Free Response - District Court of Federal Claims - federal

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 1 of 69

0001 1 IN THE UNITED STATES COURT OF FEDERAL CLAIMS 2 STOBIE CREEK INVESTMENTS, ) 3 ) Plaintiff, ) 4 ) -vs) No. 05-748-T 5 ) THE UNITED STATES, ) 6 ) Defendant. ) 7 8 Videotaped deposition of DAVID PARSE, taken before 9 DONNA L. POLICICCHIO, C.S.R., and Notary Public, pursuant 10 to the Federal Rules of Civil Procedure for the United 11 States Courts pertaining to the taking of depositions for 12 the purpose of discovery, at Room 3051, 219 South 13 Dearborn Street, Chicago, Illinois, commencing at 2:18 14 p.m., on the 6th day of August, 2007. 15 16 17 18 19 20 21 22 23 24 0002 1 There were present at the taking of this deposition 2 the following counsel: 3 SCHIFF HARDIN LLP by MS. COLLEEN M. FEENEY 4 6600 Sears Tower Chicago, Illinois 60606 5 (312) 258-5717 6 on behalf of the Plaintiff; 7 U.S. DEPARTMENT OF JUSTICE - TAX DIVISION by MR. STUART D. GIBSON 8 P.O. Box 403
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (1 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 2 of 69

9 10 11 12 13 14 15 16

17 18 19 20 21 22 23 24 0003 1

Washington, D.C. 20044 (202) 307-6586 on behalf of the Defendant; DEWEY BALLANTINE LLP by MS. KATHRYN E. LEONE 1301 Avenue of the Americas New York, New York 10019-6092 (212) 259-8414 on behalf of Deutsch Bank; BRUNE & RICHARD LLP by MS. THERESA TRZASKOMA 80 Broad Street New York, New York 10004 (212) 668-1900 on behalf of the witness. ALSO PRESENT: Mr. Walter Cwik, Videographer ******

DEPOSITION OF DAVID PARSE August 6, 2007 2 EXAMINATION BY: PAGE 3 Mr. Gibson 5 Ms. Feeney 112 4 ****** 5 EXHIBITS 6 Deposition Exhibit 500 5 7 Deposition Exhibit 501 6 Deposition Exhibit 502 28 8 Deposition Exhibit 503 29 Deposition Exhibit 504 29 9 Deposition Exhibit 505 30 Deposition Exhibit 506 31 10 Deposition Exhibit 507 32 Deposition Exhibit 508 32 11 Deposition Exhibit 509 37 Deposition Exhibit 510 40
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (2 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 3 of 69

12 Deposition Exhibit 511 41 Deposition Exhibit 512 42 13 Deposition Exhibit 513 48 Deposition Exhibit 514 49 14 Deposition Exhibit 515 50 Deposition Exhibit 516 51 15 Deposition Exhibit 517 52 Deposition Exhibit 518 56 16 Deposition Exhibit 519 59 Deposition Exhibit 520 61 17 Deposition Exhibit 521 63 Deposition Exhibit 522 66 18 Deposition Exhibit 523 70 Deposition Exhibit 524 72 19 Deposition Exhibit 525 73 Deposition Exhibit 526 74 20 Deposition Exhibit 527 76 Deposition Exhibit 528 78 21 Deposition Exhibit 529 80 Deposition Exhibit 530 81 22 Deposition Exhibit 531 82 Deposition Exhibit 532 83 23 Deposition Exhibit 533 86 Deposition Exhibit 534 88 24 Deposition Exhibit 535 102 Deposition Exhibit 536 106 0004 1 THE VIDEOGRAPHER: Here begins Tape No. 1 in the 2 videotaped deposition of David Parse in the matter of 3 Stobie Creek Investments LLC versus The United 4 States, in the United States Court of Federal Claims, 5 No. 05-748T. This deposition is being held at 219 6 South Dearborn, Chicago, Illinois, on August 6, 2007, 7 at approximately 2:18. 8 My name is Walter Cwik and I am a certified 9 legal specialist from Merrill Legal Solutions. The 10 court reporter today is Donna Policicchio in 11 association with Merrill Legal Solutions. 12 Will counsel please introduce themselves for 13 the record. 14 MS. FEENEY: Colleen Feeney for plaintiff. 15 MR. GIBSON: Stuart D. Gibson, Tax Division, 16 Department of Justice, for the United States.
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (3 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 4 of 69

17 MS. TRZASKOMA: Theresa Trzaskoma on behalf of 18 the witness, Mr. Parse. 19 MS. LEONE: Kathryn Leone for Deutsche Bank. 20 THE VIDEOGRAPHER: Will the court reporter please 21 swear in the witness. 22 (Witness duly sworn.) 23 24 0005 1 DAVID PARSE, 2 called as a witness herein, having been first duly sworn, 3 was examined upon oral interrogatories and testified as 4 follows: 5 EXAMINATION 6 by Mr. Gibson: 7 BY MR. GIBSON: 8 Q Please state your name for the record. 9 A David Parse. 10 Q And where do you live, Mr. Parse? 11 MS. TRZASKOMA: You can answer. 12 A A suburb of Chicago. 13 (Exhibit 500 marked as requested.) 14 BY MR. GIBSON: 15 Q Okay. And I have marked -- I've had the 16 court reporter mark, and it's in front of you, 17 Deposition Exhibit 500. 18 Have you ever seen this document -- Just for 19 the record, this is the notice of this deposition for 20 today for you, Mr. Parse. 21 Have you ever seen this document before? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0006 1 MS. TRZASKOMA: I'm sorry. You can answer that 2 question. I was signaling I don't know if you -3 THE WITNESS: I think I've seen this. 4 (Exhibit 501 marked as requested.) 5 BY MR. GIBSON: 6 Q Okay. And I show you what we've marked, and 7 you're holding in your hand, Deposition Exhibit 501, 8 which is the subpoena that we issued that your 9 attorney agreed to accept service on your behalf
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (4 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 5 of 69

