Deposition Transcript of Scott Rothstein - Trustee Services

1 UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
2 FORT LAUDERDALE DIVISION
3 In re:
4 ROTHSTEIN ROSENFELDT ADLER, P.A.,
5 Debtor. Case No. 09-34791-BKC-RBR
Chapter 11
6 _________________________________
7
HERBERT STETTIN, not individually
8 but as Chapter 11 Trustee of the
estate of the Debtor, Rothstein,
9 Rosenfeldt Adler, P.A.,
10 Plaintiff,
11
vs.
ADV.NO. 11-02934-BKC-RBR-A
12
13 BIRKS & MAYORS, INC., MAYOR'S
JEWELERS OF FLORIDA, INC., and
14 MAYOR'S JEWELERS, INC.,
15 Defendant.
16 /
17 500 E. Broward Blvd.
Suite 700
18 Ft. Lauderdale, Florida
Thursday, 2:35 p.m.
19 June 7, 2012
20 D E P O S I T I O N
21 of
22 SCOTT ROTHSTEIN
(Via Video Conference)
23
taken on behalf of the Trustee
24 pursuant to a notice of taking deposition
25 ---
Page 1

1 APPEARANCES:
2 GENOVESE, JOBLOVE & BATTISTA, by
BARRY P. GRUHER, Esq., of counsel, and
3 ROBERT F. ELGIDELY, Esq., of counsel
Attorneys for Trustee.
4
HOLLAND & KNIGHT, by
5 JOAQUIN ALEMANY, Esq., of counsel
Attorneys for Defendants.
6
LAWRENCE LaVECCHIO, Assistant U.S. Attorney,
7 U.S. DEPARTMENT OF JUSTICE.
8 MARC NURIK, Esq.,
Attorney for Scott Rothstein.
9
ALSO PRESENT:
10 Special Agent Taryn Guariglia
11
I N D E X
12
WITNESS
DIRECT CROSS REDIRECT RECROSS
13 SCOTT ROTHSTEIN
14 (By Mr. Gruher) 3 --
15 (By Mr. Alemany) 36
16 (By Mr. LaVecchio) --
17 (By Mr. Nurik) --
18
19
20
21
22
23
24
25
Page 2

1 Thereupon:
Page 3
2 SCOTT ROTHSTEIN
3 was called as a witness and, having been duly sworn,
4 was examined and testified as follows:
5 DIRECT EXAMINATION
6 BY MR. GRUHER:
7 Q. Can you please state your name for the
8 record?
9 A. Scott W. Rothstein.
10 Q. Good afternoon, Mr. Rothstein. Sometimes
11 during the deposition I will refer to you as "Scott."
12 I hope you don't mind.
13 We are here today on adversary case number
14 11-02934, adversary pending before Judge Raymond B.
15 Ray, Herb Stettin, Trustee vs. Birks & Mayors, Inc.;
16 Mayor's Jewelers of Florida, Inc.; and Mayor's
17 Jewelers, Inc.
18 Those are the three adversary defendants.
19 For purposes of the deposition today we
20 have two sets of documents, Scott. We have T-B&M
21 Bates stamped 0001 through 00205, and then on the
22 defendants' side that will be B&M 0001 through
23 000222.
24 I will actually be referring to both sets
25 of documents during my examination, so with that

1 we'll get to it.
Page 4
2 Are you familiar with the defendants
3 Birks & Mayors, Inc.; Mayor's Jewelers of Florida,
4 Inc.; and Mayor's Jewelers, Inc.?
5 A. Yes.
6 Q. Did you have any personal relationships
7 with anyone at either one of those defendants?
8 A. I don't know what you mean by "personal
9 relationships."
10 Q. Well, did you know anyone at any of these
11 entities on a personal level as opposed to simply a
12 business level?
13 A. The only person who I think that you could
14 say that I knew on a personal level at all would have
15 been Heidi. I think her name was Boermeester. She
16 was my original salesperson.
17 Q. When did you first meet Heidi Boermeester?
18 A. Back when I was actually living in
19 Plantation and she was working at the Plantation
20 Mayors. I may have met her before that because my
21 recollection is that she was either dating or engaged
22 to a Plantation police officer that I knew.
23 Q. When you say the Plantation store, you'd be
24 referring to the Broward Mall. Is that correct?
25 A. Yes.

1 Q. Now, there did come a time when you
Page 5
2 established an account with the defendants.
3 Is that correct?
4 A. Yes.
5 Q. Do you know which particular entity -- and
6 what I mean by "entity" -- which of the particular
7 defendants you believed or understood you were
8 establishing a credit account with?
9 A. I don't specifically recall.
10 Q. What was the reason or purpose for why
11 you established a credit account with Birks & Mayors,
12 Inc., Mayor's Jewelers of Florida, Inc.; or Mayor's
13 Jewelers, Inc.?
14 A. So I could make purchases and pay over
15 time.
16 Q. Now, was this what you would call or
17 consider to be a consumer credit card account?
18 MR. ALEMANY: Object to the form.
19 A. It wasn't like a regular credit card. It
20 was an account, if my recollection is correct, where
21 I had a certain period of time to make the payments.
22 Q. Now, when you would go in to make a
23 purchase after you established this account, did you
24 have to present any card with any moniker of any of
25 the defendants' names on it, like a Macy's card or

1 Bloomingdale's card, or something of that nature, or
Page 6
2 did you just provide them with your name and you were
3 in the system for purposes of obtaining a piece of
4 jewelry on credit?
5 A. The bulk of the purchases that I made
6 utilizing that account were made without me
7 presenting any card.
8 Q. Were you ever issued an actual card in
9 connection with the credit account you established
10 with the defendants?
11 A. I don't have a recollection one way or the
12 other.
13 Q. Let me direct you first then to Bates
14 stamp numbers, and this would be for the defendants'
15 exhibits, and it would be B&M 00010, and it's
16 entitled Mayors Premier Resolving Charge Agreement.
17 A. Give me the Bates number again, please.
18 Q. Yes, sir. B&W, and it has three zeros
19 before it and then 10. Bates stamp 10 of the
20 defendants' exhibits.
21 A. I got it.
22 Q. You're looking at that credit application.
23 Do you recall seeing that credit
24 application prior to today's deposition?
25 I'm not simply referring to the date that

1 it may have been filled out. I'm talking about any
Page 7
2 time in between.
3 A. Other than looking at it yesterday for a
4 minute, no.
5 Q. Did you fill out this particular credit
6 application?
7 A. Parts of it.
8 Q. Can you just briefly describe for me which
9 parts of the application you may have filled out?
10 A. Actually now that I'm staring at it really
11 closely, none of that is my handwriting other than
12 the signature.
13 Q. Were you present with anyone who was
14 employed by the defendants at the time that this
15 credit application was filled out?
16 A. I might have been with one of the
17 employees. I can't imagine I would have been with
18 someone who was not an employee filling this out.
19 Q. Is that your signature at the bottom of
20 that document dated 8/20/2004?
21 A. It is.
22 Q. Who provided the information for the
23 employee of the defendants to fill out this credit
24 application?
25 A. Me.

1 Q. Were you making a salary of $150,000 per
Page 8
2 month at the time that this application was filled
3 out and signed by you?
4 A. No.
5 Q. So that information was inaccurate to your
6 recollection at the time ---
7 A. Yes.
8 Q. Did anybody ever inquire or ask for any
9 proof of the fact that you had stated a salary of
10 $150,000 per month?
11 A. To my knowledge, no.
12 Q. At the time you were employed simply by
13 Rothstein and Rosenfeldt -- Mr. Adler had not yet
14 joined the firm? Is that correct?
15 A. I'm sorry. Can you ask that again?
16 Q. Yes, sir. I will.
17 On the application it says Employer Name,
18 Rothstein and Rosenfeldt, and I'm asking you: At the
19 time was Mr. Adler already with the firm?
20 A. No.
21 Q. Is there any other information on this
22 credit application now that you've had an opportunity
23 to look at it that was not accurate at the time the
24 application was filled out, other than the salary?
25 A. Give me one second to look at it.

