Scott Rothstein, in a June 5 video deposition, testified about playing a dangerous game, as he tells it, embezzling millions of dollars from a cruise line.
He testified he had his whole cast of characters involved in a scheme to defraud Silversea Cruises, wittingly or not. From his office women, Irene Stay and Debra Villegas, to partners Stuart Rosenfeldt and Steven Lippman, to club man Stephen Caputi (playing the role of a newspaper reporter), to an unnamed cop helping to convince the Italian aristocrat who owns the cruise line that he was under criminal investigation for prostitution. That was just a ruse designed to keep Manfredi Lefebvre D'Ovidio out of the country while Rothstein robbed him blind.
I don't know who the cop is but I can tell you it wasn't Broward sheriff's Lt. David Benjamin.
Throw in a Miami Beach socialite, and you're almost there, but the real show stealer is the "Swiss banker," Albert Peter, who was the CEO of Silversea and who Rothstein says beat him out of millions of dollars in the end. The story heads across the water to London and Monaco and ends in Switzerland.
Here's the first of two parts. The questioner is bankruptcy attorney Chuck Lichtman and occasionally you'll see a page number pop up out of nowhere just to let you know where you are.
14 Q. So where I'd like to start is at the very
15 beginning and get some foundational background as to
16 your relationship with Albert Peter and Silversea and
17 how that relationship began.
18 So I have a general understanding that
19 you became familiar with Silversea originally at a
20 meeting that -- or dinner -- that you attended at a
21 restaurant in Fort Lauderdale with Stanley Coniglio,
22 that was Runway 84, and Mr. Coniglio introduced you
23 to Diane DelValle, and Ms. DelValle was the
24 girlfriend of Mr. Peter, and Mr. Peter was the CEO of
25 Silversea, and that was basically how the foundation
1 of the relationship began.
2 Is that generally correct?
3 A. Yes.
4 Q. So now having that on the record and
5 knowing that that's not the best way to put evidence
6 in the record, I just wanted to make sure that I was
7 fundamentally correct in the facts.
8 So, if you would, tell me approximately
9 when it was that you first became aware of Silversea
10 Cruises as a potential client of RRA.
11 A. You'd have to look for me at the very first
12 bill we ever sent them, but it was some time in 2006,
13 I believe, when I met Albert Peter through
14 Mr. Coniglio.
15 Q. And who is Mr. Coniglio?
16 A. Mr. Coniglio is a gentleman that I had
17 known for several years. I actually met him through
18 a friend of mine at Runway 84.
19 I knew him at the time to be associated
20 with an organized crime family and he made the
21 introduction of me to Diane DelValle and ultimately
22 to Albert Peter.
23 Q. In your deposition in December, 2011 you
24 testified that you had sort of like a standing
25 dinner -- I forgot which day of the week -- at
1 Runway 84.
2 Do you recall that?
3 A. I do. It was Thursday nights.
4 Q. Thursday nights. And was Mr. Coniglio,
5 we'll call it, a member of the group of men that
6 typically you dined with on Thursday nights at
7 Runway 84?
8 A. Yes. Thursday night at Runway 84 was
9 called "council meetings." That was the -- for lack
10 of a better word, that was the secret name, and it
11 was the night that all the guys from all different
12 groups would gather at Runway 84 and eat dinner and
13 hang out most of the night usually.
14 Q. Why were you there?
15 A. Without getting into too much detail -- the
16 first reason I was there was to eat dinner.
17 Second, it was a lot of fun.
18 The third reason was I had various business
19 dealings with some of the people that ate there on
20 Thursday nights.
21 Q. I think that this would be a really sexy
22 area of inquiry, but I don't know that this part of
23 it is particularly relevant to the Albert Peter story
24 and I suspect that with Mr. LaVecchio sitting to my
25 right there would be a point quickly that he would
1 say that this is an area of inquiry that I ought not
2 go into.
3 Would that be a fair statement?
4 MR. LaVECCHIO: It would.
5 Q. Therefore, while I'm going to address some
6 limited area of inquiry with respect to Mr. Coniglio
7 and how the relationship began, I'm not going into
8 any further detail on the other color that you just
10 So with respect to Mr. Coniglio how did
11 your knowing him lead to your getting to know
12 Mr. Peter?
13 A. Mr. Coniglio was the type of person that
14 was always looking for a method to either earn money,
15 to gain favor, to enable himself to get something out
16 of what I'll term relationship building.
17 When I was introduced to Diane DelValle
18 and ultimately to Albert Peter Mr. Peter was
19 basically told by Mr. Coniglio that he was going to
20 hire me and my law firm to represent Silversea Cruise
21 Lines, and ultimately that is what occurred.
22 Q. What to the best of your knowledge was the
23 nature of the relationship between Diane DelValle and
24 Mr. Coniglio?
25 A. They were friends that spent a significant
1 amount of time together.
2 Before I ever knew Albert Peter I used to
3 see Diane on a regular basis. She'd be sitting at
4 the bar with Mr. Coniglio at Runway 84.
5 Q. Platonic friends?
6 A. To the best of my knowledge, sir.
7 Q. Now, you indicated that Mr. Peter was told
8 that you were going to be the attorney for Silversea.
9 What do you mean by that?
10 A. I don't know what the underlying
11 conversations were, but I was told directly by
12 Mr. Coniglio that I would be getting Silversea as
13 a client and he told me specifically that he would
14 handle it with Albert.
15 Apparently he and Albert through Diane
16 already had a relationship. I do not know what that
17 relationship was, but I do know that even by that
18 point in time Mr. Coniglio was taking cruises on
19 Silversea's ships, which are rather expensive, at
20 either no cost or a very, very low cost as if he was
21 a family member of a Silversea employee.
22 Q. To the best of your knowledge, was
23 Mr. Coniglio a family member of a Silversea employee?
24 A. I could say that "family" is an interesting
25 word, but no, he was not.