10 calling for you to appear today and produce documents 11 as listed in the attachment. 12 Have you seen this document before, 13 Mr. Parse? 14 A Yes, I think I have. 15 Q And have you searched for any of the 16 documents that are called for in the attachment to 17 the subpoena? 18 A Based upon the advice of counsel, I am going 19 to invoke my Fifth Amendment privilege and decline to 20 answer. 21 Q Okay. Now, have you ever had your deposition 22 taken before, Mr. Parse? 23 A Based upon the advice of counsel, I am going 24 to invoke my Fifth Amendment privilege and decline to 0007 1 answer. 2 Q Okay. Well, I'm going to give you a few of 3 the ground rules, which are that I'm going to ask you 4 a series of questions and you are to testify 5 truthfully, and if at any time I ask you a question 6 and you don't understand the question, if you tell me 7 that you don't understand it, I'll try to rephrase it 8 in a way that you will understand. It's important 9 that you verbalize all your answers because the court 10 reporter, although the videographer will get shakes 11 of the head and nods of the head and that sort of 12 thing and uh-huhs and uh-uhs, it comes out very 13 difficult to understand on a written transcript. 14 Do you understand what I just said? 15 A Yes. 16 Q And if you want to take a break at any time, 17 just say so and we'll take a break. 18 Is that okay? 19 A Yes. 20 Q Now, please tell me about your education 21 starting with high school graduation. 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0008 1 Q Please tell me about your job history 2 beginning with after graduation from high school.
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (5 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 6 of 69

3 A Based upon the advice of counsel, I am going 4 to invoke my Fifth Amendment privilege and decline to 5 answer. 6 Q Have you ever worked for Alex. Brown? 7 A Based upon the advice of counsel, I am going 8 to invoke my Fifth Amendment privilege and decline to 9 answer. 10 Q Have you ever worked at what is now known as 11 Deutsche Bank? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q Have you ever worked at a company that was 16 known as BT Alex. Brown? 17 A Based upon the advice of counsel, I am going 18 to invoke my Fifth Amendment privilege and decline to 19 answer. 20 Q Have you ever worked at a company that was 21 called Deutsche Bank Alex. Brown? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0009 1 Q Have you ever been fired from any job, 2 Mr. Parse? 3 A Based upon the advice of counsel, I am going 4 to invoke my Fifth Amendment privilege and decline to 5 answer. 6 Q Have you ever resigned or quit a job? 7 A Based upon the advice of counsel, I am going 8 to invoke my Fifth Amendment privilege and decline to 9 answer. 10 Q Please describe the circumstances under which 11 you left Deutsche Bank -- your employment at Deutsche 12 Bank. 13 A Based upon the advice of counsel, I am going 14 to invoke my Fifth Amendment privilege and decline to 15 answer. 16 Q Do you currently hold any professional 17 licenses? 18 A Based upon the advice of counsel, I am going 19 to invoke my Fifth Amendment privilege and decline to 20 answer.
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (6 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 7 of 69

21 Q Have you ever had a professional license 22 revoked in any state? 23 A Based upon the advice of counsel, I am going 24 to invoke my Fifth Amendment privilege and decline to 0010 1 answer. 2 Q Have you ever been disciplined by a federal 3 or state governmental regulatory agency? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q Are you currently a party to any lawsuit 8 arising out of your employment with Deutsche Bank? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q Have there been any complaints filed against 13 you or disciplinary charges pending at this time 14 before state -- any federal or state governmental 15 regulatory agency? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q Have you ever been sued? 20 A Based upon the advice of counsel, I am going 21 to invoke Fifth Amendment privilege and decline to 22 answer. 23 Q Have you ever been sued by a former client of 24 yours from Deutsche Bank? 0011 1 A Based upon the advice of counsel, I am going 2 to invoke my Fifth Amendment privilege and decline to 3 answer. 4 Q Have you ever reached a settlement of any 5 claim filed against you or made against you in 6 connection with your representation of them while you 7 were at Deutsche Bank? 8 A Based upon the advice of counsel, I am going 9 to invoke my Fifth Amendment privilege and decline to 10 answer. 11 Q Have you ever been sued by anyone with 12 respect to the transactions referred to as -- I'm 13 sorry. I will start again.
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (7 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 8 of 69

14 Have you ever been sued by anyone with 15 respect to your participation in the arranging of 16 transactions known as digital options? 17 A Based upon the advice of counsel, I am going 18 to invoke my Fifth Amendment privilege and decline to 19 answer. 20 Q Have you done anything to prepare for this 21 deposition today? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0012 1 Q Did you review any documents to prepare for 2 this deposition today? 3 A Based upon the advice of counsel, I am going 4 to invoke my Fifth Amendment privilege and decline to 5 answer. 6 Q Do you possess any documents relating to 7 digital options, Deutsche Bank, Jenkens & Gilchrist, 8 the law firm of Shumaker, Loop & Kendrick, or members 9 of the Welles family dating from 1999 to the present? 10 A Based upon the advice of counsel, I am going 11 to invoke my Fifth Amendment privilege and decline to 12 answer. 13 Q Have you given anyone a written statement 14 concerning digital options? 15 A Based upon the advice of counsel, I am going 16 to invoke my Fifth Amendment privilege and decline to 17 answer. 18 Q Have you given a videotaped or audiotaped 19 statement regarding digital options? 20 A Based upon the advice of counsel, I am going 21 to invoke my Fifth Amendment privilege and decline to 22 answer. 23 Q Who is Paul Daugerdas? 24 A Based upon the advice of counsel, I am going 0013 1 to invoke my Fifth Amendment privilege and decline to 2 answer. 3 Q Have you ever met Paul Daugerdas? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer.
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (8 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 9 of 69

7 Q Who is Donna Guerin? 8 A Based upon the advice of counsel, I am going 9 to invoke my Fifth Amendment privilege and decline to 10 answer. 11 Q Who is Brian Lee? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q Have you ever met Donna Guerin? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q Have you ever met Brian Lee? 20 A Based upon the advice of counsel, I am going 21 to invoke my Fifth Amendment privilege and decline to 22 answer. 23 Q Who is Sandy Burnside? 24 A Based upon the advice of counsel, I am going 0014 1 to invoke my Fifth Amendment privilege and decline to 2 answer. 3 Q Have you ever met Sandy Burnside? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q Who is Michael Cook? 8 A Based upon the advice of counsel, I am going 9 to invoke my Fifth Amendment privilege and decline to 10 answer. 11 Q Have you ever met Michael Cook? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q Who is David Waterman? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q Have you ever met David Waterman? 20 A Based upon the advice of counsel, I am going 21 to invoke my Fifth Amendment privilege and decline to 22 answer. 23 Q Who is John Ivsan? 24 A Based upon the advice of counsel, I am going
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (9 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 10 of 69