1 If that 11 year figure refers to how long
Page 9
2 I was working at Rothstein Rosenfeldt, that would be
3 incorrect.
4 Q. Thank you. Anything else you can think of?
5 A. No. The rest of it looks correct.
6 Q. At the time that you had had applied for a
7 line of credit with the defendants did you ever
8 discuss with anyone the limit of the amount of credit
9 you were able to obtain in order to purchase jewelry
10 from any of their stores?
11 A. I may have, but I don't have a specific
12 recollection one way or the other as I sit here
13 today.
14 Q. Were you ever advised by anyone or were
15 you aware of a credit limit of $42,000 as the initial
16 credit limit when you established the account with
17 the defendants?
18 A. I don't have a specific recollection of it
19 being $42,000. I do have a recollection of being
20 told that it was an amount and me telling them it
21 needed to be more.
22 Q. Do you recall when that conversation may
23 have taken place?
24 A. I do not.
25 Q. And what was the reason why you told them

1 that the amount may have been insufficient and that
Page 10
2 it should have been higher?
3 A. To the best of my recollection, I told them
4 because I buy a lot more expensive items than what
5 they were giving me as a credit line.
6 Q. When I'm talking about the "defendants,"
7 I'm talking about Birks & Mayors, Inc.; Mayor's
8 Jewelers of Florida, Inc.; and Mayor's Jewelers, Inc.
9 Did anyone at any of those entities ever
10 tell you that that was okay, they would be fine with
11 increasing the credit limit?
12 A. Yes.
13 Q. Was there ever any time that you had
14 purchased any items from the defendants on credit
15 that you were denied access to the credit line
16 because your credit limit was too high?
17 A. Yes.
18 Q. Can you recall any specific instances where
19 that happened?
20 A. The specific instances, no, but I do recall
21 being at the store attempting to purchase something
22 and being told I did not have enough credit available
23 and them either having to go back to them and ask for
24 an increase sometimes while I waited there, sometimes
25 over a period of days, and things to that -- in that

1 vein.
Page 11
2 Q. Were you ever able to resolve that issue
3 with the credit line whereby you were able to
4 establish a higher line of credit in order to
5 complete the purchase?
6 A. To the best of my recollection, I was able
7 to accomplish that goal almost every time. I recall
8 several occasions where it was not done within the
9 speed that I wished and I ended up purchasing the
10 item elsewhere.
11 Q. Do you know the circumstances under which
12 you were able to increase your credit line?
13 In other words, was there any specific
14 information or further information you needed to
15 provide to any of the defendants in order for them to
16 increase the credit line as you requested?
17 MR. ALEMANY: Object to the form.
18 A. I do not have a specific recollection one
19 way or the other.
20 Q. Do you know the person or persons you dealt
21 with when you had requested an increase in the credit
22 line?
23 A. There was a -- I know -- I can tell you who
24 I think I would have spoke to.
25 Q. Who would that have been?

1 A. Heidi, and a gentleman named Ira.
Page 12
2 Q. Is that the individual -- if you look at
3 the top of B&M 00010 you'll see it looks like the
4 name of "Ira" -- I can't make out the last name, but
5 it appears in written fashion at the very top of the
6 document.
7 A. It's kind of cut off, but the first name
8 looks like "Ira" and then it looks like a slash and
9 then says "Jack" or "Jacki."
10 Q. Is that the individual that you think you
11 dealt with when you were filling out or having this
12 application submitted for approval?
13 A. Oh, I don't know one way or the other
14 whether Ira did it or this Jacki person did it or
15 Heidi did it. I have no specific recollection who
16 did it.
17 Q. During the course of many years -- and
18 I'll give you the timeframe -- between or commencing
19 in the year around December of 2005 through March
20 of 2008 -- do you recall purchasing a number of
21 jewelry items from the defendants?
22 A. I do.
23 Q. Can you tell me in your own words or
24 describe for me in your own words the types of
25 jewelry items generally that you would be purchasing

1 from the defendants?
Page 13
2 A. Generally speaking, the bulk of the items
3 that I purchased were watches. I also had occasion
4 to purchase certain other jewelry such as bracelets,
5 necklaces, perhaps a ring or two, but the bulk was
6 watches.
7 Q. Why was the bulk of the items that you were
8 purchasing from the defendants typically watches?
9 A. Several reasons. They were an authorized
10 Rolex dealer and the other jewelers that I dealt with
11 were not and didn't have Rolex.
12 They were an authorized Cartier dealer.
13 The other jewelers that I was dealing with did not
14 carry Cartier -- most of them anyway -- the people
15 that I was frequenting the most.
16 They were an authorized Patek Philippe
17 dealer and most of the other jewelers I dealt with
18 did not carry Patek Philippe, and they gave me solid
19 discounts on those specific brands of watches.
20 Q. When you say "solid discounts," what do you
21 mean by that?
22 A. To the best of my recollection it was in
23 the 20 to 30 percent range.
24 Q. Why would they be giving you 20 to
25 30 percent discounts on these particular jewelry

1 items?
Page 14
2 A. Well, I can't get inside their head and
3 tell you why they actually did it, but I can tell you
4 why I think they did it.
5 Q. I would love to hear why you think they did
6 it.
7 A. Because I was a good customer.
8 Q. And you considered yourself to be a good
9 customer because you bought a lot of jewelry during
10 the course of a particular year or a particular month
11 or the amount or the price of a particular jewelry
12 item that you would purchase in a particular year or
13 month?
14 A. Both. Combined with the fact that Heidi
15 and Ira and I guess the woman that I dealt with was
16 named Jacki -- now that I'm thinking more about it it
17 sounds right -- all knew that I as far as perception
18 was concerned that I had -- was -- occupied a
19 prominent position in the South Florida -- let's call
20 it business and social scene -- and they appeared to
21 want to be able to say I was a customer of their
22 store.
23 Q. Did that also include an individual with
24 the last name of Dobson? Does that name ring a bell
25 for you?

1 A. You know what? Heidi's last name before
Page 15
2 she was married I believe was Dobson and then it
3 became Heidi Boermeester. "Boermeester" is the last
4 name of the cop I knew from Plantation.
5 Q. So would it be fair to say that generally
6 the salesperson that you would deal with at the
7 Mayors Jewelers store was Heidi?
8 A. In the beginning and the middle, yes.
9 Then it changed. Heidi changed stores. I moved. I
10 started shopping more in the Sunrise store. Then I
11 shopped some at the Boca store.
12 If you were going to ask me who my main
13 salespeople were, I would say Heidi, number one, and
14 then Ira and Jacki.
15 Q. But in your estimation you believed that
16 they considered you to be, let's say, a VIP customer
17 or somebody that had a profile such that it would
18 lend some credibility and perhaps some attention to
19 the fact that you shopped at their stores.
20 Would that be a fair statement?
21 A. It would. They regularly asked me to refer
22 other people in there and the like. Yes.
23 Q. Now, beginning on the first transaction,
24 which is part of the amounts that are sought to be
25 recovered by the Trustee in this case -- and I'll try

1 to phrase the question so you can understand it --
Page 16
2 the first transfer of $12,913 was documented on
3 December 15th of 2005, and if you want to refer to
4 the transfer you can go to T-B&M 00005. It's just
5 page 5 of the actual adversary complaint.
6 On page 5 and up through and including
7 page 6 you'll see a number of transactions with a
8 date, a check number, a line item called "Rothstein
9 Personal Bank Account" and then outflow.
10 Do you see that chart there?
11 A. I do.
12 Q. Now, starting with the first one which is
13 December 15, 2005, would it be a fair statement to
14 say that the Ponzi scheme that you were operating had
15 already started at or with RRA -- "RRA" meaning
16 Rothstein Rosenfeldt Adler -- the debtor in this
17 case?
18 A. To the best of my recollection, in December
19 of 2005 the Ponzi scheme was at least in its early
20 stages.
21 Q. So the answer would be that it had started,
22 though?
23 MR. ALEMANY: Object to the form.
24 A. Yes.
25 Q. In December of 2005 was your primary or

1 sole source of income derived from the debtor?
Page 17
2 A. Can you clarify that for me, please?
3 You mean legitimate income from the debtor
4 or Ponzi income?
5 Q. The Ponzi income.
6 A. In 2005 I would say that the bulk of my
7 income was derived through RRA mostly Ponzi money.
8 Q. Now, you had established a personal bank
9 account at Gibraltar -- is that correct -- by
10 December of 2005?
11 A. Yes, sir. I don't know what the start date
12 for my Gibraltar account was off the top of my head.
13 Do you have it?
14 Q. Unfortunately, I don't.
15 Let me ask you another question and maybe I
16 can get it a little closer to where I wanted to go?
17 Did you have a bank account at Colonial
18 Bank at any time when you were applying to the credit
19 facility with Mayors Jewelers?
20 A. To the best of my recollection, I did.
21 Q. Now, was the Colonial Bank account an
22 account that was different from the Gibraltar bank
23 account?
24 A. Well, by its very nature all the bank
25 accounts were different accounts.

