Court filing
Transcript of Trial Day 12 as to Eric Dean Sheppard held on 12/18/2023 — USA v. Sheppard (Dkt. 318, S.D. Fla.)
Filed February 25, 2025 in USA v. Sheppard; one of 253 filings from this case.
Record facts
| Court | U.S. District Court for the Southern District of Florida |
|---|---|
| Filed | 2025-02-25 |
U.S. District Court for the Southern District of Florida · No. 1:22-cr-20290-BB · Doc. 318 · 2025-02-25 · Docket on CourtListener
Full text
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO. 1:22-cr-20290-BB-1
UNITED STATES OF AMERICA,
Plaintiff,
December 18, 2023
9:13 a.m.
vs.
ERIC DEAN SHEPPARD,
Defendant.
Pages 1 THROUGH 268
______________________________________________________________
TRANSCRIPT OF TRIAL DAY 12
BEFORE THE HONORABLE BETH BLOOM
UNITED STATES DISTRICT JUDGE
And a Jury of 12
Appearances:
FOR THE GOVERNMENT: UNITED STATES ATTORNEY'S OFFICE
AIMEE C. JIMENEZ, AUSA
ANA MARIA MARTINEZ, AUSA
99 Northeast 4th Street
Miami, Florida 33132
FOR THE DEFENDANT: SALE & WEINTRAUB, PA
JAYNE C. WEINTRAUB, ESQ.
2 South Biscayne Boulevard, 21st Floor
Miami, Florida 33131
NELSON MULLINS
JONATHAN ETRA, ESQ.
CHRISTOPHER C. CAVALLO, ESQ.
2 South Biscayne Boulevard, 21st Floor
Miami, Florida 33131
COURT REPORTER: Yvette Hernandez
U.S. District Court
400 North Miami Avenue, Room 10-2
Miami, Florida 33128
yvette_hernandez@flsd.uscourts.gov
ALSO PRESENT: Special Agent Sarah Halleran
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Case 1:22-cr-20290-BB Document 318 Entered on FLSD Docket 02/25/2025 Page 1 of 268
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I N D E X
Certificate..................................... 268
W I T N E S S
ON BEHALF OF THE GOVERNMENT:
PAGE
MAGED SALEM
DIRECT EXAMINATION BY MS. JIMENEZ 10
CROSS-EXAMINATION BY MS. WEINTRAUB
23
REDIRECT EXAMINATION BY MS. JIMENEZ 74
HEIMDAL BARRIOS
DIRECT EXAMINATION BY MS. MARTINEZ
82
CROSS-EXAMINATION BY MS. WEINTRAUB
94
REDIRECT EXAMINATION BY MS. MARTINEZ
112
LAVDERIM HYSA
DIRECT EXAMINATION BY MS. MARTINEZ
137
CROSS-EXAMINATION BY MR. CAVALLO
213
REDIRECT EXAMINATION BY MS. MARTINEZ
242
E X H I B I T S
GOVERNMENT'S EX. NO.: OFFERED ADMITTED
3-1 through 3-3
130 131
70
134 136
72
142 143
71
144 144
41-1
157 158
41-2 through 41-5
162 162
41-15 through 41-16
200 200
41-6
200 210
41-10 through 41-11
200 210
76
259 259
DEFENDANT'S EX. NO.: OFFERED ADMITTED
M-24
95 95
M-19
100 101
M-89
100 101
M-19 attachment
110 110
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
(Call to order of the Court, 9:13 a.m.)
THE COURT: Hi. Good morning to everyone.
MS. WEINTRAUB: Good morning, Your Honor.
MS. MARTINEZ: Good morning, Your Honor.
THE COURT: We are continuing the case of United
States of America v. Eric Sheppard, Case Number 22-cr-20290.
We were -- first and foremost, I hope everyone had a
nice weekend. And we were in the middle of the testimony of
John Rodenhuis. Do we have that --
MS. WEINTRAUB: We finished him, Your Honor.
MS. MARTINEZ: We completed that.
THE COURT: Ah, okay. I actually have that as the
last entry. My apologies.
Are we ready to proceed with the next witness?
MS. MARTINEZ: Yes, Your Honor.
THE COURT: Is the Defendant ready to proceed?
MS. WEINTRAUB: Yes, Your Honor.
There is one matter that I'd like to bring to the
Court's attention --
THE COURT: Certainly.
MS. WEINTRAUB: -- for the Court to consider.
THE COURT: All right.
MS. WEINTRAUB: And that is, we are very concerned
the -- the Defense is very concerned about being in the middle
of testimony and recessing for several weeks.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
We would ask the Court, most respectfully -- because
we very well may put on our client, and the timing of that is
very if-y, and we don't want to be in the middle of that
certainly and break. So we've tried to rearrange scheduling,
but we would ask -- because of that, we would ask to break
after the Government's case and motions.
THE COURT: I'm not certain what you're asking.
MS. WEINTRAUB: I'm asking --
THE COURT: We have two days left. The Government has
represented that it believes it will be done by today. Is that
correct, Ms. Jimenez?
MS. JIMENEZ: Yes, Your Honor.
THE COURT: So you're asking that we not work
tomorrow?
MS. WEINTRAUB: Yes. And the reason is because I do
not want to be in a position where my client is on the witness
stand and we break for two weeks for them to figure out cross
and have two weeks to prepare for that. That's just, I
believe, unfair. And I also -- I object to breaking up the
Defense case.
THE COURT: Ms. Weintraub --
MS. WEINTRAUB: I mean, honestly, I thought we would
have been done before.
THE COURT: All right. Hold on.
COURTROOM DEPUTY: I just spoke to the jurors. I
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
would like to know exactly how long in that first week -- how
many days. Because I spoke to them. I have one juror that has
two appointments towards the end of that week.
THE COURT: Which week are you referring to?
COURTROOM DEPUTY: January 8th. I really need to tell
them how long in that week that we're going to be in session
because I have one juror that absolutely has two appointments
at the end of that week that he needs to attend.
THE COURT: We have worked with the jurors' schedules.
We have provided additional dates to which the jurors never
anticipated. They have reshuffled their professional and
personal lives to be here for the schedule that the Court has
given them. And to now tell them that we are not going to be
in session tomorrow, when I've advised them that today and
tomorrow are full days, is just without merit and it certainly
is not going to be what the Court's going to do.
We are going to make full use of the days that we
have, regardless of whether we're in the middle of a witness or
certainly when we're in the middle of the presentation of the
Defendant's case. So that request would be denied.
Now, with regard to today, the Government has
represented that it will be done by today. As I stated, we
will certainly address any motions. I have received the
Defendant's Motion for Judgment of Acquittal.
And in terms of next week, I believe that the jury is
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
entitled to know realistically how much more time that they're
going to need to consider the evidence. So on behalf of the
Government, how much more time do you anticipate?
MS. JIMENEZ: We expect to close today. We don't know
if we would have a rebuttal case. But if we did, it would be a
single witness.
THE COURT: On behalf of the Defendant, how many days
do you anticipate?
MS. WEINTRAUB: I've always said a day and a half, and
that's what I still think. But, you know, again, it depends on
the Government. I mean, the Government thought this case was
going to be six or seven trial days, and I think we're on --
MS. JIMENEZ: We said 10.
MS. WEINTRAUB: Then it became 10, and I think we're
on number 13. So I don't know. I think it's a day and a half.
They know who our witnesses are.
MS. JIMENEZ: And I'll say on the "we know who their
witnesses are," they disclosed three witnesses pursuant to the
Court's order on Friday. And then last night -- late last
night, they said: "Oh, we've changed our mind and we're
calling one of those three and two other ones."
MS. WEINTRAUB: The reason --
MS. JIMENEZ: So the trial by ambush continues. We
got something after midnight that I haven't seen about
documents that they intend to use in their case in chief.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: Judge, what happened, so the record is
clear, is that at four o'clock yesterday afternoon, it was
still not known and waiting to be clarified whether the witness
we intended to call, Jeanette Gonzalez, did, in fact, have
immunity. Her lawyer was not sure, reached out to the
Government. The Government did not respond till seven
something. And that's when --
MS. MARTINEZ: You're misstating.
MS. WEINTRAUB: Excuse me. And that's when, within
that time period -- we just couldn't wait for the Government
any longer after four o'clock on Sunday and had to make
strategy decisions. As soon as I made that strategy decision,
I emailed the Government at 7:15 after they responded that she
had immunity.
MS. JIMENEZ: Let me say that they disclosed Jeanette
Gonzalez as a witness on Friday. So any issue regarding her
immunity or not immunity does not mean that that would have
caused them to change the other two witnesses who they were
going to call, and advised us last night with documents that
came after midnight that -- and I haven't had a chance to even
open that email.
MS. WEINTRAUB: Judge, she asked if he's taking the
Fifth -- if she's taking the Fifth Amendment. So obviously
there were questions about immunity. I was going to put a
witness on the stand who was going to claim the Fifth
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Amendment. It's not even ethical to do that. So --
THE COURT: That's understandable.
All right. At this point, I will advise the courtroom
deputy she will advise the jurors that we anticipate that we
will need Monday the 8th, which will be a full day from nine to
five, and Tuesday the 9th, which will be a full day from nine
to five. And let's see how far we get today and tomorrow.
Okay?
MS. MARTINEZ: Your Honor, I --
THE COURT: Ms. Martinez?
MS. MARTINEZ: No. Just in light of everything that
I've seen throughout this case, I would suggest that we may
need at least an additional day with the jurors because there
is closing argument.
THE COURT: Yes. I understand. And again, let's see
how far we get today. But in answer to the courtroom deputy's
question, I think that it's clear to let the jurors know that
at the very least the first two days.
With regard to any reshuffling for purposes of closing
argument and deliberation, we will certainly do that so that
the jurors have enough time for both.
All right. As soon as Liz is done -- they are all
there?
Okay. You have your next witness ready to go?
MS. JIMENEZ: We do.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Okay. Can you see if she's done speaking
with them, so we can bring them out.
(Pause in proceedings.)
COURT SECURITY OFFICER: Ready, Judge?
THE COURT: Yes.
COURT SECURITY OFFICER: All rise for the jury.
THE COURT: Is this the witness?
MS. JIMENEZ: Yes.
(Before the Jury, 9:20 a.m.)
THE COURT: Hi. Good morning, Ladies and Gentlemen.
It's good to see each of you.
Please be seated, everyone.
I hope you had a pleasant weekend and ready to get
back to work.
And the Government's next witness, please.
MS. JIMENEZ: Yes. Thank you, Your Honor.
The Government calls Mr. Maged Salem, who is currently
on the witness stand.
THE COURT: All right. Mr. Salem, if you'll stand.
Raise your right hand to be placed under oath.
MAGED SALEM, GOVERNMENT WITNESS, SWORN
THE COURT: Please be seated, sir.
Once you're seated, if you will state your full name,
spelling your first and last name, please.
THE WITNESS: Maged Salem, M-A-G-E-D S-A-L-E-M.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
DIRECT EXAMINATION
BY MS. JIMENEZ:
Q.
Good morning, Mr. Salem. If you could pull the microphone
closer to you so...
Thank you.
Mr. Salem, were you subpoenaed to appear at this
trial?
A.
Yes, I was.
Q.
What do you do for a living, sir?
A.
I own a business.
Q.
In 2020, did you own a business that went by the name of
Mattress1One?
A.
Yes, I did.
Q.
Was that the trade name of the business?
A.
It was doing business as Mattress1One. Correct.
Q.
So what was the official name of the business?
A.
SOS Furniture Company, Inc.
Q.
What kind of business was this?
A.
A mattress retail company.
Q.
Did you have locations -- stores at different locations?
A.
Yes, I did.
Q.
Were they -- did you have stores in various locations in
the state of Florida?
A.
Yes, I did.
Q.
Did you have stores outside the state of Florida?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes, I did.
Q.
All right. Now, did you have a Mattress1One store in
Orlando, Florida?
A.
Several in Orlando.
Q.
All right. Did you have one located at the shopping center
named the Shoppes at Alafaya?
A.
Yes, I did.
Q.
All right. Mr. Salem, did you make any -- did you make
rental payments to the landlord of the store that was at that
location?
A.
Yes, I did.
MS. JIMENEZ: Can we show Government Exhibit 39-10,
please.
BY MS. JIMENEZ:
Q.
Were those checks that you yourself signed?
A.
Wait a minute.
Q.
Were they checks that you yourself signed? Looking at --
A.
Yes. That's a check I signed.
Q.
-- 39-10 --
MS. JIMENEZ: I'm sorry. If you can bring it out
again.
BY MS. JIMENEZ:
Q.
-- 39-10, dated 6/4/2019, that was -- that's a Mattress1One
check; isn't that right?
A.
That is correct.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And what is the name of the business to whom the check was
made?
A.
HM-UP Development Alafaya Trails, LLC.
Q.
Is that your signature on this check?
A.
Yes, it is.
MS. JIMENEZ: All right. Can we show the next check,
please.
BY MS. JIMENEZ:
Q.
That's -- what is the date of this check?
A.
5/22/2020.
Q.
Now, this is a different company. Pacific MS Management,
LLC, what is that company?
A.
This is a management company that was created to manage the
affairs of SOS and Mattress1One stores.
Q.
So now, this company took the place of SOS in terms of
the --
MS. WEINTRAUB: Objection. Leading.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
Well, what did -- I'm sorry. What did Pacific MS
Management do in relation of SOS Furniture?
A.
MS Management was created internally to manage payroll and
pay internal expenses.
Q.
All right.
MS. JIMENEZ: Can we show the next check.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. JIMENEZ:
Q.
This is July 22, 2020. Same? Was it pretty much the same?
A.
(No verbal response.)
Q.
Is that yes?
A.
Yes.
Q.
Is that your signature?
A.
Yes, it is.
Q.
All right.
MS. JIMENEZ: Let's show another check.
BY MS. JIMENEZ:
Q.
September --
MS. WEINTRAUB: Could we have an exhibit number?
MS. JIMENEZ: This is part of Exhibit 39-10.
THE COURT: All right.
BY MS. JIMENEZ:
Q.
Check dated September 9th, 2020. Yes?
A.
Yes. That is my signature.
Q.
And Pacific MS checks are paid to the order of what
company?
A.
HM-UP Development Alafaya Trails, LLC.
Q.
Is that the same company you had been paying before?
A.
Yes, it is.
Q.
All right.
MS. JIMENEZ: Is there another check in this exhibit?
Is that the last one?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
All right. Can we show Exhibit -- hold on.
One more check that is in Composite 39. And let me
give you the Bates stamp number. It's Bates Stamp Number
009809. It's in composite Exhibit 39.
Can we zoom out.
We're labeling this Exhibit 78.
Can you zoom out, please.
BY MS. JIMENEZ:
Q.
Now, this is January 20, 2021. Who's the check from and
who's the check made out to?
A.
Check is from Pacific MS Management, LLC, and it's to HM-UP
Development Alafaya Trails, LLC.
Q.
Is that your signature?
A.
Yes, it is.
Q.
And now what happened to your business, to Mattress1One?
A.
Mattress1One -- most of our stores was forced to close
during COVID. And once trying to reopen, once the cities was
allowing for reopening, it was very hard to get employees back
to work. And the industry went south because people wouldn't
come into mattress stores to try mattresses because everyone
was afraid of COVID.
Q.
All right. And when did that begin to happen,
approximately?
A.
Took a very bad turn in January, around January,
February 2020.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And then -- well, COVID came upon us in March of 2020; is
that right?
A.
It started in December of 2019, and it became -- people
started getting scared. Around February is when we started to
feel that the traffic was falling off.
Q.
And so how was the rest of 2020 for your business?
A.
The whole 2020 was pretty much a disaster.
Q.
All right. Now -- so ultimately, what happened to
Mattress1One?
A.
Mattress1One eventually went into a receiver. One major
large creditor, we couldn't come to terms, and they pretty much
pushed us into -- took over the company. And they eventually
filed bankruptcy, and then the company is now in a trustee's
position.
Q.
All right.
MS. JIMENEZ: Let me show you Government Exhibit 25.
BY MS. JIMENEZ:
Q.
All right. This is the first page of this document. What
is this document?
A.
This is -- this is my original lease for the space at
Alafaya shops, lease from October 23rd, 2012.
Q.
All right. And so the tenant -- who is the tenant?
A.
SOS Furniture Company d/b/a Mattress1One.
Q.
All right. And then who was the landlord?
A.
HM-UP Development Alafaya Trails, LLC.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
All right. And the -- did -- the lease started
October 23rd, 2012, correct?
A.
Yes.
MS. JIMENEZ: Could we go to Page 2 of this agreement.
BY MS. JIMENEZ:
Q.
All right. In here, you see Subsection F that says:
"Initial Term"?
A.
(No verbal response.)
Q.
The lease -- what was the period of time contemplated for
this lease?
A.
There was a first five-year term and then two five-year
options to be followed.
Q.
All right.
MS. JIMENEZ: Can we go to Page 10.
All right. Going down to Subsection 303 there. It
says: "Term Extension Options" -- hold on a second, so we
don't have to read.
BY MS. JIMENEZ:
Q.
All right. About halfway into this paragraph, the sentence
or the line that starts: "Commences," can you read from:
"Then the tenant" or "Then tenant shall." Do you see that?
A.
Can you put the mouse over it?
Q.
There we go. "Then."
A.
"Then tenant shall have, and is hereby granted, two
separate consecutive options to extend the term upon the terms,
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
covenants, conditions, and provisions set forth herein for two
periods of five years each," in parenthesis, "each renewal
term."
Q.
All right. So then, if your lease started in 2012, the
first five-year term would have ended when?
A.
2017.
Q.
And then, in 2020, you would have been in another five-year
term; is that right -- in the middle of another five-year term?
A.
In 2020 we would have been in our second term, yes.
Q.
All right.
MS. JIMENEZ: Can we go to Page 10, please -- I'm
sorry -- Page 43.
MS. WEINTRAUB: I'm sorry. Page?
MS. JIMENEZ: 43.
MS. WEINTRAUB: Thank you.
BY MS. JIMENEZ:
Q.
All right. Now looking at Page 43, the landlord is what
company?
A.
HM-UP Development, LLC -- Trail, LLC.
Q.
HM-UP Development Alafaya Trails, LLC, right?
A.
Yes.
Q.
All right. It is signed by an owner. What is the name?
A.
Scott Fisher.
Q.
All right. And then?
A.
I'm sorry. Scott Fish.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And the tenant is -- who is the tenant?
A.
SOS Furniture Company, Inc.
Q.
All right. And this lease is signed by whom?
A.
Myself, Maged Salem.
Q.
And is that your signature?
A.
Yes, it is.
Q.
All right. I notice at the bottom of the page, 43 --
MS. WEINTRAUB: Objection, Your Honor. Counsel is
testifying.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
At the bottom of Page 43, if you could look at that, is
there some handwriting at the bottom of the page?
A.
Yes. It's my initials.
Q.
Is that something that you would put on the lease?
A.
Yeah. Every lease I sign, or every contract I sign, I
always initial each page.
Q.
All right.
MS. JIMENEZ: Can we go up -- just scroll up, please.
BY MS. JIMENEZ:
Q.
Is that your handwriting on Page 42?
A.
Yes. Those are my initials.
Q.
Page 41, is that -- are those your initials?
A.
Also, yes.
Q.
All right. I'm not going to go through the entire
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
document. Did you initial each page on this document?
A.
Yes, I did.
Q.
All right. Let me show you Government's Exhibit 58-1,
please. This is another document.
MS. JIMENEZ: Let me -- can we go to the -- this --
BY MS. JIMENEZ:
Q.
Can you read who the landlord is of this lease agreement.
A.
"This lease agreement is made and entered into by and
between HM Four, LLC," in parenthesis "Landlord."
Q.
And who is the tenant?
A.
Pacific MS Management, Inc. d/b/a Mattress1One.
Q.
Did at some point Pacific MS Management -- was it doing --
did it replace SOS Furniture as the entity that was doing
business as Mattress1One?
MS. WEINTRAUB: Objection. Leading.
THE COURT: Sustained.
THE WITNESS: It --
BY MS. JIMENEZ:
Q.
Well, you can't -- did Pacific One -- I'm sorry. Did
Pacific MS do business as Mattress1One?
A.
As accounts payable department, not signing leases or
making contracts.
Q.
Who would have signed a lease or made a contract --
A.
SOS Furniture Company.
Q.
And then did you ever have a lease agreement with HM Four?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
No, I did not.
Q.
All right.
MS. JIMENEZ: Can we go to the signature page.
Go down to the bottom.
BY MS. JIMENEZ:
Q.
In 2021 -- I'm sorry -- in 2022, were you interviewed by
the FBI and shown this document?
A.
Yes, I was.
Q.
At that time --
MS. WEINTRAUB: Judge, I'm going to object to
bolstering.
THE COURT: Sustained. Rephrase, please.
BY MS. JIMENEZ:
Q.
All right. You were shown this lease; is that right?
A.
Correct.
Q.
All right. At that time did you recognize your lease
agreement?
A.
This document was presented in front of me. And just by
quickly looking at it, I recognized the address of the
location, and I assumed that this was a lease that had been the
actual lease. So I believe I said: "Yes, I recognize it."
Q.
Then did you do anything after you were shown that lease?
A.
After they spent a short period of time --
MS. WEINTRAUB: Excuse me. Objection to who is
"they."
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Sustained. Be specific.
THE WITNESS: The FBI. They appeared at my home, and
then they left me with the documents that they had. And I went
through it, and I immediately noticed that my name was
misspelled in this lease, that it had no initials on any pages.
And then I looked at the signature and that signature was not
my signature. So I called -- I called them the next morning.
MS. WEINTRAUB: Objection. Narrative.
BY MS. JIMENEZ:
Q.
Who did you call?
THE COURT: I'm sorry. And the -- hold on. There's
an objection.
MS. WEINTRAUB: It's a narrative. There was no
question pending.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
And -- all right. Did you call anyone?
A.
Yes. I called the agent, the FBI agent that came. He left
me his number and I called him the next day.
Q.
All right. And did you communicate anything about the
lease to them?
A.
Yes. I expressed to them that the document that they
showed me was not the lease that I thought it was. This was
the wrong lease. This lease didn't have any initials, this
lease didn't have my signature correctly, and my name was
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
misspelled.
Q.
How do you spell your name?
A.
M-A-G-E-D S-A-L-E-M.
Q.
Your first name has a D, not an S?
A.
Yes. The last letter is a D.
Q.
All right. Well, did you --
MS. JIMENEZ: Let's go to the front of the lease.
BY MS. JIMENEZ:
Q.
Let me ask you: Did you authorize Eric Sheppard or anyone
on his behalf to sign your name on this document?
MS. WEINTRAUB: Objection to the form of the question.
THE COURT: Overruled. I'll allow it.
BY MS. JIMENEZ:
Q.
You can answer.
A.
No, I didn't.
Q.
Did you authorize Sheppard or anyone on his behalf to use
your title as president of Mattress1One --
MS. WEINTRAUB: Judge, I'm going to object to the form
of the question. There's absolutely no basis for it or
foundation.
THE COURT: It's whether he granted authorization.
Overruled.
BY MS. JIMENEZ:
Q.
You can answer.
A.
No, I did not.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
All right. Now, this lease has a commencement date of
May 18th, 2020. Do you see that on the first page?
A.
Yes. I see that.
Q.
Do you have any recollection whether you might have been
renegotiating your lease with the landlord at that time?
A.
In May, specifically around this time, this was the hardest
time during COVID and we were not signing any leases. Our
stores were not even able to be opened. Less than 10 percent
of our staff returned to work as the company was trying to
reopen, and this was not a time that we would have been signing
any new leases or contracts. We were trying to exit leases at
the time.
Q.
Was the landlord HM-UP Development Alafaya Trails trying to
renegotiate a lease with you at that time? Do you have any
recollection?
A.
No.
MS. JIMENEZ: I have no further questions, Your Honor.
THE COURT: All right. Cross-examination.
CROSS-EXAMINATION
BY MS. WEINTRAUB:
Q.
Good morning, sir.
A.
Good morning.
Q.
We've never spoken, right?
A.
No, we have not.
Q.
You were first contacted in this case on April 11th; is
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
that right, 2022?
A.
I don't have the date in front of me, but I believe that's
correct.
Q.
Does that sound about right to you?
A.
It was in 2022.
Q.
Did you -- you said that the FBI came to your house?
A.
That is correct.
Q.
And they showed you the lease to review, right?
A.
That is correct.
Q.
And you said that they only gave you like a minute. It was
very -- you quickly reviewed it?
A.
No. They didn't give me a minute. They presented it, and
I just assumed that it was the lease that belonged to the
space. I didn't go through the lease.
Q.
Well, didn't you tell the FBI agent that you recognized the
lease?
A.
Yes. Because it had the address for a Alafaya shops
location that I had previously owned.
Q.
Okay. And you verified and confirmed to the FBI that you
signed the lease, did you not?
A.
The agent --
Q.
Yes or no, and then you can explain, sir.
A.
Yes, I believe I did. And the reason is, again, I assumed
that that was the lease that belonged to the space.
Q.
Okay. But you were shown the signature, and the FBI asked
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
you if you recognized the signature, and you said yes and
verified it was yours, didn't you?
A.
I believe I did at the time, yes.
Q.
And isn't your brother Marwan the person that handled all
the real estate transactions for your company?
A.
Marwan Salem represented the company in managing locations
and real estate for some areas, correct.
Q.
Did you speak with your brother or anyone else before you
called the FBI back four days later?
A.
Yes, I did.
MS. JIMENEZ: That was not his testimony, Your Honor.
THE COURT: Overruled.
BY MS. WEINTRAUB:
Q.
Did you call the FBI back four days later or not?
A.
No, I didn't.
Q.
When do you claim you called the FBI back?
A.
I believe it was the next day.
Q.
Who did you speak with in between regarding this lease
before you called them back?
A.
My brother was one of them, and then someone that was in
charge of payables at the time.
Q.
In charge of what?
A.
Payables. Account payables.
Q.
Now, you told your -- you told the agent when you called
back that you weren't sure that it was your signature because
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
there was a typo, right? Because the S and the D are next to
each other on the keyboard, right?
A.
No. I told them that it was not my signature.
Q.
Isn't it true, Mr. -- is it Salem?
A.
Salem, yes.
Q.
Isn't it true, Mr. Salem, that during your first meeting
with the FBI you told the agent that you were unware of an
individual named Eric Sheppard? Right?
A.
That's correct.
Q.
And then, when you called them back, you changed your
entire story, didn't you?
A.
No. I didn't change my entire story.
Q.
Well, you went from telling them you signed the lease to
you didn't sign the lease, right?
A.
(No verbal response.)
Q.
Right?
A.
Can I explain my answer? The answer is: Yes, I did.
Q.
Okay.
A.
But I did that because I quickly looked at the lease when
they came in. And after looking at it thoroughly, I realized
that it was missing my initials, my signature was not
correct --
Q.
Okay. And you went from having no idea who Eric Sheppard
was the first time you met the FBI to saying that at the
request of Eric Sheppard employees were asked to make out
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
rental checks to another company. Isn't that what you said?
A.
I never said: "Eric Sheppard."
Q.
If the FBI wrote that down, you think they just got it
wrong or...
A.
I never said that -- I never met Eric Sheppard, never spoke
to Eric Sheppard, so I could never have said that.
Q.
Now, your brother negotiated the leases typically with the
project manager in Orlando, right?
A.
In the last three years of the company -- in the last three
years of the company -- 2012, I negotiated the lease with the
actual landlord for 2012.
Q.
Did you deal with Jeff Vasilas?
A.
No. I dealt with Scott Fish in 2012.
Q.
That was the first lease. How about --
A.
There was no second lease.
Q.
I'm sorry?
A.
There were no second lease.
Q.
There was no second lease. We'll talk about it in a
second.
So are you saying that you did not tell the FBI that
Eric Sheppard's employees would ask for rental checks to be
made payable to a different company? Is that your testimony
today, sir?
A.
I said that someone representing that location would
request that, that -- the checks being made to different names.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And were you speaking with the FBI agent that's sitting
here at the table, Sarah Halleran, case agent, and Ryan Villard
(phonetic listing).
A.
At what period? What dates would that be?
Q.
Did you ever meet the case agent Sarah Halleran, who is
sitting at the table, or not?
A.
More recently. By phone.
Q.
Okay. Did you meet her on April 12th or 13th?
A.
No, I did not.
Q.
Did you speak with her on April 12th or 13th?
A.
The first two agents that came was two men -- gentlemen.
Sarah wasn't...
Q.
Now, isn't the truth that you weren't paying rent at
Alafaya for quite some time? Isn't that true?
A.
(No verbal response.)
Q.
Yes or no?
A.
When you say "some time," what period of time?
Q.
Well, we have the rental checks. Do you want to see them
or do you admit that you weren't paying rent?
A.
I just saw checks that I was paying rent.
Q.
You saw two checks that you paid rent. Are you -- is it
your testimony under oath that you never missed payments of
rent?
A.
I don't know what dates -- what period you're referring to,
but --
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
I'm referring to 2019, sir, and the beginning of 2020.
MS. JIMENEZ: Objection. Relevance.
THE COURT: With regard to 2019, sustained.
THE WITNESS: So answer?
THE COURT: You want to sharpen your question a bit?
MS. WEINTRAUB: Yes, Judge.
BY MS. WEINTRAUB:
Q.
Mr. Salem, is it your testimony that you were not in
arrears in paying your rent for quite some time at the end of
2019 and beginning of 2020?
A.
I don't recall.
Q.
Do you recall that Mr. Vasilas tried to have you evicted?
A.
I don't know who is Mr. Vasilas.
Q.
Do you remember that someone from management at Alafaya
Trails tried to have you evicted for failure to pay rent? Yes
or no?
A.
No, I don't.
Q.
So that -- you were never locked out of your store and the
police were never called, right?
A.
In 2020, not in 2019. And it was -- whoever was doing it
wasn't following the rules. They were ignoring Florida law.
Q.
The question was: Isn't it true you stopped paying rent,
and they called the police, they tried to have you evicted, and
they even tried locking the door? Yes or no?
A.
Ma'am, you're asking me questions without giving me time
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
frames of anything. I owned 300 stores at the time. I don't
recall everything that was happening at every location.
Q.
You owned 300 stores, and you were doing pretty well,
right?
A.
Up to COVID, yes.
Q.
Up to COVID.
(Pause in proceedings.)
BY MS. WEINTRAUB:
Q.
Mr. Salem, is it true that the landlord was trying to evict
you for not paying the rent at Alafaya shopping center? Yes or
no?
MS. JIMENEZ: Objection. Asked and answered.
MS. WEINTRAUB: It was never answered.
THE COURT: Overruled.
BY MS. WEINTRAUB:
Q.
Yes or no?
A.
I don't recall that.
(Pause in proceedings.)
MS. WEINTRAUB: Judge, I need one minute for a video
to be put up. It's very brief.
THE COURT: I'm sorry?
MS. WEINTRAUB: I need one minute for an exhibit.
THE COURT: All right.
MS. JIMENEZ: Can it be shown to the Government,
please?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Yes. What exhibit number? Before it's
shown.
(Pause in proceedings.)
MS. WEINTRAUB: I'll come back to it, Judge. And yes,
we'll provide it to the Government.
BY MS. WEINTRAUB:
Q.
Now, when the FBI talked to you -- I'll move on and come
back. When the FBI talked to you in this case, do you remember
they asked you about you receiving some PPP money? Yes or no?
A.
Yes, they did.
Q.
And were you honest with the FBI?
A.
Yes, of course I was.
Q.
Of course. And you told the truth, of course?
A.
Yes.
Q.
To the FBI?
A.
Yes, I did.
Q.
And you told the FBI that you had received some PPP money
and that it was being held by the courts, right?
A.
That was the second round.
Q.
Hold on. Did you tell the FBI that you received PPP money
that was being held by the courts, or is that another thing the
FBI got wrong?
A.
Talking in 2020 in April -- again, there was two rounds of
PPP. One was while I was functioning and one was after I lost
the company. The funds was transferred to a receiver, and all
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
of this was happening around the same time. So --
Q.
We're going to talk about what was happening.
A.
Okay. Go ahead.
Q.
Okay. So my question is: Did you tell the FBI that you
got PPP money but it was being held by the courts? Yes or no?
A.
Yes.
Q.
Okay. Now, the truth of the matter is that on
May 8th, 2020, you received $1.6 million in PPP money from
Legacy Bank, which you immediately diverted to your personal
account --
MS. JIMENEZ: Objection. Relevance.
BY MS. WEINTRAUB:
Q.
Isn't that true?
THE COURT: Sustained.
THE WITNESS: When did you say --
MS. JIMENEZ: Objection.