0015 1 to invoke my Fifth Amendment privilege and decline to 2 answer. 3 Q Have you ever met John Ivsan? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q Who is Tom Cotter? 8 A Based upon the advice of counsel, I am going 9 to invoke my Fifth Amendment privilege and decline to 10 answer. 11 Q Have you ever met Tom Cotter? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q I understand, Mr. Parse, that during a 16 deposition taken last week Mr. Cotter said that he 17 had two conversations with you about the digital 18 option transactions that were contemplated by the 19 Welles family members in early 2000. 20 Did you speak with Mr. Cotter about the 21 digital options transactions? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0016 1 Q What, if anything, did you say to Mr. Cotter 2 about the digital options transactions that the 3 Welles family members were contemplating? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q Did you tell Mr. Cotter that there was a 8 reasonable opportunity for the Welles family members 9 to earn a profit from the digital option transactions 10 after payment of the premium and fees and expenses? 11 A Based upon the advice of counsel, I am going 12 to invoke my Fifth Amendment privilege and decline to 13 answer. 14 Q Did you tell Mr. Cotter that there was no 15 chance for participants in the digital option 16 transactions to hit the sweet spot? 17 A Based upon the advice of counsel, I am going
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (10 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 11 of 69

18 to invoke my Fifth Amendment privilege and decline to 19 answer. 20 Q What did you tell Mr. Cotter about the 21 chances of hitting the sweet spot payout? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0017 1 Q Who is Craig Brubaker? 2 A Based upon the advice of counsel, I am going 3 to invoke my Fifth Amendment privilege and decline to 4 answer. 5 Q Have you ever met Craig Brubaker? 6 A Based upon the advice of counsel, I am going 7 to invoke my Fifth Amendment privilege and decline to 8 answer. 9 Q Who is Perry Parker? 10 A Based upon the advice of counsel, I am going 11 to invoke my Fifth Amendment privilege and decline to 12 answer. 13 Q Have you ever met Perry Parker? 14 A Based upon the advice of counsel, I am going 15 to invoke my Fifth Amendment privilege and decline to 16 answer. 17 Q Who is Daniel Brooks? 18 A Based upon the advice of counsel, I am going 19 to invoke my Fifth Amendment privilege and decline to 20 answer. 21 Q Have you ever met Daniel Brooks? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0018 1 Q Who is Jason Shih? 2 A Based upon the advice of counsel, I am going 3 to invoke my Fifth Amendment privilege and decline to 4 answer. 5 Q Have you ever met Jason Shih? 6 A Based upon the advice of counsel, I am going 7 to invoke my Fifth Amendment privilege and decline to 8 answer. 9 Q Who is Carrie Yackee? 10 A Based upon the advice of counsel, I am going
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (11 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 12 of 69

11 to invoke my Fifth Amendment privilege and decline to 12 answer. 13 Q Is it true, Mr. Parse, that while you were 14 working here at Deutsche Bank in the years '99 and 15 2000 that Carrie Yackee was your assistant? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q Who is Rod MacKay? 20 A Based upon the advice of counsel, I am going 21 to invoke my Fifth Amendment privilege and decline to 22 answer. 23 Q Is it true that Mr. MacKay worked with you 24 during 1999 and 2000 here at Deutsche Bank in 0019 1 Chicago? 2 A Based upon the advice of counsel, I am going 3 to invoke my Fifth Amendment privilege and decline to 4 answer. 5 Q Who is Rick Pychewicz? 6 A Based upon the advice of counsel, I am going 7 to invoke my Fifth Amendment privilege and decline to 8 answer. 9 Q Have you ever met Rick Pychewicz? 10 A Based upon the advice of counsel, I am going 11 to invoke my Fifth Amendment privilege and decline to 12 answer. 13 Q Who is Jeanette Michaels? 14 A Based upon the advice of counsel, I am going 15 to invoke my Fifth Amendment privilege and decline to 16 answer. 17 Q Have you ever met Jeanette Michaels? 18 A Based upon the advice of counsel, I am going 19 to invoke my Fifth Amendment privilege and decline to 20 answer. 21 Q Who is Jeanette Kwong? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0020 1 Q Have you ever met Jeanette -- Did you ever 2 know Jeanette Kwong when she worked at Deutsche Bank 3 in Chicago in 1999 and 2000?
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (12 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 13 of 69

4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q Who is Bill Boyle? 8 A Based upon the advice of counsel, I am going 9 to invoke my Fifth Amendment privilege and decline to 10 answer. 11 Q Have you ever met Bill Boyle? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q Who is Nancy Donohue? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q Have you ever met Nancy Donohue? 20 A Based upon the advice of counsel, I am going 21 to invoke my Fifth Amendment privilege and decline to 22 answer. 23 Q Who is Ross Crawford? 24 A Based upon the advice of counsel, I am going 0021 1 to invoke my Fifth Amendment privilege and decline to 2 answer. 3 Q Have you ever met Ross Crawford? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q Who is Jeffrey Rupp? 8 A Based upon the advice of counsel, I am going 9 to invoke my Fifth Amendment privilege and decline to 10 answer. 11 Q Have you ever met Jeffrey Rupp? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q Who is Todd Clendening? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q Have you ever met Todd Clendening? 20 A Based upon the advice of counsel, I am going 21 to invoke my Fifth Amendment privilege and decline to
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (13 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 14 of 69

22 answer. 23 Q Who is Jeff Welles? 24 A Based upon the advice of counsel, I am going 0022 1 to invoke my Fifth Amendment privilege and decline to 2 answer. 3 Q Have you ever met or spoken with Jeff Welles? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q Who is Peter Welles? 8 A Based upon the advice of counsel, I am going 9 to invoke my Fifth Amendment privilege and decline to 10 answer. 11 Q Have you ever spoken in person or on the 12 telephone with Peter Welles? 13 A Based upon the advice of counsel, I am going 14 to invoke my Fifth Amendment privilege and decline to 15 answer. 16 Q Who is Christopher Welles? 17 A Based upon the advice of counsel, I am going 18 to invoke my Fifth Amendment privilege and decline to 19 answer. 20 Q Have you ever met or spoken with Christopher 21 Welles? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0023 1 Q Who is David K. Welles, Sr.? 2 A Based upon the advice of counsel, I am going 3 to invoke my Fifth Amendment privilege and decline to 4 answer. 5 Q Have you ever met or spoken with David K. 6 Welles, Sr.? 7 A Based upon the advice of counsel, I am going 8 to invoke my Fifth Amendment privilege and decline to 9 answer. 10 Q Who is David K. Welles, Jr.? 11 A Based upon the advice of counsel, I am going 12 to invoke my Fifth Amendment privilege and decline to 13 answer. 14 Q Have you ever met or spoken with David K.
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (14 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 15 of 69

