in brackets, there's a figure of $3,326,718.
11
What does that figure represent?
12
A.
13
2006.
14
Q.
15
of companies, right, sir?
16
A.
It represents a net loss for the year-ended December 31,
A net loss of the InnoVida group -- combined InnoVida group
Yes.
17
18
MR. SHARPSTEIN:
Your Honor, I just interpose an
objection to the relevance to this case, 2006 reports.
19
THE COURT:
I --
Overruled.
20
21
Q.
22
now we're looking at the period ending December 31, 2007.
23
you see that, Mr. LaMacchia?
24
A.
Yes.
25
Q.
And, again, if you go from left to right, are these the
Now, we're gonna look at the same type of documents.

(954)769-5657
And
Do
185
166
same companies that we saw before with respect to the 2006
balance sheet and the statement of operations?
A.
would change over time.
Q.
it says "combined InnoVida group of companies," right?
We'd have to compare them.
I think, from memory, they
But we'd have to compare them.
Well, very, very simply then, just look at the top, where
Is this the balance sheets for those combined group of
companies as reflected on this particular document?
A.
Yes.
This represents -- that column represents the
10
mathematical sum of everything to the right, so all those
11
companies listed to the right, plus the elimination, plus the
12
consolidation entries.
13
Q.
And if we look at where it says "A," current --
14
MS. SMITH:
Can't see it.
15
MS. FOSTER-STEERS:
I'm sorry.
16
17
Q.
18
equivalents," how much is reflected in that particular column?
19
A.
$837,362.
20
Q.
Okay.
21
there?
22
A.
5,251,874.
23
Q.
Again, looking at now the combined statement of operations
24
for the period ending December 31, 2007, and then just look at
25
the bottom, where it has "net income" for that period ending
Where it says "A, current assets, cash and cash
And the "current assets," how much is reflected

(954)769-5657
185
167
December 31, 2007, what is the figure represented there?
A.
It's a negative 6,575,403.
Q.
And when you say a "negative," is that translated to a loss
for --
A.
I believe so.
Q.
Of course.
A.
Yes, it was a loss.
Q.
Okay.
THE COURT:
9
10
Can you just go up a little bit on the page?
Ms. Foster-Steers, is this a good spot to
break?
11
MS. FOSTER-STEERS:
12
THE COURT:
Yes, your Honor.
All right.
Members of the jury, we're
13
going to go ahead and recess for the evening.
14
admonition not to discuss the case or allow it to be discussed
15
in your presence.
16
at 9:30.
17
18
Remember my
And I'm gonna ask you to come back tomorrow
So, have a nice evening.
We'll see you back tomorrow
at 9:30.
19
20
THE WITNESS:
21
THE COURT:
22
During the break in your testimony, Mr. LaMacchia,
23
Your Honor, am I to leave?
I'm gonna explain to you in a second.
you're not allowed to discuss your testimony with anyone.
24
Do you understand?
25
THE WITNESS:
Yes.

(954)769-5657
185
168
THE COURT:
And we'll see you back tomorrow at 9:30.
THE WITNESS:
THE COURT:
Okay.
the Court, we'll be in recess in this case until 9:30, on other
matters until five o'clock.
(Proceedings concluded at 4:53 p.m.)
All rise.
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
(954)769-5657
185
169
INDEX OF WITNESSES
GOVERNMENT'S WITNESS
Alfred Smith
Direct by Ms. Foster-Steers
Cross by Mr. Sharpstein
Redirect by Ms. Foster-Steers
Recross by Mr. Sharpstein
3
22
42
46
Mark Hobson
48
Gabriela Fudally
Direct by Ms. Selmore
Redirect by Ms. Selmore
58
64
74
4
5
6
PAGE
7
8
9
10
11
Cameron Alford
Redirect by Ms. Foster-Steers
77
110
135
Tim LaMacchia
142
12
13
14
15
16
17
18
19
20
21
22
23
24
25
(954)769-5657
185
170
INDEX OF EXHIBITS
GOVERNMENT'S EXHIBITS:
MARKED
RECEIVED
K(1)(j)
64
64
B(1)
153
155
B(2)
158
158
B(3)
159
159
8
9
10
11
12
13
14
15
16
17
18
19
C E R T I F I C A T E
20
I certify that the foregoing is a correct transcript from
21
the record of proceedings in the above-entitled matter.
22
23
24
/S/Francine C. Salopek
Francine C. Salopek, RMR-CRR
Official Court Reporter
9-19-13
Date
25
(954)769-5657
Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 171 of171
185
2009 [26] 4/6 4/13 5/2 7/10 7/11 7/21
8/18 11/1 26/7 31/2 44/14 68/12 74/3
$1,475,274 [1] 164/12
/S/Francine [1] 170/23
80/8 80/10 80/11 81/7 88/14 89/15
$10 [5] 3/13 99/23 99/25 100/13 119/19
89/20 91/10 91/23 110/11 115/8 115/19
$10 million [5] 3/13 99/23 99/25 100/13 0
150/1
000002 [1] 164/14
119/19
2010 [64]
0003031 [1] 89/8
$15,605,029 [1] 11/3
2010081100051248 [2] 61/11 62/15
001788 [1] 98/13
$2.5 [3] 61/14 63/4 63/8
2011 [10] 38/23 44/20 58/23 59/17 73/7
06 [1] 69/16
$2.5 million [3] 61/14 63/4 63/8
73/23 80/8 114/11 115/4 132/21
08 [2] 70/18 72/11
$20,000 [1] 116/4
2012 [1] 46/10
09 [5] 68/22 69/7 70/4 70/10 70/25
$200,000,000 [1] 34/11
2013 [3] 1/6 2/1 76/1
$210,000 [1] 127/1
205F [1] 1/22
1
$3,326,718 [1] 165/10
20th [1] 70/5
1-7-2009 [1] 68/12
$3.3 [1] 33/12
21 [5] 71/13 71/13 71/14 117/17 135/24
10 [3] 71/3 71/16 72/18
$3.3 million [1] 33/12
21398744 [1] 61/22
10:30 [1] 3/3
$30,000,000 [1] 35/9
21st [3] 119/5 120/4 120/11
10:47 a.m [1] 47/20
$300,428 [2] 164/5 164/9
22 [5] 11/12 11/17 13/17 98/9 169/4
11 [10] 7/12 8/16 9/16 10/24 36/3 59/17 23rd [1] 36/3
$37,044,439 [1] 8/21
75/4 97/11 141/22 158/8
$39,296,232 [1] 8/19
25th [1] 1/19
11-9-2009 [1] 74/3
$40,000,000 [1] 36/10
26 [4] 15/2 15/9 120/7 126/3
110 [1] 169/11
$5,903,169 [1] 16/8
26th [1] 135/25
11:10 a.m [1] 47/20
$500,000 [3] 44/10 62/20 75/3
27 [2] 59/3 141/23
11th [1] 61/24
$6,615,640 [2] 11/6 89/22
27th [1] 58/19
12 years [1] 49/19
$6.7 [1] 56/23
28 [5] 3/23 15/10 36/6 86/15 89/3
12-20 [1] 70/19
$6.7 million [1] 56/23
28th [2] 120/17 120/20
12-20901-CR-WPD [1] 1/4
$70,000 [1] 114/7
299 [1] 1/22
12-9-08 [1] 70/18
$837,362 [1] 166/19
2:03 P.M [1] 76/1
12:00 p.m [1] 75/25
$9,574,152 [1] 89/14
3
13 [2] 95/16 170/23
'
135 [1] 169/11
3-10-2011 [2] 73/7 73/23
14 [2] 58/14 73/1
'000429 [1] 55/13
3.2 [1] 20/8
142 [1] 169/13
'00058 [1] 160/20
3.3 million [3] 20/9 103/18 114/1
15 [5] 66/14 73/1 74/3 134/13 134/16
'0059 [1] 160/10
30 [12] 3/24 4/6 4/13 5/2 16/5 55/20
15 minutes [3] 47/14 47/18 134/5
'01 [1] 110/16
88/14 89/15 89/20 91/10 91/23 146/12
15-minute [2] 47/11 134/2
'0402 [1] 53/19
30 years [1] 22/23
153 [1] 170/4
'0410 [1] 55/8
301 [1] 4/11
155 [1] 170/4
'0429 [1] 140/23
303 [1] 4/10
158 [2] 170/5 170/5
'0430 [1] 55/19
30th [2] 121/6 124/8
159 [2] 170/6 170/6
'0431 [1] 55/22
31 [28] 4/6 5/2 7/21 7/21 8/17 8/20 11/1
16 [2] 55/22 71/13
'0432 [1] 55/25
11/1 11/4 11/14 11/23 13/19 13/22 31/2
17 [4] 71/13 71/14 72/8 72/18
'0484 [1] 108/2
43/8 88/15 89/22 98/10 98/17 163/4
18 [7] 53/3 53/19 54/11 68/8 68/20
'07 [1] 70/25
164/2 164/5 165/5 165/8 165/12 165/22
108/2 139/8
'0750 [1] 95/17
166/24 167/1
1910 [2] 24/16 24/17
'08 [2] 72/11 72/15
32 years [2] 22/8 22/10
1985 [1] 144/20
'09 [4] 35/20 36/15 115/24 119/25
33131 [1] 1/20
1986 [1] 144/10
'1248 [2] 62/23 63/4
33132 [1] 1/16
1994 [1] 49/8
'1648 [1] 91/5
33301 [1] 1/23
1998 [1] 145/14
'1649 [1] 37/16
35 million [1] 124/1
1999 [2] 49/21 52/17
'1670 [1] 101/2
35 million-plus [1] 34/19
'1680 [1] 40/15
3:34 p.m [1] 134/18
2
'1788 [1] 13/17
3:56 p.m [1] 134/18
2,800 [1] 139/21
'2280 [1] 15/15
3rd [1] 1/19
2-9-09 [5] 68/22 69/7 70/4 70/10 70/25
'2283 [1] 16/5
20 [9] 60/8 69/17 70/1 70/5 70/19 71/25 4
'3029 [2] 87/19 88/9
72/3 72/12 146/11
'3031 [1] 35/6
40 [1] 36/9
2000 [1] 52/17
'3055 [2] 7/12 9/17
40,000 [1] 36/9
2001 [1] 78/8
'3057 [2] 10/24 36/8
42 [4] 59/13 62/5 74/21 169/4
2002 [3] 143/9 145/4 150/21
'4270 [1] 71/15
44 [3] 132/20 132/20 133/2
2002-2003 [1] 150/24
'44 [9] 67/7 67/12 67/24 70/11 73/3
46 [1] 169/5
2003 [2] 150/23 150/24
73/5 73/8 73/24 73/25
48 [1] 169/6
2006 [9] 163/4 164/2 164/5 165/5 165/7 4:30 [1] 3/3
'70 [2] 68/12 72/4
165/8 165/13 165/18 166/1
'86 [1] 144/22
4:53 p.m [1] 168/8
2007 [11] 77/23 78/25 79/1 110/13
'8744 [2] 60/25 75/4
4th [2] 1/16 53/25
110/14 111/12 113/14 159/3 165/22
'89 [1] 68/13
5
166/24 167/1
'91 [2] 69/21 70/21
4/6
5/2
7/11
7/21
8/20
11/1
2008
[16]
5,251,874 [1] 166/22
'94 [1] 49/7
11/4 88/16 89/22 149/25 150/3 152/15 5-20-10 [3] 71/3 71/16 72/18
'the [1] 96/2
155/12 158/16 159/18 160/12
5.05 [1] 96/11
2008-2009 [1] 150/1
50 percent [1] 87/16
185
accumulation [1] 151/6
accurate [7] 19/16 21/2 21/15 30/4
500,000 [2] 62/2 62/19
88/18 93/2 94/10
5657 [1] 1/23
accurately [1] 91/20
58 [1] 169/8
acknowledges [1] 120/9
acknowledgments [1] 37/18
6
acquired [1] 108/11
6,575,403 [1] 167/2
across [2] 162/21 163/5
6-3-08 [1] 72/11
action [1] 37/20
6.05 [1] 5/18
add [1] 142/13
6.06 [9] 6/14 6/17 6/22 12/6 16/25
added [1] 34/7
91/13 94/17 94/23 133/5
adding [2] 33/22 149/7
6.08 [1] 44/2
addition [2] 9/3 9/5
64 [3] 169/8 170/3 170/3
addressed [1] 100/24
adhere [1] 156/6
7
admit [1] 159/10
7-31-2010 [1] 61/19
admitted [7] 3/21 49/7 53/2 64/9 155/1
70,000 [3] 114/17 114/17 114/18
158/13 159/15
74 [1] 169/9
admonition [7] 2/22 47/11 48/10 76/22
769-5657 [1] 1/23
134/2 135/14 167/14
77 [1] 169/10
advice [10] 59/18 59/22 60/5 61/5 61/9
7A [3] 90/11 91/5 101/3
62/4 62/11 62/15 62/23 63/8
affairs
[5] 77/25 79/15 79/16 80/16
8
80/17
8-11-2010 [1] 74/22
affected [1] 39/19
8-31-2010 [1] 61/19
affidavit [1] 52/8
80 [1] 140/16
afford [1] 127/6
afternoon [6] 2/11 2/12 64/12 77/15
9
110/4 110/7
9-19-13 [1] 170/23
afterwards [1] 6/11
9.06 [1] 100/24
agencies [1] 151/6
90 [2] 132/1 133/6
agency [3] 28/22 79/11 140/17
90 days [3] 6/17 94/18 95/6
agent [1] 114/14
902 [2] 141/22 158/8
agents [1] 51/3
954 [1] 1/23
aggregate [1] 44/9
99 [1] 1/16
agree [1] 23/18
9:30 [7] 2/13 2/25 3/1 167/16 167/18
agreement [56]
168/1 168/4
agreement' [1] 96/2
9:31 [2] 1/7 2/1
agreements [6] 96/4 101/4 108/16
109/4 136/8 138/1
A
agrees [1] 120/9
A-L-F-O-R-D [1] 77/12
aid [1] 139/15
A-L-L-Y [1] 57/25
Akerman [1] 1/19
a.m [4] 1/7 2/1 47/20 47/20
al [4] 50/23 52/12 126/7 161/7
ABA [1] 49/14
alerted [1] 46/23
ability [4] 19/23 99/1 104/25 108/18
Alford [48]
above [5] 100/5 138/4 138/6 146/6
Alfred [5] 50/11 53/22 91/3 93/17 169/3
170/21
allegations [2] 46/17 46/17
above-entitled [1] 170/21
alleged [1] 46/15
absolutely [4] 59/2 93/8 93/10 113/21 allow [12] 2/23 5/12 25/16 45/25 45/25
acceleration [1] 138/11
47/12 48/11 76/23 134/3 135/15 156/13
accept [2] 32/12 156/17
167/14
acceptance [3] 155/16 155/20 156/18 allowed [3] 131/13 134/9 167/23
accepted [3] 41/15 143/18 155/17
almost [4] 28/2 49/16 49/18 124/9
access [4] 147/10 147/12 147/13
Alvarez [3] 69/23 71/7 71/20
147/14
Amarilis [11] 67/17 68/17 68/25 69/22
accessed [1] 161/24
70/13 70/22 71/6 71/20 73/6 118/5
accordance [5] 5/21 17/6 18/17 19/5
118/7
41/15
amended [3] 96/2 104/8 138/16
according [10] 5/5 5/14 6/2 12/6 18/1 amendments [1] 80/1
18/24 19/2 20/11 63/5 140/22
AMERICA [1] 1/5
account [39]
American [1] 29/1
accountant [4] 144/7 145/2 145/7
amount [18] 34/23 35/2 40/11 61/12
145/8
62/14 62/17 62/20 62/23 63/8 87/4
accountant's [1] 125/6
99/22 104/3 104/7 104/11 104/13 138/4
accounting [8] 41/15 43/14 143/18
138/6 148/8
144/16 147/13 157/12 160/3 160/4
amounts [1] 62/10
accounts [6] 65/25 66/2 66/4 68/1 68/3 analyze [1] 87/8
68/22
Andersen [10] 144/22 145/3 145/8
145/9 145/11 145/13 145/15 146/15