1 Can you be a little more specific?
Page 18
2 Q. I guess what I was asking you is: Did
3 Colonial Bank get taken over by Gibraltar or was that
4 a completely separate bank that remained independent
5 of Gibraltar?
6 A. It was a completely separate bank.
7 Q. Did you ever provide anyone at the
8 defendants -- let's call it "the defendants" for
9 purposes of these questions -- Mayors Jewelers --
10 with any information related to your Gibraltar
11 personal account?
12 A. Did I ever provide information on my
13 Gibraltar account to the people at Mayors?
14 Is that what you're asking me?
15 Q. Yes. In connection with the line of credit
16 that you established with the defendants.
17 A. Without seeing some kind of documentation I
18 have no specific recollection one way or the other.
19 Q. Do you recall ever making a payment out of
20 any bank account that you held at Colonial Bank to
21 pay for any jewelry items that you purchased from the
22 defendants on the line of credit?
23 A. I don't have a specific recollection one
24 way or the other.
25 Q. Scott, the jewelry items that we are

1 dealing with here -- I'll suggest to you we're going
2 to limit it to the jewelry that's described in both
3 sets of exhibits. There are pictures here. There
4 are invoices. There are receipts if you want to
5 take a moment to look at them.
6 My question is: Were all these jewelry
7 items that were purchased at the defendant's store
8 locations, were they for your own personal use or was
9 it a combination of personal use and items you
10 purchased for others?
11 A. A combination.
12 Q. Can you describe for me generally the
13 things that you may have purchased for yourself as
14 opposed to things you may have purchased for others?
15 MR. ALEMANY: Object to the form.
16 A. You mean (inaudible) ---
17 Q. Scott, we missed that.
18 A. Do you mean is there a difference between
19 the items?
20 Q. Yes. Was there any difference, a general
21 difference, other than perhaps if there's a pair of
22 earrings, obviously, I would hope that would be for a
23 girl.
24 A. As far as -- I think what you're trying to
25 get at is like the amount of purchase and stuff? No.
Page 19

1 I would buy just as expensive gifts for
Page 20
2 people as I would purchase things for myself.
3 Q. Do you know or can you recall who, other
4 than yourself, you would purchase any jewelry items
5 for at Mayors Jewelers?
6 A. Yeah. I can try.
7 Q. Okay. We're listening.
8 A. All right. Here we go.
9 To the best of my recollection, at Mayors
10 I purchased things obviously for myself, for Stuart
11 Rosenfeldt, for Russell Adler, for Stephen Lippman,
12 for Debra Villegas, for Irene Stay, for Bill Brock
13 for Christina Kitterman, for Howard Kusnick, for
14 Stephen Caputi, for David Boden, for my wife, for
15 other co-conspirators in the Ponzi scheme whose names
16 I don't recall at this moment, for various
17 girlfriends and mistresses, for other people's
18 girlfriends and mistresses, for various members of
19 law enforcement, for Robert Scandifio, for various
20 bankers.
21 That's all I recall at this time. There
22 may be more.
23 Q. Did you ever purchase any jewelry items for
24 Heidi or anyone else at Mayors as just a gift?
25 A. I may have purchased -- see, I don't want

1 to guess. I may have, but -- for some reason I have
2 a vague recollection of yes, having done so, but I
3 don't have a specific recollection one way or the
4 other and I do not want to guess.
5 Q. Now, in connection with paying for these
6 jewelry items, do you recall how and when you would
7 receive a particular statement indicating how much
8 you owed to Mayors Jewelers and when it had to be
9 paid?
10 A. I only recall rarely actually looking at my
11 Mayors statements.
12 Q. Would it be fair to say that Debra Villegas
13 was handling that particular aspect of your finances?
14 A. That would be a fair statement.
15 Q. Did Debra Villegas have the ability to
16 write and issue checks on your behalf and/or on your
17 behalf and that of Kimberly Wendell, your wife?
18 A. Yes.
19 Q. Was she a signatory on your personal
20 account?
21 A. To the best of my recollection, she was a
22 signatory on all my accounts.
23 Q. And for --
24 A. Meaning all my personal and all my personal
25 accounts.
Page 21

1 Q. That would include accounts at Sterling
Page 22
2 Bank, Gibraltar, Colonial.
3 Are there any other accounts that I may
4 have missed?
5 A. I don't recall whether she was a signatory
6 at Sterling or Colonial. She may have been. She was
7 definitely a signatory at Gibraltar.
8 Q. Why is it that she was a signatory on your
9 personal accounts?
10 A. Because she handled the bulk of my
11 finances.
12 Q. When a payment needed to go to Mayors
13 Jewelers for any particular account statement that's
14 identified in these documents, who made the decision
15 of when it would be paid and how much would be paid
16 on any particular account statement?
17 MR. ALEMANY: Object to the form.
18 A. Okay. That's kind of a combination
19 question.
20 Q. I can break it down.
21 A. The bulk of the time -- I'm all right --
22 the bulk of the time Debra paid the bills to Mayors
23 and decided when the bill would be paid to Mayors.
24 I would inject my two cents if I thought
25 it needed to get paid or needed to wait to get paid

1 based upon, for example, my financial condition at
Page 23
2 the time, and probably half and half I would decide
3 -- actually most of the time I would decide along
4 with her how much to pay.
5 We might look at a bill together or she
6 might show me the bill and say: How much do you want
7 to pay?
8 I'd say: Pay half, pay it all, pay the
9 minimum payment, whatever it might be.
10 I might ask her how much money we have.
11 I'd have her contact Irene and ask her how much money
12 we had, so it varied.
13 Q. When you say you would have Debra determine
14 or figure out how much money "we" have, are you
15 referring to moneys that would have been in any
16 particular RRA trust account at the time?
17 A. I'm referring to the conglomerate of what
18 we had access to in every RRA account and every
19 related RRA account and my personal accounts.
20 Q. Would it be a fair statement to say that
21 with respect to the payments that were made to Mayors
22 Jewelers, those payments would have come from moneys
23 that were derived from or in connection with the
24 Ponzi scheme?
25 A. The great majority of it, yes.