15 Welles, Jr.? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q Who is Virginia Welles Jordan? 20 A Based upon the advice of counsel, I am going 21 to invoke my Fifth Amendment privilege and decline to 22 answer. 23 Q Have you ever met or spoken with Virginia 24 Welles Jordan? 0024 1 A Based upon the advice of counsel, I am going 2 to invoke my Fifth Amendment privilege and decline to 3 answer. 4 Q Who is Stephen Bores? 5 A Based upon the advice of counsel, I am going 6 to invoke my Fifth Amendment privilege and decline to 7 answer. 8 Q Have you ever met or spoken with Stephen 9 Bores? 10 A Based upon the advice of counsel, I am going 11 to invoke my Fifth Amendment privilege and decline to 12 answer. 13 Q Who is Robert Floyd? 14 A Based upon the advice of counsel, I am going 15 to invoke my Fifth Amendment privilege and decline to 16 answer. 17 Q Have you ever met or spoken with Robert 18 Floyd? 19 A Based upon the advice of counsel, I am going 20 to invoke my Fifth Amendment privilege and decline to 21 answer. 22 Q Who is Larry Goldstein? 23 A Based upon the advice of counsel, I am going 24 to invoke my Fifth Amendment privilege and decline to 0025 1 answer. 2 Q Have you ever met or spoken with Larry 3 Goldstein? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q I'm going to ask you a series of questions
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (15 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 16 of 69

8 about transactions that are referred to as digital 9 option transactions. These are the transactions that 10 the Welles family members engaged in that are at 11 issue in this case. 12 I want to ask you, Mr. Parse, did you play 13 any role in developing the form of the digital option 14 transactions? 15 A Based upon the advice of counsel, I am going 16 to invoke my Fifth Amendment privilege and decline to 17 answer. 18 Q Did you play any role in developing any of 19 the documents used to carry out the digital options 20 transactions? 21 A Based upon the advice of counsel, I am going 22 to invoke my Fifth Amendment privilege and decline to 23 answer. 24 Q Did you play any role in reviewing any of the 0026 1 documents used to carry out the digital option 2 transactions? 3 A Based upon the advice of counsel, I am going 4 to invoke my Fifth Amendment privilege and decline to 5 answer. 6 Q Did you play any role in seeking any internal 7 approvals within Deutsche Bank for carrying out the 8 digital option transactions? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q Did you play any role in developing any of 13 the steps to be used in carrying out the digital 14 option transactions? 15 A Based upon the advice of counsel, I am going 16 to invoke my Fifth Amendment privilege and decline to 17 answer. 18 Q Did you play any role in deciding what terms 19 would be used for the foreign exchange option trades 20 as part of the digital option transactions? 21 A Based upon the advice of counsel, I am going 22 to invoke my Fifth Amendment privilege and decline to 23 answer. 24 Q Did you play any role in determining the fees 0027
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (16 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 17 of 69

1 to be charged to the clients for engaging in the 2 digital option transactions? 3 A Based upon the advice of counsel, I am going 4 to invoke my Fifth Amendment privilege and decline to 5 answer. 6 Q How is it that -- How was it determined what 7 fee you would earn from each digital option 8 transaction that your clients engaged in? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q How was your fee determined? 13 A Based upon the advice of counsel, I am going 14 to invoke my Fifth Amendment privilege and decline to 15 answer. 16 Q How was the price that Deutsche Bank charged 17 as a premium to the clients who engaged in digital 18 option transactions determined? 19 A Based upon the advice of counsel, I am going 20 to invoke my Fifth Amendment privilege and decline to 21 answer. 22 Q Is it correct that the premium paid to 23 Deutsche Bank was a percentage of the notional amount 24 of one of the options? 0028 1 A Based upon the advice of counsel, I am going 2 to invoke my Fifth Amendment privilege and decline to 3 answer. 4 Q Is it correct that the premium charged by 5 Deutsche Bank was a percentage of the income that the 6 client sought to shelter from taxation? 7 A Based upon the advice of counsel, I am going 8 to invoke my Fifth Amendment privilege and decline to 9 answer. 10 Q Did you share the fees that you had earned 11 from digital option transactions with anyone? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 MR. GIBSON: Mark this one as the next number. 16 (Exhibit 502 marked as requested.) 17 BY MR. GIBSON: 18 Q Mr. Parse, I show you what we've marked for
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (17 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 18 of 69

19 identification as Exhibit 502. This is a document 20 that the United States has received pursuant to 21 subpoena in discovery. That's a letter dated 22 December 9, 1999, from Paul Daugerdas to Jeff Welles 23 describing the terms of an engagement. 24 Have you ever seen this document before? 0029 1 A Based upon the advice of counsel, I am going 2 to invoke my Fifth Amendment privilege and decline to 3 answer. 4 MR. GIBSON: Mark this one 503. 5 (Exhibit 503 marked as requested.) 6 BY MR. GIBSON: 7 Q Mr. Welles -- Mr. Welles. Mr. Parse, I show 8 you what we've marked for identification as 9 Exhibit 503. This is a document obtained by the 10 United States in discovery, and it's got the Jeff 11 Welles fax banner on the top dated May 4, 2000, and 12 it's a document on Jenkens & Gilchrist letterhead 13 entitled Basis Enhancing Derivatives Structure, 14 Executive Summary. Take a moment to read it, please. 15 Have you ever seen this document before? 16 A Based -- excuse me. Based upon the advice of 17 counsel, I am going to invoke my Fifth Amendment 18 privilege and decline to answer. 19 MR. GIBSON: Next one. 20 (Exhibit 504 marked as requested.) 21 BY MR. GIBSON: 22 Q Mr. Parse, I show you what we've marked for 23 identification as Exhibit 504. This is an e-mail 24 obtained in discovery pursuant to subpoena, an e-mail 0030 1 dated March 20, 2000, from John Ivsan to Donna 2 Guerin, copy you, at btalexbrown.com. 3 Before I ask you about the document, did you 4 have an e-mail account on the Deutsche Bank system in 5 2000? 6 A Based upon the advice of counsel, I am going 7 to invoke my Fifth Amendment privilege and decline to 8 answer. 9 Q I show you what we've marked as Exhibit 504. 10 And this is an e-mail concerning the Welles family 11 and Stephen Bores.
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (18 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 19 of 69

