Court filing
Transcript of Trial Day 13 as to Eric Dean Sheppard held on 12/19/2023 — USA v. Sheppard (Dkt. 319, 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. 319 · 2025-02-25 · Docket on CourtListener
Full text
1
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 19, 2023
9:01 a.m.
vs.
ERIC DEAN SHEPPARD,
Defendant.
Pages 1 THROUGH 258
______________________________________________________________
TRANSCRIPT OF TRIAL DAY 13
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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 1 of 258
2
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I N D E X
Certificate..................................... 258
Government rests ............................... 6
W I T N E S S
ON BEHALF OF THE DEFENDANT:
PAGE
ERIC DEAN SHEPPARD
DIRECT EXAMINATION BY MR. ETRA 7
E X H I B I T S
DEFENDANT'S EX. NO.: OFFERED ADMITTED
X-1
48 49
M-43
53 54
X-40
63 63
X-6
66 66
M-51
67 67
M-50
72 73
X-31
83 83
X-16
89 89
M-60
114 115
M-56
118 119
M-57
122 123
X-41
127 128
X-10
142 142
X-15
148 149
X-12
168 168
X-37
182 182
X-37 attachment
184 184
X-20
185 185
X-23
188 188
X-42, X-43
193 193
X-13
197 197
X-34
198 198
X-44
204 205
M-88
218 218
X-45
225 225
X-21
238 239
X-9
244 244
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 2 of 258
3
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
(Call to order of the Court, 9:01 a.m.)
THE COURT: Hi. Good morning to everyone.
I don't see Mr. Sheppard.
MR. ETRA: He's coming in in a second.
THE COURT: Okay.
MS. WEINTRAUB: Good morning, Your Honor.
THE COURT: Good morning.
All right. Let me acknowledge the presence of the
Defendant.
Good morning to everyone.
This morning the Government will rest its case in
front of the jury. And is the Defendant ready to proceed with
its witnesses?
MS. WEINTRAUB: Yes, Your Honor.
THE COURT: All right. And Mr. Sheppard, I did
formally advise you of the Government's burden. They have the
sole burden of proving all the elements of these offenses. You
have no burden. But it is my understanding that you want to
call forward some witnesses to testify; is that correct, sir?
THE DEFENDANT: Yes, I do, Your Honor.
THE COURT: All right, then. Is there anything that
we need to address before we bring the jury in?
MS. MARTINEZ: Yes, Your Honor. I would ask just to
confirm the order of witnesses today. And I believe there's
been changes, so I'd like to just confirm that.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 3 of 258
4
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right.
MR. ETRA: Yes, Your Honor. I advised counsel this
morning Mr. Eric Sheppard will testify first and Mr. Glenn
Sheppard is available to testify second. I don't think we're
going to get past that.
THE COURT: Okay. So hold on.
Go ahead and have a seat, then.
MS. MARTINEZ: May I just ask, just in case we do get
past that, who would be after?
MR. ETRA: I don't know that I have anyone after that.
I don't -- I mean, we did not think -- we don't have anyone
planned after that, Your Honor.
THE COURT: All right. Not a problem.
Let me speak directly to Mr. Sheppard.
Mr. Sheppard, last night I did ask you whether you had
made the decision to testify. I did advise you, let me advise
you at this time, sir, you have a constitutional right not to
testify; however, at the same time, you do have the right to
testify. And whether you choose to testify in your case is a
decision only you can make. You can certainly consult with
your attorneys and they can give you their opinion, but in the
end the decision needs to be yours.
Mr. Sheppard, have you made a decision in this case as
to whether you are going to testify?
THE DEFENDANT: Yes, I have, Your Honor.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 4 of 258
5
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: And what is that decision, sir?
THE DEFENDANT: I will be testifying for -- I'm
exercising my right to testify.
THE COURT: All right, sir. So at this point in time
we will bring in the jury, the Government will rest, and then I
will then ask the Defendant if the Defendant has any witnesses.
And Mr. Etra, it's my understanding that Mr. Sheppard
will be called as the first witness; is that correct?
MR. ETRA: That is correct, Your Honor.
MS. WEINTRAUB: That is correct, Your Honor.
Before we call the jury out, though, we were very
rushed, all of us -- my fault -- yesterday, and I just want to
make it clear. I understand that the Court -- I have preserved
my record in reserving all of my motions and objections to the
Court but I also -- before we start our case, I need to
specifically state on the record that we object to the
systematic exclusion on cross-examination of our right to
confront evidence that was going to the credibility and bias of
specific witnesses. And even yesterday with Maged Salem, we
were denied the right -- he made certain statements to the FBI,
and I was not allowed to impeach him with the statements that
he made, which we clearly had evidence of. All of that was
excluded.
The only thing that was permitted on that cross,
actually, was that -- and I read it again last night -- was
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 5 of 258
6
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
that two judgments were entered against him the week before the
lease is executed, and that he lied to the FBI about that. But
other than that, everything was shut down. So I just want to
renew my objections and I guess reserve the opportunity to
further argue it at the Rule 29.
THE COURT: All right. Those objections are
preserved.
Are both sides ready to proceed?
MS. MARTINEZ: Yes, Your Honor.
MR. ETRA: Yes, Your Honor.
THE COURT: All right, then.
COURT SECURITY OFFICER: Please rise for the jury.
(Before the Jury, 9:05 a.m.)
THE COURT: Hi. Good morning, Ladies and Gentlemen.
Please be seated, everyone.
It is good to see you. Thank you for being so prompt.
And we are ready to get right back to work.
On behalf of the Government?
MS. JIMENEZ: Yes. Good morning, Your Honor.
The Government rests its case.
THE COURT: All right. Thank you.
On behalf of the Defendant?
MR. ETRA: Your Honor, the Defense calls Mr. Eric
Sheppard.
THE COURT: All right, then.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 6 of 258
7
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
ERIC SHEPPARD, DEFENDANT, SWORN
COURTROOM DEPUTY: Thank you.
Could you please state your name and also spell it for
the record.
THE WITNESS: Eric Sheppard. E-R-I-C S-H-E-P-P-A-R-D.
MR. ETRA: Your Honor, may I proceed?
THE COURT: Yes, of course.
DIRECT EXAMINATION
BY MR. ETRA:
Q.
Mr. Sheppard, good morning.
A.
Good morning.
Q.
Where were you born?
A.
I was born on Christmas Day in Miami, Florida.
Q.
Were you adopted?
A.
Yes.
Q.
Where were you raised?
A.
Initially, in Miami Beach.
Q.
Raised by one parent or two parents?
A.
Up until I was 13 years old, by two parents.
Q.
What happened when you were 13?
A.
My parents were divorced, and --
Q.
What happened?
A.
-- my mother and brother and sister moved to New Mexico,
and I stayed with my father here in Miami.
Q.
Was your father around when you were growing up after you
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 7 of 258
8
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
were 13?
A.
Yeah. In the mornings. And he was a single guy and he was
out a lot, but he was there every morning.
Q.
How about in the afternoons, did you have supervision?
A.
No.
Q.
Where did you go to high school?
A.
Miami Beach Senior High School.
Q.
Something happen prom night with your family?
A.
Yes.
Q.
What happened?
A.
After prom night, came home and found out that my mother
was -- in New Mexico was ran down by a drunk driver and in a
coma for six months.
Q.
What impact did that have with you and your family?
A.
Clearly, it was a very difficult -- it's hard to explain,
but a very difficult time.
Q.
And around that time, did you go to college?
A.
Was supposed to go to college. After the prom, I had to
get delayed a little bit because of clearly the situation. But
I ended up going to college, yes.
Q.
Where did you go to college?
A.
I went to Florida State University.
Q.
Did you graduate?
A.
Yes.
Q.
What year?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 8 of 258
9
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
1990.
Q.
What degree?
A.
Economics.
Q.
Did you work during college?
A.
Yes.
Q.
What kind of job did you have?
A.
I worked at the -- called the Governor's Square Mall. I was
in the food court. I worked at a place called The Taco
Factory, and I was working there.
Q.
Were you supporting yourself in college?
A.
Yeah. That was my way to, you know, be able to pay for
things in college, like food and stuff like that.
Q.
After college, what was your -- what industry did you go
into first?
A.
First, I went into a company called Ernest & Julio Gallo
Wines.
Q.
And why did you go there?
A.
I think -- a lot of my friends went into like banking,
stuff like that. But I think I was a little bit introverted at
that particular moment in time, and I wanted to learn, you
know, sales. I thought it would take me out of my shell to be
able to talk to people, communicate. So I -- you know, it was
a little different, but I thought it would be good to learn how
to do that and, you know, be able to talk to people.
Q.
At some point did you go into real estate?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 9 of 258
10
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Well, after that, actually, I worked for a chemical company
for a little while. After that, that's what I did. We went
to -- we sold chemicals in restaurants, in urinals and stuff,
like those little pieces in there.