146/16 151/23
angle [1] 80/21
annual [1] 92/22
answer [6] 7/25 8/1 17/2 119/10 121/7
123/15
answers [3] 159/21 160/2 160/21
anticipated [1] 130/4
anxious [1] 37/3
anymore [1] 162/19
apologize [4] 61/16 63/21 71/14 72/21
apparent [1] 131/9
APPEARANCES [1] 1/14
application [1] 99/9
applied [1] 17/15
approach [5] 3/17 53/5 65/5 141/25
153/17
approached [2] 45/7 84/9
approval [9] 27/11 85/1 85/24 99/17
99/17 100/2 100/5 100/6 100/12
approve [1] 27/18
approved [6] 27/6 36/21 99/4 99/18
99/20 140/2
approves [2] 99/25 100/10
April [4] 36/3 36/4 36/6 55/20
April 23rd [1] 36/3
April 30 [1] 55/20
Arango [1] 1/18
arbitral [3] 37/20 44/6 133/12
arbitration [1] 37/21
area [2] 106/11 140/16
areas [1] 156/14
Ari [1] 1/18
arose [4] 38/6 39/13 126/14 127/19
arrangements [2] 78/22 107/18
arrived [1] 113/14
Arthur [10] 144/22 145/3 145/7 145/8
145/11 145/12 145/15 146/15 146/15
151/23
Article [1] 96/14
Article III [1] 96/14
Artie [2] 75/2 75/3
aspect [1] 87/2
aspects [2] 125/16 157/22
asserted [1] 25/17
assessments [1] 125/17
asset [1] 35/2
assets [9] 34/18 35/3 85/18 87/3 87/5
124/6 164/10 166/17 166/20
assigned [14] 60/4 60/6 80/11 80/12
80/17 80/23 81/7 81/21 106/20 108/15
108/21 115/8 115/17 115/18
assignments [1] 108/10
assist [1] 113/16
assistant [5] 1/15 77/25 78/2 79/7
113/15
associates [1] 160/16
assume [1] 46/4
assumed [7] 8/25 12/24 13/5 18/19
28/21 29/5 150/15
Assuming [2] 12/23 120/11
attach [1] 121/5
attached [9] 11/25 15/14 29/12 54/4
54/10 54/17 86/20 121/10 142/15
attaching [1] 3/23
attachment [1] 164/14
attachments [2] 54/11 54/15
attempt [1] 19/21
attempting [1] 149/24
185
A
attorney [1] 80/16
attorneys [2] 1/15 90/22
audit [32] 32/20 43/6 103/11 126/19
143/12 143/14 143/15 143/16 143/20
143/21 143/22 145/24 146/14 146/17
146/21 146/24 146/25 147/18 148/2
149/2 149/8 149/10 149/11 149/16
149/24 150/5 151/23 152/3 152/18
153/4 153/9 159/5
audited [34] 29/25 30/6 30/12 30/19
30/19 30/23 32/18 42/22 43/1 43/3
92/23 100/21 101/11 101/12 101/17
101/19 102/1 102/4 102/7 102/12
102/14 102/17 102/23 103/2 103/13
123/1 126/14 126/16 127/5 127/6
127/20 133/7 138/13 138/17
auditing [7] 102/5 143/4 143/5 145/19
145/21 149/24 150/2
auditors [2] 43/6 92/23
audits [1] 145/2
August [14] 31/2 43/8 50/22 53/25
55/11 55/24 56/6 56/17 59/17 61/3
61/24 75/4 77/23 133/14
August 11 [2] 59/17 75/4
August 11th [1] 61/24
August 2 [1] 56/17
August 3 [1] 55/24
August 31 [2] 31/2 43/8
August 4 [2] 55/11 56/6
August 4th [1] 53/25
August, [3] 50/13 51/11 51/23
August, 2010 [3] 50/13 51/11 51/23
August-11-2010 [1] 61/3
authorization [1] 68/21
authorized [10] 66/2 66/25 67/16 67/22
67/23 69/7 69/20 69/25 71/23 71/24
authorizes [1] 66/18
Avenue [1] 1/19
awarded [1] 140/14
aware [20] 18/15 29/24 39/24 40/5
44/13 82/9 100/22 101/11 104/18
107/10 109/19 114/5 114/25 116/23
121/11 121/12 121/21 126/15 130/24
139/3
B
Bachelor [1] 144/16
background [2] 151/17 154/4
backing [2] 116/21 116/25
balance [30] 7/10 9/1 9/16 9/23 11/13
11/22 12/11 12/16 12/17 12/19 13/4
13/11 15/3 15/14 15/18 15/20 16/18
17/18 33/16 33/22 35/1 98/9 122/2
122/5 162/24 163/2 163/19 165/8 166/2
166/7
bank [22] 27/17 34/22 42/5 55/15 59/4
59/10 59/15 60/21 61/17 61/17 62/18
63/1 63/6 65/11 65/13 65/14 65/15
66/17 85/13 112/6 113/8 161/23
banks [4] 78/21 111/9 113/6 113/7
bar [2] 49/7 49/15
basic [1] 85/3
basis [7] 11/9 29/14 80/18 92/21 92/22
130/13 143/17
Bate [25] 7/12 9/17 10/24 13/17 15/15
16/4 40/15 53/19 55/8 55/13 55/19
55/22 55/24 87/19 88/8 89/8 91/4 95/16
98/13 101/2 108/2 140/23 160/10

160/20 164/13
Bates [2] 35/6 66/10
Beach [1] 161/16
began [7] 81/24 144/22 145/2 145/5
145/16 145/18 149/24
begin [2] 49/20 80/9
beginning [5] 79/20 82/4 114/1 115/7
147/1
behind [5] 30/20 70/3 113/9 113/17
125/10
Belgium [1] 49/12
belief [1] 30/15
believe [49]
believed [1] 24/7
below [2] 53/24 96/10
bench [1] 142/2
benefit [1] 69/13
besides [1] 53/16
beyond [3] 45/24 100/11 151/20
bid [1] 80/19
bigger [2] 61/21 123/1
biggest [1] 110/25
Bill [2] 25/4 118/13
blue [1] 83/16
Blvd [1] 1/22
board [1] 100/12
body [1] 56/9
bono [1] 49/13
books [5] 161/6 161/15 161/18 161/22
162/12
borrower [13] 19/21 44/5 85/20 86/2
86/24 95/23 95/25 96/4 96/23 99/7
99/12 99/20 120/9
borrowers [2] 97/3 101/6
bosses [1] 50/12
bottom [8] 11/1 66/10 66/11 89/12
124/7 124/9 165/9 166/25
bought [4] 58/25 105/11 105/12 106/18
Bowen [9] 22/8 24/14 49/18 49/20
52/15 90/22 91/2 126/4 126/7
box [5] 26/9 26/17 163/5 163/15 163/17
boxes [1] 63/17
brackets [1] 165/10
branch [1] 58/17
Brazil [1] 49/16
break [6] 3/2 112/1 133/24 134/8
167/10 167/22
Brito [1] 56/10
Broward [2] 1/22 58/14
budget [2] 6/21 94/22
build [18] 26/13 39/23 40/3 40/6 40/10
40/11 104/16 106/17 109/14 116/17
118/15 119/3 125/21 128/12 128/17
131/5 131/23 140/15
building [13] 26/12 41/2 83/22 83/24
115/21 117/4 124/19 128/4 129/10
130/11 132/1 138/20 156/13
buildings [1] 81/20
built [10] 106/19 124/21 128/22 129/1
129/4 129/6 129/10 130/25 131/23
141/3
bungalows [1] 129/11
business [34] 26/3 26/5 26/6 26/7
26/14 26/25 27/1 28/25 29/2 29/2 49/5
49/25 81/14 81/16 81/18 82/6 90/23
90/25 90/25 112/24 143/3 147/2 147/11
147/15 151/5 151/21 152/8 154/10
154/15 156/10 156/20 157/4 157/13
157/22
button [1] 60/19
buy [2] 40/2 118/15
C
call [20] 25/23 25/25 48/13 51/25 55/2
57/16 57/17 60/14 66/7 77/2 87/25
100/9 107/8 123/12 123/17 123/18
125/18 141/12 150/4 150/7
called [6] 4/10 50/23 80/3 115/4 150/16
151/2
calls [7] 25/10 25/13 48/14 77/4 94/16
100/23 141/14
Cameron [13] 3/12 6/4 18/23 23/4
28/16 53/11 53/13 53/20 57/6 77/4 77/7
77/11 169/10
Canada [3] 161/11 161/22 163/13
card [8] 66/17 67/12 70/11 70/21 71/19
72/11 73/22 85/13
cards [4] 66/1 70/3 72/2 72/3
cargo [2] 119/2 119/2
Caribbean [8] 109/8 109/14 109/14
128/21 130/2 138/21 141/1 141/3
Carness [4] 158/18 159/4 159/17
160/21
cash [14] 8/17 8/17 34/18 34/19 34/23
87/4 87/4 123/25 123/25 157/5 164/2
164/2 166/17 166/17
caused [1] 96/7
Cayman [10] 95/22 161/3 161/6 161/10
161/10 161/12 161/21 161/21 163/13
163/14
cc [1] 120/22
cc'd [1] 11/19
celebrities [1] 117/11
centered [1] 104/12
CEO [2] 83/8 100/10
certificate [3] 6/24 95/1 96/20
certification [5] 96/25 97/6 158/4 158/8
159/11
certifications [2] 95/11 96/24
certified [5] 6/22 94/24 95/9 144/7
158/9
certify [3] 95/23 96/12 170/20
certifying [2] 94/3 97/6
CFO [5] 52/16 83/9 95/10 150/17
152/11
chaired [1] 100/9
charge [1] 58/14
checked [1] 92/22
checks [1] 66/21
chief [5] 6/22 94/24 95/20 151/9 153/16
CHS [5] 52/16 151/19 152/6 152/8
152/10
CHS Electronics [1] 52/16
circumstance [1] 102/13
circumstances [2] 89/1 102/10
city [2] 160/14 161/19
city/state/country [1] 160/14
claims [1] 44/8
clarify [3] 29/12 146/18 160/13
Clark [2] 116/16 118/25
Claudio [15] 52/1 55/3 55/6 56/2 56/7
67/17 68/16 68/25 69/21 70/13 70/22
71/6 71/19 72/15 120/9
clause [1] 23/21
clauses [1] 23/10
clear [2] 5/18 74/7
client [12] 22/19 23/7 24/12 24/23 25/7
185
C
client... [7] 25/20 147/8 148/19 155/16
155/18 156/17 156/18
clients [1] 14/5
Clinton [9] 25/4 25/6 116/16 116/21
116/23 117/8 118/14 118/22 128/15
Clintons [1] 118/11
close [3] 37/3 62/7 141/18
closely [1] 67/15
closer [2] 35/14 164/7
closing [2] 19/20 96/20
colleagues [1] 162/6
collective [1] 90/23
college [1] 146/2
column [2] 166/9 166/18
columns [1] 163/25
combination [5] 8/25 33/15 33/15
160/9 163/21
combined [24] 10/23 10/25 11/8 12/15
12/17 13/18 13/21 89/9 98/14 122/2
122/5 162/24 163/5 163/10 163/15
163/19 164/10 164/14 164/18 164/19
165/14 166/6 166/7 166/23
comfortable [1] 104/13
commencement [2] 44/6 133/12
commercial [5] 22/13 27/14 29/1 31/16
42/5
commitment [14] 85/2 99/19 119/23
120/5 120/21 121/4 126/2 131/8 135/23
136/2 136/4 136/7 136/12 136/14
committed [1] 120/8
committee [1] 100/9
common [1] 140/16
commonly [1] 60/14
communicate [2] 32/11 52/21
communicated [4] 20/5 20/6 28/2
28/12
communication [1] 129/18
communications [2] 127/12 127/13
community [1] 130/18
companies [32] 12/16 12/18 22/16
29/1 29/1 29/14 30/25 33/15 33/16
33/18 33/23 50/1 92/16 92/23 112/10
121/21 121/24 122/2 122/4 122/8
149/15 156/6 159/22 162/24 163/6
164/10 164/25 165/15 166/1 166/6
166/8 166/11
company [125]
company A [2] 34/8 34/10
company B [2] 34/9 34/10
company's [5] 18/13 91/9 103/11 157/9
162/7
compare [3] 165/2 166/3 166/4
comparison [3] 6/20 88/15 94/21
competent [3] 28/22 29/5 32/6
complain [1] 23/13
complete [12] 4/19 5/1 6/23 21/15
88/18 88/24 88/25 91/13 94/9 94/25
95/10 95/13
completed [1] 32/19
compliant [3] 18/12 155/25 156/5
complicated [1] 78/20
complied [6] 17/23 19/7 19/12 19/14
19/22 23/21
complies [1] 41/23
comply [10] 16/25 17/3 17/10 18/4 18/8
32/2 32/8 41/19 58/15 143/18
components [1] 9/23
comport [3] 24/8 31/21 31/23