12 Have you ever seen this document before? 13 A Based upon the advice of counsel, I am going 14 to invoke my Fifth Amendment privilege and decline to 15 answer. 16 (Exhibit 505 marked as requested.) 17 BY MR. GIBSON: 18 Q Oh, I want to go back to 504 for a second. I 19 realize I handed you 505, Mr. Parse. If you look at 20 the next to the last paragraph on Exhibit 504, it 21 says, Unfortunately, Virginia Jordan has decided not 22 to consolidate her interests with the others who are 23 pursuing the digital options investment strategy. 24 Do you recall learning at some point in 0031 1 March of 2000 that Virginia Jordan had decided not to 2 pursue the digital options transactions? 3 A Based upon the advice of counsel, I am going 4 to invoke my Fifth Amendment privilege and decline to 5 answer. 6 Q Okay. Let's turn to 505. I show you what 7 we've marked as Exhibit 505. This is an e-mail 8 obtained in discovery pursuant to subpoena. It's 9 from John Ivsan to Donna Guerin dated March 20, 2000, 10 copy you. 11 Have you ever seen this document before, 12 Mr. Parse? 13 A Based upon the advice of counsel, I am going 14 to invoke my Fifth Amendment privilege and decline to 15 answer. 16 Thank you. 17 (Exhibit 506 marked as requested.) 18 BY MR. GIBSON: 19 Q Mr. Parse, I show you what we've marked as 20 Exhibit 506. This is a document obtained pursuant to 21 discovery. It is an e-mail dated March 24, 2000, 22 from John Ivsan to Donna Guerin, copy you; subject, 23 Virginia Jordan. 24 Have you ever seen this document before? 0032 1 A Based upon the advice of counsel, I am going 2 to invoke my Fifth Amendment privilege and decline to 3 answer. 4 Q Do you recall learning at some point during
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (19 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 20 of 69

5 March 2000 that Virginia Welles Jordan had decided to 6 participate in the digital option transactions? 7 A Based upon the advice of counsel, I am going 8 to invoke my Fifth Amendment privilege and decline to 9 answer. 10 (Exhibit 507 marked as requested.) 11 BY MR. GIBSON: 12 Q Mr. Parse, I show you what we've marked as 13 Deposition Exhibit 507. This is a document obtained 14 pursuant to subpoena by the United States in this 15 case. It's an e-mail from John Ivsan to Donna Guerin 16 dated March 31, 2000, which is the date on which the 17 Welles family members entered into the digital option 18 transactions, and it contains an attachment, Contract 19 Amount and Fee Schedule. 20 Have you ever seen this document before? 21 A Based upon the advice of counsel, I am going 22 to invoke my Fifth Amendment privilege and decline to 23 answer. 24 (Exhibit 508 marked as requested.) 0033 1 BY MR. GIBSON: 2 Q Mr. Parse, I show you what we've marked as 3 Exhibit 508. This is a document -- This is a 4 document obtained -- It's a number of pages. I 5 apologize. The first page is an e-mail from John 6 Ivsan to Donna Guerin; subject, Welles update, dated 7 April 4, 2000. The second page, for the record, is 8 the succeeding -- the next succeeding Bates number; 9 that is, IRS-JG-839. And that's an e-mail from John 10 Ivsan to Donna Guerin, copy you, dated March 22, 11 2000. And then following that are four pages -- one, 12 two -- five pages of contract amounts and fee 13 schedules concerning members of the Welles family and 14 their participation in the digital option 15 transactions. 16 Have you ever seen any of these documents 17 before, Mr. Parse? 18 A Based upon the advice of counsel, I am going 19 to invoke my Fifth Amendment privilege and decline 20 to answer. 21 MS. FEENEY: For the record, Exhibit 508 is not 22 consecutively numbered throughout the exhibit.
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (20 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 21 of 69

23 MR. GIBSON: That is correct. Actually, they are 24 consecutively numbered. There is two sets of 0034 1 consecutive numbers. If you use the first Bates 2 number that got put on there, which is the ones that 3 don't have any letters in front of them, the first 4 two are 837 and 838 and then the next ones are 862 5 through 866. 6 MS. FEENEY: Okay. 7 MR. GIBSON: It is what it is. 8 BY MR. GIBSON: 9 Q I'd like you to turn over to the third page 10 of the exhibit, which is the -- it's Bates 862, also 11 IRS-JG-863. And this is a document entitled Contract 12 Amount & Fee Schedule, Final, dated March 30, 2000, 13 3:00 o'clock p.m. 14 Have you ever seen this document before, 15 Mr. Parse? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q There is a column Contract Amount. 20 Do you know what that is? 21 A Based upon the advice of counsel, I am going 22 to invoke my Fifth Amendment privilege and decline to 23 answer. 24 Q The next column is J&G fees. 0035 1 Does that stand for the fees that were due 2 to Jenkens & Gilchrist? 3 A Based upon the advice of counsel, I am going 4 to invoke my Fifth Amendment privilege and decline to 5 answer. 6 Q The last column is SL&K fees. 7 Are those the fees to be paid to the 8 Shumaker, Loop & Kendrick law firm? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q Do you know how the amount of fees was 13 determined as reflected on this schedule? 14 A Based upon the advice of counsel, I am going 15 to invoke my Fifth Amendment privilege and decline to
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (21 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 22 of 69

16 answer. 17 Q Do you know if the fees were a percentage of 18 the income to be sheltered from taxation? 19 A Based upon the advice of counsel, I am going 20 to invoke my Fifth Amendment privilege and decline to 21 answer. 22 Q Were the fees a percentage of the income to 23 be sheltered from taxation? 24 A Based upon the advice of counsel, I am going 0036 1 to invoke my Fifth Amendment privilege and decline to 2 answer. 3 Q Please turn to the next page in the exhibit. 4 This is the one that's Bates numbered 863 and also 5 IRS-JG-864. You see over on the right-hand -- Do you 6 see the three far right columns, Amount Realized, 7 Adjusted Basis, and Approximate Gain? 8 Do you see where I am, Mr. Parse? 9 A Yes. 10 Q Is the amount realized, is that the amount 11 that the Welles family members expected to realize on 12 the redemption of their stock in Therma-Tru 13 Corporation? 14 A Based upon the advice of counsel, I am going 15 to invoke my Fifth Amendment privilege and decline to 16 answer. 17 Q The column Adjusted Basis, is that your 18 understanding of what the basis for tax purposes that 19 each of the Welles family members and Mr. Bores had 20 in their stock in Therma-Tru Corporation? 21 A Based on the advice of counsel, I am going to 22 invoke my Fifth Amendment privilege and decline to 23 answer. 24 Q The last column, Approximate Gain, is that 0037 1 just the two preceding columns, the second one 2 subtracted from the first? 3 A Based upon the advice of counsel, I am going 4 to invoke my Fifth Amendment privilege and decline to 5 answer. 6 Q Was the amount, the cumulative amount of the 7 digital option transactions in which the Welles 8 family members and Mr. Bores engaged, did they
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (22 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 23 of 69