Q.
And then at some point did you go into real estate?
A.
Yes. I --
Q.
What was your first real estate job? Who was it -- what
kind of company -- well, who was it for?
A.
It was a company -- a commercial real estate developer
located in Deerfield Beach, Florida.
Q.
How did you get the job?
A.
I interviewed for the job. And it was interesting. A lot
of the guys that were applying, they were in line -- I was a
little intimidated. They were all like Ivy League kind of
people. They were very intelligent people. I mean, I wasn't
an Ivy League type of person.
Q.
So what was your pitch to get the job?
A.
Well, I waited till everybody left. And when they were
closing, I walked in and I said: "I'm here for my interview."
And I interviewed, and they said: "Look, why do you want this
job?" I said: "Because I love -- I love seeing buildings
being built. I don't know how they're built. I don't know
anything about it, but I'll work for free." And so I told them
I would work for free.
Q.
Did you get the job?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 10 of 258
11
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I got the job -- well, I got the job and they clowned me
the first week or two and said I wasn't getting a paycheck.
And then they gave me like a very small paycheck, but I was
appreciative. But they wouldn't let me work for free.
Q.
Approximately when was that that you were working for that
company?
A.
I mean, approximately around 1992.
Q.
And when did you leave, approximately?
A.
When did I leave? 1995, approximately.
Q.
So how old were you when you started to -- 1995, when you
left that company, how old were you about, if you could do the
math?
A.
Around 26, I guess -- I mean 25, around there -- 25.
Q.
When you left that real estate company, what did you do?
A.
When I left the real estate company, I wanted to start my
own company at the time. You know, I didn't meet my wife yet
and I just was a single person. And I had -- you know, I was
going to try to take a chance in, you know, what I had learned
from the company that I worked for.
Q.
So what did you do?
A.
The company built in a lot of different states. So I went
to Georgia and found a piece of -- a piece of real estate
there.
Q.
What was the real estate?
A.
It was a -- what they call outparcels to a mall, the little
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 11 of 258
12
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
buildings out front, and it was an Arby's restaurant. And
so --
Q.
What did you do?
A.
I negotiated -- I went to speak to the -- there's a lady
there who was a real estate representative for the Arby's
people, and I told her I really wanted to buy -- negotiate to
buy the property, and she agreed.
Q.
How much money did you have at the time?
A.
I don't know exactly. But approximately -- I don't know --
2,800, 3,000 dollars maybe or something.
Q.
How were you going to buy the property with 28 or 3,000
dollars?
A.
It was not well-thought-out at first because I didn't have
the money. But I had the relationships with the tenants, the
national tenants. So I was able to get a commitment from
tenants that they would sign leases with me. I negotiated
leases. So when I did that, I went trying to find someone to
loan money to give me based upon the leases and based upon my
experience. I was very -- I was 26 years old, so I didn't have
a ton of experience, but I had some experience.
Q.
Did you get a loan?
A.
Yes.
Q.
From what kind of -- was it a bank or who gave you a loan?
What kind of person gave you a loan?
A.
A friend of mine whose family -- you know, whose was
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 12 of 258
13
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
opposite of mine. They did very well. And the father -- the
kid kept going to school. And he asked me, you know -- I mean,
I asked him, and he gave me the opportunity where his bank gave
me the loan. He signed on the loan. I mean, I had literally
close to maybe 2,500, 2,800 bucks. So he helped me as far as
signing the loan for me for the company.
Q.
So you buy the property. What did you do next with the
property? What did you do?
A.
I had to build it.
Q.
What were you building?
A.
Oh. Sorry. It was a -- it was a restaurant and real
estate where there's a parking lot. And if you -- in a
restaurant -- you need more spaces for restaurants. But I
realized that if I don't have a restaurant and I put regular
retail, I can build -- instead of 2,000 feet, I can build
10,000 feet.
So I went up there. I got a guy. His name is Pete
DeLeo. He was an engineer and a construction guy, worked at my
old company, and older than me, and I told him my vision, what
I wanted to do and -- build this company, and he said he's on
board.
Q.
So what did you and Pete DeLeo do to the Arby's?
A.
We went up there and -- I don't know if they still have
them, but there's like a Red Roof Inn. We stayed there and we
built the building. He showed me how to build the building,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 13 of 258
14
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
and I was his labor and he was the brains.
Q.
Did you have any other laborers there too to help?
A.
Yeah. He hired whoever he was supposed to hire. I had no
idea how to build anything at that particular moment in time.
Q.
So what did you build?
A.
We built a company called Only Diamonds, and there was like
a cellular company -- a cellular company.
Q.
The retail space for it?
A.
The retail space, yeah. But we had to build -- you know,
we built the walls and hired -- well, not me. But he hired an
electrician and all the other trades.
Q.
How did it work out in the end?
A.
It was grueling, but it was educational. But more
importantly, it was successful. And we built it in about, I
would say, a little less than 90 days. Worked day and night,
but we were the laborers because no one would work those many
hours. So that's what happened.
Q.
What was the outcome of the project from your perspective?
A.
It was -- it was great. I mean, it was successful and
that's what was able to start my business. At that particular
moment in time, it was like -- it was great.
Q.
You mentioned the store Diamonds. Is that a jewelry store?
A.
Yeah. It was a company called Helzberg Diamonds, and they
had a subsidiary.
Q.
So there's been testimony about Phil Wolman and WSG. So
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 14 of 258
15
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
could you just tell us how that started that you worked with
Phil Wolman and worked with WSG.
A.
There's something called the ICSC Convention in Las Vegas
for people in the shopping center business. And I went
there -- now that I could afford to go there, I was able to go
there and meet other people. And Mr. Wolman came to me and
spoke to me and said: "Hey, are you that kid that found this
piece of real estate? I was trying to buy that. How did you
do that?" I told him the story, and he said: "Why don't you
come work for me?"
Q.
And what was the -- what was his proposal and how did that
play out in terms of your --
A.
Well, at the time, he had For Eyes Optical, and I -- I was
like: "I really don't want to start working again for somebody
because, you know, I just want to build my own business." And
he said: "Great. I'll go with you. We become partners.
We'll start a company called WSG Development, but the catch is
that you have to work for me in the vice president of real
estate and construction and find those kind of locations for
the For Eyes store and expand the company across the United
States."
Q.
So could you explain what you were doing for For Eyes and
then what you were doing for WSG just very generally, please.
A.
For Eyes -- I went to about 15 different states, and I
worked day and night for three, four years. And I brought Pete
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 15 of 258
16
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
DeLeo with me because -- the construction guy, because he was
an engineer and they're very smart. And he did construction
and I found locations and built 48 new stores for For Eyes, and
almost doubled the company in three, four years.
And simultaneously, WSG Development was -- I still
bought the outparcels with Mr. Wolman's help because it's a
lot. And that's what we did. We bought the outparcels and put
For Eyes in as a tenant, we put Starbucks in as a tenant, made
great relationships, and it was successful. It was a lot of
traveling because it was in different parts of the country, but
it was great.
Q.
Now, in general -- with the way that you have done your
real estate business, do you generally buy -- build stores or
centers that are operating or do you do the construction?
A.
Like I said before, I'm really fascinated by -- always
fascinated by ground-up construction. So I only build
ground-up construction. A lot of developers just buy
buildings, but I'm not that type. I like to see the land, go
through the design, work with the tenants, and then come up
with a vision and build something -- well, Pete was the main
builder, but...
Q.
There's been a contention in this case that a developer
isn't doing construction because they just hire a general
contractor and they walk away.
MS. JIMENEZ: Objection to the form of the question,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 16 of 258
17
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Your Honor.
THE COURT: Overruled. I'll allow it.
BY MR. ETRA:
Q.
Is that correct with respect to at least your development
business?
A.
I'm sorry. I didn't understand.
Q.
Sure. I'll start again. With respect to your development
business, there's -- do you just hire the general contractor
and not consider yourself a construction company? How do you
see yourself in terms of that?
A.
I know what most people do. That's not -- based upon how I
learned with Pete building, I was always taught by him that if
you have a great superintendent, project manager who is on your
jobsite, you can go -- and you know how much the steel costs,
you know how much the block costs, and you can figure how many
manpower you need. And that lesson taught me -- building it
myself with Pete, he taught me how to actually build a building
properly and efficiently and economically by putting good
people in place, but also doing the grunt work, doing the hard
work, and buying everything out. It's hard to do.
So we always -- from that day, I've always looked to
always either build it ourselves, self -- what's called
self-performing; you build it yourself. Or if you have a good
GC company partner, and you trust them, they can build it for
you as well. But you have to develop those relationships.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 17 of 258
18
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Well, I'm going to talk about the site -- you talked about
self-performance. That's when you build it yourself. What
about when you work with a GC? Do you just sort of walk away
or are you still really involved with the GC -- general
contractor? Excuse me.