composite [4] 40/20 81/10 81/18 84/1
computer [4] 1/25 60/18 60/19 152/9
concede [4] 2/18 48/6 76/18 135/10
concerned [1] 125/12
concluded [1] 168/8
conclusions [2] 147/6 148/23
condition [21] 4/20 18/15 85/19 86/7
87/3 87/7 87/23 88/11 91/6 91/14 91/20
91/22 92/2 94/11 96/17 96/22 98/6 98/7
99/15 136/24 137/1
conditions [9] 18/18 19/19 19/20 19/22
19/24 87/12 127/24 136/5 136/20
conduct [11] 46/15 62/13 143/20
143/21 143/24 143/25 146/16 146/21
147/5 148/12 148/22
conducted [1] 149/12
conducting [7] 145/2 145/24 147/4
147/5 150/5 152/17 153/9
conference [4] 51/25 55/2 83/23 117/4
confess [1] 81/2
confusing [1] 16/1
connection [5] 51/16 96/6 100/20
107/17 139/7
connections [1] 118/10
consist [1] 146/25
consistent [1] 97/14
consolidated [10] 3/24 6/19 11/13
11/22 15/14 94/20 95/8 121/5 133/7
157/23
consolidation [8] 157/22 160/15 163/8
163/10 163/15 163/24 164/23 166/12
constant [1] 149/5
constitute [1] 96/18
constituted [1] 20/9
construction [9] 40/18 81/9 81/19
103/23 104/14 105/8 106/6 106/16
156/14
consultant [2] 58/12 58/13
contact [3] 28/15 150/9 160/16
contacted [1] 152/15
contain [5] 18/15 20/12 21/13 62/3
93/2
contained [4] 20/1 21/1 21/2 96/4
contains [1] 19/20
contents [1] 125/25
context [3] 36/4 155/19 155/21
continued [2] 3/8 84/22
continuing [1] 136/6
contract [29] 22/20 23/7 23/11 23/18
23/21 24/3 24/8 27/7 27/12 27/19 29/16
31/21 37/15 37/16 38/7 39/10 40/15
41/19 41/23 108/6 108/12 108/13
108/21 108/24 109/1 139/25 140/15
140/22 140/24
contracts [2] 106/14 107/18
control [1] 156/6
controller [2] 158/20 158/24
conversation [2] 38/22 118/17
conversations [3] 34/14 39/1 90/23
converted [3] 58/23 58/24 58/25
coordinating [1] 102/18
copied [3] 15/12 15/17 53/22
copy [2] 38/15 95/7
corner [3] 31/8 56/4 66/11
corporate [5] 49/23 66/5 78/21 160/5
160/7
Corporation [3] 77/19 90/13 96/1
corrected [1] 54/15
corresponded [2] 51/9 51/24

counsel [28] 2/4 2/18 3/16 15/7 20/22
21/23 42/15 47/23 48/6 63/12 63/16
63/22 65/9 72/23 76/5 76/18 78/1 78/2
79/7 96/6 107/24 109/23 113/16 134/22
135/10 155/4 158/1 159/8
countries [1] 105/2
country [2] 81/22 160/14
County [1] 58/14
court [17] 1/1 1/21 1/21 1/22 2/5 22/2
47/18 47/24 64/13 75/22 76/6 76/12
110/5 134/16 134/23 168/4 170/24
courtroom [19] 2/2 2/17 47/16 47/19
47/21 48/5 75/20 75/24 76/2 76/17 77/5
83/12 134/7 134/17 134/19 135/4 135/9
167/19 168/7
covenant [1] 133/5
covenants [2] 96/3 109/4
cover [1] 112/3
covers [1] 163/3
CPA [6] 30/19 143/4 144/7 144/9
144/22 151/23
CR [1] 1/4
CRAIG [37]
credit [12] 82/3 82/4 84/24 85/4 85/8
85/10 85/13 85/23 99/16 100/4 100/6
100/8
critical [4] 82/20 82/21 82/21 155/25
Cross [10] 22/1 22/3 57/9 63/11 64/10
110/1 110/2 169/4 169/8 169/11
Cross-examination [7] 22/1 22/3 57/9
63/11 64/10 110/1 110/2
CRR [2] 1/21 170/24
Cruise [4] 109/8 138/21 141/1 141/4
currency [1] 112/4
Cursory [1] 156/11
custodian [1] 64/20
customers [1] 147/15
cut [1] 65/23
cycle [1] 79/25
D
D.C [5] 49/14 78/11 78/17 110/19
110/20
data [1] 155/25
date [28] 30/6 31/1 31/5 43/8 43/10
55/11 55/12 61/1 61/23 68/11 69/5
69/16 70/10 73/23 88/13 89/25 90/1
90/6 90/9 96/15 96/16 96/19 102/15
102/24 114/12 115/1 120/11 170/24
dated [16] 3/23 11/18 15/9 55/20 55/24
56/6 68/22 71/16 73/22 74/3 86/15
91/10 96/1 135/24 155/12 159/18
dates [3] 39/2 44/22 70/4
David [1] 57/25
deadlines [1] 149/16
dealings [2] 14/5 25/8
dealt [8] 6/4 52/16 55/1 112/21 126/7
127/24 128/4 151/14
debt [1] 99/2
decades [1] 22/14
December [28] 4/6 5/2 7/21 7/21 8/17
8/20 11/1 11/1 11/4 46/9 80/11 88/15
89/22 115/8 115/19 115/24 116/2
119/25 163/4 164/2 164/5 165/5 165/7
165/8 165/12 165/22 166/24 167/1
December 3 [1] 165/7
December 31 [20] 4/6 5/2 7/21 7/21
8/17 8/20 11/1 11/1 11/4 88/15 89/22
185
D
December 31... [9] 163/4 164/2 164/5
165/5 165/8 165/12 165/22 166/24
167/1
decide [1] 90/24
decided [1] 42/12
decides [1] 23/20
decision [2] 18/19 87/11
decisions [2] 85/24 125/17
dedicated [1] 40/20
deemed [1] 19/23
default [18] 38/13 38/13 44/2 96/16
96/19 115/5 132/5 132/6 132/9 132/11
132/15 133/2 133/4 137/13 137/16
138/8 138/11 138/14
defaulted [3] 133/15 133/17 137/17
defaults [2] 109/4 133/19
Defendant [2] 1/9 1/17
definition [11] 17/4 31/22 39/21 41/13
127/23 130/6 130/8 131/13 138/25
160/4 160/4
degree [4] 144/11 144/15 144/19
156/20
degrees [1] 144/17
Delaware [1] 163/11
delay [1] 43/5
delayed [3] 42/21 43/1 43/4
deleted [1] 34/8
deliver [2] 133/6 138/15
delivery [2] 100/21 101/10
Deloitte [3] 151/18 151/22 151/25
department [3] 49/23 77/25 81/3
depend [1] 87/16
depending [2] 106/10 146/10
depends [1] 146/10
deploy [2] 105/21 107/7
deployment [1] 40/21
depositor [1] 68/21
depositors [2] 67/16 71/23
deposits [2] 74/8 74/10
derivative [3] 111/22 112/19 113/4
derivatives [1] 111/20
described [2] 26/4 153/1
describing [1] 150/4
description [3] 9/23 157/1 157/4
design [1] 148/12
designated [1] 161/11
designing [2] 147/2 147/3
detailed [2] 145/24 147/12
details [2] 26/23 38/22
determine [5] 62/14 85/10 113/18
147/22 148/7
determined [2] 148/10 148/13
determining [3] 113/22 148/6 153/8
develop [3] 143/23 148/4 148/8
developing [3] 105/2 147/3 148/5
development [3] 40/17 79/12 80/21
Devine [1] 49/2
difference [1] 118/19
difficult [1] 40/2
difficulties [1] 39/14
difficulty [1] 39/25
diligence [7] 79/21 82/1 84/8 113/3
113/6 115/16 136/6
Dimitrouleas [1] 1/11
direct [20] 3/8 21/5 44/1 48/22 58/3
61/15 61/16 77/13 80/2 86/14 100/15
119/14 142/21 149/18 155/6 169/3
169/6 169/8 169/10 169/13

directed [2] 119/8 152/20
directing [3] 74/21 91/4 157/10
direction [1] 62/13
directly [6] 6/16 59/24 108/19 118/14
127/12 151/10
director [1] 100/3
directors [1] 100/12
disaster [1] 116/12
disbursed [2] 102/8 140/21
disbursement [18] 32/17 32/18 32/25
33/11 51/20 52/3 52/4 52/9 56/18 56/21
96/23 99/21 103/16 105/13 136/20
136/24 139/7 140/21
disbursements [1] 107/17
disburses [1] 137/2
disclose [1] 20/17
disclosure [12] 9/22 10/4 12/13 17/7
18/7 19/9 20/1 20/13 20/16 21/12 31/12
31/17
disclosures [6] 9/21 12/10 20/25 97/20
100/18 101/8
discover [1] 26/2
discovered [1] 62/22
discuss [9] 2/23 47/12 48/11 76/23
134/3 134/9 135/15 167/14 167/23
discussed [11] 2/23 41/6 47/12 48/11
67/10 76/23 93/17 116/8 134/3 135/15
167/14
discussing [1] 115/21
discussion [23] 3/16 15/7 20/22 21/23
39/6 39/22 41/1 42/15 45/3 63/12 63/16
63/22 65/9 72/23 104/10 104/11 107/24
109/23 118/10 147/11 155/4 158/1
159/8
discussions [4] 16/21 24/1 38/16
38/18
dissimilar [1] 85/12
distinguish [1] 153/7
distribute [1] 126/24
distribution [1] 152/9
DISTRICT [4] 1/1 1/2 1/12 1/22
division [2] 1/3 49/22
dizzy [1] 164/25
document [31] 7/15 11/15 11/24 13/6
14/20 16/12 18/13 19/4 55/12 59/6
59/12 60/7 60/9 61/13 62/24 63/1 63/5
63/18 87/6 88/9 88/11 89/2 89/2 89/3
91/19 95/17 98/11 98/15 107/22 108/3
166/8
documentation [4] 51/1 51/18 79/24
109/5
documents [25] 14/9 19/21 52/2 53/4
53/10 54/4 54/9 55/6 56/20 57/2 57/3
63/18 64/22 64/25 65/18 65/19 65/20
69/10 86/1 86/20 86/23 113/18 130/4
161/15 165/21
dollar [1] 124/10
dollars [5] 34/9 34/10 34/19 112/5
112/7
domain [6] 104/19 105/4 105/15
105/23 106/10 128/7
domicile [1] 160/13
donates [1] 106/12
double [1] 34/12
double-counting [1] 34/12
draw [2] 100/16 148/23
drawing [1] 147/6
DRC [1] 140/15
DRC Emergency [1] 140/15

dwellings [1] 140/16
dynamics [1] 155/24
E
e-mail [38]
early [2] 3/2 25/25
earn [1] 112/5
earned [1] 89/20
earthquake [12] 82/10 82/17 82/18
82/21 82/22 82/23 84/17 115/22 116/11
119/22 119/24 128/3
easy [2] 131/9 142/15
Ed [2] 25/1 25/3
efficient [1] 40/22
Elba [10] 67/17 68/17 69/1 69/22 70/14
70/22 71/6 71/20 72/16 73/6
Electronics [1] 52/16
eliminated [1] 34/2
elimination [6] 163/8 163/10 163/15
163/24 164/22 166/11
else's [1] 122/12
embassy [1] 129/22
emergency [2] 56/10 140/15
eminent [6] 104/19 105/4 105/15
105/23 106/10 128/7
employed [8] 48/24 58/7 58/9 77/16
142/23 143/1 143/7 151/2
employee [2] 59/1 64/21
employees [2] 162/8 162/8
enable [1] 96/8
encompass [1] 147/18
energy [1] 40/22
engaged [1] 103/2
engagement [8] 7/17 145/23 146/1
146/7 146/8 148/14 149/3 150/16
engaging [1] 43/5
ensure [2] 92/5 160/15
entail [1] 109/17
enter [1] 112/6
enterprise [3] 81/3 100/3 132/25
enterprises [1] 78/22
entirely [1] 30/4
entities [17] 51/2 85/17 92/14 102/11
105/19 111/8 112/21 112/21 112/22
112/23 160/14 162/2 162/3 162/9
162/13 163/21 163/23
entitled [1] 170/21
entity [7] 84/10 85/11 87/8 87/11 92/19
124/6 160/17
entries [4] 163/24 163/25 164/23
166/12
environment [1] 130/19
envisioned [1] 39/15
equity [2] 27/17 42/5
equivalent [1] 44/9
equivalents [6] 8/17 34/19 87/5 123/25
164/3 166/18
Ernst [31] 43/16 43/21 45/10 45/12
103/7 103/9 103/11 127/10 127/16
143/2 143/3 143/7 143/11 143/21 145/5
145/16 145/17 145/18 146/16 146/20
146/20 150/15 151/23 153/9 154/6
154/9 154/10 154/16 155/18 159/5
162/1
ERP [1] 155/24
Esq [5] 1/14 1/15 1/17 1/18 1/18
Essentially [1] 26/10
establish [1] 19/22
185
E
established [2] 24/19 24/19
estimate [1] 75/16
evaluate [1] 86/4
evaluated [1] 115/15
evaluating [2] 86/1 86/23
evaluation [2] 85/15 156/16
evening [2] 167/13 167/17
event [3] 96/16 96/17 96/18
events [2] 138/2 138/2
everybody [1] 78/15
everyone [4] 2/22 48/10 76/22 135/14
evidence [21] 3/21 53/2 59/13 64/9
65/4 86/11 107/17 120/4 120/12 132/19
132/20 141/22 141/23 144/2 154/23
155/1 158/4 158/8 158/13 159/11
159/15
Evidence 902 [2] 141/22 158/8
evident [2] 17/8 19/4
ex [1] 116/25
ex-president [1] 116/25
examination [17] 3/8 22/1 22/3 42/19
46/2 48/22 57/9 58/3 63/11 64/10 74/15
77/13 96/7 110/1 110/2 135/21 142/21
exceed [1] 44/9
Excel [1] 159/2
exception [1] 54/14
exchange [1] 112/7
excluded [13] 9/14 9/18 12/24 12/25
13/6 13/11 13/13 13/21 13/25 14/19
15/20 15/23 15/24
excludes [1] 14/8
exclusion [2] 13/7 13/9
exclusively [1] 28/2
excuse [10] 16/19 25/19 36/17 37/10
42/14 63/13 63/21 71/9 72/21 128/21
excused [8] 47/7 47/9 57/13 57/15 75/9
75/13 141/9 141/11
execute [1] 27/19
executed [3] 85/1 116/4 136/23
executing [1] 39/14
execution [1] 27/11
executive [1] 156/19
exhibit [53]
Exhibit 5 [1] 120/12
Exhibit 7A [3] 90/11 91/5 101/3
Exhibit B [8] 153/22 154/14 154/23
156/23 158/3 158/15 159/10 162/20
Exhibit C [27] 3/22 4/16 4/25 6/1 6/15
7/12 8/16 9/16 11/12 11/17 13/17 15/2
15/9 53/3 59/7 59/13 60/8 74/21 86/11
92/6 93/22 94/12 95/16 97/11 98/9
108/2 139/8
exhibits [8] 141/23 142/6 142/7 142/9
142/12 142/14 170/1 170/2
Exhibits B [1] 141/23
existing [1] 95/22
exists [1] 96/19
exited [8] 47/16 47/19 75/20 75/24
134/7 134/17 167/19 168/7
expand [1] 131/2
expanded [1] 130/9
expect [3] 45/15 45/17 108/24
expected [3] 13/12 13/24 102/21
expecting [1] 102/23
experience [4] 14/9 17/6 18/6 59/9
expertise [1] 157/14
explain [11] 10/5 99/3 108/10 136/1
137/23 143/14 143/20 145/25 146/14