9 approximate the amount of gain that they expected to 10 realize upon the redemption of the stock in 11 Therma-Tru Corporation during 2000? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q Turn to the next page, please, Mr. Parse. 16 This one is titled Welles Family Contract Amounts. 17 And it's Bates 864 and IRS-JG-865. The third -- The 18 final column on the right-hand side, Contract Amount, 19 is that the amount of each family member's digital 20 option transaction? 21 A Based upon the advice of counsel, I am going 22 to invoke my Fifth Amendment privilege and decline to 23 answer. 24 (Exhibit 509 marked as requested.) 0038 1 BY MR. GIBSON: 2 Q Mr. Parse, I show you what we've marked as 3 Exhibit 509, which is a two-page document. It looks 4 to be a fax cover sheet from Larry Goldstein at North 5 Channel LLC to you at Deutsche Bank in Chicago with 6 an attachment. 7 Have you ever seen this document before, 8 Mr. Parse? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q The fax number that's on the front page of 13 the sheet listed as yours, (312) 537-3729, was that 14 your fax number in November of 2004? 15 A Based upon the advice of counsel, I am going 16 to invoke my Fifth Amendment privilege and decline to 17 answer. 18 Q The phone number right below, was that your 19 telephone number in November 2004? 20 A Based upon the advice of counsel, I am going 21 to invoke my Fifth Amendment privilege and decline to 22 answer. 23 Q Please turn over to the second page, and for 24 the record these are Bates numbered Plaintiff's 2332 0039 1 and 2333. The second page is titled Stobie Creek
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (23 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 24 of 69

2 Investments, Capital Contributions Schedule, and the 3 word "revised" is handwritten and circled. 4 Have you ever seen this document before? 5 A Based upon the advice of counsel, I am going 6 to invoke my Fifth Amendment privilege and decline to 7 answer. 8 Q Does this document, the second page of the 9 exhibit, reflect the instructions to the Welles 10 family members for how they were to pay the premiums 11 for the digital -- for the foreign exchange option 12 transactions that they were entering into with 13 Deutsche Bank Alex. Brown? 14 A Based upon the advice of counsel, I am going 15 to invoke my Fifth Amendment privilege and decline to 16 answer. 17 MS. FEENEY: Can we go off the record for a 18 minute? 19 MR. GIBSON: Certainly. 20 THE VIDEOGRAPHER: We are going off the record at 21 2:54. 22 (Discussion had off the record.) 23 THE VIDEOGRAPHER: We are going back on the 24 record at 3:02. 0040 1 (Exhibit 510 marked as requested.) 2 BY MR. GIBSON: 3 Q Mr. Parse, I show you what we've marked as 4 Exhibit 510. This is a copy of the trade 5 confirmation for the digital option transaction that 6 JFW Investments LLC did with the Deutsche Bank. 7 Have you ever seen this document? By the 8 way, it's directed to JFW Investments LLC, care of 9 David Parse, DB Alex. Brown in Chicago. 10 Have you ever seen this document before? 11 A Based upon the advice of counsel, I am going 12 to invoke my Fifth Amendment privilege and decline to 13 answer. 14 Q Please turn to the third page of the exhibit. 15 Do you recognize any of the signatures on that page? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q Did you receive copies of the trade
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (24 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 25 of 69

20 confirmations for all of your clients who 21 participated in the digital option transactions 22 through Deutsche Bank? 23 A Based upon the advice of counsel, I am going 24 to invoke my Fifth Amendment privilege and decline to 0041 1 answer. 2 (Exhibit 511 marked as requested.) 3 BY MR. GIBSON: 4 Q Mr. Parse, I show you what we've marked as 5 Exhibit 511. This is a copy of a tax opinion letter 6 from Jenkens & Gilchrist to Jeffrey F. Welles dated 7 January 2, 2001. This is the portion of the letter 8 that is specific to Mr. Welles without the additional 9 attachments, just for the record, and those are about 10 an inch thick. 11 Have you ever seen this document before, 12 Mr. Parse? 13 A Based upon the advice of counsel, I am going 14 to invoke my Fifth Amendment privilege and decline to 15 answer. 16 Q Did you get copies of the tax opinion letters 17 that your client -- that were furnished to your 18 clients who did digital option transactions with 19 Deutsche Bank? 20 A Based upon the advice of counsel, I am going 21 to invoke my Fifth Amendment privilege and decline to 22 answer. 23 Q If you turn over to Page 7 of the exhibit, 24 you will see a series of representations, Mr. Parse. 0042 1 I'd like you to just take a minute and read those to 2 yourself. They continue on to the final page of the 3 exhibit. 4 Mr. Parse, did you have any role in 5 developing those representations that are contained 6 in this letter? 7 A Based upon the advice of counsel, I am going 8 to invoke my Fifth Amendment privilege and decline to 9 answer. 10 Q Did you communicate any of the information in 11 these representations to Jeffrey Welles? 12 A Based upon the advice of counsel, I am going
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (25 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 26 of 69

13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q Did you communicate any of the matters listed 16 in these representations to any other member of the 17 Welles family? 18 A Based upon the advice of counsel, I am going 19 to invoke my Fifth Amendment privilege and decline to 20 answer. 21 (Exhibit 512 marked as requested.) 22 BY MR. GIBSON: 23 Q Mr. Parse, I show you what we've marked as 24 Deposition Exhibit 512. This is a document that was 0043 1 provided by Deutsche Bank to the United States 2 pursuant to dep -- pursuant to subpoena issued in 3 this case. It is a -- It is -- It runs from 4 DOJ-Stobie-3519 through 3525. And the front page is 5 an e-mail from you to Carrie Yackee, copy you and 6 Rick Pychewicz, dated November 23rd, 1999, with an 7 attachment. 8 Did you write this e-mail, Mr. Parse? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q Attached to the e-mail is a spreadsheet, and 13 on the front page of the spreadsheet are names, 14 amounts, the initials T/D, S/d, equity, an account 15 number, a rep number, and a dollar amount for trade, 16 and then continuing on to the next page, a net 17 premium, a confirmation number, estimated gross, 18 currency, type, two strike prices. 19 Did you play any role in preparing this 20 spreadsheet, Mr. Parse? 21 A Based upon the advice of counsel, I am going 22 to invoke my Fifth Amendment privilege and decline to 23 answer. 24 Q Are the names listed on the left-hand column 0044 1 in Field 1 in the spreadsheet, are those the names of 2 your clients when you were at Deutsche Bank in 3 Chicago? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (26 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 27 of 69