1 Q. Is there any particular instance that you
Page 24
2 can think of where those moneys would not have come
3 from the Ponzi scheme?
4 A. No.
5 Q. Is there any particular reason why you
6 would have held or maintained account balances on any
7 particular month with Mayors Jewelers?
8 A. It's certainly possible.
9 Q. Did the frequency and amount of purchases
10 to your recollection increase over time as the Ponzi
11 scheme became more successful?
12 A. Yes.
13 Q. With respect to any of the jewelry items
14 that are referenced in the exhibits that have been
15 presented in the Bates stamp that I had identified
16 earlier in this deposition, did the debtor, RRA,
17 receive any benefit or value from any of those
18 jewelry items?
19 A. No.
20 Q. Were any of these jewelry items purchased
21 for the law firm, itself?
22 A. I have no recollection as I sit here today
23 of having purchased any items from Mayors that were
24 meant to enure to the benefit of the firm whereas I
25 might have purchased an item someplace else for a

1 legitimate client or vendor, but I don't recall ever
2 having done that with Mayors.
3 Q. I understand.
4 If you could refer to Bates stamp
5 B&M 00019, it's a particular check, and when you get
6 there it will be more clear. I'm just going through
7 some examples, Scott, of some checks that were
8 written and issued to Mayors Jewelers.
9 I'm right now referring to 19.
10 Do you see that check, Scott?
11 A. I do.
12 Q. You'll notice the signature there.
13 Do you know whose signature is on that
14 check?
15 A. Ms. Villegas'.
16 Q. And is that an example of a transaction in
17 which Ms. Villegas would actually write out and issue
18 a check on your behalf and/or on your behalf and
19 Kimberly's behalf to pay Mayors Jewelers on any of
20 the accounts that are identified in the exhibits?
21 A. That's what it would have been for, yes.
22 You know, sir, hang on one second. I just
23 want to make sure the record is clear.
24 As I'm sitting here thinking about it,
25 although I don't have a specific recollection of it,
Page 25

1 it is possible that I purchased some items from
Page 26
2 Mayors that I gave to what I'll call legitimate
3 employees of RRA for a job well done or for loyalty
4 or that type of thing. There may have been some
5 derivative benefit to the firm from that, but,
6 notwithstanding that, my other answer stays.
7 Q. In those instances those jewelry items
8 would have been kept by that individual attorney.
9 Is that correct?
10 A. I have no way of knowing whether they kept
11 it or sold it. A lot of people went running around
12 selling gifs I gave them after the Ponzi scheme
13 exploded.
14 Q. But, in other words, those items, for
15 example, that may have been performed or given to an
16 attorney was given to that attorney for their
17 personal use and benefit?
18 A. Sure.
19 Q. Now, referring ---
20 A. That's a "yes."
21 Q. Now referring to another example of a
22 payment, I'm just going to direct you to B&M 00037.
23 This check purports to be a check number
24 7584. This looks like it was written on a Gibraltar
25 account for $28,700.

1 A. I see it.
Page 27
2 Q. Was that a check that Debra, again, would
3 have issued and signed on your behalf?
4 A. Yes.
5 Q. Was there any reason why the payments to
6 Mayors would have varied from bank account to bank
7 account over the course of 2005 through 2009?
8 A. It could have been Debra's choice. It
9 could have been my choice. It could have had to do
10 with how much money was in what accounts, what
11 account it was easiest to transfer to, any myriad
12 of reasons.
13 Q. I apologize. I meant up to March of 2008.
14 Not 2009.
15 A. Okay.
16 Q. Was there ever a time when you stopped
17 purchasing jewelry at Birks & Mayors?
18 A. You mean permanently stopped?
19 Q. Yes.
20 A. No.
21 Q. You continued to purchase under the line
22 of credit. Is that correct?
23 A. I have to see the line of credit documents
24 to tell you for certain, but I don't ever recall
25 stopping shopping there.

1 Q. Once you established the credit line with
Page 28
2 Mayors Jewelers did you always use or utilize the
3 credit line when purchasing jewelry items?
4 A. I don't have a specific recollection one
5 way or the other as to whether or not I used the
6 credit line all the time, whether or not I might have
7 either brought a check or had a check delivered to
8 them or whether I might have used my American Express
9 cards. I just don't recall.
10 Q. Do you know if anyone else other than
11 yourself ever purchased any jewelry from Mayors
12 Jewelers utilizing your account?
13 A. I don't have any specific knowledge of
14 that, sir. No.
15 Q. How did the purchases of jewelry from
16 Mayors contribute to the mirage or appearance of
17 success in your ability to continue perpetuating the
18 Ponzi scheme?
19 MR. ALEMANY: Object to the form.
20 A. The jewelry that I bought for myself
21 created the appearance of extreme and extraordinary
22 wealth and success. The jewelry that I bought for my
23 co-conspirators contributed to their appearances of
24 wealth and success and also served to secure their
25 loyalty and reward them for assisting me.

1 The fact that I was seen in that store by a
2 myriad of people in the community added to, for lack
3 of a better term, the Rothstein image.
4 Q. With respect to what you call the Rothstein
5 image, did you ever have any conversations with
6 anyone at Mayors Jewelers specifically, whether it's
7 Ira or Heidi, regarding the volume or amount of
8 purchases that you were putting on your account?
9 A. I'm certain I did.
10 Q. Did they ever question you why you were
11 purchasing so many pieces of jewelry on the account?
12 A. No. The only thing I recall Heidi saying
13 is that she thought I was crazy just because of the
14 way I shopped, but it was said in jest, although now
15 looking back at it it certainly looks like I was a
16 little bit crazy.
17 Q. In your estimation do you believe that you
18 purchased a large amount of jewelry items from Mayors
19 on credit?
20 A. Large compared to who?
21 Q. People that you knew. Circles that you ran
22 in.
23 A. Yes.
24 Q. Did you find it unusual or odd that at
25 times when you had outstanding balances to Mayors
Page 29

1 Jewelers they continued to allow you to purchase
Page 30
2 jewelry items on credit?
3 A. Not at all.
4 Q. Why not?
5 A. Because everybody I did business with
6 basically knew that that was the way I did business,
7 I was -- the way I carried myself and the like. It
8 all added to this thing that: Let's just service
9 him. He's going to pay. It doesn't really matter
10 how much he runs up on the account because he always
11 pays. He pays early, pays late, pays in between.
12 He always pays.
13 He certainly appears to have the capability
14 to pay and he's also got a big mouth and we don't
15 want him speaking badly of us.
16 Q. Would you say that perhaps you were treated
17 differently given your status in the community and
18 the volume of jewelry you were purchasing from Mayors
19 Jewelers as opposed to perhaps a more ordinary
20 customer of Mayors?
21 A. I believe I was given special treatment.
22 Yes, sir.
23 Q. Do you recall where the Mayors Jewelers
24 billing statements -- what addresses they were being
25 sent to?

1 A. No, sir. Without seeing a document I
Page 31
2 couldn't tell you.
3 Q. Let me refer you back to -- if you can
4 turn to -- this would be in the Trustee's documents
5 -- T-B&M 00030. Let's call it Bates stamp 30.
6 A. Okay. I've got it.
7 Q. Do you see that account statement -- the
8 address that it is being sent to and for the request
9 for remittance of payment at the bottom?
10 A. I see that.
11 Q. Can you read into the record the address
12 where the statement was being sent to?
13 A. Scott W. Rothstein. 401 East Las Olas,
14 Suite 1650, Fort Lauderdale, Florida, 33301.
15 Q. What person or entity was located at that
16 address?
17 A. The main entity located there was RRA.
18 Q. The debtor in this case. Correct?
19 A. Yes, sir.
20 Q. Now, how is it or under what circumstances
21 did Mayors Jewelers start sending account statements
22 directly to you at RRA?
23 MR. ALEMANY: Objection to form.
24 A. To the best of my recollection, I requested
25 them to send them there.

1 Q. Where were the account statements going
Page 32
2 previously, to your knowledge?
3 A. I'd be guessing.
4 Q. Scott, if you can look at Bates stamp --
5 this is the Trustee's Bates stamp -- 178 -- ending
6 in 178.
7 A. Okay.
8 MR. ALEMANY: Trustees?
9 MR. GRUHER: Yeah. Trustees. T-B&M.
10 A. Yeah.
11 Q. I'm sorry, Scott. I'm waiting for opposing
12 counsel to take a look.
13 (Discussion off the record.)
14 Q. Scott. I'm sorry. Hold on a second.
15 Do you see the address there at the bottom
16 where the account statement was being sent to and
17 remitted?
18 A. I do.
19 Q. What address was that address?
20 A. It was one of my home addresses.
21 Q. Was that the home address that you were
22 utilizing when you first opened up this account?
23 A. No. I think when I first opened up the
24 account I was using 2627 Castilla. This is 2308
25 Castilla.