MS. WEINTRAUB: It's very much relevant.
THE COURT: The objection is sustained.
BY MS. WEINTRAUB:
Q.
When the FBI came around to see you, you were nervous that
they were going to arrest you for fraud, weren't you?
MS. JIMENEZ: Objection.
THE COURT: Overruled.
THE WITNESS: That's a joke. Go ahead.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. WEINTRAUB:
Q.
Excuse me?
A.
Go ahead. No comment.
Q.
What's your answer?
A.
No. I said: "That's a joke."
Q.
That's a joke?
A.
Nothing like that happened.
Q.
Nothing like that happened? Well, then let's look at some
things. Do you remember -- let's just talk straight,
Mr. Salem. Isn't it true that the reason you put the company
in the name Pacific Management was to avoid creditors and
garnished wages? Isn't that true?
MS. JIMENEZ: Objection. Objection. Relevance.
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
Isn't it true that when the Florida courts appointed a
receiver it was because you were trying to avoid creditors and
committing fraud?
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
Did you sign an assurance voluntary complaint with
stipulations of your conduct in May at the same --
MS. JIMENEZ: Objection.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. WEINTRAUB:
Q.
-- time this is all going on, 2020?
A.
I don't understand your question.
MS. JIMENEZ: Do not -- objection. The Court hasn't
ruled.
MS. WEINTRAUB: Judge, can we have a sidebar?
THE COURT: Yeah. Come on forward.
(At sidebar on the record.)
THE COURT: All right. How is this relevant to this
case?
MS. WEINTRAUB: Judge, this tells the story of --
excuse me -- of what was going on in May at the same time that
he signed this lease, which we will show that he signed --
THE COURT: But I can understand if you're asking
questions that relate to the lease itself, but the other issues
I'm not seeing the relevance.
MS. WEINTRAUB: Well, let me explain.
The Government opened the door completely, talked
about the receivership, talked about -- he said -- he's lying
through his teeth. And he said that he -- being accused of
committing a fraud is a joke. The receiver sued him for fraud.
There is a finding of fact by the court of his fraud. There is
an AVC that he signed two years earlier that he violated and
said that he agreed to stop his deceitful practices in
selling -- selling used mattresses as new, for one.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Okay. But that's two years ago. So I'm
referring to the incident of 2019 and early 2020.
MS. WEINTRAUB: I'll tell you why. Because he denied
signing the lease, because the reason that the lease is changed
and put in Pacific Management isn't as a holding company or to
do his payroll. It was to circumvent creditors that were after
him.
THE COURT: Okay. All right. Response?
MS. JIMENEZ: The man -- he always said that
SOS was -- that Pacific was created as a management company.
The company that signed leases and contracts was SOS Furniture,
which -- he hasn't been asked anything about the actual lease.
The reason I -- the only question that I asked him
was: "What happened to Mattress1One?" And he said, you know,
it went into receivership.
THE COURT: Right. But his credibility is relevant.
It goes -- if questions are asked related to his truthfulness,
then how is that not relevant?
MS. JIMENEZ: Well, it's something -- it's something
that happened -- I don't even know when it happened.
THE COURT: Well, that's what I'm saying. Two years
ago I can understand. But 2019, 2020, in terms of the
receivership, is relevant.
COURT REPORTER: I can't hear you at all.
THE COURT: Yeah. It's only Ms. Weintraub.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: There were three judgments in --
COURT REPORTER: I cannot hear you.
MS. WEINTRAUB: -- 2020 from the receivership. It's
all at the same time. It is part of the story. It's why he
lied.
THE COURT: Anything further?
MS. MARTINEZ: Your Honor, may I just ask one
question?
THE COURT: Okay. It's -- actually, I just want one
attorney.
Ms. Jimenez, is there anything further? Your
objection was relevance. There was a request for a sidebar.
This goes directly to his credibility.
MS. JIMENEZ: We don't know anything about -- where is
this --
MS. WEINTRAUB: Well, maybe you should have
investigated your own witness --
THE COURT: Hold on. Hold on. 2020.
And with regard to the receivership that was asked on
direct examination, it's directly relevant, goes to his
credibility.
Let's step back.
(End of discussion at sidebar.)
BY MS. WEINTRAUB:
Q.
Mr. Salem, in May of 2020, isn't it true that there were
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
massive judgments against your company SOS, which was the
original tenant to the lease? Yes or no?
MS. JIMENEZ: Objection. Relevance.
THE COURT: Overruled. I'll give you a standing
objection.
BY MS. WEINTRAUB:
Q.
Please answer the question, sir.
A.
Can you reword the question, please?
Q.
Sure. In May 2020, didn't you have massive judgments --
many? We can show them to you, if you would like -- against
SOS, amounting to fraud by SOS, your company. Yes or no?
A.
Can you give a number of how many cases you're talking
about? You're just saying "massive." I don't know what
"massive" means.
Q.
Sure. Let me see if I can refresh your recollection.
Showing you Defense Exhibit M-82, which is an
unopposed post-judgment. Do you see what that says, sir?
A.
(No verbal response.)
Q.
Do you see it?
A.
Yes. I see.
Q.
Is this your case? Yes or no?
A.
This isn't a landlord. This is from a creditor.
Q.
Sir, is this pertaining to your business? Yes or no?
A.
Yes, it is.
Q.
That's correct. It's from a creditor.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: At this time, I would move it into
evidence, Your Honor.
MS. JIMENEZ: On what basis? Objection.
THE COURT: The objection is sustained with regard to
admission into evidence.
BY MS. WEINTRAUB:
Q.
So now I'll ask you again. Did you have millions of
dollars of judgment against you by May 4th, 2020? Yes or no?
A.
Yes, we did.
Q.
You had a judgment for $6 million, did you not, on
May 4th, 2020, right?
A.
Yes, I did.
Q.
And you had a judgment on May 4th, 2020, for another
$6 million, different number -- a different judgment, correct?
A.
(No verbal response.)
Q.
It's highlighted right there for you, sir. It was against
SOS, wasn't it?
A.
(No verbal response.)
Q.
Mr. Salem, are these judgments --
A.
That second judgment was for another company. It's SOS,
yeah.
Q.
And SOS Furniture company -- you were the president,
correct?
A.
Correct.
Q.
These were against your company doing business as
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Mattress1One? Yes or no?
A.
Can I ask you and elaborate?
Q.
Mr. Salem, answer the question, please.
A.
This -- yes.
Q.
Yes or no?
A.
This was my main supplier. I was buying a lot of
merchandise, and merchandise were not being sold. Simple as
that.
Q.
It was as simple as that. It wasn't a situation where you
were selling used mattresses as new and Tempur-Pedic went and
sued you and got a judgment against you for --
MS. JIMENEZ: Objection. There's nothing here about
anything like that.
THE COURT: Overruled.
BY MS. WEINTRAUB:
Q.
No? It wasn't that?
A.
Absolutely not.
Q.
You had another judgment for $898,000 on May 4th, 2020. Do
you see that?
A.
No. I don't. The screen hasn't changed.
Oh. SOS. Okay.
Q.
Yes or no? Do you see it?
A.
Yes, I see it. It's all from the same creditor.
Q.
They were all for the same part of time. But there's $14
million, right? All same kind of time? Yeah?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes, from the same creditor.
Q.
And they were all against SOS doing business as
Mattress1One, right?
A.
No, not correct. Two of the items here are from
Mattress1One, Inc., separate company, not my company.
Q.
Mattress1One, Inc. was not your company?
A.
No. That was a company that was in Miami operated by my
brother.
Q.
And they obtained a judgment against you for $400,000, did
they not, on May 4th?
A.
Not against me, no. Against Mattress1One, Inc., which was
owned by my brother.
Q.
Now, a receiver was appointed in May 2020. Is that -- in
May 2020, on the date of the lease, this was all going on; is
that right?
A.
A receiver was appointed. I don't know the days.
Q.
Well, hold on a minute. We're talking about a lease that
was signed in May of 2020, right? You saw the lease.
A.
A lease that was signed, but not by me, yes.
Q.
A lease that had Pacific Management as the tenant, right?
A.
Yes. I saw that lease.
Q.
And the reason that you wanted to use Pacific Management
was because you had all of these judgments against you; isn't
that right?
A.
No, it's not.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
A receiver was appointed, correct?
A.
Yes, he was.
Q.
And again, you wanted to be completely honest, right?
A.
(No verbal response.)
Q.
With the receiver? Yeah?
A.
Related to what? What is the question?
Q.
Well, did you hold things back from the receiver or were
you compliant and giving them the information they needed to
manage the companies?
A.
I dealt through my attorney. I'm not sure what you're
referring to. I don't know if this is relative here, but go
ahead.
Q.
By June 2nd you declared bankruptcy; is that right?
A.
I did not declare bankruptcy. The receiver declared
bankruptcy.
Q.
Okay. For your company? Yes or no?
A.
For my previously owned company.
Q.
Now, did you just say that you were compliant with the
receiver in turning things over? Yeah? A receiver is
appointed by a judge, right?
A.
I don't understand the question. I'm not an attorney.
Q.
You've been involved in quite a bit of litigation in the
past few years, have you not?
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. WEINTRAUB:
Q.
Now, you said you didn't know anything or it was a joke
about Tempur-Pedic. Isn't it true that Tempur-Pedic sued you
for selling new mattresses as old -- they were old mattresses.
You were selling them as new as a deceptive selling practice,
and then you refused to turn over your books to the receiver?
MS. JIMENEZ: Objection. Time, relevance.
THE WITNESS: No. That's false.
THE COURT: All right. Let's sharpen the time frame.
MS. JIMENEZ: Does she have a good-faith basis for
throwing all this out is the other objection.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
You said that there was not an order compelling you to turn
over your books to the receiver because you refused to, right?
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
MS. WEINTRAUB: Judge, it's all part of the same two
months.
THE COURT: The objection is sustained.
MS. WEINTRAUB: He also just denied --
THE COURT: The objection is sustained.
Your next question.
BY MS. WEINTRAUB:
Q.
Now, the trustee in November, a few months later, sued you
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
for fraud. Isn't that true? You said it was a joke before,
but I'd like you to consider it again. Is it true or not?
A.
I did not say anything about trustee was a joke. I said
that what you said didn't apply to anything pretty much. But
what is the question now, ma'am?
Q.
Mr. Salem, we could have it read back to you. But when I
asked you if you were sued by the receiver for fraud, your
answer was: "That's a joke." Are you --
MS. JIMENEZ: Objection. That was not the answer to
the question.
MS. WEINTRAUB: Objection.
THE COURT: All right. The objection is overruled.
If you don't understand the question, Ms. Weintraub, if you can
ask it again or we can have it read back.
MS. WEINTRAUB: Yes, ma'am.
BY MS. WEINTRAUB:
Q.
Did you understand the question, Mr. Salem?
A.
No. You can ask it again.
Q.
I was asking you, about 10 minutes ago, didn't you say --
when I asked you if you were sued by the trustee for fraud, you
said: "That's a joke," did you not?
A.
No, I did not. You asked me if I thought the FBI was
coming to arrest me. That's when I responded that.
Q.
Okay. Well, let's talk about the trustee suing you for
fraud. Did he?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
(No verbal response.)
Q.
He did, didn't he? You have to answer.
MS. JIMENEZ: Objection. It's --
THE WITNESS: Trustee sued --
MS. JIMENEZ: Objection. Is there some -- I mean --
just a lawsuit.
THE COURT: The objection is overruled.
BY MS. WEINTRAUB:
Q.
So a couple of months after you signed this lease that you
first said you did sign and then realized you shouldn't admit
it, you're sued by the trustee for fraud?
A.
(No verbal response.)
Q.
Yes?
A.
No.
MS. WEINTRAUB: Let's pull it up.
Could we have the exhibit where he's sued for fraud,
the adversary complaint.
BY MS. WEINTRAUB:
Q.
Now --
MS. MARTINEZ: Your Honor, the United States requests
to see these documents.
THE COURT: If you'll show it to counsel, and before
it's shown to the jury.
(Pause in proceedings.)
MS. WEINTRAUB: Could we pull up M-81 and go to Page
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
19, please, Paragraph 5.
(Pause in proceedings.)
MS. WEINTRAUB: I'm sorry. I had it backwards. It's
Page 5, Paragraph 19. Can you pull that up.
BY MS. WEINTRAUB:
Q.
Can you look at Paragraph 19, sir. You see what it says?
MS. JIMENEZ: Your Honor, I believe the witness needs
to be asked a question, as opposed to reading from a document
that's not evidence.
THE COURT: Hold on. Hold on. Let's ask the
question. If you need to refresh his recollection with
Paragraph 19, you can do so. What's the question?
BY MS. WEINTRAUB:
Q.
The question is: Weren't you sued for fraud, and you said
no. I'm trying to first refresh your recollection. Does this
refresh your recollection, Mr. Salem, or not?
A.
You said: "Sued for fraud." I didn't commit fraud nor did
I agree to commit fraud -- that I committed fraud. So...
Q.
You recognize this document, though, don't you?
A.
I never read the whole document. My lawyer did. I did
not.
Q.
You didn't read it?
MS. JIMENEZ: Objection, Your Honor.
THE COURT: Sustained.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE WITNESS: When you say: "Sustained," am I
supposed to answer?
THE COURT: All right. It's sustained. There's no
need to answer the question.
BY MS. WEINTRAUB:
Q.
Mr. Salem, is it true or not that you were sued by the
trustee for your company systematically looting and
misappropriating assets as part of an ongoing multiyear scheme
to hinder delay and defraud creditors? Yes or no?
A.
I was sued by the trustee. I never read the details you
just mentioned.
Q.
So you never heard that before?
A.
No. I assume that this is the process. When a company
goes to a receiver, then it goes to a trustee, and they go
after any potential recovery money. That's what I understood.
Q.
Are you denying what the trustee put in pleadings and --
MS. JIMENEZ: Objection. Asked and answered.
THE COURT: Sustained. The objection is sustained.
BY MS. WEINTRAUB:
Q.
Were you defrauding creditors, Mr. Salem?
MS. JIMENEZ: Objection. Asked and answered.
MS. WEINTRAUB: It was never answered.
THE COURT: Overruled. I'll allow that.
THE WITNESS: No, I was not.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. WEINTRAUB:
Q.
Now let's go back to when you signed the lease. The lease
is signed in May, right?
A.
Yes. Based on --
Q.
Would there be any reason on earth that the landlord would
know that you were trying to defraud creditors and therefore
started a new company, Pacific Management?
A.
I believe Pacific Management was started in 2018, and we're
talking about a document in 2020.
Q.
How come you didn't mention to the FBI -- when you said
that the PPP money you got was being held by the courts, did
you explain the predicament you had been in?
A.
The FBI did not ask me to go into details on any of that.
Q.
They didn't ask you. Did they ask you how much PPP money
you got?
MS. JIMENEZ: Objection. Relevance.
THE WITNESS: I don't recall. I don't recall.
THE COURT: Sustained.
MS. WEINTRAUB: Judge --
THE COURT: The objection is sustained.
BY MS. WEINTRAUB:
Q.
Did you lie to the FBI?
A.
No, I did not.
Q.
Isn't it true that you told the FBI that the money -- the
PPP money was being held by the courts? Yes or no?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Objection. Asked and answered.
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
You said that you always sign and initial the bottom of the
legal documents that you enter into, right?
A.
Yes. Leases.
Q.
And you're very sure of that, right?
A.
Yes.
MS. WEINTRAUB: Pull up 88 for him only first.
BY MS. WEINTRAUB:
Q.
Do you remember entering into a tenant estoppel letter with
the landlord in this matter? Yes or no?
A.
No.
Q.
No. Let me show it to you. It's M-88. Does that refresh
your recollection, looking at the Tenant Estoppel Certificate?
A.
This is from 2015. It doesn't, but --
Q.
Well, you said that you always put your initials on legal
documents, right?
A.
On leases, on contracts, yes.
Q.
Okay. So a Tenant Estoppel Certificate that's an
attachment to the lease doesn't count? Because there's no
signature, is there?
MS. JIMENEZ: Objection.
BY MS. WEINTRAUB:
Q.
There's no initial on it, is there?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Overruled.
THE WITNESS: There's no signature as well.
BY MS. WEINTRAUB:
Q.
Do you see your signature -- you shouldn't just always
listen to the prosecutor. You see your signature?
A.
(No verbal response.)
Q.
She's not going to object. Do you see your signature?
A.
That's a guarantor document.
Q.
Do you see your signature? Yes or no?
A.
That's my signature. That's a guarantor document,
different than the document -- different than an estoppel.
Q.
Okay. So let's back up. Because obviously you don't want
to admit that's your signature, right?
A.
I just said it is.
Q.
Okay. And do you see this is our signature on a legal
document? Yes or no?
A.
This is a one-page guarantor.
Q.
Is it a legal document?
A.
Yes, it is a legal document.
Q.
Do you see your initials on it, like you say you always do?
Yes or no?
A.
The signature page doesn't need any initial.
Q.
It's three pages, isn't it? It's not one page. Do you see
it says: "Tenant Estoppel Certificate, Page 3" for your
signature?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Can I see all three pages?
Q.
Sure. There's one, two, and your signature page, right?
A.
Page 2 is the signature page for the estoppel, and the
guarantor page is independent. Can I see the third page? The
guarantor page is independent.
Q.
Is your initial on the bottom, like you say you always do,
or not?
A.
The guarantor -- if it's one page, it doesn't need an
initial. I have my signature.
Q.
You said that you always put your initials on anything that
you sign at the bottom of the page, didn't you?
MS. JIMENEZ: Objection. That's not what he said.
THE COURT: The objection is overruled.
MS. JIMENEZ: Misstates the testimony.
THE COURT: Overruled.
You may answer the question, sir.
MS. WEINTRAUB: Your Honor, at this time, I would move
M-88 into evidence.
MS. JIMENEZ: Objection. 608, extrinsic.
THE COURT: The objection is sustained.
THE WITNESS: M --
THE COURT: The request is denied.
THE WITNESS: The --
THE COURT: All right. There's no question pending,
sir.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Your next question.
BY MS. WEINTRAUB:
Q.
By the way, the PPP money, did you use it for employees,
the money -- the $1.6 million, did you use it to pay employees?
MS. JIMENEZ: Objection. Relevance.
THE COURT: The objection is sustained.
BY MS. WEINTRAUB:
Q.
Now, let me see if I understand this. Originally your
lease was $11,000 -- $11,000 a month, right?
A.
I don't recall this. I have many locations with different
rents.
Q.
Okay. On direct examination, the prosecutor showed you the
lease and showed you the check for $11,000. Do you remember
that? It was a few minutes ago.
A.
I saw checks, yes.
Q.
Can you answer the question?
MS. JIMENEZ: Objection. He's answered the question.
MS. WEINTRAUB: Objection, Your Honor.
THE COURT: Overruled.
Do you understand the question, sir?
THE WITNESS: Please repeat the question.
BY MS. WEINTRAUB:
Q.
Wasn't the original lease with Alafaya Trails $11,000 a
month for rent? Yes or no?
A.
If that's what's in the lease, yes.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
I'm asking you -- you just saw the -- you want to see the
lease and the payment again?
MS. JIMENEZ: Objection.
THE WITNESS: I would.
MS. WEINTRAUB: Okay. Can we bring up the original
lease with the $11,000.
THE COURT: The objection is overruled.
Is this going to refresh your recollection, sir?
THE WITNESS: Yes.
THE COURT: All right. Then show the witness.
BY MS. WEINTRAUB:
Q.
Is this the lease that we -- that you were shown on direct
examination and identified for the prosecutor?
A.
Yes.
Q.
And was the term of the lease --
MS. WEINTRAUB: Bring up the $11,000 check.
BY MS. WEINTRAUB:
Q.
-- for the $11,000 a month?
A.
There's no amount. And I'm assuming yes, if it's in the
lease. But I'm not looking at an amount. I'm just looking at
a lease with a lot of words.
Yes. That check says $11,479. That's a 2019 payment.
Q.
And it says: "For June rent," right?
A.
Yes.
Q.
So without having to go through every page of this lease,
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
do you accept the fact that the lease payments were $11,000 a
month?
A.
Approximately, yes.
Q.
Would you pay approximate numbers or would you pay exact
numbers?
MS. JIMENEZ: Objection. Argumentative.
THE COURT: Sustained.
There's no need to answer the question, sir.
BY MS. WEINTRAUB:
Q.
Now, the new lease that you were shown by the FBI was a
very short-term lease, wasn't it?
A.
Can you repeat that question, because we were interrupted.
Q.
The initial lease was a five-year lease, right?
A.
Correct.
Q.
You stopped -- the lease expired and you stopped paying
rent timely. Is that accurate or not?
A.
No. We was in second option. The lease finished -- the
first initial five-year term would have finished in 2017. We
would have been -- in 2020, we would have been in the second
term of the lease.
Q.
But you were what's called a holdover?
A.
(No verbal response.)
Q.
We talked about you not paying the rent, right?
A.
I don't recall anything like that. But again, I had a lot
of locations and...
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Now, you had a five-year lease provided -- the option was
provided that there was written notice to the landlord,
right -- which you never provided -- of your intent to exercise
another option. Isn't that true?
A.
(No verbal response.)
Q.
Want to see it? It's in the lease on Page 10 --
A.
I know what the lease said. And I'm looking at a check
that was written on 6/4/2019, which would have been a period in
the second term of the lease. So we were in the second term of
the lease and paying the rent.
Q.
And there came a point where you stopped paying and they
tried to get you out.
MS. WEINTRAUB: Do we have the video yet?
MS. JIMENEZ: Objection. Asked and answered.
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
I'm going to show you a clip to see if it refreshes your
recollection that you were being evicted, the police were
called, and you were locked out of the store. See if it
refreshes your recollection.
MS. JIMENEZ: Objection. Relevance.
THE COURT: Hold on. The objection is sustained.
MS. WEINTRAUB: This is May 2020, the week before or
two weeks before the lease is signed, Your Honor.
MS. JIMENEZ: Objection. Relevance.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: With regard to a video, sustained.
MS. WEINTRAUB: Well, Your Honor, there's --
BY MS. WEINTRAUB:
Q.
Do you recognize this?
MS. JIMENEZ: Objection. It's the same objection.
THE WITNESS: No. I worked in an office. I didn't
work at this location. I don't even know that this was even
happening.
BY MS. WEINTRAUB:
Q.
You also said you didn't recognize Jeff Vasilas or know
Jeff Vasilas, right?
A.
That's correct.
MS. JIMENEZ: Objection. Asked and answered.
THE COURT: Overruled.
BY MS. WEINTRAUB:
Q.
Wasn't that him in the video or do you want to see it
again?
A.
This video is a video of a door.
MS. JIMENEZ: Objection, Your Honor. Regarding the
video --
THE COURT: All right. Hold on. The objection is
sustained with regard to the video. You may ask questions with
regard to Mr. Vasilas. Let's continue.
BY MS. WEINTRAUB:
Q.
Did you see Mr. Vasilas? He was the person that was
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
talking on the video.
MS. JIMENEZ: Objection.
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
Now, let's look at the new lease. The new lease was a
short-term lease, right?
A.
I don't know.
Q.
With a lease payment due, the terms of the lease were to
pay $22,800 up front, was it not?
MS. WEINTRAUB: And this is in evidence.
THE WITNESS: (No verbal response.)
BY MS. WEINTRAUB:
Q.
Correct? You were supposed to pay $22,800, correct?
A.
(No verbal response.)
Q.
That's what it says?
A.
The amount that I'm looking at says 22,800, correct.
Q.
And now let's look to see if you paid that money on a lease
that didn't exist.
MS. WEINTRAUB: Can you bring up the check for the --
BY MS. WEINTRAUB:
Q.
Now looking at this check which is in evidence for $22,800,
right? And you made it out to HM-UP Development; is that
correct? On May -- in May 2020; is that right? Yes or no?
A.
(No verbal response.)
Q.
Mr. Salem, do you see the check?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
This payment is still to HM-UP Development Alafaya Trails.
Q.
That's what I said, Mr. Salem. Is that a check for $22,800
made out to HM-UP Development? Yes or no?
A.
Correct. But the lease you're showing me is to HM Four
Development.
Q.
You made out the check from Pacific Management to HM-UP for
the amount of money that's in the lease, didn't you? Yes or
no?
A.
I don't know where the number -- that amount came from. It
just says: "All rents owed through June 30th, 2020," to HM-UP
Development Alafaya, which is the company we were on the lease
by.
Q.
That's because you had failed to pay rent, so they wanted
the twenty-two eight up front. And you -- it's in the lease on
the left, is it not, sir? Is it not?
A.
(No verbal response.)
Q.
"Term of the Lease. In the event on May 21st, 2020 the
amount of 22,800 is not received" -- do you see that?
A.
(No verbal response.)
Q.
Do you see it or not?
MS. JIMENEZ: Objection. Asked and answered.
MS. WEINTRAUB: He's not answering.
THE COURT: He hasn't answered the question. If
you'll respond to the question.
THE WITNESS: I'll answer you, but then I would like
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to explain this.
BY MS. WEINTRAUB:
Q.
Do you see the $22,800 that's required in the new lease
that you claim was not done? Yes or no?
A.
This amount could have been due and the lease created for
it.
MS. WEINTRAUB: I'd ask for the Court's assistance in
directing the witness to answer --
THE COURT: The question calls for a yes-or-no
response, sir. If you need to explain your answer, you may
certainly do so.
THE WITNESS: The amount is for the amount stated on
this document -- lease, yes.
BY MS. WEINTRAUB:
Q.
And for some reason, even though you say this lease didn't
exist, you made a payment for $22,800, the exact amount that's
in the lease that you deny, right?
A.
Give me one second. Let me read this.
Q.
Excuse me?
A.
Give me one second. Let me read the highlighted part.
(Pause in proceedings.)
BY MS. WEINTRAUB:
Q.
Are you ready to answer the question?
A.
Okay. Now ask me the question, please.
Q.
The term of the new lease was that you pay $22,800 up
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
front. Yes or no?
A.
This payment appears to be a payment --
Q.
Mr. --
MS. JIMENEZ: Objection.
THE WITNESS: Then the answer is no.
BY MS. WEINTRAUB:
Q.
Mr. Salem, I'm going to interrupt you and ask the Court to
direct you, if you can't understand, that you must answer yes
or no first. My question, sir, is this: The lease calls for
$22,800 up front to be paid. Yes or no?
A.
No.
Q.
No?
A.
Can I explain?
THE COURT: You may explain your answer, sir.
THE WITNESS: Okay. So a lease usually has an initial
deposit. This is not a deposit. This is back-owed rent.
BY MS. WEINTRAUB:
Q.
Oh. Back-owed rent?
A.
Back-owed rent.
Q.
Because you weren't paying it on time, back-owed rent?
A.
I just explained myself.
Q.
Yes, you did. And that would explain that you hadn't been
paying the rent, and they didn't want to get into a new lease,
so they said they wanted the 22,800 up front?
MS. JIMENEZ: Objection. Argumentative.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. WEINTRAUB:
Q.
Is that right?
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
Well, let's make it simple. So the lease on the left says
22,800 up front, and there's a check, lo and behold, for
$22,800 or the amount of money for the rent on the new lease,
right? We established that, yes?
A.
Yes. Can I explain?
Q.
You just did explain, sir. Now let's go to the next check.
MS. JIMENEZ: The witness would like to explain his
answer.
THE COURT: You may explain your answer, sir.
THE WITNESS: Okay. Again, I signed many leases in my
time. And this Article II says: "Rent, Security Deposit,
Landlord's Work and Tenant Improvement Allowance. Base rent.
Tenant shall pay the following amounts as base rent to landlord
during lease term, 22,800."
This number that's represented in the lease, it shows
it as a deposit. But the payment for the check represented --
clearly said: "All rents owed through June 30th, 2020." The
check does not match the wording of the deposit -- of the
contract in front of me.
BY MS. WEINTRAUB:
Q.
The amount does, doesn't it? It's an odd amount, $22,800.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Just happens to be the same exact amount that's in the lease,
right?
A.
(No verbal response.)
Q.
Right?
A.
The amount is correct.
Q.
I'm sorry?
A.
The amount is correct.
Q.
Okay. So now let's look. The lease term says after the
twenty-two eight was paid that monthly it would be reduced to
$8,000 a month, right? Says: "July 1st, 2020," right, "8,000
per month." Yes, you see that?
A.
I see that. Yes, I do. Yes, I do.
Q.
Okay. Now, let's go to what you paid. It's 8,000 per
month, plus sales tax, right?
A.
Correct.
Q.
And so, then we look at 8,000 per month, plus sales tax.
So we have a check for $8,480 for the next month; is that
right?
A.
That's correct.
Q.
And again, that's exactly the amount of money that is
required under the new lease that you deny is there. Yes?
A.
Yes. And I want to explain again. This check says:
"HM-UP Development Alafaya Trails, LLC" --
Q.
Mr. Salem --
A.
-- which is the landlord that I signed the lease in 2012.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Mr. Salem --
A.
This contract is for HM Four. It's a completely different
company.
Q.
Mr. Salem --
A.
Okay. Go ahead.
Q.
-- you denied the lease. I have now showed you the exact
number on the check amounts that you have paid for rent there.
Yes or no?
A.
Yes.
Q.
And in fact, because you were playing games and changed the
name to Pacific Management from SOS --
MS. JIMENEZ: Objection. Argumentative, Your Honor.
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
Isn't it true --
THE COURT: Rephrase.
THE WITNESS: Can I --
THE COURT: There's no question pending. Rephrase,
please.
BY MS. WEINTRAUB:
Q.
Isn't it true that your prior lease was in the name of SOS
Furniture? Right? Yes?
A.
Correct.
Q.
But because of all of the millions of dollars in judgments
in fraud that was going on, you then decided that you wanted
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the tenant to be Pacific MS Management for the first time,
right?
A.
That is not correct, no. And this check says --
Q.
Is it your testimony, sir --
MS. JIMENEZ: He would like to explain.
BY MS. WEINTRAUB:
Q.
-- that the landlord --
THE COURT: Hold on. Hold on.
MS. WEINTRAUB: I'm sorry.
THE COURT: Have you finished your answer, sir?
THE WITNESS: No. The check that she's showing me
says: "Month-to-month" on it. Again, it's a continuation of
payments to the previous contract. It says: "Month-to-month"
written in, "month-to-month." How can this be for a new lease?
BY MS. WEINTRAUB:
Q.
This $8,000 amount is not called for in the original lease,
is it? It's only called for in the lease that you deny, right?
A.
Yes. Can I explain?
THE COURT: You may explain your answer, sir.
THE WITNESS: It's very normal for landlords to give
abatements, adjustments to rent in difficult times, and this
was obviously a difficult time.
BY MS. WEINTRAUB:
Q.
A difficult time of fraud or a difficult time because you
weren't paying the rent, or what?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Objection. Argumentative.
THE COURT: The objection is sustained. Rephrase,
please.
BY MS. WEINTRAUB:
Q.
By the way, are these checks of yours -- they were
computerized?
A.
Yes, they are.
Q.
And so is your signature, isn't it?
A.
That is correct.
Q.
Sir, you were just talking about it's very common to have
an abatement, right, and the reduction? Yeah? You just said
that. Do you remember?
A.
Correct.
Q.
The truth is, there's no abatement in writing, and it's
part of a lease, what you're talking about. I mean, you have
no personal knowledge of that, do you?
A.
I don't understand your question, ma'am.
Q.
I'm sorry?
A.
I do not understand your question.
Q.
You just gave an answer trying to explain something by
saying: "Well, it's very common to just, you know, get a
reduction in rate." But wouldn't that be in writing, sir?
A.
It could be verbally.
Q.
A lease can be verbal and legal?
A.
No.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Is that your testimony after executing over 200 leases?
A.
I've seen it many times. I've done it many times, yes.
Q.
Never did it with Alafaya Trails, did you?
A.
I didn't. I believe my brother did.
Q.
Oh. That's new. Did you tell that to the FBI or is this
the first time that we're hearing that?
A.
(No verbal response.)
Q.
You can answer. You didn't tell anybody that till just now
when you thought of it, right?
A.
No. I didn't just think of it. I -- this is a common
practice in the business.
Q.
Mr. Salem, you keep going around and around with your
explanations. You never answered my question. You have no
personal knowledge of any abatement being done or reduction in
rent being done, do you?
A.
No, I don't.
Q.
Yet, you testified to it a few minutes ago, didn't you?
A.
You mean if I stated that? Yeah. I stated that.
Q.
When the FBI came to you and they were asking you about
negotiating the lease, why didn't you tell them that your
brother was the one who negotiated the lease and just have them
call your brother?
A.
Can you rephrase that question or repeat it?