A.
Well, you're always involved, but it's -- it depends on the
size of the project. If it's a large project, you have offices
there. If it's a very small project, like a 5,000-square-foot
building or a 10,000-square-foot building, you don't have an
office, but you have someone dealing with the project manager
or superintendent all the time.
Q.
What about the subs? Even when using a general contractor,
who brings the subcontractors and organizes them and picks
them?
A.
Are you saying like --
Q.
When you're not self-performing, when you're using a
general contractor, what role, if any, does your company have
with respect to organizing and picking the subs?
MS. JIMENEZ: Objection. Vague.
THE COURT: Sustained. Rephrase.
MR. ETRA: Sure.
BY MR. ETRA:
Q.
With respect to when you're not self-performing and there's
a general contractor, who picks the subcontractors?
MS. JIMENEZ: Okay. Same objection. No time frame.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 18 of 258
19
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Sustained. Rephrase.
All right. Let's narrow the question, please.
BY MR. ETRA:
Q.
Well, why don't we go to Orlando and the construction of
Toys "R" Us and DICK'S. Did you use a general contractor for
that?
A.
We did.
Q.
Who picked the subcontractors?
A.
When we built the Toys and the DICK'S, I had -- the project
executive in Orlando he did the vertical construction of the
Toys, Babies "R" Us Superstore, and also the DICK'S; however,
we self-performed all the site work because we had a
superintendent that worked with us and he was doing the site
work, and the vertical construction was done by a third-party
general contractor.
Q.
Let me cover some of those terms, "vertical construction,"
"site work." Could you explain the difference between vertical
and horizontal construction.
A.
In horizontal site work, it's basically the infrastructure.
It's the -- it's when you go to -- like you see a parking lot
anywhere, you see everything underneath it, the earthwork, and
all the stormwater -- all the sewer systems, the stormwater
draining system, all the FPL lines, all that stuff is what we
call the site work. The paving, the grading, that's site work,
horizontal. And vertical is when you start going vertical, in
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 19 of 258
20
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the air.
Q.
You mentioned the term "project executive." What is a
project executive in your business?
A.
A project executive in this business -- there's a developer
and then there's a project executive. He's the one who
coordinates the different parts of the project team when you're
building something, from a project accountant to a
superintendent and other people.
Q.
Okay. There's been some testimony about different
companies. Let me just ask you generally -- you know, HM-UP
and HM Management, HM Four, and HM Eight, and some other
companies. Just generally speaking, was that your idea to set
up the companies the way you set them up?
A.
No.
Q.
Where did that come from?
A.
My initial attorney was in Philadelphia because Phil Wolman
introduced me to a guy by the name of Neal Cupersmith.
Actually, Neal was here. And the attorney in Philadelphia and
Neal Cupersmith, they set up -- when you buy real estate, they
are the ones that explained to me that you're supposed to
have -- everything is like its own business. It's a LLC, and
you put it into one company. And they are the ones who
explained that to me and they set all that stuff up.
Q.
Let's talk about Neal Cupersmith for a moment. Who are the
people at his firm that you dealt with?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 20 of 258
21
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
In what time frame?
Q.
Let's say the earlier time frame, before 2015.
A.
From 1996, when he started, when I was partners with Phil,
and I used Neal because he was his long-term accountant. So
from 1996 through about 2003, '04, it was mainly Neal. It was
mainly Neal because he was doing For Eyes and also the WSG
because he was on retainer for both companies on a monthly
basis. He's on a retainer, so he does it for both companies.
Q.
And after 2003?
A.
After 2003, we started getting into much -- in Colorado and
then Miami. We started getting bigger projects than the
smaller -- small shopping center, you know, 10,000-square-foot
buildings. And so Neal had a guy by the name of Arthur
Steiger. Arthur Steiger was like the accountant for real
estate. And that's -- Neal's not really a real estate guy, but
Arthur was an expert in real estate accounting.
Q.
Mr. Cupersmith testified, I think, that he only spoke to
you maybe a half hour a year or something along those lines.
Do you recall that general testimony?
MS. JIMENEZ: Objection to the form of the question.
THE COURT: Sustained. Rephrase.
BY MR. ETRA:
Q.
How often did you speak to Mr. Cupersmith?
A.
In what time period?
Q.
Well, say the time period through 2003.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 21 of 258
22
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
A lot.
Q.
Would you give some --
A.
I'm sorry.
Q.
That's okay. It's okay. It's just -- I'm following up.
Tax return, all right. Could you give some way of
measuring how frequently or how long your conversations were?
A.
Well, we were on the board of directors of For Eyes, so at
our monthly meetings for the board of directors. Also, we also
spoke probably every quarter, you know, every three months,
about different matters.
Q.
And then throughout your time period, who else would you
speak -- you would speak to Mr. Steiger as well?
A.
I mean, I've spoken to about seven different people in his
office, and -- depending on the activity of the business that
year.
Q.
Could you just explain why you're speaking -- from your
perspective as a businessperson, why you're speaking to the
accountants about the business activity. Why is that something
you felt you needed to do?
A.
Well, I didn't feel I needed to do anything. But that's
what he told me, that -- he's the one that told me that I need
to -- everything we do as far as -- if you're buying something,
or if you're refinancing something, you need to explain what
the project is, and -- you know, so he understands it. And so
I used to give him, you know, the details of it. He wanted to
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 22 of 258
23
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
know what the forecast was for the next year.
So it was basically what business -- because we had
just a small shopping center business. Then we did some
residential and office. So all different changes in the
business, he wanted to make sure he was aware of it so he
understood. I mean, I'm not an accountant so I couldn't tell
you what that means --
Q.
What about later on when you got to the big shopping
centers? Did you also have those discussions then?
A.
Yeah.
Q.
Mr. Cupersmith testified that he recalled you telling him
that HM Four had --
MS. JIMENEZ: Objection to the form of the question.
MR. ETRA: Can I --
THE COURT: Sustained. Rephrase.
BY MR. ETRA:
Q.
Did you have a discussion with Mr. Cupersmith about -- or
people -- well, let's start with Mr. Cupersmith. Did you have
a discussion with Mr. Cupersmith about HM Four's role or --
MS. JIMENEZ: Objection. Hearsay.
THE COURT: Overruled. I'll allow it.
THE WITNESS: Yes. Just like any other company.
Every LLC that's set up, there's a discussion about every LLC,
what's its role, what's its function. And so it's a
standard -- not just HM Four but every company that's set up.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 23 of 258
24
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
It's just you always tell your accountant what you're doing as
far as business so they can do whatever they do.
Q.
In the past six or seven years, who in your office dealt
mostly with Mr. Cupersmith's office?
A.
Six or seven years?
Q.
Yeah. Who in your office dealt mostly with
Mr. Cupersmith's office?
A.
I would say Addy Sosa, Jeanette Gonzalez, Jeff Graff,
Bernie Warner.
Q.
Okay. And what was -- let's focus on, say, Jeanette
Gonzalez. What was the business purpose for Jeanette Gonzalez
to be communicating with Mr. Cupersmith's office?
A.
Jeanette, she handles the -- she is -- as I've heard in
this trial, that she's the bookkeeper. I mean, she is a
bookkeeper and handles the QuickBooks. She handles all the
money, the checks, the processing of all that kind of stuff.
And so she speaks to him about -- him or actually another guy
named Alex Zaslow.
Q.
Who was her primary point of contact in the last three or
four years pre-COVID?
A.
Alex Zaslow.
Q.
And dealing with the -- not the big picture, but the
mechanics year to year of doing tax returns, who at your
company was working on that?
A.
Tax returns?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 24 of 258
25
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Yes.
A.
We don't do tax returns. The accountant does the tax
returns.
Q.
Right. But who in your company assisted the Cupersmith
firm on -- in preparing the tax returns?
A.
It depends. When Bernie Warner was there --
Q.
I mean in the last four or five years before COVID.
A.
What year are we in? Up until about 2018, Bernie Warner,
he would deal with his projects -- because he's a project
executive. So he would deal with his project in Miami. And
then in Orlando, Jeffrey Graff would deal with Jeanette
Gonzalez, and they would both work with Alex.
Q.
So in terms of all the -- let me just talk about this --
talk about whether there's an accounting department at your
company. In your mind, the way you use the term, has there
always been an accounting department at your company?
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained. Rephrase.
BY MR. ETRA:
Q.
Is there an accounting department at the HM companies?
A.
Yes.
Q.
And generally, last, say, maybe four years -- three or four
years before COVID, who was in the accounting department?
A.
Jeanette Gonzalez, and she used her daughter Vanessa
Gonzalez for some stuff. And Jeff Graff was there as far as
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 25 of 258
26
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
quasi. He was working on the development -- trying to work on
the development side, and then he would also be overseeing them
and -- he was a CPA, and so he would oversee them.