147/25 167/21
explanation [1] 156/24
express [4] 96/8 143/12 143/17 144/2
extend [1] 102/21
extended [1] 127/20
extension [2] 102/14 127/5
extensively [1] 9/10
extent [2] 19/22 41/7
external [3] 92/22 92/23 102/5
extremely [1] 92/3
eye [1] 125/6
F
fabricated [1] 26/25
face [5] 17/9 17/22 19/2 19/4 32/2
faces [1] 105/2
facility [1] 40/19
fact [25] 3/15 4/25 6/2 6/14 7/2 10/13
16/18 20/6 23/20 25/16 29/19 29/23
29/24 41/22 84/16 90/3 94/16 95/12
98/25 100/23 104/12 116/20 120/15
126/15 137/16
factories [12] 26/8 26/12 33/19 35/8
35/8 35/11 36/9 124/19 124/19 124/21
157/7 157/9
factory [24] 26/17 40/1 40/3 40/6 40/10
81/10 83/1 83/11 83/20 83/24 103/22
104/14 105/8 105/10 105/12 106/16
106/21 106/21 118/6 119/3 128/12
131/6 131/12 131/16
failed [1] 133/11
failure [4] 132/12 133/19 137/20
138/15
fall [7] 38/21 39/4 44/14 44/25 45/8
46/14 46/23
fallen [1] 17/12
false [2] 46/17 46/25
families [1] 106/12
Fargo [6] 58/10 58/11 58/19 58/25 59/1
64/21
FBI [4] 46/11 46/22 114/10 114/14
February [4] 78/25 79/1 111/12 132/21
February 8 [1] 132/21
Federal [2] 141/22 158/8
fifth [1] 21/16
figure [10] 84/8 89/14 89/17 89/19
89/22 148/4 164/4 165/10 165/11 167/1
figures [7] 11/7 87/19 87/20 87/22
88/18 88/18 89/4
file [5] 27/5 99/8 114/21 115/9 126/3
filed [5] 38/20 39/3 46/14 46/17 133/14
files [2] 159/1 159/2
filings [1] 50/1
fill [1] 82/20
final [2] 35/5 90/17
finally [2] 99/21 148/22
finance [22] 78/18 78/19 79/14 80/7
80/14 80/16 81/3 82/4 85/25 100/3
100/16 105/7 105/17 111/4 111/5 111/6
115/9 115/14 122/15 122/17 132/25
136/5
financial [169]
financially [1] 87/14
financials [31] 3/24 4/2 4/15 6/9 7/9 8/3
10/10 10/11 18/7 18/21 19/8 20/1 20/12
30/12 30/19 30/21 30/23 31/8 31/17
31/23 32/12 32/13 33/5 36/8 120/16
120/23 121/6 121/9 126/20 127/6 144/3
financing [10] 79/12 85/3 85/11 92/4

92/4 106/16 107/4 109/16 118/15
132/25
finish [2] 119/10 127/4
finished [3] 35/14 36/12 125/2
firm [21] 24/15 24/19 30/19 30/20
43/15 49/2 78/10 78/16 78/24 79/3 79/4
110/18 110/21 143/4 143/4 143/5
144/23 148/21 151/23 157/14 157/21
firms [3] 24/15 43/14 110/25
fiscal [9] 6/18 6/18 6/19 6/21 94/18
94/19 94/20 94/23 133/7
Fitzgerald [1] 49/3
FIU [2] 144/13 144/21
five million [2] 104/3 104/4
five o'clock [1] 168/5
floor [2] 1/19 83/25
FLORIDA [15] 1/2 1/6 1/16 1/20 1/23
24/15 24/21 49/10 49/14 49/15 83/2
144/8 144/12 161/14 163/16
flows [2] 157/4 157/5
focus [4] 24/10 67/3 87/18 162/22
focused [1] 111/6
folks [1] 91/1
follow-up [2] 54/14 54/16
Food [1] 140/22
footnote [7] 17/7 18/7 18/16 19/9 20/1
20/12 20/16
footnotes [5] 20/18 21/13 97/23 98/10
98/15
foregoing [2] 142/20 170/20
forget [2] 46/6 52/9
form [13] 9/8 12/20 14/22 16/13 27/2
41/19 52/8 87/24 88/20 93/13 93/14
101/21 108/23
forma [30] 8/22 8/25 9/2 9/6 9/7 9/13
10/1 10/3 10/6 12/12 12/14 16/19 16/20
16/22 17/17 31/9 31/18 32/8 32/12
33/14 33/22 33/25 35/8 36/9 92/7 93/11
97/17 123/3 123/9 126/12
format [1] 142/14
former [6] 25/4 25/6 64/21 116/20
117/8 118/25
formerly [1] 64/21
forms [1] 10/8
formulate [1] 143/16
formulation [1] 85/23
FORT [3] 1/3 1/6 1/23
forwarded [2] 10/22 121/14
Foster [11] 1/14 3/6 47/4 77/2 167/9
169/3 169/4 169/6 169/10 169/11
169/13
Foster-Steers [7] 1/14 169/3 169/4
169/6 169/10 169/11 169/13
fourth [2] 6/18 94/19
Francine [3] 1/21 170/23 170/24
Frank [1] 57/24
frequency [1] 151/15
frequently [2] 18/18 129/21
Friday [4] 3/10 5/11 9/10 22/7
friend [1] 49/15
front [7] 11/17 42/11 48/19 68/9 68/20
77/9 83/22
Fudally [11] 57/18 57/21 57/24 58/5
59/6 60/13 61/16 64/18 64/19 74/17
169/7
fulfill [1] 18/14
function [1] 58/18
fund [5] 18/20 36/25 42/12 100/14
185
fund... [1] 132/3
fundamental [1] 35/22
funded [4] 20/7 30/13 36/18 37/8
funding [3] 18/18 20/8 42/7
funds [3] 59/18 61/4 62/23
furnished [8] 6/21 91/11 91/12 94/1
94/23 97/14 107/19 125/2
grounds [3] 133/2 138/8 138/10

group [17] 9/1 12/16 111/4 111/7
121/21 121/24 122/1 122/4 162/24
163/6 163/10 163/15 164/10 165/14
165/14 166/6 166/7
group 1 [1] 163/10
group 2 [1] 163/15
groups [1] 133/1
Gutierrez [1] 56/9
G-A-B-R-I-E-L-A [1] 58/2

GAAP [22] 5/5 5/9 5/15 5/21 6/2 17/6
17/7 17/10 18/1 18/6 18/17 18/24 19/3
19/5 19/12 20/11 31/23 32/3 32/8 32/11
41/14 41/17
Gabby [1] 57/18
GABRIELA [4] 57/21 57/24 58/2 169/7
Gamboa [11] 67/17 68/17 69/1 69/22
70/14 70/22 71/6 71/20 72/16 73/6 74/2
gather [3] 8/7 36/23 52/2
gathering [3] 153/2 154/12 154/13
general [7] 78/1 78/2 79/7 83/22
113/15 118/25 147/12
generated [1] 26/25
gentleman [2] 69/22 73/15
gentlemen [1] 132/22
George [1] 78/6
German [2] 161/18 161/21
Germany [3] 161/18 161/19 163/14
Gerstin [1] 1/18
gets [2] 41/22 106/8
gives [1] 137/2
GJW [1] 66/11
GJWB [1] 66/14
GJWB19 [1] 68/7
Global [1] 116/23
GMBH [2] 161/18 163/17
gonna [34] 25/7 25/8 27/7 32/12 43/1
43/8 53/2 61/21 65/4 66/7 67/3 68/7
78/12 86/10 89/8 90/10 103/10 116/17
117/1 128/12 128/13 129/2 130/11
131/5 131/9 142/9 144/4 145/25 148/10
158/15 164/13 165/21 167/15 167/21
Goodman [2] 49/2 49/3
goods [6] 35/14 35/19 35/25 36/12
125/2 125/2
gotten [2] 115/9 160/2
government [18] 28/22 48/13 57/16
64/4 64/22 65/12 76/9 77/4 79/12
104/25 106/10 113/19 119/6 129/21
141/12 154/23 158/3 159/10
Government's [26] 3/22 6/1 6/14 11/12
48/17 53/3 57/21 59/7 59/13 60/8 62/5
64/1 64/9 74/21 77/7 86/11 90/10
141/16 153/23 155/1 158/5 158/13
159/12 159/15 169/2 170/2
Government's C [1] 62/5
governmental [1] 128/18
grab [1] 66/14
graduate [1] 78/5
graduated [1] 110/16
graduating [1] 144/21
graduation [1] 111/12
grant [1] 32/18
granted [1] 102/21
great [2] 82/16 157/19
greatly [2] 146/10 149/15
ground [1] 129/23
H-O-B-S-O-N [1] 48/21

Haiti [40]
half [1] 124/10
hand [7] 48/16 56/4 57/19 66/11 77/6
141/15 160/25
handing [2] 3/21 153/21
Harold [1] 24/24
head [1] 56/10
health [6] 92/4 92/20 122/3 122/5
122/11 124/5
healthy [1] 87/14
hear [2] 21/9 78/15
heard [3] 30/18 47/1 126/25
hearing [2] 2/10 142/2
hearings [1] 75/15
hearsay [4] 25/10 25/13 46/19 87/25
heart [1] 116/11
Hello [1] 160/13
help [3] 82/20 92/5 155/16
helped [3] 51/1 51/2 51/18
helping [1] 79/21
Herb [3] 69/1 70/13 70/21
Here's [3] 68/10 68/11 71/15
hereby [2] 95/23 96/12
hereof [3] 96/15 96/16 96/19
hereto [1] 121/10
hereunder [1] 120/10
hey [1] 42/6
higher [1] 104/11
highlighted [1] 59/17
highlighting [1] 34/18
Hillary [1] 118/22
hired [1] 127/16
hiring [1] 127/10
history [3] 85/18 86/9 102/12
hit [2] 60/18 116/11
Hobson [13] 48/15 48/17 48/21 48/24
49/4 50/10 52/25 53/10 54/17 54/25
56/11 57/2 169/6
hold [2] 66/14 144/5
Holdings [12] 73/4 73/8 88/12 91/17
121/23 161/3 161/10 162/10 162/11
163/13 163/14 163/16
Holdings, [5] 73/25 90/12 98/14 161/14
163/16
Holdings, Inc [1] 161/14
Holdings, LLC [4] 73/25 90/12 98/14
163/16
holiday [1] 102/19
home [4] 26/25 85/13 130/18 130/21
homes [10] 39/23 40/11 40/22 41/2
104/16 106/6 107/7 115/21 140/11
156/14
honestly [2] 4/4 56/15
Honor [60]
Honorable [1] 1/11
hope [1] 155/15
Horacio [3] 69/23 71/7 71/20
horizon [4] 149/17 150/1 150/22 151/1

