SUPERIOR COURT FOR OF THE STATE OF OF CALIFORNIA THE COUNTY LOS ANGELES CENTRAL DISTRICT In the PRECISION Matter of Nevada Limited DEVELOPMENT Limited LLC a Liability Company LLC a CASTLE ASSET MANAGEMENT Delaware Liability Company Plaintiffs against YURI PLYAM an Individual NATASHA PLYAM k a an NATALIA an PLYAM Individual Individual DOES 1 50 inclusive MIKHAIL PLYAM Defendants Case No BC384285 Holiday Inn Express 300 Broadway Albany New York 12207 Tuesday June 2 2009 30 m 1p I STENOGRAPHIC Examination date before RECORD of to a Deposition Upon Notice returnable Certified Oral this pursuant Beth S Goldman Shorthand Reporter DEPONENT BARBARA J BOUCHEY APPEARANCES PILLEMER PILLEMER for Defendants and Cross Attorneys 14724 Complainants Ventura Boulevard California Suite 401 Sherman BY DAVID B Oaks 4321 91403 PILLEMER ESQ LATHAM WATKINS for Plaintiffs Attorneys 355 Los BY Grand Avenue Angeles D California ESQ 90071 ROBERT CROCKETT 1 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 STIPULATIONS IT IS HEREBY STIPULATED AND AGREED by and between the attorneys for the 1 hereto a court reporter She has administered same an oath to respective parties 2 3 You which is the oath as in a court of law 3 That the 4 5 not and has the same force and are transcript of the witness need a 4 5 6 7 8 be signed and notarized before notary public That the certified shorthand reporter be relieved of any statutory duty to care for and preserve the original transcript once it is mailed to Counsel Robert D Crockett T 6 effect even though we sitting here in an informal conference room She will be transcribing or printing up in booklet form the deposition transcript which you will be given to read and review and make any changes that you deem necessary and send to my office Let me indicate to you that if there are any material changes to the testimony that you give here today that are made in the transcript when you review it if is dealing with fact it could be used either by myself other attorney to Y to go to trial So as a 8 to to Counsel Da id Pillemer and l a certified copy of same Counsel Robert D Crockett who will be afforded Dave original transcript be forwarded ded 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2 9 10 11 signed version of the certified copy to Counsel Pillemer along with any corrections changes which the witness wishes to make thirty days to transmit a material That until said certified copy is transmitted a regular certified copy may be used certified copy or original Or ifthe witness does not sign said transcript in lieu of the 12 signed impeach You any if the matter as or were a 13 regular certified copy may be used in lieu of the original 14 15 16 17 18 possible here please testify truthfully today Is that understood A Yes Q It is very important that you answer audibly and not with umor unh The court hmm reporter is taking down everything that we say and she a 20 21 22 only take down one person speaking at thuh don say uh or unh in So response to a question Unfortunately this makes can time 24 25 no sense on or no or the record Please an respond with yes 4 give explanation for the record Is 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2 4 2 5 BARBARA J called as a BOUCHEY 1 2 3 4 5 6 name that understood A Yes by counsel for the Defendants affirmed Counterclaimants and being duly sworn by the Notary Public was examined and testified as follows EXAMINATION BY MR PILLEMER witness Q We are knowledge are here today to get your personal Personal knowledge means things that t personally If you don know indicate that you something personally please t don know which is want you to guess at a known to you Q Could you please give spell your A Barbara name us your full for the record and 7 8 9 10 11 12 13 valid response We don t Joyce Bouchey B y e h c u o though are t we don want you to an anything However even guess at anything we Q your present address A 16 Silo Drive Waterford New York 12188 Q Your phone What is estimate if you have one The difference between a guess and an estimate is that guess is not based upon personal knowledge whereas an estimate is something that is For a entitled to number please is 424 8333 to A My cell phone Q And you came here today pursuant subpoena is that correct A Yes 14 15 16 17 18 19 example if I were to ask you Ms Bouchey what is the size of my said 20 X living room in my home and you 24 you would be be Q Q Q Have you had your deposition taken before A In this case In any case A Have I ever been Yes a divorce are never seen it You have no guessing you have personal knowledge and therefore have no basis for your statement deposed do you mean 20 21 22 23 24 us IfI were to ask you the size of your living room you could give me an estimate or an approximation even though t you don know the exact size but A For Q Let me explain to you the procedure we going through here today so we have no misunderstanding The lady sitting between based upon your personal knowledge of having seen it and being able to then estimate the size Does that make sense A Yes 5 is 3 25 2 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 proceed forward I will be Ifyou don t a number of questions understand the question please tell me to rephrase the question Should you respond to a question I Q Okay asking you we As 1 2 3 4 5 6 7 8 9 A Yes Is your license in the State of New York A I think it resides with the Board for the Q College of Financial Planning In what year did you receive that A Somewhere between 1990 and 1992 will assume question hearing it A Yes that you have heard and understood th and that your answer is based upon your and understanding it Is that Q Q Any York other licensing a within the State of New understood A I am licensed in Series 6 63 22 24 term care and Q Is there any reason why you cannot forward with the deposition today A No proceed 10 11 12 7 life insurance disability long Q A Under series 6 and Q How long have you lived at your present 13 14 Yes 63 22 24 7 then Life Q Okay What is a Series 6 address A I moved in the middle of October 2008 where did you live prior A 6 Washington Lane Clifton Park New York A It under the state s securities regulations for 15 16 17 Q And Q Q What annuities A Sell mutual funds and does that allow you to do annuities variable sell is that what it allows How long did you live there A About four years Q Prior to that where did you live A I 1 Hancock 18 19 20 21 Q You can those Way Clifton Park New York you to do A Yes Q For how long high school 6 22 23 24 Q And 63 those Series 63 is what A It would be about four years Q And where did you complete A A Series 6 and 63 combined allow you to sell Troy High 25 Q What about Series 22 8 a 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q A Where is that located 1 2 A Limited partnerships sell them or create Troy Q Troy A Yes Q Q A You can them New York 3 4 5 6 7 8 9 10 A Sell them What is a Series 24 Q What year did you complete high school 1977 77 A Q Any further education after that A Hudson Valley Community College Q What did you study there A Business Administration slicense which allows you to Principal have your own broker and your own NASD dealership office Q And Series 7 A It allows you to sell all securities meaning stocks bonds mutual funds Q And did you receive any A No Q Any Q Q A College for Financial degree or diploma 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Q How long A Over ten years have you had all of these licenses some of them for twenty four further education after that planning Where did you attend there A It was self study When did you do that A In 1992 years s Q Do you have your driver license with A I think so offering you Q the Ihave been handed a s New York driver license number 6655212 for Barbara J Bouchey at Washington Lane address Date of birth Q Did you have any other education after that A No not that one would call a certification Q Did you receive a degree or diploma after studying for financial planning A A certificate in Certified Financial October seven 16 1959 female hazel eyes five foot no restrictions It expires October 16 2012 AI ve changed my address Q Q Are you presently employed name Planning Q Are you A Yes What is the of your business 9 a licensed financial planner 7 25 1 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 3 com merrillcorp www 1 2 A Barbara Bouchey Asset Management Inc 1 Q A How long has this business been in business 2 3 4 5 Q Did you take any courses or training with her other than this therapy in 188 A 3 4 5 four Twenty years What is the business of Bouchey Asset Inc Yes I did Q Management A Financial 6 7 8 9 10 11 12 13 14 15 planning and investments type of 6 7 8 9 10 Q What did you do A I took a course for a year a neuro link which is part of the programing And I became master a advisory Have you been doing this same business for twenty years four Another woman could taught that class I a Q She was training name under this other woman is believe her year Joyce and I took that for A Yes Q Are you the Management A Yes owner of Bouchey Asset 11 12 Q AI m not able to do was not What does that allow you to do sure But I think I may have been my intent 13 or Q the Are there any other officers directors of 14 15 corporation 16 17 18 19 20 21 22 23 24 25 A No When did you first meet Nancy Salzman A I think it was somewhere around 1988 1989 16 17 18 Q Q Q counseling or therapy myself but it My intent was to do it to be a better financial planner and advisor and mentoring my clients in financial planning Q At some point did you join an organization called Nxivm A Yes How did it was AI about that you met her referred to her come 19 20 21 22 23 24 Q What is that For what some A For Q What therapy kind of therapy little stressed The market had and I was A Just to be more accurate it was executive success programs and I took my first training March 27th of 2000 A I was a Q It was then called Executive Success 12 just crashed contemplating whether 1 10 25 Programs A Yes 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 wanted to stay in my career or change it was 1 2 3 4 5 Q She counseled you Dr Steve her Q When did it is change its name was a A Yes I also had the wife of A It didn change its name but it t few sfriend Nancy work who Messing who did my jaw years later we decided that Executive Success helped Q Did you become friendly with A Yes Q And A Nancy 6 7 8 9 10 11 12 13 t didn fully describe the program because we t didn only attract executives So we wanted come up to with a name that embodied more that would when did that start When did you become friendly with her Probably sometime thereafter she became a client ofmy investment company I started to manage her IRA appeal to more people So the Nxivm name was predominantly developed by Keith Raniere Although many of us brainstormed on it ultimately he created the name And a company was created and the intent was to call everything Nxivm but for some reason we Q A When did that start m going Again I think I to say t didn do that but continued probably you 14 15 16 17 18 19 20 21 22 23 24 25 11 89 like 1990 somewhere around there sabout a couple years after Q That started treatment or therapy A Wait a going by Executive Success Program and had this philosophical program called Nxivm Q What do you mean by philosophical program A It had and a web page on with a a mission statement minute t I don remember exactly same philosophy it and link that linked you to It could have started the or two Q friendly Q years And it was a At some point did you become as a result year or in small IRA a year Executive Success socially A Um hmm Is that a yes A Yes Program where the workshops and trainings were taught The classes were taught through Executive Success but Nxivm was the master organization I don know if it called t s the master Possibly Executive Success Programs was under it but I don know for sure t Q When you first joined what was your 13 4 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www I 2 position A Just to take a 1 A It kind of some of the social aspects of s the company events activities Q Was Keith Raniere on the executive board A Yes training 2 3 4 5 3 4 5 6 7 8 Did you ever move up to the ranks ofNxivm or Executive Success Q A Um hmm What did you move to A I became a coach and then I became Q And after being in Humanities Q 6 a a 7 were any other you in aspects of Nxivm charge as a were you in of any other proctor and then I became what they call senior 8 9 A I also became known field trainer 9 10 11 12 13 14 proctor Q What Q What does a field trainer do a does a coach do 10 11 12 or A Someone who has certain track record in or A Coaches other workshops or learning teach the people facilitates within the classes It is intensive and on enrollment and sales and is able to teach mentor other continues to work people And then you get paid their own personal growth or 13 14 15 technology a the curriculum how to 15 16 17 Q then What does proctor do 16 17 18 19 20 21 A A proctor is a a higher level ofthat And also lead some 18 19 20 21 22 23 proctor can ofthe classes And the proctor gets paid an override for anyone that comes in through them A proctor can also again an override based on that and what you develop or bring in And then over the course of the years there are other things that I was in of or created committees to become in charge charge of I was in charge of the annual conference and Vanguard Week And I was in charg ofthe holiday party and certain events So there were other things that Ibecame involved with paid a leadership get to teach classes and can take on more of role a 22 Q What is can Q What is senior proctor 23 24 25 14 AI Vanguard Week say probably the best description an ever is F t 24 25 AA higher level of that Q Doing the same things A The senior proctor now certain committees to mentor the that it kind of like s anyone who has annual conference where a taken workshop is invited to 16 1 2 3 4 5 6 participates oversee in and 1 2 3 attend And mountains we supervise or some would go someplace up in the type of lodging and you know proctors and the coaches in the and to day running of some ofthe programs s things So it just a higher level of 4 5 6 it would go on In the beginning it was three days and it then grew to ten days And during the course ofthat time you know Nancy would teach classes Keith would would be entertainment come leadership Q Did you A Yes serve on i 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 any committees 7 8 9 10 give programs There Different speakers would Q What committee did you serve on A My first I was on what was called the executive board It started with five was one people I 11 12 13 14 15 16 17 18 19 20 21 topics ranging education to anything that would help people develop and grow Q Does Vanguard refer to any one thing in to speak about different from science to the arts to ofthe five A Keith Raniere Q What does the executive board do Q He is called Vanguard A We would meet regularly to with Keith and the company A Yes Nancy Salzman to use discuss you know Keith would it as a time to teach us and to to share his Q Is there any other committee beside the annual conference that you chaired or were on A I mean there were different started the Vanguard which was facilitate certain discussions and vision ofthe company And then we would all be tasked to do things to help move the company and the company And each of us was in grow charge of a different division library forum things Like I committee creating teams to document and review all ofKeith Raniere videos s Nxivm cafe and Ialso started the Q was What division were you in charge of 22 23 24 25 15 brought people in and supervised and helped create that You know I started different A At that time Humanities which is what it called at that time What does humanities mean things including something called Rise and Shine which is a monthly day ofcommittee 17 Q meetings for getting certain types of work done 5 MERRILL 0277 826 800 LEGAL Fax SOLUTIONS 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 And we I also started Vanguard library and I we fund I also 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 MR CROCKETT Nxivm About any aspect of started the Ethical Humanitarian Foundation And raised about 000 400 originally a was appointed President And formed board and committee of people who had donated swhat That comes to 000 25 mind at the moment bring it up as an objection and move to strike at a later point MR CROCKETT That not good enough s MR PILLEMER That is the procedure in MR PILLEMER You can MR CROCKETT Move to strike Invasion of privacy confidential business and California MR CROCKETT No The California is that I can 8 9 10 11 12 13 14 15 arrangements are not procedure stop in policies and procedures ofNxivm which tell the reporter to I have been related in any respect at all to the association t You don name it in your Complaint and I request that you and she must stop MR PILLEMER for 28 years and Ihave practicing 16 17 18 19 20 21 22 23 24 25 asking operations Otherwise I am going to ask the reporter to suspend the deposition so I can get the judge on the line Iam directing you to suspend the deposition MR PILLEMER No you can suspend the t deposition You can move for a protective order after the deposition and move to have the testimony struck I am not suspending the deposition I am paying for the court reporter and she is moving forward cease questions about Nxivm never heard of an attorney telling a reporter to cease and desist MR CROCKETT Let Pillemer IfIcan let me 16 17 18 me ask you this Mr the California statute get you finish You are so rude If I can get the California statute that says abide by it that will you 19 20 21 22 23 24 25 MR PILLEMER I going to give you m not any commitment on what I am going to do other than moving forward with the deposition And you can at some later point move to strike her to testimony MR CROCKETT Let me state my MR CROCKETT IfI find the California statute that objection Madam reporter will you suspend taking any further testimony until I can attempt get the judge the line requires the reporter suspend the 20 deposition 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to on 1 2 3 4 5 6 7 8 MR PILLEMER You haven sought t a a A discussion was held off the record protective of me order I don have t in this motion in front MR PILLEMER You aren going to put t her in that position I m going to I have finished with that line of questioning and I am And particular instance Ihave told you Ihave ceased and desisted from asking further questions about this aspect of Nxivm I now want to move moving on forward on other aspects and MR CROCKETT Can I ask the reporter to sit that MR CROCKETT Let go off the record s MR PILLEMER We will stay on the record And as you know when we are in an official proceeding you on the record can respond to A my question discussion was held offthe record a 9 10 11 MR CROCKETT Iwill move for in time can move protective order at this point make the motion right MR PILLEMER You for whatever 12 13 14 you want I am proceeding forward with the MR CROCKETT Subdivision Let me cite CPLR 3103 deposition MR CROCKETT Can you to call the B Protective Orders 3103 Subdivision give me a chance 15 16 B And it is entitled Protective orders Prevention ofabuse The court may at any time on initiative or motion of any party or of any person from whom you seek a order shall be signed judge m not I MR PILLEMER going to start 17 18 19 20 21 22 23 24 25 19 with arguments before Judge Krumholtz I will gladly appear before him at a later point where you can move to strike her testimony But at this time Iwill move forward with the deposition MR CROCKETT You aren going to ask t any other questions about Nxivm MR PILLEMER About that aspect of Nxivm I am not going to ask further protective or order such other prejudice to any or court suspension of disclosure pending person application for protective order service ofa notice ofmotion for protective order shall matter in suspend disclosure ofthe particular Okay dispute MR PILLEMER I am anything suspending 21 6 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 disclosure on this aspect I on am not going into 1 2 3 anything all further this aspect All ofNxivm That s of my money 25 of his money although he 000 t 000 didn have 25 so he borrowed it from me and then indicated that in lieu of loan interest the 25 I lent him that he would 000 trade in the account in on 3 4 5 6 7 MR CROCKETT right Now I am 4 5 6 7 8 9 implement the to get the California statute for you and 1 insist that you comply with it Ifyou don l t am going to have your hide going began Q exchange for that So we fifty thousand dollar investment with Castle Trading with a 8 9 10 11 12 13 14 MR PILLEMER You MR are such an ass You used Castle Trading one for purposes of for it CROCKETT legal Okay thank you Now go ahead t Q Why don we go on further When and A March sanction trading A Correct Ihad asked Bill of my staff 10 did you 11 12 13 14 first meet Keith Raniere 27 2000 Q Q Under what circumstances came Losee people regarding trading firms and Castle was one of them And after speaking with Yuri I decided it seemed like a good firm to have us open the account with to do research on the Internet 15 16 17 A He in the first day at a The first day And did you training develop 15 a 16 17 relationship Q A with him Q Did you open an account with CCM as well Community Commodities Merchant t A I don know what that is All I know is that an account was 18 19 20 21 22 A In what way 18 19 20 21 22 23 24 25 y personal relationship A I developed a personal and an intimate relationship with him Q Beginning when A Probably somewhere around May of 2000 Q Until when A Up until established through Yuri were through for myself as And as Castle Trading and trades traded both an account an account for Barbara Bouchey accounts to he also had Nancy Salzman set up 23 24 well And I got statements on both well depending on how you 22 25 t firm so I don know underlying clearing firm I my you know it was an believe that he went 24 d I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 define that I think the last time was probably 1 2 3 through that was located in New York a City And it May Q A oflast year 2008 2008 when I in my opinion broke up with him or decided to alter was started with V I think it was t I don recall May of 2008 4 5 6 it offthe top of my head but I believe Yuri cleared his business through another entity officially our relationship Q Was joint Q in he that being Keith Raniere commodities using that fifty thousand What And did invest this your decision or his decision or 7 8 9 10 11 12 13 14 15 16 17 18 A Correct Q A happened to the fifty thousand A Mine Q During the time that you had a relationship with Mr Raniere were you privy to meetings and discussions related to the formation of Precision And Well he was trading shortly thereafter maybe four months later he came to my house pretty upset that the on the account around account was losing And Development A Yes margin cover calls money and that there were he needed 600 from me to 000 and the losses This was the margin calls Q And when was it that you first heard strike that When was it that you first heard about the the first time that Iunderstood what this meant because when we first put the 50 in when I 000 Plyams or when or you first made contact with either Yuri A Keith had sometime in 2001 Natalia Plyam in a asked what my risk was because I am a money the worst case manager And he indicated that scenario would be that I would lose my 25 and 000 that he would lose his 25 And essentially 000 approached me I think it was 19 20 21 22 23 24 25 23 that he had invest in commodities He had had formula that he wanted to he asked me if concept to a mathematical with And clearing firm to be able to do the trading with And he wanted to do a joint investment with me 25 000 Icould find a commodities experiment of money saved of lose 25 And so 000 my own I thought I could when a number ofmonths later he came to me and Ialready had a certain amount these very upset and explained to me how margin calls worked and how he did what he did was 25 7 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www i 1 2 3 4 5 6 7 that my first real education as to what could go wrong because he had not educated me to any of that prior And at that time I had of was 1 2 3 4 5 6 7 8 9 10 11 Keith an was sure on they were sure that I was having influence the losses that Keith was requested him to cease and desist sell out all the was wanted to me incurring in the commodities futures and options Q Did you at some point stop giving him money for him to trade A Keith doesn have his t name on positions that this wasn what I t be involved with And he promised that he anything 8 9 10 11 12 would pay me back the 600 and assured me tha 000 he would minimize and close out the positions to the best ofhis of the account ability and that we would get out requested the opened up in my name So the account was opened in my name And Iwas getting phone calls from Yuri and from Yuri clearing firm in s So proposed account be when this was to me he Q What happened A Within the next few month New York and make 13 14 15 16 17 7 1 million dollars of my Q Did you do any was all through personal money ofthe trading or was it all me on was we went 12 13 14 15 they I actually had to go down there because the moneys from what told me I was responsible for and that Ihad City a visit to come up with the money and that it had to Keith A It his Keith Keith would show Excel 16 17 18 19 20 21 22 23 24 25 originate from my name Q So the money had to your name A Yes So this account come from an account in computer an and 18 19 20 21 22 every day that he was showing me the mathematical formula of what he was doing and tracking and spending three to four hours every night trying minimize the columns wide and the spread trading sheet which 16 doing Keith and I started with was although this was a joint thing just this fifty thousand in my And Ihad put my responsible with this trading name faith in Keith to be 23 24 25 losses The accounts didn stop at my 1 t 7 million dollars It totaled 7 million He went to my cousin of the account And he kept assuring me every day that he was trying to minimize it and that Chrissy Carey and he borrowed 26 000 700 from her We went to