1 Q. How is it that the change in the addresses
2 was effectuated, if you know?
3 A. I'd be guessing.
4 Q. Why did you change the delivery or mailing
5 of the account statements from your personal address
6 to the firm address for RRA?
7 A. I did it in conjunction with Debra taking
8 over more and more of my personal finances.
9 Q. Do you know whether or not Debra had any
10 specific dealings or conversations at any time with
11 Birks & Mayors or Mayors Jewelers or any of the
12 defendants in this case regarding the status of the
13 account statements?
14 A. She certainly may have. I had given her
15 authorization I think for almost all of the people I
16 did business with for her to speak on my behalf.
17 Q. Did she ever advise you that she spoke with
18 anyone at Mayors Jewelers regarding the status of the
19 accounts or payments or things of that nature?
20 A. I don't have an independent recollection
21 one way or the other.
22 Q. With respect to each of the jewelry items
23 that were purchased in connection with the account,
24 did you take delivery of each piece of jewelry that
25 was purchased from Mayors Jewelers?
Page 33

1 A. At least for a limited period of time I
Page 34
2 did. I either took delivery or had it delivered to
3 my office.
4 Q. So you believe you received each of the
5 pieces of jewelry that you purchased from Mayors
6 Jewelers?
7 A. Yes.
8 Q. Scott, can you describe for me in your own
9 words what type of special treatment you believe you
10 received at Mayors Jewelers relative to the
11 establishment of your account and the purchases that
12 you made at the stores?
13 A. I believe that they bumped my credit limit
14 with them significantly with very little additional
15 substantiation from my banks. In fact, I believe
16 either Heidi or Ira or somebody told me at one point
17 in time I might have had the largest credit limit
18 that Mayors had ever extended to anybody.
19 They would regularly have things set aside
20 for me when I wanted to purchase them at a later date
21 without me having to put down any kind of deposit.
22 They would call me when things I was looking for had
23 come in. They would notify me of things they thought
24 I liked.
25 When I went there they treated me as a VIP

1 customer. I never waited. From time to time they
Page 35
2 would deliver items to my office. They gave me
3 discounts on Rolex watches that they did not offer,
4 at least to my knowledge, to very many people.
5 That's all I can remember at this time.
6 There may be more.
7 Q. Do you feel that they were generous in
8 terms of the flexibility they gave you for timing of
9 payments on the account and amounts that you would
10 pay on the account relative to the running balances
11 that were due on the account?
12 A. It appeared to me to be that way, but I
13 don't have any specific knowledge about what they did
14 in that regard one way or the other. They always
15 seemed to be fair to me.
16 MR. GRUHER: If we have any time left over
17 we'll reserve for any redirect.
18 MR. ALEMANY: The judge didn't allow
19 redirect.
20 MR. GRUHER: We're fine for now.
21 THE WITNESS: Thank you. We need a couple
22 of minutes for a restroom break.
23 (Short Break)
24 BY MR. GRUHER:
25 Q. Scott, this is Barry Gruher again. I

1 apologize.
Page 36
2 We had just one follow-up question just to
3 kind of round out the Trustee's examination.
4 With respect to the checks that appear in
5 the batch of checks that we provided to you, can you
6 confirm or just authenticate that these are, in fact,
7 checks that would have been written out of your
8 personal account and that those checks would reflect
9 Debra Villegas' signature on them?
10 A. If they are written off my personal account
11 and they have Debra Villegas' signature on them, then
12 that's what they are.
13 Q. You would have no reason to believe that
14 they would be no one else's signature other than
15 Ms. Villegas'. Is that correct?
16 A. That's correct.
17 Q. You would have authorized those checks to
18 have been issued and paid on your behalf with respect
19 to the Mayors Jewelers account.
20 Is that also correct?
21 A. That's correct.
22 MR. GRUHER: Thank you.
23 CROSS EXAMINATION
24 BY MR. ALEMANY:
25 Q. Mr. Rothstein, can you see me from this

1 angle?
Page 37
2 A. Yes, I can.
3 Q. Can you hear me clearly?
4 A. Go right ahead.
5 MR. ALEMANY: Let the record reflect it's
6 3:35, so we're going to go through 4:20, or I guess
7 until I finish my questioning if sooner.
8 Q. Scott, you can hear me clearly? You can
9 see me?
10 A. Yes. Yes.
11 Q. As stated before, I represent the Mayors
12 entities, the three defendants.
13 I'll try to get through this as quickly as
14 I can.
15 You had a Mayors credit card. Is that
16 correct?
17 A. Yes, sir. Credit account. Yes, sir.
18 Q. And that credit card was issued in your
19 name?
20 A. Yes, sir.
21 Q. Did the law firm RRA -- I'm going to refer
22 to the law firm as "RRA" -- at any point have a
23 Mayors credit card issued in its name?
24 A. To the best of my recollection, no.
25 Q. Most of your purchases at Mayors, if not

1 all, were made on your Mayors credit card?
Page 38
2 A. A significant number of them were, yes,
3 sir.
4 Q. By "credit card" we're referring to the
5 charge account, the Mayors charge account.
6 Is that correct?
7 A. Yes, sir.
8 Q. When you received credit card statements,
9 whether they be at your home address or at the RRA
10 office, the statements were issued in your name?
11 A. Yes.
12 Q. The Trustee pointed out that the statements
13 at one point started getting mailed to the law firm,
14 but those statements were still issued in your name.
15 Is that correct?
16 A. To the best of my recollection, yes, sir.
17 Q. And was it unusual for you to direct
18 personal bills to the law firm address?
19 A. No, sir.
20 Q. This was done largely out of convenience?
21 A. In a manner of speaking.
22 Q. I believe you testified because Debra
23 Villegas was handling your financial affairs.
24 Is that correct?
25 A. That's one of the reasons. Yes, sir.

1 Q. Why did you stop using your Mayors credit
Page 39
2 card?
3 A. I don't know whether I stopped using it or
4 not. If I stopped using it, I must have gone to
5 using my checks or my American Express.
6 Q. Do you recall ever having a discussion with
7 Mayors regarding Mayors running credit reports on
8 you?
9 A. Yes.
10 Q. What was that discussion?
11 A. I believe I asked him to stop because every
12 time they ran it it showed up as an application for
13 credit and it was interfering with my credit score.
14 Q. How often were they running it?
15 A. I don't remember, but they had some policy
16 where they were running it frequently.
17 Q. And did they stop running credit reports?
18 A. You know, they may have. I remember
19 discussing it with people from their main office, but
20 I don't have an independent recollection whether they
21 did or didn't.
22 Q. Could that have been one of the reasons why
23 you stopped using the charge account?
24 A. I'd be guessing. It's certainly possible,
25 but I'd be guessing.

1 Q. Was your credit score something that was
Page 40
2 important to you?
3 A. Yes.
4 Q. Would it have bothered you if they were
5 running credit reports more often than once a year?
6 A. Yes.
7 Q. And you would have vocalized that.
8 Correct?
9 A. Yes.
10 Q. For identification purposes it's Bates
11 labeled B&M 00010. This was a document that you
12 looked at before.
13 For further identification it's titled
14 Mayors Premier Revolving Charge Agreement.
15 A. I have that. Yes, sir.
16 Q. This is the credit card or charge account
17 application that you completed back in 2004.
18 Correct?
19 A. Yes.
20 Q. And that's your signature at the bottom?
21 A. Yes.
22 Q. And you signed this agreement intending to
23 open up a credit card charge account in your name.
24 Correct?
25 A. Yes.