1 Q. Sort of using the vernacular here, would it
2 be a fair statement then with respect to your comment
3 that Mr. Peter was told that RRA was going to become
4 counsel to Silversea, that Mr. Coniglio made him an
5 offer he couldn't refuse?
6 A. I think that's a polite way to say it. I
7 think that they had a mutually beneficial business
8 relationship and it was probably in Albert's best
9 interest to appease Mr. Coniglio, as most people who
10 did business with him did.
11 Q. Do you have any knowledge of any of the
12 facts of what the mutually beneficial relationship
13 was between Coniglio and Mr. Peter?
14 A. The only thing that I was ever told was
15 that Albert had previously been having some problems
16 in town and Mr. Coniglio resolved the problems for
18 More than that I do not know.
19 Q. And I assume you don't know what the nature
20 of the problems were?
21 A. I do not, sir.
22 Q. So at that point in time, was that when
23 you first met Albert Peter was after Coniglio told
24 you that you'd be getting Silversea's business?
25 A. Yeah. It was soon thereafter that I metPage 10
2 Q. And to be sure, you were also told by
3 Mr. Coniglio that in exchange for his arranging for
4 you to get Silversea's business you bought through
5 RRA with RRA funds Mr. Coniglio a Lexus.
6 Do you recall that?
7 A. Yes. You're jumping a little bit far ahead
8 because that was after we had collected a significant
9 amount of money from Silversea through our billings,
10 both legitimate and illegitimate billings, and
11 Mr. Coniglio was clearly being told by Diane DelValle
12 and Albert how much money we were receiving, and that
13 is when Mr. Coniglio came to me and "requested" that
14 I buy him a car.
15 Q. Then we'll move into that down the road,
16 but just quickly: Did you ever have to give
17 Mr. Coniglio any money of that which was generated
18 from real and/or fictitious billings sent by RRA to
20 A. Just the car.
21 Q. So then you met Albert Peter.
22 What was your understanding of Albert
23 Peter's position at Silversea?
24 A. He was CEO.
25 Q. Did you have an understanding that he was
1 able to direct that you would get the legal work for
3 A. It took some doing, but yes.
4 Q. When you say "it took some doing," what do
5 you mean by that?
6 A. At the time that I was told that I was
7 going to be getting Silversea as a client and at
8 the time that I met Albert I was told by Albert that
9 there was another law firm representing Silversea at
10 the time and that he would have to go through some
11 maneuvers to have them fired.
12 Q. Do you know who that other law firm was?
13 A. Arent Fox.
14 Q. I know that there was a point in time where
15 there was some litigation between Arent Fox and
17 A. There was.
18 Q. Did that litigation result from Arent Fox's
19 termination as counsel to Silversea?
20 A. I don't specifically recall.
21 Q. So ultimately, though, Albert was able to
22 direct legal work to RRA. Correct?
23 A. Yes. Ultimately Arent Fox was terminated.
24 I don't know if they kept them on, as there
25 were a few files that they were pretty deep into, but
1 at a certain point in time shortly after meeting
2 Albert I was hired on to handle the bulk of
3 Silversea's work.
4 Q. When you say "the bulk of Silversea work,"
5 do you mean as sort of outside general counsel?
6 A. Yes.
7 Q. Describe for me generally what you
8 understood your -- meaning RRA's role -- was going to
9 be with respect to Silversea once Mr. Peter was able
10 to direct the work to RRA.
11 A. Any day-to-day legal issues that they had,
12 any day-to-day labor and employment issues that they
13 had -- just about anything I think with the exception
14 of admiralty work was going to be handled by me and
15 my firm.
16 Q. And did that, in fact, to the best of your
17 knowledge occur?
18 A. Yes. With very few exceptions we were the
19 firm for them.
20 Q. At the beginning of when you began doing
21 legal work for Silversea, what was the nature of your
22 relationship with Albert Peter?
23 A. It was professional with the undercurrent
24 of the knowledge that I was placed there by
25 Mr. Coniglio.
1 Q. Did Mr. Peter actually acknowledge that to
3 A. He acknowledged it to me. Diane DelValle
4 acknowledged it to me, and I was regularly reminded
5 of it by Mr. Coniglio.
6 Q. So it sounds to me like at the beginning
7 your relationship with Mr. Peter was arm's length.
8 Is that a fair statement?
9 A. You know, it's hard to explain, but when
10 you're given business by someone like Mr. Coniglio
11 generally the person you're doing business with in
12 the transaction is not really ever arm's length
13 because all the parties have a vested interest in
14 getting along, so I think that we were both thrust
15 into a situation that was good for everybody involved
16 but that required us to start off possibly closer
17 than we might have been under normal circumstances.
18 Q. Did the relationship that you had with
19 Mr. Peter grow over time?
20 A. Yes. Very quickly.
21 Q. Describe how that happened.
22 A. Just starting with the fact that I had met
23 him through Mr. Coniglio and, in addition, had met
24 him through Diane DelValle, who was one of his
25 mistresses at the time, I was, for lack of a better
1 term, in the know about his extracurricular activity
2 and I guess it's the birds of a feather argument that
3 we became close right from the get-go.
4 I was also spending a significant amount of
5 time at Silversea reviewing old files, going through
6 things that needed to be looked at, doing legitimate
7 legal work, and we spent a lot of time eating lunch
9 We, of course, saw each other frequently
10 out. We socialized a lot together right from the
11 get-go, and the relationship grew from there.
12 Q. You said that you were knowledgeable about
13 Mr. Peter's extracurricular activity.
14 By that did you mean the fact that
15 Mr. Peter was married to Iris Peter while he was
16 having an affair with Diane DelValle?
17 A. Yes.
18 Q. And were you also aware that Mr. Peter was
19 having an affair at the same time with Tatiana Yoel?
20 A. Well, Tatiana came into the picture a
21 little bit down the road, but, yes, ultimately I was
22 aware that he was having an affair with both
23 Ms. DelValle and with Tatiana.
24 Q. Did Ms. DelValle know about Ms. Yoel?
25 A. At some point in time she did. In the
1 beginning she did not.