Q.
When the FBI came asking you questions about negotiating
this lease that's at issue here, why didn't you just say that:
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
"My brother negotiated it and talk to him"? Didn't you just
say your brother negotiated this?
A.
I did not say my brother negotiated this.
Q.
Mr. Salem, did you tell the FBI that your brother Marwan
Salem handled all real estate transactions? Yes or no?
A.
What was the question from the FBI?
Q.
Did you tell the FBI that your brother Marwan handled all
the real estate transactions? Yes or no?
A.
I don't recall. Again, can you tell me what the question
was from the FBI agent that would have led to that answer?
Q.
I can only tell you what is written in a report.
A.
Okay.
Q.
So I want to know if they got it right or if you're
changing your testimony. Which is it?
A.
No. My brother handled real estate for the last few years
of the company, but not signing leases. Discussing and
negotiating, not signing leases. He never signed the lease.
(Pause in proceedings.)
MS. WEINTRAUB: If I can just have a second, Judge.
Sorry.
THE COURT: All right.
(Pause in proceedings.)
BY MS. WEINTRAUB:
Q.
Mr. Salem, you said that you were suffering from hard times
because of COVID, right?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
(No verbal response.)
Q.
That's what you blamed it on?
A.
Everyone was suffering from hard times.
Q.
I'm sorry?
A.
Yeah. COVID affected everyone.
Q.
Okay. But that wasn't the question. You're good.
The question was: Was it your testimony that all the
problems that you had in the business was because of COVID?
MS. JIMENEZ: Objection. Misstates his testimony.
THE COURT: Overruled.
THE WITNESS: No. I didn't say all the problems I had
was because of COVID. I had a company in Texas that I had a
partner, and I had issues with that company in Texas. So there
was problems prior, like any business has.
BY MS. WEINTRAUB:
Q.
Like any business has. Does any business have $16 million
of fraud judgments against it, sir, that you agreed to?
MS. JIMENEZ: Objection. Argumentative, asked and
answered.
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
Mr. Salem, do you admit --
(Pause in proceedings.)
BY MS. WEINTRAUB:
Q.
Do you admit that long before COVID -- couple of years
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
before COVID, you agreed and stipulated, you signed and agreed
that you would not make any more false or misleading
misrepresentations when selling mattresses and related sleep
items to consumers?
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
MS. WEINTRAUB: Judge, it's direct impeachment.
THE COURT: The objection is sustained.
You may continue.
BY MS. WEINTRAUB:
Q.
Didn't you agree years before COVID to cease and desist
from selling or delivering mattresses as new --
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
-- when they were used?
MS. WEINTRAUB: Judge, just so I don't go through more
of it is the Court prohibiting me from using the document at
all?
THE COURT: If it relates to the last question, yes.
(Pause in proceedings.)
THE COURT: Ladies and Gentlemen, how is everybody
doing? Do we need a little break?
Yeah?
Let's go ahead and take a 10-minute recess, please.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
(Jury not present, 10:44 a.m.)
THE COURT: All right. We're on a 10-minute recess.
MS. WEINTRAUB: Can the witness be admonished not
to --
THE COURT: Sir, as you're on the witness stand you're
not to discuss your anticipated testimony or any other aspect
of the case. All right, sir?
We'll see you back here in 10 minutes. I'm speaking
to you, sir.
THE WITNESS: To --
THE COURT: You can't speak with anyone, sir.
THE WITNESS: Okay.
(Recess from 10:45 a.m. to 10:55 a.m.)
THE COURT: All right. We're just waiting for the
witness.
All right. Come on forward, Mr. Salem.
Both sides ready to continue?
MS. WEINTRAUB: Yes, Your Honor.
THE COURT: All right.
MR. ETRA: Let's bring in the jury.
(Before the Jury, 10:56 a.m.)
THE COURT: All right. Welcome back, Ladies and
Gentlemen.
Please be seated, everyone.
And we'll continue with the cross-examination.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: Thank you, Your Honor.
BY MS. WEINTRAUB:
Q.
Mr. Salem, I'm going so show you again the Exhibit
Number...
MR. CAVALLO: M-88.
BY MS. WEINTRAUB:
Q.
And this is the estoppel letter that we talked about
before. Do you recognize it again?
A.
(No verbal response.)
Q.
Yes?
A.
This says: "Guarantor."
Q.
Yes. Now, you said, when I was talking to you about this,
that this was a stand-alone document. Do you remember that?
A.
It appears to be, yes.
Q.
And the truth is -- if you go up to the page before, the
truth is that it is not a stand-alone document. It was Page 3
of a three-page document, correct?
MS. JIMENEZ: The objection's not in evidence. I've
checked. We're talking about the document.
THE COURT: All right. If the witness -- if this is
refreshing his recollection, he can look at the document not
being shown to the jury but just to the witness.
MS. WEINTRAUB: I'm happy to move M-88 into evidence,
Your Honor.
MS. JIMENEZ: No. Objection.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right.
MS. JIMENEZ: I said: "No," comma, "objection."
THE COURT: Do you have an objection?
MS. JIMENEZ: Yes.
THE COURT: All right. Then show it for purposes of
refreshing the witness's recollection.
BY MS. WEINTRAUB:
Q.
You see that, right? You see that actually what's
happening is your signature -- if you want to read what it
says -- your signature is guaranteeing the above provisions.
Do you see that? It says that: "Agrees with lender and its
successor" --
MS. JIMENEZ: Objection. She's reading from a
document not in evidence.
THE COURT: Sustained.
MS. WEINTRAUB: Sorry.
BY MS. WEINTRAUB:
Q.
Do you see this on the --
MS. WEINTRAUB: I was just trying to move it along.
BY MS. WEINTRAUB:
Q.
It's on the fourth line, Judge -- I mean Mr. Salem. Do you
see that? It's highlighted now. Does that refresh your
recollection?
A.
Estoppel and guarantor agreements are stand-alone
agreements. Page 2 of the estoppel is not signed. The
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
guarantor page is what's signed.
Q.
Okay. And now can you answer my question please, sir? The
question is: Your signature there guarantees the above
conditions, does it not?
MS. JIMENEZ: Objection. He's answered the question.
Asked and answered.
THE COURT: Overruled.
MS. JIMENEZ: He's not a lawyer.
BY MS. WEINTRAUB:
Q.
It binds you, does it not, on the previous guarantees?
A.
(No verbal response.)
Q.
Yes or no?
A.
No.
Q.
Okay.
A.
Not from my understanding. A guarantor is a separate
document, separate contract -- agreement. An estoppel is
something different. The estoppel is not signed.
Q.
But the guarantee is, right?
A.
They could have been connected at a later date.
MS. JIMENEZ: Asked and answered.
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
Now, in summing up, I just want to make sure that I
understand that the first time the FBI came, you told the
truth, right?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I always tell the truth to the best of my ability.
Q.
Isn't the reason that you called the FBI back was because
you realized that when you admitted and verified your
signature, and admitted that that lease was real, it was with
Pacific Management and you were just incriminating yourself to
having a scheme to avoid your creditors? Is that right?
MS. JIMENEZ: Objection.
THE COURT: And the basis?
THE WITNESS: No, absolutely not.
MS. JIMENEZ: Argumentative.
THE COURT: Sustained.
BY MS. WEINTRAUB:
Q.
Is that because you would never do something like that?
MS. JIMENEZ: Objection. What was the -- I couldn't
hear. I'm sorry.
MS. WEINTRAUB: Well, he answered.
THE WITNESS: I said no, it's not because of that.
It's because I realized that it wasn't my signature, and my
name was misspelled, and I was missing the initials. That's
why I called back.
BY MS. WEINTRAUB:
Q.
And the misspelling is the typo, right, with the S and the
D which are next to each other on a keyboard; is that right?
A.
I don't have a keyboard in front of me. I don't know.
Q.
And as you said, you tell the truth all the time, right?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Objection. Argumentative.
THE COURT: Sustained.
All right. Any redirect?
REDIRECT EXAMINATION
BY MS. JIMENEZ:
Q.
Mr. Salem, when your business went into bankruptcy, did
that mean that you couldn't pay creditors?
A.
The business went into bankruptcy after the receiver took
it over. But I couldn't pay even before the receiver took it
back -- took it over.
Q.
So was it the case that creditors sued you --
MS. WEINTRAUB: Objection. Leading.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
-- so that you could get your money back?
MS. WEINTRAUB: Objection.
BY MS. JIMENEZ:
Q.
Were you sued by creditors?
A.
I was sued by creditors.
Q.
Did they want their money?
A.
Yes, they were [sic].
Q.
You were asked about the two times you spoke with the FBI,
April 11th, and then you call them the following day. When you
were first approached by the FBI, did you know they were going
to come and talk to you?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
No.
Q.
Did they schedule an appointment with you ahead of time?
A.
No. They just showed up.
Q.
And were you confronted with a lease for the first time?
MS. WEINTRAUB: Objection. Leading.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
Were you confronted with a document?
MS. WEINTRAUB: Objection to the form of the question.
Confronted.
THE COURT: Overruled. I'll allow it.
THE WITNESS: I was presented a document. Yes.
BY MS. JIMENEZ:
Q.
Had you seen that document before?
A.
No, I never had.
Q.
You were asked what you said about your brother. Did you
say that your brother, Marwan Salem, handled the real estate --
MS. WEINTRAUB: Objection. Leading.
BY MS. JIMENEZ:
Q.
-- transactions?
THE COURT: Overruled. I'll allow it.
BY MS. JIMENEZ:
Q.
Did you say that?
A.
Yes, I did. He was handling the real estate for the last
few years.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Did you tell the FBI that because you're president of the
company you would be the one to sign the lease?
A.
Yes. That's correct.
Q.
Did you also tell them in that interview that a final lease
would have to have your initials?
MS. WEINTRAUB: Objection, Your Honor.
THE COURT: Basis?
BY MS. JIMENEZ:
Q.
Did you tell them that?
MS. WEINTRAUB: It's a prior consistent statement --
MS. JIMENEZ: He was asked about it.
MS. WEINTRAUB: -- and it's leading.
THE COURT: Overruled. I'll allow it.
BY MS. JIMENEZ:
Q.
Did you tell them in that interview?
A.
I told them that my signatures always comes with initials
on every page. That's my habit.
Q.
And then you spoke to the FBI again? Did you speak with
the FBI again the next day?
A.
The next day is when I told them about the signature and
the initials.
Q.
So you spoke with someone from the FBI the following day --
A.
Correct.
Q.
-- right? Did you call the FBI or did the FBI call you?
A.
No. I called them.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And you -- and when you called them, why did you call them?
MS. WEINTRAUB: Objection. Asked and answered.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
What did you tell them when you called them?
MS. WEINTRAUB: Same objection.
THE COURT: Overruled.
THE WITNESS: I told them that I had some questions
about the document that was left. I told them that it didn't
appear to be something that I signed, and I told them that my
name was misspelled, the signature didn't look right, and it
was missing initials throughout the pages.
BY MS. JIMENEZ:
Q.
Did you tell them whether or not you'd ever heard of this
company, HM Four?
A.
I don't recall at the time. And I didn't just -- I
never -- I didn't look.
MS. WEINTRAUB: There's no question pending.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
Please explain your answer. Go ahead.
A.
No. I just -- I saw the date -- I mean I saw the address,
and that's why I thought it was the same agreement initially.
I did not look to see that there was a difference in the name.
I figured that out later on.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
So you don't recall telling them --
MS. WEINTRAUB: Objection, Your Honor.
BY MS. JIMENEZ:
Q.
-- that you -- that you didn't remember --
THE COURT: Sustained. Rephrase.
BY MS. JIMENEZ:
Q.
Did you, the second day, tell them that --
MS. WEINTRAUB: Objection.
BY MS. JIMENEZ:
Q.
-- whether the company --
THE COURT: Sustained. Rephrase.
BY MS. JIMENEZ:
Q.
-- whether the Defendant's company asked you to make
payments to other companies?
MS. WEINTRAUB: Your Honor, objection.
THE COURT: The objection is sustained. Rephrase.
BY MS. JIMENEZ:
Q.
Well, do you remember talking or telling them anything else
that had to do with your payments?
A.
Yeah. I told them -- and I'm trying to remember exactly
how -- what I told them. But I told them that there was
something weird about this collection because someone would --
people would show up to the office, which was not typical, to
collect. And I believe there was even an incident where the
store was forced shut because a payment wasn't released.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I also was told by someone in the office that --
MS. WEINTRAUB: Objection. Hearsay and --
THE COURT: Sustained.
MS. JIMENEZ: Can we pull up 39-10, please.
And then can you put it to one side. And can you put
up 78, is it?
BY MS. JIMENEZ:
Q.
At any point did anyone tell you you were paying the wrong
company?
A.
No.
Q.
Did anyone ask you to make payments to an HM Four, not
HM-UP Development Alafaya Trails?
A.
There was a request to write checks to different names,
different companies.
Q.
Did you ever receive a request that you recall specifically
to pay HM Four?
A.
No.
MS. JIMENEZ: Can we show the Exhibit 20 -- no.
Sorry. Hold on.
(Pause in proceedings.)
MS. JIMENEZ: Exhibit -- can you just leave 78. Put
up Exhibit 58-1, please.
MS. WEINTRAUB: Judge, Government's 79 is not in
evidence -- 78, sorry.
MS. JIMENEZ: What I indicated is that this is part of
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Composite 39, and I indicated the Bates numbers and that we
were going to call it 78.
THE COURT: All right. So it is in evidence or it is
not?
MS. JIMENEZ: It is in evidence. It's part of
Composite Exhibit 39, and I gave the Bates page of Exhibit 39.
THE COURT: All right. 9809. All right. You may
continue.
BY MS. JIMENEZ:
Q.
Did anyone ever say to you that they wanted to negotiate a
lease with you with a different company, HM Four?
MS. WEINTRAUB: Objection. Leading.
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
Did you have any discussions or were you advised at any
point that your lease was now with a different company?
MS. WEINTRAUB: Objection. Calls for a hearsay
response.
THE COURT: Overruled.
THE WITNESS: No. I was never told that any -- there
was any request to change any company.
MS. JIMENEZ: Can we go to the last page of 58-1.
BY MS. JIMENEZ:
Q.
The signature for you -- let me ask you: On checks, your
signature you indicated is, what, like an automated signature?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: Objection, Your Honor. Counsel is
testifying.
THE COURT: Sustained.
MS. WEINTRAUB: He said it was a computer.
THE COURT: All right. Let's continue.
BY MS. JIMENEZ:
Q.
What did you say about your signature on the checks?
A.
I said this is a digital signature, but my signature is
pretty consistent.
Q.
When you -- and for your company, you're the one who signs
the leases; is that right?
MS. WEINTRAUB: Objection. Leading and asked and
answered.
THE COURT: Overruled. I'll allow it.
THE WITNESS: Yes. I sign leases.
BY MS. JIMENEZ:
Q.
Do you sign with a computer or do you actually sign a
lease?
A.
A physical signature.
Q.
Looking at Exhibit 58-1, the signature page, is that your
signature, Mr. Salem?
A.
No, it's not.
MS. JIMENEZ: I don't have any other questions, Your
Honor.
THE COURT: All right. Is the witness excused?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Yes.
MS. WEINTRAUB: Definitely. Yes.
THE COURT: All right. Thank you, Mr. Salem. You are
excused.
(Witness excused.)
THE COURT: The Government's next witness.
MS. MARTINEZ: The United States calls Heimdal
Barrios.
(Pause in proceedings.)
THE COURT: All right. Good morning, sir.
Come on forward.
COURTROOM DEPUTY: Please raise your right hand.
HEIMDAL BARRIOS, GOVERNMENT WITNESS, SWORN
COURTROOM DEPUTY: State your name and spell it for
the record.
THE WITNESS: H-E-I-M-D-A-L. Last name B-A-R-R-I-O-S.
DIRECT EXAMINATION
BY MS. MARTINEZ:
Q.
Good morning, Mr. Barrios.
A.
Good morning.
Q.
Mr. Barrios, in 2020, where were you working?
A.
SunTrust Bank.
Q.
Get closer to the microphone there.
A.
SunTrust Bank.
Q.
And how long had you been working for SunTrust Bank? When
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
did you roughly start there?
A.
I was working for about five years. So sometime in 2016
probably I started.
Q.
And in 2020, what was your location? In what location of
SunTrust Bank were you working?
A.
The Bal Harbour office on Collins and 96th Street.
Q.
And what was your particular position?
A.
I was the bank manager or financial center manager.
Q.
For that particular branch?
A.
For that office. Correct.
Q.
During your time at the Bal Harbour office, did you ever
know Mr. Eric Sheppard?
A.
Yes.
Q.
I'm going to show you what's --
MS. MARTINEZ: Could you pull up Exhibit 39-11.
Could you just -- yeah, highlight the top.
BY MS. MARTINEZ:
Q.
Do you recognize what's already been admitted into evidence
as Government's Exhibit 39-11?
A.
Do I recognize it? Yes.
Q.
Do you recognize what type of document this is? What is
it?
A.
Yes. This is a signature card that is used at the
beginning of establishing an account. So this is what we would
use to verify a customer's signature if they were to cash a
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
check or anything pertaining to that account.
Q.
And what is the company name?
A.
HM Four, LLC.
Q.
And what are the last four digits of the account?
A.
5817.
Q.
And who is the signer in the account?
A.
Eric Sheppard.
Q.
And what's his listed title?
A.
Manager.
Q.
Is there anybody else on that signature card that has
authority over this account?
A.
No.
Q.
And what was the date that it was opened?
A.
October 22nd, 2020.
MS. MARTINEZ: Can you just show the bottom.
BY MS. MARTINEZ:
Q.
What's the box that's checked, the type of company?
A.
It's an individual/sole proprietor or a single member LLC.
Q.
And there's an additional signature and date at the bottom.
Is that -- who normally fills out that signature at the bottom?
A.
The signer of the account.
Q.
The same person that you have on the signature card above?
MS. WEINTRAUB: Objection, Your Honor.
THE WITNESS: Correct.
THE COURT: And the basis?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: There's no personal knowledge and
there's no foundation for this. Is this --
THE COURT: Overruled. Overruled.
(Pause in proceedings.)
MS. MARTINEZ: Could you pull up 58-3. It's already
been admitted into evidence.
BY MS. MARTINEZ:
Q.
Mr. Barrios, have you seen this document before?
A.
Yes.
Q.
Who showed it to you?
A.
The first time I saw this document from -- was Sarah.
Sarah from the FBI text it to me.
Q.
Do you recognize the signature on the document?
A.
It's similar to mine, but I don't believe it's mine.
Q.
Why -- why do you say that it's not your signature?
MS. WEINTRAUB: Objection. That's not what he said.
THE COURT: The objection is sustained.
BY MS. MARTINEZ:
Q.
Do you recall signing this letter?
A.
No. The reason for that is because it's common for a
customer or a client of the bank to request a letter of this
kind. So I would not be able to tell you the specific
instant -- whether I signed this or not, because I've signed so
many of them.
Q.
Do you recognize this as your signature?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
No.
Q.
And what is your -- how is your signature different from
this one?
MS. WEINTRAUB: Objection, Your Honor.
THE COURT: Basis? I'm sorry?
MS. WEINTRAUB: That's not what he said.
THE COURT: No. The question is: "How is your
signature different?"
Overruled.
THE WITNESS: May I continue?
BY MS. MARTINEZ:
Q.
You may answer.
A.
So the H -- so my signature consists of an H and a B
combined at the beginning, followed by the rest of my last
name, which I usually end with an S and a dot for the I, and
the S at the end of my name.
Aside from that, the H and the B seems -- doesn't seem
as smooth as my signature would be. So those are the two
reasons why I believe that may not be my signature.
Q.
The date is November 11th, 2020, correct?
A.
Correct.
Q.
We just saw that the bank account had just been opened
October 22nd, correct?
A.
Yes.
Q.
And we saw that the signer on the bank account was Mr. Eric
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Sheppard?
A.
Correct.
Q.
Could you read out the first sentence in this letter.
A.
"Eric Sheppard and Jennifer Sheppard are a valued customer
of SunTrust Bank."
Q.
Is Mrs. Sheppard on this account?
A.
Based on the signature card we saw previously, no.
Q.
In your experience, when you wrote any letter for a
customer relating to an account, did you add --
MS. WEINTRAUB: Objection, Your Honor. Hypothetical.
THE COURT: Sustained. Rephrase.
BY MS. MARTINEZ:
Q.
Looking at the letter, does the first sentence indicate to
you whether or not you wrote this letter?
A.
The signature card states Eric Sheppard is the only signer.
I wouldn't type a letter with false information on purpose.
Q.
And what is the false information?
A.
Based on the signature card previously shown to me,
Jennifer Sheppard is not a client -- I'm sorry -- is not a
signer on that specific account. I can't confirm whether she's
a client of the bank or not. I don't recall. I don't have
that information. But she was definitely not a signer based on
the signature card.
Q.
On the HM Four account?
A.
On the HM Four account, correct.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. MARTINEZ: Can you zoom out. Can you Zoom so just
the top, what is -- the account that we're talking about.
BY MS. MARTINEZ:
Q.
And just -- this letter lists an account number. What are
the last four digits of the account number?
A.
5817.
Q.
And the company name?
A.
HM Four, LLC.
Q.
Now, in addition to a letter like this, is there a process
at SunTrust for verification of accounts?
A.
Yes.
Q.
And what is that?
A.
We would indicate for the customer to call the 800 number,
where there is an option for different types of investigations
on your account/bank relationship.
Q.
Is that a way that you use for account verifications --
you?
MS. WEINTRAUB: Objection.
THE COURT: I'm sorry. What is the basis?
MS. WEINTRAUB: Again, it's a hypothetical.
THE COURT: Overruled.
THE WITNESS: Can you repeat the question? I'm sorry.
BY MS. MARTINEZ:
Q.
Can you explain to the jury how the account verification
process works and in your experience how you use it.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
So there's a process where the customer would call the 800
number, and that 800 number would have the authority to verify
the customer over the phone and give any kind of information
necessary or requested.
Q.
And do you refer requests for verification to that 1-800
number?
A.
Correct. Yes.
MS. MARTINEZ: Could you pull up 58-5.
Could you just highlight the top part, just because
it's difficult to read. I'm sorry. Just the whole...
Can you zoom this down and go back to the previous
exhibit. Do you remember the number -- or do I need to give it
to you?
Okay. Good.
BY MS. MARTINEZ:
Q.
Does -- is SunTrust open on holidays, like Veterans Day?
A.
No.
Q.
And I suppose you don't have a calendar with you.
November 11th, 2020 was Veterans Day?
A.
They took my phone from me, so unfortunately I don't.
Q.
Okay. Let's just say if November --
A.
Sure.
MS. MARTINEZ: Your Honor, could the Court take
judicial notice that November 11th, 2020 was Veterans Day?
THE COURT: On behalf of the Defendant, is there any
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
dispute?
MS. WEINTRAUB: I'd have to look at the calendar, to
be honest, Judge. I have no reason to doubt Ms. Martinez,
though.
THE COURT: All right. Well, to the extent that it
is, the Court can take judicial notice.
BY MS. MARTINEZ:
Q.
Mr. Barrios, was the SunTrust Bank open on Veterans Day?
A.
I don't believe so. It's a national holiday, so we should
have been closed.
Q.
A national federal holiday?
A.
Correct. A national federal holiday.
Q.
Okay.
MS. MARTINEZ: Can we go back to the other exhibit.
I think it was 58-5.
And go to the top.
BY MS. MARTINEZ:
Q.
Do you recognize this type of document?
A.
Yeah. It looks like either a bank statement or a
transaction history.
Q.
Well, what's the period of time given on the right?
A.
November 1st to November 17th of 2020.
Q.
So is that a full transcript?
A.
It's not.
Q.
And why did you call it like a transaction history?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Because there's two different documents that we would be
able to print out to show this kind of information. One would
be your monthly statement, which is generated automatically
every month. The other would be a transaction history, which I
would be able to print out -- or myself or any of the bankers
or tellers would be able to print out from their desk. And
with that document, you would be able to choose what dates you
print the transactions for.
Q.
So taking a look at 58-5, what are the two deposits -- the
dates of the two deposits that are in the transaction history?
A.
There was a deposit on November 12th for $80 and a deposit
on November 16th for 60,000.
MS. MARTINEZ: Can you go to the bottom part of this,
and all the way to the -- there you go.
BY MS. MARTINEZ:
Q.
Do you recognize the items on the bottom half of the
document?
A.
I don't recall any documents stating "printed by," so that
stands out to me.
Q.
And does the stamp -- do you recognize the stamp?
A.
The stamp does look similar. It is -- it may be a stamp
that I have used, SunTrust Bank. I'm not sure why it would say
"Miami" after "SunTrust Bank." But there is -- if this is not
the stamp, there is a stamp that I use that's very similar to
this one.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And during --
MS. MARTINEZ: You can bring it down.
You can zoom out.
BY MS. MARTINEZ:
Q.
During -- during the pandemic, was the branch open in the
normal way?
A.
No.
Q.
Or did it have different procedures?
A.
There were different procedures during the pandemic.
Q.
And what were those?
A.
So when we first -- when the pandemic first started, we
were completely closed to the public.
Q.
That would be -- you mean when there was like the national
shutdown in March of 2020?
A.
Right.
MS. WEINTRAUB: Leading.
THE COURT: Sustained. Rephrase.
THE WITNESS: Because we were still reporting to the
bank. We were -- I believe they call it essential workers. So
we would report to the bank, but we were not able to deal with
the public. Then shortly after, I can't tell you how much time
after --
MS. WEINTRAUB: Objection, Judge. Judge, this is
still narrative from the first question that was sustained.
THE COURT: Let's ask another question.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
What were the procedures with respect to the pandemic in
2020?
A.
Okay.
Q.
You can just explain again.
A.
Okay. So the -- at the beginning, we were unable to deal
with the public. Shortly after, we were able to take care of
clients through the drive-through, as well as being able to
have them park in the parking lot. And then we would go out,
get any kind of document we needed signed with a form of an ID,
and then come back in, scan, do what we had to do. And then,
eventually, they let us have about 10 customers in the bank at
once. And then slowly but surely we continued to just
eventually open fully to the public.
(Pause in proceedings.)
BY MS. MARTINEZ:
Q.
During the pandemic, your bank did offer Paycheck
Protection Program loans, right?
A.
Correct.
Q.
To your recollection, did Mr. Sheppard seek one from --
MS. WEINTRAUB: Objection, Judge.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Did you ever deal with Mr. Sheppard with respect to any
loan?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: Objection, Judge.
THE WITNESS: No.
THE COURT: I'll allow that. Overruled.
BY MS. MARTINEZ:
Q.
Let me state the question again, so the record states it.
Did you deal with Mr. Sheppard with respect to any loan?
A.
No.
MS. MARTINEZ: No further questions, Your Honor.
THE COURT: All right. Cross-examination.
CROSS-EXAMINATION
BY MS. WEINTRAUB:
Q.
Good morning, Mr. Barrios.
A.
Good morning.
Q.
We've never met, right?
A.
I don't believe so.
Q.
My name is Jayne Weintraub. I'm one of the lawyers
representing Mr. Sheppard. We have never met, right?
A.
I don't believe so.
Q.
Okay. Mr. Barrios, you have known Eric Sheppard since
2017, right?
A.
I can't give you an exact date on when I met Mr. Sheppard.
But it has been a few years, yes.
Q.
Well, maybe I can refresh your recollection.
A.
Sure.
MS. WEINTRAUB: For the witness only.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
(Pause in proceedings.)
BY MS. WEINTRAUB:
Q.
Do you recognize this document, sir?
A.
Looks like an email.
Q.
From?
A.
From me.
Q.
It looks like an email from you to?
A.
Mr. Sheppard.
Q.
Dated?
A.
May 17th, 2017.
Q.
Does that refresh your recollection that you knew
Mr. Sheppard as long ago as 2017?
A.
You just confirmed it. Yes.
MS. WEINTRAUB: Your Honor, at this time we would move
it into evidence.
MS. MARTINEZ: Your Honor, I have no objection.
THE COURT: All right. Admitted into evidence.
(Defendant's Exhibit M-24 received into evidence.)
BY MS. WEINTRAUB:
Q.
And you reached out to him just to say?
THE COURT: My apologies. The exhibit number?
MR. CAVALLO: It's M, as in Mary, 24, Your Honor.
THE COURT: Thank you.
All right.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. WEINTRAUB:
Q.
You knew Eric Sheppard's family also around that time,
right?
A.
No.
Q.
Did you meet his family and other members that have
accounts in your bank as the manager of the bank?
A.
I don't believe so.
Q.
Okay. Is it your testimony that Eric Sheppard and his
family did or did not have many other accounts in your bank at
the time, September, October, November of 2020?
A.
I can definitely confirm that Eric Sheppard had multiple
accounts with the bank.
Q.
And can you also confirm that they were in the millions of
dollars and he was a valued customer?
A.
Correct. That's one of the only reasons I would deal with
him as the manager of the bank.
Q.
Of course. And is it your testimony that you are not sure
if his family, in particular his wife Jennifer Sheppard, had a
personal account there as well?
A.
I wouldn't recall.
Q.
Now, when you were first approached by the Government in
this case, it was in the middle of June last year, right?
A.
June of last year? No. It was a few months ago.
Q.
Okay. And it was the FBI agent seated right here, right,
Sarah Halleran?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Correct.
Q.
Now, did she come to you in person or did she call you?
A.
She called me.
Q.
And she called you at the bank; is that right?
A.
Incorrect. She called my cell phone.
Q.
Do you know how she had your cell phone, aside from the
fact she's the FBI?
A.
Nope. Just assumed because she was the FBI she had my
phone number.
Q.
That's okay.
MS. WEINTRAUB: Now pull up M-76.
MR. CAVALLO: For the witness only, please.
Oh. That's in evidence.
BY MS. WEINTRAUB:
Q.
The FBI agent wanted to come --
MS. WEINTRAUB: Actually, it's up, right, for the
jury?
BY MS. WEINTRAUB:
Q.
The FBI agent wanted to come -- wanted you to look at this
letter, right?
A.
Correct.
Q.
And she texted you and asked you, did she not, if you
signed the letter?
A.
Correct.
Q.
And you responded to her: "I don't recognize the signature
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
as my own"?
A.
Correct.
Q.
Essentially, you were saying you didn't remember the
letter, not that you didn't write the letter. Is that
accurate?
A.
I don't remember typing the letter, nor does that signature
look like mine.
Q.
Okay. Are you denying under oath, sir, that you signed
this letter?
A.
I am telling you I don't recall signing the letter.
Q.
Okay. Let me see if I can refresh your recollection. Do
you see the signature block on this?
A.
Yes.
MS. WEINTRAUB: Let's pull up M-89 and M-19, just for
the witness.
And M-19.
BY MS. WEINTRAUB:
Q.
Do you recognize M-89, the exhibit that only you can see at
this time, as an email?
A.
It looks like an email, yes.
Q.
Whose email is it?
A.
It's from me.
Q.
So that is your email? Yes?
A.
It looks like it, yes. Yeah. Yeah.
Q.
Does anybody else use your email from SunTrust Bank?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I would be the only one to use that email, ma'am.
Q.
Okay. So can we confirm that M-89 is your email?
A.
If you're stating that this is my email, then that's my
email. You're showing me something on a screen that I don't
know where you got it from.
Q.
Okay. But it is your email. I'm asking you to look at
your signature.
A.
Heimdal.barrios@suntrust.com was my email at that time.
Q.
Thank you.
A.
You're welcome.
Q.
Now I'm going to ask you -- I'm sorry. Were you done?
A.
No. I'm just saying you're welcome.
Q.
I'm going to ask you --
MS. WEINTRAUB: Can you highlight the signature block
on the left, where it says "Heimdal Barrios, VP Branch Leader."
Right.
BY MS. WEINTRAUB:
Q.
You see that signature?
A.
Yes.
Q.
And where it says -- on the next document, on M-19, do you
recognize that email address from you?
A.
It's the same email address.
MS. WEINTRAUB: At this time, Your Honor, I would move
M-19 into evidence.
THE COURT: Any objection?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I'm sorry. Is there any objection?
MS. MARTINEZ: Your Honor, the witness does not
remember these documents.
MS. WEINTRAUB: That's not what his testimony was.
THE COURT: Is there any objection to the introduction
of these two exhibits?
MS. MARTINEZ: Your Honor, the -- we just don't have
it authenticated. So yes, I object.
THE COURT: All right. Then let's set forth the
sufficient predicate to admit the documents.
MS. WEINTRAUB: Yes, Your Honor.
BY MS. WEINTRAUB:
Q.