Q.
And was there -- what about the project executives? Do
they have a role in the accounting department or not? In
the -- the project executives in the different sites.
A.
Every project executive -- you don't have a project
executive if it's a small site. Right? If it's a bigger
project, you have a project executive with their team. So like
Orlando or Miami or other projects, we have a project
executive, they have a private accountant, and they do their
particular location, so they're involved with it. And then
after that, it goes to Miami and also the people in
Philadelphia.
Q.
So essentially, a project executive from outside Miami has
to work with the accounting people in Miami; is that right?
MS. JIMENEZ: Objection. Leading.
THE WITNESS: They don't really work with them --
THE COURT: I'll allow it.
THE WITNESS: -- but they do their own and then
they forward the information --
MS. JIMENEZ: Did she rule on the objection?
THE WITNESS: Oh. I'm sorry.
MR. ETRA: I didn't hear Your Honor's ruling.
THE COURT: I said: "I'll allow it."
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 26 of 258
27
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Thank you.
THE WITNESS: Sorry, Your Honor.
BY MR. ETRA:
Q.
That's fine. Let's continue, then.
There's been some discussion about Canyon Ranch. I
just want to get to the meat of it. When Lehman goes under --
MS. JIMENEZ: Objection to the form of the question.
THE COURT: Overruled at this point. You may
continue.
BY MR. ETRA:
Q.
When Lehman goes under, what happens at Canyon Ranch? What
happened -- excuse me -- at Canyon Ranch?
A.
Well, Lehman, the lender -- and they were also an equity
partner. And when Lehman -- Lehman Brothers went bankrupt.
And I was the manager of that entity, amongst a lot of other
entities. So when they went bankrupt, there was obviously a
problem for the world. But we weren't completed with the
construction, and so that was a problem at the time.
Q.
So what did you do when your funder, partner, went under?
A.
Well, Phil didn't go under, but Lehman Brothers went under.
Q.
That's what I meant.
A.
So I stepped in and I funded myself personally to finish
the project because I've never not finished a project in my
life, and it was a high-profile project. And you know, I
worked day and night, I sat on the jobsite, and started to run
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 27 of 258
28
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the project with the construction people.
Q.
How common is it in your industry to have that record of
never not completing a project?
A.
I can't tell you about the industry. People get named a
developer. And a lot of developers, when things get tough,
they run and they blame everybody else. But I don't, because I
went in, I always finished. Most of our projects have always
been pretty, you know, successful. But there are projects that
get -- there's problems. And I've stepped in every single time
myself and worked with my team and finished it. It's
everything. If you don't finish a project, then you're --
you're just tarnished forever. It's a bad reputation. And
that's what I do.
Q.
There's been some reference to bankruptcies. Did you ever,
Mr. Sheppard, ever file bankruptcy?
A.
I've never filed bankruptcy.
Q.
Did your HM -- your companies file bankruptcy?
A.
HM companies have never filed bankruptcy.
Q.
Any companies that you were ever involved with filed
bankruptcy?
A.
Well, involved with, yeah. I was involved with Lehman
Brothers, and we had a lot of assets, even though I was the
majority owner. And they were the equity partner, but they
were also the lender too. So when they went bankrupt, the
whole thing went bankrupt. So yes, I had to deal with
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 28 of 258
29
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
bankruptcies.
It was -- it's a very difficult situation because you
don't control the bankruptcy. You're not the person in the
bankruptcy. It's the entity with -- you know, everyone
understands the Lehman bankruptcy was...
Q.
I want to understand your area of your knowledge and focus
on real estate. In terms of the world of real estate, what is
the thing that you do? How did you refer to that?
A.
What I do?
Q.
Yeah. What is your area of expertise or experience in the
world of real estate?
A.
I'm the guy who doesn't sit still a lot. I'm always kind
of moving and active.
MS. JIMENEZ: Objection. This is non-responsive.
THE COURT: Overruled.
BY MR. ETRA:
Q.
What -- in terms of the things that your companies do, how
would you describe what your companies do in real estate in
terms --
A.
It's my personality. I'm very active. And I'm the person
who -- I visualize things. I see things. Like I told you from
the beginning, I always was fascinated by how does a building
get built, who could own a building. I just thought it was
very cool, you know? And I love to look at something that
people don't see, and I figure out what you're supposed to do.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 29 of 258
30
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
So I'm more of the design visionary. I love going to
a construction site and sitting with people and talking to them
and, you know -- and I love just the building of a building. I
like concrete tangible things that get built over time.
Q.
Let's focus on individual tasks. Who finds the land for a
development that you do?
A.
My expertise. And why I became partners with Mr. Wolman is
because I'm very good at the research with regards to the
acquisition of a property and identifying the markets. So you
have to identify the market, and that's what I do. I deal with
national companies. We build in places like -- you know, like
the Dadeland Mall, or the Aventura Mall, or you know, the
Kohl's -- regional places. Where you have your local places,
we specialize in regional places. So you have to go all across
the country.
So I'm very good at understanding all parts of the
country, the locations. So I research it. I know where young
families are moving, and I do all that kind of stuff, and I
know what the tenants want. There's certain criterias when you
go to a regular store. Right? When you go to a Starbucks or
you go to a Walmart, there's certain specifics for their
customers. So I understand all that, and that's what I focus
on.
And then the actual talking to a landowner, a
person -- they may not want to sell. They may sell. You try
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 30 of 258
31
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to, you know, work on something that's satisfactory, and that's
what I do.
Q.
What about working with the national tenants? Who in your
organization does that?
A.
I do.
Q.
And what does that involve very generally, in terms of
putting together a development?
A.
National tenants have very -- a lot of them are public
companies. So you have to. When you say something, it has to
mean something. If you have to -- if you say you're going to
deliver something, you have to deliver. And so I work with
them to understand what markets they're relocating the store,
or if they're building a new store.
And I take that and -- that communication, and I deal
with, you know, some very -- I deal with Walmart, I deal with
Starbucks, I deal with Men's Wearhouse, a lot of different
companies. And that's what -- we developed the relationship
over the years, a lot of years of traveling around the country
every single day. I've traveled a lot doing this.
Q.
What about financing for these projects? Who's involved
with that?
A.
In what respect? I mean --
Q.
What is your role?
A.
My role? My role is developing relationships, cultivating
them with -- a lot of them have been banks in New York and some
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 31 of 258
32
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
local banks. Not many local banks, but a lot of larger banks
in New York or in a local community. There's always a
community bank that I've dealt with.
So I'm involved with the -- talking to them and
presenting the loan package on every transaction, whether it be
a construction loan, development loan, or a permanent
financing.
Q.
And what about taking from a -- a dirt or land to what
was -- what it's going to be? Who does the vision for that?
A.
Well, I mean, that's what my expertise was. But obviously,
I have other people. You have a team. You have other people
that work with you. So from -- identifying a site. Then once
you've identified it, you have to buy it. Then you call the
lawyer. The lawyer sets up an LLC. Tell the accountant, the
accountant deals with the accounting stuff. And then that's
how I do that.
And then, once you buy the site, right -- and part of
buying is that you negotiate a -- like, I negotiate a lease
with the tenant because I want to make sure -- I don't want to
make a risk. I'm very conservative like that. I want to make
sure I have a tenant's lease first, or if it's an office
building, have commitments from office tenants or whatever.
So then after that, I go ahead and we acquire it, and
you have -- and then you have an architect, you have an
engineer, you have a surveyor.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 32 of 258
33
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
What is your role with those folks?
A.
I just -- myself or someone with me -- but I've taught
people how to do it. You go and you sit with them. You give
them your vision. You tell them what you want them to do. And
they -- they're professionals. I rely on them to -- they
design what I think and they go and do that.
Q.
What about budgeting and making sure it's economically
feasible? Do you have a role in that?
A.
I have a role because I understand enough to be dangerous,
I guess. But I rely on really a quality project manager,
superintendent. Some guys really understand like the nuts and
bolts of construction. I'm not going to -- those guys are --
they're -- they're a -- they're a rare kind. They really
understand it. So I rely on them to give me numbers.
But I know inside -- I know how much block, steel,
what things cost pretty much. And -- but they give me numbers,
budgets. Then I get it. I look at it. And the project
executive also is obviously involved.
Q.
How about the process of government approvals, zoning
permitting, and all that? Are you involved in that?
A.
Yes. I go ahead and I -- I try to figure out what the
local codes are, and I understand what I want to do and what
would be the -- to maximize profit and density, and just to
make sure that the actual deal works.
And once I do that, then I usually have a zoning
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 33 of 258
34
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
attorney. Then the zoning attorney goes and they deal with the
county. And then people in my office also go deal with the
county. They have to be there to meet with the county. I
always tell my people: "You have to go" -- I know it's the
Internet in this world today, but I say: "You have to
physically go and speak to people face to face so they
understand what you're saying and they know you. But you can't
go emailing and texting people all the time. Just go there,"
and I tell them to do that.