2 Q. How did that go over once she learned about
4 A. Like a two-ton boulder.
5 Q. And, likewise, I assume that Ms. Yoel
6 ultimately learned about Ms. DelValle, as well?
7 A. Yes, sir.
8 Q. With the same reaction as Ms. DelValle?
9 A. Pretty much the same.
10 Q. And when you said two birds of a feather,
11 meaning you, is that because you were having
12 relations with other women, as well, so Albert and
13 you had that issue in common?
14 A. Yes, sir.
15 Q. Although I think it would be a fair
16 statement in 1986 you were not yet married to Kim.
17 Is that correct?
18 MR. GOLDBERG: 1986?
19 Q. Excuse me. 2006.
20 In 1986 you were in diapers.
21 A. I wish I was in diapers in 1986.
22 In 2006 I was not married to Kim, no.
23 Q. You were single. Correct?
24 A. You know, I don't remember when I -- what
25 year I started dating Kim, but unfortunately, Chuck,
1 even when I was dating someone seriously I was
2 generally having extracurricular activities with
3 other women, so it was something in my nature and it
4 did have -- it did create a bond between Albert and I
5 in addition to the Coniglio bond and the other bonds
6 that grew over time.
7 Q. Do you have before you Trustee -- it's a
8 document titled T-AP22, and it's the complaint.
9 Actually, the first page of it is 18.
10 MS. GUARIGLIA: Chuck, what's the Bates
12 MR. LICHTMAN: That's what it is. T-AP18.
13 A. Mr. Lichtman, just so that the record is
14 clear --
15 Q. Yes.
16 A. -- one of the other things that made Albert
17 and I so close right from the get-go is that because
18 Diane DelValle was his assistant at the time at
19 Silversea he knew that I was being fed significant
20 amounts of information about what was going on there,
21 so that added to the, let's say -- the confidential
22 nature of our relationship.
23 MR. LICHTMAN: Taryn, do you have that
24 exhibit up now, the complaint?
25 MS. GUARIGLIA: Yes. Yes.
1 Q. All right. If you would turn to page 5.
2 That's T-AP22.
3 A. Okay. I'm there.
4 Q. If you would take a look at paragraph 22.
5 A. Yes, sir.
6 Q. What I want to do is confirm or deny or
7 supplement any of the items that I have listed in
8 paragraph 22 that discuss the strength of your
9 relationship with Mr. Peter.
10 At paragraph 22(a): The Trustee alleges
11 that the Peters regularly socialized with Rothstein
12 and his wife Kimberly Rothstein.
13 Is that a true statement?
14 A. That's incorrect.
15 Q. Incorrect. All right.
16 What is incorrect about it?
17 A. It should say: Albert Peter regularly
18 socialized with Scott Rothstein and his friends.
19 Q. Okay. So it would be inaccurate to say
20 that Albert and Iris socialized with you and Kim?
21 A. They were together on a handful of
22 occasions with Kim and I, but they did not socialize
23 with Kim and I as a couple on a regular basis.
24 Q. Subparagraph (b) says that Peter and
25 Rothstein spoke frequently about personal matters and
1 they socialized together regularly for drinks and
2 cigars independent of their spouses.
3 Is that a correct statement?
4 A. Yes, sir.
5 Q. Can you give me some detail to support that
6 allegation, please -- and that's a vague question so
7 let me put it into a context for you of quantity, as
8 an example -- how often you saw him.
9 A. As the relationship grew Albert and I
10 would not only see each other on Thursday nights at
11 Runway 84, but he and I would frequently have lunch
12 together. We'd frequently go to dinner together. We
13 would take off in the middle of the day and go have
14 cocktails or wine and cigars. We would go shopping
15 together. We spent a lot of time together both
16 during the workday and afterwards.
17 I would go to his office and we'd sit and
18 chat about any number of things for hours at a time.
19 I would go pick Albert up from his office and we'd go
20 shopping together. We'd go out in the middle of the
21 day drinking. We had a very close relationship.
22 Q. You commented a moment ago that Albert
23 joined you for dinners at Runway 84.
24 Did he then participate in the council
25 dinners that you had?
1 A. No.
2 Q. These are separate dinners?
3 A. Well, they were separate dinners -- you
4 have to understand -- on Thursday nights different
5 groups of guys eat with each other. Albert would
6 generally be eating with Diane and then people mix
7 and socialize so he was in the restaurant at the same
8 time. Then we'd meet at the bar for cocktails and
10 Generally after -- I forgot what time it
11 was, but Anthony Bruno, the owner of Runway, used to
12 allow us to smoke cigars in there inside actually
13 after a period of time.
14 Q. So just to be sure, he was not a
15 participant in the standing Thursday night dinners
16 that you had with Mr. Coniglio and that group of men?
17 A. No.
18 Q. In your last deposition you described that
19 you had different tiers of friends. You had a tier
20 of friends that were like your A list. Those were
21 the guys that were closest to you, like Ted Morse as
22 an example.
23 Then you had a tier of friends right
24 underneath that that was like Mark Levinson.
25 Where did Albert Peter fit into your tier
1 of friends?
2 A. Between the Ted Morse group and the Mark
3 Levinson group, but closer to the Ted Morse group.
4 Q. So he was actually one of your absolute
5 closest friends then.
6 Is that a fair statement?
7 A. Yes. For the bulk of the time we knew each
8 other, yes.
9 Q. In paragraph 22 (c) the Trustee alleges
10 that Peter discussed purchasing a home next door to
11 the Rothsteins.
12 Is that correct?
13 A. Yes. At the time that we were living on
14 Castilla Isle he had looked at the home right next
15 door, or down the street.
16 It might have been actually across the
17 street or down the street, but yes.
18 Q. Paragraph 22 (d) says that you became
19 Mr. Peter's personal legal counsel.
20 Is that correct?
21 A. Yes.
22 Q. What type of matters did you give him
23 counsel on?