Mr. Barrios, looking at those emails, do you recognize
as -- I think you said you're the only one who used your email
that's on this email.
A.
Correct. I'm the only one with access to that email
address, yes.
Q.
And do you recognize the signature block that is
highlighted in yellow as your own?
A.
It looks like a signature block from one of my emails,
correct.
MS. WEINTRAUB: At this time, I would move Exhibit
M-89 and M-19 into evidence.
THE COURT: Any further objection on behalf of the
Government?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. MARTINEZ: What are they requesting to move into
evidence?
THE COURT: M-19 and M-89. It should be on your
screen.
(Pause in proceedings.)
THE COURT: Any objection?
MS. MARTINEZ: Your Honor, I object. Just -- it has
not been properly authenticated.
THE COURT: Overruled. M-19 and M-89 admitted into
evidence.
(Defendant's Exhibits M-19 and M-89 received into
evidence.)
BY MS. WEINTRAUB:
Q.
Mr. Barrios, I'm going to ask you now to look at M-19, and
look at the date of that email. First of all, who is that
email from?
A.
From me.
Q.
And the email is to Eric Sheppard, right?
A.
Correct.
Q.
And it's November 12th, 2020, right?
A.
Correct.
Q.
And what does it say is the subject?
A.
"Ref Letter."
Q.
Reference letter, right?
A.
Right.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And it says that there's an attachment, right?
A.
Correct.
Q.
And it's from you, Heimdal Barrios, VP Branch Leader,
right? We've established that?
A.
Yes.
Q.
And you're the only one who uses that email?
A.
Correct.
Q.
Now let's show you the attachment.
MS. MARTINEZ: Your Honor?
BY MS. WEINTRAUB:
Q.
Now showing you the attachment. It is dated November 11th;
however, you sent it --
MS. MARTINEZ: Your Honor -- Your Honor --
MS. WEINTRAUB: Can I finish my question?
MS. MARTINEZ: We had not seen this attachment. So
I --
THE COURT: All right. Let's look at the attachment.
MS. MARTINEZ: Without --
THE COURT: Hold on. Hold on, Ms. Martinez. Let's
make sure. You were shown the exhibits, not the attachment.
Let's make sure that the witness recognizes the attachment.
MS. MARTINEZ: Yes. But this is being shown to the
jury.
THE COURT: No. It shouldn't be shown to the jury.
MS. WEINTRAUB: Isn't this in evidence?
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Miami, Florida 33128
(305) 523-5698
THE COURT: M-19 and 89 are not -- are in evidence but
not the attachment.
MS. MARTINEZ: Right. You can't slip an attachment
like that.
THE COURT: All right. So let's take it -- let's take
it -- let's take it off the screen, and let's establish the
predicate with regard to what was attached.
BY MS. WEINTRAUB:
Q.
Mr. Barrios, you were asked to look at the letter which is
Government's Exhibit...
MR. CAVALLO: 58-3.
BY MS. WEINTRAUB:
Q.
You were asked to look at this letter on direct examination
with the prosecutor, were you not?
A.
I'm sorry. Can you repeat that? I didn't hear you.
Q.
Yes. You saw this letter when the prosecutor was
questioning you, right?
MS. MARTINEZ: Objection.
THE WITNESS: No. This is not the same letter.
THE COURT: The objection is sustained.
BY MS. WEINTRAUB:
Q.
Sir, isn't it true that Eric Sheppard called you and asked
you to write a letter for him confirming his business account
with your bank?
A.
I do not recall.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
You're not saying that it didn't happen. You're just
saying you don't remember?
A.
I don't remember that specific instant, correct.
Q.
And as you said on direct, you signed so many of these
kinds of letters it's hard to remember them all, right?
A.
Correct.
Q.
Now, you were asked by the prosecutor -- or you stated to
the prosecutor that the letter does not contain accurate
information.
MS. WEINTRAUB: Put the exhibit up. And can you pull
up 58-23 next to this.
BY MS. WEINTRAUB:
Q.
And do you see, sir, the letter -- the wording of the
first, say, sentence of the letter? The one that's in evidence
says: "Eric Sheppard and Jennifer Sheppard are valued
customers of SunTrust Bank." Do you see that?
A.
Yes.
Q.
Do you have any reason to doubt that?
A.
No -- well, do I have a reason to doubt that they -- that
she was on the account?
Q.
And that they have millions of dollars -- I'm sorry?
A.
Based on what the FBI and DOJ have explained to me,
Jennifer Sheppard was not on this account, but I cannot confirm
or deny. I don't recall.
Q.
Hold on. Hold on. Hold on. I didn't ask you if Jennifer
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Sheppard was on the account.
A.
What was your question? I apologize.
Q.
That's okay. All I asked you was: Was she a valued
customer at the bank as well?
A.
I don't recall. I answered that previously.
Q.
But you also said that the information was false --
A.
I didn't say the information was false. I was told the
information was false. I cannot confirm or deny whether she
had an account with us or was on the account.
Q.
Okay. So you were told by the FBI? Yes?
A.
That she was not on the account, correct.
Q.
But you don't know if that's accurate or not, true?
A.
Correct.
Q.
Now, the wording of these two letters -- the sentence
doesn't say that Jennifer Sheppard is on the account. The
sentence says that she is a valued customer of SunTrust Bank,
right?
A.
That's accurate.
Q.
So there was nothing that was not accurate at the time.
The account HM Four was in good standing on November 11th and
12th, was it not?
A.
I don't know what was the status of the account in -- at
that time. I wouldn't be able to tell you.
Q.
Well, you were just testifying about the account and a
$60,000 deposit, right?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Based on the information that was showed to me on the
screen, yes. I was just confirming what I was seeing on the
screen.
Q.
Okay. So -- but you did testify, did you not, sir, that
the account -- there were the two deposits that you talked
about, right?
A.
Correct.
Q.
Do you have any reason to doubt that HM Four, LLC was in
good standing at the time?
A.
Not at this moment.
Q.
Okay. And the bank also gave Mr. Sheppard -- the bank
account was opened October 2020, right?
A.
I don't recall what the signature card said. If you want
to bring that back up, we can all confirm.
MR. ETRA: For the jury, and not admitted. Take that
down and just do the admitted one for the jury.
MS. WEINTRAUB: Chris, put up October 2020, the bank
account.
BY MS. WEINTRAUB:
Q.
The bank gave Mr. Sheppard voided checks and a direct
deposit slip; is that right?
A.
At the account opening. Yeah, that's the norm.
MS. WEINTRAUB: Let's pull that up.
BY MS. WEINTRAUB:
Q.
Showing you M-21. Is this a bank statement from your bank,
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
as it was?
A.
It could be. I believe we established it was a transaction
history because of the dates. It wasn't a full month's bank
statement.
Q.
But it comes from the bank? Yes?
A.
It definitely looks like it comes from the bank, yes.
MS. WEINTRAUB: And let's now show the direct deposit
form, M-20.
BY MS. WEINTRAUB:
Q.
And that looks like a starter check and it's voided from
the bank, right?
A.
It's a direct deposit form. Now -- yes. Now it's a
starter check.
MS. WEINTRAUB: We would move M-20 into evidence.
MR. CAVALLO: It's in. It's in.
MS. WEINTRAUB: Okay.
BY MS. WEINTRAUB:
Q.
I'm showing you the direct deposit enrollment.
THE COURT: Hold on. Let me just make it clear. M-20
is in evidence.
MS. MARTINEZ: It should be part of Exhibit 39, Your
Honor, the SunTrust account records.
THE COURT: Thank you.
MR. CAVALLO: Correct.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. WEINTRAUB:
Q.
All right. And M-21. Do you see the other exhibit,
Mr. Barrios?
A.
The direct deposit, yes. Enrollment form, yes.
Q.
And that is also showing that the bank account was
operating then? That's a bank document, is it not?
A.
Yes.
Q.
And you printed a November bank statement for Mr. Sheppard,
did you not?
A.
I don't recall.
Q.
Do you remember after you left the bank that you contacted
Mr. Sheppard for a job?
A.
I remember Mr. Sheppard offering me to call him when I
explained to him that I was leaving to work on real estate,
yes, and I called him and he didn't answer me.
Q.
And...
A.
And I called him, like I called many clients.
Q.
Mr. Barrios, I got to stop you because there's not a
question pending.
A.
Sure. I just thought -- I was under the impression that --
THE COURT: There's no question pending, sir.
THE WITNESS: Okay.
(Pause in proceedings.)
BY MS. WEINTRAUB:
Q.
You've said a lot of times here today that you don't really
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Miami, Florida 33128
(305) 523-5698
have a good recollection about these documents that you're
being shown with your name on them, right?
A.
Yes.
Q.
And for some reason -- well, you left the bank and it
wasn't able to be accessed. And for some reason, you don't
remember the letter being written. Do you remember Eric
Sheppard coming to the bank in person to see you?
A.
Eric came to the bank many times to see me.
Q.
Did he come to the bank to see you about this letter?
A.
I don't recall.
Q.
Okay. So you saw the email -- you don't know. You saw the
email where you sent him the reference letter he asked for.
Did he come to get it?
A.
I don't recall.
MS. WEINTRAUB: Could I have a moment, Judge.
THE COURT: Certainly.
(Pause in proceedings.)
BY MS. WEINTRAUB:
Q.
And Mr. Barrios, with regards to the letter, I mean, your
bottom line is you just don't remember it, right?
A.
Correct.
Q.
But you do see that you sent the letter in your email,
right?
MS. MARTINEZ: Objection. The attachment has not been
authenticated.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Overruled.
THE WITNESS: I saw the images on the screen, yes.
BY MS. WEINTRAUB:
Q.
And do you agree that that's from your email?
A.
I agree that it has my email on it, and it has my signature
that would normally be on my emails, yes.
Q.
And that nobody else had access to that email while you
were at the bank?
A.
Nobody else had access to that email, correct.
MS. WEINTRAUB: I move it in and say it's
authenticated.
MS. MARTINEZ: Authenticate what?
THE COURT: The attachment.
MS. MARTINEZ: There has been no one who can say what
those little words really have in them. There's no
authentication --
THE COURT: It's sufficient for the jury to consider.
The objection is overruled. And the attachment -- I'm not sure
if it was to M-19 or M-89, but the attachment will be admitted
into evidence.
(Defendant's Exhibit M-19 Attachment received into
evidence.)
(Pause in proceedings.)
BY MS. WEINTRAUB:
Q.
And again, with your signature, you're just saying it's
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
similar; you're not sure because you signed so many documents?
MS. MARTINEZ: Asked and answered.
BY MS. WEINTRAUB:
Q.
You can't swear it is, but you can't say it's not.
MS. MARTINEZ: Asked and answered, many times.
THE COURT: Sustained.
MS. WEINTRAUB: Can the record indicate that the
witness was nodding his head in the affirmative?
THE WITNESS: Yes.
MS. MARTINEZ: What? What? What?
THE COURT: The objection is sustained.
MS. MARTINEZ: I couldn't even hear what counsel was
saying.
THE COURT: Is that the end of the cross-examination?
Ms. Weintraub, have you completed --
MS. WEINTRAUB: I just want to confirm with my client,
Judge, but I think the answer is yes.
(Pause in proceedings.)
MS. WEINTRAUB: Yes, Your Honor.
Thank you.
THE COURT: All right. Any redirect?
MS. MARTINEZ: Yes, Your Honor.
Can you bring up again Government's Exhibit 39-11.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
REDIRECT EXAMINATION
BY MS. MARTINEZ:
Q.
Mr. Heimdal?
A.
Yes, ma'am.
Q.
Again, Exhibit 39-11 is a bank record from SunTrust,
correct?
A.
It looks like a --
MS. WEINTRAUB: Objection. Leading and beyond the
scope.
THE COURT: Sustained.
Rephrase, please.
BY MS. MARTINEZ:
Q.
What type of document is that?
A.
This looks like a business account signature card.
Q.
For what account?
A.
For HM Four, LLC.
Q.
And who is the only signer?
A.
Eric Sheppard.
Q.
You were asked on cross-examination about a letter that
discussed this particular account, correct?
A.
Yes.
Q.
And in the letter, it describes not just Mr. Sheppard but
also his wife?
A.
Correct.
Q.
Can you tell the jury, would you add --
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: Objection, Your Honor, to the form of
the question.
MS. MARTINEZ: Can you --
MS. WEINTRAUB: It's a hypothetical.
THE COURT: Rephrase. Sustained.
BY MS. MARTINEZ:
Q.
Can you explain to the jury whose name would be on a letter
that you wrote regarding an account, the account signer or
other people?
MS. WEINTRAUB: Objection, Your Honor.
THE COURT: What's the end of the question? Whose
name -- let me hear the end of the question.
BY MS. MARTINEZ:
Q.
Whose name would be on an account verification letter?
THE COURT: The objection is overruled. You may
answer the question, sir.
THE WITNESS: If we're speaking about a reference
letter, the only individuals that should be named on the letter
are the individuals on the account.
BY MS. MARTINEZ:
Q.
And who was the only individual on this account?
A.
Based on this business account signature card, Eric
Sheppard.
Q.
Now, you were shown an email that purported to have an
attachment. Do you have any recollection of that attachment?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
No.
Q.
You were shown an email that had not your signature but
your name, right?
A.
Correct.
Q.
When counsel was talking about it as your signature,
really, can you explain to the jury what that is. That's just
a signature?
MS. WEINTRAUB: Objection, Your Honor. Leading.
BY MS. MARTINEZ:
Q.
Can you explain --
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
-- to the jury what that is.
A.
That is a signature on your email, which is -- it's
automatic. I don't type that in every time. It goes with
every email that is sent out.
Q.
And I don't have the exhibit, but you saw that, the
purported attachment?
MS. WEINTRAUB: Objection.
MS. MARTINEZ: Basis?
THE COURT: And the basis?
MS. WEINTRAUB: "Purported." It's in evidence and he
identified his email.
THE COURT: Overruled. You may continue.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
You saw that there was some little letters after the word
"attachment," right?
A.
Yes.
Q.
And the letters were -- and, I mean, you --
MS. MARTINEZ: I am just restating what is in the
document that you have moved into evidence.
BY MS. MARTINEZ:
Q.
E-R-I-C, dot, D-O-C-M.
MS. WEINTRAUB: Objection, Your Honor.
MS. MARTINEZ: I am restating what is --
THE COURT: Hold on. What's the basis? Give me the
legal basis for the objection.
MS. WEINTRAUB: Yes, Your Honor. She's referring to a
document that isn't identified. I'd like to --
THE COURT: All right. Just give the exhibit number
you're referring to.
MS. MARTINEZ: What is the exhibit number of your
exhibit?
MR. CAVALLO: M-19.
MS. MARTINEZ: Okay. So I'm referring to M-19.
THE COURT: All right. Do you understand the
question, sir?
THE WITNESS: Can you repeat the question, please?
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Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
Do you recall the little words that were -- that -- the
little letters that were following the attachment?
A.
No.
MS. MARTINEZ: Could I have a copy of M-19?
MR. CAVALLO: Did you want us to put it up?
MS. MARTINEZ: No. I would like a copy.
(Pause in proceedings.)
MS. MARTINEZ: Can you -- thank you.
Go to ELMO.
BY MS. MARTINEZ:
Q.
I'm showing you a document that is Defense Exhibit M-19.
First, the top of it says: "Barrios, Heimdal. On behalf of
Barrios, Heimdal." What does that mean? Is it somebody that
had access to that email or is it --
MS. WEINTRAUB: Objection, Your Honor. Leading.
THE COURT: Overruled. If the witness knows.
THE WITNESS: I was definitely the only person that
had access to that email.
BY MS. MARTINEZ:
Q.
And what does it mean when it says: "On behalf of"?
A.
Honestly, I don't know.
Q.
Okay.
A.
I don't know if it maybe was forwarded. Honestly, I don't
know. I don't want to guess. I don't want to --
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Okay. Do you see the little letters after the word
"attachments"?
A.
Yes.
Q.
Eric.D-O-C-M?
A.
Yes.
Q.
Do you recognize this being a document that can be
modified?
MS. WEINTRAUB: Objection, Your Honor.
BY MS. MARTINEZ:
Q.
Do you recognize --
MS. WEINTRAUB: Objection, Your Honor. You know, this
is the third time.
THE COURT: Hold on. What's the legal basis for this
objection?
MS. WEINTRAUB: It's outrageous.
THE COURT: Overruled.
MS. WEINTRAUB: She is accusing counsel of modifying a
document.
THE COURT: Overruled. You may answer the question.
MS. WEINTRAUB: And it's in evidence, and it wouldn't
have been --
THE COURT: It's in evidence. The objection is
overruled. You may answer the question, sir.
BY MS. MARTINEZ:
Q.
Let me ask you a question. Do you sometimes write
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(305) 523-5698
documents in Microsoft Word?
A.
Yeah. Of course.
Q.
Okay. Do you sometimes print a document to PDF?
A.
Sure. Yes.
Q.
Okay. A Microsoft Word document, if you send that to
someone else --
MS. WEINTRAUB: Objection. Calls for a hypothetical,
and not what happened in this case, and he doesn't recall.
THE COURT: Overruled. The witness may answer the
question.
BY MS. MARTINEZ:
Q.
If you send someone a document in Microsoft Word, can the
other person open it in Microsoft Word, too?
MS. WEINTRAUB: Objection.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Is Microsoft Word something --
MS. WEINTRAUB: Objection.
THE COURT: Okay. Hold on.
Is Microsoft Word -- what's the question?
BY MS. MARTINEZ:
Q.
Whether that is a printed document or scanned document, or
is that a document with a native sort software that can be
changed?
Native software, do you understand what I mean by
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that?
MS. WEINTRAUB: Oh, my God. Objection. And I request
an instruction.
THE COURT: The objection is sustained. The objection
is sustained.
BY MS. MARTINEZ:
Q.
A Microsoft Word document --
A.
Yes.
Q.
-- when you receive it by email, can you open it?
A.
Yes.
MS. WEINTRAUB: Objection, Your Honor.
THE COURT: If the witness can open a -- overruled.
THE WITNESS: Yes.
BY MS. MARTINEZ:
Q.
Okay. Does it open within Microsoft Word?
A.
Yes.
MS. WEINTRAUB: Objection. Relevance.
THE COURT: Sustained.
MS. MARTINEZ: Your Honor, the witness has been
asked --
THE COURT: I -- let's continue with our redirect,
please.
BY MS. MARTINEZ:
Q.
That document -- the document that you were shown -- this
document -- well, let me -- let me ask you: This attachment,
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the letters that you see there, do you recognize that?
A.
It likes like an email that was printed out.
Q.
No. No. The attachment, E-R-I-C --
A.
No. I don't know. I don't know what that is. It just
looks like words on a paper.
Q.
Do you recognize it as Microsoft software?
MS. WEINTRAUB: Objection.
THE COURT: If the witness recognizes it. Overruled.
THE WITNESS: I can't confirm whether it's Microsoft
or another program. I can't confirm based on the letters.
BY MS. MARTINEZ:
Q.
Based on your experience, would you send someone --
MS. WEINTRAUB: Objection. He's not --
THE COURT: Hold on. It's based on his experience.
At this point, overruled.
What's the question, Ms. Martinez?
BY MS. MARTINEZ:
Q.
My question relates specifically to this document, M-19.
Would it be your practice to send a client an unsigned letter
in software that can be changed?
MS. WEINTRAUB: Objection, Your Honor.
THE WITNESS: That is --
THE COURT: Overruled.
THE WITNESS: That is not the norm. That wouldn't be
normal for me to do.
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BY MS. MARTINEZ:
Q.
Okay. And what would be normal for you to do if there was
a reference letter? Would you actually sign it at your office
and then send it?
MS. WEINTRAUB: Objection, Your Honor. He has said he
doesn't know or recall --
THE COURT: As to his normal practice. Overruled.
MS. WEINTRAUB: -- three times.
THE COURT: Overruled.
You may answer the question, sir.
THE WITNESS: Based on --
MS. WEINTRAUB: Can he be asked if he remembers before
he answers?
THE COURT: It's his normal practice. Overruled. The
question is proper.
THE WITNESS: Based on the processes, I would not send
an unsigned letter. I may sign it and send it, but I
definitely wouldn't send it blank.
BY MS. MARTINEZ:
Q.
So if you would sign --
A.
That wouldn't be the norm, is what --
Q.
Right. To send a signed letter, what would be your
practice? Would you scan the document so that it could be --
then create a PDF and then send it?
A.
Correct.
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MS. WEINTRAUB: Objection, Judge. These are the same
questions that were sustained five minutes ago, what he would
do about scanning or a PDF or a Word document.
THE COURT: In terms of his normal practice,
overruled.
BY MS. MARTINEZ:
Q.
Would it be your practice to write a letter on a federal
holiday?
A.
No. I wouldn't have access to my email.
MS. WEINTRAUB: Objection, Judge. The email is
November 12th, not the 11th.
MS. MARTINEZ: Stop interrupting the witness.
THE COURT: Sustained.
Okay. Ms. Martinez, let's continue and I'll rule on
the objections.
MS. MARTINEZ: My concern, Your Honor, is that --
THE COURT: We don't need to know the concern. What
we need to hear are the questions.
(Pause in proceedings.)
BY MS. MARTINEZ:
Q.
I'm going to -- I'm showing you a comparison -- I'm going
to try to show you a comparison of Government's Exhibit 58
Bates label 031143, which is a letter --
MS. WEINTRAUB: Objection, Your Honor.
THE COURT: It's in evidence, correct?
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MS. MARTINEZ: Yes, Your Honor.
THE COURT: All right. Let's continue. Overruled.
(Pause in proceedings.)
MS. WEINTRAUB: Judge, it's being shown to the jury.
THE COURT: They are both in evidence, correct? This
is M-20. And is this -- what's the other exhibit number? Let
me -- if you can pull it up so I can see the Bates stamp on the
other one.
MS. MARTINEZ: Your Honor, this is what's been
admitted.
MS. WEINTRAUB: Can you take off the Post-it?
Thank you.
THE COURT: All right. So SHEPP 31143 is what
exhibit?
MS. MARTINEZ: I'm going to tell Your Honor. It's
from Exhibit 58, and it's -- I've marked it separately as 58-3.
THE COURT: All right. You may continue.
MS. MARTINEZ: And I believe -- the Defense Exhibit is
M-19, I believe.
MR. CAVALLO: Correct.
BY MS. MARTINEZ:
Q.
First let me -- Mr. Barrios, what I'm showing here on
ELMO -- we call it ELMO. It's a projector -- is side by side
the Government's exhibit, which purports to have your
signature, and then the unsigned attachment that was in the
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Defense exhibit. Do you see -- do you see your signature on
the Defense exhibit?
A.
Yes.
Q.
This is the Defense exhibit.
A.
Oh. I'm sorry. No. No, I don't see my signature on that
document.
Q.
And would you send a document unsigned like that to a
client?
A.
That would not be the normal process, no.
Q.
Would you -- do you see that the letters --
MS. WEINTRAUB: Objection, Your Honor. It's leading.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Are the letters exactly the same or is there some
difference between them?
MS. WEINTRAUB: Objection.
THE COURT: Overruled.
THE WITNESS: They are not exactly the same.
BY MS. MARTINEZ:
Q.
So there has been a change in Exhibit M-19, right?
A.
Yes, there's a difference.
Q.
Or one from the other?
A.
There's a difference --
MS. WEINTRAUB: Objection.
THE WITNESS: -- between the two documents in front of
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me.
THE COURT: Overruled.
BY MS. MARTINEZ:
Q.
Did you ever authorize anyone to sign for you and to submit
a letter signed by you -- I'm sorry. Did you authorize anyone
to sign for you?
A.
No.
(Pause in proceedings.)
BY MS. MARTINEZ:
Q.
Just to -- the letter is dated November 11th, 2020, which
was a federal holiday. Would you have written a letter on that
day, on November --
MS. WEINTRAUB: Objection. Asked and answered.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
In addition to what you stated with respect to not allowing
someone to sign for you, again, did the signature in
Government's Exhibit 58-3 have the little dots that you
normally put in a signature?
A.
No.
Q.
How about that break that there is right here? Is that --
MS. WEINTRAUB: Objection, Your Honor. This is all
asked and answered about this signature.
THE COURT: Sustained.
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BY MS. MARTINEZ:
Q.
Is that the way you would normally write?
A.
No.
(Pause in proceedings.)
MS. MARTINEZ: No further questions, Your Honor.
THE COURT: All right. Thank you.
Is Mr. Barrios excused?
MS. MARTINEZ: Yes, Your Honor.
MS. WEINTRAUB: Yes.
THE COURT: All right. Thank you, sir.
You are excused.
(Witness excused.)
THE COURT: And Ladies and Gentlemen, as you can see,
it's 12:15. We'll take our one-hour recess for lunch, and I'll
see you back here at 1:15.
Have a pleasant lunch.
COURT SECURITY OFFICER: All rise for the jury.
(Jury not present, 12:14 p.m.)
THE COURT: All right. Go ahead and have a seat for
just a moment.
Will the Government be resting its case?
MS. MARTINEZ: We have another witness, Your Honor.
MS. JIMENEZ: We have another witness.
THE COURT: Which witness do you have?
MS. MARTINEZ: I have the accountant, and he's going
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to put in several summaries.
THE COURT: All right. All right. Have a pleasant
lunch, and I'll see you back here at 1:15.
MS. WEINTRAUB: Judge, I have a quick motion to make.
THE COURT: All right.
MS. WEINTRAUB: And that's a motion for a mistrial
based on prosecutorial misconduct. This is the third time --
and I just need to remind the Court. The first was that we
were accused of staging pictures that are in evidence that were
not staged. The second time was Neal Cupersmith. We produced
emails, and the Government said that they can't be real or
genuine, they have to be fake because Neal Cupersmith gave them
all of their emails, and again accused the Defense lawyers of,
I guess, manipulating evidence or faking evidence. This is the
third time, and it's in front of the jury, and this has got to
stop.
I am a lawyer in good standing for 31 years, and I
have never been accused of -- I've been accused of a lot of
things, Judge. I've never been accused of anything like this.
Manipulating documents or faking evidence that goes in before a
jury is one of the most outrageous claims I could ever fathom,
and there is no -- no good-faith basis even for the questions
that the prosecutors tender. And in front of the jury, it's a
disgrace. And I even asked for an instruction to the jury
right away, and it was denied.
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THE COURT: Response?
MS. MARTINEZ: Your Honor, with respect to the witness
that was just on the stand, the purported email that was given
to us for the first time had a modifiable document, meaning,
you know, native software document. The question was only to
go -- it had nothing to do with counsel. It only had to do
with the facts of the case.
The attachment on it had software that could be opened
and changed. And in fact, the evidence moved into evidence
reflects that the document, in fact, was changed. If it was
sent, it certainly was changed because the paragraphing was
moved.
THE COURT: Do you want to respond specifically to the
motion that claims that the Government was accusing the
Defendant's attorneys of manipulating evidence?
MS. MARTINEZ: It's just that it had nothing to do
with the attorneys. I never referred to them or anything like
that. It was completely having to do with is it software -- is
it a scanned document that has a signature or is it a document
that could be opened up at the other end and could be -- in
fact, Your Honor, even the change doesn't even have to be like
a negative change. It just could be that it could be moved
around, which is what it -- appears to have been done.
So it's just -- it appears like a complete
overreaction to something that is actually in the record.
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MS. JIMENEZ: And Your Honor, the case is full of
forgeries and changed documents, not anything that Defense
counsel did.
THE COURT: Okay. One argument from one attorney.
Thank you, Ms. Jimenez. Ms. Martinez has done a fine job of
responding.
Ms. Weintraub, is there anything further?
MS. WEINTRAUB: Yes, Your Honor.
I was specifically accused at sidebar of staging the
pictures and of producing a fake email with regard to Neal
Cupersmith.
THE COURT: Well, the record will bear out whether the
attorney was personally accused. And at most, that was at
sidebar and outside the presence of the jury.
But with regard to the comment on the evidence, I
believe that the comment was fair, and I don't believe that
there is any evidence before this jury that the lawyer was
being accused of manipulating evidence. To the extent that the
Defense believes that there was, then certainly the Court can
give an appropriate cautionary instruction, and I would ask
that the Defense attorneys prepare one for the Court to
consider --
MS. WEINTRAUB: Yes, Judge.
THE COURT: -- to give either following the lunch
break or at the close of all of the evidence.
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Have a pleasant lunch, and I'll see you at 1:15.
MS. WEINTRAUB: Thank you, Judge.
THE COURT: And for the record, the motion for
mistrial is denied.
COURT SECURITY OFFICER: All rise.
(Recess from 12:19 p.m. to 1:17 p.m.)
THE COURT: All right. Welcome back.
Let me acknowledge the presence of the Defendant.
Are both sides ready to continue?
MS. MARTINEZ: Yes, Your Honor.
There's just -- I'm looking through the exhibit list,
and there's just a couple of exhibits that I want to make sure
that I move into evidence and to clarify whether or not -- so
I'm going through...
(Pause in proceedings.)
THE COURT: What exhibits?
MS. MARTINEZ: All right. Let me -- you want us to --
MS. JIMENEZ: 3-1 through 3-3, they are certified
deeds.
THE COURT: No. They're not in evidence.
MS. MARTINEZ: No. No. We are -- we're moving them
in.
THE COURT: Oh. You're moving them in now.
All right. Is there any objection?
MR. CAVALLO: I'm sorry. Which ones?
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Miami, Florida 33128
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THE COURT: 3-1 to 3-3.
MR. CAVALLO: No objection.
THE COURT: All right.
MS. MARTINEZ: Your Honor --
THE COURT: Admitted into evidence.
(Government's Exhibits 3-1 through 3-3 received into
evidence.)
MS. MARTINEZ: Thank you.
And again, we're just doing a -- checking through the
list. There's a subscriber information, 9-1, from Yahoo. The
other ones were admitted. We just don't have in our list that
this one was.
THE COURT: It was admitted into evidence.
MS. MARTINEZ: 9-1?
THE COURT: Yes. 9-1.
MS. MARTINEZ: Thank you so much, Your Honor.
MS. JIMENEZ: 9-2 and 9-3?
THE COURT: 9-2 and 9-3.
Okay. Are we ready to bring back the jury?
MS. MARTINEZ: Your Honor, I'm just going through
this. There's only a couple more.
THE COURT: All right.
MS. JIMENEZ: I have Exhibit 75, which wasn't
previously on the list. These are a couple of additional
emails that PayPal produced. If the Court remembers, the
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Defense introduced a couple of emails from PayPal that they had
not provided to me. They went back and retrieved a couple of
additional emails. I've turned them over to the Defense a week
or two ago. They have a business record certification, and we
have them marked as Government Exhibit 75.
THE COURT: Are you seeking to introduce it at this
time?
MS. JIMENEZ: Yes.
THE COURT: Is there any objection?
MR. ETRA: There is an objection, Your Honor. These
are documents that are Rule 16 materials that were not provided
until after the PayPal witness got on and off the stand. We
weren't able to question the witness about them, and we
shouldn't be able to --
THE COURT: All right. So this is a supplemental
certification?
MS. JIMENEZ: It is, Your Honor. They -- they did
not -- they produced the emails with respect to the company
that applied. There were a couple of additional emails that
they introduced with other companies' tax returns. So to them
that was a separate record. So they retrieved -- and really,
it's just a couple of -- there's -- from the email that they
put in evidence from February 17th, 2021, there was a
subsequent email February 22nd, 2021, which is not in the
record. That's one additional email.
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THE COURT: So your supplemental certification
includes the emails that the Defendant introduced, as well as
these additional ones?
MS. JIMENEZ: Yes. A couple of additional emails.
THE COURT: And what would be the basis of the
objection?
MR. ETRA: Because it's untimely, not because it's
late generally. Because we cross-examined -- we didn't --
we're prejudiced. We didn't have it for the witness. We went
through the witness if their production was incomplete. The
witness insisted their production was complete. We established
that it wasn't, and we asked questions on those, and now they
want to come after the fact and do more documents we weren't
able to ask the questions about and create a false record:
"Oh, look, I don't know what they were saying about the
documents not being complete."
THE COURT: I agree. You can call another witness,
but for purposes of entering in these additional documents
after the witness has already testified would be improper.
All right. Anything further?
MS. MARTINEZ: Let me proceed with my exhibits.
With respect to the SBA witness, my records show that
59 had been admitted, but the paralegal asked me a question
about it. So I just wanted to ask the Court. Fifty-nine.
THE COURT: I have to look at my notes. I don't see
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59 on the exhibit list as being admitted into evidence.
MS. MARTINEZ: We had, with the SBA witness, from 51
through 59. I'm sorry -- yes, 51 through 59.
(Pause in proceedings.)
THE COURT: And the question is -- yeah, M-59?