6 answer. 7 Q Are those the names of clients who did 8 digital option transactions with you at Deutsche 9 Bank? 10 A Based upon the advice of counsel, I am going 11 to invoke my Fifth Amendment privilege and decline to 12 answer. 13 Q The initials over in Column 4, T/D, does that 14 stand for trade date? 15 A Based upon the advice of counsel, I am going 16 to invoke my Fifth Amendment privilege and decline to 17 answer. 18 Q If you look up in Row 2, it says -- it looks 19 like it says estimated fees, non-EY. 20 Did EY -- Does EY stand for Ernst & Young? 21 A Based upon the advice of counsel, I am going 22 to invoke my Fifth Amendment privilege and decline to 23 answer. 24 Q And then in Line 3 it says EY premium. 0045 1 Is that the amount of the premium that went 2 to Ernst & Young? 3 A Based upon the advice of counsel, I am going 4 to invoke my Fifth Amendment privilege and decline to 5 answer. 6 Q The -- You see over in Field 5 it says S/d. 7 Is that the settlement date for the digital 8 option contracts? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q Over in Field 6 it says Entity. 13 Are those the entities that were listed as 14 the parties opposite Deutsche Bank on the digital 15 option transactions? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q In Field 7 it says Account Number. 20 Are those the Deutsche Bank accounts numbers 21 for the entities listed in Field 6? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (27 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 28 of 69

24 answer. 0046 1 Q Over in Field 8 it says Rep Number. 2 Is it true, Mr. Parse, that when you worked 3 at Deutsche Bank in 1999 and 2000 your representative 4 number was Number 30? 5 A Based upon the advice of counsel, I am going 6 to invoke my Fifth Amendment privilege and decline to 7 answer. 8 Q In Field 9 it says Trade with a dollar 9 amount. 10 Is that the amount that each one of the 11 individuals on the left-hand side engaged in in terms 12 of the digital option transaction? 13 A Based upon the advice of counsel, I am going 14 to invoke my Fifth Amendment privilege and decline to 15 answer. 16 Q If you turn over to the next page, the 17 spreadsheet continues into Field 10, and the heading 18 says Net Premium. 19 Is that the net premium that the individual 20 who did the digital option transaction paid to 21 Deutsche Bank? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer base. 0047 1 Q In Field 11 it says Confirm Number. 2 Are those the numbers, the trade confirms 3 that reflect the digital option transactions? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q The next four columns, 13, 14, 15, and 16, 8 which are Currency, Type, First Strike, and Second 9 Strike, are those specific details about each of the 10 digital option transactions reflected on each 11 particular line? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q The total -- Each of the transactions that 16 are listed in this exhibit, in Exhibit 512, are these
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (28 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 29 of 69

17 the digital option transactions that your clients did 18 with you at Deutsche Bank in the calendar year 1999? 19 A Based upon the advice of counsel, I am going 20 to invoke my Fifth Amendment privilege and decline to 21 answer. 22 Q Over on the front page of 512, it says -- the 23 attachment is identified as Paul D 1999 Digital 24 Options Master.xls. 0048 1 Is that -- Is Paul D. Paul Daugerdas? 2 A Based upon the advice of counsel, I am going 3 to invoke my Fifth Amendment privilege and decline to 4 answer. 5 (Exhibit 513 marked as requested.) 6 BY MR. GIBSON: 7 Q I show you what we've marked as Exhibit 513. 8 It's a document obtained pursuant to subpoena issued 9 to Deutsche Bank in this case. It consists of a 10 cover sheet and an attached Excel spreadsheet, 11 DOJ-Stobie-9474 through 9500. The cover sheet is an 12 e-mail from you to Carrie Yackee dated Monday, 13 December 27, 1999, with an attached Excel 14 spreadsheet. 15 Did you send this e-mail, Mr. Parse? 16 A Based upon the advice of counsel, I am going 17 to invoke my Fifth Amendment privilege and decline to 18 answer. 19 Q And is Paul D. referenced in the attachment, 20 is that Paul Daugerdas? 21 A Based upon the advice of counsel, I am going 22 to invoke my Fifth Amendment privilege and decline to 23 answer. 24 Q Would you start on the first page of the 0049 1 attachment, which is 9475, would you please 2 describe each -- the meaning of each of the headings 3 for each of the fields in the Excel spreadsheet? 4 A Based upon the advice of counsel, I am going 5 to invoke my Fifth Amendment privilege and decline to 6 answer. 7 Q Is this spreadsheet a list of clients of 8 yours at Deutsche Bank who did digital option 9 transactions in the year 1999?
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (29 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 30 of 69

10 A Based upon the advice of counsel, I am going 11 to invoke my Fifth Amendment privilege and decline to 12 answer. 13 MR. GIBSON: What was that? 14 MS. TRZASKOMA: 513. 15 MR. GIBSON: Thank you. 16 (Exhibit 514 marked as requested.) 17 BY MR. GIBSON: 18 Q Mr. Parse, I show you what we've marked as 19 Exhibit 514. It's a document obtained from Deutsche 20 Bank pursuant to subpoena in this case. It's an 21 e-mail string, and it's identified as DOJ-Stobie-3624 22 and 3625. And the way I understand you read these is 23 you read them from the bottom up, so if you start on 24 the second page and you see there is an e-mail from 0050 1 Rick Pychewicz dated January 24, 2000, and then there 2 is a second e-mail at the bottom of the first page, 3 January 28, from Rick Pychewicz to himself, copy 4 Craig Brubaker, Kristine Humphrey, Perry Parker, you, 5 and two other people. And then the top is an e-mail 6 from Carrie Yackee to Rick Pychewicz, copy you, dated 7 January 28. 8 Have you ever seen -- Did you receive the 9 e-mails that were directed to you as are indicated on 10 the first page of the exhibit, Mr. Parse? 11 A Based upon the advice of counsel, I am going 12 to invoke my Fifth Amendment privilege and decline to 13 answer. 14 (Exhibit 515 marked as requested.) 15 BY MR. GIBSON: 16 Q I show you what we've marked as Exhibit 515, 17 Mr. Parse. This is a document obtained from Deutsche 18 Bank pursuant to subpoena issued in this case. It's 19 Bates stamped DOJ-Stobie-3434 through 3439. It 20 consists of an e-mail with an attachment. The e-mail 21 is from Carrie Yackee to Rick Pychewicz, copy you and 22 Carrie Yackee, dated January 28, 2000; subject, Re: 23 premiums due. 24 Did you receive a copy of this e-mail, 0051 1 Mr. Parse, around the time it was sent? 2 A Based upon the advice of counsel, I am going
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (30 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 31 of 69

