00045 LO mui \l 00 LO IN) l?\J l\J LU -b l?\J 00046 05 -5 IN) IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA CASE NO: 02-3317 CA 20 FASWAG INTERNATIONAL, LTD., a F1orida Timited partnership, and AFR GROUP, INC., a F1orida corporation, Piaintiffs, vs. CHAMPION HOLDINGS GROUP, LIMITED, a British Virgin Is1ands corporation, Defendant. CHAMPION HOLDINGS GROUP, LIMITED, a British Virgin Is1ands corporation, P1aintiff, vs. FASWAG INTERNATIONAL, LTD., a F1orida Timited partnership, and AFR GROUP, INC., a F1orida corporation, Defendants. 73 west F1ag1er street, Miami, F1orida, Friday, 10:45 Apri1 18, 2003JAMES MICHAEL LAURIE taken on beha1f of the Defendant_ pursuant to a notice of taking deposition APPEARANCES: RICHARD BURTON, Esq Attorney for P1aintiff. ZUCKERMAN SPAEDER, by JACK FERNANDEZ, Esq., Attorneys for Defendant. I WITNESS DIRECT JAMES MICHAEL LAURIE (By Mr. Fernandez) CROSS REDIRECT RECROSS EXHIBITS FOR IDENTIFICATION 2 290 Page 1 Laurie1O418 3 296 4 298 5 304, 309 6 315 7 318 THE SPECIAL MASTER: Let's state our appearances for the record. MR. FERNANDEZ: Jack Fernandez on beha1f of Champion Ho1dings, Inc. MR. BURTON: Richard Burton on beha1f of FASWAG Internationa1, Ltd. and AFR Group, Inc. THE SPECIAL MASTER: Mr. Rector. MR. RECTOR: Matt Rector from Champion Ho1dings. THE SPECIAL MASTER: And the deponent. THE WITNESS: Michae1 Laurie. THE SPECIAL MASTER: Before we start and swear Mr. Laurie in, 1et me just set a few ground ru1es in order so that we have a p1easant day. First of a11, 1et's ta1k about objections. Under the F1orida Ru1es of Civi1 Procedure on1y objections to the Form of the question need be made at the deposition to preserve the right to object at the tria1. A11 others are preserved unti1 the tria1. However, many attorneys wish to make an objection for the record so that 1ater on if they forget why they objected, they can check the transcript. I have prepared a 1ist of 23 objections. There wi11 be no speaking objections, but I prepared one for each one of the attorneys so that if you do have an objection and you wish to put it on the record, if you 1imit yourse1f to those 23 I think you wi11 find that they are a11 covered. There wi11 be no speaking objections. For examp1e, an attorney mag not say I object, the witness cou1d not possi 1 know the answer to that, he wasn't there. attorney then is testifying. of course, the typica1 witness response after hearing that is I don't know. I wasn't there. In discussin? these objections, Ru1e 1.310 now inc1udes the an uage requiring any objection to be stated concise y, in a nonargumentative and nonsug estive manner. so if you do, p1ease 1imit yourse to those un1ess it is something outside Page 2 Laurie.O418 read them to him- SPECIAL MASTER: Do you need those to testify today? THE WITNESS: To be sure what I can reca11ed. MR. BURTON: Then he's entitied to see them. THE SPECIAL MASTER: He's entit1ed to See ?t em. MR. FERNANDEZ: Thank you, sir. Q. Sir, why don't we start at the beginning. what I wou1d iike to do is I wouid 1ike to get some of your history, who you are, who you've worked for and so on. so 1et's start at the very beginning and then we wi11 move into issues that are strictiy re1evant to this case. where were you born? A. Beck1ey, west Virginia. Q. what year? A. 1940. Q. what is your date of birth? A. March 23, 1940. Q. Did you graduate from high schoo1? A. Yes. Q. where did you go to high schoo1? A. Va11ey Forge M11itary Academy. Q. where is that. sir? A. wayne, Pennsy1vania. Q. what did you do after high schoo1? A. I went into the Marine Corps. Q. what unit were you with in the Marine Corps? A. Second division combat engineers. Q. what years were you in the Marine Corps? A. I did some research on this to be ab1e to testify. when I tried to appiy for socia1 security and my records were burned, a1ong with thousands of others in Ohio and the on1 thing I can te11 you is I joined when I graduated high school in '58 or '59 and when I 1eft.the Marine Corps it was 1ike 1964, '65. whatever six years is. Q. Do you current1y have no records regarding your Marine Corps time? A. None. Q. They were burned in a fire in Ohio? A. That's what I'm to1d by the GSA, I guess. Q. so you beiieve that your records of your Marine Corps service were burned in some government fire? A. Yes. It is a documented fire, I beiieve. Q. Do you know what a DD214 is? A. Sure. Q. Do you have a copy of your A. NO. Q. Do you reca11 the name of the commanding officer of your unit? A. There were 1ots of commanding officers. . Do you reca11 any of the peopie with whom you served? A. The are dead or gone now. I don't have any contact wit them. Q. Do