Noelle Nielsen and unfortunately these two force are in conspiracy against him by the clearing firm and also that 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 borrowed 000 200 and went to Michael Sutton and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 he was some borrowed 1 million from him 4 had indicated to all of these Nancy that and Keith people they a spiritual being and there was you know universal energy in force here and that those two things were causing the account to lose money would pay them back And Keith assured me throughout this entire time that he promised to pay me back and pay all of these people back and that he felt awful about the losses he was not that his mathematical formula was off or that he was making mistakes a In the meantime I had number of phone me that calls with Yuri And Yuri said to he was incurring was in all ofthese accounts as And he also claimed that he felt though the clearing firm telling choosing the positions Keith that this was crazy how he was was that he choosing And prices spreadsheets at one thing and in the middle ofthe night somehow they changed the price And he felt rigging the the me on He would attempt to show that the price would close Keith insisted that he knew what he was doing and he didn take Yuri advice ts how many occasions did you speak to regard A Quite a number because this was my life savings Not only was it my life savings but 1 in this also had to go into debt to those positions cover some Q On Yuri confident that there was and that the market and that was a conspiracy against being rigged against him him they knew it was him trading ofthe Also he had suggested as well as Nancy Salzman and Pam Kafritz phonetic that because he was a spiritual being that the universal forces were at work here and that because I was having was an point did you stop having your trade company A At some point what Keith explained to me is Q that you couldn get out ofthe t positions until And he was trying to extend the they expired At some emotional reaction to stock market losing my money that the crashing because of my emotional come over to reaction And Nancy would me give me a reaction positions to minimize the losses and that But 29 hand and counsel so that the market through my negative t wouldn keep crashing because hopefully things would ride out and be okay he explained that you couldn just tthat the 27 8 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 6 000 600 t in you couldn just swhat he say I want out At least that t explained to me that you couldn just say hey I quit and close the position that there were certain things that you had bought and you had to wait until they expired that first went 1 2 3 4 5 6 7 8 Keith and Nancy who were responsible for paying back that money Noelle Neilsen was paid back with interest And I have not been back and paid Idon have t Keith a loan agreement because at that time 3 7 8 9 10 11 12 13 14 15 Q Q Futures and options A It was words that I didn understand t was t my boyfriend and it didn seem necessary to have a written agreement from my boyfriend And also I at that time thought he was one ofthe most ethical and honest Ithought his word on was as during the time that you were both intimately and personally involved with Keith was This 9 10 11 12 13 14 people I knew so his honor And I have him this year his A Yes At that time tape as to me Keith was my as recently the beginning care of boyfriend and pretty And at that time I felt was saying that he would take of the though the curriculum and the material Michael Sutton loan and get my name on name off it and put amazing And pretty brilliant there was a whole group Q There was a an ofpeople who had known him for ten twenty tape made 15 16 17 18 A I have 16 17 18 19 20 21 22 23 24 25 thirty years saying that he was the most ethical honorable noble person they knew And so I trusted that this was so And although Ithought Nancy and Keith were crazy when they tried to accuse me of my emotional outbursts having an effect on that question and he was audiotape where I am asking him responding that yes he me up six months ag in the Losee case and me would to because Michael called was he 19 20 21 22 wanted to review certain being deposed things with And he reminded the market I did consider that Keith that my name was on this loan note that Keith owed him And I at that time me had shared with me that the government was watching him and that because of the CVI approached Nancy to say to her Listen I want to days and were 23 24 because ofwho he the was when he tried to show me spreadsheets that he thought the prices get my name off this note I forgot my name is on the note Would you speak to Keith Iwould like to 25 30 get my name off 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 being rigged and were at be play a plausible explanation reason was that the government or some politics here I did consider that that might But in my opinion the he didn understand t 1 2 3 4 5 6 7 8 9 10 11 12 Q A It When did you call Nancy was probably in the fall biggest trading Q Why did you call her A Keith and Iwere not speaking and each other because as of commodities that his mathematical was not seeing formula working and that he was of May oflast year Itold him I didn want to be in an intimate t irresponsible Q Did he ever A No As were a relationship all pay back the money matter offact Imean there months he refused to with him anymore And for three or speak to me and see me at So I conveyed this to occasions that he would rumor from to him my understanding now is that it is being called a gift that his partner and was followed up with said she Nancy because she is responsible for it I Nancy a couple of times and she he would Q He is spoke to Keith about it and that telling people 13 A I don know where it t s coming from I m 14 15 16 17 18 19 20 21 22 23 24 25 consider that and would be speaking to me And when I didn hear from Keith I approached him t hearing that from some ofthe leaders that are speaking around the countryside right now that this amount of money is being described as a gift myself in January Q A Of 2009 and also the money from Michael Sutton In order to keep things in line my understanding is that the loans had to be in my name and the monies had to be put into my account And from my account Yep And I said to him I want my name off that loan because it not s s my loan it your loan And he said Okay We work that out ll And a few months later I asked him again was and s that the they it was had to go down to the clearing firm clearly understood from different audiotape Ihave ofasking him where he so that said yes I told him Michael Sutton town and he said he would coming to Noelle Neilsen and Michael that people although my name Sutton and Chris Carey was on the loan it was 31 bring it the loan with him himself and Keith could like cosign over to Q Did you ever write an e mail in May of last 33 9 MERRILL 0277 826 800 LEGAL Fax SOLUTIONS 2300 593 818 2301 593 818 com merrillcorp www 1 1 2 3 4 demanded two year to Nancy Salzman where you million eighty dollars A It was not last year it requested it was this 1 2 3 4 5 6 7 would go to the press Q Did they respond year I 5 6 7 Q A You requested was two million dollars Well it I requested the exact dollar amount was 000 650 1 seven or which is what went 8 9 into the commodities eight years ago when 8 9 10 11 12 13 14 10 11 000 Keith promised to pay me back There was 25 that Kristen Keefe and Nancy Salzman had retained of my retainer of a through them lawyer that I had hired 12 13 14 Q A What was that 000 25 15 16 Provost I think the attorneys were and there was a lawsuit they had And I 15 16 17 18 Eighteen hours later I received a legal s Coffey office citing that they me to the authorities and they were reported excusing me of extortion coercion and could bring me up on criminal and civil charges Q Did anything happen A Legally officially no Just a lot of threatening letters and phone calls between their attorneys and my attorneys And in my opinion there was a pretty negative defamation campaign around the countryside about me and against me and not a full explanation ofwhat actually occurred Nobody explained where the two million number ca A letter from Steve t asked for my 25 retainer back and they didn 000 17 it back to me although I asked a number of give 18 times And there were commissions due me of 19 about 150 over the last eight years of people 000 20 that they had doing work for both Nancy personally 21 or for Nxivm corporate George Wilson doing 22 carpentry work Ben Meyers doing plumbing and 23 24 25 from and that we had spent twelve hours in or meetings with Keith the week prior discussing those things a 19 20 21 Q Prior to the e going out mail total of on A Yes We had had four meetings 12 hours It all filmed s videotapes of our 22 23 24 discussions with Keith about all the particulars Flanagan doing work Instead of giving them money they would give them a credit for it was money toward taking trainings And Brendan at an executive 25 34 the money that was owed was this with Keith that they owed you this two raised million Was that discussed among the group of Q Including 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 decided board meeting three and a 1 2 3 4 5 6 7 8 9 you A We didn discuss the money within the group t half years ago that these types of exchanges that Nxivm and Nancy were making with the different people not only for myself but other field meetings Q After those series of letters back and forth trainees in the ethical and organization that it was not that they should get paid And then t they didn pay the commission for the trainees so it was decided and agreed upon that those thing just went away There was no further activity t A I mean we haven heard much from Stephen office in the last couple of weeks My s Coffey between the lawyers the whole things would be paid in attorney has not heard back from him me on the So there was another 150 000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 our request clients for monies owed to is from some other commissions that they owed me over the years that had not been paid Angela Ucci had some head trainee fees due to her Susan Dones and Kim Wolhouse had a center Bronfmans Stephen Coffey representing on the bookkeeping fees owed but the the to me in Seattle And based on things over yet last ofthat nature So activity has died s I don know that it t down in the 16 17 18 19 20 21 22 23 24 using methods of one times the annual revenues 000 they had had 100 in those trainings and 200 coaching They came up with an amount of 250 for that So there were a number of us that were owed money dollar amount or thereabouts that we requested of them to discuss with us payments ofthat so we came a two couple of weeks about the Bronfmans how did you in to ofthe Q Talking meet them A They came Was it a one up with million Q Q workshop that you workshops were teaching that you first met A No Do you recall when it was Q Did you ever threaten that if they pay you will take it to the media t A Our words were if they didn respond to request to t didn them A I am going to say it must have been four or five years ago maybe five years ago Q At the time that you first met them did you 37 24 25 35 25 speak about it and deliver we or it 10 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 relationship or did you start a business relationship with them A Just probably social and professional through Nxivm because I was a senior proctor at have just a social 1 2 3 4 5 6 were some foundations formed so there was maybe anywhere at one on over the years And from ten to twenty different sets ofbooks that we did accounting in my office for And I hired point there were four 5 6 7 8 that time time or a proctor whatever I was at that into a people working that Ihad their bookkeeping Q Did your business A Yes relationship develop relationship with them 7 8 9 Q At some point were you called upon to transfer the Bronfmans money for the purposes of investment in commodities A I think a more correct way of saying it was Keith had begun trading in another commodities account 9 10 11 12 13 14 15 Q Why did you take them on as A Well for several reasons One assets financial clients Iowned an 10 11 12 13 14 15 16 17 18 19 a they client And Keith Raniere suggested that I good take them on as a client And they wanted to help support the growth and development of Nxivm planning firm and would be using First Principals Advantage Futures and even in Nancy Salzman name And s phonetic it appears as though something similar as again Ibelieve it was a company Cadence and 16 17 18 19 20 21 22 which was a value of mine what happened when he was t wasn working Keith or trading in my from they approximately when that was A About four years ago Q When you first took them was your Q When became clients do you recall commodities account that the mathematical formula So was Iwould we get phone calls would Nancy and then speak to the on as a client what a 20 21 22 23 24 25 girls And what decided is that they approach cover 23 24 relationship planner or bookkeeper A A financial planner basically At that time they transferred some oftheir personal financial with them Were you Sara and Clare to borrow money from them to for the losses that Keith was incurring in the trading of these accounts And so I would then look at the different investments that the girls 40 25 1 monies to me and I put them into an institutional 38 had and I would decide which investments would 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 money management portfolio that I work with And I started to educate them about investments 1 2 3 4 make the money to most sense at least in text makes the most sense to stocks bonds Q mutual funds because that all s First liquidate And we would wire the Principals and then from First would be sent on to that I worked with Did that relationship some Principals the money where Keith Castle change from just a 5 6 7 8 9 10 11 12 financial advisor at A At some point point later on I was asked to help them with their bookkeeping Both Clare and Sara t didn have any real efficient methods for their So they hired Dazzle Eckblatt who bookkeeping did basically bookkeeping we to come work for me and invited Clare and Sara And then our it was so was trading Trading Q During this period oftime you were receiving calls from both Keith and Nancy asking for the money A Well Keith had a tendency to not want to call me directly so Iwould get wind that there were moneys being lost And because I was in an intimate relationship with him Iwould call him his account decided to have their mail come to that we could bills You office 13 14 15 help them with the payment oftheir and say Iwas very upset at the time and said to him you know You need to stop this This is not good You need to stop this And t Didn Q Q as were paying their bills the business 16 17 A Yes At some time And so I you learn your lesson the first of the amount of money became you know aware I would say to him so we would have conversations where I would say to him numerous an the point did bookkeeping for over expand as far 18 19 20 21 22 23 24 25 the Bronfmans How much A Yes I mean expanded from us just sSlate River Farm to doing Clare And Sara Bronfman had some a the last four years it doing the personal accounts for her horses we would do you think you are going have conversations and he would say I only need five million now I m confident that I to need And individual books so there was a Provente And they bought jet company formed to manage bills for the jet There 39 pretty give it back to the girls in thirty days Or I only need it for sixty So there were numerous phone calls days will be able to we had 41 11 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 back and forth because my role for the Bronfmans was that we managed the money and I would need to figure out where to disburse the going 1 2 3 4 5 6 the legal fees because all ofthis money was to be paid back to them with interest So Iwant to be clear that the commodities Bronfmans no account was not the There was money and we paid their bills have that kind of money t And they don so I liquid available as a financial investing in the commodities which the Bronfmans would call Keith direct because There was no opened up for it investment made on behalf of the making losses to planner need to I would want to liquidate 20 event understand my gosh million dollars for the next do we 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Bronfmans Keith owed them investments with companies he dealt with and then 10 11 12 thirty the girls in the So official months What do Ineed to do to prepare And Keith and Nancy went cover to Sara and Clare they keep lending money come I had conversations with Keith But the borrow this money to commodities slosses in the Keith request for the money would or from Q And to your knowledge there was nothing were in 13 14 15 Nancy Kathy So Keith wanted So my Russell and to have a through through flow protocol Sara and Clare writing have to cover those loans A I don know if those agreements t never seen I 16 17 18 19 20 understanding this very carefully every time with Nancy because she was his partner Again they were both liable and responsible for these moneys that were going to be owed to Sara and Clare Bronfman is that he would review all of myself we these agreements physically although I knew there were numerous calls a would make And Keith procrastinated as lot as well over Nancy did course And we had a very hard time out the So he the of two years trying to get would have these to 21 22 23 24 25 review what her was keep she lengthy Nancy going on keep her informed in the loop so she would understand what was was conversations with agreements in Q Q Was writing Becky Freeman an employee was of yours A Yes What her liable for position me with the company whe Q How do you know she having long 42 24 25 she first started A She started with around ten years ago 44 conversations with him 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Because she would tell me and Keith told 1 2 3 4 5 6 7 8 She first started as an admin person admin and She moved up and changed the College for could get her CFP So we all knew that we were all talking So Nancy would call me or call Becky and say you know we need another ten million another three million another two million And over the me operations Q What happened positions AI Financial course over the short to period of time it amounted somewhere between five sixty and seventy As financial helped her enroll in Planning so she degree And her activities became more involved million dollars oflosses with the clients and financial started to focus once planning the CFP once she her planners Becky we and Iwere was 9 10 11 12 13 14 15 she passed And telling Sara and Clare that felt it very was on the insurance and estate planning important that although Keith was giving his word and Nancy was giving her word that they would pay back the money with to area and around four years ago her focus became as well within the investments She started to interest that we wanted them learn and service clients in that So that after year of that she was now able to address things and help me with my clients in the areas of a get it in writing actually ever wound up so Q Did they in Ican honestly say t writing were pushing for it very heavily A I don know if it t 16 17 18 19 20 21 22 23 24 25 43 investments and estates and insurance and stuff being gotten And we Q When you started up and the Bronfmans cam I know that we to you were you handling the accounts or were yo also recorded of every everything so we had Excel how did it work A For the first year I was the key liaison person and Bill Losee did a little servicing on the accounts but year day and every dollar that Nancy for the for the legal fees and other or commodities as and financial planners things So bookkeepers ever was lent to spreadsheets Keith and predominantly me for the first kept track ofthe money they gave Keith and Nancy for real estate for the commodities for we Q A Then what happened Becky started to take on more ofthe 45 12 MERRILL LEGAL SOLUTIONS 0277 826 800 2300 593 818 Fax 2301 593 818 com merrillcorp www 1 to day handling of their requests for services 1 and Yuri had been and that Keith had person a discussing a real estate 2 3 4 5 6 7 2 that Yuri seemed like project a good Q You changed a her position a from financial advisor to she become A She vice was a vice within the company vice president Did 3 4 5 6 7 8 hard worker out smart man an honest man exactly Q when that president t president yes I don know but it was somewhere happened handling of the Bronfmans girls projects 8 9 10 11 12 13 14 over the years As far as her 9 10 11 12 13 14 15 account what were her duties on certain A To work with the working with the bookkeeping they were on to be the contact person estate project they figured were going to form a general partnership and They Yuri was going to be the general partner and Keith was going to recommend to Sara and Clare that he thought it was a good real estate project that they came up with and that he thought they should invest the money there And my understanding was that the structure was going to be from what Keith explained Yuri was going to be the general and this real or and some to of their and attorneys or accountants instructions or implement partner and that Clare and Sara would be limited partners as well as Nancy Salzman would be a limited 15 16 17 18 19 20 21 complete liquidation of their moneys kind requests for the oflike their partner and 16 17 18 19 profits be on in the real s Nancy would represent Keith because Keith estate project at this time that his name not maintenance And then she grew into after a year convinced all of us of that you know being somebody that they felt they could also trust to ask for education anything which was better for him and name not better for all of us that his traceable because the and be advice Q Was or her views on certain things 20 21 22 23 24 25 government on was watching him sense 22 23 24 25 that would send the money off to First Principals or other locations where one she the things would be monitored and it made be it for his name not to needed to pay the bills A Yes Nancy knew nothing about real estate in 48 They talked to Yuri about Q Was there anyone in your establishment who 46 there and her s Nancy name being getting part of the project which 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 actually writing the checks and sending the wires Was that Becky or was that someone else was 1 2 3 sand her position and for would represent Keith Keith and Yuri working together to create the s real estate A The way it would go either from my conversations with Keith or through Nancy either me or project And this was hypothesized calling 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 from Keith that he thought it would have a fifty his Becky that we would be informed how much money Keith needed to cover for the losses Ithen would look at the different accounts and I would decide which account would make the most the money And Iwould give the instruction to Becky and she would liquidate sense to percent Q Did Keith tell you return when it was all said and done that Nancy having Nancy share would be his share A Yes It was understood that liquidate represented that Keith Keith and her this would be them partnership together and receiving part working with Yuri as the moneys from the portfolios and give the instructions to the trust companies to wire the money into either Sara accounts at Key Bank or ofthe profits because Keith was on this and also counseling and as s Clare personal well counseling and mentoring him mentoring and advising the the most part wired that money from First Principals And then from First And Dazzle Eckblatt for Key Bank to Principals Bronfinans Q So share s that why is he was entitled to the from there it would go to the commodities Q At some point did the Bronfmans get involved in Precision A Yes How did you first hear of Precision A From Keith At that time Keith and Yuri A Yes Q When this business was Development Inc Precision Development as to were you officially set up part ofthe discussion A No the creation of Precision Q Keith again because we were in a relationship as well as 1 personal and intimate was the day because of the number of years of the commodities and they had become good friends And Keith had shared with me that he were speaking every girls financial planner I would need to figure in the out where the money was going to come to from 49 girls portfolios He had a tendency 47 13 MERRILL LEGAL Fax SOLUTIONS 1 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 speak that to there weren many people in Nxivm t 1 2 3 4 5 6 7 8 9 10 11 12 13 14 be done A Yes be minded business and thinking people So as I was intimate with him and I was the Bronfmans financial consultant in this other were And Keith and Yuri they would that the both talking about credit was Q How much it agreed project investment so I was the 6 7 8 9 10 11 12 13 14 15 16 share these ideas with the Bronfinan logical person for him to which he would And so Nancy t doesn know would be initially A My memory is 13 million My understanding is that there was going to be somewhere upward between five and ten and the girls and anything about investments or financials and business And my opinion is that she prefer not to in a way So she relied heavily on what Keith counseled and advised her and pretty much went along with what he thought was best because everyone including Keith though good mathematical and financial and business as single family homes built projection was originally 13 million And you were then tasked to find that money A I was tasked with when Yuri and Natasha Q would need disbursements or that the felt procedure or would he was a be that either Yuri an Natasha would call send minded person and because he had a number of 15 16 17 18 19 20 21 22 23 17 18 19 years of talking with Yuri every day everybody trusted that Keith opinion of Yuri was a solid s they needed And we liquidate the moneys accordingly from their portfolios at that time would mail requesting what e Q And how would that contact come be by phone B