Free Motion for Leave to File - District Court of Federal Claims - federal

Case 1:05-cv-00748-CCM

Document 37-3

Filed 03/09/2007

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IN

THE

UNITED

STATES

COURT
)
) ) )

OF

FEDERA

CLAIMS

JADE TRAING, LLC, by and
through ROBERT W. ERVIN AND

LAUR KAVANAUGH ERVIN on
behalf of ERVIN CAPìTAL, LLC, Partners Other Than the Tax Matters Partner,

)
)

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8

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Plaintiffs i
v.
Docket No.:
03 -2164T

7 UNITED STATES,

8 Defendant. Courtroom 2306
Friday i

9

10

10 Atlanta, Georgia
13 at 8:14 a.m.
14

9 Russell Federal Building
75 Spring Street, N.W.

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11 September 9, 2005
12 The parties met, pursuant to adj ournment,
BEFORE: HONORALE MAY ELLEN COSTER WILLIAMS

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16

Judge

APPEACES:
For the Plaintiffs:

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DAVID D. AUGHTRY, Esquire
LINDA S. PAINE i Esquire

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NICOLAS F. KORY i Esquire

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Chamberlain, Hrdlicka, White, Williams & Martin
191 Peachtree Street, N. E., 9th Floor

Atlanta, Georgia 30303-1747
(404) 659-1401

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Sept-09-05

Case 1:05-cv-00748-CCM

Document 37-3
Page 795

Filed 03/09/2007

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Page 797

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APPEARANCES: (Continued)
For the Defendant: STUART J. BASSIN, Esquire MATTHEW C. HICKS, Esquire MICHAEL S. RAUM, Esquire

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EXHIBITS
IDENTIFIED RECEIVED DESCRIPTION

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3 PLAINTIFF'S

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4 EXHIBITS:

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6 280

JENNIFER P. WILSON, Esquire
U.S. Department of Justice Tax Division P.O. Box 55 Washington, D.C. 20044 (202) 307-6542

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904

Expert Report of

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Jeffey Frankel

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Page 796

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Page 798
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CONTENTS
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EXHIBITS

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VOIR

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3 WITNESSES:

DIRECT CROSS REDIRECT RECROSS DIRE

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4 For the Plaintiff:
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6 Abraham Pfeiffer
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805 847

859

879

--

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2 DEFENDANT'S EXHIBITS: IDENTIFIED RECEIVED DESCRIPTION 3 965 9-8-00 letter from 525 4 Bricker to Dudzinsky 5 526 990 992 7-26-99 bil by Curtis Mallet
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874
881

528
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8 529

993 973 983 983

994

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10 Jeffrey Frankel
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884 905

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1020

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12 Wiliam L. Bricker, 909

950

1034 -

13 Jr.
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16

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1-8-02 memo from Bricker to Lynch Stipulation and Curtis Mallet cash receipt info

4-15-99 memo from Bee
to Bricker
Draft consulting agreement with New Vista

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12 556

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16 559

983

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990 E-mail from Conjeevaram to Bee
Draft Master Trading
Agreement, 7-99

983 997
1000

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23 24
25 701

1001 Assignment and Assumption Agreement
1001

Aventuri Trading, AIG

Sept-09-05

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Case 1:05-cv-00748-CCM

Document 37-3
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Filed 03/09/2007

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1 1 PROCEEDINGS 1 23 THE COURT: Let's go a.m.) 2 2 (8:14 on the record. 3 3

1 He found a half a dozen documents. Those
2 were copied. They were checked. Only one of them was

4 4 Mr. Bassin. 4
11 11 things that came up yesterday in my absence; one 11 12 12 relating to documents from Mr. Starke's computer. And 12

3 something different than what had already been either

4 produced or a pnvilege claim had been asserted.
5 MR. AUGHTRY: I'm confused.

