Docstoc

Exhibit 3 to the SEC Office of Investigations: Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme - Public Version - August 31, 2009, Report No. OIG-509

Document Sample
Exhibit 3 to the SEC Office of Investigations: Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme - Public Version - August 31, 2009, Report No. OIG-509 Powered By Docstoc
					Page
UNITED STATES SECURITIES AND EXCHANGE COMMISSION

1

In

the

Matter

of:

File
GIG-509

No.

GIG-509

WITNESS:

Number

3

PAGES:

1 through

61

PLACE:

Securities
100 F Street,

and

Exchange
N.E.

Commission

Washington, DATE: Thursday,

D.C. February

20549 19, 2009

The
to notice,

above-entitled
at 2:20 p.m.

matter

came

on

for

hearing,

pursuant

Diversified

Reporting
(202) 467-9200

Services,

Inc.

MADOFF

EXHIBITS-00082

Page
1 APPEARANCES:

2

3 4 5 6
7

On behalf H.

of

the

Securities ESQ., ESQ.

and Inspector

Exchange General

Commission:

DAVID KOTZ, STEIBER,

HEIDI

Investigator ESQ.
General

CHRISTOPHER
Office of

WILSON,
Inspector

Investigator

8
9

Securities
100.F Street,

and

Exchange
N.E.

Commission

10
11

·

Washington,
202-551-6037

D.C.

20549

12

13

On

behalf

of

the

Witness:

OCIE Staff Accountant

14
15

PRO

SE

16

17

18
19

20

21

22

23 24 25

MADOFF

EXHIBITS-00083

Page
1 CONTENTS

3

3 4

WITNESSES
OCIE Staff Accountant

EXAMINATION 6

6

EXHIBITS

7 8 9 10 11 12
13

EXHIBITS: 1 2 3 4 5
6

DESCRIPTION 3/4/06 4/7/06 4/17(06 8/15/06 4/22/06
8/21/06

· e-mails to to to to Swanson
OCIE Staff Accountant

IDENTIFIED 23 25 29 31 34

Sadowski/Swanson Sadowski Swanson Swanson Swanson
OCIE Branch Chief

e-mail e-mail e-mail e-mail

OCIE Staff Accountant

Sadowski
to

invitation

14
15 16 17
18 19 20 21

McCarthy
7 8 9 4/18/06 4/24/06 3/1/07

for

Swanson
e-mail e-mail e-mail

farewell
to to to

reception
Sadowski

42
48 49 50

McCarthy Swanson McCarthy

Sadowski Swanson

22

23 24

25

MADOFF

EXHIBITS-00084

Page
1 PROCEEDINGS

4

2 3
4

MR. KOTZ: 2009
Office

We are States
General.

on

the

record and

at

on

February

19,

at

the
of

United
Inspector

Securities

Exchange

Commission

5
6 7 8 raise your

I'm
right

going

to

give

you

the

oath.

Would

you

please

hand?

Whereupon,
OCIE Staff Accountant

9
10

was called
sworn, was

as

a witness
and

herein,
testified

and
as

after
follows:

being

first

duly

examined

11
12 for the

MR. KOTZ:
record?

Could

you

state

and

spell

your

full

name

OCIE Staff Accountant

13
OCIE Staff Accountant

THE WITNESS:

14

15 16 Inspector

MR.

KOTZ: of

Great. the United

My name States

is

David Securities

Kotz. and

I'm

the

General

17
18

Exchange
of Inspector

Commission.
General,

This
case

is
No.

an

investigation

by

the

Office

OIG-509.

19 20 21 22 23 24 25 If it you won't give going record to

I'm provide later Please

going

to

ask

you

certain oath.

questions. The that to court is your

You're reporter said. questions. response, will

answers transcribe provide of to so the be the

under

and

everything verbal head picked record or up will answers another by the be

a nod able

nonverbal court clear,

be

reporter. please let me

Also,

MADOFF

EXHIBITS-00085

Page 1 2
3

17

Q relationships
A

Okay. he
He did.

Did was

he

ever

confide

in

you

about

romantic

having?

4
5 he involved

Okay.
with

When

you

first
do

met
you

him

in

February

2001,

was

somebody,

remember?

6
7 8
9

A
Personal Privacy

If

I

remember

correctly,

he

was

dating

a girl

from

·

(Z
A

And
I

how

long
have

did

that

last?
on that, not that far back.

don't

numbers

10 11 12
13

Q relationship eventually
A

Do you with married?

know

if

he

ever other

had than

a very Shana

serious Madoff, who he

somebody

Jane Doe

Yes.