horrible [1] 116/12
house [3] 53/14 53/14 128/17
houses [12] 104/16 105/22 106/12
116/18 118/15 118/16 125/21 128/12
130/12 131/23 132/1 140/11
housing [8] 26/13 81/11 81/12 81/20
82/16 103/24 109/17 131/4
hum [10] 62/21 66/3 66/6 68/4 71/2
74/23 99/11 106/23 122/20 128/8
hundred [3] 24/17 34/9 34/10
hurricane [1] 115/19
I
I'd [6] 43/10 59/6 60/7 61/15 74/20
165/2
I'll [17] 3/4 5/12 24/10 25/16 31/6 33/9
41/12 45/25 45/25 65/22 66/7 68/8 89/6
117/22 132/20 162/22 164/24
I'm [66]
I've [3] 59/17 75/15 117/13
identification [6] 60/2 64/2 153/22
153/23 158/5 159/12
identify [2] 83/14 106/7
III [1] 96/14
imagine [2] 73/23 150/22
immediate [1] 44/24
immediately [2] 44/5 118/23
impact [1] 105/5
imperative [1] 119/12
implementation [2] 156/7 156/8
implementing [2] 79/25 155/23
in-house [2] 53/14 53/14
in-process [1] 156/7
Inc [2] 71/16 161/14
incapable [1] 46/6
include [3] 84/24 90/23 131/4
included [2] 132/12 138/24
including [1] 66/1
inclusion [1] 17/7
income [15] 7/10 11/2 11/8 16/6 16/19
16/20 17/17 26/13 81/12 81/20 89/12
103/23 124/9 165/10 166/25
incoming [6] 59/22 61/9 74/8 74/9
74/17 74/21
incomplete [2] 14/12 14/13
independent [1] 30/19
INDEX [2] 169/1 170/1
indicated [2] 61/25 62/4
indicates [1] 34/22
indicating [4] 12/10 68/22 83/16 90/1
individual [4] 32/6 50/10 146/15
164/21
individually [1] 44/8
individuals [1] 67/22
inevitably [3] 36/18 40/14 40/14
inform [1] 138/6
information [70]
informed [1] 96/9
inherent [1] 156/2
initial [6] 20/7 32/25 33/10 84/11
103/25 104/1
initially [3] 29/24 115/20 153/1
Initiative [2] 116/24 128/15
Innorez [6] 90/12 95/21 97/1 97/3
161/18 163/14
InnoVida [161]
InnoVida's [7] 81/13 81/16 81/18 83/1
91/21 91/22 108/18
185
I
inquiries [1] 143/16
instance [1] 19/25
intention [1] 128/16
interact [1] 162/7
interacted [1] 151/16
intercompany [2] 34/3 34/7
interest [4] 114/2 114/5 114/7 127/1
interested [3] 82/18 150/5 152/17
interests [2] 26/12 124/19
internal [1] 156/6
internally [1] 95/9
international [3] 49/13 144/12 156/1
interpose [1] 165/17
interpretation [2] 33/24 88/1
interrupted [1] 117/13
interview [4] 46/9 46/10 114/13 114/20
interviewed [1] 46/23
interviews [1] 147/11
introduce [4] 63/24 142/17 154/23
158/3
introduced [7] 59/7 59/12 60/8 62/4
83/9 86/10 90/10
investigate [1] 125/10
investigating [1] 79/21
investigation [3] 37/23 62/13 96/8
investment [4] 77/19 90/13 96/1 100/9
invoice [2] 55/20 55/24
involvement [1] 151/18
irrelevant [1] 74/17
Island [4] 161/6 161/10 161/12 161/22
Islands [1] 95/22
issuance [3] 136/11 136/14 136/15
issue [14] 28/9 29/23 105/14 105/23
105/24 105/24 106/3 121/2 126/14
128/7 142/3 142/13 146/21 148/25
issued [3] 121/1 125/19 132/8
issues [19] 27/3 39/13 39/23 40/4 40/5
102/18 104/18 104/20 104/22 104/24
105/9 106/8 127/19 127/23 128/2
128/18 130/3 157/13 157/21
issuing [1] 138/8
items [1] 54/2
J
Jacqueline [1] 1/18
James [1] 132/24
James C [1] 132/24
January [16] 3/23 36/6 38/23 39/18
86/15 89/3 115/4 117/17 120/4 120/7
120/17 120/20 126/3 131/8 135/24
144/22
January 21 [2] 117/17 135/24
January 21st [1] 120/4
January 26 [2] 120/7 126/3
January 28 [4] 3/23 36/6 86/15 89/3
January 28th [2] 120/17 120/20
January 5 [1] 38/23
January, [4] 44/20 82/9 84/6 84/15
January, 2010 [3] 82/9 84/6 84/15
January, 2011 [1] 44/20
Japanese [1] 112/5
job [15] 79/4 112/16 113/14 113/15
113/21 122/10 122/11 122/13 123/22
123/23 125/13 125/14 125/15 146/10
150/16
joint [6] 26/12 26/22 27/1 64/6 82/7
127/13
Jones [4] 110/22 110/23 112/9 112/17

Judge [9] 1/12 2/2 47/19 47/21 75/24
76/2 134/17 134/19 168/7
July [5] 1/6 2/1 55/22 58/23 76/1
JULY 1 [2] 2/1 76/1
July 16 [1] 55/22
June [4] 16/5 72/2 114/8 114/17
June 30 [1] 16/5
jurors [1] 76/14
jury [84]
jury's [2] 30/18 69/12
K
keep [2] 129/16 129/18
kids [1] 130/21
Kimberly [1] 1/15
kinds [1] 153/3
knowledge [4] 26/16 38/1 38/4 100/17
L
L-A-M-A-C-C-H-I-A [1] 141/20
LA [1] 141/16
labeled [4] 63/19 69/11 73/8 73/24
lack [1] 26/8
lacked [1] 18/7
Ladies [1] 132/22
LaMacchia [25] 141/14 141/20 142/23
144/4 149/18 152/13 153/21 155/6
155/9 155/14 156/9 156/12 157/18
158/15 159/17 159/18 160/8 162/22
164/1 164/7 164/17 164/20 165/23
167/22 169/12
land [7] 39/23 40/3 104/20 105/9
105/11 106/8 128/10
language [2] 40/12 41/9
lapse [1] 96/17
large [9] 22/17 28/22 28/25 29/3 33/20
78/21 110/18 121/21 121/23
largely [1] 113/7
late [1] 114/6
latest [2] 70/8 71/3
latitude [1] 5/12
LAUDERDALE [3] 1/3 1/6 1/23
law [18] 24/15 24/15 46/5 49/9 49/11
49/12 49/13 78/4 78/9 78/10 78/16
78/24 79/3 79/4 110/16 110/18 110/25
156/5
laws [1] 95/22
lawsuit [4] 47/2 132/10 137/21 137/21
lawsuits [9] 38/20 39/3 46/14 46/16
46/24 132/12 132/17 133/14 138/7
lawyer [20] 22/8 23/1 23/1 23/6 23/13
28/17 28/23 29/6 31/15 32/6 42/1 49/5
49/6 53/14 110/8 110/11 114/14 115/17
115/25 121/13
lawyers [3] 24/20 53/14 53/16
laying [1] 147/4
laypeople [1] 122/6
leading [3] 118/5 118/8 153/4
learn [1] 26/2
learned [6] 26/6 26/17 127/16 128/20
129/24 138/7
lease [1] 40/3
leased [1] 105/10
leave [3] 75/11 79/3 167/20
leaving [1] 49/11
ledgers [1] 147/12
left-hand [1] 56/4
legal [16] 37/20 44/6 49/25 50/14 77/25
79/15 79/16 80/16 80/17 82/5 90/21

90/24 99/16 128/2 128/18 133/12
lend [3] 41/23 87/11 87/12
lender [7] 19/23 19/23 27/17 32/6
35/17 35/23 42/5
lenders [2] 18/18 29/14
lending [6] 50/2 50/4 50/5 78/21 111/5
111/8
letter [18] 85/2 116/3 119/23 120/5
132/5 132/6 132/7 132/11 132/15
132/22 135/24 136/2 136/4 136/7
136/12 136/14 137/14 137/16
levels [1] 160/3
Lewis [7] 158/18 159/4 159/7 159/17
160/9 160/13 162/15
liabilities [1] 87/3
license [1] 144/9
licenses [2] 144/6 152/12
life [1] 79/25
light [2] 156/11 156/11
Limited [4] 90/12 95/21 151/18 163/14
linchpin [1] 87/10
Lincoln [3] 161/15 162/12 162/13
lined [1] 142/12
Lines [4] 109/8 138/21 141/1 141/4
Lisa [1] 56/9
list [7] 54/2 54/7 54/8 54/10 142/4
149/6 149/7
lists [1] 159/20
litigation [15] 37/17 37/20 38/1 38/5
38/6 38/8 43/25 44/13 44/21 44/25 45/6
45/8 138/2 138/4 138/5
litigation's [1] 38/10
LLC [5] 69/16 73/25 90/12 98/14
163/16
loan [109]
loaned [1] 114/1
loaning [1] 140/10
loans [3] 29/1 29/3 115/2
local [1] 160/16
location [1] 162/8
Lois [1] 1/14
London [1] 78/11
loss [4] 165/12 165/14 167/3 167/7
losses [1] 58/17
low-income [4] 26/13 81/12 81/20
103/23
lunch [2] 75/15 75/18
Luncheon [1] 75/25
Lynn [18] 3/23 20/3 36/6 57/3 80/25
82/2 83/4 83/4 84/22 85/25 86/18 90/25
120/22 121/14 122/16 122/19 123/23
127/13
Lynn's [2] 125/14 125/18
M
MACCHIA [1] 141/16
mail [38]
maintained [1] 162/13
major [2] 28/15 43/14
management [4] 92/19 95/9 122/25
144/1
managers [3] 146/3 146/4 146/5
manner [1] 157/15
manufacture [3] 81/10 81/11 83/25
manufactured [1] 124/21
manufacturing [3] 40/18 112/22
112/23
March [12] 11/14 11/23 13/19 13/22
185
M
March... [8] 50/20 90/8 95/6 96/2 98/10
98/17 130/5 131/8
March 31 [6] 11/14 11/23 13/19 13/22
98/10 98/17
March 9 [1] 96/2
March, [2] 50/25 51/7
March, 2010 [2] 50/25 51/7
Margolis [3] 69/1 70/13 70/22
mark [8] 48/14 48/17 48/21 73/15
100/1 100/5 100/13 169/6
marked [6] 64/1 153/21 153/23 158/5
159/12 170/2
market [2] 58/12 58/13
Marl [1] 161/19
maroon [1] 83/16
massively [3] 87/8 87/9 87/17
master's [1] 49/12
material [3] 96/15 97/8 148/6
materials [2] 103/22 156/13
mathematical [2] 164/21 166/10
matter [13] 25/17 29/13 29/23 45/5
50/14 50/18 50/24 51/8 51/12 51/12
51/15 116/20 170/21
matters [9] 44/2 49/25 50/2 50/3 50/4
50/5 75/23 96/9 168/5
May 20 [4] 69/17 70/1 70/5 71/25
May 20th [1] 70/5
mean [45]
meaning [3] 92/21 93/13 97/22
meaningful [2] 34/2 148/6
means [5] 9/7 33/14 40/17 95/5 122/5
meant [5] 8/25 95/3 122/24 123/4
123/12
mechanical [1] 1/24
medium [3] 81/3 100/3 132/25
meet [5] 7/23 27/18 52/17 78/22 83/7
meeting [10] 23/15 23/17 38/23 84/7
117/2 117/3 117/14 118/7 118/8 120/10
Meland [2] 73/15 73/18
member [5] 10/5 79/16 80/6 85/22
125/15
members [37]
memo [7] 154/1 154/5 154/7 154/9
155/9 155/19 155/21
memory [3] 155/20 157/20 166/3
messy [1] 34/17
Miami [16] 1/16 1/20 83/5 83/17 84/6
84/12 84/15 84/17 84/20 105/14 107/1
117/2 131/16 144/24 161/16 161/24
microphone [5] 48/19 59/24 77/9
141/18 164/8
Microsoft [1] 155/23
middle [1] 116/2
military [2] 119/1 119/2
million [20] 3/13 20/9 33/12 34/9 34/10
34/19 56/23 61/14 63/4 63/8 99/23
99/25 100/13 103/18 104/3 104/4 114/1
119/19 124/1 124/10
minimum [1] 146/11
minute [4] 47/11 117/1 117/23 134/2
minutes [6] 47/14 47/18 119/25 134/5
134/13 134/16
misleading [3] 14/17 14/18 14/20
mismatch [1] 112/4
mistake [1] 54/15
mitigate [1] 58/17
model [1] 156/2
moment [1] 109/20

MONDAY [2] 2/1 76/1
money [16] 26/21 34/6 35/2 35/24 37/4
41/24 86/24 99/22 103/20 103/21 104/7
113/19 124/15 126/23 137/2 156/25
monies [6] 98/25 100/14 102/8 140/9
140/10 140/21
months [2] 49/15 119/20
Montreal [1] 161/23
Moran [1] 67/17
Moran-Osorio [1] 67/17
morning [7] 2/10 22/5 22/6 58/5 58/6
64/15 64/16
mostly [2] 52/12 92/11
move [17] 17/12 21/17 63/23 64/4 64/6
82/19 82/24 84/23 90/3 94/4 100/8
119/6 119/12 141/23 154/23 158/3
159/10
moved [2] 37/7 119/15
movement [1] 64/6
moving [3] 15/22 64/3 64/5
Mr [4] 169/4 169/5 169/8 169/11
Mr. [161]
Mr. Alford [34] 28/13 29/5 32/10 34/14
36/14 36/24 37/2 53/17 77/15 77/16
81/25 84/20 86/10 86/15 86/23 88/17
89/12 91/4 91/16 96/21 97/21 98/2
98/24 99/4 100/17 104/18 108/20 109/7
110/7 134/8 135/3 135/5 135/23 140/20
Mr. Cameron [1] 23/4
Mr. Carness [1] 160/21
Mr. Hobson [9] 48/24 49/4 50/10 52/25
53/10 54/17 54/25 56/11 57/2
Mr. LaMacchia [20] 142/23 144/4
149/18 152/13 153/21 155/6 155/14
156/9 156/12 157/18 158/15 159/17
160/8 162/22 164/1 164/7 164/17
164/20 165/23 167/22
Mr. Lewis [1] 159/4
Mr. Meland [1] 73/18
Mr. Osorio [13] 25/3 25/21 25/22 25/25
83/8 84/5 115/20 117/7 117/10 117/24
120/13 127/14 127/16
Mr. Osorio's [1] 118/10
Mr. Sharpstein [11] 42/21 43/24 44/19
48/2 63/17 133/23 135/17 135/23 137/4
137/13 138/20
Mr. Smith [31] 2/9 2/14 3/10 4/2 4/19
4/24 5/24 7/7 9/13 10/8 11/7 15/4 15/19
16/7 16/21 20/17 20/24 22/5 42/21
43/24 45/5 46/4 127/9 127/11 127/12
127/14 130/6 131/2 137/5 137/9 137/10
Mr. Toll [30] 26/4 27/25 28/2 38/19
43/5 52/14 52/21 52/24 55/17 56/14
70/25 72/18 83/9 83/12 84/5 97/6 118/3
118/4 121/8 123/12 127/14 127/15
137/12 150/11 150/14 150/25 151/2
151/10 152/12 152/15
Mr. Toll's [8] 2/4 47/23 76/5 134/22
151/7 151/17 151/25 153/14
Mrs. [1] 61/15
Mrs. Podalski [1] 61/15
Ms [11] 23/9 35/6 128/6 169/3 169/4
169/6 169/8 169/9 169/10 169/11
169/13
Ms. [22] 3/6 27/11 28/13 32/10 34/14
36/14 36/25 38/19 38/24 47/4 58/5 59/6
60/13 64/3 64/19 74/17 77/2 81/1 116/3
117/15 120/25 167/9
Ms. Foster-Steers [4] 3/6 47/4 77/2