Q.
Do you work on one deal at a time?
A.
No.
Q.
Are they all in the same stage at the same time?
A.
No. We're unique because we're limited in at least the
small shopping center. But you're limited because there's
only -- when you're building in regional areas, you can only go
to so many areas. You can't -- so you have to go to other
cities. So you have the one project being built, one project
being designed, one project being bought, one project being
turned over to the property management. There's all different
parts of it.
Q.
What are your work hours?
MS. JIMENEZ: Yes. Time frame, please.
THE COURT: Sustained.
BY MR. ETRA:
Q.
How about in the last -- from 2017 through the beginning of
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 34 of 258
35
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
COVID?
A.
I work a lot. I mean...
Q.
Do you have set hours?
A.
No, I don't. I'm constantly on the phone. I'm constantly
working. I walk a lot on the phone, which my family -- it
drives my family nuts. I walk in circles.
Q.
Okay. I want to focus on other aspects of your business.
We talked about the accounting department. Are there other
people who handle administrative functions?
A.
I'm sorry?
Q.
Let me say it again. Who handles the bookkeeping in your
company?
MS. JIMENEZ: Objection. Could we have a time frame,
please?
THE COURT: Sustained.
BY MR. ETRA:
Q.
Let's go from 2017 to COVID -- to the beginning of --
before COVID -- to before COVID.
A.
The actual bookkeeping, like do the entry thing?
Q.
Yeah.
A.
Jeanette Gonzalez.
Q.
What is your role in bookkeeping?
A.
I have zero role in bookkeeping.
Q.
In the same time period, who handles the payroll? The time
period being 2017 until before COVID.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 35 of 258
36
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Jeanette Gonzalez.
Q.
And same time period, who handled human resources, hiring?
A.
Well, it depends if it's in the office or it's at a
specific jobsite.
Q.
What if it's in the office?
A.
If it's in the office, it would be Jeanette.
Q.
And what if it was at a jobsite?
A.
It would be either the project manager, superintendent, or
the project executive.
Q.
What was your role in those years for payroll and human
resources?
A.
My role?
Q.
Yeah. 2017 to before COVID.
A.
My role is -- I have no role, except for the fact that if
money goes into the payroll account they call me to tell me
that they're putting money into the payroll account.
Q.
What about things like paying insurance? Whose job was
that?
A.
Are you talking about the same time frame?
Q.
Yeah. 2017 to before COVID.
A.
Jeanette. And also, Jeff Graff was involved with a lot of
health insurance because of certain requirements he needed for
his wife.
Q.
What about paying invoices of suppliers or bills,
utilities, whatever? Who was in charge of that from 2017 until
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 36 of 258
37
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
before COVID?
A.
The project executive, project accountant, and then that
would go transfer to Jeanette in the office, and also I believe
Vanessa. And there's somebody else I can't think of right this
second. So there would be a process that goes with that.
Q.
And earlier in time, who were some of the people -- if you
recall any names -- who were in charge of those areas?
A.
Well, originally from 1996 through 2000 was -- in the For
Eyes office, we had a guy named John Puckle and Bob Kitchen.
One was the CFO and the other guy was in charge of that stuff.
And then, after that, Jeff Graff came in 2000. He was the CFO,
and then he had some people that worked with him.
And then when Jeff Graff decided that he wanted to be
in the development side, in 2006 around, I think, then a guy by
the name of Steve Faloso -- Falosi or Faloso [phonetic
listings], he became the CFO after that. Then he had a project
team, Denise Soriano, Addy Sosa, Joanne Puckett, and Dagny
something, and some other people.
And then, after that, Denise left to run a project for
another company in town, a high-rise developer. And then Addy
Sosa, who worked under her, she was the person -- Addy. And
then she had a couple people, including Jeanette. And then
Addy ended up leaving at some point in 2016, and then Jeanette
took over for Addy. And then Jeanette was there with I want to
say Vanessa and a lady named Barbara. And Barbara was there
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 37 of 258
38
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
and --
MS. JIMENEZ: Objection. Narrative. Move to strike.
No time frame.
THE COURT: There was a time -- overruled.
THE WITNESS: Okay. That was -- again, that was
around 2016. And then, about 2017, '18 -- then Addy left. And
from that period on until today, Jeanette Gonzalez.
BY MR. ETRA:
Q.
Okay. Do you recall Mr. Graff's testimony that Eric
Sheppard, you, decided who was a 1099 and who was a W-2?
A.
I do.
Q.
Is that correct?
A.
No.
Q.
What was -- what was the level of your focus on who's a
1099 versus W-2?
A.
I never like thought about it. I've never -- that's never
been in my wheelhouse about that kind of stuff.
Q.
Why?
A.
It's not my job. I focus on what I do. I'm on -- there's
this side of the house and there's that side of the house. I
look at employees as employees, and I don't get involved with
how they're identified and stuff like that.
Q.
When you say you look at employees as employees, what do
you mean?
A.
You know, we're not a big corporation. We're just a
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 38 of 258
39
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
regular company and they're employees. I mean, if they're
working for myself, or working with the project, or -- everyone
works together, you know. And they work -- you're paying
somebody, and how they get paid, or what they get paid, they're
showing up every day, whether it's on a jobsite, whether it's
here or there, and that's what they are. They're -- to me,
they're workers. They're people. I don't get involved with
how they fill out the paperwork or how they -- that kind of
stuff.
Q.
How do you refer to someone -- well, let me restate that.
In your world, do you ever use the term "independent
contractor"?
A.
I do.
Q.
What does an independent contractor refer to from your
perspective?
A.
From my perspective is on the construction side of my
business. When someone tells me an independent contractor, I
look at them as a Carrier air-conditioning, a electrical
company. They're third-party companies. They have their own
workers. So to me -- that, to me, is like an independent
contractor. You pay them, and if there's a problem on the job,
talk to the superintendent. Superintendent goes, talks to the
owner of their company, and they talk to the workers.
That's how I view my -- I mean, maybe -- I'm not
brilliant, but -- maybe not understanding the world, but that's
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 39 of 258
40
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
how I've always looked at it. As an independent contractor,
we're paying you one check. I don't tell you what to do with
your workers. You do whatever you want. But just make sure
you have a contract and you deliver the product on schedule, on
time.
Q.
Over the course of your years doing what you do, have you
had anyone bringing you papers to sign?
A.
Mr. Graff said thousands and thousands. Yes. A lot.
Q.
You agree with that part of Mr. Graff's testimony?
A.
That part, I agree with his testimony.
Q.
And did Mr. Graff ever bring you things like loan documents
to sign?
A.
Yeah. From time to time.
Q.
And when he brought them to you, do you sit and review them
or no?
A.
No.
Q.
Why not?
A.
Because typically, when you have loan documents, you have
lawyers and you have other people look at it. So by the time
you're getting to sign the loan document, it's already been 60
days that they've already negotiated between the bank and the
lawyers, and that's what lawyers do. I mean, I'm not a lawyer,
but that's what they do. And through the process I'm involved
by -- they ask me business questions, but I'm not a lawyer. I
can't talk about legal stuff or accounting stuff. I know the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 40 of 258
41
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
business stuff.
Q.
What about the accounting department, say, Addy Sosa or
Jeanette Gonzalez? Did they ever bring you papers to sign?
A.
Yes.
Q.
And when that happens, do you review those papers?
A.
I don't understand. Say again.
Q.
When they bring the papers to you, do you sit and read them
before you sign them?
A.
It depends what they're bringing me.
Q.
What if it's something about accounting or bookkeeping or
payroll?
A.
If it's anything to do with accounting stuff, I'm relying
on them to say: "Okay. This is true and correct," and I sign
it. And normally, I only sign stuff once a week or maybe once
every two weeks. So I'm not in the office. So when they come
to me, they bring me a stack of papers, I go through it, and
sign them, and that's it.
Q.
Is there like a tab for a signature?
A.
Yes.
Q.
Why do you think -- do you think that's okay to do? Did
you feel like you were doing -- that that was reasonable as a
businessperson to rely on your accounting people?
A.
Well, rely on them if they've been there for some time. I
mean, if the person just started that day, I'm not going to
rely on them. But if someone's been there for a long period of
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 41 of 258
42
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
time, I would rely on them. But not just a person that just
started that I don't really know yet. So...
Q.
Let's jump ahead and focus on the 941s in this case, the
941, 940s, and RT-6s that we've seen in this case. Can we
focus on that for a second?
A.
Sure.
Q.
Do you have a memory of ever signing any of those
documents?
A.
I do not.
Q.
If they were given to you by Jeanette Gonzalez or Jeff
Vasilas, would you have signed them?
A.
Yes.
Q.
Would've reviewed them first?
A.
No.
Q.
Why not?
A.