3 to invoke my Fifth Amendment privilege and decline to 4 answer. 5 Q Please turn to the second page, which is the 6 first page of an Excel spreadsheet that runs four 7 pages. 8 Are these -- Is this a compilation, 9 Mr. Parse, of the dates, amounts, trade dates, 10 entities, account numbers, trade amounts, and net 11 premiums to Deutsche Bank of clients of yours who 12 participated in digital option transactions during 13 1999? 14 A Based upon the advice of counsel, I am going 15 to invoke my Fifth Amendment privilege and decline to 16 answer. 17 (Exhibit 516 marked as requested.) 18 BY MR. GIBSON: 19 Q I show you, Mr. Parse, what we've marked as 20 Exhibit 516. This is an e-mail from you to Darlene 21 Gobrecht, Carrie Yackee, and Rod MacKay dated 22 October 24, 2000; subject, digital -- October digital 23 option business. 24 Who is Darlene Gobrecht? 0052 1 A Based upon the advice of counsel, I am going 2 to invoke my Fifth Amendment privilege and decline to 3 answer. 4 Q Did you compose this e-mail, Mr. Parse? 5 A Based upon the advice of counsel, I am going 6 to invoke my Fifth Amendment privilege and decline to 7 answer. 8 Q Did you send this e-mail? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q Does this e-mail list the amounts that -- of 13 premiums paid to Deutsche Bank -- I'm sorry. I'm 14 going to start this one again. 15 Does this e-mail list the amount of money 16 that you earned from clients of yours who 17 participated in digital option transactions during 18 October of 2000? 19 A Based upon the advice of counsel, I am going 20 to invoke my Fifth Amendment privilege and decline to
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (31 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 32 of 69

21 answer. 22 (Exhibit 517 marked as requested.) 23 BY MR. GIBSON: 24 Q I show you what we've marked as Exhibit 517. 0053 1 This is a document obtained from Deutsche Bank 2 pursuant to subpoena. It is a cover e-mail and an 3 attached Excel spreadsheet. It runs from 4 DOJ-Stobie-9438 to 9458. And this is an e-mail from 5 Carrie Yackee to Richard Ignacio dated October 25, 6 2000; subject, Digital Options Master 2000 7 10-24-00.xls. 8 Who is Richard Ignacio? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q Did you ever see this document at or about 13 the time it was sent? 14 A Based upon the advice of counsel, I am going 15 to invoke my Fifth Amendment privilege and decline to 16 answer. 17 Q Is the -- Please turn to the spreadsheet, 18 which begins on the second page of the exhibit, 19 Mr. Parse. 20 Is this a compilation of the details of the 21 clients of yours who engaged in digital option 22 transactions with Deutsche Bank in the year 2000? 23 A Based upon the advice of counsel, I am going 24 to invoke my Fifth Amendment privilege and decline to 0054 1 answer. 2 Q If you look on the second page of the 3 exhibit, which is 9439 on the bottom, if you look on 4 line -- I can't tell if it's 34 or 35 -- David K. 5 Parse. 6 Is your middle initial K? 7 A Yes. 8 Q Is that you? 9 A Based upon the advice of counsel, I am going 10 to invoke my Fifth Amendment privilege and decline to 11 answer. 12 Q Did you participate in a digital option 13 transaction on your own account -- for your own
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (32 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 33 of 69

14 account in the year 2000? 15 A Based upon the advice of counsel, I am going 16 to invoke my Fifth Amendment privilege and decline to 17 answer. 18 Q Now, if you look on the very top of that 19 second page of the exhibit, it says black, JG; blue, 20 DBO; purple, Ivsan. 21 What do those mean? 22 A Based upon the advice of counsel, I am going 23 to invoke my Fifth Amendment privilege and decline to 24 answer. 0055 1 Q Is JG Jenkens & Gilchrist? 2 A Based upon the advice of counsel, I am going 3 to invoke my Fifth Amendment privilege and decline to 4 answer. 5 Q Is BDO BDO Seidman? 6 A Based upon the advice of counsel, I am going 7 to invoke my Fifth Amendment privilege and decline to 8 answer. 9 Q And is Ivsan John Ivsan of Shumaker -- then 10 of Shumaker, Loop & Kendrick? 11 A Based upon the advice of counsel, I am going 12 to invoke my Fifth Amendment privilege and decline to 13 answer. 14 Q Do you know if any of the transactions that 15 are compiled in Exhibit -- in the spreadsheet 16 attached as part of Exhibit 517, if any of those 17 clients hit the sweet spot in the digital option 18 transactions? 19 A Based upon the advice of counsel, I am going 20 to invoke my Fifth Amendment privilege and decline to 21 answer. 22 Q If you just go back for a second, I want to 23 ask you the same question about 513. You should have 24 it in that pile, Mr. Parse. 0056 1 A Got it. 2 Q Do you know if any of the individuals who are 3 listed in the spreadsheet attached to the e-mail in 4 Exhibit 513 hit the sweet spot on their digital 5 option transactions with Deutsche Bank? 6 A Based upon the advice of counsel, I am going
file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Bri...ponse%20to%20Motion%20to%20Exclude%20Depositions.txt (33 of 69)3/19/2008 1:44:05 PM

file:///D|/Upload/Stobie%20Creek/Exhibits%20to%20Briefs/Exhibit%201%20to%20Response%20to%20Motion%20to%20Exclude%20Depositions.txt

Case 1:05-cv-00748-CCM

Document 102-2

Filed 03/19/2008

Page 34 of 69

7 to invoke my Fifth Amendment privilege and decline to 8 answer. 9 Q Did any client of yours who engaged in 10 digital option transactions with Deutsche Bank ever 11 hit the sweet spot? 12 A Based upon the advice of counsel, I am going 13 to invoke my Fifth Amendment privilege and decline to 14 answer. 15 Q Do you know of any client of -- who engaged 16 in a digital option transaction with Deutsche Bank 17 who ever hit the sweet spot? 18 A Based upon the advice of counsel, I am going 19 to invoke my Fifth Amendment privilege and decline to 20 answer. 21 (Exhibit 518 marked as requested.) 22 BY MR. GIBSON: 23 Q I show you what we've marked, Mr. Parse, as 24 Exhibit 518. This is a document obtained from 0057 1 Deu