24 A. I gave him counsel on ---
25 Q. What I don't want you to do, as odd asPage 21
1 this sounds even with Mr. Peter's counsel not being
2 present, I don't want you to tell me the advice you
3 gave him. I'm just asking generally the type of
4 matters you did give him ---
5 A. Financially ---
6 Q. Meaning -- I'm sorry. I spoke over you.
7 A. Go ahead.
8 Q. What I don't want you to do is divulge
9 attorney/client communications.
10 A. I understand.
11 Marital issues, property issues, financial
12 issues, business issues.
13 Q. When you say "property issues," did you
14 discuss with him -- how do I get into this -- did you
15 discuss asset protection with him?
16 Was that a topic of your consultation with
18 A. It was, but it was more him telling me
19 about what he was doing than me counselling on it.
20 Albert is a fairly bright finance guy and
21 it was less me giving him advice and more him telling
22 me what he was doing.
23 Q. Did you have an engagement letter that you
24 executed with Mr. Peter as his personal counsel?
25 A. No, sir.Page 22
1 Q. Did you ever open a file for Mr. Peter as
2 his lawyer?
3 A. I may have. I don't recall.
4 Q. Do you recall if Mr. Peter ever paid RRA
5 any legal fees?
6 A. That's a loaded question. I certainly
7 received ---
8 Q. In his personal capacity.
9 A. I don't recall him ever paying us personal
10 legal fees.
11 Q. Were you, indeed, his lawyer or were you
12 in the place of, for instance, we'll call it personal
13 counsel, a friend that gave him advice as opposed to
14 being his lawyer, per se?
15 A. As I sit here today, I don't recall ever
16 representing him specifically in a legal matter.
17 I believe that my law firm handled a real
18 estate closing for him at one point in time, but I'm
19 not even certain of that.
20 You know, if you're asking me did I
21 consider myself his legitimate lawyer, I don't even
22 know how to answer that because there was so much
23 illegitimate activity mixed in with anything
24 legitimate we might have been talking about, I
25 can't tell you.Page 23
1 Q. Let's just focus in on the issue of your
2 serving as his lawyer.
3 I'm looking at your state of mind.
4 Were you his lawyer?
5 A. Not his legitimate lawyer, because in my
6 state of mind the way I thought about it I was
7 Silversea's lawyer, so from a legitimate standpoint
8 I couldn't have been Silversea's lawyer and his
9 personal lawyer because I was representing him in a
10 business capacity and there were times when his
11 personal positions were in conflict with those of
13 However, as you already know, I also took
14 to advising him in a capacity that was to the
15 detriment of Silversea and to his benefit.
16 Q. That was on his termination. Correct?
17 A. His termination and other things that were
18 going on with Silversea where he was being questioned
19 about things. I did render advice to him.
20 Q. Was that on his expenses?
21 A. In large part, yes.
22 Q. Were there other areas, as well?
23 A. Yes. He was -- when his affair with Diane
24 DelValle became a very bad point with his bosses at
25 Silversea I counseled him on how to handle that with
1 his bosses and how to handle it with Ms. DelValle.
2 Q. Is your best understanding as to Albert's
3 state of mind that he viewed you as his personal
5 A. Yes.
6 Q. With respect to his affair with
7 Ms. DelValle while she was employed at Silversea were
8 you requested by Silversea to render legal advice as
9 to what to do about Albert's relationship with her?
10 A. I was.
11 Q. And did you give him advice on how to
12 handle the issue?
13 A. I did.
14 Q. I want the record to be clear. I don't
15 feel comfortable asking you the nature of the advice
16 so I'm not going to, all right, but as I understood
17 your testimony from a few moments ago you also
18 provided Mr. Peter with advice. Correct?
19 A. Yes. I did.
20 Q. Was that ---
21 A. I provided ---
22 Q. Was that in a legal or friendship capacity?
23 A. Well, I was providing him advice because I
24 was his friend and because we were co-conspirators in
25 a criminal enterprise.Page 25
1 I was providing him legal advice that was
2 contrary to the best interests of Silversea, if that
3 helps explain it a little bit better.
4 Q. Yes. Only because it's a gray area and
5 I don't believe there was an attorney/client
6 relationship established between you and Mr. Peter,
7 but I don't want to run the risk of asking questions
8 that would even potentially contaminate this
9 transcript, so I'm not going to ask those kinds of
10 questions with respect to Mr. Peter either, at least
11 as of right now.
12 Okay. I'm going to address the issue in
13 subparagraph 22 (e) about this $403,000 payment to
14 Mr. Peter later in this transcript, so I'm going to
15 skip that.
16 I'm also going to for now skip the Jewel
17 River Cruises issue because I'm going to get to that.
18 Subparagraph (g) says that you used your
19 relationship with the Levinsons -- that's Mark and
20 Robin Levinson at Levinson Jewelers -- to enable
21 Mr. Peter to buy jewelry from Levinson at a discount.
22 Is that an accurate statement?
23 A. Yes.
24 Q. Can you describe the facts about that
25 transaction or transactions?Page 26
1 A. Albert had asked me a bunch of times about
2 jewelry and watches that I had purchased at
3 Levinson's and asked if I was getting good prices. I
4 told him I was. He asked if I could speak to them
5 because he'd like to make some purchases from them of
6 a significant nature and I told him I would.
7 I went and talked to Mark and Robin. I
8 said this guy is a very close personal friend and
9 very important to my business and I'd appreciate it
10 if they would handle him on that basis, so they did.
11 Q. Is my recollection correct that you
12 actually did not ask the Levinsons for discounts as
13 to the purchases of jewelry that you made for
15 A. I never asked them for a discount for
16 myself. Only for other people.
17 Q. That was my next question, but did you ask
18 them for a discount as to Mr. Peter?
19 A. Yes, I did.
20 Q. And to the best of your knowledge that
21 discount was provided?
22 A. To the best of my knowledge, yes.
23 Q. I think that we've already covered
24 paragraphs 22 (h) and 22 (i), except I will add that
25 the paragraph 22 (i) reference that you often
1 mutually addressed Mr. Peter and vice-versa with the
2 title "brothers."