1 Q. If you can turn to the next document in the
2 production, which is number 11, you can mark this as
3 Exhibit Number 2?
4 MR. GRUHER: Doesn't the protocol say that
5 you provide the Bates stamped --- I think if you
6 provided it to us already I don't think you have to
7 mark it.
8 (Discussion off the record.)
9 MR. GRUHER: You can just refer to the
10 Bates stamp number and that's your exhibit or you can
11 move all your stuff in as exhibits is fine. You
12 don't have to mark it separately.
13 MR. ALEMANY: Okay.
14 Q. All right. With respect to Bates label
15 number 11, let's call that number 11 for
16 identification purposes, Bates label B&M 00010, this
17 is an authorization to release financial information
18 to Mayors from Colonial Bank.
19 A. That's what it appears to be. Yes, sir.
20 Q. This authorization was required by Mayors
21 in order to confirm balances and to maintain the
22 credit card account open?
23 A. Yes, sir.
24 Q. Then if you can turn to the next document
25 in the production, which we'll mark as Exhibit 3 --
Page 41

1 it's the last exhibit -- B&M-00012 -- and that is an
2 authorization to release financial information to
3 Mayors from Sterling Bank.
4 A. Yes, but I don't see my signature.
5 Q. Do you recognize the signature in the
6 bottom right-hand corner?
7 A. No, sir.
8 Q. At that time would you have authorized
9 Mayors Jewelers to request information from Sterling
10 Bank?
11 A. Sure. I mean, if they wanted the
12 information. I'm just telling you that's not my
13 signature and it doesn't look like Debra's signature,
14 either.
15 Q. Could it have been someone else with
16 signing authority at Sterling Bank?
17 A. You mean someone at Sterling Bank
18 authorizing release of my information?
19 I don't think they can do that.
20 Q. No. No. Could it have been someone else
21 from RRA -- one of your employees that had signing
22 authority?
23 A. No.
24 Q. You maintained a personal bank account at
25 Sterling Bank?
Page 42

1 A. Yes.
Page 43
2 Q. And you also maintained a personal bank
3 account at Colonial Bank?
4 A. Yes.
5 Q. Moving on to the purchases, you bought
6 jewelry at Mayors. Is that correct?
7 A. I did.
8 Q. You testified that you received all the
9 jewelry that you purchased from Mayors?
10 A. I did.
11 Q. And there was never a time that you did not
12 receive jewelry that you purchased from Mayors?
13 A. That's correct.
14 Q. So when you paid for that jewelry do you
15 believe that you received reasonable equivalent value
16 in exchange for the amount that you paid?
17 MR. GRUHER: Object to form.
18 A. I'm sorry. I don't understand the
19 question.
20 Can you reask it, please?
21 Q. When you paid for that jewelry did you
22 believe that you were receiving reasonably equivalent
23 value in exchange for the amount that you paid?
24 MR. GRUHER: Object to form.
25 A. Yes. If I'm understanding -- do you mean

1 do I think I was paying a fair price and getting
Page 44
2 something fair in exchange?
3 Q. Yes.
4 A. Yes. I do.
5 Q. What happened to the jewelry that was
6 purchased from Mayors?
7 A. Some of it was given away as gifts. Some
8 of it was given away as bribes. Some of it was sold
9 at various points in time.
10 Q. You had testified earlier that the bulk of
11 the purchases were for men's watches, or were they
12 just watches?
13 A. I testified that the bulk of the purchases
14 were watches.
15 Q. At the time of these purchases did you
16 consider yourself a watch collector?
17 A. I did.
18 Q. Was collecting watches a hobby of yours?
19 A. Yes.
20 Q. How many watches did you eventually have in
21 your collection -- not only from Mayors, but just as
22 a whole?
23 A. It varied from time to time from a hundred
24 to hundreds. It varied.
25 Q. Over two hundred at the high point?

1 A. Very possibly. I don't recall specifically
2 as I sit here today. Certainly possible.
3 Q. Is it safe to assume that not all of these
4 watches were worn by you?
5 A. Well, since I gave a bunch of them away to
6 various people, that is safe to assume.
7 Q. And within the watches that were within
8 your collection, is it safe to assume that of those
9 watches that they were not all worn?
10 A. No. It's not safe to assume that.
11 Q. Within your collection you said you had
12 between a hundred to hundreds.
13 That doesn't include the watches that you
14 gave away as gifts, or did that number also include
15 -- was that a purchases number or a number of the
16 watches that were in your collection?
17 MR. GRUHER: Object to form.
18 Q. Let me rephrase that.
19 How many watches did you have in your
20 collection that were not acquired for purposes of
21 gifting?
22 A. I don't know. Your guess is as good as
23 mine. I'd be totally guessing.
24 Q. Would you say over a hundred?
25 A. Are you only talking about purchases from
Page 45

1 Mayors?
Page 46
2 Q. No. No. Purchases as a whole. Not just
3 from Mayors.
4 A. I purchased to the best of my recollection
5 more than a hundred watches.
6 How many I ultimately kept and had in my
7 collection and how many I gifted I'd be totally
8 guessing.
9 Q. Not all of these watches were purchased for
10 purposes of furthering the goals of the Ponzi scheme.
11 Is that correct?
12 A. I'm sorry. Say it again.
13 Q. Not all of these purchases of watches were
14 purchased for purposes of furthering the goals of the
15 Ponzi scheme?
16 MR. GRUHER: Object to form.
17 A. That's correct.
18 Q. Some of these watches were purchased for
19 yourself?
20 A. Yes.
21 Q. Or for your wife, as you testified?
22 A. Yes.
23 Q. Or as gifts that had nothing to do with the
24 Ponzi scheme?
25 A. Some, yes.

1 MR. ALEMANY: I'm just marking off some
Page 47
2 questions that have already been answered.
3 Q. If I were to tell you that approximately
4 40 percent of the items purchased from Mayors over
5 that two and a half period of December, 2005 to
6 March, 2008 -- that 40 percent of those purchases
7 were for women's jewelry, would that surprise you?
8 A. No.
9 Q. That would include bracelets, necklaces,
10 earrings, things of that nature?
11 A. Yes.
12 Q. Would most of those purchases have been for
13 your wife?
14 A. No.
15 Q. Who would most of those purchases have been
16 for?
17 A. Other women.
18 Q. For example?
19 Let me rephrase that. I'm sorry.
20 You had indicated that some of those
21 watches were for mistresses, for Debra, and possibly
22 for employees of RRA. Is that correct?
23 A. Some of those watches were for -- yes.
24 For mistresses, other non physical
25 relationship girlfriends -- friends that were

1 girls -- and for employees that were females.
Page 48
2 Q. Were those ---
3 A. And -- hang on -- and for friends -- my
4 friends' wives and employees' wives.
5 Q. And those purchases of female jewelry,
6 were they in furtherance of the Ponzi scheme or
7 were they more in the nature of gifts?
8 A. Some were in furtherance of rewarding
9 people involved in the Ponzi scheme. Some were
10 gifts.
11 Q. Do you recall -- I know it was a while
12 back -- but do you recall which one -- was it more
13 the gifts side or more on the rewarding side?
14 A. I'd be guessing.
15 If you have a list or maybe pictures of
16 the watches or something I might be able to help you
17 better, but without that I'm just kind of guessing in
18 the dark.
19 Q. I may come back to that because we actually
20 do have pictures of them.
21 MR. GRUHER: They're in the Bates stamps.
22 MR. ALEMANY: We'll circle back to that.
23 Q. You previously testified back in December
24 during your Rule 2004 exam that the payments that
25 were made to Mayors were made from your personal bank

1 account or personal bank accounts.
Page 49
2 Is that still your recollection today?
3 A. Yes.
4 Q. The personal bank account, if you remember,
5 at Sterling Bank, that was the bank account that
6 ended in 1250?
7 A. I don't have the slightest clue.
8 Q. And the Gibraltar private bank, again only
9 if you remember, are the last four digits 0609?
10 A. I'd be guessing.
11 Q. Debra Villegas had signing authority on
12 your personal accounts as well as your RRA accounts.
13 Is that correct?
14 A. She had signing authority on my personal
15 accounts to the best of my recollection and on
16 certain RRA accounts.
17 Q. But you maintained control over your
18 personal bank accounts?
19 A. Define "maintained control."
20 Q. Who was the ultimate decision maker on how
21 that money was spent, how that money was moved from
22 that account, whether it's outflow or inflow?
23 A. With that being the definition, the answer
24 is me.
25 Q. Did anyone else have that level of control,