5 5 MR. BASSIN: Your Honor, thank you for your 5

6 6 consideration yesterday. 6
7 7 THE COURT: You're welcome. I hope you're 7

8 8 feeling better. 8

6 MR. BASSIN: That's what our letter said. 7 MR. AUGHTRY: We meet with the witness. We 8 depose the witness. He says he has not checked his
9 computer yet for whatever fies and documents he may

9 9 MR. BASSIN: It's getting better. 9 10 10 I understand that there were two procedural 10

10 have. We suspend the deposition, ask him to go back 11 and check and see what he has got on his computer.

12 We are told that there is only one document
13 relating to a draft of a ruling, about which we don't

13 13 I have here a copy of a letter that we sent to Mr. 13
14 14 Aughtry on August 2nd, and I would like to provide a 14
16 16 THE COURT: Very

15 15 copy to the Court. 15

14 have a great deal of interest, and a telephone

well. 16 17 17 MR. BASSIN: It's paragraph 1 that matters. 17

15 conversation with counsel for Defendant.

16 We learn yesterday that there are five,
17 maybe a half dozen documents, and somehow they were

18 18 This is our response to Mr. Aughtrys inquiry 18
19 19 regarding documents on Mr. Starke's computer, and 19 20 20 we've said, 'With one exception, we have determined 20

18 found long before the deposition and included in the
19 file and produced as part of the executive pnvilege

20 claim. I don't see how that's possible.

21 21 that all fies on Mr. Starke's computer were included 21
22 22 in the Rev. Ruling 95-45 file and either produced or 22

21 MR. BASSIN: But that's not correct. 22 THE COURT: I don't think thats what the
23 witness said. I think the witness said he just put
24 them on a disk and turned them over.

23 23 subject to a pnvilege claim in Manott." 23 24 24 There was one exception. It's a one-page 24
25 25 document. Mr. Aughtry and I have discussed it. It's 25

25 MR. BASSIN: Right.
Page 802

2 2 ruling. 2
Page 800

1 1 about eight lines of a draft of the proposed revenue 1

1 MR. AUGHTRY: But he did it after the
2 deposition.

3 3 I asked him if he wanted us to go all the 3
4 4 way and get the privilege declaration for that. That 4

5 5 hasn't been pursued. 5

3 THE COURT: Correct. 4 MR. AUGHTRY: Right.
5 MR. BASSIN: And there were a significant

6 6 We have people back in Washington today 6

7 7 confirming the accuracy of that letter, but we were 7

8 8 prett careful back then. 8
9 9 THE COURT: The question I would have was 9
10 10 were the document requests made dunng the deposition 10

6 number of them which were duplicates. My 7 understanding, and we wil confirm that today, is that
8 there were a significant number of them were 9 duplicates of what was in the hard paper file which 10 had already been reviewed, produced, and pnvilege had

12 12 yesterday? -12 13 13 MR. BASSIN: That is 13
11 11 the same as those requests that were made in Court 11
14 14 MR. AUGHTRY: We asked for all of the 14 15 15 documents this gentleman had relating to this matter, 15

11 been asserted on, with the one exception. That's what

12 the letter says. 13 THE COURT: We need a list of the document.
14 MR. BASSIN: Okay. And if need be, we can
15 bnng someone -

16 16 relating to our inquiry here, and relating to his work 16 17 17 associated with what we have referred to as the 17
18 18 Helmer/Cram memo. We now understand there are five 18
19 19 documents rather than the one that we were told. 19

16 THE COURT: Title, date author.
17 MR. BASSIN: - down early next week.

20 20 MR. BASSIN: That isn't what we were - 20
21 21 excuse me. His only involvement in anything related 21

18 MR. AUGHTRY: That would be fine. 19 THE COURT: Does that satisfy you? 20 MR. AUGHTRY: That would be fine, Your
21 Honor.

22 22 to the Helmer issue was in the context of working on 22
23 23 Revenue Ruling 95-45, and what we had - what he did 23

22 MR. BASSIN: Okay. Your Honor, there was a

23 second matter that came up, I understand, regarding a
24 Mary Berman.