you reca11 any names of anyone with whom you served in the Marine Corps? A. No. Page 7 24 25 00086 H. . A _nn. . . . Lauries0418. indicted when I did work for them. The government had seized a 1ot of their documents. Q. W1th regard MR. BURTON: I retained him in that case. Beyond that, I would ask that nothing further be disciosed about his re1ation. THE SPECIAL MASTER: Rexa11_sundown? MR. BURTON: Yes. I was their counsei for many years. MR. FERNANDEZ: That's not a ripe objection yet. THE SPECIAL MASTER: No, not yet it isn't. Q. who are some of the other ciients, the indicted ciients for whom you did investigative work? A. I worked for 1awyers. Frank Snitow (phonetic) in New York on the Sedima (phonetic) case. That's the on1y racketeering case that was ever reversed. Q. Sedima versus SPRL, right? A. Right. In those days peop1e didn't rea1ize that civi1 and criminai racketeering were just a sheet of paper apart. Unschoo1ed peop1e. Later I worked on Hobson (Hobson), United States versus Hobson for racketeering and that was reversed. The first criminai case ever reversed. Q. A11 of these attorneys for whom you have worked, what you have to1d me is that you have done investigations incident to assisting in the defense of these crimina11y indicted defendants. correct? A. Right. Q. You aiso ho1d yourseif out as an asset protection/%iquidation specia1ist, correct? A. Rig t. Q. Did you work for any of these attorneys doing asset protection/iiquidation? A. Asset protection. yes. Liquidation, no. strike that. I worked for K1einfe1d, Marc Rector in iiquidating some of his assets in the United States. Q. Is Marc Rector the on1y person for whom you've done asset 1iquidation? A. No. Herman Sporting Goods. Q. Let's ta1k about individuais for a second. we11, 1et's not do that. we wi11 get to that in a minute. with regard to asset protection. I want to make sure I understand what you have done for these defendants. These are crimina11y indicted defendants for whom you did asset protection? A. some were. some weren't. That's not asset protection work. Q. what did you do? A. Tria1 preparation. Q. with regard to asset protection I'm asking you specifica11y about for whom did you do asset protection? MR. BURTON: Again, I think that this might be that wou1d identify what he did with whom. MR. FERNANDEZ: I object to the speaking Page 18 r.Laurier0418u mi1itary?-it was a U.S. hospita1. Q. Do you know what name you were brought into that hosp1ta1 under? A. No. Q. was it the name, Michaei Laurie? A. I don't know what the name was. Q. Then you came back to the U.S. where did you f1y into? A. Andrews. Q. Did you f1y back mi1itary? A. Yes. Q. Do you know why you Fiew back as opposed to privatethis stuff was arranged by other individuais and you just went and did what you were to1d and didn't ask any questions? A. You don't ask questions in my business. Q. what is your business? A. Damage contro1. Q. what does that mean? A. If you get drunk tonight and run down a pedestrian on the side of the road, don't ca11 your 1awyer, ca11 me. Q. why? what wi11 you do? A. The same thing you wouid do if you were a iawyer. Q. which is what? A. Protect your rights. your mouth shut. Q. So, specifica11y, if I got drunk tonight and ran somebody over, what wouid you advise me to do? A. I don't know what the circumstances wou1d be. I wou1dn't obstruct justice, if that's what you are asking. My entire career has been on the edge of obstructing justice, but I have never quite done it. Q. what other things iike that do you do? what other damage contro1 do you do? Make sure you keep A. Marc Rector. Your c1ient is the best examp1e of a11. Q. Give me some other exampies of what you do. A. Smo1ka MR. BURTON: I'm going to instruct you not to answer. That wou1d be attorney?c1ient privi1ege. MR. FERNANDEZ: N0. MR. BURTON: I do represent the Smo1kas. Q. what damage do you do for the smo1kas? MR. BURTON: Objection. Not to answer. THE SPECIAL MASTER: Grounds? MR. BURTON: The Smoikas are the principa1s of FASWAG and anything he asks wi11 be in vioiation of that. He is not a11owed to answer. He works for them as an empioyee. I represent them and under that articu1ar memorandum I gave you I have duty to assert it, it is assumed to be correct and it must oniy be cha11enged before the court and I'm instructing him not to answer. THE SPECIAL MASTER: okay. They are the corporate p1aintiff or Page 28 24 25 00153 Laurie.0418 Q. Why was he supposed to go through you? A. Because I was running the hote1 and they agreed to that. Q. Why 15 victor Wagner in Vienna now? A. He's a1ways been in Vienna. He furnishes the c1eanin and food for a11 emp1oyment