MS. MARTINEZ: No. No. This is Government's
Exhibit 59.
THE COURT: Oh. All right.
MS. MARTINEZ: My records show that 51 through 59 were
admitted when I put on that witness. I just --
THE COURT: With which witness?
MS. MARTINEZ: Brent Motes from the SBA. We may have
admitted them in advance of him testifying at the time that
Ms. Palancar testified at well.
THE COURT: All right. Here we go. Yeah, 51 through
59.
MS. MARTINEZ: That's right.
Okay. So check for the paralegal.
Your Honor, I'd like to move into evidence
Government's Exhibit 70. It's records relating to vehicles.
It's just financial records.
THE COURT: Any objection?
MR. ETRA: Sorry, Your Honor, we just weren't
expecting this. We're checking up.
THE COURT: Okay. Recall I didn't want to take a lot
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of time away from the jury. You need this for the next
witness?
MS. MARTINEZ: Yes, Your Honor. GMC [sic], yes. It's
the financial records, Your Honor. It's just --
THE COURT: Is there any objection?
(Pause in proceedings.)
MR. ETRA: Your Honor, the fact that GMAC is someone
that got payments, and who they are, part of it we have no
objection to. We're just concerned because some of these
financial documents, because it's a GMAC, may implicate other
things. We don't want to stop them from establishing that --
the ownership information, the payment information. They can
call on their witness. So maybe we can put only that part in
and then we can check at the break.
MS. MARTINEZ: Your Honor, these are business records
with a certification.
THE COURT: Oh. All right. So there is a
certification. So would there be any other basis to object?
What information is in there that would need to be redacted?
MR. ETRA: The problem is that this is one of the
documents where kind of like we thought there was more
information than needed to be, just simply -- it's not a
business certification issue. It's not an authentication
issue. It's simply the fact that there's a lot of financial
information that seems unrelated to this case.
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THE COURT: All right. How many pages is Exhibit 70?
MR. ETRA: Forty pages.
MS. MARTINEZ: Your Honor, may I say that it is not
unrelated, number one. There are payments to this company from
the bank accounts that received PPP and EIDL money. It is part
of the evidence, and obviously we subpoenaed the records --
THE COURT: All right. Then Exhibit 70 will be
admitted into evidence, subject to -- and Mr. Etra, you'll just
need to advise the Court as to what redactions need to be made,
and we can certainly argue outside the presence of the jury
with regard to those issues.
MR. ETRA: Thank you, Your Honor.
(Government's Exhibit 70 received into evidence.)
THE COURT: All right. Let's bring in the jury.
COURT SECURITY OFFICER: All rise for the jury.
(Before the Jury, 1:26 p.m.)
THE COURT: All right. Welcome back, Ladies and
Gentlemen.
Please be seated, everyone.
I trust you had a pleasant lunch and ready to get back
to work.
And the Government's next witness.
MS. MARTINEZ: Your Honor, the United States calls
Mr. Hysa. I do know how to spell his last name. It's H-Y-S-A,
but I cannot even pronounce his first name.
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THE COURT: All right. Let's bring the gentleman in.
(Pause in proceedings.)
THE COURT: Good afternoon, sir.
If you'll remain standing. Raise your right hand to
be placed under oath.
LAVDERIM HYSA, GOVERNMENT WITNESS, SWORN
COURTROOM DEPUTY: Thank you.
You can have a seat.
Would you please state your name and also spell it for
the record.
THE WITNESS: Lavderim Hysa. L-A-V-D-E-R-I-M. Last
name H-Y-S-A.
COURTROOM DEPUTY: Thank you.
DIRECT EXAMINATION
BY MS. MARTINEZ:
Q.
Mr. Hysa, because you have such a long first name, do you
have a shorter nickname that is used?
A.
Yes. My mom called me day one Ladi, L-A-D-I. So...
Q.
Ladi Hysa?
A.
Ladi Hysa, correct.
Q.
Where do you work, Mr. Hysa?
A.
For Federal Bureau of Investigation, FBI.
Q.
And when did you start working for the Federal Bureau of
Investigation?
A.
May 11th, 2011. I'm sorry. Take it back. May 8 is my EOD
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Miami, Florida 33128
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date, 2011.
Q.
What is your position at the FBI?
A.
Forensic accountant.
Q.
What does a forensic accountant do at the FBI?
A.
Typically, a forensic accountant performs financial and
analyzes financial records and provides summary findings, fact
findings in this situation, for litigation purposes to
stakeholders. And stakeholders today are the Ladies and
Gentlemen of the Jury, Judge, Government, and Defense counsel.
Q.
What was your education with respect to accounting?
A.
I received bachelor of science in administration with
concentration in accounting from University of Pittsburgh, and
I also received master of science in finance in state of
Michigan.
Q.
In addition to your degrees, have you also been an adjunct
professor of accounting?
A.
That is correct.
Q.
What licenses and credentials do you have?
A.
I do possess a CPA, certified public accountant, as well as
CFE, certified fraud examiner.
Q.
Can you explain to the jury -- certified public accountant,
what type of education do you have to have in general for that?
A.
In general, to be a CPA, you have to -- it is, first of
all, a statutory license required by the state. And you are
required to gain this license through education, passing a
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
standard CPA examination and experience.
Q.
Are there some things with respect to financial statements
that only someone who has a CPA license can do?
A.
Indeed. That is correct. And it depends on the situation.
If you are a certified public accountant, with title
"independent auditors," and you are working, let's say, for a
public accounting, a certified public accountant increases the
trust and the reliability of the financial statements for us,
investors, creditors. So in other words, it increase the
reliability. It protects the integrity of the market.
Q.
So there's certain audits of financial statements that only
CPAs can do?
A.
That is correct.
MR. CAVALLO: Objection, Your Honor. And the
objection is that Mr. Hysa is not here as an expert. There was
no expert disclosure --
THE COURT: Overruled at this point.
BY MS. MARTINEZ:
Q.
As part of your job at the FBI -- well, before I go back to
the FBI, let me ask you: Prior to the FBI, did you have other
work especially as an accountant?
A.
I did.
Q.
And did you work both in the government and in private?
A.
That is correct.
Q.
Tell the jury what your government job was before the FBI.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I was working for Inspector General, United States Office
of Personnel Management, as a compliance auditor.
Q.
And what is the Office of Personnel Management of the
United States?
A.
It's practically a human resources of United States
Government in basic terms.
Q.
So it deals with the employees of the United States, right?
A.
That is correct. And in this case, I was as an auditor to
audit federal employee program to ensure that the federally --
by auditing the largest -- Blue Cross Blue Shield, for example,
if they were in compliance with obligation contracts and so on.
Q.
And did you also have experience in private accounting?
A.
I did.
Q.
And where did you work?
A.
I worked for KPMG.
Q.
And what IS KPMG?
A.
KPMG is one of the fourth largest public accounting firms
in the world.
Q.
In addition to your experience working for the United
States Government, Office of Personnel Management, and for
KPMG, did you also have some experience actually working with
smaller businesses?
A.
I did. While I was teaching financial and intermediate
accounting in undergrad and graduate program, I had my own
small bookkeeping and 1040 small individual tax returns.
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Miami, Florida 33128
(305) 523-5698
Q.
Your own -- I think you didn't complete --
A.
My own firm.
Q.
Okay. Thank you.
Now, since you've been at the FBI in 2011, what type
of cases -- were they criminal cases that you worked on?
A.
That is correct. Criminal.
Q.
Tell the jury what type of cases you've worked on.
A.
I've been working typically investment security cases
including wire, mail fraud, money laundering, as well as
working loan -- fraud loan activity, like prepaid advanced fee
schemes, "Pay me a little money, I promise you the world,"
including the PPP and EIDL loans.
Q.
Do you also have experience working in cyber?
A.
I do.
MR. CAVALLO: Object again, Your Honor. This is
bolstering a summary witness. He's here under Rule 1006. He's
not here as an expert --
THE COURT: This is not an expert. Can we get to the
testimony, please.
MS. MARTINEZ: We're almost there, Your Honor.
THE COURT: Sustained.
MS. MARTINEZ: Your Honor, the witness is summarizing
records. So --
THE COURT: I understand. Let's get to the testimony.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
When you say the word "cyber," what does that mean?
A.
It's a criminal cyber. In other words --
MR. CAVALLO: Same objection, Your Honor.
THE COURT: Sustained.
THE WITNESS: -- subject --
THE COURT: The objection is sustained.
MS. MARTINEZ: Can you pull up for the witness only
Government's Exhibit 72.
BY MS. MARTINEZ:
Q.
Can you see that?
A.
I do.
Q.
Without -- don't read from it yet. Just tell me: Do you
recognize it?
A.
I do.
Q.
And did you work on preparing this summary?
A.
I did.
Q.
And did you review a large amount of documents to prepare
this summary?
A.
Yes.
Q.
What type of documents did you review? Just in general
what type of documents did you review?
A.
Loan records and bank records.
MS. MARTINEZ: And Your Honor, the United States will
move into evidence Government's Exhibit 72.
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Miami, Florida 33128
(305) 523-5698
MR. CAVALLO: We object, Your Honor.
THE COURT: And the basis of the objection?
MR. CAVALLO: The basis of the objection goes back to
something we argued, which is that this chart includes entities
that are not named in the Superseding Indictment.
THE COURT: The objection is noted. It's preserved.
Overruled. Exhibit 72 will be admitted into evidence.
(Government's Exhibit 72 received into evidence.)
MS. MARTINEZ: Can you also now put that down, and can
you pull up Government's Exhibit 71. Only for the witness.
We're still working only with the witness.
BY MS. MARTINEZ:
Q.
Do you recognize Government's Exhibit 71?
A.
I do.
Q.
Did you work on preparing that summary?
A.
I did.
Q.
And what type of records did you review to prepare this
summary?
A.
For this one, I reviewed loan notes, IP addresses, and loan
agreements.
Q.
What's an IP address?
A.
IP address stands for Internet Protocol. It's like a
unique identifier which connects to devices and transmits
electronic -- just like a telephone number, if I could say.
Q.
Right. And the IP records that you reviewed were from
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Miami, Florida 33128
(305) 523-5698
Breezeline?
A.
That is correct.
MS. MARTINEZ: Your Honor, the United States moves
into evidence Government's Exhibit 71.
THE COURT: Any objection?
MR. CAVALLO: Your Honor, we object because we don't
believe the document's complete and contains all IP address
information that was presented in the case.
THE COURT: All right. You'll have an opportunity to
cross-examine. That goes to the weight as opposed to its
admissibility. The objection is overruled. Exhibit 71 is
admitted into evidence.
(Government's Exhibit 71 received into evidence.)
MS. MARTINEZ: Now let's go back to Exhibit 71 -- I'm
sorry -- 72, and let's publish to the jury.
BY MS. MARTINEZ:
Q.
Mr. Hysa, now both you and the jury can see the document.
Can you explain to the jury first what did you review with
respect to -- first, what's the title of the summary?
A.
It's a Summary of Loan Applications.
Q.
And let's go through the first row, the first row from left
to right, so that we can explain to the jury what is there. On
the first column, the first row, what is shown there?
A.
The first one is application date, 4/15/2020.
Q.
That's April 15th, right?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Right. April 15th.
Q.
And what type of application -- the next column gives us
the loan application type, correct?
A.
That is correct.
Q.
And what type of application was that application?
A.
This is a PPP loan.
Q.
Well, it was a Paycheck Protection Program loan to what
entity?
A.
To HM-UP Development Alafaya Trails d/b/a HM Management and
Development.
Q.
Okay. I'm going to slow you back and go to the column that
says "Loan Application Type."
MS. MARTINEZ: Go to that column.
BY MS. MARTINEZ:
Q.
And that is a PPP loan to what lender?
A.
WebBank, but through the PayPal.
Q.
And the applicant -- the legal business name of the
applicant according to the application, that's the third
column, right?
A.
That is correct.
Q.
And for that particular application, what was the name on
the application records that you reviewed?
A.
HM-UP Development Alafaya Trails, LLC.
Q.
And was there a doing business as name as well on the
application?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Correct.
Q.
What was it?
A.
HM Management and Development.
Q.
And the next column. What do you show on the next column?
A.
I see -- I read here: "Representative/Owner per
Application Eric Sheppard."
Q.
And the next column has two parts. The next column that
says: "Loan Amount." It has two parts. Can you explain that
to the jury. Why does the next column have two parts?
A.
The first one is requested when Eric Sheppard applied for
the loan. And then the second one is the actual -- the
receiving, so funded.
Q.
In that actual -- in that particular one, you have an
additional note. What's the additional note with respect to
that application?
A.
The "forgiven" means the loan application filed by Eric
Sheppard to -- for loan forgiveness.
Q.
Meaning that there was an additional application for loan
forgiveness?
A.
That's correct.
Q.
And "forgiven" means that it was granted?
A.
That's my understanding.
Q.
From the records?
A.
That is correct.
Q.
You were just summarizing records, right?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
That is correct.
Q.
Now, you have a final column on the right that says: "Bank
Account Number" and "Signer." Again, for that particular
application, what does it say for the bank account and the
signer?
A.
It says SunTrust account ending 7571, and the signer is
Eric Sheppard.
Q.
Now, you're familiar with that particular account, right?
A.
I am.
Q.
So is that 7571 the bank account of HM-UP Development
Alafaya Trails?
A.
That is correct.
Q.
Actually, 7571 -- do you remember?
A.
I do remember. It's under HM-UP -- I'm sorry -- HM
Management and Development, SunTrust 7571.
Q.
Right. Which is -- do you remember which is the account
that was under HM-UP Development Alafaya Trails?
A.
It is SunTrust 5973.
Q.
Now, with respect to -- I'm not going to review the entire
rest of the Summary of the Loan Applications.
But following April 15th, 2020, there are four -- look
at the exhibit -- there are four additional applications. Do
those applications all have the same date?
A.
They do.
Q.
And what is that date?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
7/24/2020.
Q.
And those next four applications, what type of loan was the
application for?
A.
EIDL. Economic Injury Disaster Loan.
Q.
And for those applications, were they to a private lender
or were they to the US Government?
A.
SBA, US Government.
Q.
And what's the SBA?
A.
Small Business Administration, one of the -- another agency
of United States Government.
Q.
With respect to the loan amounts for those four
applications, you listed amounts --
MS. MARTINEZ: Can you highlight that, Ms. Font.
BY MS. MARTINEZ:
Q.
-- the loan amounts for those four applications?
A.
That is correct. I did.
Q.
Right. You -- you reviewed records with respect to these
numbers?
A.
Yes, I did.
Q.
And what is the amount that was requested on those records
for these four applications, for each one?
A.
$160,000.
Q.
And I'm going to go back for a second, because I'm just not
sure I put it on the record. The amount that was funded for
the previous one, for the one that went to WebBank, what was
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the amount that was funded?
A.
$150,000 minus --
Q.
Read your own product.
A.
Correct. $146,000 and 457.
Q.
Now, with respect to the four that we were just talking
about, that were from July 24th, 2020, were all of them funded?
A.
No.
Q.
How many of them were funded?
MR. CAVALLO: Objection, Your Honor.
THE WITNESS: Two --
THE COURT: Hold on. What's the basis?
MR. CAVALLO: My objection is this is a summary
witness, the document speaks for itself, and this is like
closing argument where they're just having the witness read --
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Does your -- does your summary reflect whether or not the
applications were funded?
MR. CAVALLO: Same objection, Your Honor. The
document speaks for itself.
THE COURT: Referring to the summary, you may
certainly answer that question.
THE WITNESS: Yes.
BY MS. MARTINEZ:
Q.
And do you have separate columns for whether it was funded
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Miami, Florida 33128
(305) 523-5698
or not?
A.
I do.
Q.
And when it was funded, do you list the amount?
A.
I do.
Q.
Okay. I'm going to ask you with respect to -- you see the
fourth application that was on July 24th, 2020?
A.
I do.
Q.
Do you see the bank account that is listed there as the
receiving bank account even though it wasn't funded?
MR. CAVALLO: Same objection, Your Honor.
MS. MARTINEZ: Your Honor, this is a fact witness.
THE COURT: You may answer the question referring to
the summary exhibit.
MS. MARTINEZ: Your Honor, this is a fact witness --
THE COURT: I just -- I'm overruling the objection.
You may continue.
THE WITNESS: Correct.
BY MS. MARTINEZ:
Q.
With respect to the fourth one, and you see One Florida
Bank, what is that account?
A.
It is SunTrust 7571.
Q.
My question was: With respect to the fourth application on
July 24th, the fourth one, what's the company there?
A.
It is HM Management Development Alafaya Trails TRU, LLC.
Q.
And what bank account is listed on the far right?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
One Florida Bank 2368.
Q.
And have you reviewed those bank records?
A.
Yes, I have.
Q.
Is that bank account connected to another bank record of
Mr. Sheppard's?
A.
Yes.
Q.
What type of other bank record is that?
A.
It's a SunTrust Bank account.
Q.
My question is with respect to the One Florida Bank
account. Does the One Florida Bank account have another
account in addition to 2368?
A.
Correct. Loan account 1470.
Q.
Okay. You remember the number. And what type of loan is
that?
A.
It's a private loan.
Q.
And was that connected to this checking account that's
listed in your summary?
A.
It is.
Q.
Now, sometimes in your summary -- sometimes you have more
than one name. Again, where did that come from?
A.
From the application. For example, he applied under
Nationwide. The Nationwide notes both names.
Q.
And did the applications also indicate an account for the
money to go to?
A.
Yes, it does.
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Miami, Florida 33128
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Q.
And that's why you have an account even though some were
not funded, right?
A.
Correct.
Q.
What is the total amount on this summary that was requested
in terms of PPP and EIDL loans?
A.
1,766,333.
Q.
And what is the total that was funded?
A.
893,445.
MS. MARTINEZ: Can you bring up Government's
Exhibit 71.
BY MS. MARTINEZ:
Q.
This is another summary that's been admitted into evidence.
Can you explain the -- obviously there's a date column,
correct?
A.
Correct.
Q.
And can you describe to the jury how you created this --
what kind of documents did you look to find the IP address that
is listed next to that date?
A.
I reviewed the application -- for example, the first one --
PPP application through PayPal.
Q.
And it's from there that you obtained that IP address?
A.
That is correct.
Q.
Now, did you -- with respect to the Breezeline records,
what did the Breezeline records say about that particular IP
address?
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Miami, Florida 33128
(305) 523-5698
A.
The Breezeline records also indicate this specific IP
address.
Q.
And who's the subscriber?
A.
Eric Sheppard.
Q.
And specifically at what location Eric Sheppard -- what
address?
A.
180 Bal Cross Drive, Bal Harbour, Florida 33154.
MS. MARTINEZ: Can you go -- I realize I should have
followed up on something else on the previous exhibit. I
apologize. Can you go back to Exhibit 71.
Thank you -- or 72.
BY MS. MARTINEZ:
Q.
We had covered that the first one on April 15th, 2020 was a
Paycheck Protection Program and the next four were Economic
Injury Disaster Loans. How about the next two, the next two,
what type of loans were those?
A.
9/5/2020 EIDL, and 10/22/2020 EIDL as well.
Q.
Now, for the dates -- you have four dates in 2021. What
type of loans were those?
A.
These are all PPP loans.
Q.
Okay.
MS. MARTINEZ: Go back to 71.
Thank you.
BY MS. MARTINEZ:
Q.
So now, for this particular exhibit, which is the one of
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Miami, Florida 33128
(305) 523-5698
the IP addresses, in addition to applications, you have other
documents. For example, the first line, April 15th, 2020, what
type of document is listed there?
A.
PPP application.
Q.
And then, for the next one, May 1st, 2020, what type of
document -- and read out the entire type of document that you
have there.
A.
"DocuSigned Application and Loan Note for Alafaya Trails
PPP Loan from PayPal/WebBank."
Q.
In this particular summary, you have not just loan
applications but also loan notes, correct?
A.
Correct.
Q.
And other DocuSigned documents, right?
A.
Correct.
Q.
So you have the first two that relate to Alafaya Trails,
and at the bottom of your summary you put some asterisks. Can
you explain to the jury what these asterisks mean.
A.
It means abbreviation of "Alafaya Trails" represent HM-UP
Development Alafaya Trails, LLC. And "HM Management," HM
Management and Development, LLC.
Q.
So the first two documents related to what you have called
an abbreviated way is Alafaya Trails, right?
A.
That is correct.
Q.
Just going by date, on September 5th, 2020, just tell me
the type of application and the company name.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
"EIDL Application Intake Information from HM Six to SBA."
Q.
On September 25th, 2020?
A.
"DocuSigned Loan Agreement and Note for Alafaya Trails EIDL
Loan from SBA."
Q.
And on October 22?
MR. CAVALLO: Objection, Your Honor. Again, it's just
reading from this summary.
THE COURT: Sustained.
(Pause in proceedings.)
BY MS. MARTINEZ:
Q.
I'm going to -- again, looking at your summary, I see that
there's two dates for January 19th. Those are two different
things. Can you explain to the jury two different documents on
the same date.
A.
There are two different documents.
Q.
And does -- the first one relates to which company, the
first one on January 19th, 2021?
A.
Alafaya Trails.
Q.
And the second one, on January 19th, 2021, does it relate
to a different company?
A.
Yes, it does.
Q.
And between the first one that you said was
January 19th, 2021 Alafaya Trails, to what lender was that?
A.
The first one was WebBank.
Q.
And --
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
And the second one is Cross River Bank.
Q.
And again, the second one was for a different company, HM
Management, right?
A.
That is correct.
Q.
Now, on -- the next dates that you have is that you again
have two for March 12, 2021.
A.
Is that a question?
Q.
My question is -- my question is: Do those -- the first
one from March 12th, 2021, with respect to what company does
that relate?
MR. CAVALLO: Objection, Your Honor. Same thing.
Just asking the witness to read from the summary. The document
speaks for itself.
THE COURT: Is there anything on the summary that you
think would be helpful for the witness to explain to the jury?
MS. MARTINEZ: Yes, Your Honor. As I'm going through,
I'm explaining that there are multiple items that are done on
the same day, and they're not the same items. The only way to
do it is to just point it out.
THE COURT: All right. All right. I'll allow it.
Overruled.
BY MS. MARTINEZ:
Q.
On March 12th, were there two separate items in 2021?
A.
There were.
Q.
The first one was with respect to which company?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Alafaya Trails.
Q.
And the second one was with respect to which company?
A.
HM Management.
Q.
And then, on March 25th, 2021, again, are there two
separate wire transmissions on that day?
A.
Yes.
Q.
And the first one relates to which company?
A.
Alafaya Trails.
Q.
And the second one relates to which company?
A.
HM Management.
MS. MARTINEZ: For the witness only, can you go to
41-1.
BY MS. MARTINEZ:
Q.
Do you recognize Exhibit 41-1, what's been marked for
identification as Exhibit 41-1?
A.
I do.
Q.
Did you prepare that summary?
A.
I did.
Q.
What type of records did you review to prepare that
summary?
A.
Bank records and loan application.
MS. MARTINEZ: Your Honor, the United States moves
into evidence Government's Exhibit 41-1.
THE COURT: Is there any objection?
MR. CAVALLO: I would object that it's duplicative of
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
what we just went through and contains the same information.
MS. MARTINEZ: Your Honor, this is just the funded
ones.
THE COURT: The objection is overruled. 41-1 will be
admitted as a summary.
(Government's Exhibit 41-1 received into evidence.)
MS. MARTINEZ: Can we publish to the jury?
THE COURT: You may publish.
BY MS. MARTINEZ:
Q.
Mr. Hysa, can you -- first let me ask you: What's the
title of 41-1?
A.
Summary of the Bank Accounts and PPP and EIDL Loans.
Q.
Now, this particular summary only includes loans where
Mr. Sheppard actually received money, right?
A.
That is true.
Q.
Now, your summary says: "Sole Authorized Signer." Did you
review all the signature cards for each and every account that
is on this summary?
A.
Yes.
Q.
And who is the sole authorized signer for every bank
account that received PPP and EIDL money?
A.
Eric Sheppard.
Q.
Now, explain to the jury your summary, the first column.
A.
The first column is the date, deposit date when the loans
were actually deposited in these bank accounts.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
In the column that says: "Loan Amount Received," the next
one, what did you base that on -- what did you base that amount
on?
A.
Solely on the bank records.
Q.
Now I'm going to -- I'm going to go to the opposite side,
to the far right side of your summary. You have specific --
like last four digits of numbers. What are those?
A.
These are the account numbers.
Q.
The account numbers that actually received the deposit of
the loans?
A.
That is correct.
Q.
And then you have another column in the far right that --
what is that far column?
A.
This "Date Account Opened" represent when Eric Sheppard
opened the bank accounts.
Q.
The particular one on that row, right?
A.
That is correct. Pertaining to these three accounts.
Q.
Now, the third column on the right, what is that?
A.
It's the "Loan Type," PPP versus EIDL.
Q.
And the next column?
A.
"Lender."
Q.
Now, after that, you have two columns. "Entity Borrowing,"
"Entity Receiving." Let's walk through the first row so we can
explain to the jury why you have two columns.
On the first deposit date, what is it?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
5/1/2020.
Q.
And the amount received?
A.
146,457.
Q.
The loan type?
A.
PPP.
Q.
And the lender?
A.
WebBank.
Q.
Now, you have "Entity Borrowing." Is that based on loan
documents?
A.
That is correct.
Q.
So for that first row, what was the entity borrowing?
A.
HM-UP Development Alafaya Trails, LLC.
Q.
Now, did the bank account for HM-UP Development Alafaya
Trails receive the money?
A.
Not in this case, but it did receive others.
Q.
Others. But this particular deposit went into -- that's
why you have the next column that says "Entity Receiving the
Funds"?
A.
That is correct.
Q.
So you just said the amount that was for the PPP -- the
first PPP loan. For the next three, which are Economic Injury
Disaster Loans, are all three of the amounts the same?
A.
They are.
Q.
And what's the amount that was deposited for each of those
three loan -- Economic Injury Disaster Loans?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
149,900.
Q.
And then, in 2021, you have two deposits relating to PPP.
I don't want you to read the exact numbers, but they're
approximately how much each one?
A.
$148,000.
Q.
Two of them in March of 2021, right?
A.
Correct.
Q.
And what is the total that was actually funded and received
into accounts where Eric Sheppard is the only signer?
A.
893,145.
Q.
893,000?
A.
$893,145.
MS. MARTINEZ: Your Honor, if I could go to the
witness only.
Okay. I'm going to ask Ms. Font to bring up four
additional summaries but we're going to show them to you, just
for you to identify them, two at a time. Because that's the
only thing we can do, two at a time. So could you first pull
up 41-2 and 41-3.
BY MS. MARTINEZ:
Q.
Do you recognize 41-2 and 41-3?
A.
I do.
Q.
And did you create those summaries?
A.
I did.
Q.
Do they relate to specific bank accounts?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
They do.
Q.
I'm going to --
MS. MARTINEZ: Can you now bring up 41-4 and 41-5.
BY MS. MARTINEZ:
Q.
Do you recognize 41-4?
A.
I do.
Q.
Did you prepare that summary?
A.
I did.
Q.
Does it also relate to a specific bank account?
A.
It does.
Q.
Are you familiar with 41-5?
A.
I am.
Q.
And does that one relate to the three bank accounts that
are in 41-2, 41-3, and 41-4?
A.
That is correct. It's representation of those three
accounts.
Q.
And what type of documents did you review to create those
summaries?
A.
Bank accounts.
MS. MARTINEZ: Your Honor, the United States moves
into evidence Government's Exhibit 41-2, 41-3, 41-4, and 41-5.
MR. CAVALLO: No objection, Your Honor.
THE COURT: All right. Admitted into evidence.
(Government's Exhibits 41-2 through 41-5 received into
evidence.)
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. MARTINEZ: Can you put up 41-2, please.
And can you -- yes. Highlight the top, please.
BY MS. MARTINEZ:
Q.
What -- what is the title of the bank account that you
summarized here?
A.
The title of the bank account is SunTrust 7571.
Q.
Actually, the name of the company.
A.
And the name of the company receiving money.
Q.
What is the name of the company?
A.
HM Management and Development, LLC.
Q.
And who is the sole authorized signer of this account?
A.
Eric Sheppard.
Q.
You go from -- you have dates of your analysis here. What
are the beginning and end dates of your analysis?
A.
5/1/2020 to 3 -- I'm sorry -- 10/20/2021.
Q.
I know you're reading the numbers because that's what we
have. But if you don't mind, could you say it in words, like
May 1st and October, just normal?
A.
Absolutely. May 1st.
MR. CAVALLO: Objection, Your Honor. Again, just
asking him to read dates that are right there for everyone to
see.
THE COURT: Overruled. I'll allow it.
THE WITNESS: May 1st, 2020 through October 20, 2021.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
Can you explain to the jury, why did you use May 1st, 2020
as the beginning date for your analysis?
A.
This is the first date when the first loan -- government
loan, in this case, PPP loan, is received on this account.
Q.
And why is your end date October 20th, 2021?
A.
When the bank is zeroed out.
Q.
Zeroed out meaning --
A.
Meaning no activity.
Q.
In that bank account --
A.
In this specific bank account. Correct.
Q.
So we're looking at the top section of your summary. The
first line in the top section of your summary -- first, it has
a title. What's the title?
A.
Summary of Money Flow.
Q.
For the first box, what's the title?
A.
Sources of Funds.
Q.
Okay. And then you took the trouble to create a first row.
Can you describe -- explain to the jury what that means. Why
do you have a first row with a certain number?
A.
This account represents, I mean, the beginning balance,
like any other bank. So on the day, 5 -- May 1st, 2020, when
the -- the first loan coming in, the balance -- beginning
balance is 35,300 -- almost 347 dollars.
Q.
So that's what was in the account --
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Before.
Q.
-- before the first loan was funded, right?
A.
That is correct.
Q.
Now, the next -- and again, this is just to explain to the
jury your summary. The next box that you have in your summary,
can you explain to the jury, what is that?
A.
This is the combination sources of funds coming from these
three loans.
Q.
So what type of loans?
A.
Two PPP and one EIDL.
Q.
So do you -- do you list there -- what are the three loans
that came into this account, from what lender --
MR. CAVALLO: Objection, Your Honor.
MS. MARTINEZ: Your Honor, this is a fact witness. He
is not limited --
THE COURT: Let me hear the basis of the objection.
What's the basis?
MR. CAVALLO: Again, it's just calling for the witness
to read from a summary that we all have and can see.
THE COURT: To the extent that walking through with
the witness is helpful to the jury, I'm going to allow it.
BY MS. MARTINEZ:
Q.
Mr. Hysa, did you review in detail the bank records of
SunTrust 7571?
A.
I did.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And as a fact witness, are you familiar with 7571 beyond
these summaries?
A.
I am.
Q.
Have you spent quite a bit of time with this bank account?
A.
Quite time.
Q.
Did you actually review the checks?
A.
I did.
Q.
Did you actually review the bank statements?
A.
I did.
Q.
Did you review Excel spreadsheets that you created to be
able to summarize this bank account?
A.
I did.
Q.
So do you have factual knowledge about the bank account
beyond this summary?
A.
I do.
Q.
Now, with respect to this particular summary that you
tried -- that you've worked on for the jury, explain to the
jury -- you have a name of a lender, a type of loan, and a
deposit date. Can you explain to the jury how to read that
section of the box of your summary. What is it that you're
providing to them in that summary?
A.
The total money in, total sources of funds coming from two
PPP loans and one EIDL, which the total is $444,000 and 948,
which is the total of three loans.
Q.
Okay. Now, you've gone to the far right column.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. MARTINEZ: Let me have Ms. Font -- can you
highlight that $444,948? Do you see it on the right there?
BY MS. MARTINEZ:
Q.
Just to explain to the jury how to read this type of
document, what is 444,948? What is that addition of -- what is
that the sum of?
A.
This is the sum of three loans, WebBank PPP loan, SBA EIDL,
and Cross River PPP loan.
Q.
Right. But the numbers that are below the 444,000, are
those the numbers that are added into the 4 --
A.
That is correct. So from bottom up, I'm adding the
numbers.
Q.
Now, your summary also includes the name of each lender,
right?
A.
That is correct.
Q.
The type of loan?
A.
Yes.
Q.
And then you've also added a notation. For example, for
the first one, there's a notation about the deposit date. What
does that reflect?
A.
This is the first loan coming from WebBank, May 1st, 2020,
for the amount 146,457.
Q.
For each loan, do you note in the summary the exact date
when the deposit came in?
A.
I do.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
So this account had received two loans in 2020 and one in
2021, right?
A.
That is correct.
Q.