24 24 was he went back to his computer and dug up his 24
25 25 computer files on the Revenue Ruling 95-45 subject. 25

25 THE COURT: Right.
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Document 37-3
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MR. BASSIN: Okay. I have discussed this

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DIRECT EXAMINATION
BY MR. AUGHTRY:
Q
A

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2 with Mr. Aughtry on several occasions. There is a 3 document that she apparently authored. It's 4 authentic. It's as irrelevant as everyhing else, but 5 it's authentic, and that -6 THE COURT: Very welL. 7 MR. BASSIN: - had not been an -- I didn't

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Mr. Pfeiffer, what do you do for a living

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4 today?

I run the back offce at an investment
How long have you been associated with

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6 manager funds.
Q
A

8 know that was an issue.
9 MR. AUGHTRY: Here, if it's authentic, and I 10 assume it can then go into evidence. It appears to be 11 a one-page excerpt. There is no indication as to the 12 date, and there is a reference to TL something 93. If 13 we could ask Defendant to confirm this '93 document,

8 investment management?
Since 1997.

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Q
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And before that, how were you employed?
I was employed at Goldman Sachs as a -

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12 actually as a computer programmer for a number of

13 systems, but it started with the portolio management
14 system.

14 we wil stipulate it, put it in. Ms. Berman, who is
15 an employee of the Internal Revenue Service at the

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Q A

And then what else did you do at Goldman

16 time, that wil be done.
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16 Sachs?
Eventually that involved into -

MR. BASSIN: She was an employee of the
the time.

18 Internal Revenue Service at

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Q
A

Share those to Judge Willams, please.
Oh, I'm sorr. I'm sorry.

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MR. AUGHTRY: We'll stipulate to her 20 position and to the extent the Defendant can tell us 21 the date, the document wil go in, and we will be done 22 with that. 23 MR. BASSIN: Okay, thank you. 24 THE COURT: That disposes of that, and 25 you'll mark it as appropriate at the time.
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THE COURT: That's okay. THE WITNESS: The microphone is on this

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22 side.
After the portolio management system, it 24 eventually evolved into performance management system,
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25 which measures the performance of clients' portOliOS
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MR. AUGHTRY: Yes, Your Honor. 2 THE COURT: Any other preliminary matters? 3 MR. BASSIN: Your Honor, of course, we are 4 reserving the right to argue on brief that it's 5 irrelevant and it's meaningless. 6 THE COURT: Right. Well, it hasn't been 7 admitted yet. 8 MR. BASSIN: Okay. 9 THE COURT: He's going to offer it. 10 MR. AUGHTRY: Right. Nothing preliminary
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using various methodologies.
Eventually after that the final project or

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3 system that I was responsible for was the prime

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4 brokerage system, which is a method of settling -- a 5 system which settles trades for clients. Typically, 6 clients have multiple brokerage accounts. They trade
7 with multiple brokers.

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11 for the Plaintiffs. If the Defendant has nothing
12 else, we would like to proceed with our next witness. 13 THE COURT: You may. 14 MR. AUGHTRY: Thank you, Your Honor. 15 Plaintiffs take pleasure in callng Mr. 16 Abraham Pfeiffer to the stand. 17 Whereupon, 18 ABRAHAM PFEIFFER 19 having been duly swom, was called as a 20 witness, and was examined and testified as follows: 21 THE COURT: Be seated. Make yourself 22 comfortable. 23 THE WITNESS: Thank you.

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8 And there is a concept called the prime 9 broker, which provides for all trades that a person or 10 a fund or an entity does to settle in one place, so it 11 has all the reporting in one place, all the cash in 12 one place. They settle all the trades for the client, 13 and that was my final project. 14 BY MR. AUGHTRY: 15 Q And when you -- you left Goldman, you said,

16 in 1997?
And where did you go at that stage? left to found, to open up Sentinel 20 Advisors in March of 1997. 21 Q With whom? 22 A With Ari Bergmann. 23 Q And how did you know Mr. Bergmann? 24 A We're neighbors. 25 Q All right.

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Yes.
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Sept-09-05

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