Like I said, people that -- people that I know, that I
trust, I rely on. If it's not in my wheelhouse or my -- my
world, I'm relying on them. Because, I mean, I wouldn't even
know what to look for anyways. So that's their job.
Q.
If you were told: "Hey, these are 941s. They're connected
to W-2s" --
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
At the time in, let's say, the beginning -- well, in COVID,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 42 of 258
43
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
did you know what a -- that a 941 was connected to W-2s?
A.
No.
Q.
Did you know if you had W-2s versus 1099s in your company?
A.
I never -- I never asked that question. It's not a topic
of conversation.
Q.
If you were told that this document that you're being asked
to sign was fraudulent, would you have signed it?
A.
No.
Q.
What if it meant you couldn't get a loan?
A.
Then I would go a different source, a different way. I
would either fund myself or go to a different -- I would not
get a loan if I didn't qualify for a loan.
MR. ETRA: I'd like to put up in evidence photographs
that are Q-1.
Let me just go quickly through each of them and then
I'll ask the witness questions. Could we just go through --
just click on each of them.
BY MR. ETRA:
Q.
Do you recognize these photos?
A.
I do.
Q.
What are we looking at?
A.
That was --
Q.
Generally, what are we looking at in all the photos?
A.
An office. My office at 12000 Biscayne Boulevard, Suite
508.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 43 of 258
44
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
When did you have that office?
A.
From -- I don't know the exact dates but until some time in
2020. Started probably 2017, '18, around there, maybe. I
don't know.
Q.
The state of the office, in terms of the papers sitting
around on desks and on the floors and whatnot, was that typical
or not typical of your office and conference room?
A.
It was pretty typical.
Q.
There was a question about whether these pictures were
staged for this litigation --
MS. JIMENEZ: Objection to the form of the question.
THE COURT: Sustained. Rephrase.
BY MR. ETRA:
Q.
Were these pictures staged for this litigation for this
case?
A.
No.
Q.
Did you have -- after you were arrested, did you still have
your office at that point?
A.
I was out of my office in 2020. So...
Q.
Before your arrest?
A.
Yeah. I mean, just...
MR. ETRA: You could take this down.
BY MR. ETRA:
Q.
I want to talk about Mr. Graff. What were the
circumstances of his hiring?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 44 of 258
45
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
He was working at Braman Automotive in accounting,
assisting -- I don't know, whatever, assistant something to the
CFO. And he -- you know, I've known him for 40 years. And he
came to me and asked me, he said: "I would love to get out of
Braman right now. There's not a lot of upward mobility and I
want to do something new. And I'd like to be a CFO and also be
in the real estate industry because I want to learn the real
estate industry." And I said: "Okay." It was good timing.
Q.
Why was it good timing for you?
A.
For me, I think it was around, I want to say, 2000 maybe.
And my role at For Eyes in 1996 -- 5, whatever, through 2000,
WSG Development Company -- the development company grew very
fast, and I reduced my role at For Eyes at that point. And I
was relying only on the For Eyes accounting people and all
that. So I wanted to have my own accounting people because we
were changing. And that was around 2000. I said: "It's good
timing," and I said: "Okay. If you want to do this, that
would be great." And I've known him my whole life and I trust
him and, you know, we've been through a lot together, and I was
like: "Okay."
Q.
A lot together growing up.
A.
Yeah. You know, childhood friends.
Q.
I'm not asking for details.
A.
Yeah.
Q.
What were the circumstances of Mr. Graff becoming -- going
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 45 of 258
46
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
from a W-2 to a 1099?
A.
Well, I heard him testify. So you know, it refreshed my
memory. Prior to that, I didn't even really remember anything,
but --
Q.
What is your refreshed memory of the circumstances of him
going from a W-2 to 1099?
A.
That was around 2008, '09. And frankly, Lehman Brothers
was going bankrupt, they had all these projects, and it was an
economic meltdown in the world. And I remember him -- I do
remember him coming up to me and talking to me about it, and he
says: "Hey, listen, do you mind if I do this to a 1099?" And
I said: "Look, do whatever you want. You're the CPA. You're
an accountant. I don't -- I got other things to deal with
right now. Whatever you feel. If that's what you want to do
for your benefit, great."
Q.
So did you tell him -- was it your idea for him to be a
1099?
A.
No. That was far from reality. That's not -- no.
Q.
Was there any reason that you at that time would want to
pick out Mr. Graff and say: "You need to be a 1099"? Any
business reason at the time?
A.
Any business reason? Just, it was -- I never -- first of
all, him or anybody, I've never gotten involved with that. I
just -- he's a CPA. What am I going to -- the guy's an
accountant. That's like way much more brain power than myself.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 46 of 258
47
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
"So you do what you do. Tell me what you want to do. Great.
That's what you think is great. You want your tax benefits.
Go do it."
What were the circumstances of him going from being --
going into the development side? He wanted to be a developer,
and two guys I brought in around 1997, '98, this guy Jim Leach
and Eric Gordon, they were developers and they worked with me.
They were just like me, started with nothing and I taught them
the business and they went on the road. And they decided to
leave after they worked for a while, and they wanted to start
their own company, which was great. And I said: "Okay," and
that's when Jeff Graff said: "Hey, can I jump on this side and
like take their positions?"
Q.
And was that okay from your perspective for him to start
getting into development?
A.
Yeah. I mean, I had no problem because his development was
the small shopping center business. I was concentrated on
other projects at the time to expand the company. And you
know, he was my childhood friend and, you know, I had no
problem with it.
Q.
Do you recall his testimony that he brought --
MS. JIMENEZ: Objection to the form of the question.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Did Mr. Graff bring in the WSG Arundel deal?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 47 of 258
48
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Objection. Same objection.
THE COURT: Overruled.
THE WITNESS: No.
BY MR. ETRA:
Q.
Who brought in the Arundel deal?
A.
The tenant was mine because I had relationships, but it was
Jim Leach from 2003, something like that.
Q.
Do you recognize the document that's put in front of you?
It's not in evidence, so please just answer generally.
A.
Yes, I do.
Q.
Generally, what is it?
A.
It's a 2015 tax return for WSG Arundel, LLC.
Q.
Is that --
MS. JIMENEZ: Objection. Relevance.
THE COURT: Overruled.
BY MR. ETRA:
Q.
Was that one of your companies?
A.
Yes.
MR. ETRA: Your Honor, the Defense offers Exhibit X-1
as a business record.
MS. JIMENEZ: Objection. What's the relevance?
THE COURT: Is that the basis of the objection?
MS. JIMENEZ: Yes.
THE COURT: On grounds of relevance, Ms. Jimenez?
MS. JIMENEZ: We haven't seen this.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 48 of 258
49
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. Let's look at it, and let the
Court know what the basis of the objection is.
MS. WEINTRAUB: It was produced over the weekend.
MR. ETRA: It was produced.
THE COURT: Let's look at the exhibit, X-1, and advise
the Court what objections you have.
MS. MARTINEZ: Could he flip through the pages? This
may have been produced at midnight on Sunday night, but I
haven't looked at it.
(Pause in proceedings.)
MS. JIMENEZ: It's 2015, and relevance as to this
company as to the time frame.
THE COURT: The objection is overruled. X-1 will be
admitted into evidence.
(Defendant's Exhibit X-1 received into evidence.)
BY MR. ETRA:
Q.
Showing you on the screen the cover page and the first page
of WSG Arundel. Do you see that?
A.
I do.
MR. ETRA: Highlight Section E, "Date Business
Started," right next to the top.
BY MR. ETRA:
Q.
While we're waiting, why don't you talk about -- what does
it say on Date Business Started?
A.
September 6th -- well, it says: "'02," but 2002, I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 49 of 258
50
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
imagine.
Q.
What does that say about when the deal was first found, for
lack of a better term?
A.
Well, like I said, every deal is set up into a separate LLC
that stands on its own. And when you acquire the property you
set up with the government like the identification number, the
EIN number, and -- so you know when the business starts, and
that's when you start the process of that company.
Q.
So when was this deal first located or started?
A.
It was acquired in '02.
Q.
And when did Mr. Graff start looking for properties to
develop?
A.
In 2006.
Q.
Okay. What about the other deals -- and then -- but then
did you offer him -- what about the other deals, Hanover and
Kansas City? Are they other deals that you got him involved
in --
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
What other deals you got him involved in initially -- well,
sorry. Let me start over again.
Did you give Mr. Graff any percentage interest in this
project?
A.
Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 50 of 258
51
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
How much?
A.
I believe -- whatever Mr. Gordon and Mr. Leach had, the
10 percent each, I gave -- when they left, I gave him their
10 percent.
Q.
Did you do that for any other deals?
A.
Yes.
Q.
Which ones?
A.
WSG Kansas City, which is a project I built in Kansas City.