recommendation And so Sara and Clare flew out based upon Keith recommendation flew out to s California to meet with Yuri mail Would it e A Either through somewhere else phone or mail e 20 21 22 23 24 25 along with Nancy to walk the property It was pretty casual I mean again this is in the early days The girls t weren educated Q Directly from them A Directly from Natasha or Yuri Q Did you ever get instructions from pay money to A No The Keith to ever really about any kind of investments They were never much interested they had an amateur novice understanding of them in other words did he say so 24 25 to you to pay Yuri 50 procedure was that Yuri and Keith 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 investments and money and how all of that worked s anyway So everybody relied on Keith mentoring ofthis and Keith trust and opinion of Yuri s s 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 would talk Keith would then advise and recommend to was Sara Clare and Nancy what And then they would all that would be the general concept agree that ability to or do this Iwasn part of the creation t or part ofthe recommending and advising I was whatever that dollar amount was that they came up t didn have those conversations with Yuri and or Keith What I with agreed upon Iwould sometimes be part of hearing that Sometimes 1 would not part of was the conversations me And so then it would be with Keith where he would share with conveyed to his ideas And then there would be these with Yuri occasionally meetings And then Yuri came to okay Yuri So me that 13 million is going to go out to every week or every month we would get mails directly from Yuri and Natasha So the a way it was done is Sara Clare Nancy Keith Yuri would have these meetings Sometimes I would be town and we would have them at s Nancy house And it would be Nancy Yuri and was Keith Sara Clare myself Natasha where Iwas there to hear what part of it sometimes I wouldn But it would be t me going on And then it was up to me to figure out what portfolios ofthe girls to use in order to send the money to California you attended the meetings where it was discussed that this is what they need and how by them that they all mutually agreed that yes 13 million is okay We approve conveyed to that And Sara and Clare let us know they Q So approved that and we were told to honor the on a request by Yuri and Natasha basis whenever weekly or monthly much it and so on and you would be told how to do they would make the requests for the distribution A Yes Q Was Keith intimately involved in those 22 23 24 discussions A Yes Q When they made the requests for distribution approximately how long would it generally take for the distribution to be made A Oh we would either Q Was he telling or guiding what was going to 51 25 from the portfolio the same liquidate the monies day or the next day 53 14 MERRILL 0277 826 800 LEGAL Fax SOLUTIONS 2300 593 818 2301 593 818 com merrillcorp www I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Usually take a it takes a couple of days cash to have 1 2 3 4 5 6 7 investments settle for and it would then Key Bank account And then it would be wired from Key Bank out to Precision Development So beginning to end it could take anywhere from three to five day to wire the money to the father and asked their father if they could take 20 million out of this trust and they would pay it back In fact I went with them to Citibank and we negotiated a Citibank line of credit of 20 million for Clare and 20 million for Sara And their father gave permission for them to use the trust that they would inherit when their father died two as days Q What is Key Bank 8 to hold all of the collateral to cover for the A The bank we use locally 9 10 11 12 13 14 15 20 million lines ofcredit was used to Citibank the And some 40 as to checking Q accounts for Sara and Clare million losses give to Keith to cover some as In your estimation it was somewhere between three to five days before the money was ready to be wired to A Yes on the commodities well be used for Precision California is that correct In addition Development they bought a a plane and I also went down with Sara to New York Citibank to City was to or Q And generally when the money was sent whe Natasha or mail or you got an e a call from either from negotiate cover plane loan for eleven 16 17 18 19 twelve million dollars And that money as needed 18 19 20 21 22 23 24 25 Yuri Nancy and would you have to go to either Sara or well to help for the losses Keith as say Look I have got this request Can Isend the money How did it work A The way it was set occurred with the commodities as well Precision for of Development So during this period gave permission was told that it was okay and that I could trust Yuri and Natasha because Keith and Yuri every day And s Yuri request So it wasn necessary t was up Iwas told that they for the 13 million and then I 20 21 time between the commodities which was about 22 23 24 25 54 spoke so I told to just honor The five sixty million and between Precision Development amounting to somewhere between 20 million and 25 million as well as their paying Keith and Nancy legal fees these things were s re amounting to millions each year You talking 56 1 2 3 4 5 6 7 and pattern was that it was not necessary that Icall or that any of us call Sara and Clare each time and say We are sending this procedure 1 2 3 4 5 6 7 about 100 million in the course of a two to oftime So this required year four period constant communication amongst everyone because where we were w out is that okay although they were made aware of all of this because we provided them with reports bookkeeping reports and investment reports and spreadsheets as well as there were t times that we didn know where we were strategize continually going to find these sums of money Q Did you strategize with the Bronfmans needed to with the Bronfmans and Keith A All ofthe above or 8 9 10 11 12 13 14 15 16 going to 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 55 get the money so we would have to call them and exhausted the money in your say You have Q What about with Nancy A All ofthe above Everybody was in personal account and we need to can get a distribution communication about all ofthis I would Keith speak to Or you get credit your RPOT from the trust account or distribution from account Or your quarterly s your father trust is coming in and we need to from here use some a distribution from telling him my concerns and my worries about the money and we were getting money out ofthe sfather was very s father trust Sara and Clare concerned at this point were because as well as the trustees ofthat to send out So it was quite on it 17 18 frequent that they would hear from us because between that and the commodities going to when we went and got the 20 million at Citibank and then requested 20 million to each come out ofthe trust they were very anxious to have that money go back into the trust And I remember myself and Sara Clare and Nancy all 19 20 21 22 23 24 25 became like Where from At one are we going get this money point they father There was a trust set borrowed money from their up for them that having conversations with Keith because Keith they would not receive until their father died but they would receive a certain income per quarter And at one point when the commodities losses were every time assure us would send him money Keith would t This is it This is it there won we really great the girls went to their be any more It going to come back I promise s to s you it going toback Things are going come 57 15 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www i I 2 3 4 5 6 7 8 turn around They were also panicked is this 1 2 3 4 for money going to come back But the trustees s father account were very upset about this the And so there were a lot of conversations with or the money and that he trade and handle himself well t didn know how to was irresponsible with in commodities I It was never heard him say that once was always a plot against were him and what he 9 10 11 12 13 Keith because every day was calling saying Are you going to get the 20 million back Are million back And every you going to get the 20 day he was like working on it Now that 20 s million did come back and went into the father I and 5 6 7 8 9 doing Q When they same time you were panicking this is at the sending money to Precision Development A Yes 10 trust but not the forty million in the Citibank 11 the sixty million never line of credit So five abou 12 came back There was constant communication Q Q And for the trades A Yes Who was panicked 14 15 16 17 18 19 20 21 22 23 everything 100 money and people upset come million is not a small sum of were 13 14 15 A Sara and Clare because it was their money No one knew panicking Everyone was where the money was going to was me about from 16 that period of time Keith Ihad conversations with 17 During promulgating this as he had conversations with 18 19 20 21 22 23 well as Sara Nancy was really panicking because she was liable and felt responsible for being the one to ask the girls for the money quite often And Becky who was working for me was panicking because she t didn have any personal experience with Keith and was starting to wonder was he a madman or crazy what kind of person was Clare Nancy and Becky about this Keith felt he So she and was s confident and he felt that Sara and Clare father Bronfinan was involved and he felt that Edgar panicking The monies were we were Edgar doing for the 24 25 Bronfinan Senior had figured out a plot with the commodities clearing firm and would be able to somehow shift the money from these accounts Keith 58 work and had all the employees working no them 24 25 yet the money our we got paid revenues on was leaving 60 firm so we would have money to pay certain 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 was trading the father figured and that this was a clever way that out how to cheat and rig the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 59 people I was panicking because Isaw Keith do money to have the money somehow shifted and have this before with my own account when it was only supposed to be fifty thousand and it cost us half a million the money shifted to Edgar Senior Keith felt confident that the father was involved and that dollars So Ipanicked and told him You have got to stop this stuff This is were a crazy aware explaining the tremendous losses as well as explaining that he was learning how the world was And there were other people Karen Untermyer number of us all was Lauren Salzman There ofwhat market worked going on We were panicking i Q Who was learning shiftings and conspiracies in the commodities clearing firm and that Keith was a victim ofthese plots and conspiracies ofthe father Edgar Bronfinan Senior and that although we were losing these great sums t of money wasn it great that Keith was learning A Keith was that there were how the world market worked because these valuable lessons about have were five Sixty million dollars oflosses in commodities is nothing to sneeze at And there He was trading again were other people involved on an account for Michael Sutton so he was calling me and saying s What going on So he understood what is this about the market So there were other people involved that were aware of some ofwhat was And so Keith was learning moving our own money around And Keith wanted to country our own currency and market our own way of doing things So he needed to learn how the cheaters in the world markets part it was set in constricted circle because what would the Nxivm community think if they found out that the leader of the mission was irresponsibly gambling millions and millions and millions of dollars and losing it This would shake the confidence of many going on But a very tight tight for the most worked And he was learning this great body of him knowledge about the world that would never serve well Keith admitted that his math formula was people So we all you know like were afraid talk to anybody about this going on because it looked crazy And it was to and commodities knowledge lousy and that he crazy 61 16 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 Q During that the that time Plyams were you told initially Precision investment was to be some 1 2 3 4 3 4 5 thirteen million at A Yes point are aware Q Q Did that change that you or 5 6 7 8 portfolios That was my domain But as a planner I felt their budgeting was becoming compromised and their liquid cash was becoming compromised And I was suggesting that thought maybe this might not be but what was model financial 6 7 8 9 A Yes 10 11 12 change My understanding again from Keith Yuri Nancy Sara and Clare was that Keith and Yuri came up with a condo project which was supposed A be about five million from what I recall And the and How did it that Keith and Yuri they trusted trusted Keith Keith and his opinion of Yuri They told to me was sidea ofthe and Yuri under control you but no project and they I all had it told thank 9 to And pretty much was 10 11 concerns thank you for your advice or your role was to honor requests And my only girls that made another trip out to was California 12 13 14 the first weekend in March of2007 They 13 14 15 when Yuri and Natasha would request wires of mone out what account to liquidate it and simply figure went with Nancy to meet with Yuri and Natasha and with from and send it out 15 16 17 18 19 look at the new use of land and talk briefly Yuri and Natasha about this 16 17 18 19 20 21 22 23 24 20 21 22 23 24 25 My understanding is that they came back mail trip and there was an e from Yuri office copying me on an ethat he had to my mail In the sent to Keith And he was explaining mail to e Keith he reviewed his projections and cost estimates and he was sending it to Keith for from that sreview because Keith and Yuri talked about Keith all of this Q Were both Bronfmans based upon your knowledge and based upon your interaction with them and Keith and Nancy have gone into any of this real estate into Precision Development or without the guidance and Raniere A blessing knew of Keith Absolutely And not The girls about real estate and they knew investing They they went out nothing nothing about there for a day on some And then Yuri sent an mail e was had dinner and walked around t didn understand saying Keith reviewed it and everything okay 62 25 properties They things like 64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 they needed another seven or eight million for this ongoing project the real estate mail project And that was April 2 2007 the e mail he to my office Becky Freeman copying the e and that sent to Keith confirming that 1 2 3 4 5 6 7 8 9 10 11 this What they trusted was Keith He had about four years of daily communications with Yuri I mean I would be with Keith and he would be at my house on a Saturday afternoon or Sunday evening they would need calling most Yuri another seven it was or eight million more So again part and They spoke every Sunday for the year they had a three or four conveyed through Sara Clare Keith Nancy and Yuri that the girls were going to invest more money in this project and that we were to continue to disburse money to Yuri and Natasha when they asked us to or relationship estate a friendship going And Keith and Yuri would discuss the structure of how this real project was to be And some you know the exchange was that Yuri would do the work Keith would help hem out with ofthe figuring Q not Did you oppose this particular investment 12 13 out and the contracts and mentoring run and counseling And Yuri could things by him and So that was A You opinion Ifelt the as know this is when I started to voice my that I was not comfortable with this I reasons 14 15 16 17 18 19 20 21 Keith would recommend to Sara and Clare and educate advise and counsel them t wasn comfortable with it for two One his role But Sara and Clare would have done this real estate the never though given had the available cash that project if Keith didn have t girls to be going was 3 miles across 000 left this was a large sum ofmoney into real estate and real estate that one relationship with Yuri and Keith had not that this a was a strongly recommended good Keith and Yuri the country into location But it wasn my fiduciary t investment and would make good responsibility estate Ididn handle t or advise or 22 23 24 25 63 spoke every day and he felt confident that the t girls shouldn worry that this was a good investment for them or counsel them and any of my clients on real like that Ionly put their money into institutional assets allocation projects or anything Q What about the condos A Same thing 65 17 MERRILL 0277 826 800 LEGAL Fax SOLUTIONS 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 Did you hear Keith at any time suggesting advising the girls to go into this particular Q 1 2 3 4 out there was on And I said look infringing on in my opinion it Sara and Clare scash flow and investment A Yes their accessible monies And the money started going out to the commodities and I felt they were 5 6 7 8 9 10 11 12 13 14 Q What did you hear him were say either 5 6 7 8 many conversations by telephone conversations that Keith and I had personally and intimately about those kinds of things where he would voice his opinion There were these meetings occasionally at Nancy house s that I would sometimes be them all I was a a A There compromised And not only that there was no accounting of any ofthis money Yuri would send Keith these spreadsheet with estimates of what it would cost to do the individual houses and the condo But there was never a 9 10 11 12 part of and sometimes that I wouldn be part of where I would overhear t talking writing check 5 1 And Keith was my boyfriend and my companion in 16 different things and Iworked in the company with 17 about it for the most part disbursement girl you know So 13 14 booking ledger or t Quickbooks And I suggested geez we don know how they are this money So it was at spending this one meeting that everyone was at when we requested of Yuri and Natasha that they send reports Now t they weren something like that But I recall I think Natasha saying that they were trying to get the bookkeeping into the Quickbooks format They had it in a Excel spreadsheet And I shared that what we provided to the girls was a report on an ongoing through Quickbooks basis so that they could see where their money from what I recall or 15 16 17 18 19 20 21 22 using Quickbooks him on the business line And the exact time and Idon know t There were 18 19 20 21 22 23 24 25 location Q numerous numerous conversations about it When you received a request from Yuri after the decision to do the condominium when you received the requests would you then just wire them the money when you were asked to liquidate A The procedure for a couple of years was that 23 24 25 Natasha for the most part it might have been 66 And we as a group talked about and Keith talked about how it would be too good for Yuri and Natasha to provide Sara and Clare with went 68 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Yuri occasionally one ofthem called the office 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 mail that or sent e We need 000 400 And that month once every other month on 000 200 000 300 happened maybe once or twice a a constant spreadsheets And Iremember distinctly Keith taking time at this meeting to teach Sara and Clare how it would be responsible ofthem and be basis good for them to start learning how to read And after the request we would be given the green light from Sara Clare Keith and Nancy and Yuri either in those conversations communicated to us or balance sheets and this would be to understand a it would be accounting good education for them to begin these things becau should they e girls would have a working So we thought this was a spreadsheets reports and that that it was okay to honor the start other businesses with Keith or with other request the first they liquidate around go was 13 million was sent to this money So people that the The second knowledge great idea strike as word of this around go was five million was And last March it to have these said that it going to be seven or million So we would be told eight in spurts that they MR CROCKETT Objection Move to nonresponsive other than the first needed this much money and that it was okay They were going to invest this much money and they thought it was a good idea Q Did the spreadsheets ever show up A No Q Did you ever ask for or receive from the Plyams a breakdown ofwhat was being spent A Yes Iremember one time they came in for a 19 20 21 22 23 24 25 67 Q And the discussion that was had that you described that is what occurred in your presence relating to these spreadsheets A Yes meeting and Keith Nancy Sara Clare were at and myself of Yuri and Natasha is when there was this meeting large And this sum already a very money that had gone out I think this might have been in the summertime of2007 And Iwas beyond my comfort of the amount of money that was point were you were informed that problem in raising money for Precision Development some Q At there was a A Yes going Q When were you informed ofthis 69 18 MERRILL LEGAL SOLUTIONS 0277 826 800 2300 593 818 Fax 2301 593 818 com merrillcorp www 1 2 A October of2006 1 2 Q 2006 or 2007 the money in different trusts that could be used as collateral things like that labeled Q 3 4 5 6 7 A 2006 is when I first to find some started because in that Yuri wanted to 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 70 Was that information sent October of 2006 I became aware A Yes financing through a normal bank situation to assist in completion of some of the houses in addition to the money the girls went try out an 8 9 10 11 12 And I have a friend I Chuck Cronin who owns investment bank we spoke to Keith about this a and agreed that Chuck Cronin could be good Q And to your knowledge was that that was going on through August Was there ever meeting held concerning trying to get additional loans other than what you have described so far Were there any other meetings or discussions abou getting other loans in June A Not that I know of I one was source for this And Chuck worked on real estate involved for that them Chuck Cronin were deals and promotional properties so all around the period oftime by bringing 13 14 15 United States Yuri and Chuck Cronin spoke And I was aware that Yuri and the Bronfmans somewhere between October and December of 2006 involved in the middle of2007 was oh yes there 16 17 18 19 20 21 22 23 24 25 meeting place between Sara Chuck and Nancy sometim in 2007 where Chuck actually met with them after he spoke to Yuri And Chuck had explained to me was a Now there that officially There was a gentleman named Frank Parlato took When did you first hear of Frank Parlato A Sometime in the latter part of 20071 saw Q him and some fellow that he worked with in the that what Keith and Yuri came up with the idea Senate And when I asked who is this man Iwas told he is with creating this real estate project was not normal real estate banking procedure In other for some helping with PR helping you know campaign or marketing for Nxivm that we were I words and t industry didn want to have general banking a builder put ten foundations in the ground without having a buyer for those houses that they the the banks that he worked with in became paying being liquidated from the Bronfmans account 95 sent to Frank Parlato from Sara 000 and Clare and a October November and mails in aware were monies him because there 72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 like to see a track record They like to see a 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 poured foundation building the next then sell the house and start sell that house and build December to pay Frank And Ibecame aware of a meeting Natasha and Yuri came in for the October festival and the first weekend in there was a meeting between Natasha Nancy Keith and Frank Parlato while they were in for that meeting to discuss the real estate project Now I was not invited to that house the next house And Chuck told Sara and Nancy and December and Clare Sara Yuri and t 1 at this at this meeting that he couldn help them and he didn know of any bank that might t in this project because it was high risk invest and considered not the norm and a lot ofbanks meeting and Iwas told that it was not t wouldn want to touch it So I myself tried to that I attend the meeting And also now over the necessary Keith and I or three connect them with someone to find financing Now had periods of time years where or not we last two as again so t that didn work there was some a Then tried to find time in 2007 when Yuri seeing banks himself Ihave got June with our regularly speaking were having trouble personal relationship so I was not would not be each other We mail to 12 2007 that Yuri sent an e Becky in my office where Yuri was trying to find banking Cathay Banking was asking us for documentation for the Bronfmans in order to try to solidify some loans So I know the Bronfmans and Yuri were meetings But Iunderstood from Sara Clare and Nancy because Iwas concerned about the invited to real estate project and concerned about the 16 17 18 girls availability know they to cash And I wastold that you s it all under control and that Keith knew trying were to find June of 2007 and from June us financing through throughout the normal banking still in 19 20 21 22 23 24 year because they were what he was doing and Keith and Yuri knew what s that my understanding of were doing So July August they Frank at that time MR CROCKETT strike as not asking Q for different documentation that the or Objection Move to banks needed wanted for the Bronfmans responsive 73 What kind of documentation A The balance sheets how the trusts were 25 71 When you first heard of Frank Parlato were could assist in you told his background that he Q 19 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 1 t 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 this Precision venture A I became some aware 1 2 that Frank apparently had and that real estate background see lay so many foundations at one time without buyers He was also asking me questions about came who they were 3 4 5 going to send the financing strike as not him up to if he could maybe find Move to up with this concept