3 Do you agree with that?
4 A. Yes, sir.
5 Q. Paragraph 22 (j) states that you often
6 provided Mr. Peter with false alibis to Mrs. Peter
7 providing cover for Mr. Peter's time with Tatiana
9 Is that a correct statement?
10 A. Yes, sir.
11 Q. How many times would you say you did that?
12 A. I have to answer that this way.
13 I was asked dozens of times to cover for
14 him. There were only a handful of times when I
15 actually had to put the cover into play.
16 (Short Break)
17 Q. Mr. Rothstein, if you would go to the
18 documents that we provided you starting with the
19 document Bates stamp of T-AP00090.
20 A. I got it.
21 Q. We're going to spend some time now talking
22 about invoices that were sent by RRA to Silversea.
23 A. Okay.
24 Q. Now, I think that you have acknowledged
25 that you were counsel to Silversea.
1 That's pretty clear. Right?
2 A. That's correct.
3 Q. And in connection with serving as counsel
4 it would be the business practice of RRA to send
5 legal fee statements to Silversea for services
6 rendered. Correct?
7 A. That's correct.
8 Q. Take a look at the exhibit Bates stamped
10 I'm going to mark for the record here --
11 and we provided the court reporter -- as Composite
12 Exhibit 1 -- that whole series of invoices.
13 That's just for the record.
14 (Whereupon, the documents referred to
15 were marked Plaintiff's Composite Exhibit No. 1 for
17 Q. Are you familiar with this legal fee
19 A. Yes, sir.
20 Q. What was the business practice of RRA in
21 connection with preparing -- I want you to listen
22 closely -- preparing authentic legal fee statements
23 to Silversea?
24 By that I mean statements that accurately
25 reflect time performed for the client along with the
1 dollar amount attributable to that time.
2 A. The work would be performed. The time
3 entry would either be placed on a handwritten
4 timesheet and then inputted by a billing person into
5 our billing system, or once we had the billing
6 software where the lawyer could enter it directly,
7 the lawyer would enter the time directly.
8 Pre-bills would be printed up. They would
9 be given to the supervising lawyer, which was either
10 me or another lawyer assisting the other lawyer
11 working on it, and ultimately all the bills for
12 Silversea would come to me.
13 I would review the bills and then
14 ultimately I would have them delivered to Silversea.
15 Q. So you have before you as part of Composite
16 Exhibit 1 -- take a look at page 90 again.
17 A. I am.
18 Q. That would reflect from your perspective
19 legitimate time that was performed by Melissa Lewis
20 is the top four entries. Correct?
21 A. Correct.
22 Q. Then underneath there's two entries that
23 you put in for 11.8 hours on working on employee
25 Would that be legitimate time?
1 A. That's correct. Yes, sir.
2 Q. And then there's a balance of work that
3 was performed by Ms. Lewis and you, and the total fee
4 broken down on an hourly rate basis you'll see was
6 Did you agree with that?
7 A. I do.
8 Q. And that would be an invoice that would
9 reflect actual time and legitimate billing for
10 Silversea. Correct?
11 A. That's correct, sir.
12 Q. Now, if you'd be kind enough to please turn
13 to page 92.
14 Actually, go back for one quick second.
15 Page 90 -- do you see that's an invoice
16 dated July 10, 2006?
17 A. Yes, sir.
18 Q. Now take a look at page 92.
19 That's an invoice that's also dated
20 July 10, 2006. Correct?
21 A. Yes, sir.
22 Q. Now we're going to go back and forth a
23 little bit here to make sure the record is clear.
24 At page 90 you'll see that that is invoice
25 number 66531?
1 A. Yes, sir.
2 Q. And then page 92 is invoice number, also,
3 66531. Correct?
4 A. Yes.
5 Q. Now what I'd like you to do is take a look
6 at the time entries that are reflected on pages 90
7 and 91 for the time period of June 13, 2006 to
8 June 30, 2006, and compare the language that's
9 located on pages 92 and 93 -- just the language --
10 and tell me if you agree that it is verbatim
12 A. It appears to be. Yes, sir.
13 MR. LICHTMAN: I'd like the record to
14 reflect, because this is not a video deposition, that
15 the witness took approximately a minute to compare
16 the documents.
17 Now you'll note that at page 91 the total
18 fee charged was $8,618. Do you see that?
19 A. I do.
20 Q. And you'll see at page 93 the total time
21 charged was $23,336. Do you see that?
22 A. Yes, sir.
23 Q. So you have two invoices with the same time
24 entries, but one is for $8600 and the other is for
1 How do you explain the difference in the
3 A. The difference is the money that we stole
4 with Albert Peter.
5 Q. What do you mean by that?
6 A. We were engaged in a scheme with Albert
7 Peter to embezzle money from Silversea utilizing
8 fraudulent legal bills, and what would occur is the
9 following: In this particular circumstance we
10 printed up a real bill, which was the one which
11 actually has the time entries on it with the people
12 who performed it. We then had the bill redone by
13 someone, they hand did it on the system, without the
14 time entries.
15 We used a format that did not have the
16 biller or the time entry. We discussed how much we
17 were going to bill with Albert Peter. We printed up
18 the forged bill with the bumped amount and the bills
19 were always hand-delivered to Mr. Peter, and on this
20 particular occasion and on some others we gave him
21 both bills -- the one with the entries and the one
22 that did not have the entries -- the fraudulent
23 bill -- so that he could see the amount specifically
24 that we actually did and how much we bumped --
25 Q. Was this the ---
1 A. -- so that he could see it.
2 Q. I'm sorry. Were you finished?
3 A. No. So that he could see how much the bump
4 was so he knew how much to ask us for back.
5 Q. Was this the business practice that you
6 engaged in with Mr. Peter for every invoice where
7 there would be an invoice with legitimate time that
8 would reflect the hourly charges -- the hours billed
9 -- the charges for those hourly charges -- and then a
10 similar or identical invoice where those entries,
11 such as the hours and charges, were deleted?