Now, again, to try to explain to the jury how your chart
works, go to the box that says: "Internal Transfers from
within Sheppard Accounts Receiving PPP and EIDL Loans."
A.
So these are -- are the two accounts who received PPP loan.
Q.
This -- we're still looking at money coming into the
account, correct?
A.
That is correct.
Q.
The first line says: "HM-UP Development Alafaya Trails
SunTrust Account 5973," and then you list an amount on the far
right. What's the amount on the far right?
A.
The total amount?
Q.
Yeah -- no. The amount coming in from the 5973 Alafaya
Trails account.
A.
$189,450.
Q.
Now, you've listed that in that box. Explain to the jury
what you mean that this is an account that also received PPP
and EIDL loans that is moving money into this account. Explain
that to them, how that worked.
A.
So total I reviewed three accounts. And all three accounts
are receiving six loans, three PPP and three SBA. So here, the
internal transfer means the money's moving two from within
these three accounts.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
So in this case account 7571, HM Management, is
receiving $189,450 from other SunTrust account who also got
government funds. And then the next one is HM Four account
5817 is bringing in $19,700.
Q.
And in addition to noting the total that came from these
other accounts, you also include in your summary deposit dates
but it's a range. Can you explain to the jury -- for example,
focusing again on HM-UP Development Alafaya Trails, SunTrust
account 5973 that brought in $189,450, you have deposit dates
there. What does that mean?
A.
There were multiple deposits versus like a first one.
May 1st, 2020, we received a loan. In this case, we are
receiving multiple deposits within this range.
Q.
So the range that you have of deposits that are coming from
the Alafaya account is what?
A.
It is June 1st, 2020 through June 15th, 2021.
Q.
In addition to this box that you have -- in addition to
this box that you have of other Sheppard accounts that received
PPP EIDL loans, you have another box called "Other Sheppard
Accounts." Can you explain that box to the jury.
A.
These are two other accounts who are not receiving PPP and
EIDL loans.
Q.
Right. And is this HM Management account 7571 receiving
money from these other accounts?
A.
That is correct.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Now, again, One Florida Bank is the one you previously
mentioned that had a commercial loan?
A.
That is correct.
Q.
And then the other one that you have bringing money in is
Amerasia. Amerasia brings in only after -- actually, a
two-month period after September of 2021, right?
A.
That is correct.
Q.
And from the One Florida Bank, which is the one with the
commercial loan, how much came in?
A.
$261,688.
Q.
Now, you do -- for this incoming money, you do create a
total at the bottom, right?
A.
I do.
Q.
And it's roughly a million, right?
A.
Correct.
MS. MARTINEZ: Can you go to the bottom of this
summary.
BY MS. MARTINEZ:
Q.
Can you explain -- you divided this -- the "Uses of Funds"
into basically groups; is that right?
A.
Correct.
Q.
So explain to the jury what the first group -- I'm going to
call it a category. Is that what you would call it?
A.
Correct. Category.
Q.
Can you explain to the jury what that is.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
This is -- the first box or --
Q.
The first box, yeah.
A.
The first box is a payment, money used to pay credit card,
card payments at Credit One Bank.
MS. MARTINEZ: Excuse me one second.
(Pause in proceedings.)
BY MS. MARTINEZ:
Q.
With respect to the credit cards, again, can you just --
there's a number at the top. What is the 290,000 number?
A.
The same logic, the summation of the numbers from top --
I'm sorry -- from top down or down up. So the total -- I mean,
summation here is a combination of credit cards, card payments,
and Credit One Bank.
Q.
And how much money went to paying credit cards?
A.
$271,022.26.
Q.
The next grouping that you have is "Mortgage Payments."
A.
Correct.
Q.
Did you review those records?
A.
Could you repeat the question, please.
Q.
Did you review the records relating to the IBERIABANK
mortgage payments?
A.
I did.
Q.
And whose home was that mortgage for?
A.
Eric Sheppard.
Q.
And how much was paid out of this account during this time
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Miami, Florida 33128
(305) 523-5698
period?
A.
$117,287.61.
Q.
Now, in addition, you have again sections that talk about
internal transfers. Now, this is money going out to other
accounts that also received PPP EIDL money?
A.
Correct. The same logic processing money, but now the
money from 7571 is going out to account 5973, $50,000.
Q.
When we had looked at the part above, we had seen that
money had come into this account from the Alafaya Trails
account, and now we're seeing some money going out?
A.
Correct. If I correctly recall, it was about 189,000 in,
and now 50,000 is going out.
Q.
Now, in addition, you have again another box that's "Other
Sheppard Accounts." Again, these --
A.
Correct. That's -- I'm sorry.
Q.
Go ahead.
A.
Yeah. It's the same logic. Has money in, but in this
case, total of $45,038.81 is going out --
Q.
Now --
A.
-- to accounts 1470 loan account and One Florida Bank 2368.
Q.
So the money going out to other Sheppard accounts that
didn't receive PPP EIDL money is all to One Florida Bank where
there was a commercial loan, right?
A.
That is correct.
Q.
Now, in addition, you have auto payments and you break it
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Miami, Florida 33128
(305) 523-5698
down by car company, right?
A.
By car company, correct.
Q.
And what's the total of auto payments going out from this
account?
A.
$25,784.93.
Q.
Now, in addition, you have payments that you have grouped
relating to tuition, Jennifer and Jacob Sheppard. What is the
total there?
A.
The total is $25,366.52.
Q.
Now, in each of the accounts that you -- that we're going
to look at, you also have categories of payments to individuals
and entities. What -- what are those? There's names --
A.
Just like I noted here, names which I don't know the
capacity. But there are companies, entities, for example,
could be LLC, could be Inc., could be all the above.
MS. MARTINEZ: Could you go to 41-3.
BY MS. MARTINEZ:
Q.
Now, what is the company name of this account?
A.
HM-UP Development Alafaya Trails, LLC.
Q.
And what is the number of the bank account?
A.
5973.
Q.
And who's the sole signer?
A.
Eric Sheppard.
Q.
Now, in this particular account, you don't begin on
May 1st, 2020. You begin on August 14th, 2020. Can you
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
explain to the jury why.
A.
This is the first money incoming from another account who
received PPP loan, which is 8/14/2020.
Q.
So let's find that on your Sources of Funds. It was
actually not a direct -- not a direct funding into this account
but actually receiving another account, right?
A.
That is correct.
MS. MARTINEZ: Can you highlight in "Internal
Transfers," HM Management and Development.
BY MS. MARTINEZ:
Q.
Mr. Hysa, I've just highlighted a source coming in of
$50,000 from the account we were just looking at, 7571 --
A.
Correct.
Q.
-- in the name of HM Management. And you indicate a
deposit date of 8/14/20, August 14th, 2020. Is that the reason
you started this analysis on August 14th, 2020?
A.
Yes.
Q.
So basically, you're summarizing and looking at records
after Mr. Sheppard receives PPP or EIDL money?
A.
Correct.
Q.
Okay. With respect to receiving PPP EIDL money into this
account, can you just --
MS. MARTINEZ: Can you highlight the total. Do you
see that 298,297?
I'm just asking Ms. Font.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Can you highlight that.
I'm sorry. I meant the total of the PPP EIDL loans.
I didn't finish my sentence.
BY MS. MARTINEZ:
Q.
Mr. Hysa, I've had Ms. Font highlight for you -- what is
the total of PPP EIDL money that came directly into this
account?
A.
$298,297.
Q.
So we have the 298,297 that came directly, and then in
addition we have the 50,000 that came from HM Management,
right?
A.
That is correct.
MR. CAVALLO: Objection, Your Honor. That's basically
testimony -- the attorney is basically giving testimony in the
form of a question.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Did you tell the jury where in your Source of Funds are the
PPP and EIDL loans?
A.
The second bolded row, "EIDL/PPP Loans," total amount,
$298,297 is summation of two loans, SBA EIDL loan deposited
9/28/2020 and from Northeast Bank PPP loan on March 31st, 2021.
Q.
And then, in addition, there was some coming in from
another account, right?
A.
Correct.
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Miami, Florida 33128
(305) 523-5698
Q.
Now, in your Source of Funds for this particular account,
you also have a box that says: "Rent/Lease Related." Can you
explain that to the jury.
A.
These are the -- as the name notes for itself, are some
entities Burlington Coat, Batteries Plus, Posh Nails Day Spa,
LLC, J-Petal Alafaya, Pacific MS Management, GMRI, Inc. --
THE COURT: Slow down.
MS. MARTINEZ: Slow down. You need to slow down.
Okay? Just because the court reporter needs to get whatever
you're saying. Okay?
THE WITNESS: Okay.
BY MS. MARTINEZ:
Q.
You don't have to read the whole thing. Just an example of
rent/lease-related payments is Burlington Coat Factory,
correct?
A.
Correct.
MS. MARTINEZ: Now could you remove the highlights
that you have and highlight Pacific MS Management d/b/a
Mattress1One. It's one of the rent/lease related. All the way
to the...
BY MS. MARTINEZ:
Q.
Could you read out to the jury this company that was paying
for rent.
A.
Pacific MS Management, LLC d/b/a Mattress1One. Deposit
dates September 11th, 2020, January 20, 2021, for $42,400.
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Miami, Florida 33128
(305) 523-5698
Q.
Now, that's a total of payments during that time period,
right?
A.
Yes.
(Pause in proceedings.)
MS. MARTINEZ: Could you take that one down, that
highlight.
I'm sorry. Just the highlight.
And then could you highlight "Internal Transfers" on
this one.
BY MS. MARTINEZ:
Q.
In addition to the 50,000 that came in from HM Management,
which you had indicated was another loan, what other company
that received PPP EIDL money is moving money into here?
A.
HM Four and HM Management and Development.
Q.
And what is the amount?
A.
The amounts are 64,000, 50,000, respectively.
Q.
For HM Four what's the amount?
A.
64,000 for HM Four, and 50,000 for HM Management and
Development.
MS. MARTINEZ: Can you take that down and go to the
"Other Sheppard Account."
Just a little lower. "Other Sheppard Account."
I'm sorry. When I say: "Take that down," I should
say: "Remove the highlight."
Stay at the top.
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Miami, Florida 33128
(305) 523-5698
There you go.
BY MS. MARTINEZ:
Q.
This account -- in "Other Sheppard Account," this account
is receiving funds from what account?
A.
Account One Florida Bank 2368 under the name HM-UP
Development Alafaya Trails, LLC.
Q.
From One Florida Bank, correct?
A.
Correct.
Q.
And again, that's the account that had the commercial loan,
correct?
A.
Correct.
MS. MARTINEZ: Can you zoom back in and then go to the
bottom, "Uses of Funds."
BY MS. MARTINEZ:
Q.
For this account, what is the total that you have in your
category for credit cards, card payments, and Credit One?
A.
$388,220.64.
MS. MARTINEZ: And can you highlight how much for
IBERIABANK mortgage payment.
A little lower.
BY MS. MARTINEZ:
Q.
How much is that?
MR. CAVALLO: Objection, Your Honor. I'll do a
standing objection if you want.
THE COURT: Yeah.
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Miami, Florida 33128
(305) 523-5698
MR. CAVALLO: Just repeatedly asking the witness to
just read from the --
THE COURT: Yeah. In terms of just -- if there's
something that needs to be explained in terms of the summary,
let's go ahead and do that. Otherwise, it's in evidence.
The objection is sustained.
BY MS. MARTINEZ:
Q.
Did you separate the categories, similar as you did before,
including mortgage payments, auto payments? Is that right?
A.
Yes, I did.
Q.
And in addition to that, there are payments that are going
out from this account to other Sheppard accounts, correct?
A.
Correct.
Q.
And by "other Sheppard accounts," I mean accounts that are
not receiving PPP EIDL money, correct?
A.
Correct.
MR. CAVALLO: Object, Your Honor. Counsel is
testifying.
THE COURT: Sustained.
MS. MARTINEZ: Your Honor, if I can't refer to the
summary and I can't ask a question --
THE COURT: You can refer to the summary, but -- and
by asking questions that are not leading in nature.
BY MS. MARTINEZ:
Q.
With respect to the category "Other Sheppard Accounts,"
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Miami, Florida 33128
(305) 523-5698
there are some accounts -- there are two accounts there from
One Florida Bank. Can you describe to the jury, are those
related?
A.
They are related.
Q.
One is a loan and another is a checking, correct?
A.
Correct.
Q.
Now, there's another account that we have not talked about
under Other Sheppard Accounts from Wells Fargo. Can you tell
the jury what the name of that one is and the number.
A.
Yes. HM-UP Development Alafaya Trails, LLC, FBO Basis,
Wells Fargo account 5874.
Q.
And again, this is money going out to that account, right?
A.
Yes.
Q.
And in addition, you have a section under "Use of Funds."
It's "Internal Transfers Within Sheppard Accounts Receiving PPP
and EIDL Loans." Now, this is money going out to other
accounts that received PPP EIDL money, correct?
A.
Yes.
MS. MARTINEZ: So what I'd like you to do is I'd like
you to zoom out, Ms. Font -- zoom out completely, meaning
let's -- and can you do something where you zoom at the top
where it says: "Internal Transfers," and then also zoom at the
bottom where it says: "Internal Transfers."
BY MS. MARTINEZ:
Q.
Mr. Hysa, the top is money coming in and the bottom is
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
money going out. In particular, I'd like you to focus on HM
Four. How much money is going out to HM Four 5817?
A.
66,000.
Q.
And how much money came in?
A.
64,000.
Q.
So what's the net between those two?
A.
It's a net out $2,000.
Q.
From this account to HM Four, right?
A.
Correct.
MS. MARTINEZ: Zoom away.
Can you go to Exhibit 41-4.
And can you pull up -- before you do that, can you
pull up next to it Exhibit 39-11.
BY MS. MARTINEZ:
Q.
I don't know if you can see that, Mr. Hysa. Do you
recognize Exhibit 39-11 on the right?
A.
I do.
Q.
And what type of document is this?
A.
This is a signature card.
MS. MARTINEZ: And Ms. Font, can you highlight the
bottom -- I mean zoom out on the bottom, the part where it
shows the date.
Yeah. The whole bottom section.
BY MS. MARTINEZ:
Q.
The signer on the account is who, Mr. Hysa?
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Miami, Florida 33128
(305) 523-5698
A.
Eric Sheppard.
Q.
And when was the account opened?
A.
October 22nd, 2020.
Q.
Okay.
MS. MARTINEZ: Okay. You can take Exhibit 39-11 down.
Can you go to 41-4.
There you go.
And can you highlight the top.
BY MS. MARTINEZ:
Q.
Now, on this account, we just saw that was opened on
October 22nd. You start the sources of funds on
November 11th -- I'm sorry -- November 16th -- oh. We have a
typo on this one. I can see that. It's not 2023, is it? I
thought we had fixed that one.
A.
Correct. It is a typo.
Q.
What is the correct date?
A.
2020.
Q.
Just like it says at the top in the title, correct?
A.
Correct.
Q.
On what basis did you start on November 16th, 2020?
A.
November 16th, 2020 is the first money coming in. Also,
the first deposit, meaning first deposit of $80, but also there
is money coming in from another SunTrust account.
MS. WEINTRAUB: He's just reading from the document.
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Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
And is that the 66,000 total?
A.
That is -- 60,000 actually comes on 11/16/2020.
Q.
Do you recall -- 60,000 comes in on November 16th, 2020?
A.
16th, 2020.
Q.
What happens on the next day, November 17th?
A.
Fifty thousand dollars goes back, goes to account -- if you
could see, it's account 5973.
Q.
We're going to see that in the Uses of Funds.
A.
Correct. Correct.
Q.
But you recall -- what you just said to the jury you recall
from your review of the bank statements, right?
A.
Yes, I do.
Q.
So on November 16th, 2020, 60,000 comes in. On
November 17th, 60,000 goes right back out, right?
MR. CAVALLO: Objection, Your Honor. Counsel is
reading the chart and testifying.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
In addition to that, what happens on November 23rd? What
is deposited into the account on November 23rd?
A.
SBA loan, EIDL loan on 11/23/2020, for the amount 149,900.
MS. MARTINEZ: Can you -- Ms. Font, can you go to the
bottom of the chart.
Oh. I -- let me scratch that. Go back to the top.
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(305) 523-5698
BY MS. MARTINEZ:
Q.
Mr. Hysa, are there any rental moneys that come into this
account HM Four?
A.
No.
Q.
Your top summary "Sources of Funds" includes everything
that comes into this account, right?
A.
Correct.
Q.
Okay.
MS. MARTINEZ: Go to the bottom.
With respect to Uses of Funds, can you highlight the
section, Ms. Font, that says -- it's the first category --
"Internal Transfers."
BY MS. MARTINEZ:
Q.
Mr. Hysa, could you just explain to the jury again how
these transfers back out to other accounts relates to what you
just described from the incoming money.
A.
Correct. So in this case, these are two accounts, 5973,
7571, receiving money from 5817. So this is money took out.
And in this case, 5973 receives 64,000, and account 7571
received 19,700. Both these accounts received government
funds.
Q.
Right.
MS. MARTINEZ: And Ms. Font, if you could just do
this: Zoom out, and now compare the "Internal Transfers" at
the top to the "Internal Transfers" at the bottom.
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BY MS. MARTINEZ:
Q.
So Mr. Hysa, again, this HM Four account received, you
indicated, how much money from HM-UP Alafaya Trails?
A.
66,000.
Q.
And how much money went right back out?
A.
64,000.
Q.
And here we also have money being transferred over to HM
Management 7571. How much?
A.
19,700.
MS. MARTINEZ: Can you zoom back in. And just -- can
you do the bottom section of the chart.
BY MS. MARTINEZ:
Q.
So other than these internal transfers, you have various
categories here similar to the other accounts?
A.
Correct.
Q.
One of the categories includes mortgage payments to
Mr. Sheppard's house, correct?
A.
Correct.
Q.
Another one includes auto payments, correct?
A.
Yes.
Q.
And then another one includes credit card payments,
correct?
A.
Yes.
Q.
And like your other summaries, you have some listing of
payments to individuals and entities, right?
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A.
Yes.
Q.
There's an over-the-counter withdrawal. What does that
mean, an over-the-counter withdrawal?
A.
This could be hard cash or could be a purchase of cashier
check. In this case, the bank did not provide the support. So
it is exactly what the bank statement notes.
MR. CAVALLO: Objection, Your Honor. Move to strike.
He's saying "could be," speculating what --
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
I think you indicated over-the-counter withdrawal is
exactly what the bank statement says?
A.
Exactly what the bank statement --
Q.
And what is cash out? What does that mean?
A.
It's cash. It's cash out. Hard cash.
MS. MARTINEZ: You can take that down.
Can you put up 41-5, which has been already admitted
into evidence.
Okay. Just stay there for one second.
BY MS. MARTINEZ:
Q.
And can you explain to the jury now, what have you done in
Summary 41-5?
A.
This is a summary of -- to identify sources and uses of
funds. So this --
Q.
Okay.
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(305) 523-5698
A.
This summary --
Q.
And in the ones that we just covered previously, you
focused on individual accounts, right?
A.
Correct.
Q.
And in this one, what did you do?
A.
I combined all three accounts into one summary sheet.
Q.
And again, now, the three accounts that we are summarizing
here, read just the company names.
A.
HM Management and Development, LLC, HM-UP Development
Alafaya Trails, and HM Four, LLC.
Q.
And for all the accounts who is the authorized signer?
A.
Eric Sheppard.
Q.
And what's the time period of your analysis now?
MR. CAVALLO: Objection, Your Honor. That's three in
a row just reading the title of the chart.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Well, you'll see that --
MS. MARTINEZ: Ms. Font, can you highlight the date of
the -- the date of the time period for this summary. You see?
And zoom that out, and -- if you could. And then -- no. No.
No. Just the top. Just the title. Just the title.
Now, you see the little tiny asterisks at the bottom?
Can you highlight that for the jury, so we can see what we're
talking about. So we can see that we're not just reading a
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Miami, Florida 33128
(305) 523-5698
summary.
BY MS. MARTINEZ:
Q.
Can you explain to the jury the asterisk at the bottom of
how you combine these and what time periods you used for the
data that you have in this combined summary.
A.
So the first date, May 1st, 2020, pertains to HM Management
and Development SunTrust account 7571. This is a date when the
first loan comes in.
And then, for the next one, 5973, Alafaya Trails, the
first $50,000 coming from another HM account, SunTrust account.
And the last, 5817, HM Four, is the date when they
deposit the first $80, the first deposit, plus $60,000 coming
from Alafaya Trails.
Q.
The point is to explain that the data -- even though the
title says: "May 1st, 2020 through October 20, 2021," the
data, the information that you have in this combined summary,
with respect to the second account, it only starts on
August 14th of 2020. And with respect to the third account, it
only starts on November 16th, 2020; is that right?
MR. CAVALLO: Objection, Your Honor. Testifying and
leading.
THE COURT: I'll allow it. Overruled.
THE WITNESS: That is correct.
BY MS. MARTINEZ:
Q.
And the reason you only took data from that time period is?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Is to focus on government loans, to make sure what are
exact sources and uses of funds pertaining to the six
government loans.
MS. MARTINEZ: Can you bring the highlights down.
Now, for this particular summary, can you highlight
the first box -- I mean Zoom out on the first -- yeah. You can
just zoom out the first top -- thank you.
BY MS. MARTINEZ:
Q.
After the beginning balance, what is the first category
that you have in this combined box?
A.
"PPP and EIDL Loans."
Q.
And in this box do you list the type of loan and the
deposit date?
A.
Correct.
Q.
And then the amounts on the far right, right?
A.
Correct.
Q.
Now, what is the total of all six loans?
A.
$893,145.
MS. MARTINEZ: Can you do something where -- just --
is there some way to do this?
Yeah, just do the next box.
BY MS. MARTINEZ:
Q.
Now, with respect to the next category, what is it?
A.
It's "Rent/Lease Related" pertaining to HM-UP Development
Alafaya Trails account 5973.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Now, you have that parenthetical in your summary that says:
"HM-UP Development Alafaya Trails SunTrust 5973." What does
that tell the jury with respect to these deposits? What
account of the three actually received all these rental
deposits?
A.
Alafaya Trails.
Q.
5973, right?
A.
Correct.
Q.
Not the other two accounts?
A.
No.
Q.
Okay. And what was the total?
A.
$873,037.18.
Q.
Okay.
MS. MARTINEZ: Can you zoom back out -- oh, wait. I
guess -- no. That's okay. That's okay. We've already done
it. That's okay.
I don't know if you can do this, but can you -- this
is a two-page document. Can you go -- can you zoom "Internal
Transfers Within Sheppard Accounts" on the sources, and then
also do a little blowup of the second page?
No chance. Technology limits? I will recommend that
as an improvement.
Okay. So no worries. Can you highlight -- I mean
zoom up -- no, just -- only -- only "Internal Transfers" for a
moment.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
Again, when you call it "Internal Transfers," it means only
coming in from accounts that also received PPP/EIDL loans,
right?
A.
Correct.
Q.
Okay. And what's the total, at least in this situation of
movement in --
A.
$389,150.
MS. MARTINEZ: Could you now go to the "Uses of Funds"
and just highlight "Internal Transfers" for a moment.
Internal Transfers is the third category. Third
category at the top. Third category at the top.
There we go.
BY MS. MARTINEZ:
Q.
And this is the section of your summary that is use of
money going out. With respect to internal transfers, meaning
money going out to other accounts receiving PPP/EIDL loans,
what's the total?
A.
The total is $304,150.
THE COURT: Ms. Martinez, just let me know when it
might be a good time to give the jurors a comfort break.
MS. MARTINEZ: Any time, Your Honor.
THE COURT: All right. Ladies and Gentlemen, let's
take a 10-minute recess.
COURT SECURITY OFFICER: All rise for the jury.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
(Jury not present, 2:53 p.m.)
THE COURT: All right. We're on a 10-minute recess.
How much longer do you have on the direct?
MS. MARTINEZ: Your Honor, I would say at least half
an hour.
THE COURT: All right. We're on a 10-minute -- yes?
MS. MARTINEZ: Before -- I really appreciate the
break. But before we break, I just wanted to let the Court
know it's entirely possible that, in addition to this break, at
some point the witness may need a break for medical reasons.
So -- and I can advise the Court of that at sidebar --
THE COURT: Can he take the break now?
MS. MARTINEZ: No. No. We are. But I'm just -- I
didn't have an opportunity to mention that before. And it's
nothing contagious or anything like that, but --
THE COURT: All right. Sir, did you need to take an
additional break? This witness, correct?
MS. MARTINEZ: This witness.
THE COURT: All right. Just let the Court know if you
need to take another break after this one. All right, sir?
THE WITNESS: Thank you.
THE COURT: All right. We're on a 10-minute recess.
MS. WEINTRAUB: Judge, I'm just asking in terms of
scheduling, because this was the witness that was going to be
15 minutes, according to Ms. Jimenez on Thursday, when we
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
broke. So we are two hours in, with another half hour on
direct. I assume that cross will be a half hour or 45 minutes.
We have a Rule 29. I don't know if the Court wants to consider
that after the jury leaves or early before they come so that we
don't waste jury time. I'm just throwing that out there and
asking the Court to do that.
Most respectfully, I don't mean to put more work on
you, but I'm just -- I'm extremely upset about what's going on
with the scheduling because -- especially, I should not have
made the announcement I did this morning about my client, I
guess. Because before I told them that it would be our client
testifying, it was a 15-minute witness. And now -- and I made
a specific motion so that we are not caught between direct and
cross for a two-week break.
THE COURT: What are you requesting, Ms. Weintraub?
MS. WEINTRAUB: I just want some guidance from the
Court, Judge.
THE COURT: I think the guidance is my hope was that
we would have already finished the Government's case some time
ago. But I can't -- all I can do is rule on the objections.
But the parties have taken a significant amount of time with
these witnesses. So at this point in time, we're on a
10-minute recess.
I'll see you back here in 10 minutes.
(Recess from 2:55 p.m. to 3:06 p.m.)
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Okay. All right. Let me acknowledge the
presence of the Defendant.
Are both sides ready to continue?
MS. MARTINEZ: Yes, Your Honor.
THE COURT: On behalf of the Defendant?
MS. WEINTRAUB: Yes, Your Honor.
THE COURT: All right. Can we see if they're ready to
go.
Okay. Thank you.
(Pause in proceedings.)
MS. WEINTRAUB: The Government's not here -- I'm
sorry. I'm sorry.
MS. MARTINEZ: I'm very little, but --
MS. WEINTRAUB: I'm sorry. I'm sorry. I apologize.
THE COURT: Do we need to wait for Ms. Jimenez?
Ms. Martinez, do we need to wait for Ms. Jimenez?
MS. WEINTRAUB: No. She'll just be telling her to
hurry up.
MS. MARTINEZ: Let the record reflect that no one
knows what she's telling me.
THE COURT: Do we need to wait for Ms. Jimenez?
MS. MARTINEZ: She's coming.
MS. WEINTRAUB: Does that mean yes?
THE COURT: I just need an answer.
MS. MARTINEZ: There she is.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. Let's bring in the jury.
MS. MARTINEZ: Thank you. Thank you, Your Honor.
COURT SECURITY OFFICER: All rise for the jury,
please.
(Before the Jury, 3:07 p.m.)
THE COURT: Welcome back, Ladies and Gentlemen.
Please be seated.
And we'll continue with the direct examination.
MS. MARTINEZ: Ms. Font, could you please go to 41-2.
And this one is dead -- can you help me to bring it
back to life.
(Pause in proceedings.)
BY MS. MARTINEZ:
Q.
Mr. Hysa, I've gone back to Exhibit 41-2.
MS. MARTINEZ: And I'm going to ask Ms. Font, on the
Uses of Funds, can you just zoom up where it says: "Florida
Department of Revenue" at the bottom, bottom, bottom. Lower,
lower, lower. Florida Department of Revenue.
BY MS. MARTINEZ:
Q.
Mr. Hysa, from reviewing the bank records of HM Management
and Development, 7571, do you remember reviewing the checks
that actually went to the Florida Department of Revenue?
A.
Yes.
Q.
And what was the memo line on those?
A.
"State tax" and there's a unique number.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And was there another company name listed?
A.
Correct.
Q.
Do you remember the other company name?
A.
CJUF, CJUFF [sic].
Q.
Thank you.
MS. MARTINEZ: You can bring that down.
Can you go back to 41-5, and go to "Uses of Funds,"
the second page.
Can you go to "Other Sheppard Accounts" and bring that
out.
BY MS. MARTINEZ:
Q.
Mr. Hysa, what is the total amount that went to One Florida
Bank, loan number 1470?
A.
$47,397.03.
Q.
And what is the amount that went to the related checking
account, 2368?
A.
Thirteen dollars and 51 -- 13,000 dollars and 51 dollars.
MS. MARTINEZ: Your Honor, may I go to ELMO a second?
THE COURT: Certainly.
BY MS. MARTINEZ:
Q.
Mr. Hysa, I'm showing you what's been admitted into
evidence --
MS. MARTINEZ: Well, I went too high up and I turned
it off.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
I'm showing you what's been admitted into evidence as
Exhibit Number 47, which includes the account opening documents
for 2368. And also, I'm going to show you Bates label 034077.
Can you read who is the lender on this promissory
note.
A.
One Florida Bank.
Q.
And at the top left, what is the principal amount of the
loan?
A.
$600,000.
Q.
And what are the last four digits of the loan?
A.
1470.
Q.
What is the loan date and then the maturity date?
A.
May 18th, 2020.
Q.
And what is the maturity date?
A.
November 18th, 2020.
Q.
And on the left where it says: "Borrowers," who are the
borrowers?
A.
Eric Sheppard and Robert Kallman.
Q.
And what is the residential address given?
A.
180 Bal Cross Drive, Bal Harbour, Florida 33154.
MS. MARTINEZ: Your Honor, while I'm at ELMO, could I
publish only to the witness?
THE COURT: All right.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
This is just for you to identify it, Mr. Hysa. Do you
recognize this document, 41-16?
A.
Yes.
Q.
Did you prepare that summary?
A.
Yes.
Q.
And did you likewise prepare it from bank records that you
reviewed?
A.
Yes.
MS. MARTINEZ: I'm going to come back to it, Your
Honor. I'm just going to show the witness a number of
summaries.
THE COURT: All right.
MS. MARTINEZ: If I could go back to counsel's table,
but only for the witness.
Could you bring up 41-15.
BY MS. MARTINEZ:
Q.
Now, do you recognize that document?
A.
Yes.
MS. MARTINEZ: Now, just for the witness only, can you
scroll down so he can see that it consists of three pages.
BY MS. MARTINEZ:
Q.
Do you recognize that document?
A.
Yes.
Q.
Did you prepare that summary?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes.
Q.
And did you prepare it from the bank records of Wells Fargo
5874?
A.
Yes.
Q.
Again, just for identification I'm going to show you a few
summaries. Okay?
MS. MARTINEZ: Can you bring up 41-11.
BY MS. MARTINEZ:
Q.
Do you recognize this document?
A.
Yes.
Q.
Did you prepare that summary?
A.
Yes.
Q.
Now, that one you prepared from the same bank records as
the combined PPP/EIDL loan accounts, right?
A.
Yes.
MS. MARTINEZ: Can you bring up 41-10.
BY MS. MARTINEZ:
Q.
Do you recognize this document?
A.
Yes.
MS. MARTINEZ: Can you scroll down just so that the
witness can see that it's three pages -- oh. It's actually
four.
BY MS. MARTINEZ:
Q.
Did you prepare that summary?
A.
Yes.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And did you prepare it from American Express records?
A.
And Discover.
MS. MARTINEZ: Can you bring up 41-6.
BY MS. MARTINEZ:
Q.
Do you recognize this summary?
A.
Yes.
Q.
Did you prepare it from reviewing the three bank records
from SunTrust that received EIDL and PPP funds?
A.
Yes.
Q.
And also from reviewing the mortgage documents from
IBERIABANK?
A.
Yes.
MS. MARTINEZ: Your Honor, the United States would
like to move into evidence Exhibits 41-15 and 41-16.
THE COURT: Any objection? Any objection to 41-16 and
41-15?
MR. CAVALLO: No objection to 41-15. I'm looking for
41-16.
No objection, Your Honor.
THE COURT: All right. Both admitted into evidence.
(Government's Exhibits 41-15 and 41-16 received into
evidence.)
MS. MARTINEZ: In addition, at this time, since I just
showed the witness, I'd like to move into evidence Government's
Exhibit 41-10, 41-11, and 41-6.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. CAVALLO: No objection to 41-10. No objection to
41-11. And I'm sorry, counsel. What was the last one?
THE COURT: 41-6.
MR. CAVALLO: No objection, Your Honor.
