Testimony hints at commingled funds between a law firm’s legitimate work and an alleged Ponzi scheme tied to Epstein investors

OoOrArnork WNE had to have Curtis Renie or Bil! actually come into my office, set up a special icon to allow me to do that. It was a real pain, so it was rare. Q. Who else attended the meetings that you had with the Clockwork group with respect to the investors in the Epstein case? A. There were multiple meetings with what I'l] call the Clockwork investors at various points in time. A variety of people came in and out of the meetings. Some of the meetings occurred down in Bova. Other people came up to the meetings. Some of the meetings involved Michael Szafranski, our fake independent verifier. Some of the meetings may have involved bankers and the like. ] cannot tell you specifically who was at those meetings. Q. The specific meetings that we are talking about with -- where you left the boxes at your office, do you recall who else was there with you at that meeting? A. J only remember there being a handful of people from the investment group and myself. | don't recal] -- and ] remember the guys bringing the boxes the down, but they didn't stay for the meeting. There may have been other people there, ] don't recal] one me She RB where we owed 20, $30 million in Ponzi payments out and she needed to write a check for even $5,000, she probably would have checked with me on that. So substantial and whether or not she would have checked with me depended upon the circumstance at the time. Q. You stated earlier, and J think I'l] get this quote right, that 2009 was a dismal year; is that correct? A. For the legitimate law firm business, it was a dismal year. Q. Soin the months immediately preceding the dissolution of RRA, July to October of 2009, what would you consider a substantial expense that had to be approved? A. It would vary literally from day-to-day. Q. Do you have any independent recollection of how you were doing in, say, July 2009? A. The legitimate business was always doing poorly in 2009, as far as ] was concerned. Q. So would you have -- A. The Ponzi scheme had its moments of significant wealth and significant poverty, so it varied from time to time. It was a daily thing. Sometimes it was hourly. It just depended upon what OnrmwnrnrFrowwmrwntnuornesk wWwnr owmrn ars WN FH = : : g : a i : e : i : : = i a a ; Page 86 i MM NM MH NM NW FT | way or the other who it was. was coming in and what needed to go out. Ey Q. Ifthe expenditures were being made on a case that were substantial, did you have to approve them or did you have a specific practice for them? A. The head of a practice group could basically approve them but Irene, our CFO, would generally run them by me before she actually cut the check. If] wasn't around she'd run it by Stu. Q. So as the equity partners you had the authority to make the determination what funds could and could not be expended? A. As the shareholders, as the two 50 percent shareholders, we controlled the finances. Q. And if Irene was coming to you to tell you what the funding was for, to get approval rather, would she tell you specifically what the funding was for or just tell you "we need $100,000"? A. No, if it was a substantial expense -- Q. Tell me what you deem as substantial. A. That would have been -- substantial to me would have been based upon how much money we had in our coffers at the time. So, if it was one of those Q. So would you have to utilize the illegitimate funds to fund the legitimate cases at times? A. Yes. Q. And that varied daily you said? A. Well, aj] the money was commingled together, so we used whatever funds were in there to fund both the legitimate and the iJlegitimate financial requirements of the firm, the Ponzi scheme and other legitimate and illegitimate things that were going on. Q. Ifan outside agency or investigator was being utilized for a case and they needed a signed retainer agreement with your firm, would you have to approve that? A.. It would depend upon the significance of the expense. | didn't necessarily get involved in every retention of every expert in every case. Q. Okay. So it would depend on the cost or the nature of the case? A. Who the lawyer was, their level of expertise, all things of that nature. MMMM P PRP RPP BBP PB WNHNFrFPOW MAND UBWNHEH OW DANAUS WNHPH periods of time where we had 20 or $30 million floating around the law firm, Irene probably would have just written a check without even letting me know we were writing it. If it was one of those times Q. Ifit was this gentleman who you have no recollection of meeting, Mr. Black, and the attorney was Mr. Edwards, was that something you needed to look over? Page 873 Page 89 stent iBT DRAPES aN eet ae ee ao esse R RP a ER GRA NERS TES EPR ERA NE NER a hm Mm oof ia eeeienamuagiet 23 (Pages 86 to 89) FRIEDMAN, LOMBARDI & OLSON 305-371-6677 5ed93085-0554-447f-bcdd-ca2d8fe941df HOUSE_OVERSIGHT_017512