12 A. It would, and it would also have been --
13 there are -- should be a series of bills that don't
14 have a real corresponding bill that were also
15 fraudulent, so both. Yes.
16 Q. I'm going to get to those.
17 A. Okay.
18 Q. Whose idea was it to come up with this
19 scheme to pad the bills and submit them to Silversea
20 for payment?
21 A. Albert and mine.
22 Q. Do you remember how it came about?
23 A. At some point in time Albert was discussing
24 with me his need for additional moneys to assist him
25 with payment of one or more of his mistresses and
1 other things that he needed money for over and above,
2 I guess, his compensation with Silversea.
3 Q. Besides his mistresses what other things
4 did he need money for?
5 A. Things that he wanted to buy -- cars and
6 the like.
7 Q. Rock star lifestyle?
8 A. Yes. He definitely lived the rock star
10 Q. To digress for one moment, with respect to
11 Mr. Peter, what do you mean by rock star lifestyle?
12 A. He lived the life of a flamboyant Swiss
13 banker. He chartered jets. He bought a lot of cars.
14 He bought a lot of jewelry. He wore expensive
15 clothes. He had homes in Switzerland and Florida.
16 He went to very nice restaurants.
17 I mean, he lived a very, very expensive
18 life far exceeding what he was earning at Silversea.
19 Q. Going back to these invoices, who knew of
20 this fraudulent billing scheme besides you and
21 Mr. Peter?
22 A. At what point in time?
23 Q. Starting at the beginning, and then you can
24 tell me if it changed, when it changed, and who else
1 A. In the beginning it was me, Albert Peter,
2 Diane DelValle, Irene Stay, Debra Villegas. I don't
3 know who our billing clerk was at the time that was
4 handling those bills -- you'd have to go back and see
5 who the input clerk was -- but that particular
6 person's knowledge it would just -- that person would
7 not necessarily know that it was a fraud. They would
8 just see the change in the bill and the increase in
9 the amount, but the people that I named already,
10 those people were at that point in time aware that
11 there was a fraud going on at Silversea.
12 Q. That would be from the beginning --
13 correct -- if I understand your testimony?
14 A. From the very beginning.
15 Q. Is there a paper trail that I would be
16 able to find that would link this to Irene Stay or
17 Ms. Villegas other than the two documents in front
18 of you, being the statements?
19 A. Sure. At various points in time I actually
20 sent entries to Ms. Villegas to actually create a
21 bill outside our billing system.
22 Q. Those are the fake invoices?
23 A. Yes. Not all of them. Some of the fake
24 invoices were done on our time billing system. Some
25 were just typed up by Deb on our system.
1 Additionally, those invoices would then be
2 forwarded either by e-mail or in-person to Irene so
3 she knew how much money to expect.
4 You should also find e-mails from me to
5 Irene and Irene back to me asking how much money I
6 needed in the accounts for various things and then me
7 telling her how much I was going to bill Silversea to
8 make sure we had enough money to cover it.
9 Q. Did Melissa Lewis, who was performing
10 services on any of these bills, know what you were
12 A. No, sir.
13 Q. I have a general understanding that Steve
14 Lippman worked on some Silversea matters as well.
15 Is that correct?
16 A. Later on, yes, sir.
17 Q. Did he have any involvement with respect to
18 alteration of legal fee statements?
19 A. At the very end, yes.
20 Q. What was his involvement?
21 A. To the best of my recollection at the very
22 end of our relationship not with Silversea -- it's
23 not the end of our relationship -- at the very end of
24 Albert's relationship with Silversea over the period
25 of time that Silversea was attempting to get rid of
1 Albert Peter.
2 This is the one case for certain that I'm
3 certain Mr. Lippman assisted me in, and it's the one
4 case for certain I know that he was aware that we
5 were sending fraudulent bills over to Silversea,
6 because we were on both sides of that transaction.
7 We were representing Silversea and we were advising
8 Mr. Peter as to how best to extricate himself from
9 the difficult position with Silversea.
10 Mr. Lippman was, in fact, the person that
11 traveled to London with me to do the final
12 negotiations on behalf of Silversea while we were
13 improperly advising Albert at the same time as to how
14 to avoid potential civil and criminal problems with
16 Q. I'm going to spend some time on Mr. Peter's
17 termination, but tell me how that answer you just
18 gave ties Mr. Lippman to having knowledge and
19 involvement in fraudulent billing.
20 A. Because we would enter the time -- the real
21 time that we were spending on Mr. Peter's separation
22 from the company and then I would give the bill to
23 Mr. Lippman and ask him to create additional entries
24 that made sense, okay, from a general business
25 standpoint -- to inflate the bill -- because at this
1 point in time our bills are no longer being reviewed
2 by Albert Peter, who reviewed them cursorily at best.
3 You're talking being having our bills now
4 being reviewed by Amerigo Perasso and Manfredi
5 Lefebvre at the very top of the food chain at
6 Silversea, so we had to be very careful as to what
7 we were sending over in the form of bills, and
8 Mr. Lippman assisted me.
9 Wait. Let me finish that thought.
10 The other way you know that Mr. Lippman was
11 involved in it is we are over in London. We are
12 going to meetings with Manfredi and Amerigo advising
13 them as to how this thing should play out, and we're
14 billing them for that, legitimate billing.
15 We are then spending a significant amount
16 of time with Albert telling him what's going on
17 behind the scenes, breaching attorney/client
18 privilege, telling Albert what we're discussing with
19 Manfredi and Amerigo and what they intend to do,
20 crafting a scheme to extricate him from the problems
21 that he's created, and then Mr. Lippman and I are
22 billing Silversea for that time as if it's
23 Silversea's time.
24 Q. Meaning the time that Mr. Lippman and you
25 were spending with Mr. Peter you were billing to
2 A. Yes, and then when we returned home, when
3 we were looking at the amounts of the bills, we then
4 inflated the time. We looked at it and we -- let's
5 say excess value billed.