As

far

as

the

serious

nature

of

a

14

relationship,

meaning
Jane Doe

like

somebody
Personal Privacy

I

know

he

was

with

for

a

~S
16
17
18

period
Personal Privacy

of

time,

19 20 21 22 23 24 25

MADOFF

EXHIBITS-00086

Page

18

1 2
3

Personal Privacy

4

5

6
7

8

9
10

11
12
13

14 15
16

17
18 19

20
21

22
23

24
25 April

Q

Okay.

Now, in the 2003 time period,
2003, we have some documents

around say
which I can show

to August

MADOFF

EXHIBITS-00087

Page

19

1
2

you which
Shana Madoff.

demonstrate

some

communications

between

Eric

and

3

A

Okay.

4
5 friendly

Q

Do you know if
with Shana?

during

that

period

of time he was

6 7
8

A Shana

All

I know is until

that

I really dating

never her.

even

heard

of

Madoff
Q

he started

Okay.

9

A

But

I will

--

but

I do know that

he was --

he and

10

John McCarthy

used

to go·and

do these

symposiums,

these

11

speaking

events.

And as far

-- and I did have a very -- I

12
13

had a ~ront-row seat with him and Shana as their
grew once I -you know.

relationship

14

But

in

my opinion,

and

this

is

--

I'm

almost

15 16
17
18

certain point
know.

of it,

Eric's

a very emotional

guy, okay, to the talk and he would
him and her.
between the

to where he and I would really
He had -things just sprang
was is

you

up between
somewhere

And basically

what

happened

19 20
21

dissolving happen,
Q
A

of his marriage, and I would probably
And
No.

the marriage say late

that

was supposed

to

spring/early

summer --

this
This

is
is

2005?
2006.

23

Okay.

Because

October

2005

--

24
25

A

October

2005 he was supposed

to be marrying

Jane Doe

MADOFF

EXHIBITS-00088

Page

20

1

Q

Right.

2
3

A
Q

And they were in a very serious
Right.

relationship.

4 5
6

A telling
months.

I never

even heard

of Shana probably could
I will

--

and I'm

you what -- my dates
I would say -but

be off
say the

by two or three
earliest that I

7 8 9

probably

heard

of Shana was probably

late

spring err

2006. to a month it couldn't

Now, once again, before that. But it could

I would probably have been --

I guess

10
11 12
13

have been too far after
it was just out of the

that
blue,

because
bam, all with

basi-cally

what happened,
you know.

of a sudden, they
it

I know from his
each other through

conversations
the

me that
but that

had known
never

symposium,

was

14
15

anything
time.

more

than

a working

relationship

for

most

of

that

16
17 probably

After
into the

the

dissolving
it

of the
remained

relationship
the same until

and
at some

spring,

18
19

point

during,

7 don't
you know,

know, one of the dinners
I think it became a little

or something
more

afterwards,

20

personal.

I think

there

was some kind

of

connection

there.

21
22
23 24 25

Q
that
frame, A

And you think,
he had
you would Absolutely. So when he first

given
for her

your
prior,
it?

relationship
in the

with
2003/2004

Eric,
time

if

feelings
have

known

about

talked

about

the

fact

that

MADOFF

EXHIBITS-00089

Page

22

1
2 mind,

A
until

I can't
this

-- I don't
thing

remember.
the

I don't
news,

-- in my
no idea

came up in

I had

3 4 5
6 7 8
9

that didn't

she was compliance. -I wasn't really

He may have paying I remember
funny industry,

said

it

and I just part of it

attention is being
kind know. time

to that -of

because,
thought but she Q
was interested

you know, all
it did was kind it in of the

I always
did what I did

how she you first

And so when was the
in her?

you

heard

that

Eric

10
11 12 13 early
Jane Doe

A

Once again,
He kind a period of like,

I think

it

was either
his the

late

spring
with where been

or

summer. for kind

of bemoaned of hey, time, Eric, to you

relationship point to

I was broken

almost

know,

you've

14
15

up with
like in

her
my

almost
head.

as long

as you were with

her,

you know,

16 17
18 19 20
21

So he really let's
April, months. things

did

go through

a mourning

period.

So March,

just
May.

say November,
You know,

December,
now you're been

January,
talking for

February,
about nine six or

seven before

They might broke
BY

have

together

months

down with
MS. STEIBER:

the

wedding.

22 23
24

(Z met
ever
Jane Doe

Had he ever to the
any other

dated where

anyone

during

the

time

that

he he

point

he met Shana?

Do you know if

saw

women?

25

A

No.

Eric

Swanson is a -- he's

not the type of guy

MADOFF

EXHIBITS-00090

Page

23

1
2

that
in

plays

the

field.
you

He's
know,

a relationship
he kind of --

guy.
just

When he gets
kind of sets

a relationship,

3
4

the
know.

tone.