Q What did you tell him A I told him Keith and Yuri MR CROCKETT Objection 6 7 Q Did you have any further discussion with responsive told that he was him A I was also struck because I feel also that Kristen Keefe started Q Were you financing A Yes going to find 8 9 10 talking and diminishing s Keith involvement in the real estate Q Who told project you was Keith 11 A I believe that it and Nancy ou 12 Ilooked at Kristen and I looked at Frank and I said it not true Keith has s been And Q Was there any indication as to what else he was doing At some point did Frank Parlato go to California A always 13 14 15 16 17 involved in this real estate project and it because of Keith that the girls he had recommended this to the as was My understanding is that he went to girls And it struck me odd to hear that because this wasn so So l t to Frank that Keith some California twice On the first visit that he went it is my from Keith and that began explaining Frank was was not is very understanding he was going to help find financing project MR CROCKETT strike as not Nancy 18 19 20 involved in all ofthat and for for the fully aware reason ofthat And Kristen trying to say that it was not Objection Move to necessarily that 21 22 way Mr CROCKETT strike as not To your California responsive Q Why did he go to California the first time Objection Move to 23 24 A To find financing MR CROCKETT Q responsive knowledge did he go back to 76 Objection move to 25 74 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 strike as not responsive and no foundation 1 2 3 4 5 6 7 8 A Yes Do you recall when he went out there for the first time Q A I want to say that it was somewhere between November and December Q Did you Barbara Bouchey Asset Management send to him any monies as a result ofhis going to California A Before was that Q When he ran came back A And I s Bellini into Frank and Kristen Keefe at there anything I want to say when you asked as part ofthat conversation me at Frank suggested to lunch that he and I Mr CROCKETT Objection came 9 Q Q Did you see Frank after he back 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 75 A Yes Where did you see him A Iran into Kristen Keefe and Frank at s Bellini Q Was there a discussion day and that speak to Yuri and Natasha to try to figure out what they were doing look at their books understand the financing and what was going on and Iagreed I thought it was a good idea I then contacted Sara Clare and Nancy that night and expressed my concerns and between the two ofus we should fly to California the next could offered take to go out with Frank to California and to A Yes a look at Q What was the substance of that discussion A He found out that Iwas the girls financial planner and he was very concerned estate project and how it was being about the real handled and me the properties strike Objection Move responsive Q Iwill put it in the form of a question as not MR CROCKETT managed Q was And he wanted to convey this to Did he say why he was worried was Did Frank suggest that you go out to California at that time A Yes A Yes He concerned about how the project the houses And he also Q What was the reason for being done meaning me going out to California A He was explained to that this wasn traditional to t concerned about the way the project 77 20 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 was being handled What did he 1 the Bronfmans international real estate consultant On I have Q suggest that you do in to 2 California A That he and Iwould Natasha and try to take look at the books and a 3 January 8th Frank as a legal agreement speak Yuri and 4 5 6 7 signed by Clare Sara appointing Q Q with what his A Jim Del and Frank Parlato project the bookkeeping and on a look at the their international consultant are f responsibilities understand what was going Q Did you agree that was good idea 8 9 A Yes Where did you get that mailed me Negro e the agreement And that was January 8th you send him any further money after 10 11 12 13 14 15 16 17 18 19 Q Did you contact anybody to A Clare Sara and Nancy speak to them 10 A Yes 11 12 13 14 Q Did that A Yes Q Did they agree that you should go out A Clare never returned the phone call Sara did and said to me We all when we were at January 15th I have e mail just had a meeting the festival and we have full a faith in Keith We all had meeting and have it t under control and you needn help And the from Nancy and my conversations was very input similar And I said to the record as correspondence between Becky Freeman and Dazzle 15 Eckblatt where Sara and Clare were going to pay mail 16 Frank one million dollars Ihave an e where 17 Dazzle and Becky figured out which accounts Sara 18 and Clare would get the payments from And with 19 20 21 22 the wiring instructions Nancy 20 21 22 stating right I want to go on now that I believe 000 800 s went from Clare Key account 200 from 000 s Sara Key Bank acco that both you and Keith are blocking Sara and Clare from getting input about this I said I would like you to convey this message to Keith for the record I am not in my behalf And on 23 24 25 23 24 25 a company Frank wanted the money sent to And the wires 15th and 16th between one ofthose went payable to Johnston Keach which is January two dates agreement with how you are handling this and I 78 Q And did you have any discussion with 80 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 think that something needs to be done and someone 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 should go out there and take a look at this MR CROCKETT Objection Move to strike as not anybody concerning this million dollars why was going to Frank Parlato A With Keith it responsive Q Q A You spoke to Keith Q A What did she respond A Yes When was that By saying something similar which was that The girls feel confident as well as Ido with Keith and Yuri in what Beginning of January What was they are doing Thank you Q discussed me but no thank you And I will convey your message to Keith A Keith had shared with Yuri was that he felt as a Q Did you receive any instructions at any time to send money to Frank Parlato A Yes The money began in October November and December There were moneys that went to Frank Parlato though embezzling money and that he was crook and how devastated he was about this And Frank had gone out there and discovered that in that Yuri and Natasha sand Frank Keith s opinion were money and misappropriating funds and that Frank Parlato had real estate development stealing 1 Q How much was it 16 experience it was 17 18 19 20 21 22 23 24 25 A In October 000 95 In November an mail e 17 18 background and Frank knew how to work with people to get things done and he thought and best that Frank go out there And he was recommending to the girls to hire him and put him in t because I don check the Quickbooks mail The e said to send the same month before so 000 95 And in December thing that you did the m assuming it was another I mail said to send the e 19 20 21 22 23 24 25 79 charge ofthe project oversee and and make him the CEO and have him handle things and that the snormal payment to him Frank three payments that went And on So then in January were those upon agreed dollars dollars was amount to pay him was one million And Keith January 4th Becky informing him that Frank was being appointed as mail to sent an e Yuri was telling me the million warranted because just being able to on some transfer ownership of the assets alone was 81 21 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 I 1 2 3 4 5 6 7 worth one million dollars for Frank And Frank on 1 2 3 4 5 6 7 8 9 10 11 conversation with Keith Ramere was aware aware personally so I t wasn willing to take was the project unless he that this was occurring And Iwas paid the one million up front so Keith thought it was a good deal to pay Frank the million dollars because the girls had already invested over that that was Keith recommendation ofhow s was not to handle this So it unusual that the me actual instruction went not to but to Becky speak and 20 million and Keith still felt the would still meet 25 was It wasn unusual that Nancy Salzman would t to project percent a once or completed 8 9 great part ofit and that a million Becky or that Sara or Clare spoke to Becky Becky implemented the instructions Q that A Yes 10 11 12 13 14 15 price to be paid for the potentiality of anywhere from 20 million to 40 million to come back MR CROCKETT strike as not small Was she authorized in your company to do Objection Move to 12 13 14 15 16 17 18 19 20 Q had Was this based upon normal practice that you responsive 16 17 Q When you were in the discussion with Keith did he say he instructed that the girls should pay the money A Yes A Yes Q with sending reason out money from the Bronfman accounts to Precision A Yes The started a is that Becky already 18 19 20 21 22 Q Were you instructed my anyone else to get the money and pay it or did you do that based upon the discussion with Keith t A I wasn instructed The instruction to came year and a half earlier than that to work with Nancy with the admin office ofNxivm to 21 22 23 24 25 try to straighten out the bookkeeping to try to sand Clare sinterests So Becky protect Sara was 23 24 25 Becky who was oftentimes the point person for ofthe implementation of the instructions so there was instruction given to Becky who And liquidated this million dollars And Becky some mentoring Kathy Russell was in the accounting office and becoming the liaison with Nancy Salzman Sara and Clare because we were trying to get agreements documentation and other assets 84 82 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Del already had a copy ofthe legal agreement from Negro from January 18th and they were instructed to wire out the money s Defendant Exhibit S was marked for Jim 1 2 3 4 5 signed over to were identification Q Q Have you ever seen this document before 6 7 they lending Nancy So Becky became an integral part ofthe accounting at Nxivm as well as the accounting in my office So it was not unusual at this point not only that she was speaking more to Sara and Clare than I was so a to Keith and the girls for all ofthe money A Yes Where does this come lot oftimes the instructions actually from 8 9 10 11 12 13 14 15 16 17 18 19 20 A Within my office computer system this is mails between Becky and Dazzle Eckblatt within a my office This is normal we Nxivm directly Becky accounting strike as not to because of her would go integral part in Move to and with Sara and Clare MR CROCKETT Objection procedure for us When responsive a would liquidate came we the monies moneys we would document wher from and we would provide a report and would approve it So this is the documentation Not only that but because more of the money came based upon the relationship that existed with Becky in your words did she have relationship with Sara and Clare Q Now A Yes from Clare than from Sara in our we kept track of keeping records and everything copacetic Q Based upon her relationship would she get instructions from them and from Nancy Salzman A Yes kept track of the fact that Clare needed to have 000 300 So in fact Clare and Sara wound up paying Frank 500 000 Q Was that your joint understanding what was A Yes Did you discuss it with Clare or Sara A Myself not personally I had the Q Q And you concurred that this was As far the acceptable A Yes as that 21 22 23 24 25 accounting that went on who would do the books in your business to be sure there was enough money to cover it Is that Q something do you would do or that someone else woul 85 83 22 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www I 2 3 4 5 A My responsibility oftentimes was to figure 1 2 continuing Q Who to finish the project So now our or out where to take the money from and where to instructions were coming exactly from different people I was find the money For example I went to New York City to negotiate with Sara and Clare with Citibank 3 4 5 6 7 8 9 were you getting instructions from A I don know t not as at that point 6 7 8 9 10 11 12 13 14 forty negotiate for the eleven million dollar plane loan So it wasn unusual t for me to be the brain to figure out where can we find this money They would come to me and I helped them find the money or figured out which portfolio it was better to liquidate the money from That was oftentimes my role Becky role s was the implementer ofthe instructions get credit I also helped to the million dollar line of 10 11 12 13 14 point coming from because there were There was Jim who now different point people there working out there through Becky and Alison Halas And requests were made directly through bookkeeping so I was not as involved because the Bronfinans money at this point was pretty much gone and it was limited as to accessibility of instructions were involved at that where the it So the instructions and where to find that Oftentimes Nancy or and Sara and Clare would call 15 16 17 18 Becky directly we was and say We need this much money need this much money And Becky if there in the books or 15 16 money was more in the hands of Becky Clare on where that was coming from Jim Sara enough money Becky or personal Or if are we 17 18 Q Did your relationship change at some point with Sara and Clare accounts she would not called million just liquidate and said it A In April I met with Sara and Clare to inform them that I may want to let them go as 19 20 21 22 23 24 me We need five 19 20 21 22 23 24 clients three million Where the hell Q Why A Because the amount of people that I had going where to get it So Becky and I brainstormed are we going to find the money what is available we told Nancy Sara So knowing or servicing their if I it also added account was not as profitable added as Clare of 86 were to go out and find other clients more And more to one Mr CROCKETT 25 responsive leading but Q And Objection as not I won object on the basis t complexity and 25 management of my office That was number 88 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 one And secondly of money that about were there was promised The payment for million were there any 2 3 4 was supposed to a very large sum be coming over other Precision payments that you Development were know of that went to s 000 140 in the father trust that they working in the Canadian court to have the A There dramatically Q What changed A There hired to start I think so yes But changed at that point things 5 6 7 trustees on changed we that we were working with them was a woman Alison Halas that was 8 9 10 11 12 13 14 15 thought would take six months And it took over two years and so Ikept doing this work and not charging what 1 would normally something I could have made more money because I spent time waiting for the trust of 140 million to show up The trustees were not officially doing work for Precision Jim Del were out in California charge And Negro there from and Frank Parlato handling things out there and doing books out And so now there were still requests us coming for certain payments to different but the bookkeeping and people monies liquidation of changed at that point a little bit or more summertime of 2008 which was a few months after Ihad told Sara and Clare that I no longer wanted to keep charging the same rate that in order for me to keep working with them changed over until Q money A Well for a period of time it was less And then apparently it was decided that the project was taken over shortly after Frank was fired And they were then trying to find other people to take over the project My understanding is that when they found other people to take over the Would you say it was less money 16 17 18 19 20 21 22 23 24 25 87 they needed to pay me more money less work for them MR CROCKETT strike Not or I needed to do Objection Move to responsive Q Did they agree that you could charge more money MR CROCKETT Also the question is vague Q What year did you have this discussion A April 2008 89 project we then began sending 000 000 000 200 300 400 money again because they were 23 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 respond to your of 2008 that you April wanted to raise your fees or stop doing as much work indication to them in Q How did Sara and Clare 1 2 3 4 5 They represented that they would not speak again unless I went and got some help with what they perceived to be my victims and that to me A after that 6 7 8 They were quiet during the meeting and told me they wanted a couple ofweeks to think about it and they would give me a response at that time Q Did they give you a response A No A 6 7 8 9 9 10 11 12 13 14 Q Q Did they ever respond to you 10 11 12 me A Not until October tell you in October A In October I met with them and they told What did they meeting s Nancy Salzman house And it was at that meeting that Nancy apologized to me and apologized to them saying that she had been for years and she had altered the suppressing me internal s representation of me in Sara and Clare minds and she apologized that she added to the deterioration of our relationship and also that was Q Where the third A The third was at 13 14 15 there was more than met the eye an Sara and Clare 15 16 17 they refused and would not discuss my fee or billing with them that instead in order for me to be able to have that conversation t didn know that Ihad intimate relationship with Keith about nor did anybody else We didn talk t hard for Sara and Clare to and I weren speaking at t to believe that the reason with them I 16 17 18 19 20 21 22 it so it was 18 19 20 21 22 23 24 25 first needed to heal my ethical breach with Keith and with Nancy with the executive board with understand all he why Keith So they were led was not Nxivm damages what I have done with their money because I stepped down from the executive board stopped enrolling and building the company And they felt it was very t damaging and they didn want to work with someone like me because they felt I was not an ethical humanitarian And to continue to work with me with them and fix the speaking to me they were sure I must something very bad or else he would not be doing this They didn know that I broke t up have done with him and I didn want to relate to him in t that way that he didn want to t speak to me until I came to my senses and resumed the relationship as it was before 92 23 24 I 90 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 needed to fix these relationships and these Once I gave what I was that I have 1 2 3 4 5 6 7 8 9 10 Q Q Did you have What a fourth damages them a plan going done with that meeting meeting they perceived with deadlines times Idid A Yes happened at the fourth as to to do and factor in the damages a A The same or similar the first two caused and what I wanted to bill them after I had meetings position the with Sara and Clare We went back to the me that then they me would have conversation of sharing with that Ineeded to fix me as to the services provided and the fee they Q Q would pay Was this October of2008 A Yes After that what happened to your 11 12 13 14 relationship Nancy and heal my and went back on the board and damages helped build the company and things ofthat nature Q Any meetings after that A Yes There was a meeting at the end of December with Keith and relationship Q A Where with them A We had five meetings because s Clare house Q What happened at that meeting and they Some ofthe meetings were at were A Well Ihad requested Nancy Pam 15 16 17 18 19 20 21 some at s house some at Nancy Salzman house were they Q A They ranged from October November and my When s Karen help with the Bronfmans telling them that I felt the way they were handling me was inappropriate was not ethical and that Ididn t December agree with their assessment as to what Ineeded to do to earn a business relationship with them and talk about their financial situation response with what they was that Q Q A Of 2008 Their A Yes At the first meeting what was discussed 22 23 24 are They presented to me with what I just shared with you Q What happened at the next meeting 91 25 your relationship fix things here And the response was yes Ido but this is inappropriate And what they are anything wrong t Don you want to fix with Keith Don you want to t asking they t don see 93 24 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 accusing even me of was inappropriate on and they t don that 1 2 3 4 5 6 7 8 Q What did he say was a know what going s me up It was told to me A He said that he had heard that there 3 4 Nancy would speak called five to the girls And the girls stalemate and that he heard the certain girls wanted and said it was decided that at the things from me a but that from what he 5 6 7 t meetings they didn really allow me to speak spoke at me and decided maybe they should have a meeting with me to hear what I had and that they to say said Q he hadn heard t He had not lot A That swhat he said 8 9 10 11 12 13 14 Q Did you have such A Yes Q When was a meeting 9 10 11 Q Were there any further discussions or involvement with the Bronfmans after that A No that A That some was in December the end of December at 12 13 time 15 Did you at that conclusion Q meeting come to a 14 15 working for you day was January 23 2009 Q Was that breakup amicable or otherwise A I think that it was cordial but there were Q Is Becky still A No Her last major differences Q Why in A Several and it was strained 16 17 18 19 20 21 22 23 24 25 A I shared with them at the meeting that I felt that the process of how 16 me is that reasons they were treating 17 18 19 20 21 22 23 24 25 94 t One Becky wasn pleased go as and that way handling they me was not and there were things ethical and inappropriate about Keith and Nancy and I was we April considering letting them of2008 when I told the Bronfmans that I clients unless t didn know about and I didn think the t discussed the fee and services provided to they were handling this was proper And I requested that we bring in other parties to help arbitrate and mediate our differences because I felt it sided was one them Q Why A She did she say that against me because there was thought they were a valuable client and that she thought they had developed the means we Sara Clare Karen Pam and Nancy on one side needed them for the company and we didn need t 96 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and then there was in an me So I requested that we 1 2 3 4 5 to let them go That was one reason bring objective unbiased party to help us discuss our conflicts in what would be an ethical process to move Q What is the other reason was A She unhappy I had earlier asked forward that The response was Q Q Did you do that permission relationship Becky from Keith to with him divulge along my intimate with his relationships A I requested 6 7 8 9 10 we What did they respond would think about this with other women And I wanted to get counseling with because I was I needed it and I t couldn find a person to help counsel me about my t relationship because Icouldn get it with Nancy A That they Q What happened A They would if they would come up with a t didn agree to it we mutual agreement on when Karen Pam Kristen and Mark Keith said it was 11 12 okay might possibly separate ways Q Did you come up with such A No agreement 13 14 15 16 17 18 19 20 21 to divulge my relationship relationships with people and begin having Becky do some therapy work with me on that Q Did you in fact disclose your relationship and his other Q Did you stop doing work for them A No What happened was that I then with Keith to A Yes Becky you me but approached Keith about this Q Did she counsel Q When did you approach Keith A New Years Eve Q Q 2009 2008 A Yes What was the A She started to handle the dynamic of our this changed an relationship that there was Q Was there a reason amicable split were substance of your discussion ofwhat was 22 23 A There and dynamics between with Keith A Iasked Keith if he was aware 24 25 95 Becky spend a lot bring became conflicted oftime with Nancy and myself Nancy started to and started to Becky going on between all of us her into projects that Nxivm did Nancy had 97 25 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 a daughter Lauren who started coaching Becky 1 2 3 4 5 this point and she became part of this group of people that would come in and try to counsel me about my intimate relationship with Keith and his other EXAMINATION CROSS BY MR CROCKETT Q Could I see the notes that you intimate 6 7 relationships Becky pulled in my opinion And in her opinion she shared with felt she me And started to feel that brought with 6 7 you today A Offering she felt conflicted and she Q Q When did you 8 9 10 11 was put in the middle and didn t really know what was the truth anymore So around June of 2008 Becky started to withdraw from Nxivm and type this up type this 8 9 10 A This Did morning someone ask you to up A No from the activities And she didn like the t 11 12 13 14 12 13 14 politics going on so Q A When and the dynamics was and things that were that strained And then also Q Why did you type these up A Because if you are going to ask me for s and as information it best to be the Bronfmans precise stopped talking this to her accurate as possible Piliemer 15 16 17 18 19 was 15 summer Q Did you talk at all with David Well sometime in the of2008 Clare 16 17 before today and Becky 20 21 22 23 24 25 were close friends and they stopped spending time together And Clare and Sara Becky went from spending 30 to 50 percent of her week with Clare and Sara to them not calling her much at all during the week And this was disturbing her In November Clare called Becky and had a conversation with her accusing her of misappropriating some oftheir funds to Precision A Yes 18 19 20 21 Q How many times did you talk to David befor today A Just once Q When was that 22 23 24 25 98 A Last evening mean Q Do you A Yes Q How yesterday that long was meeting 100 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 without her permission a and this really in disturbed 1 2 3 4 A Maybe a couple ofhours Becky She and I had number ofconversations our about this because this was not so opinion a And Q Did he call you or did you call him A My legal counsel advised me Q So counsel A Igave him the do you know how he knew your legal Becky and I started to have we conversations that maybe needed to come up with 5 6 7 8 9 10 11 binding contract spelling out our fiduciary responsibilities