1 that decision-making, or independent decision-making
2 authority with respect to the Sterling bank account
3 or the Gibraltar bank account?
4 A. You're saying personal accounts?
5 Q. Correct.
6 A. No. I had the most control.
7 Q. You previously testified earlier this week
8 that this was your fraud, not RRA's fraud, and that
9 you were the bad actor. Do you recall that?
10 A. Me and my co-conspirators, yes. It was a
11 legitimate law firm called RRA that had nothing to do
12 with the Ponzi scheme except its appearance -- hang
13 on -- except its appearance and the fact that it
14 added legitimacy to my Ponzi scheme.
15 Q. And that you also testified that you were
16 at the top of the pyramid of the Ponzi scheme?
17 A. Yes. I'm the one who took RRA and used it
18 as the entity through which all the Ponzi business
19 was being done.
20 Q. Would you agree that you were the
21 orchestrator then of the fraudulent scheme?
22 A. The orchestrator? Give me a better word.
23 I know it's late in the day, but give me a better
24 word than the "orchestrator."
25 I've been called a lot of things, but
Page 50

1 "orchestrator" ---
Page 51
2 Q. That you were in control or at the helm of
3 the ship -- how about that -- when it came to the
4 Ponzi scheme.
5 A. The sinking ship, like being at the helm of
6 the Titanic.
7 Q. Is that a "yes"?
8 A. I was the conductor. I organized and
9 directed the moving pieces and then a lot of
10 co-conspirators did a lot of other things to make
11 sure that these things got carried out, yes.
12 Q. You testified also earlier this week that
13 you had control of the RRA bank accounts, and for
14 "control" let's define that as ultimate
15 decision-making authority with respect to how those
16 moneys were moved around.
17 A. Yes. There were other people who had the
18 ability to move the money, but I was the ultimate
19 decision maker.
20 To quote George Bush, I was the decider.
21 MR. GRUHER: Can you say it like him?
22 THE WITNESS: No.
23 MR. ALEMANY: I don't think he wants to say
24 it like him.
25 Q. To the extent that money was transferred

1 from an RRA account to your personal bank account,
Page 52
2 you also had control of the money once it was
3 received into your personal bank account.
4 Is that correct?
5 A. Yes.
6 Q. Did you feel that anyone had more control
7 than you over your personal bank accounts?
8 A. No.
9 Q. You are the one that decided how that money
10 was going to be spent. Correct?
11 A. For the most part, yes.
12 Q. And no one from RRA told you what you
13 should be purchasing with that personal account.
14 Is that correct?
15 A. They made suggestions, but, no. Ultimately
16 I was the one who decided what I would purchase.
17 Q. And I believe you testified that you and
18 Stu Rosenfeldt were responsible for managing the
19 accounting personnel at RRA. Is that correct?
20 A. That's correct.
21 Q. Were you in a position to ascertain RRA's
22 solvency from December, 2005 to March, 2008?
23 A. Yes.
24 Q. Was RRA solvent?
25 A. Are you talking about as a legitimate

1 entity?
Page 53
2 Q. Correct. Between 2005 and 2008.
3 A. It was not.
4 Q. When that money was transferred from RRA
5 into your personal bank account you knew that those
6 funds were obtained through the Ponzi scheme.
7 Correct?
8 A. Yes.
9 Q. You knew that the source of the funds was
10 from the Ponzi scheme?
11 A. The Ponzi scheme and its various tentacles,
12 yes.
13 Q. And the transfer of those funds from RRA
14 to your personal bank account was made at your
15 direction?
16 A. Yes.
17 Q. And if the funds were not transferred at
18 your direction, they were transferred based on
19 protocols and policies originally set up by you or
20 authorized by you?
21 A. Authorized by me, yes.
22 Q. And with your consent and authority?
23 A. Yes, sir.
24 Q. And you knew that the transfer and use of
25 those funds by you was being done in bad faith?

1 MR. GRUHER: Object to form.
Page 54
2 A. It was stolen money, so I think by
3 definition it's bad faith of some sort.
4 Q. And you were not an innocent participant
5 to the extent you used those moneys?
6 A. Can you rephrase that question, please?
7 Q. And you were not an innocent participant
8 to the extent that you used the moneys that were
9 transferred from RRA to your personal bank account?
10 A. I didn't say "repeat the question." I said
11 you need to rephrase it.
12 I don't know what you mean by an "innocent
13 participant."
14 Q. Well, the Trustee has alleged that the
15 money that was transferred from the law firm to your
16 personal bank account and then used to purchase
17 jewelry, that you had no knowledge that that money
18 was fraudulent or that money was from a Ponzi scheme.
19 You were an innocent participant. In essence, it's
20 calling you a mere conduit.
21 That's kind of the reason I'm going into
22 this legal jargon.
23 Did you consider yourself an innocent
24 participant when you used those moneys?
25 MR. GRUHER: Objection. Asked and

1 answered.
Page 55
2 A. No.
3 Q. No one at Mayors was an investor in RRA.
4 Is that correct?
5 A. To my knowledge, no.
6 Q. And no one from Mayors was an investor in
7 the Ponzi scheme. Correct?
8 A. To my knowledge -- to my knowledge, no.
9 Q. And no one from Mayors was involved in any
10 of the illegal activity that you have pleaded guilty
11 to. Is that correct?
12 A. To my knowledge, no.
13 Q. Did anyone at Mayors have any knowledge of
14 the Ponzi scheme while you were purchasing jewelry
15 there?
16 A. To my knowledge, no.
17 Q. You previously testified that Mayors was
18 just a third party vendor that you dealt with to buy
19 jewelry. Is that correct?
20 A. That's correct.
21 Q. And you testified earlier that you felt
22 that you received value when you paid for that
23 jewelry from your personal bank account.
24 Is that correct?
25 A. Yes. I believe that I paid a fair price

1 and was given an item equal to the value I paid.
Page 56
2 Q. Do you believe that Mayors received your
3 money in good faith?
4 A. Yes.
5 MR. GRUHER: Object to form.
6 Q. As a true third party retailer and/or
7 vendor?
8 MR. GRUHER: Object to form.
9 A. I don't know what that means, but I do
10 believe that Mayors believed I was a real customer
11 with real money who wanted to buy things from them
12 and they sold them to me with that understanding.
13 Q. Do you believe that Mayors was aware of
14 any red flags or anyone at Mayors was aware of any
15 red flags that would have led it to believe that the
16 payments were being made from moneys illegally
17 obtained?
18 A. That's outside the scope of my knowledge.
19 I can't answer that. I'd be guessing.
20 Q. But to your knowledge you're not aware of
21 anyone at Mayors that knew of any of your illegal
22 activity?
23 A. To my specific knowledge, sir, no.
24 Q. Do you think that Mayors acted in bad faith
25 in any way?

1 MR. GRUHER: Objection to form.
Page 57
2 A. I don't have any idea what was going on
3 behind the scenes, and your question unfortunately
4 throws into the mix were there conversations in a
5 back office, "Hey, where the hell is Rothstein
6 getting all this money from?"
7 I don't know. So I'd be guessing.
8 It's outside the scope of my knowledge and
9 I'm not comfortable providing a guess of that nature.
10 Q. Did anyone at Mayors ever do anything or
11 say anything in front of you that would imply that
12 they were acting in bad faith when they sold you
13 jewelry?
14 A. No.
15 Q. Earlier when you testified regarding the
16 credit application or the charge account application
17 you indicated that the $150,000 per month figure was
18 not accurate.
19 Do you recall how much you were making at
20 that time?
21 A. I'm sorry, sir. I don't have the slightest
22 idea.
23 Q. How do you know it was inaccurate. That's
24 approximately 1.8 million per year.
25 A. Okay. Let me revisit the question for a

1 second.
Page 58
2 Are you asking me if that was an accurate
3 statement of my legitimate income at the time?
4 Q. No. I'm asking -- you had indicated when
5 the Trustee's counsel asked you if that was an
6 accurate salary figure, the $150,000 per month, you
7 said that it was inaccurate -- I think in both
8 contexts -- whether it was through the Ponzi scheme
9 or through legitimate sources.
10 So my question ---
11 A. No. No. No. That's not what I was asked.
12 I'll give you the answer.
13 As to salary -- and I interpret salary or
14 income as my legitimate earnings -- it was
15 inaccurate.
16 As to my gross earnings, including
17 illegitimate earnings, it understated my income, so
18 it overstated legitimate and it understated my
19 illegitimate.
20 Q. When asked about increases to the credit
21 line on the charge account, you indicated that you
22 were almost always able to accomplish purchasing
23 whatever you were trying to purchase through the
24 charge account. Is that correct?
25 A. To the best of my recollection.