167/9
Ms. Fudally [5] 58/5 59/6 60/13 64/19
74/17
Ms. Selmore [1] 64/3
Ms. Tabernacki [11] 27/11 28/13 32/10
34/14 36/14 36/25 38/19 38/24 116/3
117/15 120/25
Ms. Tabernacki's [1] 81/1
multinational [1] 29/1
multiple [1] 110/20
N
N.E [1] 1/16
name [26] 43/15 48/19 48/20 50/11
50/14 56/3 57/4 57/23 57/23 58/1 64/17
69/22 73/15 77/9 77/10 77/11 80/2 80/3
80/5 103/7 109/8 110/21 111/6 141/18
141/19 149/19
names [2] 68/5 83/10
native [1] 142/14
nature [2] 24/7 26/14
navigation [1] 155/24
near [1] 161/22
necessary [2] 96/8 103/22
neck [1] 126/22
negative [2] 167/2 167/3
negotiate [5] 23/7 27/7 90/21 99/19
126/4
negotiated [7] 7/24 18/22 29/19 40/3
40/7 40/14 41/6
negotiating [3] 3/12 5/25 22/20
negotiation [3] 39/9 79/24 90/20
negotiations [6] 4/3 6/8 24/1 36/23
36/24 127/4
net [9] 11/2 11/8 16/6 89/12 124/9
165/10 165/12 165/14 166/25
New York [1] 78/11
newly [1] 112/20
NGO [2] 106/11 118/15
NGOs [4] 105/19 106/24 107/6 128/15
nice [2] 75/18 167/17
nickel [2] 36/16 126/18
nine [4] 2/10 3/1 124/10 149/25
nine o'clock [2] 2/10 3/1
nine-and-a-half [1] 124/10
Nineteen [1] 72/10
nobody [1] 67/20
none [5] 17/7 19/8 19/10 19/12 19/14
nongovernment [1] 106/24
nongovernmental [1] 105/25
normal [3] 154/9 154/15 158/10
north [1] 109/15
notations [2] 97/25 98/15
noted [1] 164/3
notice [4] 38/13 44/2 96/18 138/2
notification [2] 44/25 45/6
notified [3] 39/21 132/14 132/17
notify [6] 38/8 44/5 132/12 133/11
137/20 137/21
November [2] 114/18 115/2
number [66]
Number '0059 [1] 160/10
Number '0429 [1] 140/23
Number '1788 [1] 13/17
Number '2280 [1] 15/15
Number 0003031 [1] 89/8
Number 15 [1] 74/3
Number 20 [1] 72/12
185
OPIC's [5] 86/24 98/25 122/13 136/4
138/1
number 2010081100051248 [1] 62/15 opinion [5] 96/9 143/17 144/3 146/21
Number B [1] 164/14
148/25
numbers [6] 9/3 9/5 60/4 66/10 66/12 opinions [1] 143/12
68/12
opposed [1] 165/8
numerous [1] 19/20
orange [1] 34/18
order [5] 47/1 52/2 147/7 156/16 162/2
O
ordinarily [1] 34/7
o'clock [7] 2/10 3/1 75/16 75/19 75/22 ordinary [1] 33/24
75/23 168/5
ORG [1] 74/24
oath [2] 2/14 135/6
organization [2] 139/16 147/14
Obama [1] 117/9
organizations [3] 105/25 106/24
object [2] 23/10 64/5
118/19
objected [2] 24/6 45/24
organize [1] 51/2
objecting [1] 15/22
organized [4] 79/13 82/6 86/6 95/21
objection [19] 5/7 9/8 12/20 14/22
original [2] 41/7 41/9
16/13 21/4 25/11 46/19 63/23 64/7
originally [3] 40/10 43/7 131/5
87/24 88/20 94/4 94/4 101/21 154/24
originator [1] 74/25
158/11 159/13 165/18
Osorio [43]
objective [1] 105/15
Osorio's [1] 118/10
obligations [2] 112/20 120/10
ours [2] 150/16 150/16
obtain [3] 52/10 54/21 99/22
outgoing [1] 74/10
obtained [3] 8/12 56/13 85/1
overall [4] 82/7 85/19 118/17 122/3
obtaining [2] 39/25 40/5
Overruled [13] 9/11 12/22 15/25 16/2
occasion [1] 50/13
16/15 21/7 21/18 46/20 88/3 88/22 94/6
occasions [5] 31/7 31/12 32/2 50/19
101/23 165/19
52/17
overseas [4] 29/2 77/19 90/12 95/25
occupation [1] 49/4
owe [1] 112/5
occupy [1] 106/12
owed [3] 34/6 34/9 34/10
October [4] 114/11 158/16 159/18
owned [4] 33/19 40/19 65/25 128/10
160/11
owners [1] 156/19
October 4 [1] 114/11
ownership [1] 160/3
October 6 [3] 158/16 159/18 160/11
owns [1] 86/7
October, [1] 49/21
Oxley [1] 156/5
October, 1999 [1] 49/21
P
off-tank [1] 107/18
offering [1] 119/1
p.m [5] 75/25 76/1 134/18 134/18 168/8
office [7] 81/20 83/10 117/4 117/4
package [2] 73/1 106/20
129/10 160/16 161/24
page [28] 11/21 16/11 35/5 36/7 36/8
officer [7] 6/23 76/13 79/14 94/24
37/11 37/16 40/15 67/4 67/11 88/8 89/6
95/20 151/9 153/16
92/8 97/20 97/21 97/25 124/8 132/21
officer's [2] 6/24 95/1
133/2 156/23 160/10 160/11 164/13
officers [1] 156/19
165/1 165/3 165/9 167/5 169/2
offices [5] 78/10 83/22 84/12 110/20
page 2 [1] 133/2
111/2
page 6 [1] 37/16
official [6] 1/21 62/18 63/1 63/6 65/15 page 7 [1] 40/15
170/24
pages [1] 68/7
offtaker [4] 106/11 107/8 108/12
panels [30] 26/13 36/16 40/21 81/10
108/19
81/18 84/1 84/13 103/22 104/15 104/16
offtakers [7] 105/19 105/25 106/3
105/13 105/14 105/17 105/18 105/20
106/7 106/14 107/6 108/9
106/5 106/6 106/22 106/25 107/7
oh [4] 65/21 124/1 139/13 158/24
107/21 119/3 124/13 124/16 124/21
oldest [1] 24/15
124/24 125/7 126/19 131/14 131/20
omitted [1] 12/19
paper [2] 85/23 100/8
one o'clock [2] 75/16 75/23
papers [1] 154/19
ongoing [3] 92/21 149/9 149/10
paragraph [8] 139/14 155/14 155/22
online [1] 63/3
156/24 157/1 157/10 157/18 157/19
operate [2] 26/14 82/6
parameters [1] 85/3
operated [2] 40/19 66/1
paraphernalia [1] 119/2
operating [8] 85/18 86/8 102/11 112/21 parcel [1] 40/5
112/23 162/18 162/18 164/22
Pardon [1] 14/21
operation [1] 40/18
parent [12] 5/19 6/20 6/23 44/7 91/9
operationally [1] 58/15
94/21 94/24 95/7 121/23 133/4 133/6
operations [17] 10/23 10/25 13/18
133/8
13/22 16/4 16/7 89/10 91/15 98/14
part [23] 13/3 17/14 17/16 64/20 100/6
102/18 156/1 164/15 164/18 164/19
106/20 109/16 113/21 114/19 116/23
165/6 166/2 166/23
118/10 118/17 122/13 129/21 136/13
OPIC [146]
148/5 148/20 148/20 149/10 154/13
154/19 160/22 162/7

parties [4] 23/18 23/18 101/5 109/3
partner [15] 24/24 140/15 143/2 143/12
143/14 145/10 145/12 145/18 145/19
145/21 146/5 150/15 150/16 152/2
152/3
partnered [1] 128/21
partnering [1] 125/21
parts [3] 23/10 23/21 33/18
party [10] 22/20 23/1 23/9 23/10 23/13
23/20 23/22 24/2 92/22 102/5
Patricoff [5] 24/24 25/1 25/3 25/6 25/15
Pause [3] 53/8 71/11 157/3
pay [5] 108/18 112/8 114/24 114/24
133/19
payable [1] 108/19
payment [1] 108/17
payments [3] 114/5 114/7 114/25
pending [7] 27/11 37/23 38/1 44/25
45/6 45/8 156/7
penny [1] 35/19
people [15] 51/25 66/18 68/25 69/7
69/8 71/24 90/24 105/22 119/6 128/13
130/24 142/12 146/2 146/3 146/8
percent [1] 87/16
perform [1] 103/11
performing [1] 58/18
perhaps [1] 6/10
period [33] 3/12 4/3 4/5 4/12 4/21 5/24
6/10 7/20 8/17 10/25 11/4 11/13 11/22
13/18 13/22 16/5 38/13 61/17 88/14
88/15 89/14 89/21 91/15 98/17 149/11
163/2 164/2 164/4 165/4 165/6 165/22
166/24 166/25
periodically [1] 159/7
periods [2] 5/2 88/14
person [3] 51/5 52/14 137/10
personal [2] 63/2 63/3
personally [5] 52/20 55/7 65/13 73/22
122/9
personnel [1] 147/13
persons [1] 117/12
perspective [2] 17/9 19/16
pertain [1] 101/16
phase [3] 82/1 147/1 147/1
phases [1] 146/25
phone [6] 25/23 26/1 38/24 52/23
127/14 127/15
physical [1] 112/16
pictures [3] 117/7 117/10 129/25
piece [2] 111/6 113/11
place [4] 80/21 105/22 120/3 131/12
Plaintiff [2] 1/6 1/14
plan [1] 143/23
planes [1] 119/2
planning [4] 143/22 147/1 147/7
147/19
plans [1] 147/5
platform [2] 156/4 156/8
plug [1] 132/3
plus [6] 22/23 34/19 35/9 164/22
166/11 166/11
Podalski [1] 61/15
point [8] 26/20 29/12 58/20 83/14
84/23 115/18 155/17 156/9
pointing [1] 72/10
points [1] 90/25
Polan [1] 132/24
policies [1] 58/16
185
proceeding [1] 37/21
proceedings [7] 1/11 1/24 44/7 133/13
policy [4] 84/25 85/4 85/5 100/4
142/20 168/8 170/21
political [1] 128/2
proceeds [2] 99/10 99/14
politicians [1] 117/11
process [28] 37/8 43/13 84/23 84/24
polling [4] 2/19 48/7 76/19 135/11
84/25 85/4 85/5 85/8 85/10 85/24 99/4
position [9] 7/25 8/1 8/4 81/1 145/16
99/17 100/5 100/7 115/16 115/17 132/1
151/7 151/25 152/10 153/14
143/16 143/23 146/17 146/22 149/5
positive [1] 158/20
149/9 154/13 154/13 155/16 155/23
post [2] 82/18 82/22
156/7
post-earthquake [2] 82/18 82/22
processed [1] 119/18
postpone [1] 30/6
produced [4] 1/25 26/12 29/17 30/7
postponed [4] 2/11 30/8 30/25 31/5
producing [2] 106/22 156/13
postponing [1] 39/7
production [2] 40/20 84/13
potential [2] 86/2 86/24
professionally [1] 151/17
power [1] 74/1
profit [5] 16/9 89/19 89/24 98/22
practice [1] 46/5
124/10
pre [1] 82/21
profitable [1] 99/1
pre-earthquake [1] 82/21
profits [1] 11/10
preceding [1] 160/11
progress [6] 55/9 79/23 139/3 139/6
precise [3] 31/5 40/12 47/1
139/8 139/12
precisely [1] 35/12
progressed [1] 145/10
preliminary [1] 27/18
project [67]
prepare [6] 5/20 51/1 51/18 92/14
projects [1] 80/14
92/16 92/19
promotion [1] 79/12
prepared [8] 6/2 17/5 18/1 18/16 19/2 pronounce [1] 161/7
19/5 95/9 122/25
proof [1] 107/16
presence [11] 2/18 2/24 47/13 48/6
property [3] 104/25 105/1 128/4
48/12 76/18 76/24 134/4 135/10 135/16 proposed [2] 18/14 85/20
167/15
prosecutor [24] 23/9 24/5 24/11 29/11
present [14] 2/4 2/4 4/20 17/14 47/23
31/6 31/11 31/20 33/1 35/6 36/3 37/14
47/23 76/5 76/5 91/14 99/8 99/16
37/24 38/11 41/11 46/10 46/22 67/5
134/22 134/22 157/14
73/5 74/6 113/23 114/14 120/15 121/10
presentation [3] 100/8 117/25 118/1
128/6
presented [4] 17/18 31/23 33/21 81/9 prospective [1] 99/7
president [14] 25/4 25/6 83/8 100/2
provide [4] 44/24 57/2 65/13 152/19
100/10 116/16 116/16 116/20 116/21
provided [32] 10/10 10/18 10/20 12/6
116/25 117/8 117/8 117/9 132/24
17/15 17/25 27/25 28/6 28/10 29/13
President Bill [1] 25/4
29/21 33/11 43/21 45/11 45/12 52/25
President Clinton [4] 25/6 116/16
55/17 55/18 57/3 64/22 64/25 65/11
116/21 117/8
65/25 93/21 95/12 97/12 98/3 148/16
President Obama [1] 117/9
152/23 152/24 159/4 160/21
press [4] 120/22 120/25 121/2 125/19 provisions [1] 101/4
pressure [3] 36/25 119/6 119/14
public [2] 144/7 156/6
presume [1] 20/3
pull [3] 68/8 69/10 142/8
primarily [2] 52/22 104/12
pulled [2] 132/3 142/12
principally [4] 28/16 106/3 108/16
pulling [1] 142/7
109/17
purchase [3] 103/21 107/7 107/20
principals [1] 156/18
purchased [1] 139/21
Principles [2] 41/15 143/19
purchasing [1] 106/5
print [2] 60/19 142/16
purported [3] 17/19 17/22 140/24
prints [1] 60/19
purportedly [1] 61/1
private [4] 27/17 77/19 90/12 96/1
purposes [2] 60/2 84/8
pro [31] 8/22 8/25 9/2 9/6 9/7 9/13 10/1 pursuant [16] 6/22 7/3 7/6 91/12 94/23
10/3 10/6 12/12 12/14 16/19 16/20
95/14 95/14 96/11 97/6 98/3 138/9
16/22 17/17 31/9 31/18 32/8 32/12
141/21 158/3 158/6 158/7 159/10
33/14 33/22 33/25 35/8 36/9 49/13 92/7 pursue [1] 79/23
93/11 97/17 123/3 123/9 126/12
push [2] 116/17 118/18
pro bono [1] 49/13
Q
pro forma [30] 8/22 8/25 9/2 9/6 9/7
9/13 10/1 10/3 10/6 12/12 12/14 16/19 qualified [2] 28/22 32/5
16/20 16/22 17/17 31/9 31/18 32/8
quarter [8] 6/18 6/18 6/21 94/19 94/19
32/12 33/14 33/22 33/25 35/8 36/9 92/7 94/23 95/5 98/23
93/11 97/17 123/3 123/9 126/12
question [40]
problem [3] 39/17 105/1 159/2
questioned [1] 137/5
problems [8] 39/17 39/20 127/19
questioning [3] 9/9 21/5 21/5
128/16 128/17 129/2 130/4 130/11
questions [27] 21/24 29/11 31/24
38/12 41/11 41/20 45/20 57/7 57/10
procedures [1] 58/16
72/25 75/7 109/24 121/7 123/10 123/15
proceed [1] 3/6
123/17 123/18 123/25 125/10 126/9