between Sara and Clare because we were subpoena that I was being subpoenaed Q Q Q Who is your legal counsel A ItPat Green s What A Here in concerned about the comments that Clare and Sara were making So Becky became stressed eventually within a out about all of this and couple Q ofmonths she quit were city is he Albany a in You requested by subpoena to bring som 12 13 14 15 16 17 18 Do you have sure copy of this somewhere else at documents with you I received an e mail or letter from your attorney indicating that you had turned your attorney all ofthe originals of documents that you had to a firm called Connell O A Yes over to home AI m not if I saved it as an the Q deposition Do you mind if Iattach it exhibit to Aronowitz is that correct A I would like to ask my attorney t Q You can A Then the answer Q So all of those originals have firm is that correct A Yes gone to that 19 20 21 MR CROCKETT this document be marked would be no you can t I am going to ask that as an Exhibit to the Why minute break at this point five 40 m Recess taken 2p MR PILLEMER I have MR PILLEMER t don we take a 22 23 24 deposition s Defendant Exhibit T was marked for identification Q And in your nothing further at 99 25 meeting with Mr Piliemer did 101 26 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 he talk about before A There some of the things you that were testified to 1 2 meeting A In part yes were some things talked 3 4 5 6 7 8 9 10 11 Q What does that mean in part were moments about yes Q For instance A First A There of water he got up to get a drink 6 7 8 did you talk about the Bronfmans commodities losses with him the Bronfinans didn lose money t in commodities To be correct about this it was off So in part yes Q Were documents given to by Mr Pillemer A No your legal counsel 9 10 11 12 13 14 Keith Ramere They lent money to Keith to cover the losses They were not investments of the Bronfmans Q Did it appear that anybody had documents with them that they were reading from A No Q You understood that the Bronfmans had a were 12 13 14 15 lending correct A Yes loan to First Principals Q Did you discuss dollar amounts and things involving specific sums in this meeting A We talked about the sums of Precision 15 16 17 Development Q Q Q held Was Precision Q Do you consider an investment A No Just to be are a loan as someone handling 16 17 18 19 20 21 22 Development Development ever your client A Was what Was Precision ever your 18 19 20 21 22 more accurate with you you when you say the Bronfmans saying investment in commodities the Bronfmans client A No Did you a ever understand that the Bronfmans Precision investment that were was in Keith and Nancy who are debtors majority interest in Development 23 24 paying back their money MR CROCKETT Objection strike as not responsive A I think the Bronfinans gave A Yes and move to 23 24 Q Did you understand that Precision 19 Development was an investment ofthe Bronfmans A Yes 104 25 Nancy and Keith 102 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 money to help them out believing that that money 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 might come back to them Q And you discussed specific amounts of money invested and transmitted to Precision Development with Mr MR CROCKETT Move to strike as not Pillemer is that correct responsive except for the word no A We discussed in ofthe Q Do you believe the money that the Bronfmans gave or whatever they did to Keith and Nancy for the commodities that that was transaction A Yes a project being generalities the first part 13 million and the second not part was five million but specifics came as far as financial from just dates times generalities and the overview ofthe project Q Was Nxivm ever your client where the monies A No Q that that money A Yes Were the Bronfmans your clients at the time was given to Keith and Nancy Q Q and Was Nancy Salzman ever your client A Yes Q Did you discuss this giving of money to Keith and Nancy with David Pillemer at your meeting A Imade mention that the Bronfmans gave Keith and Nancy money to cover some of their losses yes starting date for Nancy Salzma Nancy as your client ending A 1988 or she started with a small IRA 89 What was the date for and then she ago liquidated those matters some time 18 19 20 21 22 23 24 25 Q was Q Did you also discuss with Mr Pillemer the real estate investments with Yuri and Natasha was some conversation with my counsel My legal counsel pretty much got Can I have the year she no longer your client was liquidated that she A It awhile ago it A There legal Q A Was it a year ago My suspicion is that we was probably during different so things your that took place in the session the time lost all the money with First the answer would be yes Q So legal counsel was there at that 103 25 Principals Q What in year did First Principals lose money 105 27 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the commodities market A First 1 2 3 w A Do I have the right to call my attorney Principals was I believe where Keith right now Q Ifyou traded the second time And I can be sure I t money which used to open up an account with my name and one with s Nancy name That was somewhere around mean own do I am I know about my going to move to strike personal 4 5 6 7 8 everything A I don have t a right to call my attorney You can call your attorney t Q A I understand that I have the right to have years ago t don even know when First Q So you Principals lost all the money in the commodities market A I was instructed to transfer money from the portfolios to First Principals so I that some seven or eight a bathroom break 9 10 11 12 Q If you are going to call your attorney I am during A Don raise your voice with t to the bathroom me Bronfmans was aware going ofthe money went to First aware 13 14 15 16 17 MR PILLEMER We don have to act like t Principals and we And Iam was from my And relationship all knew children here MR CROCKETT will move to with Keith that it all were because Keith was trading money we You get up and go and 1 losing strike everything are about it THE WITNESS You threatening me Q Q You can pin down t a specific year 18 19 20 21 22 right Q can now Let me A No Ican t Let me ask you is it correct then that you have absolutely no clue as to the specific lost all of its year in which First make sure tell your lawyer you understand so that yo Again here it is Your Principals no investment in the commodities market A The answer me a 23 24 would be Ihave a clue 106 Q Give clue 25 lawyer promised me yesterday he would not participate in this deposition We told him that if he did we would move to suspend the depositio and move to strike the entirety of your testimony because of a conflict of interest Ihave a right 108 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 a A The bulk of the losses were in 2006 1 2 was to proceed to continue on with this I will Q Were there any losses in 2007 A Ican say for sure I believe that it t over grant you the right Michael say the reason to say I t won answer about 3 4 5 6 7 8 9 10 by then The bulk was in 2006 1 could go to accurate records and moment based on pull that up But at the my memory the bulk was in 2006 Is Michael Sutton your client A No Sutton and I will grant you the right to why and then we will move on But t just saying you won answer we will move to file a motion to compel and your lawyer can help THE WITNESS I can Q Q Q appreciate time it I would like you to ask me questions and I would like to answer Was he ever your client them At the same I am here A Yes What were the A You know years when he was your client I don even know if you even have t 11 12 13 14 without counsel and you might anticipate and that I like to seek advice appreciate might because I don have anyone t sitting here with me right to ask me some ofthese questions an How would I know that MR PILLEMER There is it invades t right now and I don know if you are asking me that are things inappropriate and whether or not I am objection if 15 16 possibly saying things that me to are not necessary privacy me for say And instead of your MR CROCKETT Don argue with t Just MR PILLEMER Don t with argue responding 17 18 with respect you are threatening me MR CROCKETT I will withdraw the her 19 20 21 22 23 Counsel will and don be combative t question about Michael Sutton Q The next question is Do you did receive a have you WITNESS Just repeat the question and I answer Q Q Hold it Do I have produced on document today But why didn you produce any t other documents in response to the subpoena A Because the documents you are asking for are and the original ofthose bookkeeping documents 109 document and you have A And don be abusive t No rights 107 24 25 28 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 documents are with the Bronfmans and their 1 2 Q Q Did you bring that file with you today bookkeeping Q Have you made A No copies 3 4 5 6 7 8 to 9 10 11 12 13 14 15 16 17 A Some copies Will you produce it in response to my request that you produce A Sure t didn you produce the copies t A I don know if I have what you are for I made relates to Q Why looking copies of what pertains what me I didn make t everything I sent all ofthe copies of originals back are Q Is it is true that you told Precision Development representatives that you refused to produce the Quickbooks file until they resolve your request A It is not true from Precision Development or anybody else asked you to produc s Precision Quickbooks files A My attorney has told me that they would like the Quickbooks files and we made a backup of it And they have not proceeded with that so you will have to speak to my attorney Q When you say they A The Bronfmans the attorney representing the Bronfmans I only understand through my attorney that they asked for it I made a backup floppy of it It ready to give and it hasn been s t the Bronfmans So what you source or would be your best looking for they doing or whoever is Q Has anybody bookkeeping for them if it David s whoever the Bronfmans or i 14 15 would be to get them from the Bronfmans since they have the originals and they have everything And they have a bookkeeper who is intimately pull out that information j 16 17 18 19 20 21 22 23 24 25 familiar with where to in a j snap better than I MR CROCKETT Imove to strike that as 18 19 20 21 22 23 3 responsive Q At this meeting with Mr Pillemer did you discuss the documents whether you would produce not them or not A No MR CROCKETT I am forthcoming from them to reask for it going to ask you to 2 4 25 produce the documents in response to the subpoena 110 sure that the Precision Q Development representatives have not asked for this on a Are you 112 1 2 3 4 5 6 7 And I will ask you to reconsider not producing them I said it both ways I would like you to produce the documents in response to the 1 2 3 4 5 6 regular basis me A Not to directly subpoena Iwould ask you to reconsider your decision not to produce them WITNESS m asking you Q To whom I t A I haven been asked by anyone other than through Q your my attorney And if we don t Then Iwould just serve You used the word ethics and ethical in answers MR CROCKETT 7 8 1 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 another subpoena for you to produce the same documents and we will go through this again it would be best after to your maybe thirty times What ethics are So 9 10 11 12 13 14 15 16 you talking about A I sure what you m not mean a by many times talking lawyer you can voluntarily and cooperatively produce the documents in your possession all right Q Now you mentioned Quickbooks file What is A several times z a Q I am trying to ask you response to never question questions posed by Mr Pillemer In he used the word ethics but you used that word thirty times in your answers And Iwould like to know what ethics you are talking about when you are about ethics talking A Quickbooks file Quickbooks is a software bookkeeping and checking Q program that does Why t don you share with me each instance are Is it true that you still manage s Nancy Salzman money A Not that Iknow of 000 100 of 17 18 19 and I will referring Q explain within each instance you to what are ethics Do you believe that Keith Raniere has acted Q sort Quickbooks of a computer system Do you still have the The file is maintained so on some 20 21 22 unethically A I don recall t s it software data A Yes saying that Q Do you believe that the Bronfmans have acted Q Quickbooks file for 23 24 25 111 Precision Development A Yes unethically t A Idon recall saying that either Imove to strike the last 113 y Mr CROCKETT 1 29 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www t 1 two sentences as not responsive are 1 A I guess so I m not sure that I concur with 2 3 4 5 Q Inot asking you what you saying or 2 3 4 5 6 7 what you are suggesting so t didn believe I am asking Do you believe that Q Do you believe that there is any rule in the Keith Raniere has acted MR PILLEMER and unethically Objection overly broad standards that govern your profession that you to hold a client sfinancial matters in require 6 7 8 ambiguous You can answer or not confidence A Q Yes I believe so A I don know whether t It does matter my opinion the 8 9 10 11 12 13 14 15 16 17 Q A Do you know the number of that rule 9 10 11 12 13 14 15 t matters and I don see how it relevant s No I don t Q Can you answer Q rule Let me ask you if you have heard of this 16 17 18 19 20 21 22 23 24 25 question A It depends on how you describe ethics Q Okay What do you understand to be the ethics which guides you in your profession A Regarding Keith Raniere Why don you ask t me what it is are you wondering about and then I can before Principle 5 of the CFP Designee shall not disclose any confidential client information without specific consent of the a rule that client Does that sound like your governs profession specifications for that A Yes define it for you Do you believe Q Do you know the Q in Nancy me Salzman has ever acted 18 19 rule an unethical manner A No A Just describe to what you mean by that 20 21 22 23 24 25 114 t say I can answer the question A Then I guess I can answer the t question Q You can matters Q Why did you discuss confidential client regarding the Bronfmans and Nancy Salzma MR PILLEMER with MrPillemer Q Do you have any you in your A Um hmm system of ethics that guides professional work Objection Misstates prior testimony and lacks foundation Assumes facts not in evidence and calls for a legal 116 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Q Do you 1 2 3 4 5 6 conclusion A Yes And what is that system of ethics A It a code ofethics in the financial s Q You can answer the MR CROCKETT Are you to answer the question MR PILLEMER She can question telling her not make up her mind planning industry ethics and then there is a code of internally in your what she wants to do Q Who promulgated the code of ethics profession A In the industry the planning board Do you know the full name Q A Standards for I don know t 7 8 9 10 11 12 13 14 15 16 A Are you asking me for a conclusion Q Iam asking you to answer the question Do I obviously have to know what the you believe confidential information is Iwant you to tell me exactly whether you believe sure Q that You mean t don know the name of the board AI m not guides you in the ethics that you live by A The College for Planning the Standard of Q The Q Let me finish can We can only talk one at a time You Ethics Board say whatever you want to say Do you believe in your meeting with Mr Pillemer that you discussed and disclosed confidential information about financial matters of Nancy Salzman and the Bronfmans with Mr Mr PILLEMER Same A I discussed them here college something that I on a A You know what It not s call them 17 18 19 20 21 22 regular basis for So Do you know that there is a rule of ethics in the code ofethics and professional Q Pillemer objection responsibility that requires you to hold inviolate calls for Q You are not confidential issues MR PILLEMER sitting here with you answering and in this process qualifications for that My attorney was things discussed 117 El M Objection can a 23 24 you are required to A I sure ofthe m not so legal conclusion Q You can answer the answer would be no if you 5 2 115 present and there were certain 11 111111 1 a 1111 30 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 There were no specifics and I don recall t 1 and what sort of connection was there to have this 2 3 4 5 6 7 s discussing any of Nancy finances I recall discussing Precision Development with the amounts that went and I described losses that my clients Losses of Precision 2 3 4 5 while you sway Do you know that he had this sway were on an intimate relationship with carrying Keith Raniere and not is an area Q Q Development 6 7 8 9 with telling the Bronfinans of inquiry doing to get into am some specificity I going to ask you we are This A Yes You discussed losses in the commodities 8 9 10 11 about the extortion threat you made in your letter I m sure you knew that MR PILLEMER market A Yes Objection I am to a 10 misstatement of the testimony MR CROCKETT Q You discussed in vague and general terms 11 12 13 14 15 16 17 going to be asking 12 13 14 15 16 17 dollar amounts correct A Yes And you disclosed to Mr Pillemer the fact that there were investments in First Principals you about the sensitive financial details of the Bronfinans that you revealed in carrying out your threat to contact the Q and the fact that there were loans to First 18 19 20 21 Principals A No response correct girls the fact that you people commodities losses in general when that was not publicly known and that you were the source of that I am going to ask questions mentioned to 18 ca about we are I think that sit for MR PILLEMER to focus on now 22 23 21 25 a Now I understand you the bathroom and after you return I m going go to And if he tells me that to contact your lawyer you discussed matters with him during the process MR CROCKETT 19 20 So tell your lawyer that going as things that aren the t And 1 21 22 23 24 real issue at hand I don think so t know well as you do s what really deposition I am going to object MR PILLEMER Again you are threatening and making these threatening of the statements to this witness here and let focus s you that on the ancillary in MR CROCKETT going on things So your lawyer will tell a 25 118 things may come out caustic fashion 120 1 2 3 4 5 6 7 8 9 10 11 12 13 You are trying if she to 1 2 3 intimidate her which is wants to You are a violation ofthe ethics because you are a hostile witness THE WITNESS Itnot correct what you s are code She is entitled to take a break saying m not I hostile me pressuring her by asking her 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 119 not MR CROCKETT Let finish legal conclusions and stuff like that She is THE WITNESS It not correct I am s not hostile entitled to discuss matters with her attorney The fact that he told you he would not be here is t true he is not here But it doesn say that he t can discuss with her or she can call her t MR CROCKETT s It a legal term m I attorney and obtain his advice t can tell her not to do that on what to do You you THE WITNESS Ifyou want to call s telling the truth hostile that your opinion MR CROCKETT because you mean are a hostile saying anything against Iam going to ask MR CROCKETT Let me tell you the kinds of questions that are going to be asked I will be witness that doesn t 14 15 16 17 18 asking questions about several kinds ofethical hostile person It means you are either for or against by your meeting with Mr you are a profession pertaining going to be asked specific questions about commingling violations you have made in your to the rules ofethics You are Pillemer THE WITNESS I for m not or against with Mr anybody MR CROCKETT Pillemer for a nondisclosure You are going to be asked by meeting 19 20 21 22 23 24 25 questions is a about having sex with Keith Raniere couple ofhours and helping him to which in light ofinvestments by the Bronfmans clear violation of your standard of ethics m We are going to be talking about that fact I make t you prepare for this deposition It doesn hostile as a person But because you are a hostile witness that gives me the right to going your to be asking the following questions Is it understanding that Keith Raniere had a lot of discredit you as a biased witness THE WITNESS Okay MR CROCKETT to find out sway with the Bronfmans in their financial affairs why you 121 a 31 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 I 2300 593 818 2301 593 818 com merrillcorp www 1 were doing all of these things and to assemble the 1 2 3 4 5 6 7 MR CROCKETT ask that you and We don tam going to I to 2 3 4 5 6 7 necessary information that we can to determine how you injured and harmed the Bronfmans Just for the you called and asked if I want to meet with your attorney and Iwould have WITNESS I am comply produce at your which I am going subpoenaed deposition so we can continue record discuss the documents that you produce I am going to ask that you come and make those I will telling Don you myself subpoena the Quickbooks filings that you personally that t didn give to Oyet Connell THE WITNESS Not yet MR CROCKETT of copies and on 8 9 10 11 12 are MR CROCKETT WITNESS Yes Kinsella right 8 9 MR CROCKETT I will tell you that you welcome to make that call and we will be 10 11 12 withholding a set withholding subpoenaed Quickbooks are You 13 14 15 16 17 18 19 20 21 22 waiting for you The witness exited the room Time noted 3 40 p m Recess taken Counsel Patrick Green entered the room The deposition resumed at approximately 5 00 p m MR CROCKETT Mr files I know that your counsel and I will settle another date and I want you to come and bring we 13 14 15 16 17 18 19 those with you and about that will ask you more questions with MR GREEN counsel first t Why doesn she speak m sure she I MR CROCKETT will work that out will and we Green could you behalf of And if she refuses we will state for the record your appearance MR GREEN Patrick Green Barbara 12207 BY MR CROCKETT on 20 work it out in another way BY MR CROCKETT Bouchey 90 State Street Albany New York 21 22 23 Q You gave us a detailed explanation as to why Rebecca Freeman left Do you remember that A Yes 23 24 25 Q lawyer Now Ms Bouchey on sent a letter to Mr April 28 2009 your Connell O apparently 122 24 25 Q Would you agree with me that if you sent letter out to clients at the time of Rebecca a 124 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 someone named Steve Coffey saying that he 1 2 3 4 5 6 s Freeman departure would be her a more explaining her departure tha t couldn deliver records that my client was asking for as you were in the process of complying with the demands set forth in the case reliable statement of reasons for departure no subpoena in this A Not necessarily Q Oh really m sorry I I didn mean to t A Yes Q Then my clients correct A Yes you sent a bill to my to pay for the client one of copying charges 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 say that Let me show you a document All I have the document on is my computer and it not dated s A That not the only reason s t Q Let me continue It doesn have a date and I apologize Does this piece of paper it appear to have your letterhead A Yes on on explain to me why if you worked on working on complying with the demands se forth in the subpoena and sent my client a bill for copying charges can you explain why you have not produced the documents A They have not paid me for copying so why were Q Can you it Q It says Dear Ann and John Do you know who that is A I believe so Q Q Who is that should they have the original records I made copies to comply but they are not paying me for having done that action Q I am hearing that one ofthe reasons you are saying no to complying with a lawful subpoena is that you have not been A Ann and John Murray Are they clients of yours there is A Yes Q And then a signature on the paid for the copying It bottom Does that look like your signature Barbara at least your graphic signature A Yes charges was suggested if they have the originals they could provide their own copies from the originals s no that not 123 It was suggested 23 24 25 Q Do you remember sending to Ann and John a letter explaining Rebecca Freeman departure s 125 32 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www I 2 3 4 5 6 7 8 9 10 11 12 3 A About Q few weeks ago yes And you explained that for a 1 over a were before Rebecca Freeman left you year in 2 3 4 5 6 7 8 9 10 11 Q Is it correct to say that your letter contains this information that This is a key on disagreement about your perspective regarding Nxivm You said you were not pleased with their leadership running personal and professional basis A Unfortunately she and some other staff were unhappy about my severing ties with Nxivm Q Because they wanted to stay associated or contributing relationship in January reason why Becky and I separated A Yes of the company both on a Q Then you said Please note although I enjoy the curriculum at Nxivm as well as there t being many good things and people there I don feel them to be in line with my values nor want to be associated with them any longer Is that correct A Yes A That correct s Q t You didn state that answer earlier in your reasons 12 13 14 15 16 13 14 15 16 17 18 19 20 21 22 23 24 25 deposition earlier reasons You didn state those t Q find is that correct Did you state those in your deposition What is it about Nxivm svalues that you so abhorrent when you said that A I think I stated that Becky felt the middle of a conflict between there were caught in and Nancy and I 17 18 19 20 21 22 23 24 2 5 A Should I say everything or t don find them in line with my Q You said I values I asked you you used the word ethics politics It didn mean she t things going on at Nxivm left completely It that she s and thirty times in as to m curious I response to questions your values that you found pulled away I never said she left Nxivm s Itnot my question Do you remember Q saying previously in your deposition anything along the lines that She and the other staff important to articulate in the letter What were they that you find in Nxivm so abhorrent to you A First of all Ididn feel it was t to tell them all the reasons why so I appropriate used values those reasons happy about my possibly severing ties with Nxivm because they wanted to stay associated