But he also

gets

very

involved

very

quickly,

you

5
6 documents.

MR. KOTZ:

Okay.

I'm

going

to

show

you

a couple

of

7
8 Alex Sadowski

This
to

is

an
Eric

e-mail
Swanson.

on

March
And

4,
then

2006.
--

And

it's

from

9
10

THE WITNESS:
MR. KOTZ: Yeah.

This

is
And

it
then

right
Eric

here?
Swanson to Alex

11
12

Sadowski.

And

we're

going

to
(SEC

mark
Exhibit

this
No.

as
1

Exhibit
was

i.
marked for

13
14 BY MR. KOTZ:

identification.)

15 16
17

Q better
between

Take sense
Swanson

a look of the
and

at time
Shana

this, frame
Madoff

and in

maybe which

this the

will

give

you

a

relationship

started.

18 19 "There

A was

Oh, an

okay. option.

(Examining) I took

This a pass."

is

Eric

to

Alex.

20
21 re

SZ
Madoff.

Then

it

says,

"Quite
I'm idea a what

an

earful

from

Personal Privacy

last

night

Apparently have any

sycophant." that refers to?

Do you
23 A

Who's

Personal Privacy

OCIE Branch Chief

24
25

Q
A

Could
It could

it

be
Personal Privacy

be

because

I

know

was

a

branch

chief

MADOFF

EXHIBITS-00091

Page

41

1
2
3

Eric

truly

did not want to lose
relationship
with her.

John as a friend.
Shana because

He didn't
he was

want to end the
falling in love

with

4

Honestly,

I'm

not

so sure

how --

I think

5

eventually

-- let's

just

say none of this

stuff

happened, and

6 7
8

let's Shana.
because

say Jonn never mentioned any problems with Eric dating I'm pretty sure that,
she was firmly planted

down the road, Eric probably -in New York. I'm sure he

9 10
11

would have left I think be left
relationship

the SEC, taken a job in New York anyway. earlier because of the deteriorating

But

with

John McCarthy.

12
13 John

Q

So did his relationship
ever recover from

-- Eric's
this situation?

r~lationship

with

McCarthy

14
15
16
17

14
Q

I do believe so.
Okay.

John McCarthy was at the weddirig.
Swanson were at odds, so to

But there was -- how long of a time period

where John McCarthy and Eric
speak, over this matter?

18 19

A

Once again, weeks,

I don't

have

a definitive Can I ask,

time. when did

But I this

would say six

maybe more.

20
21

stu~~ start
have those

hitting
dates?

the fan, and when did Eric leave?
document.

Do you
is a

Q
23 farewell

Yeah.
reception

Let me show you another
for Eric Swanson.

This

24

A

Yes.

And when

did

this

stuff

start?

25

(Z

We'll

mark this

as Exhibit

6.

And this

is

from

MADOFF

EXHIBITS-00092

Page

46

1 metShana. I don't remember first time I've goneout, the 2 on-e sgain, date-wise. But I do havespecifics of when,yoU
3 know --

4
5

Q
A

And was John McCarthyever out as well?
John McCarthy out? I was never -I can't recall

6
7

ever being at a restaurant with Shjna, ~ric, and john at a
time that this was happening.
I was at the wedding. I

8 can't -- I don't believe I wasever -- off Lhetop of my
9
10

head, I don't remember beiny with John, Shana, and Eric ever
during the time -- with all three together at a time that
this stuff was going on.

11

12

O

Okay. As Eric and Shana's relarionshils got more

13 serious, di~ Eric ever talle to youabu~it iact that, you Ihe 14 know, Shana froma well-todo farr~ilq~ a rich fami~y:' was or
15
16 he

A
didn't

Weli, yeah. He tcld me ~ho she was,
--

you

know.

But

17

Q

Howdid hedescribe

that as who she was?

18
19 20 21

A
Q A

Youknow,he didn't really go into detail.
That she was the niece of Bernie Madoff? Yeah. I don't knowif he caid the niece put it this way.
When the
of

Eric -Bernie

Madoff. He said -- let's
the other guy.

stuff

22 hit the fan, I didn't know whetherher lather wasBernie cr
Okay? Honestly --

24
25 Madoff

So Eric talked about the fact that Shanawas in the
family?

MADOFF

EXHIBITS-00093


				
DOCUMENT INFO
Description: SEC Deposition of OCIE Staff Accountant UNITED STATES SECURITIES AND EXCHANGE COMMISSION In the Matter of: File No. GIG-509 GIG-509 WITNESS: Number 3 PAGES: 1 through 61 PLACE: Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 DATE: Thursday, February 19, 2009 The above-entitled matter came on for hearing, pursuant to notice, at 2:20 p.m.
About