And then a project in Hanover, Maryland, WSG Hanover. One in
Oklahoma, WSG Oklahoma. I don't know the name -- Quail
Springs, WSG Quail Springs, LLC.
Q.
And did -- did Mr. Graff bring in any of those deals?
A.
No.
Q.
Did Mr. Graff bring in any deals that you worked on -- that
your companies worked on?
A.
To my -- best of my knowledge, I don't believe he brought
one develop -- ground-up development deal.
Q.
What hours did Mr. Graff keep?
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Did Mr. Graff go on the road, like you, Jim Leach, and
Mr. Gordon?
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 51 of 258
52
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Generally speaking, where was Mr. Graff -- where was he
working most of the time?
MS. JIMENEZ: Objection. Time frame.
THE COURT: All right. Let's give a time frame,
please.
BY MR. ETRA:
Q.
Sure. Let's start with 2006 to 2010.
A.
He was working in Miami at the different Miami offices.
Q.
What about 2010 to 2015?
A.
I'm sorry. 2000 what?
Q.
2010 to 2015.
MR. ETRA: Sorry to raise my voice, Your Honor.
THE WITNESS: He was working at the office building on
Miami Beach. And then the office building -- later, in like
2015 through '20 or whatever, in North Miami at 1200 Biscayne
Boulevard -- or 12000 Biscayne Boulevard. Sorry.
BY MR. ETRA:
Q.
What was the -- did Mr. Graff, even after he started doing
development -- did he still play a role in the accounting or
the back office?
A.
Yes. He was the -- he was the glue, basically. And when
people had questions -- he wouldn't do the daily work of
accounting. He would just be there as like a encyclopedia -- I
guess there are no more encyclopedias, I guess. What are
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 52 of 258
53
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
they -- the Google. He'd be the guy who would talk about -- I
mean, explaining to the people in accounting, you know, are you
doing this right, that right. He'd be there on one side. But
he'd also be very involved with the accounting banks,
reconciliations for year-ends, for tenants and banks. He would
do that himself because he had the ability, where they didn't
have that ability.
MR. ETRA: Putting up only for the witness Exhibit
M-43, M, as in Mary, 43.
BY MR. ETRA:
Q.
Mr. Sheppard, do you recognize the document in front of you
as M-43 -- I'm sorry -- which is M-43?
A.
I do.
Q.
Is that an email from you to Mr. Graff and Ms. Gonzalez as
part of your business?
A.
It is.
Q.
And was it part of your business practice to email those
individuals about the subject matter in the email?
A.
Would I usually email them?
Q.
Was the -- the subject matter, was this correspondence with
them part of your business practice?
A.
Well, I would correspond with them. I wouldn't usually
write emails about incoming expenses, but...
MR. ETRA: Your Honor, the Defense offers M, as in
Mary, 43 as a business record.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 53 of 258
54
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Well, I don't object to it as a
statement of the Defendant. I don't know if it's a business
record.
THE COURT: All right. Without objection admitted
into evidence.
(Defendant's Exhibit M-43 received into evidence.)
MR. ETRA: Okay. Could I publish it, please?
THE COURT: You may.
BY MR. ETRA:
Q.
So here now we're in March 22 of 2020. Do you see that?
A.
I do.
Q.
Okay. And I want to focus on the second paragraph -- well,
first paragraph you say: "You've been asking for
reconciliations and incoming expenses for 2019 for Flagler and
Orlando." Do you see that?
A.
I do.
Q.
Did you request those of both individuals, Ms. Gonzalez and
Mr. Graff?
A.
I did.
Q.
Why were you including Mr. Graff on this?
A.
Because he handles the reconciliations of incoming
expenses, and Jeanette's also involved, but that's more in
his -- in his department. I mean, not department, but his
scope of work that he was doing.
Q.
And second paragraph you say: "On both properties, the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 54 of 258
55
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
lender has asked multiple times for us to provide the 2019
income and expense statements." What is that issue? Why is it
part of the business to provide a lender this kind of
information?
A.
Because -- the loans here were a little bit different.
They were called securitizations. So a little bit different
than a normal bank, and there's requirements because you have
to provide year-end to the bank -- well, any bank you have to
provide year-end. But every quarter they weren't complete. So
I'm saying: "Look, you're late. This has to be given to
these -- the lenders. It's -- otherwise you're in default of
your lease agreement -- your loan agreement."
Q.
And this, then, continuing, you say: "Please forward to me
so I can review." Was it part of your business to review this
type of information?
A.
It is.
Q.
Why?
A.
Well, they prepare it, and then I look at it and -- because
that's what I do. I want to make sure that -- when you're
dealing with banks that you make sure that -- I have to see
what they're doing. I mean, I want to see the numbers to make
sure that they're accurate with the tenants' rents and the
expenses, and make sure it's within the budget. And if it's
not within the budget, there's a variance. So they prepare it,
because that's what they do, and they have the data and the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 55 of 258
56
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
information, and so I have to be involved with that.
Q.
And then the paragraph further down that's highlighted, you
say: "I understand, Jeanette, you have the information in your
computer and Jeff sits with you to go over." Do you see that?
A.
Yes.
Q.
Was that your understanding at the time?
A.
This is my understanding all the time. I just -- listen, I
was a little frustrated. That's why I wrote it. I usually
don't write emails. So I very rarely write that, but I usually
say it. And then I wasn't getting the information. And so I'm
telling them: "Guys, you do there -- you sit there together.
I need you to give me the actual information because it's
important."
Q.
Okay. And then you say: "As a management company, we are
supposed to follow leases, loan documents, and any REAs in
order to manage the assets properly." Do you see that?
A.
Yes, I do.
Q.
What are you referring to when you say: "The REA"?
A.
REA is a real estate agreement.
Q.
What is the basic business function of an REA?
A.
The REA is in larger properties. It's basically the
person -- a company that does the rules and regulations and
they are responsible for all the common area maintenance and to
make sure it's maintained properly in a first-class manner.
And it's very important with national tenants and for a lender
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 56 of 258
57
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
that you have the REA in place, so -- if there's multiple
owners on a property, someone has to be the referee and make
the rules and regulations.
Q.
And if we can jump ahead, for Orlando, the Alafaya project,
initially who was the -- what company was the developer which
had the responsibility on the REA?
A.
Initially?
Q.
Yes.
A.
HM Eight, LLC.
Q.
And was there a change at some point?
A.
Yes.
Q.
Approximately, when was there a change?
A.
2014, I think, around there.
Q.
And what entity became the -- essentially acting as the
developer under the REA?
A.
Well, they stepped into developer role as authority. And
that was HM Four, LLC.
Q.
And did that remain so through --
A.
Yes.
Q.
-- till today? Well, at least through COVID?
There's been some testimony or questions that if
something happens -- if someone signs something at your company
then --
MS. JIMENEZ: Objection to the form of the question.
THE COURT: Sustained.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 57 of 258
58
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Is it the case that if someone signs something at your
companies, then you, Eric Sheppard --
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Do you personally authorize or approve everything that's
signed at your companies?
A.
Everything?
Q.
Everything.
A.
Not that, no.
Q.
Can you think of any specific examples with respect to the
Orlando property pre-COVID where you didn't -- someone signed
something that you didn't approve?
A.
Yes.
Q.
What is that example or any example?
A.
There was a guy named Scott Fish and he was the project
executive. And he was running the project at -- not just that
Orlando project, but the two other buildings they built, and he
signed a lot of documents that were just wrong.
Q.
What was he doing?
A.
He was stealing money.
Q.
So what did you do about it?
A.
We investigated it, and Orange County told us that they
were sending rebate checks to his place somewhere in Tennessee.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 58 of 258
59
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
So HM Four, LLC filed a lawsuit against him and his companies
called UP Development, and we sued him in Orlando for what he
was doing.
Q.
You said his company was UP Development. Was his company
HM-UP or it was the UP?
A.
It was the "UP." He's from a place called, I guess, the
Upper Peninsula maybe, in Michigan maybe -- Upper Peninsula,
Michigan, so he calls it UP Development. Good guy. He's a
hardworking guy. He was a very hardworking guy, but he --
Q.
As a -- doing the construction, how was he?
A.
He's great.
Q.
But there was a problem?
A.
Not during construction.
Q.
Okay. But the problem you described later?
A.
Oh. When we finished -- when he finished the Toys "R" Us
and DICK'S Sporting Goods in 2012, from 2012 to 2014, just --
we couldn't get the books and records because, again, each
project, they control their own books and records, whatever
projects they're at. We couldn't get the books and records.
We couldn't get the bank statements. We couldn't get anything.
And then there was no money coming in, and it was very strange.
So --
Q.
How does that happen that that happens under your watch?
A.