voice p1ea is and chec 1ock and envyVictor Wagner? A. I gave him the money we borrowed from Rector. Let me make sure I understand what you Just sa1 . FASWAG borrowed money from Rector, which is evidenced in the note at issue here, correct? A. Right. Q. And that was about $2.8 mi11ion, correct? A. Correct. Q. And that $2.8 mi11ion was secured by some portion, some or a11 of this hote1? . A. 90 percent of our ho1dings were on that note. Q. And then you took the $2.8 mi11ion Rector gave you and you gave it to Victor Wagner? A. I didn't give it to anyone. Q. What did you do with it? A. I never touched the money. smo1ka had it and I think he paid Wagner off two and a ha1f mi11ion and he made 700 grand on currency exchange. He was happy. Q. I want to understand the money trai1. get a check from Champion Ho1dings? . I don't get a check. Where did the check go? I assume it went to Fe1ix. What did Fe1ix do with it? He paid Wagner. How do you know that? Wagner went away. . So you are drawing that inference that Wagner went away? A. No. They to1d me they paid him off. He came by to see me, we shook hands and had a great good-bye which was an improvement of me throwing him out of my office he went bygones and went to Vienna. Q. You are taiking about Wagner now? A. Yes. Q. What did Smo1ka te11 you about his havin paid Wagner $2.8 mi11ion to get rid of him? - A. 'As I reca11, it was two five, two six, two four. I'm not sure. It was a consensus between Tom Smo1ka, the father, Feiix Smo1ka, the son, A1ex Smo1ka, the other son, and myse1f that Wagner was YOU e>o?9?9> the prob1em with the business b1eeding. Q. _You are the one who got champion Ho1dings to invest its money in FASWAG, correct? A. correct. Q. And when you got Champion to invest in FASWAG, ou to1d Marc Rector that the money was secured parts of that hote1, correct? A. Yes. I sent him a recent credib1e-??. Page 46 .. . . . LaurieT0418 to each other you do so outside. Otherwise here you direct your objections to the court. You fo11ow my ru1es. I gave them to you a11 six hours ago and you don't seem to reca11 them a11 the time. Q. Are you a trained private investigator? A. Yes. Q. Through whom did you get your training? A. I interned with two 0 the best in the wor1d. Q. who? A. George S1attery and Kevin Peterson. when you say you interned, was there any forma1 program you went through? A. No. Q. where are those two individuais now? A. S1attery is here and Peterson is in New York. I was 1icensed aiso in New York. Q. Do you currentiy ho1d any 1icenses? A. No. They are expired. Did you ever ho1d 1icensesstate? A. Virginia, New York and F1orida. Q. And I take it those Ticenses were in your name, James Laurie? A. Yes. Q. And what were those 1icenses in? A Licensed private investigator. . Do you have any other iicenses other than that? A. I have a iicense to carry a concea1ed firearm. Q. Is that with the State of F1orida? A. Yes. Q. Have you read the deposition of Matthew Rector? A. NO. Q. I don't want to get into attorney-c1ient discussions that you may have had with Mr. Burton? MR. FERNANDEZ: And, Your Honor, I know you are going to have to ru1e on this. Q.. Did you have any discussions with Mr. Burton regarding what the two of you saw as to this extortion? MR. BURTON: I'm going to object and instruct him not to answer. Your Honor, that wou1d be attorney?c1ient priviiege. That or work product. And I don't want him to get into what it is he did or did not discuss with me. There is aireadg a ruiing on that from the court, that it wou1d inap?ropriate For him to go there. That's where we ad the fight the Tast time. MR. FERNANDEZ: Let me withdraw the question and ask you. Q. Did Mr. Burton ever teT1 MR. BURTON: Objection. same thing. THE SPECIAL MASTER: It wouid be iike an attorney's instructions. MR. FERNANDEZ: No, sir, not if the attorney Page 94 ou what he saw? at wouid be the (1. This is when you tefl hm to move to Spain? A. I said. think the best thing for Ken to do 1'5 to go on vacation. preferabiy out of United states. not fleeing any 'urisdiction. You've been to France many times. I ink on shuu1d go to Paris." He said, 'when?" This is Second mine I met him at his house. I said. "New." He said, "when can we Mama" I said, "As fast as you can get packed, I've got a jet sitting at the airport and we wi'l'l gm." "Where are we go gu'ing to 907" decide. we'n H16 in the air. we'Tl deude after we get there. I just think it is time to go." asked them if they pack up some stufF. It took me two Linco1n Towncars to handie the baggage, aH this custom buflt LUU1S vuitmn stuff. Chad Shaddey gave me two checks For 10,000 at that pain: and I didn't even