135/18 137/10 138/22 141/6 144/1
160/1 162/14
quick [1] 65/23
quickly [5] 37/1 37/7 82/19 119/12
119/15
R
Rabin [2] 75/2 75/3
raise [4] 48/16 57/19 77/6 141/15
raised [2] 26/24 157/13
RAK [1] 163/14
ranks [1] 145/10
rapid [1] 40/21
rarely [1] 112/21
Ras [1] 161/7
Ras al [1] 161/7
Rasco [1] 49/2
re [1] 149/7
re-requesting [1] 149/7
reach [1] 129/22
reached [1] 162/2
reaching [1] 162/6
read [6] 31/20 96/3 121/17 124/2 157/2
162/21
readily [1] 131/9
reading [3] 162/23 163/5 163/23
reads [1] 95/19
ready [5] 3/5 48/2 77/1 115/10 121/2
reasons [4] 32/17 82/17 133/16 137/17
recall [59]
recant [1] 147/9
receipt [1] 136/24
receivables [1] 34/11
receive [6] 63/7 95/11 109/5 109/18
112/7 121/11
received [14] 8/9 38/15 64/8 94/13
117/19 117/21 136/18 137/6 138/17
154/25 158/12 159/14 162/14 170/2
receiver [2] 73/16 73/20
recently [2] 116/8 140/14
recess [11] 47/11 47/18 47/20 75/15
75/22 75/25 134/2 134/16 134/18
167/13 168/4
recognition [1] 157/23
recognize [3] 53/4 153/22 165/2
recognized [1] 157/24
recollection [2] 102/16 116/9
reconciliation [1] 55/15
record [27] 2/3 3/16 15/7 20/22 21/23
37/16 42/15 45/3 48/20 57/23 63/12
63/16 63/22 65/9 66/18 72/23 76/4 77/9
107/24 109/23 134/21 141/18 154/14
155/4 158/1 159/8 170/21
recorded [1] 1/24
records [14] 62/14 62/18 62/22 63/1
63/6 65/11 65/15 147/10 147/13 161/7
161/18 161/22 161/23 162/12
RECROSS [2] 46/2 169/5
RECROSS-EXAMINATION [1] 46/2
redefined [1] 131/2
redefining [1] 40/8
Redirect [9] 42/17 42/19 74/14 74/15
135/20 135/21 169/4 169/9 169/11
reduced [1] 104/15
reduction [1] 104/7
refer [3] 25/7 100/15 105/18
reference [9] 13/7 13/9 13/12 13/20
14/19 16/18 118/20 141/1 141/3
185
139/14 156/23 157/2 167/21
Secretary [1] 118/22
referenced [2] 14/9 132/11
section [26] 4/10 4/10 4/11 5/18 6/14
references [5] 4/11 15/19 16/12 91/8
6/17 7/3 7/6 12/6 16/25 18/4 18/23
139/14
37/15 37/17 41/7 43/25 44/1 44/2 91/13
referral [1] 25/3
91/16 94/17 95/3 95/15 96/11 100/24
referred [7] 13/25 25/7 67/11 67/23
125/1
77/20 85/2 156/3
Section 303 [1] 4/10
referring [3] 72/6 72/7 156/4
Section 5.05 [1] 96/11
reflected [10] 4/25 12/13 16/6 61/2
Section 6.05 [1] 5/18
61/10 61/13 163/22 166/8 166/18
Section 6.06 [5] 6/14 12/6 16/25 91/13
166/20
94/17
reflecting [2] 91/20 98/5
Section 6.08 [1] 44/2
reflection [1] 94/10
Section 9.06 [1] 100/24
refresh [1] 116/8
secured [8] 50/2 50/4 50/5 87/14 87/14
refuse [1] 41/23
87/15 87/15 87/16
refused [1] 32/18
security [3] 50/3 76/12 106/20
registered [1] 51/2
Security-related [1] 50/3
regular [1] 29/14
seeking [2] 99/9 99/22
relation [1] 35/3
sees [1] 24/2
relationship [5] 29/8 82/7 107/11
selling [11] 26/8 26/11 26/21 35/19
139/15 151/11
35/25 36/16 124/16 124/19 124/23
relative [3] 157/7 157/9 157/19
125/6 126/19
relatively [3] 37/7 37/9 126/18
Selmore [4] 1/15 64/3 169/8 169/9
release [3] 120/22 121/1 121/2
sending [1] 136/4
releases [1] 125/19
sends [1] 137/1
relevance [1] 165/18
senior [1] 146/4
relied [1] 93/9
seniors [2] 146/3 146/4
relief [1] 56/10
sense [1] 105/21
rely [1] 113/7
Senterfitt [1] 1/19
remain [1] 145/8
September [21] 3/24 4/6 4/13 5/2 11/18
remember [42]
15/10 32/23 32/24 35/20 88/14 89/15
remind [1] 3/4
89/20 89/21 91/10 91/23 114/6 114/17
remote [1] 156/14
121/6 124/8 133/15 155/12
repay [2] 99/2 106/18
September 28 [1] 15/10
repayment [1] 92/5
repetitious [2] 5/10 21/4
September 30 [9] 3/24 4/6 4/13 5/2
replace [1] 69/3
88/14 89/15 89/20 91/10 91/23
report [5] 55/9 55/11 139/4 139/8
September 30th [2] 121/6 124/8
139/12
Reporter [3] 1/21 1/21 170/24
series [3] 19/21 65/11 65/25
S
reporting [1] 132/17
serious [3] 22/16 24/20 128/2
reports [3] 129/24 139/6 165/18
sale [1] 35/11
serves [1] 157/15
represent [6] 11/8 17/19 61/8 65/22
Salopek [3] 1/21 170/23 170/24
service [1] 58/16
91/18 165/11
Sarbanes [1] 156/5
services [2] 103/2 140/15
representation [9] 6/10 17/13 17/15
Sarbanes-Oxley [1] 156/5
Services, [1] 71/16
17/16 17/17 17/25 94/2 97/7 113/8
sat [2] 27/25 38/19
Services, Inc [1] 71/16
representations [6] 4/10 96/3 96/13
satisfactory [1] 19/23
setting [2] 109/2 118/15
109/3 113/7 144/1
satisfied [1] 42/6
settle [1] 105/9
represented [12] 22/16 22/19 87/20
saw [12] 11/25 19/1 28/9 33/8 38/11
seven [1] 142/5
87/21 87/22 88/10 88/18 89/18 89/19
62/8 102/3 107/22 108/3 108/20 164/25 shall [2] 5/20 44/5
96/5 140/20 167/1
166/1
shareholders [1] 157/15
representing [3] 28/19 88/11 122/3
scan [2] 71/19 72/2
Sharpstein [16] 1/17 42/21 43/24 44/19
represents [3] 165/12 166/9 166/9
school [15] 49/9 49/11 78/4 78/9
48/2 63/17 133/23 135/17 135/23 137/4
110/16 128/22 129/1 129/2 129/6
request [17] 10/11 10/13 10/16 10/18
137/13 138/20 169/4 169/5 169/8
56/18 56/21 65/2 80/16 103/25 104/1
130/19 130/21 130/22 131/24 138/21
169/11
104/1 104/8 104/9 139/7 152/16 152/17 141/3
sheet [21] 7/10 9/16 9/24 11/13 11/22
153/12
schools [1] 130/17
12/11 12/16 12/17 12/19 13/4 13/11
requested [5] 12/2 12/2 43/7 52/24
scope [8] 43/6 45/25 147/22 147/25
15/3 15/14 15/18 15/20 16/19 17/18
153/10
148/4 148/5 148/9 148/13
35/2 98/9 122/5 166/2
requesting [3] 149/5 149/7 156/15
scopes [2] 143/24 147/3
sheets [9] 9/1 33/16 33/22 122/2
requests [1] 52/9
Scott [1] 77/11
162/24 163/2 163/19 165/8 166/7
required [15] 6/11 6/15 12/6 29/16
screen [10] 60/14 60/17 60/18 60/20
shelters [5] 129/13 139/21 140/1 140/9
29/24 30/7 41/14 41/16 102/7 102/10
60/23 62/3 63/3 67/6 68/8 137/16
140/11
107/16 108/15 136/11 136/15 138/15
SE [1] 1/19
ship [3] 105/14 119/3 131/14
requirement [8] 6/13 17/23 20/1 20/12 seat [1] 48/18
shipment [2] 104/15 104/16
30/2 31/1 31/21 38/7
SEC [1] 50/1
shipped [1] 103/23
second [15] 21/20 32/17 32/18 42/14 shipping [1] 106/25
requirements [9] 7/23 8/2 8/13 10/9
51/19 51/20 52/3 52/4 56/17 56/21 71/9 shop [1] 130/24
10/12 39/7 54/20 93/23 102/4
resolutions [1] 66/5

respective [1] 160/17
responds [1] 118/22
response [23] 10/11 10/18 14/3 14/14
44/19 54/3 54/6 70/15 86/13 113/2
120/1 123/7 125/23 129/15 131/10
139/5 139/9 139/17 140/4 148/18
149/13 155/8 164/16
responses [3] 50/9 161/1 162/15
responsive [1] 119/13
rest [1] 132/3
restate [2] 32/16 89/5
result [1] 138/11
results [1] 91/14
resume [2] 3/5 77/1
retain [1] 154/12
retained [2] 43/12 43/13
retainer [2] 45/10 116/4
revenue [6] 26/24 36/7 36/8 112/5
125/1 157/23
revenues [7] 26/25 35/7 35/8 35/11
36/9 85/19 157/24
review [3] 86/1 122/10 123/22
reviewed [1] 142/10
Richard [1] 1/17
right-hand [1] 66/11
rights [2] 108/15 108/22
rise [4] 47/15 76/16 134/6 168/6
risk [3] 98/25 106/10 113/23
risks [2] 58/17 112/3
RMR [2] 1/21 170/24
RMR-CRR [1] 170/24
road [6] 27/3 32/22 36/2 161/16 162/12
162/13
role [3] 108/12 113/11 150/16
room [5] 1/22 47/13 83/23 117/4 134/4
rooms [1] 140/16
Royal [8] 109/8 109/14 109/14 128/21
130/2 138/21 141/1 141/3
Rule [2] 141/22 158/8
185
state [8] 48/19 49/10 57/22 77/9 118/22
141/18 144/7 160/14
shore [1] 109/15
stated [2] 92/1 123/4
shot [4] 60/14 60/17 60/23 62/3
statement [52]
shown [3] 67/3 91/18 120/15
statements [124]
Shutts [9] 22/8 24/14 49/18 49/20
STATES [10] 1/1 1/5 1/12 1/22 48/14
52/15 90/22 91/2 126/4 126/7
57/17 79/11 119/1 141/14 141/22
sic [10] 20/25 49/3 56/15 61/3 61/15
station [1] 56/10
70/18 70/19 89/1 157/15 163/3
stay [2] 141/17 145/3
side [15] 23/1 41/22 79/24 80/15 80/16 Steers [11] 1/14 3/6 47/4 77/2 167/9
82/3 82/5 85/25 90/20 90/20 90/21
169/3 169/4 169/6 169/10 169/11
90/24 122/15 122/17 125/17
169/13
sidebar [2] 141/25 142/20
stenography [1] 1/24
sign [2] 23/18 66/18
step [8] 47/6 57/12 75/8 141/8 146/17
signator [2] 68/21 73/6
146/17 146/22 146/22
signators [5] 67/16 68/16 69/20 69/25 step-by-step [2] 146/17 146/22
71/23
stick [1] 126/22
signatory [1] 74/18
stipulation [1] 64/7
signature [7] 57/1 66/1 66/17 67/12
stop [2] 37/24 58/22
71/19 74/1 136/15
stores [1] 58/14
signatures [1] 66/2
straight [1] 78/20
signed [9] 23/17 56/25 101/5 120/21
Street [1] 1/16
126/3 130/5 132/23 132/23 136/18
structural [1] 40/21
single [2] 42/4 148/2
structure [5] 78/22 82/8 86/5 160/5
site [5] 39/25 83/1 83/11 83/20 105/10 160/7
sites [1] 106/7
structured [5] 78/18 78/19 111/4 111/5
situation [4] 33/25 34/12 129/23
111/6
136/23
structures [8] 40/22 41/2 129/25
size [5] 85/18 99/18 100/11 119/19
130/14 130/17 130/18 131/4 138/24
146/10
structuring [1] 112/18
slightly [1] 99/17
subject [1] 136/5
small [4] 81/3 100/3 113/11 132/25
submit [9] 6/11 6/15 7/2 8/8 10/8 18/11
small/medium [2] 81/3 100/3
18/14 19/6 95/7
SMEF [1] 132/24
submits [1] 19/21
Smith [38]
submitted [24] 3/11 4/18 5/5 5/14 6/6
software [3] 155/24 156/4 156/8
6/7 6/10 7/6 8/9 10/10 16/24 18/13 19/8
sometime [1] 150/21
21/1 33/5 42/22 52/5 82/2 89/2 89/3
soon [1] 84/16
101/9 139/4 160/7 160/8
sophisticated [3] 111/8 111/17 113/6 submitting [1] 8/11
sorts [1] 52/8
subpoena [1] 65/2
sought [2] 88/25 104/8
subsequent [1] 97/10
sound [1] 58/15
subsidiaries [3] 33/20 102/20 159/24
sounds [1] 43/20
subsidiary [3] 34/6 34/6 160/3
south [1] 83/2
subsidiary's [1] 162/8
Southeast [1] 69/21
substantial [2] 35/2 124/6
Southeast, [1] 69/16
sufficient [1] 106/9
Southeast, LLC [1] 69/16
sufficiently [1] 80/15
SOUTHERN [1] 1/2
suit [2] 37/20 83/16
SOX [3] 155/25 156/4 156/5
sum [2] 164/21 166/10
specific [12] 34/13 63/18 90/9 94/10
supermarket [3] 130/24 130/25 131/24
107/20 112/18 114/12 116/24 117/11
supervise [6] 145/21 145/23 146/3
119/13 125/25 155/20
146/4 146/5 146/6
specifics [2] 56/12 109/2
supplier [1] 139/21
spelling [4] 48/20 57/23 77/10 141/19 supplies [1] 103/21
spent [2] 83/23 103/20
support [6] 56/21 58/12 58/13 58/16
spoke [3] 25/22 44/22 52/22
119/1 161/23
sponsored [1] 80/7
supporting [1] 161/15
spot [2] 133/23 167/9
surprise [1] 142/11
spreadsheets [2] 142/15 160/15
Sustain [1] 14/24
spring [1] 37/25
swaps [2] 111/24 113/4
staff [5] 145/2 145/7 145/8 146/2 146/3 sworn [5] 48/17 57/20 57/21 77/7
stage [2] 52/6 147/19
141/16
stamped [2] 40/15 66/11
system [1] 62/14
stand [1] 135/3
systematically [1] 60/5
standards [1] 148/21
T
STANLEY [1] 1/8
start-up [2] 3/4 49/25
Tabernacki [21] 3/23 20/3 27/11 28/13
32/10 34/14 36/6 36/14 36/25 38/19
starting [3] 2/12 75/16 110/20
38/24 57/5 57/6 80/25 83/4 86/18 116/3
starts [1] 143/22
117/15 120/22 120/25 122/16