were not Values is a word to describe 128 why I would make my decision to 126 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Do you remember Pillemer A I remember our saying that when asked by Mr over 1 2 believe I need to them all the leave In the letter to my clients I don t full disclosure and tell give you all t reasons why they aren in line with my values here today if you would like me to MR CROCKETT Move to strike as not reasons stating there was a conflict 3 4 5 6 7 8 9 why but I will tell relationship That with Nxivm and with to me is a a Salzman conflict with Nancy Nancy And if you want full explanation in another form I would tell you all the reasons why Becky left my organization and why if you want me to give you all the details MR CROCKETT Move to strike as not responsive MR PILLEMER I believe9t was clearly responsive to your question 10 11 responsive Q Would you agree with me that MR CROCKETT You know those arguments t aren appropriate in California You don argue t motions them THE WITNESS Iwould like to your question and my values answer on t 12 you didn say 13 14 15 16 17 our the record There is no one to rule on in your prior answers in your deposition that you wanted to leave the Nxivm account and she wanted to keep the Nxivm account is that correct about what is not in line with Nxivm A That correct s Q And then you say This was a key contributing reason why Becky and I separated relationship in January Is that an accurate statement A Iwould say it is And I already stated was a conflict between Becky and MR CROCKETT Move to strike as not a 18 19 20 21 responsive Let me explain deposition to trial you so When I go to trial This is meant for when Igo to trial I have got to read my questions and I have to read the answers And if you continue to talk when it colloquy then Ihave s to start all over again and I have that there our I as 22 23 relationship and politics with Nxivm as not got the got to use MR CROCKETT Move to strike 24 25 127 formality of moving to strike 129 responsive Let me ask the question again Do you want her read back the question 33 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 3 1 2 3 4 so I can hear it and she me can answer I move to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 or mystical figure nature he was able to women to strike Let persuade ask the question again these two multimillionaire decisions make unwise Q You said Idon find them to be in line t 5 6 7 8 9 10 11 12 with my values How did you find Nxivm to be abhorrent in terms of your values A Ibelieve that the A I don know for sure You can ask them t leadership conducts itself in 13 14 15 16 17 18 19 20 21 22 personal way at times that in my s opinion is inappropriate That one I believe they show favoritism and not intragroup exchanges amongst the organization Ibelieve that they have secrets and things t they don divulge to the because they don want them to know t community And therefore they are not being transparent which is causing many problems They are dishonest with people And there have been strategies a year ago there were conference calls in connection with accusing me of being a full suppressive and having taken the fall with many people in the organization which is a are asking me to guess No In response to Mr Pillemer questions s you were very forthcoming about how you feel Keit asking you A I don know You t Q Q I am Raniere had all sorts of improper power and control over the Bronfman girls and Ijust want you to tell me whether you MR PILLEMER really believe that Objection misstates her prior testimony Q You can answer A I believe that there are a number of people I don know if Sara and Clare are t included But I have personal experience with quite a number of people that believe that Keith is in line Keith believes he is and that he has a spiritually evolved guru spoken to them and me in my presence about his being unified and about his powers as that kind of a person So I can only speak to you as to what I have heard him say and defamation of character Q Q Are finished with your answer Continue with your answer I want a full A Ithink that on 23 24 25 23 24 answer please A Okay I believe that they use manipulation 130 25 what I have heard other people say and report back to me their view ofhim 132 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of people s That enough at the moment reasons 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q The why its founder A No sleeps you dislike Nxivm is because with its financial advisor m not Q I guess I interested in what an 18 16 year old girl may have thought of the situation I am really interest in what a 30 or Though that in and of itself would be ineffective From the years in which you were physically intimate with Keith Raniere start with the year old or 32 old as of today date thought year s of him When you were intimate with Keith being Q Raniere from 2000 to first year and last year 2000 to the beginning of 2008 During that period of time did you believe that Keith Raniere held over at any time during that of time did you ever believe that Mr Raniere had some sort of extraordinary power of 2008 period persuasion over the Bronfmans of Svengali sway the Bronfmans in their financial management some sort t A I don know what you mean Q Some sort of a mystical or by Svengali magical sway over A I would say yes Q And what was that power that you thought he had over them What is this mystical power you are talking about them with respect to their financial decisions A I do believe this was an element Did you believe it then in 2000 A I believed he presented that A It I think how it is s the presented to be by as not organization and by how he conducts himself Move to strike Q Q or 2008 MR CROCKETT What does that mean was A Meaning I heard that it that the commodities losses some told to them his being 19 20 21 22 23 24 25 were due to responsive It was unfair because I asked you two questions Q The question specifically is Do you think that the best way to describe the extraordinary power that Mr Raniere held over the Bronfman girls is this mystical nature that he had Yes or no A I think in not sure it some a kind of spiritual guru and that because of who he was in the world it was having an effect on the market That to me is as some kind of mystical presenting figure himself yes in some m ways I 133 Q So you think that because ofhis mysticism 131 played part 34 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 Did you see anything wrong with having pillow talk about the Bronfmans investments at Q 1 A Yes 2 3 4 5 Q that What is the name or he does business under the same time you were serving as their financial A Robert Petro Wind Spirit something like advisor A No Q He is a psychic 6 7 8 9 10 11 Q You didn see that t as a conflict of 6 7 A He does psychic stuff coaching work interest of any sort A No The reason is that he was present for 8 many of my meetings with the Bronfmans It was in that they many conversations with the Bronfmans 9 10 11 FBI CIA for consulting missing people s Q He basically a psychic and engages in psychic powers He does psychic coaching A Yes He works with the 12 13 14 speaking to him and with him and at times was requested to speak to him So he was considered part of the circle as many other people were This was considered normal everyday knew I was 12 13 14 15 Q When he is coaching is it related to psychic powers A No 15 16 17 18 19 20 21 routine activities for us Q You have relied matters on on him repeatedly for Q There was relationship clue about A something major about your with Keith Raniere that they had no 16 17 18 19 20 21 psychic psychic A Yes I relied means him for coaching and t They didn know about the sex but Inever asked if they knew about the sex MR CROCKETT A The answer Move to strike him for is no Q Looking back today as a licensed Q You have never relied on psychic 22 23 24 25 professional governed by conflict of interest and 22 23 24 matters A Reask the question Have you ever relied psychic matters confidentiality rules that are pretty strict in the industry don you think that disclosing to t them that you were having sex with someone with 134 Q on Robert Petro for 136 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sway over them in terms of financial matters would 1 2 3 have been something they wanted to know about t A Relied upon presupposes that I don make or own decisions and consult with girlfriends my t A I don know advisors Q or friends So rely on presupposes Q Well Imean you professional You are You are a are a licensed understand wha correct 4 5 6 7 that that is only what I do is it is correct to say that licensed supposed to professional This is Mr Robert Petro sweb site is net robertpetro www Offering A Yes Let me show this to Mr Pillemer first A Ibelieve so yes Q That is his web site and you with it A Yes Q You are supposed ethics correct A Yes to know about rules of 8 9 10 11 12 13 14 15 16 17 18 19 20 are familiar s Q Do you believe today that it a conflict of interest to be representing clients for financial purposes on Q s Let see if we can find what we talked the one hand and sleeping with about A You are mystical sway over them circumstance no I have heard said by people who know you Q well that you expend certain advisory payments or pay to a certain advisor known as Robert Petro is somebody ANot in this that correct A Yes who has using the words relied on as not MR CROCKETT Move to strike responsive Q Essentially if we can s I know the web site Let see find where it is MR PILLEMER This violates her to right privacy and constitutional other than Q Q Q How long has that been going on 21 22 23 24 25 135 with people right to counsel doctors or people with A About a year and a half What kind of what is his address other areas of expertise Q Is it a business expense A Latham He is in Latham MR PILLEMER Where she takes the money and pays it is irrelevant 137 35 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 MR CROCKETT Do you think so MR PILLEMER It an s Iwould like to find where he talks about his 1 2 month when it but to was limited not to psychic issues to me 5 6 7 8 9 10 11 12 coaching Readings by cell phone Q Do you think that he has anywhere on his we site anything having to do with coaching MR CROCKETT MR PILLEMER 3 4 5 6 7 coaching approximately what that date you discussed with him MR CROCKETT MR PILLEMER record MR GREEN issues And describe was and the topics s Let go offthe record We are not going off the Irrelevant and not discovery of admissible evidence or have anything to do with this case Q Do you think that he has anything having to do with coaching on his web site likely t A I don know t Ihaven read the web sit to lead to 8 9 10 11 12 13 14 questions than you one Maybe if you wrote the down There were three questions rather m just I question okay trying to help Q A When is the last time you on spoke with Robert issues 13 14 Q help guide you in making business decisions for the Bronfmans correct A No You hired him to Petro purely psychic non coaching Every time When is the last time 15 16 17 18 15 Q Q Q You asked him about stock market trends 16 17 18 A Last week Did you discuss business matters depends on what you call business correct A No A It 19 20 21 22 23 24 25 Q Q for You ask him about investments correct 19 20 matters s That true I have been told that you expense approximately through your business A No What does a Q financial planner use a psychic 21 22 000 16 A No a month on his services a year is that correct MR PILLEMER Objection Invasion of 23 24 25 sconstitutional rights privacy Invasion of one to privacy Irrelevant to discovery Not likely 138 Q But it is thousands is that correct 140 A It has been 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to lead to admissible evidence in this case 1 2 3 4 5 6 7 8 9 10 11 12 13 14 A It is coaching also Q What kind of coaching A Same thing as for Executive Success on Programs coaching mentor how to advise counsel and Q So have you ever used this psychic for non psychic coaching work MR PILLEMER Objection a violation of privacy t A I don know what you mean by non psychic In other words he coaches matters me on different Q Q On what subject matter A Different subject matters Q You said he is a psychic and a coach But Idon see anywhere in this web site t A Yes Would you agree with me that nowhere in his web site it mentions coaching A Because it not s on Q When he coaches psychic non matters violation of privacy to lead to you does he coach you on there doesn mean he t MR PILLEMER Objection s Ita t doesn coach He has different does different companies So and irrelevant and not likely things discovery of admissible evidence in Q We will talk to Mr Petro I would like 15 16 17 18 19 20 21 22 23 24 25 this case you to tell me the last instance in which you relied on him for coaching with respect to your business and describe that to me MR PILLEMER Q You can answer a A We talk about lot of things Move to strike It not s MR CROCKETT Objection invasion of privacy You can answer MR GREEN A When was the Okay is When is responsive Q When he coaches psychic non matters discussed alien talked about you does he coach you on When he has coached you has Has he not last time Ispoke to him he not relied on his tarot cards Q No The question specifically not talked about trances Not the last time you spoke to him in connection with your business retainer that you pay him every 139 A None ofthose horoscopes things are discussed 141 36 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q How about missing persons Have on you relied 1 2 And Q Q it violates her You fiduciary duties to Michael them Sutton can answer A Kristen Keefe and 1 had two meetings with 3 4 him A Yes Do you think you have in your tapes dealing with Mr Sutton MR PILLEMER Q So you have involved your a paying clients client 5 6 possession A Kristen Keefe is not paying Q Your relationship through Nxivm A Yes with Kristen is purely 7 8 and is not likely to lead to Objection Irrelevant discovery of duties 9 do you involve Mr 10 11 admissible evidence And it is violation ofher Q Do you involve Nxivm privacy Sutton and ofher fiduciary regarding Mr Petro with your A With paying clients I don believe that t paying clients 12 13 14 MR CROCKETT I don understand t that any client ofmy company has been with Robert because you brought The out Michael Sutton in your reason Petro that I know of questioning question areas only I am mentioning Q m curious I as to why you expense it as a 15 16 Michael Sutton is because in business item MR PILLEMER your she mentioned the name five names answer to invasion of privacy and not Objection Irrelevant likely to lead to case 17 18 19 discovery Q You Q ofadmissible evidence in this can answer 20 21 and 22 A It for s guidance ever Have you coaching sought guidance specifically and coaching from him in matters related to the Bronfmans A Have I asked him 23 24 25 do you mean are delving into totally not connected to anything that I raised or anything that I asked her And you are trying to impeach her by raising questions as to her personal character and nothing to do with anything that she stated when I asked the questions MR CROCKETT What wrong with you s MR PILLEMER You are that Q Have you ever mentioned the Bronfman name to 142 MR PILLEMER I m entitled to make an 144 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Robert Petro A Yes Did you have the Bronfmans consent to to a psychic about their financial affairs 1 2 objection too bad If you don like the t objection s it Q speak 3 4 5 asking her questions and Q You made many objections when I was Ididn stop you t MR CROCKETT You re right A No MR PILLEMER Objection Misstates 6 7 8 Do you remember the response to many of Mr s Pillemer questions using the words Michael prior testimony Q that she spoke to him about her Sutton A Yes correct financial matters Have you heard the tape recordings of his 9 10 11 12 13 14 15 16 17 18 19 20 sessions A Yes Q In connection with your consultation did you have Michael Sutton consent to discuss him with s Mr Petro MR PILLEMER to lead to an Q Do you know how long he keeps the tapes t A He doesn keep them He either mails them to you or discards Objection and not likely and discovery of admissible evidence them invasion of privacy You can answer s you have the tapes Robert Petro tapes of sessions with you Q Do Q so A Itook Michael Sutton to Robert Petro and A In the past Ihave yes Q Do you have any now in which the word Bronfman appears A I sure m not Michael and Ihave met with Robert and have to him spoken anywhere on the tape ever Q Have you ever mentioned to Mr Petro s Salzman name A I took answer Nancy the Q How about Michael Sutton Did you discuss Michael Sutton with Mr Petro MR PILLEMER 21 22 23 24 25 143 Nancy Salzman to Robert as Petro so Objection invasion of is yes And she has gone was present when I spoke to her well while he privacy discovery irrelevant and not likely to lead to case Q I don know if I asked you this t question ever ofadmissible evidence in this and I apologize Was First Principals your 145 37 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 client A I don think so t 1 2 reason the demand that she set aside the tapes and particular why you Q t didn seek consent from MrPetro to discuss the Is there any 3 4 5 Bronfmans with Mr Petro MR PILLEMER prior produce them This was not part of any request for production Iwas the only one signing the t request for production Counsel You didn t And as far as my request to produce it didn include a Objection Misstates 6 7 request for any ofthese types of are now testimony You lacks foundation documents that you s it improper to Q can answer 8 You asked if she request that she MR PILLEMER sought 9 10 11 12 13 THE WITNESS seeking to discover produce them I don have a problem t so permission Q from Robert Petro t Can you explain why you didn seek from the Bronfmans to discuss them with permission Mr Petro MR PILLEMER not in evidence Becky Freeman and Dazzle Eckblatt have provided all of this on separate requests and possibly Tracy so these have already been previously provided as well Both s OBSERVER TRACY It not true Objection Assumes facts 14 15 Q you a Wait are a minute Hold on I understand what Q You can answer 16 saying but the A It would just come through He would talk 17 18 lawyer when Igo to problem I have is that as present proof in trial I about it Q He came to know that the Bronfmans were you 19 20 21 need to be able to say that at the time ofthe deposition this was contained in the files So at times we ask the clients correct A Yes parties and people and third we parties to produce related materials and then Q He came to know that you financial manager correct A Yes Q were their 22 23 24 25 146 stack them and there a lot of duplication But s I need to be able to say when I took the deposition that she had the following documents t didn have So I can comment on o And you discussed some details of their this document 148 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 investments correct A Not the financial details just them people and my relationship with Nancy financial 1 as 2 was and what 3 4 5 6 7 t that you have and on ones that you don have s That why I ask you A Ihave them and I would already provided them for going on have provided today I was led to were Q Did you discuss the fact of commodities losses with him A Yes MR CROCKETT I am believe that because the documents provided were My attorney led me to believe two weeks ago that the documents and all ofthe originals to the Bronfmans and are going to ask you to 8 9 10 11 12 13 14 15 16 17 freeze all of your tapes Do not destroy them t And I am going to ask you if you don know which ones contain reference to the Bronfmans Iam going provided they possession of all ofthe documents and the originals and the bookkeepers know exactly how to find all ofthose documents It was my assumption that you didn need to get it from t Your own me in to ask you to produce them all If you are anymore uncomfortable doing that I can work out with your counsel a way to produce it through a neutral who can clients have it listen to all ofthem But this is part of the request I made for you to t today which you didn do produce documents t Q You didn hear what Ijust said Even though that may be true Istill have to document what you have today But having said that now that response you just gave me did you explain that to Mr Pillemer in your discussion A I believe it was mentioned that the Basically respond sure to that why subpoena question I asked her t she didn And I m not 18 19 20 21 22 23 24 either to I understand the response But Itold her respond to the request so I can respond ll we come you with a subpoena out and do this all again with my serve originals Q So are with the Bronfmans did Mr Pillemer go along with the idea to the documents and of you not producing documents today And own A No He wasn t subpoena just for the record Iam MR PILLEMER going to object to 147 25 Q Do you remember we talked about the letter where you asked for more than two million dollars 149 38 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 from my clients Do you remember that hmm A Um 1 2 3 4 5 6 that is documented in A I think the attorney writing was Provost and I was Q The two million dollars included a 65 1 told they would take million loan to Keith Raniere for commodities back because they of getting my retainer fired him a month after I gave care case 5 6 7 8 9 10 11 12 trading losses A Yes correct it to him for the Losee of that So and sued him for some Q There was a 000 25 legal retainer for the 7 8 9 They have the money I was told said Don worry You get your 25 t ll 000 they Losee case A Yes back It was year and attorneys came to a a half later that the Q There was a 000 100 FT commission on 10 11 12 barters never received A Yes 13 14 15 16 17 18 19 20 21 Q There was 000 FT 25 proctors org each 13 14 15 16 17 18 19 20 21 22 23 24 25 150 training program and were asking me questions And it was that indeed they got the money back and claimed me in their case And they received the money so I believe if you request those legal papers from Provost you will see an amount A You reading from Susan Dones Q I am reading from the letter Next to are the claim made and you will of money paid to them see there was line item it says A It an e that came out of my account s mail but the letter is signed by nine women And within that description there is an amount owed you to and who it is owed to be more So mjust I are precise with what you asking asking me t Q I take it you don have the paper documents do you yourself A No because they have them Q And you are demanding commissions on barter never received Do you have any pieces of paper that support that A I have documentation of all of them 22 23 24 25 Your letter says 25 and under the 000 Barbara Bouchey What is that for heading Q Q t A I don know Do you and I can tell you mean show it to me A No And you didn attach it to your letter t Nancy Salzman has received an Excel 152 spreadsheet 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Offering A No So just so that you know this is not an s original document this is a copy It not 1 2 3 4 5 6 Q Why is it a round number of 100 000 amounts of money were for A It 150 and I rounded it down to s 000 000 100 Some ofthe exactly making as the letter was so s that why it not s s it not services that weren rendered t So instead of which was much sense to me because precise or going knew and searching that I decided on an amount that I was collected a safe accurate an amount Q So sum you are not with that asking description for the 25 000 or a 7 8 less than they owed It was number A Not personally but Ibelieve it s that Susan Dories and Kim Wolhouse possible was 9 10 11 When you put in the demand you didn want t to get specific because you didn want to do t Q nickel and ing dime is that correct no Q You are was A That asking for Angela Ucci a person who a for five thousand A The way you said it did 12 13 14 15 16 Mr PILLEMER Objection misstates the training Do This is see would like to copy of a document Ifyou the original Q you today A Indicating have documents you brought with you testimony Q The next question you demanded of approximately 5 I take it it s 000 documented in a commissio writing personal demand It was This is the loan to Keith 17 18 a note or A It was not my Raniere for commodities trading losses Q I assume that something A No He was documented with 19 20 21 22 23 Angela Q This sfor head trainee Ucci is in the letter that you sent Is it was my many spouses draw up loan documents t boyfriend I don know how draw up legal documents when they correct to say that Included in the following we to this letter by 11 59 are requesting response m pSaturday A Yes April 25 2009 written signed notarized Q The demand for case I take it Nxivm legal retainer was responsible a in the Losee for that and 151 1 n 1 24 25 Q We are requesting contract between for the below amount 59 by 11 153 11 39 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 April 29 A Yes 2009 1 2 recipient A is that correct No s it not true see Q We are requesting a cashiers check for the 2009 3 4 5 6 7 Q Did Susan Dones the letter before it amount of 088 000 2 by Thursday April 30 went out is that correct A Yes Is it correct to say that you said that If these requests are not met we will move forward b A So I m clear was on signed by nine question this letter people Those nine people your Q include Susan Dones letter So all nine of us wrote the it It 8 9 10 11 All nine of us put our names on contacting A Yes the press just mail account happened to be on my e MR CROCKETT Move to strike It not s Is it correct to say that you followed through with that threat and contacted the Q press 12 13 A No responsive Q I am trying to determine whether other people physically eyeballed this letter A Nine Q Q use a You didn contact the t press 14 A No Was it your intent in sending this letter to the threat of contacting the press to extract MR PILLEMER 15 16 17 18 Q it Were there any other persons other than who possible lawyers was eyeballed the letter before mailed financial settlement A No Objection question can Misstates 19 20 21 Q So prior testimony Q the You Assumes facts not in evidence the refuse to this letter the