THE COURT: All right. Each admitted into evidence.
(Government's Exhibits 41-6, 41-10, and 41-11 received
into evidence.)
MS. MARTINEZ: Thank you, Your Honor.
Can you bring up 41-5, and just highlight -- zoom out
again, rent/lease amounts, the box of money coming in.
BY MS. MARTINEZ:
Q.
Mr. Hysa, as you had indicated, the account that received
PPP/EIDL money, that also received rent money, was the Alafaya
account, 5973, right?
A.
Correct.
Q.
And the total received during the time period that you
looked at?
A.
You want me to --
Q.
The total that was received.
A.
Correct. I did see the total.
Q.
What's the total?
A.
$873,037.18.
MS. MARTINEZ: Can you bring that exhibit down and
bring up 41-15.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
Now, Mr. Hysa, this is a different bank account. It's not
at SunTrust, right?
A.
That is correct.
Q.
What is the name of the company account?
A.
HM-UP Development Alafaya Trails, LLC.
Q.
So the name is the same as the other account we had just
looked at, 5973 from SunTrust, right?
A.
Yes.
Q.
Now, this account is in Wells Fargo and what are the last
four digits?
A.
5874.
Q.
Now we're looking at the first page.
MS. MARTINEZ: Can you just scroll down so that we can
see that there's three pages, and then go back up to the first
page.
BY MS. MARTINEZ:
Q.
Can you explain to the jury -- each page covers a different
year?
A.
Correct. Each page covers different year. The first --
this one here is 2019.
Q.
And these are rental payments that Mr. Sheppard was
receiving from other companies that did not go into the 5973
account?
MR. CAVALLO: Objection, Your Honor. Counsel
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
testifying, leading.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Have you looked at who's the signer of the Wells Fargo
account?
A.
Yes.
Q.
Who's that?
A.
Eric Sheppard.
Q.
And these rental payments that you summarized within this
exhibit, 41-15, they came into this account, not into the other
account that you previously testified about, right?
MR. CAVALLO: Objection. Counsel testifying, leading.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
These particular companies that are listed -- did you list
the company names here, as well as the dates when the amounts
were received?
A.
Yes.
Q.
Did these companies also deposit into the 5973 account?
A.
Could you repeat the question?
Q.
These companies, DICK'S Sporting, Aspen Dental, did they
also deposit in the 5973 account or were there deposits in the
5973 account from different companies like Burlington, et
cetera?
A.
So these are different companies who did not put money on
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the 5973.
Q.
So how did you organize this summary? Can you explain that
to the jury.
A.
So this is just one account, 5874. This is just the money
coming from these rental/lease related, as noted here, and I
divided this per quarter. This is based on the inflows, which
is deposits, and money going out.
Q.
So you have a column for deposits in and money for -- a
column for money going out?
A.
Correct.
Q.
Okay. And at the bottom, what do you do, do a total for
each year?
A.
Correct.
Q.
So do you have a total of rental money received into this
account in 2019?
A.
I do.
MR. CAVALLO: Objection, Your Honor. Again, just
asking the witness to read the bottom of the chart.
THE COURT: All right. And again, to the extent that
this may be helpful in the jury understanding the chart, I'll
allow it.
MS. MARTINEZ: Oh, dear God. Sorry, Judge.
MS. WEINTRAUB: Judge, I think what the Court just
missed was that about six of the jurors just had their hands
raised.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Oh. Is there something wrong with the --
MS. MARTINEZ: They have been admitted and we're not
publishing it to them. I didn't realize.
THE COURT: Ah, okay. Let's make sure that the
exhibit is published to the jury. It's in evidence.
MS. MARTINEZ: It's 41-15.
When they press a button, it will work.
BY MS. MARTINEZ:
Q.
Okay. There it is. The jury can see it now, Mr. Hysa.
How did you -- as you had indicated, you organized
this by quarter?
A.
Correct.
Q.
And I know you know what it means, but when you say you
organized by quarter, that's for like three months of the year,
then another three months of the year, another three months of
the year; is that right?
MR. CAVALLO: Objection. Leading.
THE COURT: I'll allow it.
THE WITNESS: So yeah, one year has four quarters,
January through March, and so on.
BY MS. MARTINEZ:
Q.
And again, on the first page, that's the total received by
the account in rental money for 2019?
A.
$1,166,323.19.
MS. MARTINEZ: Ms. Font, can you go to the next page.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
And what's the total for 2020?
A.
$1,047,653.87.
MS. MARTINEZ: And the next page, Ms. Font.
BY MS. MARTINEZ:
Q.
And what's the total for 2021?
A.
1,207 -- I'm sorry -- $1,247,612.13 [sic].
MS. MARTINEZ: Your Honor, I need to go to ELMO just
for one second.
One minute.
BY MS. MARTINEZ:
Q.
What's been admitted into evidence as Exhibit 41-16, now,
this one is not of an individual account. Which accounts did
you combine together for this summary?
A.
This one I combined Wells Fargo account 5874, which we just
went through, SunTrust 5973, Amerasia, 1903.
Q.
And in this case -- so all of those three accounts were in
the name of HM-UP Development Alafaya Trails?
A.
Yes.
Q.
So in this one you also divide it by quarters?
A.
Yes.
Q.
But what you have is totals on the right side by year,
right?
A.
Yes.
Q.
So without reading the exact numbers, roughly --
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
approximately how much money came in total in 2019?
A.
1.4 million.
Q.
1.4 million. And roughly in 2020?
A.
Approximately the same.
Q.
And in 2021?
A.
2.4 million.
MS. MARTINEZ: Can you pull up Government's
Exhibit 41-11.
Oh. I'm sorry. Can you go to counsel's table.
Yeah. Thank you.
BY MS. MARTINEZ:
Q.
Just to explain to the jury --
MS. MARTINEZ: Can you just do the top, just so we can
see what the title of the summary is.
BY MS. MARTINEZ:
Q.
Just to explain to the jury, what did you do on this
summary?
A.
In this summary, per three accounts, I grouped payments to
individuals. There are a total of 44 individuals, as well as
27 company related.
Q.
And these are payments specifically out of the three
accounts that received PPP/Economic Injury Loans, right?
A.
Yes.
MS. MARTINEZ: Can you take that down.
Can you bring up 41-10. It's been admitted into
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
evidence. Can you just scroll down so that we can all see that
it includes several pages.
Okay. Can you go to the top.
BY MS. MARTINEZ:
Q.
First, the "Summary of Credit Cards" box, the top section
of this, just to explain to the jury, what credit cards in
general did you look at? I know it's listed in the summary,
but what type of credit cards did you look at, the type of
credit cards?
A.
Two type, AmEx -- American Express and Discover.
Q.
And on the left, what are the names of the cardholders that
you analyzed?
A.
Eric Sheppard, Jennifer Sheppard, and Jordan Sheppard.
MS. MARTINEZ: Can you zoom back out.
And can you do -- the two bottom boxes, can you zoom
those -- both of them out.
BY MS. MARTINEZ:
Q.
So just to explain to the jury -- because there's a
difference here, and I want you to explain to them why.
There's a difference in your dates for summary of charges and
also -- and there's a difference in your dates for summary of
payments. Walk the jury through that. Why do you start
March 13th, 2020 for the charges but then you only start the
payments on May 1st, 2020?
A.
When we use a credit card, we use a credit card and then we
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
pay later. So normally the expenditure happens first and then
we pay later. And there is a time, could be a month I would
say more or less, to pay your charges for your time, credit
card charges.
Q.
So with respect to Mr. Sheppard, what is the total amount
that was paid -- what's the total -- I'm sorry. No. Because
you have it by charges.
Let's go to the payments. For the Alafaya Trails
account, 5973, how much money from that account was used to pay
these credit cards?
A.
377,000 --
Q.
You don't have to read the exact number, just roughly.
A.
-- 951.
Q.
And how much money was used from the HM Management account
to pay these credit cards?
A.
The SunTrust account 7571, HM Management paid 184,735.
Q.
And go to the HM Four. How much money was used from HM
Four to pay these credit cards?
A.
HM Four, LLC, SunTrust 5817 paid 36,176.
MS. MARTINEZ: And can you go to the next page.
BY MS. MARTINEZ:
Q.
And just to explain to the jury, you broke out the summary
into categories and descriptions. Did you base that on the
actual charges that you saw in the records?
A.
Correct. I relied on this categorization solely on the
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
credit card statement itself.
Q.
And what are your general categories that you divided it
into?
A.
"Property, Retail," "Legal," "Utilities," "Other," and
"Meals, Lodging/Hotel."
MS. MARTINEZ: Can you go back up for a second.
BY MS. MARTINEZ:
Q.
So for example, under "Property," you have "Pool," and you
listed that under "Property," right?
A.
Correct.
Q.
For "Retail," you have "Grocery," for example?
A.
Yes.
Q.
Okay. And what does "Apparel and Merchandise" mean?
A.
The "Apparel and Merchandise," it is, for example, Target,
Macy's, Nordstrom, et cetera.
MS. MARTINEZ: Can you go to the --
BY MS. MARTINEZ:
Q.
Now, here in this particular page that we're looking at,
which is Page 2 of this exhibit, it's focusing specifically on
cards under Mr. Sheppard's name, right?
A.
Yes.
MS. MARTINEZ: Can you go to the next page.
Stop.
BY MS. MARTINEZ:
Q.
So again, the categories that you broke it out, "Pet,"
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
"Vet," "School," it was based on the -- what was reflected on
the charges, right?
A.
That is correct.
MS. MARTINEZ: Could you go to the next one, next
page.
And stop.
BY MS. MARTINEZ:
Q.
What is the total amount paid for Jennifer Sheppard's card?
A.
$94,166.
MS. MARTINEZ: And can you go to the bottom.
BY MS. MARTINEZ:
Q.
What's the total paid for Jordan Sheppard's card?
A.
2,398.
Q.
Okay.
MS. MARTINEZ: You can put that down.
Can you go to Exhibit 41-6.
BY MS. MARTINEZ:
Q.
Can you explain to the jury what this is.
A.
This is a summary of mortgage payments made out of three
SunTrust accounts, and they are --
Q.
You don't have to read the exact numbers. We know. These
are the accounts that received PPP/Economic Injury Disaster
Loans, right?
A.
Correct.
Q.
And the mortgage is for the house of who?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Eric Sheppard.
Q.
And is that the house in Bal Harbour?
A.
Correct.
Q.
And you reviewed again the IBERIABANK mortgage documents,
correct?
A.
Yes.
Q.
And in addition, you reviewed all these bank account
records from SunTrust, right?
A.
Yes.
Q.
Now, from May 1st to December 1st of 2020, which account is
being used to pay the mortgage?
A.
7571.
Q.
And that's in the name of which company?
A.
HM Management and Development, LLC.
Q.
And without reading the exact, you know, numbers, roughly,
how much is the monthly amount?
A.
It's roughly average over 11,000.
Q.
Per month?
A.
Per month, correct.
Q.
And then in January and February of 2021, what company is
used to pay the mortgage?
A.
SunTrust 5817, under HM Four, LLC.
Q.
And then we have, in March, it goes to which company?
A.
To HM-UP Development Alafaya Trails, LLC, SunTrust 5973.
Q.
And then the next two go to HM Management, right?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Correct.
Q.
And the last one that you have in your chart,
June 1st, 2021, what company is paying the mortgage?
A.
HM-UP Development Alafaya Trails.
Q.
For the time period that you have, May 1st, 2020 to June
1st, 2021, what's the total amount that is paid for the home
mortgage out of these three accounts?
A.
162,542.
(Pause in proceedings.)
MS. MARTINEZ: I have no further questions, Your
Honor.
THE COURT: All right. Cross-examination.
(Pause in proceedings.)
CROSS-EXAMINATION
BY MR. CAVALLO:
Q.
Good afternoon, Mr. Hysa.
A.
Good afternoon.
Q.
It was your testimony that you're a forensic accountant,
correct?
A.
Yes.
Q.
And a certified fraud examiner?
A.
Yes.
Q.
And you have experience investigating the sources and uses
of funds, correct?
A.
Yes.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
But you're here today as a summary witness, aren't you?
A.
Yes.
Q.
And what that means is you were given documents, like bank
statements, and you were asked to create charts like we just
looked at, correct?
A.
Yes.
Q.
And you're not here to give any opinion based on your
expertise in forensic accounting, correct?
A.
Yes.
MR. CAVALLO: Your Honor, I'm working off an old set
of exhibits, so I'm going to ask if the Government minds
putting up -- until my side can get a copy, could you please
put up 72, Government's 72, which is in evidence.
(Pause in proceedings.)
MR. CAVALLO: Do you mind just putting up 72 while
he -- thank you. Thank you. Appreciate it.
BY MR. CAVALLO:
Q.
Mr. Hysa, do you remember reviewing this chart on your
direct examination?
A.
Yes, I do.
Q.
And this is a chart you prepared, correct?
A.
Correct.
Q.
And am I right that the documents you reviewed to create
this chart are the loan applications?
A.
Loan applications. Correct.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Were there any other documents you reviewed in order to
prepare this chart?
A.
Bank records as well.
Q.
Okay. The column that says: "Representative/Owner," that
was just the name that was listed on the application, correct?
A.
Correct.
Q.
You didn't investigate who actually filled out these
applications, correct?
A.
I'm part of the investigation team, and I did note the
names of these accounts per bank records.
Q.
The bank accounts. But my question is: You don't know
which human being actually sat down and completed these
applications, correct?
A.
Filling this application, I don't know. But what I know is
what's given to me and I reviewed.
Q.
Correct. So you're agreeing with me. You don't know who
filled out these applications, correct?
A.
I don't know. I wasn't there.
Q.
And you don't know who submitted supporting documentation
with each of these applications, correct?
A.
If you could show me the other exhibit, I know that
application came from Internet Protocol provider number which
is tied to Eric Sheppard.
Q.
Well, it's tied to Mr. Sheppard's modem at his house,
correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
That's fair statement.
Q.
So it's inaccurate to say it's tied to Mr. Sheppard.
A.
It's coming to the address, so I read and noted exactly
what I reviewed.
Q.
It would be inaccurate to say that the applications are
tied to Mr. Sheppard, the human being, correct?
A.
That could be. Could be possible, true.
Q.
You didn't investigate whether there was a loan broker who
was assisting in the preparation of some of these applications,
correct?
A.
When I reviewed, I noted Nationwide Lending, PayPal.
Q.
Did you say PayPal?
A.
PayPal. To fill up applications.
Q.
Do you know which applications on this chart Nationwide
assisted in preparing?
A.
If you could show me the underlying documentation. But it
is my understanding 7/24s are filled -- are processed through
Nationwide. And I do have my underlying support with me to
give you a precise answer.
Q.
So your testimony is the 7/24, those four applications,
it's your understanding those were -- Nationwide assisted in
preparation of those applications?
A.
Correct.
Q.
Okay.
MR. CAVALLO: Could we look at 71. I think my side
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
has it now under control.
Oh. You're downloading it?
Okay. I'm sorry. Could you put up 71.
BY MR. CAVALLO:
Q.
Mr. Hysa, the four applications on July 24, 2020 are not on
this chart, are they?
A.
They are not.
Q.
And they're not on this chart because they were submitted
from a different IP address, correct?
A.
Because some of them were not funded.
Q.
Some of them were submitted from a different IP address,
correct?
A.
That is correct.
Q.
Did you do any investigation into where that IP address was
located?
A.
No, I did not.
MR. CAVALLO: If you can go back to 72, please.
BY MR. CAVALLO:
Q.
The chart speaks for itself, but you agree with me that
half of the loans on this chart -- or more than half weren't
funded?
A.
There are total of 12, and -- 12 funded and 12 sought,
requested.
Q.
And you were asked specifically about the application for
HM-UP Development Alafaya Trails TRU, LLC, the last one on
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
7/24/20, correct?
A.
Correct.
Q.
And you were asked specifically about the bank account at
One Florida Bank, correct?
A.
Yes.
Q.
And this is one of the applications that Nationwide
assisted in filling out, correct?
A.
Yes.
Q.
And you don't know whether it was Nationwide or someone
else who put in the One Florida Bank bank account information,
correct?
A.
I noted here exactly what I noted on Nationwide
application.
Q.
And you don't know if it was Nationwide or someone else who
put in that information, correct?
A.
Oh, yes. I was not there physically. I did not observe.
Q.
And this loan was not funded, correct?
A.
This loan was not funded. Correct.
Q.
So no EIDL money went to any bank account at One Florida
Bank, correct?
A.
Could you please repeat the question?
Q.
Sure. No EIDL money went to the One Florida Bank account
ending in 2368, correct?
A.
Correct. Correct.
(Pause in proceedings.)
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. CAVALLO: Are you set up now?
UNIDENTIFIED SPEAKER: Yes.
MR. CAVALLO: We can switch to Defense table.
Thank you.
Thank you for helping.
Could you please put up 41-5.
(Pause in proceedings.)
BY MR. CAVALLO:
Q.
You were asked about this chart on your direct as well,
correct?
A.
Yes.
Q.
And am I correct that this chart is summarizing bank
account information?
A.
Correct. Three bank accounts receiving six loans.
Q.
Isn't it also true that this chart does not include other
bank accounts for HM-UP that were open at the same time --
during this period?
A.
That is correct.
Q.
So there are other bank accounts for HM-UP that are not
taken into account in this chart?
A.
Correct. But they are reflected as far as money in and
money out. Meaning, with these accounts --
Q.
I didn't ask a question. Thank you.
Am I also reading this correctly that from this period
of time for the -- just these three accounts, there's 893,000
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
in PPP and EIDL loan money?
A.
That is correct.
Q.
And am I also correct that if you total the other
categories, including "Leases," "Transfers," the "Other
Sheppard Accounts," that there's over 1.6 million in
non-government loan funds in just these three accounts?
A.
Could you -- could you help me. How did you come up with
1.6?
Q.
Sure. It's the 2.6 million total at the bottom.
A.
Correct.
Q.
Minus the 893,145 in government loan money.
MS. MARTINEZ: He's got it wrong.
THE WITNESS: We have "Internal Transfers" here and
"Other Sheppard Accounts." We have to net them out to give the
jury the precise answer.
BY MR. CAVALLO:
Q.
Okay. So that's about 600,000. So it would net -- even
netting those out, if they were accurate to net those out, it's
over one million?
A.
They are accurate. That's for sure. But yeah, absolutely
right.
Q.
Over one million in non-government funds, correct?
A.
Correct.
Q.
And again, this isn't every account. This is just these
three?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Correct.
Q.
And isn't it also true that in one of the accounts that's
missing from here, which is a Wells Fargo account you testified
about, there's millions of dollars of rent money that are
flowing into that account per year?
A.
That is correct.
MR. CAVALLO: If you could scroll down to the "Use of
Funds" section.
UNIDENTIFIED SPEAKER: Next page?
MR. CAVALLO: Yeah. Next page.
BY MR. CAVALLO:
Q.
This is the other side of the coin, so to say. This is the
uses of the funds for just those three accounts?
A.
That is correct.
Q.
Isn't it correct that you did not investigate, for example,
how much of the 735,000 in credit card payments went to
business expenses versus personal expenses?
A.
I relied solely on the credit card statements. Meaning I
read the credit card statements, and if I know they are pool,
ABC Pool, I note pool related. So solely relied on the credit
cards, and I don't know exactly if it would be a business or
personal.
Q.
Because the credit card doesn't tell you if it's personal
or business, correct?
A.
No.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Home Depot could be for my house or it could be for my
business, correct?
A.
Fair statement.
Q.
And it's the same thing with payments to individuals, which
is the next line down, 517,000. Those could be -- you didn't
do any investigation as to whether those payments are to -- for
workers or for some personal expense, correct?
A.
Solely I relied on the bank records, meaning when I have a
check, it was written to John Doe, and if the check was
"payroll" on memo, and then I just categorize to individuals
because I don't know the capacity of this individual.
Q.
Because you're a summary witness and you weren't asked to
investigate that kind of thing, correct?
A.
I investigated my bank records to make sure I categorized
over 4,500 rows of transactions.
Q.
I see that. But my question is: You didn't -- you didn't
go a step further and then investigate whether the people and
entities receiving payments listed on this chart -- whether the
purpose of that was for business or for personal?
A.
Well, that's fair statement.
Q.
Okay. And on "Internal Transfers," you didn't investigate
whether there was some business purpose for transfers occurring
at certain times, correct?
A.
Internal transfers are internal transfers, so I don't know
the purpose of money in and money out.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Right. So you don't know whether or not there was a
business purpose for each of those transfers?
A.
No, I don't.
Q.
Same -- I'm not going to belabor the point, but it's the
same for "Legal," "Insurance," "Atlantic Retail," and many
other categories on this "Use of Funds." You're just going by
the bank statements and credit card statements. You did no
investigation as to which of these categories of "Use of Funds"
is business or personal, correct?
A.
Yes.
Q.
And just to go back up to the first page again, 893 is the
PPP and EIDL loan funds, correct?
A.
Yes.
MR. CAVALLO: And if you could go back down.
BY MR. CAVALLO:
Q.
You didn't investigate whether there's more than 893 in
business expenses listed in the bottom of this chart, correct?
A.
Correct. I -- I noted exactly what bank records identify.
Q.
So you agree with me it's possible that there's more than
893,000 in business expenses, including potentially payments to
workers in this part of your chart?
MS. MARTINEZ: Objection to the form of the question.
Vague and compound.
THE COURT: Does the witness understand the question?
THE WITNESS: I do.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. Overruled.
THE WITNESS: I did not -- like I said, I did not --
was there to physically identify what's the purpose of the
money. What I noted per my review is exactly what you see
here.
BY MR. CAVALLO:
Q.
Right. Okay. Thank you.
(Pause in proceedings.)
MR. CAVALLO: Could we please go to 41-2.
BY MR. CAVALLO:
Q.
This is, once again, a chart you reviewed on direct. And
this is a chart that's limited to the 7571 account for HM
Management and Development?
A.
Correct.
Q.
That's the only account that's being reviewed in this
chart, correct?
A.
No. I reviewed three charts.
Q.
No. No. In this one chart. That's the only bank account
that provided the information that's in this chart?
A.
That is correct. Yes.
Q.
On your direct, I think you testified that you chose the
10/20/21 end date because that's when the account was zeroed
out. I think that's the terminology you used.
A.
That is correct.
Q.
Does that mean the account was closed then?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Correct. Was closed.
Q.
Okay.
MR. CAVALLO: If you go to the second page.
BY MR. CAVALLO:
Q.
I have the same question for you. You agree with me that
you did no investigation to determine whether these categories
under "Use of Funds" went to business or personal, correct?
A.
Could you rephrase the question, meaning -- investigation,
what do you mean exactly?
Q.
You did not go beyond the bank and credit card statements.
So for example, "Credit Cards," the first category 290,698 --
A.
Correct.
Q.
-- you didn't take any steps or conduct any investigation
to determine if those were business or personal expenses?
A.
No, I did not. But based on this one, I can speculate. I
have to --
Q.
I'm not asking you to speculate, sir.
And for example, I direct your attention to Miami
Country Day School, 10,000 -- the category "Tuition" and
Jennifer/Jacob Sheppard, 25,366.
A.
Is that a question?
Q.
I just want your attention there so they're highlighting
it.
A.
Okay.
Q.
Did you conduct any investigation to determine whether
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
these expenses had been historically paid from HM Management or
HM-UP?
A.
I have noted this before.
Q.
So you agree with me that this type of expense has been
paid by the companies long before May 1, 2020?
A.
That could be possible.
Q.
So you agree with me it's not like the companies began
paying -- sorry -- the sun. It's not like -- you agree with me
that it's not like the companies began paying this expense in
May 1, 2020?
A.
I don't agree with you a hundred percent.
Q.
You don't agree with me a hundred percent?
A.
On this chart did I investigate this business or personal?
Q.
Right. My question is: You don't -- did you do any
investigation to determine whether, for example, Miami Country
Day School had been historically paid by the companies?
A.
Correct. That's possible it was paid prior to this
account.
Q.
So my follow-up question -- I'm sorry if I wasn't clear --
you agree with me it's not like this expense just started being
paid by the companies on May 1, which is the start date for
your chart?
A.
That is true.
Q.
And it's the same for IBERIABANK, correct?
A.
That is true.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
That was also -- did you do any investigation to determine
whether IBERIABANK had historically been paid by HM Management
or HM-UP?
A.
And when you say: "Investigation," I worked prior to this
timeline, meaning May 1st, 2020, when the first loan --
government loan comes in, so my recollection is yes.
Q.
And how far back did you look?
A.
I believe 2013.
Q.
And did the companies historically pay this expense going
back that far?
A.
I don't recall that far, but I do recall there were some
payments.
Q.
It's possible that the companies had been paying the
IBERIABANK expense going back to 2014, correct?
MS. MARTINEZ: Objection. No foundation.
THE COURT: If the witness -- overruled. If the
witness knows.
MS. MARTINEZ: Objection to the form of the question,
"possible."
THE COURT: Hold on.
In terms of possibilities, the objection is sustained.
The witness can certainly answer based on his personal
knowledge of the documents.
BY MR. CAVALLO:
Q.
The IBERIABANK expense. You said you reviewed as far back
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
as you think 2013 the bank statements?
A.
That's my recollection.
Q.
And you don't know whether IBERIABANK has been paid by HM
Management or HM-UP going back as far as 2014?
A.
I don't recall exactly.
Q.
The category of Legal, 51,273.97, you see that?
A.
I do.
Q.
You didn't investigate whether those payments were for
representation for the business, did you?
A.
No, I didn't. Or personal.
Q.
You didn't investigate whether those payments were for
representation for Mr. Sheppard personally?
A.
I did not.
Q.
Did you do any investigation to determine if Mr. Sheppard
has taken any salary going back as far as 2013 through the end
of this chart?
A.
I've seen payments made to Eric Sheppard.
Q.
You've seen payments made to Mr. Sheppard personally?
A.
Yes. I've seen payments, as I noted, per check to -- under
the payee, Eric Sheppard.
Q.
Did you review the QuickBooks for HM-UP and HM Management?
A.
I reviewed them like three years ago, two and a half years.
Q.
Sorry. You reviewed them two years ago, the QuickBooks?
A.
About right.
Q.
Okay. Do you remember how personal expenses like
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
IBERIABANK were booked in the QuickBooks?
A.
I don't recall.
Q.
So you don't know whether they were booked as personal
expenses in QuickBooks?
A.
I don't.
Q.
You don't know if they were booked as equity reductions in
the QuickBooks?
A.
No, I don't.
Q.
And looking at the top again, PPP and EIDL Loans 444,000,
pretty much 445,000, right?
A.
Correct.
Q.
You don't know whether there was more than 445,000 in
business expenses paid from this account during this period of
time, correct?
A.
I don't know it's a business or personal. What I know --
what I noted in this chart.
Q.
So it's possible -- well, strike that.
You agree with me there very well may be more than
445,000 in business expenses in the "Use of Funds" section of
this chart?
A.
I agree what I have noted here. I don't know the purpose,
business or personal.
Q.
Okay.
MR. CAVALLO: Let's go to 41-3.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. CAVALLO:
Q.
This is a chart for HM-UP Development, correct?
A.
HM-UP Development Alafaya Trails.
Q.
Right. And again, this is a chart you prepared based on
your review of one bank account, SunTrust 5973?
A.
Yes.
Q.
And you agree with me that HM-UP had other accounts that
were opened during this period of time, correct?
A.
HM-UP Development Alafaya Trails?
Q.
Correct.
A.
That could be possible.
Q.
And this chart doesn't take into account what was occurring
in those bank accounts during this period?
A.
Correct.
Q.
Looking at the top, the "Source of Funds," there's 298,000
in government loan money there between EIDL and PPP, correct?
A.
Yes.
Q.
And even netting out the internal transfers, as you've said
is appropriate, you agree with me that there is roughly a
million dollars of non-government money that was in these
accounts during this period of time, correct?
A.
Is it possible to show me the internal money out, the
second portion?
Q.
Well, I'm asking based on this top portion.
A.
No. I just want to net out 298 coming in versus money out
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to give you -- to give the jury a good answer.
Q.
I'm just asking based on -- do you agree with me there's
873,000 in rent?
A.
Absolutely.
Q.
That's not government funds, correct?
A.
Correct.
Q.
And do you agree with me there's 21,000 from SBK Realty?
A.
Correct.
Q.
And do you agree with me there's other funds coming from US
Treasury and miscellaneous?
A.
US Treasury, yeah, I do.
Q.
And those are non-government funds, correct?
A.
Treasury is government money.
Q.
You're right. You're right. Okay. Those are -- you've
got me. Those are non-PPP/non-EIDL funds?
A.
Non-PPP, correct.
Q.
Okay.
MR. CAVALLO: You can zoom out.
BY MR. CAVALLO:
Q.
And without going through each one under "Use of Funds,"
again, you're not here to testify which of these expenses are
personal and which are business, correct?
A.
Correct.
Q.
And you don't know sitting here whether there are more than
298,000 in business expenses that are listed here?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. MARTINEZ: Objection. Asked and answered.
THE COURT: Sustained.
(Pause in proceedings.)
BY MR. CAVALLO:
Q.
And you also agree with me -- I know we already talked
about this -- this chart is missing HM-UP Development accounts,
correct?
A.
Correct.
MS. MARTINEZ: Objection to the form of the question.
This is only one account.
MR. CAVALLO: Right. Exactly.
THE COURT: Overruled.
BY MR. CAVALLO:
Q.
And this does not include Wells Fargo 5874?
A.
Correct.
Q.
And you also agree with me that there was millions of
dollars in rent money, non-government money, flowing into Wells
Fargo 5874 in 2020 and 2021?
MS. MARTINEZ: Okay. Good. Thank you.
THE WITNESS: Correct.
MR. CAVALLO: Could we go to 41-10.
Could you go down. I'm not sure which page I want
based on this.
That one right there. Thank you.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. CAVALLO:
Q.
These categories that the credit card expenses are broken
into, and I'm talking about "Property," "Retail," "Legal," did
you come up with those?
A.
Yes.
Q.
Okay. So that's not -- those categories weren't given in
the credit card statements?
A.
Correct.
Q.
Okay. And I just want to make sure I'm correct, so I'm
going to ask you again --
MS. MARTINEZ: Again?
BY MR. CAVALLO:
Q.
-- you don't -- I'm not trying to be repetitive --
MS. MARTINEZ: Objection. Asked and answered.
THE COURT: I haven't heard the question.
MS. MARTINEZ: He said he was going to ask again.
THE COURT: I understand that, but that's not the
question. What's the question?
BY MR. CAVALLO:
Q.
You cannot tell sitting here today which of these property
expenses, for example, are for business or personal?
A.
No, I don't [sic].
Q.
And it's the same for every other category of charge on
this AmEx, correct?
A.
Correct.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And you don't know who physically was holding
Mr. Sheppard's AmEx card during this period of time, do you?
A.
No.
Q.
And you don't know how AmEx and Discover card payments were
booked in the company's QuickBooks either, correct?
A.
No, I don't.
MR. CAVALLO: I'm sorry. I didn't write down which
chart this is. Could you go to the chart that lists the
five -- or sorry -- the six loans.
This one here. I don't know which one. Do you know
which chart this is -- sorry -- that lists the loans?
MS. MARTINEZ: 41-1.
MR. CAVALLO: 41-1.
Could you please go to 41-1.
BY MR. CAVALLO:
Q.
You reviewed this chart on your direct?
A.
Yes.
Q.
I believe you testified that Mr. Sheppard received the
893,000 listed here, correct?
A.
These bank accounts, under a sole authorized signer, Eric
Sheppard, received 893,145.
Q.
Mr. Sheppard didn't receive $893,000. These borrowers did,
correct?
A.
These bank accounts received from lenders 893,145.
Q.
Okay. And these bank accounts are in the -- for example,
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the first one, the bank account is in the name of HM Management
and Development, correct?
A.
Correct.
Q.
That's not Mr. Sheppard's personal account?
A.
This is a business account.
Q.
The second one, HM Management and Development, that's not
Mr. Sheppard's personal account?
A.
Correct.
Q.
You agree with me that none of the government loan funds
went into Mr. Sheppard's personal account?
A.
I'm not sure, because there's money in and money out.
Q.
I'm talking about the deposit from the SBA, or whoever it
is, into the receiving account, the first transfer. They all
went into company accounts, correct?
A.
It would be misleading because when you pay Jennifer
Sheppard, or Jordan Sheppard, or Eric Sheppard's affiliated
entities, that money, which we noted, made to the
personal-related accounts.
Q.
That's not what I'm asking you. I'm asking if the loan
amount went into an entity bank account.
A.
Correct.
Q.