6 Q. Padded?
7 A. Because we knew at that point in time,
8 Mr. Lichtman, that our lifespan with Silversea was
9 probably coming to a close, so we wanted to get as
10 much money out of them as possible, but it needed to
11 look legitimate because we did not have the
12 protection of Albert any longer.
13 Q. When you say the "protection of Albert,"
14 what do you mean by that?
15 A. All our bills were approved to my knowledge
16 by Albert Peter. Various bills were ultimately
17 reviewed by the home office in Monaco, but any time
18 there was a question as to the billing Albert always
19 took up for our position.
20 We never ended up having an ultimate
21 billing problem with Silversea. Our bills were
22 always paid.
23 Q. And he took up with your position ---
24 A. To the best of my recollection.
25 Q. And he took up with your position from the
1 best of your knowledge because you had arranged with
2 him to split the illegal money that you had bilked
3 Silversea out of from your fraudulent billing.
4 Is that correct?
5 A. We weren't splitting it down the middle,
6 but, yes. He was receiving compensation of an
7 illegal fashion from the money that we were
8 embezzling from Silversea with his assistance.
9 Q. So, to be sure now, going back to Bates
10 stamped pages 91 and 93 the difference between the
11 sum of $23,336 on page 93 and $8,618 on 91 would be
12 the amount of money that you stole from Silversea and
13 that Mr. Peter later participated in receiving in
14 some fashion or another. Correct?
15 A. Correct.
16 Q. I'm going to do some other invoices a
17 little quicker, but take a look now at pages 94 and
19 A. Okay.
20 Q. You'll see that pages 94 and 95 are for an
21 invoice dated August 24, 2006. The invoice number is
22 67878, and if you peruse the entries there's not very
23 many of them. It totals $4,247 on page 95.
24 Do you see that?
25 A. I do.
1 Q. Then if you take a look at page 96, it's
2 an invoice also of August 24, 2006. It's the same
3 invoice number as on page 94.
4 Do you agree with that?
5 A. Yes.
6 Q. Do you agree that the entries on page 96
7 are the same as those on pages 94 and 95?
8 A. They appear to be.
9 Q. Except this bill, instead of being $4,247,
10 is $44,247.
11 Do you see that?
12 A. That's correct.
13 Q. This is another fraudulent bill?
14 A. Yes, sir.
15 Q. Take a look at page 98.
16 A. Yes, sir.
17 Q. That's an invoice dated September 5, 2006,
18 invoice number 68243. There's one entry by Melissa
19 Lewis for $248.
20 Do you see that?
21 A. I do.
22 Q. Take a look at page 99.
23 That invoice is also dated September 5,
24 2006. It's the same invoice number, 68243, except
25 this bill instead of being $248 is $47,123.32?
1 A. That's correct.
2 Q. Another fraudulent bill. Correct?
3 A. Yes, sir.
4 Q. And your business practice with respect to
5 these invoices when you submitted them was to give
6 them to Mr. Peter. Correct?
7 A. Hand-delivered by me or a member of my
8 staff. Yes.
9 Q. And what happened after you gave these
10 invoices to Mr. Peter?
11 A. We were frequently paid the same day or
12 within a day or two after.
13 Q. And to be sure your practice was also to
14 give him the original bill and the fake bill.
16 A. When there was an original and a fake we
17 furnished both to him.
18 Q. And Mr. Peter typically consulted with you
19 in what the amount of the fake bill would be -- the
20 inflated bill?
21 A. I would have a conversation with him about
22 what the market could bear at the current point in
23 time and then we would decide on the approximate
24 amount to inflate the bill.
25 Q. What were the factors that you discussed
1 with him in the amount of time that you could inflate
2 a bill on?
3 A. How much scrutiny he was getting from
4 Monaco, how much money Silversea had at the point in
5 time, how much money he needed, how much money we
7 Q. The Lindsay case -- Silversea Cruises, LTD
8 versus Robin Lindsay -- that was a real case.
10 A. Yes.
11 Q. So at page 109, as an example, if you would
12 go to that.
13 Are you there?
14 A. Okay.
15 Q. Pages 109 through 116 would be what a
16 legitimate bill for services rendered would look like
17 on this real case. That's the Lindsay case.
19 That fee is $6,319?
20 A. Yes.
21 Q. And then starting at page 117 and
22 continuing through 122, that would be your fictitious
23 invoice. Correct?
24 A. One second. I'm getting there.
25 Q. Okay.
1 A. Yes.
2 Q. I'm going to skip the rest of them for now
3 because I think we have a good enough record there,
4 but let us now address what we'll call what I believe
5 are totally fake invoices.
6 If you would be kind enough to turn to
7 page 137, and I'm going to mark documents that are
8 from Bates stamp range 137 through and including 200
9 as Composite Exhibit 2.
10 (Whereupon, the documents referred to
11 were marked Plaintiff's Composite Exhibit No. 2 for
13 A. Okay.
14 Q. You'll see that this is an invoice dated
15 January 13, 2006.
16 A. Yes.
17 Q. That reflects a bill -- it's invoice number
18 63401 -- it's titled Confidential Special Projects
19 and the amount of the bill is $150,000.
20 A. Yes.
21 Q. Would you describe to the best of your
22 recollection what this bill represents?
23 A. Nothing.
24 Q. When you say "nothing," meaning that there
25 were no legal services performed in connection with
1 this bill?
2 A. To the best of my recollection there were
3 no legal services performed in connection with this
5 Q. I had seen some e-mails that referenced
6 that you were indeed looking at some confidential
7 information for Mr. Lefebvre.
8 Did you ever have any legitimate billing
9 as it pertained to investigating confidential matters
10 for either Mr. Lefebvre or Silversea?
11 A. To the best of my recollection, no.
12 Q. So the time entry to the best of your
13 recollection placed within the body of document 137
14 is all made up. Is that correct?
15 A. Yes. We may have been actually looking
16 at his computers for some things, but if it was it
17 would have been of an illegal nature.