1 Q. Were there instances where if you didn't
Page 59
2 have enough credit in your account you used American
3 Express or another credit card to make up the
4 difference.
5 A. Yes.
6 Q. And when you said you were always able to
7 accomplish that goal of making those purchases, that
8 could have been by using the American Express or by
9 using a Visa or MasterCard. Is that correct?
10 A. Yes.
11 Q. You testified that there were discounts on
12 the watches because you were a good customer.
13 Is that correct?
14 A. That was my belief. Yes, sir.
15 Q. And you thought that they were in the 20
16 to 30 percent range?
17 A. That's the best of my recollection.
18 Q. Could they have been in the 10 to
19 15 percent range?
20 A. They could have been. That's not what I
21 recall, but they certainly could have been.
22 Q. If the account statements reflected a 10 to
23 15 percent reduction -- is there anything you could
24 look at -- if I showed you a few receipts, would that
25 refresh your recollection with respect to the

1 percentage?
Page 60
2 A. Sure.
3 Q. We'll come back to that.
4 Before when we were talking about who some
5 of those gifts were for, who some of those purchases
6 were for -- and we went through that long kind of
7 exhaustive list that you gave us -- were you
8 referring to just gifts that you gave from all
9 jewelers or just gifts from Mayors -- from purchases
10 at Mayors?
11 A. That list?
12 Q. Correct.
13 A. It was people that I had given gifts from
14 Mayors. I may have also given those people gifts
15 from other places, but that list that I gave was
16 specific to Mayors.
17 Q. I believe the Trustee also asked you if
18 your credit line increased as the Ponzi scheme
19 success increased.
20 Is that the only reason that you attribute
21 for the credit line increasing, or was it also
22 because you were establishing yourself as a good
23 customer in Mayors' eyes?
24 MR. GRUHER: Objection to form.
25 A. I'd be guessing. I'm just giving you what

1 I'm speculating to be the reason.
Page 61
2 It could be a combination of any number of
3 factors.
4 Q. If you had to speculate, why do you think
5 they increased your credit limit?
6 MR. GRUHER: Objection. Calls for
7 speculation.
8 A. You're asking me to speculate?
9 I think they increased it because they
10 perceived me as a good customer and because I was
11 spending a lot of money there and because I was
12 paying my bills and they wanted to sell me stuff.
13 Q. I'm just going to go through ---
14 MR. GRUHER: Can I make a suggestion?
15 We're going to go through the exhibits
16 because you're marking and ---
17 MR. ALEMANY: I'm not going to mark these.
18 MR. GRUHER: For the Trustee we're going to
19 have both sets of documents put in as exhibits
20 because I want to keep these exhibits straight
21 because we have some marked and we have the ones that
22 were produced.
23 MR. ALEMANY: I don't have an objection to
24 that -- like the ones you referenced?
25 MR. GRUHER: The ones that you produced and

1 the ones that we produced that should have been Bates
2 stamped should be marked into this deposition
3 respectively on the Bates stamps and we can just
4 refer to the Bates stamps, because now we're going to
5 have another set of marked documents that I don't
6 want to have in the depo.
7 (Discussion off the record.)
8 Q. Very quickly, Mr. Rothstein, if you can
9 take a look at B&M 00024, let me know once you have
10 it pulled up there.
11 A. Okay. I've got that.
12 Q. If you look at the total for the purchases
13 -- I just picked this receipt at random.
14 If you go up, the item that's being
15 purchased, item number 41001773806, the item price is
16 $6,650. Do you see that?
17 A. It says $8,650, it looks like. Maybe it's
18 6,000. I can't see that.
19 Hold on. Let me make it bigger.
20 Yes. $6,650. I got it.
21 Q. Then you see the item level sales discount?
22 A. I do.
23 Q. And that's in the amount of 650?
24 A. I see that.
25 Q. That would represent an approximately ten
Page 62

1 percent discount?
Page 63
2 A. Approximately.
3 Q. Then just to pick another one at random, if
4 you looked at B&M 001022 -- this is the last
5 question -- you can pick any receipt you want at
6 random ---
7 A. I've got it.
8 Q. You see the $76,000 amount and then the
9 sales discount amount of 7,000, also reflecting a ten
10 percent discounted?
11 A. Yes.
12 Q. Does that refresh your recollection that
13 some of the discounts were in the range of ten
14 percent?
15 A. Yes, sir.
16 Q. And if all the receipts in this production
17 -- which I know you can't look at today -- but if
18 they all reflected this type of a percentage and not
19 a percentage of 20 to 30 percent, would that refresh
20 your recollection as to the percentage discount that
21 was given by Mayors?
22 A. Yes. That would be the best evidence
23 of -- to what percentage I was actually given as
24 opposed to my guessing.
25 Q. Unfortunately, we're running out of time.

1 We can't go through the pictures of the watches, but
2 thank you for your time, Mr. Rothstein.
3 MR. GRUHER: Thank you, Scott.
4 THE WITNESS: Thank you, sir.
5 (Whereupon, the taking of the deposition
6 was concluded at 4:19 p.m.)
7
8
SCOTT ROTHSTEIN
9
Sworn to and subscribed
10 before me this day
of , 2012
11 Notary Public, State
of Florida at Large.
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Page 64

1 CERTIFICATE
2 STATE OF FLORIDA )
COUNTY OF DADE )
3
I, SUZANNE DUNAY SIEGEL, a Notary Public in
4 and for the State of Florida at Large, do hereby
certify that, pursuant to a Notice of Taking
5 Deposition in the above-entitled cause, SCOTT
ROTHSTEIN was by me first duly cautioned and sworn to
6 testify the whole truth, and upon being carefully
examined testified as is hereinabove shown, and the
7 testimony of said witness was reduced to typewriting
under my personal supervision and that the said
8 deposition constitutes a true record of the testimony
given by the witness.
9
I further certify that the said deposition
10 was taken at the time and place specified hereinabove
and that I am neither of counsel nor solicitor to
11 either of the parties in said suit nor interested in
the event of the cause.
12
WITNESS my hand and official seal in the
13 City of Miami, County of Dade, State of Florida, this
11th day of June, 2012.
14
15 ____________________________
SUZANNE DUNAY SIEGEL
16
17 NOTARY PUBLIC-STATE OF FLORIDA
SUZANNE DUNAY SIEGEL
18 COMMISSION# DD954552
EXPIRES: JAN.22, 2014
19 Bonded Thru Notary Public Underwriters
20
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Page 65

1 FRIEDMAN, LOMBARDI & OLSON
Suite 924, Biscayne Building
2 19 West Flagler Street
Miami, Florida
3 Telephone (305)371-6677
4 June 11, 2012
5 RE: Rothstein Rosenfeldt Adler, P.A, Debtor
Herbert Stettin, not indivicually but as
6 Chapter 11 Trustee v Birks & Mayors, Inc., et al
7 Marc Nurik, Esq.
One E. Broward Blvd.
8 Suite 700
Ft. Lauderdale, Florida 33301
9
Dear Mr. Nurik:
10
With reference to the continuation of the
11 deposition of SCOTT ROTHSTEIN taken on June 7, 2012
in connection with the above-captioned case, please
12 be advised that the transcript of the deposition has
been completed and is awaiting signature.
13
Please arrange for him/her to stop by our
14 office for the purpose of reading and signing the
deposition. Our office hours are 9:00 a.m. to 4:00
15 p.m., Monday through Friday. Please telephone in
advance.
16
He/she may, however, read a copy of the
17 transcript provided by any of the attorneys connected
with the case, denoting any corrections by page and
18 line number on a separate sheet of paper. This
correction page must be signed by him/her and
19 notarized and returned to us for filing with the
original.
20
If this has not been taken care of, however,
21 within the next 30 days, or by the time of trial,
whichever comes first, I shall then conclude that the
22 reading and signing have been waived, and shall then
proceed to deliver the original of the transcript to
23 Charles Lichtman, Esq. without further notice.
24 _______________________________
SUZANNE DUNAY SIEGEL
25 COURT REPORTER
Page 66