On your direct you noted the difference on the first loan
between the borrowing entity and the receiving entity, correct?
A.
Yes.
Q.
You didn't do any investigation to determine whether
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Mr. Sheppard or whoever applied for that loan tried to correct
the application --
MS. MARTINEZ: Objection. No foundation.
MR. CAVALLO: I'm asking if he did any investigation.
THE COURT: Hold on. Then let's rephrase, please.
Sustained.
BY MR. CAVALLO:
Q.
Did you do any investigation into what occurred between the
applicant and PayPal for that first loan?
A.
I reviewed the loan application, and I noted exactly what
you see here.
Q.
Okay. You didn't review anything beyond the loan
application, correct?
A.
Bank records.
Q.
You didn't review the communications in Salesforce between
the applicant and PayPal, correct?
A.
I reviewed communication -- the lending -- Nationwide, for
example.
Q.
I'm asking about the first loan Nationwide wasn't involved
in. I'm asking about communications between the applicant and
PayPal on the first loan.
A.
No, I didn't.
Q.
Did you review any documents besides the loan applications,
the bank statements, the credit card statements, and the
QuickBooks?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I reviewed the IP address, Breezeline, and loan agreements.
Q.
You didn't review all the business records of HM Management
and HM-UP, did you?
MS. MARTINEZ: Objection. Vague. I don't know what
he means by "business records."
THE COURT: Does the witness understand the question?
THE WITNESS: Yeah. I need some clarification --
BY MR. CAVALLO:
Q.
Well, without listing again -- you said you reviewed the
bank statements, the credit card statements, the QuickBooks,
the loan applications, and I think you said one -- did you
review anything -- and the IP addresses. Did you review
anything besides that?
A.
What I stated I reviewed.
Q.
Is that what I just listed, what you stated? Is there
anything else beyond what I just listed that you reviewed?
A.
No.
Q.
You didn't investigate the relationship between HM
Management, HM-UP, and HM Four, correct?
A.
Would you clarify your question?
Q.
Sure.
A.
"Relationship"? What do you mean exactly?
Q.
I mean you didn't investigate whether, for example, HM
Management or HM-UP would on occasion pay expenses on behalf of
HM Four, correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I see money in and money out transfers.
Q.
But you didn't do any investigation as to why that was
occurring, correct?
A.
As I testified, I don't know the purpose.
Q.
You didn't investigate how these companies operate day to
day, correct?
A.
Why do you mean by "operate"?
Q.
You didn't investigate what HM Management does day to day,
correct?
A.
No, I didn't.
Q.
You didn't investigate what HM-UP does day to day, correct?
A.
Can you note companies -- the name, the full name?
Q.
I'm sorry. I thought I did. Sorry. HM-UP Development
Alafaya Trails, LLC.
A.
Correct.
Q.
You didn't investigate -- you didn't investigate whether HM
Four has responsibilities and obligations, correct?
MS. MARTINEZ: Objection, Your Honor. No foundation.
MS. WEINTRAUB: This is cross.
THE COURT: The objection is sustained.
BY MR. CAVALLO:
Q.
You're not here to testify about the SBA rules for EIDL,
correct?
A.
I'm here to testify on my summaries.
Q.
And you're not here to testify about PPP rules, correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I'm here to testify about the summary charts I produced.
(Pause in proceedings.)
BY MR. CAVALLO:
Q.
You don't know whether there was over a million dollars
paid to workers from May 1st through the end of 2021, correct?
MS. MARTINEZ: Objection. No foundation.
THE COURT: Sustained.
(Pause in proceedings.)
MR. CAVALLO: If you would give me one second, Your
Honor.
THE COURT: Certainly.
(Pause in proceedings.)
MR. CAVALLO: Could you please put back up 41-2.
BY MR. CAVALLO:
Q.
In the "Use of Funds" section, "Tuition," and Jennifer and
Jacob Sheppard -- do you see that, 25,366 --
A.
Yes.
Q.
-- is it your testimony that the bank accounts showed
tuition being paid for Jennifer and Jacob Sheppard?
A.
It says -- if you see down here Miami Country Day Schools,
I detailed -- and there is a name I believe on the bank records
I reviewed which notes Jacob Sheppard. And then Jennifer
Sheppard is noted here because she receives 6,700. And then
Jacob receives 5,400.
When it comes to tuition, Miami Country Day School for
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
10,300 and Florida Prepaid I categorized as a tuition. But
Jennifer's and Jacob Sheppard, I kept them stand-alone, as you
can see on the second row.
Q.
Isn't that a mistake in your chart, Mr. Hysa? Jennifer
Sheppard is Mr. Sheppard's wife.
A.
I just -- I just noted the name. I grouped them for the --
for the stakeholders here. As I noted, there were over 4,500
lines of transaction for --
Q.
It's your testimony that there's in the bank statements
payments going for Jennifer Sheppard tuition?
A.
I didn't say are for Jennifer Sheppard tuition. What I
note in this chart, there is a group payments made to tuition
and Jennifer and Jacob Sheppard, and I detailed them. Miami
Country Day School and Florida Prepaid is paid $13,267,
Jennifer Sheppard 6,700, and Jacob Sheppard 5,400, which makes
12,100 --
Q.
Okay.
A.
-- based per bank records.
Q.
You didn't investigate -- well, strike that.
How current does your review of the bank statements
go?
A.
Current?
Q.
Yeah.
A.
10/20/2021.
Q.
That's where you stopped your review of the bank
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statements?
A.
For this summary chart.
Q.
I'm talking in general. Your review to be here today, what
are the -- what is the latest set of bank statements you
reviewed?
A.
Some of them goes to 12/31/2021.
Q.
Okay.
A.
It's Exhibit 41-15, I believe, the Summary of Rental
Deposits.
Q.
Sitting here today, based on your review of the bank
statements, you don't know whether Mr. Sheppard is paying back
all of these loans, correct?
MS. MARTINEZ: Objection. No foundation.
THE COURT: Sustained.
(Pause in proceedings.)
MR. CAVALLO: I don't have anything further, Your
Honor.
THE COURT: All right. Any redirect?
MS. MARTINEZ: Yes, Your Honor.
THE COURT: Do you need some water?
Yes, of course.
Do we have some -- I'm not sure what happened to our
water pitcher for the witness.
THE WITNESS: That's fine.
THE COURT: I saw the court security officer bring it
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out.
Just hold on one moment. Let's get the witness some
water, please.
MS. MARTINEZ: I got it. I got it.
Thank you, Ms. Martinez.
REDIRECT EXAMINATION
BY MS. MARTINEZ:
Q.
Mr. -- don't worry. You don't have to talk. You can
swallow.
A.
I don't want to splash here.
Q.
Mr. Hysa, you were -- oh. Thank you.
A.
Thank you.
Q.
Mr. Hysa, you were asked about QuickBooks. Can you explain
to the jury whether or not QuickBooks are audited?
A.
No, I don't.
Q.
No. Are QuickBooks audited?
A.
Oh, yeah. QuickBooks are audited. Yes. Absolutely.
Q.
But in this case, are you familiar whether Mr. Sheppard's
QuickBooks were audited to see if the information in it was
true?
A.
I don't know that answer.
Q.
What does it mean to check and audit something like a
QuickBooks? What does that mean?
A.
Well, in QuickBooks there are pretty much three types of
transaction: the original one when you enter debits and
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credits; the second one is when you void something; and the
third one when you delete.
Normally the QuickBooks captures all these three
situations with corresponding dates, and there is audit log for
these three situations. So the audit -- the QuickBooks can
produce an audit log for all three, original, edits, deletion,
or void.
Q.
And who inputs the information into QuickBooks? In other
words, can someone manually insert information into QuickBooks?
MR. CAVALLO: Objection, Your Honor. Personal
knowledge.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
You were asked about whether or not you had included
QuickBooks in your analysis, and you answered that you had
reviewed some QuickBooks some years ago. My question is: Is
the QuickBooks something that a human being can put information
in?
A.
Correct.
Q.
So it depends on the truthfulness of the person putting in
the information, right?
MR. CAVALLO: Objection. Leading.
THE WITNESS: That is --
THE COURT: Sustained.
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Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
So in your summary charts, you relied on bank records,
correct?
A.
That is correct.
MR. CAVALLO: Objection. Leading.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Did you -- and on American Express records, correct? And
other credit card records, right?
MR. CAVALLO: Objection. Leading.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Did you rely on business records that came from banks and
credit card companies?
A.
Yes.
Q.
With respect to QuickBooks, after someone enters
information in it, can it be changed?
A.
Yes.
Q.
You were -- you were asked about whether or not you knew
what Mr. Sheppard's business was. In the HM-UP accounts, 5973,
and also the Wells Fargo account, which is also HM-UP Alafaya
Trails, what type of money, what type of payments and deposits
was coming into those accounts?
A.
Rental, lease related.
Q.
And it's based on those bank records -- that is your
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Miami, Florida 33128
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understanding of what Mr. Sheppard's business is, correct?
MR. CAVALLO: Objection. Leading.
THE WITNESS: Correct.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Your knowledge of what Mr. Sheppard does comes from the
bank records, correct?
MR. CAVALLO: Objection. Leading.
THE COURT: Overruled. I'll allow that.
THE WITNESS: Correct.
BY MS. MARTINEZ:
Q.
And what type of deposits were made into the HM-UP
Development Alafaya Trails accounts 5973 and the Wells Fargo
account under that same name?
A.
Rent, lease related.
Q.
And the rent, was it from individuals or from companies?
A.
Companies.
Q.
What does that tell you is the business of Mr. Sheppard?
What does he do? What does that tell you?
MR. CAVALLO: Objection.
BY MS. MARTINEZ:
Q.
What do the bank records tell you?
A.
Does not tell me anything.
Q.
You were -- you were asked about the payments that you
categorized from the American Express card, right?
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A.
Yes.
Q.
And you were asked questions whether you could tell from
some of the entries whether it was personal or business, right?
A.
Yes.
MS. MARTINEZ: Could you put up Exhibit 41-10, and
could you go to the last page.
Go up.
BY MS. MARTINEZ:
Q.
Do you see notations -- this is the page that summarizes
charges by whom?
A.
By Jennifer Sheppard.
Q.
And at the bottom?
A.
Jordan Sheppard.
Q.
Now, with respect to Jennifer Sheppard's cards, what is the
first line?
A.
"Retail."
Q.
And what is the second line?
A.
"Meals/Entertainment."
Q.
What did you include in "Meals and Entertainment"?
A.
Steakhouse. Could be a movie theater.
Q.
What did you include under "Medical"?
A.
"Medical." It could be --
MR. CAVALLO: Objection, Your Honor. Speculating.
Move to strike.
THE COURT: Sustained.
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Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
No. No. No. It's just based on what you recall -- what
you recall. What do you recall seeing that made you put it
under "Medical"?
A.
It was, for example -- I don't exactly recall, but it was
like noted medical related, Baptist or DO or MD, and there was
a name.
Q.
With respect to "Jewelry Related," I'm going to show you
from Composite Exhibit 49 --
MS. MARTINEZ: Could I go to ELMO, please.
BY MS. MARTINEZ:
Q.
This is from Composite Exhibit 49, Bates label 005440.
This is -- what do you recognize this to be?
A.
This is American Express credit card ending 2006, under
Eric Sheppard's name.
Q.
Now I'm going to page forward so that we can see. Does the
same document on Bates label 005445, which we can see here --
does the same statement go on to also list charges by someone
else?
MR. CAVALLO: Your Honor, I object. This is outside
the scope of cross. I did not go into these particular charges
in my questioning.
MS. MARTINEZ: He was asked in detail about whether he
separated business or personal. And I'm only going to show one
transaction, Your Honor.
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Miami, Florida 33128
(305) 523-5698
THE COURT: All right. All right. I'll allow a
limited amount. It is proper on redirect.
BY MS. MARTINEZ:
Q.
Does the same bill then go on to show charges by another
individual?
A.
Yes.
Q.
And who is that?
A.
Jennifer Sheppard.
Q.
And on Bates label 005447, could you just read the
transaction at the top. Can you read it?
A.
Richemont, Inc., jewelry, watch, sil -- S-I-L-V-R-W-A-R
[sic].
Q.
And did you say the date?
A.
The date, no. June 3rd, 2021.
Q.
And the location?
A.
New York.
Q.
And let's see if we can see the amount.
MS. MARTINEZ: Hoping this thing will autofocus.
There we go.
BY MS. MARTINEZ:
Q.
Can you see the amount charged for jewelry, watch,
silverware?
A.
$4,548.
Q.
Now, I know you didn't make a separation in your charts
regarding business or personal. In that case, does the jewelry
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Miami, Florida 33128
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appear business or personal?
A.
This one appears personal.
Q.
You were asked on cross-examination --
MS. MARTINEZ: I'm going to bring up Government's
Exhibit 72, please.
Oh. I need to go back to counsel table, please.
Actually, I'll stay on ELMO. That's okay.
BY MS. MARTINEZ:
Q.
You were asked with respect to Government's Exhibit 72,
correct?
A.
Yes.
Q.
And you recall being asked with respect to HM-UP
Development Alafaya Trails TRU that there was a bank account by
the -- in the application One Florida Bank 2368. You recall
that?
A.
Correct.
Q.
I'm going to show you from Government's Composite 66 what's
been marked and admitted into evidence as 66.1.
Do you remember reviewing this document?
A.
Yes.
Q.
Is that Nationwide document one of the documents that you
used to prepare the summary?
A.
It is.
(Court reporter interruption.)
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Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
My question is that -- I'm on Bates label 033796.
Mr. Hysa, do you see on the document that you reviewed
to prepare Government's Exhibit 72?
A.
"Bank name: One Florida Bank," "Account Number" --
Q.
You can just give the last four digits.
A.
Account number last four 2368.
MS. MARTINEZ: Can you bring up 41-5, please.
Can you go to counsel's table please.
And can you go to the second page, please.
Can you highlight or zoom out the "Other Sheppard
Accounts," which is the box in the middle.
BY MS. MARTINEZ:
Q.
You were asked on cross-examination whether any of the
PPP/EIDL loans had been deposited directly into the One Florida
Bank account. I ask you now, taking a look at the "Use of
Funds" in Exhibit 41-5, do you see funds going to One Florida
Bank loan and One Florida Bank checking account?
MR. CAVALLO: Objection, Your Honor. Goes beyond the
scope of a summary witness.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
You were asked on cross-examination specifically whether
PPP and EIDL money had gone to the One Florida Bank account.
A.
Correct.
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Miami, Florida 33128
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Q.
Does your -- and 41-5 is a summary relating to the three
accounts that received six PPP and EIDL loans, correct?
A.
Yes.
Q.
Which totaled almost $900,000, correct?
A.
Correct.
Q.
From those accounts, does money go to One Florida Bank loan
1470?
A.
Yes. There is $77,011.
MR. CAVALLO: Your Honor, I object. And I would move
to strike. He's a summary witness, and he's apparently
conducting some kind of tracing that an expert witness --
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
You were asked on cross-examination whether or not PPP/EIDL
money went to One Florida Bank account. Did the three bank
accounts that you summarized in 41-5 -- did they receive six
loans from PPP and EIDL?
A.
Correct.
Q.
And then, after receiving that money, did money go out to
One Florida Bank?
MR. CAVALLO: Objection. Leading.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
Looking at your chart, what are the other Sheppard accounts
that received -- other Sheppard accounts, meaning not PPP/EIDL
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receiving accounts, that received money from these accounts?
A.
One Florida Bank 1470, One Florida Bank 2368, SunTrust
5452, and Wells Fargo 5874.
Q.
Now, you were asked on cross-examination whether you knew
who was actually filling out these forms. Remember that?
A.
Yes.
MS. MARTINEZ: Can you pull up Government's
Exhibit 71, please.
BY MS. MARTINEZ:
Q.
Government's Exhibit 71 includes approximately 13 loan wire
transmissions, correct?
MR. CAVALLO: Objection. Counsel testifying.
THE COURT: Sustained.
BY MS. MARTINEZ:
Q.
How many does it list, approximately?
A.
Thirteen.
Q.
And what do the dates range from? From which date to which
date do you have?
A.
April 15th, 2020 through March 25th, 2021.
Q.
And every single one, who is the IP address subscribed to?
A.
Eric Sheppard.
Q.
And for every single one, what address was -- that IP
service address, what was the IP connected to?
A.
180 Bal Cross Drive, Bal Harbour, Florida 33154.
MS. MARTINEZ: Can you bring up Exhibit 41-1, please.
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Miami, Florida 33128
(305) 523-5698
BY MS. MARTINEZ:
Q.
And for the PPP/EIDL loans that were funded, who was the
signer --
A.
Eric Sheppard.
Q.
-- of -- let me complete my question. Who was the signer
of every account that received PPP/EIDL money?
A.
Eric Sheppard.
Q.
Was there anybody else who was a signer on these three
accounts?
A.
No.
MS. MARTINEZ: No further questions, Your Honor.
THE COURT: Is the witness excused?
MS. MARTINEZ: Yes, from the United States.
THE COURT: On behalf of the Defendant?
MR. CAVALLO: Yes, Your Honor.
THE COURT: Thank you, Mr. Hysa. You are excused.
(Witness excused.)
THE COURT: The Government's next witness?
MS. JIMENEZ: Your Honor, the Government does not have
any other witnesses.
THE COURT: Does the Government rest its case?
MS. JIMENEZ: Well, we have a couple of exhibits to
move in, but aside from that...
THE COURT: All right.
MS. JIMENEZ: Yes.
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THE COURT: Did you want to move them in at this time?
MS. JIMENEZ: We would.
MS. MARTINEZ: There were some remaining issues that
we need to make sure that they are resolved, Your Honor, with
respect to some redactions.
THE COURT: All right. Then, Ladies and Gentlemen, we
will adjourn early for the day. As you can see, it is quarter
to five. Tomorrow's schedule, we will begin -- we were able to
re-schedule one of the morning matters so we'll begin right at
nine a.m. Unfortunately, we will need to end the day by 4:30.
So I'll see you tomorrow morning at nine a.m. Have a
pleasant evening.
As you leave the courthouse, please remember you're
not to discuss this case with anyone, nor permit anyone to
speak with you. Everything learned about the case is learned
in the courtroom.
If you'll place your juror notes in the jury room.
Have a pleasant evening. And I'll see you tomorrow
morning at nine a.m.
COURT SECURITY OFFICER: All rise for the jury.
(Jury not present, 4:46 p.m.)
THE COURT: All right. Go ahead and have a seat.
What exhibits are you seeking to introduce?
MS. JIMENEZ: So first of all, Your Honor, I just -- I
wanted to raise something with respect to Government
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Miami, Florida 33128
(305) 523-5698
Exhibit 75, which is the PayPal additional couple of emails.
The Defense put in some emails from PayPal, and the last one
was dated February 17 -- February 17, 2021, from the Defendant
to the PayPal individual's email address.
Subsequent email, which they did not put in, which I
have a business record for, and is an admission of the
Defendant, or statement of the Defendant, February 22nd, 2021,
is also from the Defendant to the same email account at PayPal.
So I do not see why that record should not come in. There's a
business record provided for it. It is a statement of the
Defendant.
THE COURT: Didn't you have a business certification
stating that the records that the Government introduced into
evidence were the true and complete copies?
MS. JIMENEZ: Well, it's a business record
certification.
THE COURT: Did you, in fact, have a certification
that the records were the true and complete copies?
MS. JIMENEZ: I don't know that the word "complete,"
honestly, is there. I mean, it's -- it's a business record
certification. These are the records that they produced that
they maintained in accordance with their business. They filed
these additional records, as the witness testified, under the
HM Four because it was an HM Four tax return, so they looked in
a separate place essentially. But it's for no other reason to
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Miami, Florida 33128
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complete the record as to that email chain. It's just a
subsequent email by the named individual, the Defendant. It's
his statement. And they provided an additional certification.
THE COURT: All right. The Defendant's response?
MR. ETRA: Your Honor, nothing's changed from Your
Honor's ruling. They're just -- we discussed this already, and
it's just an additional email.
MS. JIMENEZ: Right. And he --
MR. ETRA: And she could have done a Rule 16. They
did a lot of Rule 16 discovery. We put on the witness. We
showed their production was incomplete. We impeached them. We
introduced new exhibits, and the witness left, and now they
want to fix it without us questioning the witness about it.
It's unfair.
MS. JIMENEZ: The witness would have this email.
MR. ETRA: That was Your Honor's ruling. Nothing's
changed.
THE COURT: Yeah. Nothing has changed.
The records were introduced. They were used in
questioning the witness. And now that the witness is long
gone, if you want to call another witness for purposes of any
rebuttal case, you may certainly do so. But at this point in
time, I'm not going to allow what was already introduced into
evidence to be supplemented.
What other issues?
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MS. MARTINEZ: Your Honor, I just --
THE COURT: What other issues with the exhibits that
you'd like to introduce into evidence, so we can have the
Government rest on the record, please?
MS. MARTINEZ: There's only two issues that I just
wanted to clarify. First, with respect to -- because it
requires certain steps. So first with respect to the -- some
of the SBA loan files, at the end of the notes, meaning at the
very end, it has a statement about the Defendant being
indicted.
Now, that is not -- that's not something that is not
known. Obviously, the Defendant is on trial. But I just
wanted to confirm the Court would like us to go back in and
redact just that page that says that he has been indicted?
THE COURT: I believe that was what you had agreed to
do, correct?
MS. MARTINEZ: Yes.
THE COURT: All right. Then what other evidence needs
to be introduced by the Government so the Government can rest
on the record this evening?
MS. MARTINEZ: With respect to -- with respect --
here. With respect to -- there were some exhibits that the
Defense had objected to portions of a credit report, and I
still am not clear what portions they would want redacted.
There's one in particular that is like 300 pages, and I
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
don't -- and there's some that are much shorter, like only four
pages.
But I just want to be clear which are the ones that
they need redaction and what part do they need redaction. I
still -- I mean, it doesn't affect -- the exhibits are already
into evidence --
THE COURT: All right. Here's what we're going to do:
We've got a lot of time between now and when we're going to
pick up this case in January. It is extremely unlikely, given
the pace today, that we are going to finish the Defendant's
case, the Government's rebuttal, a charge conference, closing
arguments, instructions to the jury, and jury deliberation in
one day, given that today is day 12 of a seven-day trial.
So what I'm going to do right now is ask you to
introduce all of the exhibits that you want to introduce so the
Government can rest on the record, so I can have a colloquy
with the Defendant, so tomorrow we can start the Defendant's
case.
So with regard to redactions, issues related to
personal information that should not be on the exhibit, the
attorneys are going to work together because it's the
Government's obligation to have one exhibit list with all of
the exhibits uploaded on a clean laptop for this jury, so that
there is no delay once the jury eventually goes into that jury
room to deliberate.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
So what exhibits does the Government seek to introduce
into evidence before it announces that it's resting its case?
MS. JIMENEZ: Your Honor, there was also Exhibit 76,
which was a routing sheet for HM Management and Development's
tax return for tax year 2018, which was shown to
Mr. Cupersmith --
MR. ETRA: No objection.
MS. JIMENEZ: -- on rebuttal.
MR. ETRA: No objection.
THE COURT: Admitted into evidence.
(Government's Exhibit 76 received into evidence.)
THE COURT: What other exhibits?
MS. JIMENEZ: Your Honor, I believe -- let me just
have one moment.
(Pause in proceedings.)
MS. JIMENEZ: That's it for the Government, Your
Honor.
THE COURT: Does the Government rest its case?
MS. JIMENEZ: Yes, Your Honor.
THE COURT: All right. On behalf of the Defendant?
MS. WEINTRAUB: Your Honor, on behalf of the
Defendant, at this time, we would preserve all our motions that
were previously made, and we would move for a judgment of
acquittal pursuant to Rule 29, and I'd like argument.
THE COURT: All right. And with regard to -- since it
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
has been a long day, I would like to have a colloquy with the
Defendant.
The Defendant has filed Docket Entry 162, its Motion
for Judgment of Acquittal. I would -- and as well, for the
record, the Defendant has provided the Court with a binder that
contains cases in support of that motion. I'd like to give the
Government an opportunity to respond to the motion, and I will
reserve ruling on the Motion for Judgment of Acquittal.
With regard to the Defendant's case, Ms. Weintraub,
have you spoken with Mr. Sheppard as to whether he will be
presenting a defense in this case?
MS. WEINTRAUB: Yes, Your Honor, I have spoken with
Mr. Sheppard and other witnesses as well, as far as timing is
concerned.
THE COURT: All right. Then let me have a
conversation with Mr. Sheppard directly.
Mr. Sheppard, the Superseding Indictment, Docket Entry
60, charges you separately with nine counts of wire fraud and
four counts of aggravated identity theft. The Government
carries the sole burden of proving all the elements of each of
these offenses. You have no burden; however, while you have no
burden, you certainly have the right to present a defense, and
that defense would include the calling of witnesses, the
presentation of evidence, which has already been presented
during the Government's case in chief by your attorneys, as
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
well as your own testimony.
So Mr. Sheppard, have you made a decision whether
you're going to be calling witnesses in your case?
THE DEFENDANT: Yes, Your Honor.
THE COURT: And what is that decision, sir?
THE DEFENDANT: We will be calling witnesses.
THE COURT: And have you spoken directly with your
attorneys as to the witnesses that will be called in your case
in chief?
THE DEFENDANT: Yes, Your Honor, I have.
THE COURT: Have you spoken with your attorneys with
regard to your right to testify? And let me advise you,
Mr. Sheppard -- you were here when I did question the jury, so
let me advise you of the law again. And that is that you have
a constitutional right not to testify; however, you also have
the right to testify. And whether you choose to testify, you
can certainly consult with your attorneys, but in the end the
decision needs to be yours.
Mr. Sheppard, have you made the decision whether
you're going to be testifying in your criminal trial?
MS. WEINTRAUB: Does he have to say that right now,
Judge, whether or not he's going to testify, since we're taking
a two-week break?
THE COURT: All right. So you have not made the --
that can be the answer. So you haven't made the decision, sir?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE DEFENDANT: (No verbal response.)
MS. WEINTRAUB: That's correct, Judge.
THE COURT: All right. Then since Mr. Sheppard has
agreed that witnesses will be called, tomorrow -- Ms. Weintraub
or Mr. Etra, who will be called tomorrow in the Defendant's
case?
MS. WEINTRAUB: Your Honor, we don't know. But I do
know that there's a witness who is scrambling on his way to an
airport in New York as we speak. I went out to talk to him.
And that would be Robert Kallman. I also was able to get Glenn
Sheppard, who is outside the door.
Those would be the two witnesses, in addition to
whether or not, depending on the evening -- and I'm sure the
Court could see by the length of the motion that was submitted
very late last night that we were not in the Keys this weekend
having a good time. We've been working very hard, very
diligently, and working with our client on whether or not he
will testify. We cannot give the Court an answer, but he may
testify tomorrow.
THE COURT: Then I will colloquy Mr. Sheppard at the
conclusion of the last witness, whether -- Mr. Kallman will be
first, if he can get into Miami from New York, and then Glenn
Sheppard. Following those two witnesses, would that be the
time that Mr. Sheppard would make a decision, Ms. Weintraub?
MS. WEINTRAUB: Judge, I don't mean to be -- I'm
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
certainly not being disrespectful, and I don't mean to be rude,
but it's been a very strategic and trying time, because of the
break, to figure this out, and I just want to give the Court an
answer. I mean, we can --
THE COURT: Well, other than the two witnesses, Robert
Kallman and Glenn Sheppard, putting aside the Defendant, will
you be calling any other witnesses?
MS. WEINTRAUB: Yes, Your Honor.
THE COURT: All right. So who else will be testifying
tomorrow other than Robert Kallman and Glenn Sheppard?
MS. WEINTRAUB: And I don't know if Robert Kallman
will get on the flight or not, but we also could call Vanessa
Gonzalez and Jeanette Gonzalez. I mean, I've been here all
day, and I have not been reaching out to them.
THE COURT: All right. So there may be four
witnesses, other than whether Mr. Eric Sheppard chooses to
testify. And those four witnesses are expected to testify
tomorrow?
MS. WEINTRAUB: I'm hoping to make those arrangements,
Your Honor.
THE COURT: All right.
MS. JIMENEZ: This is the third different lineup that
we've gotten since Friday. I just -- is the Defense expert
witness also expected to testify, since that was --
MS. WEINTRAUB: Not tomorrow, Your Honor. And Your
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Honor, we heard Thursday that the summary witness would be 15
minutes. And I can tell you the lineup would have been
different had we been able to start this afternoon.
THE COURT: All right. But this is a different issue.
As the Government was required to advise the Defense as to what
witnesses it was going to be calling, as well the Defendant
should advise the Government so the Government is prepared with
regard to those witnesses.
So tomorrow you'll be calling Robert Kallman, if he
arrives from New York, Glenn Sheppard, Vanessa Gonzalez, and
Jeanette Gonzalez; is that correct?
MS. WEINTRAUB: That would be correct, and/or my
client.
THE COURT: All right. Well, I'll certainly colloquy
Mr. Sheppard at the appropriate time. But you will have
witnesses here at nine o'clock tomorrow, correct?
MS. WEINTRAUB: Yes, Your Honor.
THE COURT: All right. Then --
MS. MARTINEZ: And just to clarify, the Defense expert
is not testifying tomorrow or is he on standby?
MS. WEINTRAUB: It is not our expectation.
MS. MARTINEZ: Is there any possibility? I just need
to know whether I need to be -- it's a fair question. Is there
a possibility that the Defense expert is going to get on the
stand tomorrow? It's a fair -- is there a possibility?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: Honestly, I do not expect -- honestly,
I do not expect to put him on tomorrow.
MS. JIMENEZ: And then there were two other witnesses
who were mentioned on Friday who are not now being mentioned.
Are those off the table? Mercedes Fonseca, Mr. Kerby Kleef?
MS. WEINTRAUB: They won't be able to get here by
tomorrow, so no.
THE COURT: All right. So it's very likely that the
Defendant's case will move into Monday, January 8th; is that
correct?
MS. WEINTRAUB: Yes, Judge.
THE COURT: All right, then.
All right. Is there anything further that the Court
can assist the parties with?
MS. WEINTRAUB: Judge, when will the Government be
replying to the Rule 29, and when -- will we have argument
before we take a break or...
THE COURT: I'd like to have full use of the day with
the jury and not take time away from the jury --
MS. WEINTRAUB: I agree.
THE COURT: -- with regard to any argument. So how
much time does the Government need to respond to the written
Motion for Judgment of Acquittal?
MS. JIMENEZ: Well, Your Honor, I am going to be on
vacation as well. So I would ask to be able to file something
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
in January.
MS. MARTINEZ: And Your Honor, just on my colleague's
behalf, she says the word "vacation"; however, she has
out-of-town, out-of-country family coming, as well as two
teenage boys.
THE COURT: All right. And I understand Ms. Jimenez
has concerns with regard to her schedule.
MS. WEINTRAUB: We all have stuff.
THE COURT: But Ms. Martinez, are you able to assist?
Is there a reason why that can't be filed by Wednesday or
Thursday of this week?
MS. JIMENEZ: How about Friday of this week, Your
Honor?
THE COURT: All right. That's fair.
All right, then.
MS. WEINTRAUB: Can we have two days for a reply, Your
Honor?
THE COURT: Certainly.
All right. We do not need the tables for tomorrow
morning so you're free to leave your items here. The courtroom
will remain locked.
Is there anything further before we recess for the
evening? On behalf of the Government?
MS. JIMENEZ: No, Your Honor.
THE COURT: On behalf of the Defendant?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: No, Judge. Thank you.
THE COURT: All right. Have a pleasant evening.
I'll see you tomorrow morning at nine a.m.
COURT SECURITY OFFICER: All rise.
(Proceedings adjourned at 5:02 p.m.)
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
UNITED STATES OF AMERICA )
ss:
SOUTHERN DISTRICT OF FLORIDA
)
C E R T I F I C A T E
I, Yvette Hernandez, Certified Shorthand Reporter in
and for the United States District Court for the Southern
District of Florida, do hereby certify that I was present at,
and reported in machine shorthand, the proceedings had the 18th
day of December, 2023, in the above-mentioned court; and that
the foregoing transcript is a true, correct, and complete
transcript of my stenographic notes.
I further certify that this transcript contains pages
1 - 268.
IN WITNESS WHEREOF, I have hereunto set my hand at
Miami, Florida, this 25th day of February, 2025.
/s/Yvette Hernandez
Yvette Hernandez, CSR, RPR, CLR, CRR, RMR
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
yvette_hernandez@flsd.uscourts.gov
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Case 1:22-cr-20290-BB Document 318 Entered on FLSD Docket 02/25/2025 Page 268 of 268File and source
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