go home. I didn't Page 99 .. .. Laurie.0418. get a bag, I didn't do anything. we got on the jet and went to7?we Tater decided in the air. we went to Maiaga, Spain nonstop. . Are ou done with your answer? A. oh, e11 no. THE SPECIAL MASTER: Take five minutes. [Recess taken.] Q. You ta1ked a 1itt1e ear1ier about a guy named A1ex Burton, correct? A. Yes. Q. Did you meet A1ex Burton? A. No. Q. You reca11 that one of the reasons that Marc Rector hired you was to track down a series of e?mai1s that A1ex Burton was sending, correct? A. No. He mentioned that and I expiained to him that I'm computer and dysiexic and I couid be of no use to anything to do with the computer. Q. 7But you took custody of the computer, correct. A. I'm sorry? Q. You took custody of that computer that A1ex Burton was using? A. A11 I know is I picked up every computer there was, put it in a container and shipped it out of the country. Anywhere. Q. And Marc Rector to1d you, didn't he, that A1ex Burton had been sending e?mai1s to peopie Yes, he did. Q. Did you ever review those e?mai1s? 3: 22d A1ex Burton was one of these guys who had infiitrated him from David Geffin, right? 0 A?d you knew that to be the case, didn't u. A. It was toid to me. I certainiy didn't observe what they were doing. It was toid to me by Rector and it was toid to me by Shackiey and there were two or three boys working in the mansion in Caiifornia, who I converted into undercover a ents and put them on my payroii, and I taiked to em two hours every day and every 1itt1e tidbit that came aiong and I discussed each and every reiationship with them with each and every person and I had the gardener and a1so the housekeeper working for me. Q. so whi1e you were working ostensibiy and being paid by Marc Rector you had peopie undercover and working on him? A. No. I was working for him. My job, to which I did, was to gain testimony from who I feit were potentiai witnesses for whatever authority and get statements from them, damming or otherwise. And when I hit the otherwise statement, that nothing was damming and nobody was, it wouid be difficu1t for them to appear before a grand jury or someone e1se and impeach themseives. Q. Exactiy what a good defense attorney wouid Page 100 - as A Laurie.0418 A. Yes. I thought it would be obstruction if I did speak to him, since he was represented by counsei. I spoke indirectiy to 20 some-odd peopie and cou1dn't find one erson to sa anything about Rector acting improper y, physicai or business?wise. He iavished gifts. He took young men a11 over the worid in jet pianes. He went to parties at Geffin's house and Geffin at his house and things of this nature. But nothing, and we questioned them c1ose1y, but nothing recommending or outiining any type of i11egaT activity on Rector's part or ackiey or Pierce. This was subtie triai preparation in anticipation of ciyii compiaints against Rector, wherein they wouid say one thing to the grand jury and then under testimony I wouid bring in my investigators and impeach them. Q. we11, I'm a criminai defense iawyer. I understand what you are doin . A. I'm just doin my jo . Q. Do you know Mr. L?m (phonetic) is? A. Yea . You couid say e's my banker. Tat Lee Bank in Singapore and Mr. is the generai manager of the branch across the street from an office on occasion I share with Subhas Anandan. And he is the bank officer that I arranged-?first we wired the money down to the escrow account of Subhas and then I put??I took Chad Shackiey with me and we went down to Singapore, opened the account and transferred a11 of the funds into Chad Shack1ey's account and he was the oniy signature. MR. FERNANDEZ: I haven marked that document but it is going to be P1aintiff's Exhibit No. 5. MR. BURTON: First of a11, for the record, it is defendant's in this case exhibit. MR. FERNANDEZ: weii, it is marked--what convention wou1d you prefer we use, Your Honor? I marked them a11 p1aintiff's exhibit. THE SPECIAL MASTER: whatever you agree to is fine with me. MR. BURTON: I wouid agree if they be the defendant's. THE WITNESS: I remember??I can testify to a11 of these. MR. BURTON: The issue is a pureiy procedure one. They are the defendants in this case. THE SPECIAL MASTER: If you are the defendants in this case in the styie, then they shouid a11 be marked as defendant's exhibit. MR. FERNANDEZ: Let me go back and remark them because I made an error, assuming incorrectiy that we were the piaintif 5. It wouid be heipfui for a iawyer to know which sides he represents, wou1dn't it? MR. BURTON: It wouid. THE SPECIAE MASTER: obviousiy, in the other case your positions were reversed. MR. FERNANDEZ: Yes, sir. Page 110