Tabernacki's [2] 81/1 123/23
tables [1] 83/25
tabs [1] 129/16
take [29] 27/18 32/16 36/7 40/13 47/11
65/20 68/1 71/13 73/1 92/6 99/2 99/18
105/1 105/20 108/19 112/9 115/15
119/18 119/20 120/19 125/1 125/5
125/5 133/24 134/2 144/2 146/17
146/21 149/14
taken [6] 47/20 70/25 75/25 112/4
134/18 146/17
talk [3] 44/20 101/12 161/11
talked [10] 3/10 24/11 25/20 38/20
40/10 73/4 74/1 106/21 128/6 148/14
talking [7] 4/21 19/17 83/3 92/17 113/4
120/5 156/7
talks [5] 91/5 140/13 161/3 161/21
163/19
tank [1] 107/18
tax [1] 157/12
team [15] 79/16 79/18 80/6 80/24 85/22
99/12 115/14 125/15 145/23 146/1
146/7 146/7 146/9 148/14 149/3
teams [1] 79/14
technical [2] 19/16 19/17
telephone [3] 28/3 28/4 150/9
telephonically [1] 114/13
tell [34] 9/17 20/17 24/5 30/5 35/13
41/9 42/25 43/12 50/17 78/4 79/8 81/6
81/25 83/21 84/16 85/7 87/1 90/16 95/2
98/19 103/19 104/21 107/13 109/10
117/13 124/15 124/23 142/25 143/10
144/5 149/22 150/13 151/21 164/1
telling [5] 46/13 46/22 114/16 118/13
118/21
term [12] 7/17 9/13 9/22 10/6 16/22
17/4 18/22 26/8 29/16 39/21 60/15
138/24
termed [1] 111/5
terminology [2] 61/4 61/7
terms [16] 10/14 18/8 19/14 23/7 27/7
30/18 45/6 85/18 95/24 100/7 119/14
125/16 130/14 138/9 146/13 151/15
test [6] 147/5 148/2 148/3 148/5 148/9
148/10
testify [3] 62/25 88/1 114/21
testimony [4] 134/9 134/9 167/22
167/23
testing [2] 147/4 148/8
tests [10] 143/16 143/23 143/24 143/25
147/5 147/5 147/6 148/12 148/12
148/22
Thank [13] 3/7 45/21 47/6 47/8 57/12
57/14 60/11 75/6 75/8 75/10 134/14
141/8 141/10
think [37]
thinking [3] 79/22 98/20 98/24
thought [1] 122/10
threatened [1] 38/10
threshold [1] 138/5
thresholds [1] 138/3
thumb [1] 68/2
tie [2] 83/16 113/25
Tim [6] 141/14 141/16 141/20 155/9
159/18 169/12
time [60]
times [7] 3/4 24/6 42/4 50/22 51/10
52/23 160/6
185
unaudited [40]
underlying [1] 51/1
timing [3] 100/20 101/10 155/20
understand [14] 2/14 9/15 9/22 15/23
tiny [1] 162/22
82/5 99/13 99/14 111/21 124/17 134/11
title [4] 52/9 81/2 104/24 106/9
135/5 140/5 158/9 167/24
TOLL [58]
understanding [43]
Toll's [8] 2/4 47/23 76/5 134/22 151/7 understands [8] 22/25 26/11 36/5
151/17 151/25 153/14
66/16 68/11 110/8 126/2 128/9
top [8] 8/23 56/2 56/3 56/4 92/8 97/16 understood [4] 30/15 39/25 43/14
162/23 166/5
122/23
total [1] 35/3
undertake [1] 99/12
Touche [3] 151/19 151/22 152/1
undertaking [1] 82/3
tough [1] 147/9
underwriting [12] 82/3 84/24 85/4 85/8
tour [3] 84/2 118/5 118/9
85/10 85/13 85/24 99/16 99/16 100/7
toured [1] 83/10
115/16 136/14
towards [4] 104/13 104/15 108/17
unique [1] 105/1
153/4
UNITED [10] 1/1 1/5 1/12 1/22 48/14
traction [1] 108/8
57/17 79/11 119/1 141/14 141/22
trails [1] 50/8
University [3] 49/10 78/6 144/12
tranche [1] 20/7
Unless [1] 38/10
transaction [13] 31/15 31/16 59/23
unsecured [1] 87/13
61/1 79/20 85/3 102/3 112/19 113/5
unusual [1] 27/23
113/11 113/17 148/2 161/23
updated [3] 68/21 70/11 73/7
transactions [20] 22/13 22/17 27/14
updates [1] 109/18
32/7 34/8 42/5 46/7 66/21 71/24 78/1
upfront [1] 157/20
79/11 79/13 79/15 111/8 111/17 112/18 us [20] 19/2 20/6 20/24 42/6 81/9 82/2
113/16 148/3 148/4 157/24
83/21 91/18 94/1 95/7 132/12 138/1
transcript [3] 1/11 1/24 170/20
138/6 142/6 142/11 146/13 146/17
transfer [14] 59/18 59/22 61/4 61/9
154/13 159/7 164/1
61/12 62/3 62/11 62/15 62/23 63/7 67/1 user [1] 148/6
67/9 67/23 67/24
V
transfers [4] 34/3 66/23 74/5 74/6
transitional [3] 139/21 140/1 140/9
vacation [2] 50/23 52/12
translated [1] 167/3
vague [1] 12/21
transport [1] 61/12
varies [3] 146/10 149/15 149/15
travel [5] 83/5 150/17 150/18 151/4
vary [1] 99/17
151/6
vendors [1] 147/14
Treasury [1] 100/16
venture [2] 26/12 27/1
Trial [1] 1/11
ventures [1] 82/7
trip [1] 116/15
ventureships [1] 26/22
trouble [1] 108/18
verify [1] 30/21
true [20] 4/25 8/3 21/2 21/15 22/9
via [1] 51/9
22/15 22/18 23/23 24/4 24/9 24/22
vice [2] 100/2 132/24
24/25 62/17 62/22 62/24 88/18 89/3
viewed [1] 18/6
96/14 97/8 140/20
violate [1] 41/18
truth [1] 25/17
virtue [1] 20/6
Tuesday [2] 15/10 118/14
vision [12] 41/8 107/8 107/11 107/19
109/6 128/15 139/15 139/20 139/24
Twenty [1] 72/13
139/25 140/8 140/24
two o'clock [2] 75/19 75/22
typical [1] 27/21
visit [8] 83/1 83/17 83/19 84/6 84/15
84/17 84/20 120/3
typically [2] 80/14 146/2
voice [2] 50/8 78/12
U
volunteer [1] 80/18
U-D [1] 57/24
volunteered [1] 80/20
U.S [2] 1/15 103/22
vouching [1] 102/5
U.S. [2] 100/16 129/21
W
U.S. government [1] 129/21
U.S. Treasury [1] 100/16
Wachovia [14] 58/20 58/22 58/25 58/25
59/3 59/9 59/10 59/15 60/1 63/7 64/21
UAE [2] 161/8 162/4
64/21 65/16 69/15
uhm [8] 109/1 109/13 111/20 113/6
138/3 143/22 147/9 149/24
wait [1] 76/12
ultimately [6] 114/6 125/16 125/18
waiting [1] 129/1
144/2 147/6 154/20
waive [6] 2/19 18/18 19/24 48/7 76/19
135/11
Um [10] 62/21 66/3 66/6 68/4 71/2
74/23 99/11 106/23 122/20 128/8
waived [4] 19/25 20/13 30/2 101/4
Um-hum [10] 62/21 66/3 66/6 68/4 71/2 waiver [12] 20/2 20/5 20/6 20/9 20/24
74/23 99/11 106/23 122/20 128/8
21/12 100/20 100/21 101/14 101/16
101/17 102/21
un [2] 18/15 140/16
unacceptable [1] 32/11
waivers [5] 80/1 100/17 100/23 101/3
101/7
warehouses [1] 131/20
warrant [1] 102/12
warranties [6] 4/10 17/25 37/18 96/4
96/13 97/7
warranty [1] 17/13
Washington [2] 78/6 84/22
Washington, [2] 78/11 78/17
Washington, D.C [2] 78/11 78/17
Watts [1] 49/3
Watts-Fitzgerald [1] 49/3
we'd [5] 63/23 87/12 108/24 166/3
166/4
wearing [2] 83/15 83/16
website [2] 152/20 153/1
Wednesday [3] 3/3 53/24 56/6
week [2] 3/1 84/19
weekend [2] 142/4 142/12
weeks [1] 119/22
well-established [2] 24/19 24/19
well-known [1] 139/15
Wells [6] 58/10 58/11 58/19 58/25 59/1
64/21
Wesley [2] 116/16 118/25
who's [3] 66/25 74/17 102/5
Wide [7] 150/17 150/17 151/2 151/4
151/5 151/8 151/11
wife [1] 118/5
William [1] 1/11
willing [4] 126/22 126/24 127/6 127/21
wire [20] 59/22 61/9 61/12 61/25 62/3
62/11 62/15 62/17 62/23 63/4 63/7
66/23 67/1 67/9 67/23 67/24 73/4 74/6
74/17 74/22
wires [3] 60/4 62/10 74/8
withdraw [2] 51/19 120/2
witness [22] 3/17 21/6 47/9 48/13
48/17 53/5 57/10 57/15 57/16 57/21
75/13 77/2 77/5 77/7 135/4 135/19
141/11 141/12 141/16 153/17 158/10
169/2
witnesses [3] 142/5 142/7 169/1
word [4] 9/6 10/1 10/3 113/23
wording [1] 94/10
words [15] 8/22 8/24 12/12 12/13 31/8
33/25 92/7 92/10 93/11 93/11 93/15
93/17 97/17 115/12 130/14
work [40]
worked [18] 28/21 49/15 49/18 50/19
51/5 51/7 51/11 77/22 78/10 78/16 80/7
80/22 81/4 110/18 111/4 112/17 130/6
158/19
working [13] 49/20 52/12 58/22 59/3
59/9 78/1 78/21 80/9 81/24 82/13
111/17 129/25 157/21
works [2] 23/6 105/3
world [20] 33/19 79/13 107/8 107/11
107/19 109/6 110/25 111/2 111/9
121/22 124/20 128/15 139/15 139/20
139/24 139/25 140/8 140/22 140/24
162/7
worldwide [1] 102/18
worthwhile [2] 82/4 85/11
WPD [1] 1/4
write [2] 132/7 132/22
writing [3] 101/5 101/7 116/3
written [2] 75/1 132/21
wrote [2] 115/12 132/6
WV [1] 56/10
185
Y
year-end [2] 7/10 7/11
year-ended [2] 165/7 165/12
yen [2] 112/6 112/7
York [1] 78/11
you'd [2] 34/11 160/25
young [32] 43/16 43/21 45/10 45/12
103/7 103/9 103/11 126/18 127/10
127/17 143/2 143/3 143/8 143/11
143/21 145/5 145/16 145/17 145/18
146/16 146/20 146/20 150/15 151/24
153/9 154/6 154/9 154/10 154/16
155/18 159/5 162/1
Z
zero [6] 35/14 36/12 67/15 68/10 69/17
125/6
zeros [2] 61/22 66/14
Ziegler [1] 57/4

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Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 1 of 185

UNITED STATES DISTRICT COURT

Richard A. Sharpstein, Esq.

Francine C. Salopek, RMR, CRR

MONDAY, JULY 1, 2013, 9:31 A.M.

(The Judge entered the courtroom)

Counsel are present.

Anything to come before the Court before we bring the

Mr. Toll's present.

We're back on the record.

No, your Honor.

I guess we need to get Mr. Smith back in.

I had some hearing set for nine o'clock this morning.

I had it postponed for this afternoon.

starting up this afternoon until two.

Mr. Smith, you understand you're still under oath?

(The jury entered the courtroom)

Let's bring in the jury.

Counsel concede the presence of the jury

and waive its polling?

Yes, your Honor.

Yes, your Honor.

And did everyone follow my admonition not

to discuss the case or allow it to be discussed in your

Tomorrow we're going to start at 9:30.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER

at about 4:30, and then Wednesday we'll start at 10:30.

I have to break a little bit early tomorrow night,

Ms. Foster-Steers, you may proceed.

I think we're ready to resume.

Thank you, your Honor.

DIRECT EXAMINATION (CONTINUED)

Mr. Smith, when we left off on Friday, we had talked about

a financial statement that was submitted to OPIC during the

period of time that you were negotiating with Cameron Alford

with respect to a $10 million loan.

And, in fact, sir --

Do you remember that?

(Discussion had off the record between counsel)

May I approach the witness, your

as Government's Exhibit C(4), which is an e-mail from Craig

Toll, dated January 28, 2010, to Lynn Tabernacki, attaching

consolidated unaudited September 30 financials.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER

Had you seen those financials, Mr. Smith, during your

negotiations with OPIC in that time period?

I'm honestly not sure.

Well, these are financial statements, sir, for the period

ending September 30, 2009, and December 31, 2008.

And if we look at the loan agreement, sir, under the

section called "Representations and Warranties," Section 303 --

I'm sorry -- 301(c), this particular section references a

ending September 30, 2009.

They would appear to be.

Now, the financial statements that were submitted to OPIC,

Mr. Smith, they had to be complete and correct and fairly

present its financial condition -- when I say "its," I'm

talking about InnoVida -- as of the period then ended, correct,

Was it your understanding, Mr. Smith, that the financial

statements reflected in Exhibit C(4) were, in fact, the true,

Do you see that?

Were those, those same financials that we see in

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER

correct, and complete financial statements for InnoVida for the