other persons who physically saw were Susan Dones Angel Ucci Kim Nina Cowel can answer MR GREEN Or you answer 22 Wolhouse Sheila Cote Kathy Ethier Jan Hiem Ellen Gibson A Yes question WITNESS I refuse You are 23 24 25 154 Q Did each of them agree that this letter 156 Q pleading the Fifth Amendment should go out 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A I don know what I am t MR GREEN Yes pleading 1 2 3 4 5 6 7 8 9 see A Yes Q did Q Did you draft this letter MR PILLEMER Violation of a lawyer help one Did any ofthem ever tell you there were of the nine ever tell you Once the client attorney privilege Q It is not protected You can answer or do you plead the Fifth Amendment What is your answer Do you A Yes letter goes out Nxivm will be with us A I believe so yes pressured to settle Q Who said that A I think plead the fifth Did any persons other than a lawyer draft of this letter before it was sent out Q the 10 11 12 Q Washington A Yes we all felt that way What is Tacoma Center Is that someplace in A No Q Well you their A Are you have some names It looks like 13 14 Q The letter says We are requesting the closure of outstanding value exchanges there may be something missing here We are requesting the closure of outstanding value exchanges not met as signatures saying is one ofthose people an 15 16 attorney or well as the buyout for Tacoma Center for the Q asking draft I am not saying that at all All Iam 17 saw people not mentioned in the letter Do you is if someone other than a let me back lawyer this 18 19 20 21 22 23 24 25 remember A Yes stating that A Nine women mailed this draft up You e wrote it I saw the letter Q Therefore we were requesting closure of as Q Q You e mailed this letter correct outstanding buyout value exchanges not met well as the A Yes You mail probably have on your current e ofthe letter being sent to various copies 155 ofthe Taconic Center for the people mentioned below What does that mean A Itpretty s account straightforward exchange is and 157 people before you sent it to the ultimate Q I don know what a value t 40 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 Taconic Center or buyout 1 2 3 are revenue stream almost like an annuity and pension 3 4 agreement that he to pay all the money That is an promised exchange As far as the commission there an A Keith and I had 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 that the company would value Should someone want to retire or leave the company would pay for the market value ofthat 5 6 7 8 9 minutes ofthe executive board meetings that Q that It sounds like what you are some stipulate is based that barters and services the commission on Nxivm adherents created the Tacoma exchange So there was a service provided to those people Iprovided an That is value regarding telling me is something of Center and they should the service when I enrolled them and there are 10 11 12 pay for it First of all the person referred to this kind of person came up with knowledge I called him A an commissions due me That is an exchange Angela did admission and training She is due head trainer fees created That is an adherent was Nancy Salzman President Keith with lot of was exchange Susan and Kim founder I call them a person 13 14 15 years a center that had close to 100 students and there were renewable membership fees as over the and power with the company and their word is considered very authoritative It came authority well as ongoing fees generated within the from them 16 17 18 19 20 21 payment for services as well as having developed 40 coaches and trainees that Nxivm had available to their labor force Q buy m not I talking about Keith and Nancy a What is your demand for the Tacoma Center that someon it out that someone of a So we used accounting lower rank Nxivm methods to calculate the value of that Q Is it really so bad to be a A In the context ofhow this suppressive organization uses can adherent receive money for something ofvalue that they created in connection with the Tacoma Center Is that your demand A I guess if you consider guess the answer to the 22 23 24 that word it is the worst label that you a call an adherent someone person who is of a lower rank than Keith and Nancy I Q Am I suppressive 158 24 25 25 A No Q So you question is yes sent that letter hoping that Nxivm 160 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q What is a A Someone with suppressive no conscience 1 would who is crazy 2 3 4 5 6 7 8 who likes to do bad acts and gets enjoyment out of it It based on the curriculum model s s the center A Yes cough up cash right to pay people with regard to Q Would improper sexual behavior lead to being called suppressive in your organization MR PILLEMER Objection lacks never foundation A No We have had that conversation Q Had you ever seen that done in the Nxivm organization where Nxivm had coughed up cash someone that developed some sort of regional center someplace A No Do you want to know why or do you just want to ask fo 9 10 11 12 13 14 Q Why Center did Nxivm have to buy out the Tacoma Q No I don t A I think in the business world and standard of a normal business that there is for a A I know you don t Q Move to strike Sorry A No need to market value apologize something Who that is traded it When you asked it be Nxivm to appear in Q Now we talked about the million dollar Q out opened bought 15 16 payment to Frank Parlato Do you remember that testimony A Yes A There are no contracts at 17 18 Q It must have been important Q for Do you know what that million dollars on was your letter to demand a buyout Who was going to 19 pay for the buyout and who was going to be bought 20 out A It has been talked about on A Based my conversation with Keith it was 21 to pay him to go over and spearhead the project was forums and 22 23 24 25 159 tapes You can also Keith and someone subpoena a Nancy at Nxivm by A fielder salesperson creates an those from Nxivm Did you ever see the loan document that created for that million dollars Q A No not that I know of who creates center ongoing Q Did you know that it was 161 41 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 A It was not considered a loan by the way 1 2 3 4 Q You never saw a million dollar was a agreement and many people on the executive board that all felt as though this was information that they t didn want to share with where the million dollars loan to be secured against secured One Niagara a loan me just Keith but Keith anybody So plus the president it wasn t ofhis t A Idon know about I know he told and it Frank was being going 5 to be 6 7 8 9 10 11 12 13 14 15 16 17 18 paid a million dollars up front to take on the project And I only saw correspondence within my office to pay that million dollars to him I t don know about whatever deal he and Frank or the came up with when you had these discussions with Q Now Keith Raniere about the million dollars you were company plus t Q Didn you think it was wrong to conceal your relationship with Keith Raniere from the Bronfmans while the executive board members dealing with such on large sums of 9 10 11 12 13 14 money involving A I didn know whether it t 1 was in conflict about it for as the Bronfmans was a the other hand Bronfmans right or wrong long time as far t my relationship with Keith but I didn think with Keith was a that concealing my relationship wrong to the Bronfmans Q You were conflicted with it A Within secrets the ones that actually arranged correct for the wiring of 15 16 17 18 the million A No dollars myself personally Idon like t Q A Who did Becky Freeman She was 19 20 21 22 23 24 Q Q in your organization correct 19 20 21 t And you didn like keeping this secret from the Bronfmans Q A Yes Before you sent the million dollars out to A That correct s Frank Parlato you knew this was Bronfmans account correct A Yes Did you tell the coming from the 22 23 24 Q Eventually when the Bronfmans decided to part ways with you they were angry and expressed anger with you over of the fact that you had been sleeping with Keith Raniere and did not tell them A That is not correct 25 Q Bronfmans before you had 162 25 t They didn say that 164 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 them part with that that you were sleeping with 1 2 3 Keith A No t you didn to tell the Bronfmans that as to Where did you get that from nor did I They t didn say that Q you I guess I m curious why 4 5 6 7 8 9 10 11 12 13 14 15 Q Is it correct to say that you had no independent will when you were dealing Raniere Mr PILLEMER with Keit think it was were important sleeping with Keith Objection testimony It misstates A Because Keith didn want anyone to know who t prior testimony Q Regardless stands on Lacks foundation of prior the testimony sleeping with except the sleeping with nor did Nancy he was woman he was his own Q You had to determine ethics when independent thoughts or ability right from wrong about ethics or non dealing with Keith Raniere no will when dealing the sexual stuff Did you have no independent with Keith Raniere in terms of A I had independent will MR PILLEMER misstates her evidence Objection assumes That facts not in Q will Do psychics help you with your independent on testimony and MR PILLEMER Objection can based Q You can answer In addition to sleeping 16 17 privacy and nothing that lead to discovery of with Keith Raniere and talking about the admissible evidence in this MR GREEN You case can answer Bronfmans investments with them and you were the 18 19 one that sent the money out of the accounts what m hearing is that the I the question you Q What is the answer Do psychics help only reason disclose your sexual relationship Raniere is that he didn want it disclosed t correct A t you didn with Keith 20 21 22 23 make your decisions t A Idon know I think that everything helps information to make decisions Information is Q you If we were to we Well the more accurate answer is that there 24 25 163 Petro would were listen to the tapes with Mr hear comments upon the fact that relations with Keith Raniere 165 were a group of women including Nancy Salzman having 42 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 A Yes 1 on for the commodities correct A Yes relationship with Yuri Plyam Q Maybe the same tape in which you were 2 3 4 5 6 7 8 o 3 4 5 6 7 8 9 discussing the Bronfmans A Possibly Q Why were you willing to raise such matters with a psychic but not with the Bronfmans MR PILLEMER Objection invasion of privacy Lacks foundation A Because Keith and Nancy and many members the executive board for years told me and others that it was not wise to do so that Keith believed what we do in our Q A You No are the one who instigated that Keith did And I went and found the commodities trade firm Q You felt he was acting on behalf of the Bronfmans A There were two 9 10 11 12 13 14 15 16 17 18 19 20 21 commodities Which one are 10 11 you referring to 12 13 private lives including sexual t content didn need to be shared with other 14 people And we believed him 15 Q So you relied upon what a non client told 16 17 With the Bronfmans money The first time the Bronfmans money went in Keith Raniere spok to you about that did he Q A No Q How were you the the one is it correct to the decision to you in to your 18 19 20 21 22 23 24 25 making decisions about making disclosures paying clients is that correct MR PILLEMER Objection Lacks say that you A No were one making hook the Bronfmans up with Yuri Plyam foundation A No Q Keith never told you to hook the Bronfmans Q s not correct It up with Yuri A No A It not the only s thing that factored into in what you 166 22 23 Q the But a while before years before you were my decision t Q It wasn a factor at your non one who located Yuri and connected him up wit all fact 24 25 Keith Raniere is that correct A That correct s 168 client organization was telling 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Nxivm had no relationship or effect at all upon 1 2 3 4 5 6 7 Q And so did it seem to you that Keith a your decision not to disclose your relationship with the Bronfmans MR PILLEMER foundation Raniere asked you to look into commodities broker correct A He asked me to find one Objection Lacks Q t You found one correct You weren a Q Q You can answer commodities broker A No right t A I don know You are licensed to trade securities 8 9 10 Q Q You couldn trade in commodities correct t But clients often come to you with correct A Yes A Correct Q Can an he call up t A I don believe ordinary person sell securities Can the stock exchange and an order place so 11 12 13 14 things expertise and you accommodate by pointing them to the right person correct not within your A Yes them Q Q What does it take a licensed Q in the I and A You have to go through I would have to correct use someone person like you 15 16 17 A I don make recommendations I t area making recommendations point them If I am not proficient in that area 18 A Or you can go in and trade on Charles needs to be licensed 19 Schwab but someone somewhere that takes the order 20 21 22 23 24 were might refer them Q So like for instance when the Bronfmans were talking about getting a loan for their Precision Development properties you recommended to them a A No Q As a advising A Yes CFP you receive training on not only clients on stock trades but on other mortgage broker correct matters such as life insurance correct Q A mortgage lender t No I didn They had A an Q In this case you the one who arranged 167 25 relationship with Citibank and existing they asked me to go 169 43 MERRILL 0277 826 800 LEGAL Fax SOLUTIONS 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with them to Citibank to loan help them negotiate help for a 1 2 search of a commodities person I found a few I s interviewed them And I said to Keith Here t don you give him a call And Keith s called him That it plain and simple one Q So one negotiate of the things you do is for loans 3 4 5 6 Why A I had never done that for any other client financial Q By reason of that relationship with Yuri and They were the first Q They came to you knowing advisor A you are a 7 8 Keith it appears to you later that Yuri started trading First Principal money is that correct s MR PILLEMER Objection Misstates the They came asking me to help it right Keith Raniere to Yuri you in 9 10 11 prior testimony A Are you Q Q like A And you did talking about the original time or A Yes When you pointed 12 13 14 15 16 17 18 19 20 21 22 23 zipping a few years into the future Q You came to know in a few years that Yuri Plyam became the commodities broker for Principal organization correct A Yes And you understood at the time that the monies to place the trades in First Principal came the Firs were relying upon your expertise that correct finding people t Actually I don have an expertise in finding people like that And I relied on a staff member to do research on Q it and we found a few and researched them and chose Yuri Q So Keith Raniere relied upon your staffs expertise and you found someone to engage in commodities training correct A No from your own clients the Bronfmans correct A Yes Ibecame aware that they were giving Keith money to cover the losses Q You understood the total number of wires was that went into the commodities trades Q I guess what I am hearing from you is that Keith Raniere is the one who found Yuri Plyam s he the one who came to something A Yes more than 60 million correct an 2 4 2 5 you and said he wanted to 170 Q And you understand that they lost all of 172 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 do commodities A The word training with him rely is your word that own me to 1 that were correct a loan you use 2 3 4 5 6 A Iunderstand that there was that they Keith Raniere makes his independent thinking one giving to Keith and Nancy and that Keith and thoughts so he asked locate And he to work Nancy then lost it turned around with that money and they was spoke to Yuri and he decided he wanted with that account Q You understood at the time that money Q Now before Keith Raniere came to you and 7 8 9 10 11 12 13 14 asked you for advice pertaining to commodities brokering did you think that he had any prior going in the form of a loan to Keith and Nancy of First Principals correct and that your firm was the one facilitating the movement ofthe money from the Bronfmans accounts to Keith and Nancy and First Principals correct A We followed instructions to send the money where experience trading commodities A He told me he didn t on Q So your expertise right MR PILLEMER Objection Misstates the he relied someone they wanted it to go testimony A I got through someone in came to the office 15 16 17 18 19 20 21 22 23 24 25 171 and he found someone Q So Can you assume when Keith Raniere help you and said me find a commodities broker I As you were moving that ever sum increasing of money in First Principal which Keith and Nancy headed up did you at any time tell the Bronfmans m sleeping with Keith Oh by the way I MR PILLEMER That assumes facts not in Q t t you said Ican Idon have t Don ask me to do that expertise s A That not what I said you did what he asked A It might be nicer to say exactly what you s are talking about That not exactly what I evidence to It is irrelevant and not likely to lead discovery ofadmissible evidence Q The investments in the commodities market was Q So that done in your name A The first time yes Q When it was done were you acting as a front 173 25 said Let me repeat it again to you I went in for other people 44 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 A What do you mean 1 Q Were other people just using your specific were name to 2 3 4 5 6 7 8 9 10 11 12 13 14 15 invest money more 3 4 Q Do you know there is an advisory opinion that you are prohibited from loans from clients A I told you I researched it at the time and it was not out A You need to be of compliance I not my even called my Q The losses that you incurred they all 5 6 attorney about it your losses in my name and any losses in the account were losses pertaining to incurred A The account was Q That was 7 A You are asking me 8 9 10 t haven read what you question t something I don know I t are speaking ofand I don that there is an my name and my account in your you money to invest have it fresh in my mind Did anyone give name in that account Q Q Do you know today advisory board 11 12 13 A No opinion prohibiting designees and their loans between clients CFPs Q Q t You didn invest for Michael Sutton MR PILLEMER foundation and calls for a A No It was all your are 14 Objection Lacks legal conclusion or 16 17 A You money not being precise with was 15 MR GREEN Yes A I guess no saying were this The account 18 19 losses in the borrowed money account how you are in my name and there We then went and 16 17 18 sitting here right now no My understanding is that there is something about that t but it not black and white I don know s the exact 19 20 20 21 22 Q From who knew that there specifics of it But at that time was something like that was I and 1 A Noelle Sutton Nielsen Kristen Carey client and Michael 21 22 researched it and got counsel and told that 23 24 25 Q Michael Sutton was a 23 the way I did it was not against whatever it was at that time that was written Because Iwas t concerned about it I wasn going did exist to do it if it A I don know that he t was a client t Idon 174 24 25 believe he was I do believe that Michael Sutton t At that time it didn exist in the 176 1 2 3 4 5 6 had an account with his name as on it And if Keith sure 1 2 3 4 fashion that would cause me to be not in was my traded with him well m not I if he did compliance strike that And Christine Carey cousin 1 think he did around that time some I know he did at MR CROCKETT I guess we will move to point people who you a loan were any invested with of those your Q Did any of these 5 6 7 8 9 1 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you or gave clients A Yes Q When you were having discussions with David Pillemer last night do you remember anybody taking notes A I think Natasha had remember if she a notebook but I can t I had a Q Which ones actually was wrote in it to write A Both Kristen Carey and Noelle Neilsen were 10 11 12 piece of paper I going on but I Q Did you tell them that you with Keith Raniere Mr PILLEMER not sleeping Objection irrelevant and 13 14 15 likely to lead to discovery of admissible yes t anything So I wouldn say so Q At some point in time you testified to the fact that you became aware of the possible real estate development involving Yuri Plyam in t didn write California A Yes Do you know of any expertise that Sara and Clare Bronfman have in high luxury home end evidence A Actually Christine 16 17 18 Q Q before she made the loans Q A Yes How about the other persons your 19 2 0 21 22 23 24 25 175 development in California A No A No Q Do you know there is a rule that guides profession that prohibits commingling your investments with others and I researched it And the way it was handled was not out of compliance A Q Do they have any known expertise in commodities A No trading correct to say that the Yes Q So is it relationship with Yuri when it came to 177 45 MERRILL 1 LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 1 2 commodities and the luxury home California that all sprung from development your pointing in 1 2 sin the middle MR PILLEMER When she of answering a question in the middle of the 3 4 5 6 7 8 9 10 11 12 13 14 15 Keith Raniere to Yuri Plyam Objection misstatement lacks foundation assumes incomplete hypothetical MR PILLEMER facts not in evidence s MR GREEN It a yes or no Let me reask the question Is it correct to 3 4 5 answer you said move to strike and went to the next question And she jumped in Q any or 6 7 8 Is it correct to say that you have never had discussions with Yuri Plyam or Natalia Plya Q to any Precision Development person prior 2008 about the subject ofthe January 1 9 the commodities say that not only was Yuri Plyam 10 broker but he was also the real estate developer 11 in correct Quickbooks file MR correct PILLEMER Objection California A Yes 12 13 14 A Do you want me to answer that question I t t didn ask for Quickbooks they didn have it MR CROCKETT Move to strike Q Is it also fair to say to say that neither ofthose two things would have happened had you not pointed Keith to Yuri for 15 16 17 16 17 MR PILLEMER speculation lacks Objection Calls function incomplete 18 19 20 21 22 23 24 hypothetical Q Q You How could she know what would or 18 19 20 bookkeeping files They Quickbooks They Move to strike The question is really Q simple Do you ever remember using the word Quickbooks with the Plyams A I asked them for t didn have it t didn have would not have happened why s it refuse to A Yes when Can you let me can answer Q A finish t A No I don even know Just tell me 21 22 23 Okay 1 Just answer or answer Do you remember ever using the word Quickbooks with the Plyams prior to January Q MR GREEN t A I don know t Or say you don know 178 24 2008 A Yes 180 25 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Do you know of any expertise that Nancy has in high luxury home development in California end A No 1 2 3 4 5 6 7 8 9 10 11 12 Do you know of any expertise Keith Raniere has in high luxury home development in end Q Q All right And then earlier your testimony being that when you had a discussion with them about Quickbooks they said No we kee our books in an Excel spreadsheet correct A Yes You said you never got a copy of those correct It sounds to me that you were the one California A No You indicated to me or to Mr Pillemer that Q Q that was entrusted with not his Quickbooks file for you asked Yuri Plyam for Precision Development Do you remember that A To be more they said that they had Bronfmans money to Yuri following the expenses associated with the only wiring the but monitoring and specific investments correct MR PILLEMER an Excel spreadsheet They had as not Objection Misstates MR CROCKETT Move to strike 13 14 15 16 17 18 19 20 21 prior testimony A responsive Do you remember testifying previously that asked them for their Quickbooks file you A No that is not accurate No s it not correct Q Q Can you explain to me why you would have the an interest at all in trying to determine their accounting m sorry I in determining Q You used the word Quickbooks in discussing your request A You are not when costs associated with the project coming A There a history with the Bronfmans mail s and all being precise Let her finish her Q Let me finish MR PILLEMER answer through to 22 23 so that my office And I was requesting I could forward it on to them not oversee it not correspondence and communications supervise it on to not monitor it Q me I don have to t stop and let her interrupt 179 24 25 it them because things would It was to post come in and to them we would open up the mail and send it 181 46 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 a Q So you played a fiduciary role A It not a fiduciary role s MR CROCKETT Let Imove to strike Is it correct to say you played a fiduciary role with them in following and monitoring their me 1 2 3 continue please 4 5 6 7 t why don you define it and answer the question Q Do you perceive yourself as a fiduciary when you are a CFP giving financial advice to clients on the definition so I will Q A Yes Q Do you know the investments in Precision MR PILLEMER meaning of the term Development Objection It calls for 8 9 10 11 fiduciary A Why don you t define it for me legal conclusion an on the part of this witness Assumes facts and is incomplete hypothetical Q No Do you know the A I already defined it MR CROCKETT meaning ofthe term not in evidence Move to strike as not Q So when you transferred the wires to Precision Development amounting to 26 million so I guess that was correct A Correct 12 o responsive Do you know the meaning of A I have already said yes Q Using your definition of 13 14 15 16 Q fiduciary fiduciary non is that fiduciary Q is Do you really understand what a fiduciary I to 17 whatever that may be in your head do you believ that you were a fiduciary in handling the tens of millions in cash that First Principals a or was 18 transmitted to either A In the context that you are was just following instructions me describing 19 20 21 Yuri Plyam Fiduciary MR PILLEMER Objection It calls for represents that you give aid advice or recommendation and oversee some kind of activities legal conclusion on the