18 Q. What does that mean when you say "looking
19 at his computers for some things"?
20 A. I might have sent somebody over there with
21 a specific purpose of determining whether or not, for
22 example, Monaco was able to read his e-mails, whether
23 someone was copying his stuff and sending it to
24 Monaco, whether his secretary could read his stuff,
25 whether people were copying files, but it was all for
1 the protection of the embezzlement scheme and
2 protection of his separate embezzlement scheme that
3 he was using through his American Express card that
4 that would have been done.
5 There were no legitimate services provided
6 to Silversea. This was all concocted.
7 Q. Was the person that you sent over to
8 Silversea to look at the computer for those purposes
9 that you just enumerated -- was that Bill Corte,
10 Curtis Renie or Rey Leon?
11 A. I don't know who it was actually. I'd have
12 to know timeframe -- that I actually sent someone
13 over there to do it.
14 I don't even know that I actually sent
15 someone over there at this point in time.
16 Q. Your recollection, though, is that you
17 did send somebody over to do some type of forensic
18 computer analysis as to whether or not Albert's
19 computer had been imaged for some purposes?
20 A. Yes, but not necessarily at this point in
22 In other words, Mr. Lichtman, this could
23 be a completely fictitious billing or it could be a
24 -- let's call it a semi-fictitious billing where we
25 might have spent a couple of hours time, but I can
1 tell you that regardless of how much time, if someone
2 did go over there and look at his computers, number
3 one, it wasn't for Silversea, it was to protect our
4 schemes, and, number two, it would have been a couple
5 of hours, not $150,000 worth of time or expense.
6 Q. Let me ask a question. I want to go back
7 just briefly to Composite Exhibit 1. This will also
8 relate to Composite Exhibit 2.
9 You agree that proof of payment of these
10 invoices would be best reflected by the ledgers that
11 RRA maintained with respect to cross referencing
12 invoices and payments received by a client?
13 A. Can you say that again?
14 Q. Would you agree that business records
15 from the accounting servers of RRA would contain the
16 information to show that all of these invoices were,
17 in fact, paid?
18 A. That, in combination with Silversea's
19 records as to what it was paid. Perhaps the
20 cancelled checks.
21 I seem to have a vague recollection that
22 some of these checks may have been deposited into
23 other accounts, but I'm not certain of that one way
24 or the other.
25 Q. With respect to this $150,000 bill, that's
1 a fairly significant billing.
2 You would agree with that, wouldn't you?
3 A. Yes.
4 Q. Do you recall the circumstances on drafting
5 this particular bill and how the $150,000 fee was
7 A. I don't recall the specifics, but if you
8 look at all our billing it's not an unusual amount
9 once we really got going with this fraud.
10 Q. You were previously asked and described
11 circumstances about Albert Peter being complicit in
12 formulating these bills.
13 Is that the same thing with respect to
14 these totally fake invoices?
15 A. Yes, sir.
16 Q. Describe for me, just so the record is
17 clear, Mr. Peter's involvement with respect to the
18 fabrication of invoices from scratch.
19 A. Okay. Several different circumstances.
20 I would be sitting with Mr. Peter and talk
21 to him and say, "I need money. How much can I bill,"
22 and he would tell me.
23 There would be other times when I'd be
24 sitting with him and he'd tell me that he needs money
25 and he would ask me if I could please send a bill outPage 49
1 and then get him the money in one form or another.
2 That might occur in person or over the
3 telephone, but that's the basic way that the
4 completely fraudulent bills were created.
5 Q. You earlier described the circumstances
6 upon which Mr. Peter said he needed money.
7 What were the circumstances that you needed
9 A. Law firm bills, personal bills,
10 co-conspirator bills, Ponzi money.
11 Q. Did Mr. Peter know that you were engaged in
12 the Ponzi scheme?
13 A. He knew that I was engaged in a fraud. I
14 don't know that you could say that he knew it was a
15 Ponzi scheme.
16 We never had discussions of that nature.
17 Q. You didn't typically hold those discussions
18 with hardly anyone, though. Correct?
19 That was not a phrase that you used in
20 speaking with people?
21 A. In the entire time that I was conducting
22 the Ponzi scheme the word never came out of my mouth
23 meeting with any co-conspirator as to what we were
25 I limited the conversation to what people
1 needed to do and needed to know, and I limited their
2 contact with each other as best as I possibly could.
3 Q. In addition to these fraudulent bills tell
4 me what other activities Albert to the best of your
5 knowledge knew about that were fraudulent.
6 A. Say that again.
7 Q. What other fraudulent activities did Albert
8 know that you were engaged in besides the fraudulent
9 billing to Silversea?
10 A. He knew that we were using illegal methods
11 to assist him in keeping his embezzlement from the
12 company and our embezzlement along with him from
13 being detected by Manfredi Lefebvre.
14 Q. I know there was a point in time where he
15 participated with you in bridge loans immediately
16 following his departure from Silversea.
17 Did he know while he was at Silversea that
18 you were doing bridge loans?
19 A. You know, I don't remember the timeframe,
20 Mr. Lichtman, but there was a point in time when he
21 may or may not have known that the bridge loans or
22 deals were fictitious, and then there was a point in
23 time when he did know that.
24 Q. How do you know that -- that he did know
25 they were fictitious?
1 A. Because I discussed it with him.
2 Q. Do you recall the circumstances of when you
3 discussed it with him and where you were?
4 A. I do not.
5 Q. What is it you recall discussing with him?
6 A. It was a point in time when he actually
7 just said to me -- listen, he was a very, very bright
8 financial guy, as I said previously.
9 I recall the conversation with him where he
10 basically said to me, "I know that this can't be
11 real." He said in all his years as a Swiss banker
12 he'd never seen any such thing -- not in any market,
13 not in any business.
14 Q. Does the "this" ---
15 A. I laughed and I said, "Are you making
17 And he said, "Yes."
18 I said, "Are you happy?"
19 He said, "Yes."
20 I said, "So don't worry yourself with what
21 I'm doing."