Deposition of Scott Rothstein re - Trustee Services

Deposition of Scott Rothstein re - Trustee Services Deposition of Scott Rothstein re - Trustee Services

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1 terms that are generally referenced in the e-mail that 2 we were just discussing? 3 A. It does. 4 Q. Other than this promissory note, do you know 5 if there were any other documents that evidence this 6 deal? 7 MR. SALIM: Form. 8 THE WITNESS: I don't know one way or the 9 other. Obviously, other than the e-mail we just 10 looked at. 11 BY MR. GAY: 12 Q. So subsequent to this deal that's 13 represented by the promissory note dated March 19, 14 2007, did you then enter into subsequent deals with 15 Mr. Tonacchio and/or Mr. Lipsitz? 16 A. I did. 17 Q. Tell me a little bit about how that 18 happened. 19 A. I pitched them the Ponzi scheme using the 20 settlement pitch. 21 Q. What did that pitch involve? 22 A. It was an abbreviated version of my 23 full-blown pitch. I don't remember exactly the words 24 I said. I simply explained that was -- the funding of 25 prepaid, meaning money in-house settlement deals where Page 50

1 they could make a lot of money with very little to no 2 risk. 3 Q. Earlier we talked about that there was a 4 difference between the bridge loan scheme and what 5 we've talked about being the settlement agreement 6 related Ponzi scheme, correct? 7 A. Are you saying that all of the promissory 8 notes, the loan deals, that that's what you are 9 referring to as bridge loan notes, bridge loan deals? 10 Q. Well, I'm not actually trying to refer to 11 one group or another, I'm just trying to ask you if 12 there was a scheme regarding bridge loans that was 13 separate and apart from the settlement agreement 14 related Ponzi to sort of differentiate what that 15 involved. 16 MR. SALIM: Form. 17 THE WITNESS: There were some deals that 18 were pitched to a variety of investors as bridge 19 loans, to clients and other business people. There 20 were some deals that were pitched as the settlement 21 deals, but that were what I call minimal paper. 22 There were promissory notes alone or 23 promissory notes in an e-mail alone and then there 24 was the full-blown packets. To the best of my 25 recollection, the deals that were pitched and Page 51

1 terms that a<strong>re</strong> generally <strong>re</strong>fe<strong>re</strong>nced in the e-mail that<br />

2 we we<strong>re</strong> just discussing?<br />

3 A. It does.<br />

4 Q. Other than this promissory note, do you know<br />

5 if the<strong>re</strong> we<strong>re</strong> any other documents that evidence this<br />

6 deal?<br />

7 MR. SALIM: Form.<br />

8 THE WITNESS: I don't know one way or the<br />

9 other. Obviously, other than the e-mail we just<br />

10 looked at.<br />

11 BY MR. GAY:<br />

12 Q. So subsequent to this deal that's<br />

13 <strong>re</strong>p<strong>re</strong>sented by the promissory note dated March 19,<br />

14 2007, did you then enter into subsequent deals with<br />

15 Mr. Tonacchio and/or Mr. Lipsitz?<br />

16 A. I did.<br />

17 Q. Tell me a little bit about how that<br />

18 happened.<br />

19 A. I pitched them the Ponzi scheme using the<br />

20 settlement pitch.<br />

21 Q. What did that pitch involve?<br />

22 A. It was an abb<strong>re</strong>viated version <strong>of</strong> my<br />

23 full-blown pitch. I don't <strong>re</strong>member exactly the words<br />

24 I said. I simply explained that was -- the funding <strong>of</strong><br />

25 p<strong>re</strong>paid, meaning money in-house settlement deals whe<strong>re</strong><br />

Page 50

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