part of this witness and the answer 22 23 lacks foundation A Based no on my definition would be Q You don think t a fiduciary includes a 24 person who handles someone s else bank accounts 182 25 Q In connection with the role you played in 184 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and cash A There is a 1 the transmission of cash you difference in handling it and 2 3 they held A Yes various stock liquidated positions positions recommending Q Will you strike MR PILLEMER Do you think She did answer the question Imove to 4 5 6 7 8 9 10 11 12 13 a fiduciary includes one Q handling transmitting cash of a client A Based on my definition no There is a fiduciary responsibility between activity transactions and recommending and supervising So which fiduciary responsibility are you t Q Essentially you weren a fiduciary I what is required is a trading execution executed by the Bronfmans to do that right A What do you mean by trading execution Q To liquidate their positions to come up with such cash to transmit to the Plyams since you t weren a fiduciary it required one of the assume Bronfmans to execute the trade and send those trade instructions in referring to as not writing eventually correct to a registered dealer in securities to be MR CROCKETT Move to strike 14 A No That wouldn be correct Ihave t t don need it in funds from need a a I responsive We will try again Q Do you believe that you were fiduciary when 15 acting as a 16 17 18 19 20 21 22 able writing liquidate Ionly client in connection with to you were handling tens of millions of dollars of money and transmitting it to either First Principals or to Yuri Plyam A When Iam verbal request transmitting it answer if that means s Q When you liquidated let say in the latter part of 2007 September to December of 2007 when you made changes in their position did you consult the Bronfmans on fiduciary then the is yes s Q Do you think it a fiduciary responsibility I am not asking you to riddle games with me A You know what You and I are not play 23 24 liquidation decision you made money to Yuri MR PILLEMER each and every so you could send was not sent to Money agreeing 183 25 Yuri it was sent to Precision Development 185 47 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Okay answer to Precision Development And you can 1 2 MR GREEN I you mind forgot the question was Do A Not on every one no because there was already authority given to me to release a certain amount ofmonies to Yuri 3 4 5 restating it The previous question 187 line 13 read Page A I sent them money whenever to they requested me never an Q What kind of authority was that How could a 6 7 not be you have that authority and Can you explain that to me fiduciary are 8 9 And when you did that you Bronfmans that you were having Q told the affair with A Look I am I said your and my definitions Keith Raniere correct different 10 11 12 can A No When you were sending money off to Yuri Plyam and liquidating their stock positions Q A My using yours definition of fiduciary is s question Explain to me how it can be liquidating stock Q Q You don have to restate it You t the 13 14 15 liquidating stock positions ofthe Bronfmans in answer possible positions that you connection with your position do you feel that you were a fiduciary in doing so ofthe Bronfmans with the were authority a that 16 17 18 19 20 21 you have and you given and not be fiduciary sthe definition of fiduciary A Ifthat Again she was sending to Precision Development not to the Plyams A I acted with what was my responsibility to MR PILLEMER follow the instructions MR CROCKETT think the is I move to it Q got a problem It s not my definition Keep in mind I have strike I Bronfmans Ihave with the way you handled the got a major problem You are 22 23 24 25 conspirator agitated with the Plyams Please note in the record that Mrs Plyam it getting awfully 186 question specifically were liquidating the Bronfinans accounts and sending money off to Precision Development ru by Yuri Plyam in connection with Precision Development did you feel that you were a fiduciary when you Did you feel 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MS PLYAM I AI m sorry The am laughing is 1 2 3 4 5 as in doing so question Q All right So my specific question is Using your definition of fiduciary do you think with the your definition of fiduciary comports that are expected of you fiduciary requirements a A In this context yes Q Did you perceive MR GREEN Did you answer THE WITNESS Yes 6 7 Q Hold on You have been asked the same professional MR PILLEMER question and you have answered it differently Objection It calls for 8 9 10 11 12 13 14 15 16 17 18 a legal conclusion on the part of this witness and lacks foundation and assumes facts not in Were you acting as a fiduciary m not A In my definition no I or evidence A Yes Q So were were never a liquidating you continue to hold the view that you fiduciary for the Bronfmans when yo their stock positions and sending correct on how acting with advising and fiduciary responsibilities where the money goes I am simply supervising following instructions in sending it where the where they want me to put it money MR GREEN She has answered Did you act Bronfmans Q as a fiduciary for the the money off to Keith Raniere at First Principals Q A In selecting an assets allocation model of A It depend I am using you define it definition You told your me 19 20 21 22 23 the trust company yes Q Did you act as a fiduciary for the Bronfmans in your definition is consistent with the definition that fits your profession I have no clue what a placing trades for them MR PILLEMER vague and Objection overbroad fiduciary is A I already Iam you answered the question asking Q Answer the question please answer the 187 24 25 question again objection to the words ambiguous trades placing Q Registered securities did you act as a fiduciary in placing registered securities 189 48 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 A Ididn place trades t 1 when providing financial planning 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q Did you act as a fiduciary in the trades to a trading house A Based answer over on communicating 2 3 4 5 6 7 8 9 10 A Yes Would you agree that the definition of fiduciary is One who acts with utmost effect Q is no my definition of fiduciary the I have no discretionary authority A Yes t meaning I don choose investments m not only time if I mistaken that you were ever a fiduciary in your own mind for the accounts The Q Q cannot engage in Would you agree that a fiduciary is one that misleading communications with their clients A Yes Would you agree that a fiduciary must provide full and fair disclosure of all material Bronfmans is when you were allocation model for them which model or you creating this asset Q A Yes and if Imade recommendation or on 11 12 know how to diversify the facts including A Yes conflicts of interest on portfolio Q So the we 13 have dozens of a mails from you to asking for information asking for 14 Based were that definition with yes correct Q You didn see it t as a conflict ofinterest Plyams spreadsheets 15 16 17 that you A No sleeping Keith A That not true s mails to Q You have many a the Plyams for information asking for spreadsheets A No It came from you or your employees correct mails asking A I am not aware of sending a MR PILLEMER Objection calls for a asking 18 19 20 21 22 23 24 legal Q that conclusion You didn see it t as a 19 20 21 22 23 24 25 conflict of interest Q well did you warn the Bronfmans about their investment in First Principal A No them for from Yuri about m aware of a to me mails spreadsheets I spreadsheets that we forwarded on t Q You don recall Becky Freeman questionin 19 25 Q You warned Keith according to your testimony correct A It depends on what do you mean by warn 192 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the expenses the expense for additional wires A To whom 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Q You took exception Principals A Yes to the investment in First Q The Bronfmans to Yuri or Natalia A It possible I s m not aware ofthat A Yes Q So you are not aware of the fact that Rebecca Freeman was asking for justification for continuing requests A I don know I t when they for Q You know the money for First Principals was being fueled by cash coming from the Bronfmans A Yes wires is that correct mean I know that we asked Q Explain instead to me might need the money no communicate that t exactly why it is you didn to the Bronfmans and warning Q swhat I That m looking for I am asking or whether you know today Yes A I t don know is correct you communicated it to your boyfriend t don know that Ididn communicate it to t AI the Bronfmans t Q You just told me you didn t A You didn ask me that question Q Do you know today that at some time in the mails the past Becky was asking by a Plyams for justification for particular wire requests A The answer would have to be no because I Q Did you communicate warnings on the Principals investment to the Bronfmans A Ibelieve that I First t don know that she asked them to answer justify So the expressed a my displeasure means t would be no It doesn mean that she If you want to call that yes warning that t didn Q Are you aware of the fact that your CFP a Q Approximately when and where and in was board standards have the word A No particular definition for fiduciary approximately expressed A Probably 2006 Q And to whom what year this warning Q Would one you agree that the term fiduciary is who puts the client sbest interests first 191 was the A A number of people warning presented Becky Keith Nancy 193 49 MERRILL 0277 826 800 LEGAL Fax SOLUTIONS 2300 593 818 2301 593 818 com merrillcorp www i 1 2 3 4 5 6 7 8 Pam the Bronfmans Kristen 1 Q So First is it your testimony that you your recall 2 3 4 5 6 you expressed your displeasure with Precision was Keith Raniere A Yes respect to specifically disclosing correct A Yes displeasure with the investment to the Bronfmans Principals Q Q A It was long before December of 2008 A No How long before 12 was it 08 same Q Now the losses did this warning come before or after 7 Probably around the time 8 9 10 11 12 9 10 11 12 13 14 15 A Probably after t Isn it easy to cry fire when the ship is t burning rather than wouldn a fiduciary want Q Why would you tell Keith Raniere about you displeasure with Precision Development before Q telling your own clients A Because I saw he was in charge of it sleeping to cry fire when the or gasoline spills lit on the deck Q So with as when the match was 13 or no you saw one guy that you were in charge of your real clients correct MR GREEN Answer yes A Yes You waited to express your after the losses were mounting 14 15 investment A Yes 16 17 18 19 20 21 22 23 24 Q displeasure until 16 Q Q And you didn see that t All as a conflict 17 18 19 20 21 22 23 A No A Yes right stake Let a five minute break awhile testimony you displeasure with the commodities expressed your investment long before that time with Keith Raniere A Yes Q IfI understand your We have been going on for in these ever see Recess taken Q Ms Bouchey coaching sessions with Mr Petro did you A Yes him go into trances when you would ask him questions time correct 196 25 24 Q IfI understand your testimony right you had concerns and fears about the investments that 25 194 Q Usually most of the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the Bronfmans making in the Precision Development investments correct were 1 2 3 4 5 6 7 8 9 A No A Yes I assume you then went to the Bronfmans and told them Hey don do this This is a t Q Was he ever in questions about the A Yes when you asked him Bronfmans a trance Q Q him And was he problem A I did that in December of 2008 yes questions ever in a trance when you asked about market conditions MR PILLEMER Objection assumes It misstates Q it In December of 2008 you know that would pu prior testimony and evidence A No also facts not in A No 2007 I will correct Q just a few days investigate A Yes 2007 would put it like myself just three days 10 or 11 12 13 14 Q You didn ask him about stock market t before Frank Parlato was sent to options A No Q Stock bids Q You were Parlota to A No part of the investigate was decision to send Frank 15 16 17 A No Q So if we get the tapes I would the imagine about money s there nothing A Be on tapes talking Q You knew he going out there 18 19 that the Bronfmans more A No specific Q Is it fair to say you expressed displeasure over A Let me correct your 20 21 22 23 24 25 195 that I believe the answer Is it correct to say if I were to have someone go through the tapes they would be very like unlikely to find any trance discussions where Q to that is yes I think Keith told me Frank Parlato was going out there discussions about the you are talking about Bronfmans investments in anything A I think it would be fair to say there is 197 Q Is it correct to say that the first person 50 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not in that context 1 2 Q So you had coaching sessions with him outside of trances A Yes 3 4 I guess my specific question is If we were subpoena your business records just for checks or ledger entries showing payments made to Q to psychics A No would we find psychics other than Petro Q How would you break it down in terms percentages IfI were to listen to the tapes would it involve asking questions while he is trance and how much of 5 6 in a 7 8 When you met with him did you have discussions about the Bronfmans Q involved normal sessions was not A No A My time with him all taped was not on 9 10 11 12 13 on Q all IfI were to listen to the tapes tape the Q In 2007 what percentage would you say of your business would be attributable to the Bronfmans in terms of gross revenues A Maybe 35 percent maybe thirty percent A Iam on telling tape am you my time with him Ipaid for time that was not and paid I for time that was Q just focusing ofwhat might be 14 sall I have IfI were to tapes because that listen to the tapes would I expect most of it to be counseling sessions or in a trance A Yes On the tapes 15 16 17 Q How much would you say you have obtained from them in terms offees over the course of your relationship Millions of dollars A I would say about a million Q One million dollars A Correct Q Q Am Icorrect that mostly trances coaching comes through 18 19 20 21 22 23 Q And summer did you go to a psychic conference last A Yes Have you had other psychics that you have paid in the past five years A Yes t A I don remember You don remember whether t you attended conference psychic Q a Q Have you discussed the Bronfmans with them 24 25 198 A No A A psychic workshop conferences Q A psychic involving psychics 200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 psychics Objection Relevance invasion ofprivacy lacks foundation incomplete hypothetical Q There is no hypothetical You can answer are Q And who these 1 2 3 4 5 6 last summer A No Mr PILLEMER Is it correct to say that you once gave a presentation in which you boasted that you were Q so A There isn t efficient that you were able to reduce your office hours from fifty or sixty per week to four A I may have said that Q You can think of a t single other psychic 7 8 9 10 11 12 13 you have used A It depends on how you define psychic s It my girlfriend the psychic knowing what food was Q And A Yes was that a true statement when made I believe I said that that reduced the hours going to You taste Q really in your belly think that is a psychic good Q Q From 50 or 60 or 70 a week to no four A In a context like You never that depends Q So you are charged for their services offering psychological aid right A Yes A It said that no for 14 15 16 17 18 19 A Not in those words Q What work three a words did you use A I said when I first joined ESP I was able to Q Are there others that you have used within the last five years A Yes Q A Who are they 20 21 22 23 24 25 199 days a week After I was with ESP for couple of years I was down to working ten or fifteen hours per week And after that I could do it within four hours So it didn go from 50 t to 60 down to four t Now I don know some ofthem Like for example walking down the street someone doing a palm reading Do I remember the name no but I tell you the location What I am nothing else like Robert can It was increments Q So at about the time that you separated your ways from the Bronfmans you were only workin saying is four hours a week MR PILLEMER Objection It misstates 201 51 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 prior testimony Q Is that correct A Yes maybe Q relationship At the time that you severed your with the Bronfmans is it correct to 1 2 3 4 5 6 7 no there A Yes I think that I know am responsible am Do I everything responsible not no But I ultimately MR CROCKETT Move to strike It was say that you that correct only worked four hours a week is responsive s It yes I supervise everything MR CROCKETT Move to strike as not A Yes A I wouldn think that is accurate t 8 9 10 11 12 Q How many hours do you think you were working a week at the time you say you severed your relationship with the Bronfmans responsive Q The specific word the statement that Iread more accurate would be have been if I threw in th A Are you you realize saying before or after because do they only left a week ago So is the trying to find out whether you ultimately responsible 13 14 15 16 17 A I am responsible How many weeks vacation did you take in 2008 question Q before or after Q I guess I am were being truthful when you said you are only working four hours a week because you were so t A None I don take check in a s week vacation 1 every day And there work done every s a really true or was this a he that representation when you made MR PILLEMER Objection Misstates testimony and is argumentative prior A There are periods oftime when that statement is true Was it true at that time no Q Is it correct to say that during the period tens of millions of dollars were going to Yuri efficient Is that 18 19 day t for the most part I don take and disappear and go on vacation week off 20 21 22 23 24 25 202 How many days outside of a typical work month in 2008 would you expect that you are at your office Q depends I work from home I dial in I don need to physically be in my office t Q How many employees did you have at the en A It 204 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 6 1 17 18 19 20 21 22 23 24 25 were times when you worked only fou week in your office hours a MR PILLEMER Objection Misstates the Plyam there 1 2 3 4 5 6 7 8 of calendar year 2008 A Five Q Q How many do you have now You gave up your office and work in your testimony that the money went to Yuri Plyam A I would ask you to be more specific with the week or the month You will have to reask the A Two home A Yes you moved your office and question Q No Is it true that all advice and activities in your office are always supervised you and under your direct guidance A Yes Iam Q Explain why move by 9 10 11 ultimately responsible strike it is not it into your home A The stock market reduced gross revenues by 40 to 45 and I thought it was wise to percent MR CROCKETT Move to 12 13 responsive Q A Is this an accurate limit any overhead out of my office And I knew that there was a chance that I was not going to have the Bronfmans decline like as statement 14 15 16 17 18 19 20 21 again right A letter you sent to your clients in disparaging Becky Freeman statements s and arguments stating Any advice decisions or activities regarding your account is always supervised by me and under my guidance Say All it t didn know if the market clients anymore and I to continue to was Q And as a financial going planner it seemed a more prudent thing me to do Can you tell now Q how many clients you have MR PILLEMER Objection give Invasion of A Yes privacy Q A You can answer Q So is that accurate 22 23 24 25 Just me a round A Yes number Q Do you feel it is more accurate if you just throw in the word ultimate or ultimately in 203 Seventy Do you remember I asked you about that 205 Q 52 MERRILL 0277 826 800 2300 593 818 LEGAL Fax SOLUTIONS 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 letter that you sent to the Bronfmans where you asked them for money or you would go to the press Do you remember that letter A No I didn send the letter to the t Bronfinans 1 2 3 4 5 Mr GREENE Can you answer the question A Based that was on the advice of counsel I thought wise Q To Nxivm 6 7 A Yes Q Are you going to produce your copies and your Quickbooks file without me subpoenaing further A Yes Q for money Q Q You sent a letter to Nxivm and asked them 8 9 Q Q and without charging me any money A Isent it to the executive board Do you remember we talked about that A Yes Do the Bronfmans owe 10 11 A Iwill speak to counsel first 12 13 14 15 Did you have an idea of who was going to come up with the two million dollars that would you any money right respond A No to your demand in your letter now A Yes Q A What do they you Bookkeeping fees owe 16 Q You knew most of Nxivm Bronfmans correct A Yes is funded by the 17 18 Q A How much Q You must have figured cough that the Bronfmans up that Bookkeeping I think ten or eleven thousand that you of 19 20 21 were going to have to change right Q Is that for the copying charges A No MR CROCKETT incurred in A No getting documents prepared s It for bookkeeping for the month year 22 23 24 25 206 submit please tapes We are Again Iurge you to that you will preserve those April Q What A 2009 going to request that you produce things that were referred to either by the Bronfmans or by my other client Nancy Salzman 208 them the Del Negro or my other my other client James client Precision Development Would you do that or 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Did you prepare an invoice for the copying 1 2 3 fees incurred in preparing documents for the deposition A I did not no on THE WITNESS Yes 4 Q And hopefully that Q Q Someone your behalf did 5 6 they out you and Ican work it could be surrendered to me or third so A Yes How much was that parties MR CROCKETT Ihave no 7 8 9 10 or further same A About two thousand Q Do you consider that owed as well A To supply the documents yes Q Did you surrender the originals before after you received your subpoena A After Q questions stipulations ofthis witness Imove the as jurat all ofthe other witnesses MR PILLEMER Iagree to that 11 12 13 BY MR PILLEMER Q Let me ask you a question You indicated in 14 Do you think that was wise to do in the face to surrenderwhat was being 15 of a pending subpoena the Center about others your response regarding to being paid for their work and you were going subpoenaed MR PILLEMER 16 something What were you going to add when t Mr Crockett told you he wasn interested in the add rest of your A I sure m not legal conclusion on Objection calls for a the part ofthe witness and 17 18 19 20 response of the question he asked me violates attomeylclient privilege a A Was it wise Q Why you why did Q that Yes I mean I represent are not bunch of people 21 22 23 24 25 207 t your clients Don you think I would want to see those documents MS PILLEMER She is not answer do you know He asked believe that Nxivm should pay for you the Tacoma Center And then you said A Because Keith Raniere and Nancy Salzman over was it written the years have shared with the organization on going to the question create within the many occasions that what we help fee and there would company would have an ongoing 209 53 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www 1 2 3 4 5 6 7 8 9 be a out market value with that and they would buy whatever that market value was assuming normal 1 STATE OF NEW YORK SS 2 3 COUNTY OF ALBANY business accounting methods Thank you This I have MR PILLEMER 4 have s nothing further MR CROCKETT transcript recites by a 6 entitled read heard the transcript in the above matter and do hereby acknowledge it to be true 7 lot of inside information about the business operations of Nxivm I have been instructed 10 11 12 13 14 15 Nxivm representatives to hold this transcript confidential Would you agree with that MR PILLEMER Hold it what does that mean MR CROCKETT In other Treat it as or and accurate except for the additions and 8 confidential 9 corrections herein as noted in the errata sheet enclosed confidential 10 11 12 words it can be shown to any third t Your definition of third party MR PILLEMER 13 14 is 16 17 18 19 BARBARA J BOUCHEY party is my experts Experts included Are you going to be able is a MR CROCKETT MR PILLEMER the 16 17 18 19 20 21 20 21 22 23 experts could be sealed There stipulation on the record okay MR CROCKETT Okay a 24 25 copy MR PILLEMER Thank you MR CROCKETT I am ordering 33 certified 210 24 25 miniscript and a disk Thank you 212 1 2 3 4 5 6 The deposition was concluded 00 m approximately 8 p INDEX TO EXHIBITS Defendant Exhibit S at 1 2 C E R T I F I C A T I ON STATE OF NEW YORK 3 SS COUNTY OF ALBANY 4 Description Time line of disbursements mails e Id 83 s I BETH S GOLDMAN Certified Shorthand 6 7 7 Exhibit 8 9 10 11 12 13 T Subpoena duces tecum 101 8 PRODUCTION Page Line Exhibit 110 Exhibit 112 Exhibit 147 REQUESTS BY COUNSEL Description 24 Document re subpoena 03 Quickbooks re Precision Development 09 Tape recordings re session with psychic 21 9 10 Reporter Registered Professional Reporter and Notary Public in and for the State of New York do hereby certify that BARBARA J BOUCHEY was by me first duly swomto testify to the truth the whole truth and nothing but the truth and that the above deposition pages I through 210 inclusive was recorded stenographically by me and reduced to computer transcription generated 1 FURTHER CERTIFY that the foregoing transcript of the said deposition is a true and correct transcript of the testimony given by the said witness at the time and place specified hereinbefore 11 12 13 14 I or 14 Exhibit 208 15 16 17 18 19 20 21 22 23 24 25 Tape recordings employee FURTHER CERTIFY that I am not a relative or attorney or counsel of any of the or am 15 atto 16 17 or rneyn I interested financially directly indirectly in this action IN WITNESS WHEREOF have hereunto set 1 hand and seal of office at Albany New York 18 19 20 21 my BETH S GOLDMAN Certified Shorthand Reporter 22 Registered Professional Reporter Notary Public 23 24 2s 211 213 54 MERRILL LEGAL Fax SOLUTIONS 0277 826 800 2300 593 818 2301 593 818 com merrillcorp www