Well, I guess you can phrase it my watch. But if you have
projects in different states, and you have people that are
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 59 of 258
60
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
doing things, like, you can say that I can only be responsible
for so much. I mean, I'm responsible for everything,
obviously, clearly, but -- as the owner. But I can't
micromanage every single person, what they're doing, and I
mean, yes, things happen. I can't go to 10 different states
and figure out -- or if there's three big projects, I don't
know every nickel that goes into the project except for what I
get on a report.
I mean, I let people -- I let people go into place,
and I trust them, rely on them, and I hope -- sometimes you
have a lot of good people -- you have to have a lot of good
people, and sometimes you have some bad people. And you just
hope that, you know, they do the right thing. That's all.
Q.
Did you try to put guardrails of protections after what
happened with Mr. Fish?
A.
I don't understand the --
Q.
Sorry. Did you ask anyone to watch over things -- in your
organization that you trusted to watch over things after what
happened with Mr. Fish?
A.
Yes.
Q.
Who was that?
A.
Jeff Graff and then Joe Beirne.
Q.
And when did -- and what happened in COVID? Did you have
Mr. Graff available in COVID?
A.
No. He left. Soon as COVID started, he ran -- he left.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 60 of 258
61
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Okay. And who -- when we get to the COVID period, who was
there -- strike that.
All right. Let's start the -- get into the chronology
and the development of the Orlando project. When did that
first begin?
A.
What do you mean? What part?
Q.
Just the beginning. Just put a time frame from the very
beginning of the Orlando project.
A.
I owned a property in Coral Springs. And I sold in 2004,
2005. And I sold the property in Coral Springs. And it's
called a 1031 exchange. You buy the property -- I mean sell
the property and you exchange into a different property, which
I did, which is in Orlando, this property.
Q.
What was the concept, the vision, for this property that
became Alafaya Trails?
A.
Well, the vision was -- it was a little bit risky because
there was no approvals and it was a swampland. It was what
they call a conservation easement. It was in the middle of --
near the University of Central Florida, and they were making a
conservation easement. So it was a swamp. So the vision was
to drain the swamp, like get rid -- get the approvals to do
that, and that was basically what it is.
Q.
What was the -- what about the location -- what was
attractive for you?
A.
It was attractive because University of Central Florida,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 61 of 258
62
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
which is a great school, and they --
MR. ETRA: Your Honor, I'm putting up only for the
witness Exhibit X-40.
BY MR. ETRA:
Q.
But if you can just finish your answer and I'll then
address it.
THE COURT: All right.
THE WITNESS: Should I talk?
BY MR. ETRA:
Q.
I cut you off because I had to say something for the Court.
What was the attraction of the location for you?
A.
University of Central Florida was -- it still is a very
growing university. Now I think it's one of the second largest
universities in enrollment. And the property was located from
a big mall across the street, about two million square feet.
So usually, when there's a big mall, it doesn't really go
anywhere. And then a lot of young families were moving to the
area. And there was a road called the 408, which is a highway
that connected that area to Downtown Orlando. So you got there
very quickly, compared to going on Colonial Drive, which is
like a U.S. 1. You just go, go, go, go, go. So that
connection was able to get people back and forth to downtown.
So I thought -- to me, it was -- it was worth the --
you know, to get there before the market starts taking off.
Q.
I have X-40 in front of the screen. It's not in evidence,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 62 of 258
63
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
but describe generally what it shows. Generally.
A.
It shows a map.
Q.
Of?
A.
Of the Waterford Lakes Town Center area, which is -- where
it says: "Burlington," that's the area, where the red dot is
right there. Yeah.
Q.
And the surrounding area, correct?
A.
Correct.
MR. ETRA: Your Honor, I offer -- the Defense offers
Exhibit X-40.
THE COURT: Any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-40 received into evidence.)
THE COURT: And Mr. Etra, just let me know when it
might be a good time to give the jurors a break.
MR. ETRA: Any time, Your Honor.
THE COURT: All right. Ladies and Gentlemen, let's go
ahead and take a 10-minute recess.
COURT SECURITY OFFICER: All rise.
(Jury not present, 10:27 a.m.)
THE COURT: Mr. Sheppard, the rules apply equally to
you, sir. You are not to discuss your anticipated testimony or
any aspect of the case, since you are on the witness stand.
All right, sir?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 63 of 258
64
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
We're on a 10-minute recess.
MR. ETRA: Thank you, Your Honor.
(Recess from 10:28 a.m. to 10:39 a.m.)
THE COURT: All right. Welcome back.
Both sides ready to continue?
MR. ETRA: Defense is.
THE COURT: On behalf of the Government?
MS. JIMENEZ: Yes, Your Honor.
THE COURT: All right.
COURT SECURITY OFFICER: Please remain standing for
the jury.
(Before the Jury, 10:41 a.m.)
THE COURT: All right. Welcome back, Ladies and
Gentlemen.
Please be seated, everyone.
And we'll continue with the direct examination of
Mr. Sheppard.
MR. ETRA: Thank you, Your Honor.
We had X-40 in evidence on the screen.
BY MR. ETRA:
Q.
Mr. Sheppard, ready to proceed?
A.
Yes.
Q.
Okay. Could you -- using X-40, the map, could you explain
your thinking in terms of the location.
A.
My thinking, along with other people in my company, you
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 64 of 258
65
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
know, together, UCF was down the street, which is where it
says: "UCF Recreation Wellness Center" there on the top of the
screen. And there's the 408 highway, and that goes all the way
to Downtown Orlando.
And I saw -- there's a lot of growth with a lot of
young families. And they always want to get young families in
there that they're buying houses and building their life
together. So it's a good, stable market where people are, you
know, working and, you know, building their life. So that's
kind of how we pinpoint a location, so they can have services
for them. So that was kind of my thought process to do that,
along with some residential apartments as well for the
university.
Q.
Was that part of the plan, to put residential apartments in
too?
A.
Yes.
MR. ETRA: For the witness only, could we put up
Exhibit X-6.
BY MR. ETRA:
Q.
Generally speaking, do you -- it's not in evidence, so --
but generally speaking, what is X-6, sir?
A.
X-6 is the earthwork that commenced on this particular
location.
Q.
Is this a fair and accurate picture of the development at
the very earliest stages?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 65 of 258
66
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes.
MS. JIMENEZ: Can we give a time frame, please?
BY MR. ETRA:
Q.
What time frame would this be for, Mr. Sheppard?
A.
I don't know the exact date. 2010, '09 -- '09, '10, around
'09.
MR. ETRA: We renew our offer for Exhibit X-6.
THE COURT: Is there any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-6 received into evidence.)
MR. ETRA: Can we publish it, please?
THE COURT: You may.
BY MR. ETRA:
Q.
What is the -- which part -- could you -- best you can with
this photo, could you describe the scope of the land at issue
here that was purchased for this development. Which part of
this is the land that your companies purchased?
A.
Where you see all the muck and the site work, where there's
like a silt fence -- like a black -- a black little fence that
you can see by the -- dividing the property, plus all the trees
in the back, all the trees all around it.
It's total -- they are different parcels, but about
probably around 40 acres, approximately, between all the
parcels.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 66 of 258
67
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
This whole area, was this all single-family homes?
A.
No. It was a swamp. It was a conservation easement.
MR. ETRA: And if we could take this down and for the
witness only put up Exhibit M, as in Mary, 51.
BY MR. ETRA:
Q.
Without going into detail, because it's not in evidence,
could you describe what this picture shows generally.
A.
It's the -- the market where it's at, and also the overall
site of ownership of all of the different parcels.
Q.
And could you put a time frame on when this picture was.
A.
2019, '18, '19.
Q.
Is this a fair and accurate picture of the development in
that time period?
A.
Yeah.
MR. ETRA: The Defense offers Exhibit M, as in Mary,
51.
THE COURT: Any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit M-51 received into evidence.)
MR. ETRA: Publish it, please.
BY MR. ETRA:
Q.
Could you take us through the different parts of the
development, the building and whatnot? Let's start on the very
right-hand side, the box there, the square. What is that?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 67 of 258
68
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
On the top right side, you asked?
Q.
Well, not top. All the way to the right -- yeah, top of
the developed part, yes.
A.
Right. So the larger building is a 60,000-square-foot --
at this particular moment, probably 18 in this picture because
they went bankrupt, but Toys "R" Us, Babies "R" Us Superstore.
It was the flagship store that I built -- or we built.
Q.
Okay. And then the other roughly equal size white square
or so on the other corner, what is that?
A.
Those are -- one is a 50,000-square-foot DICK'S Sporting
Goods. And near the road, there was a small shop space that
we -- abutted that particular building.
Q.
Is that the -- there's a thick line sort of toward the
bottom. Yeah. So where the circle is now, what was there?
What is that?
A.
That's another building where there was a quarter in
between the buildings for fire safety and then the small shop
space where the other tenants were at.
Q.
Does that include Mattress1One -- or did it include
Mattress1One?
A.
At that particular moment in time, yes.
Q.
Okay.
MR. ETRA: And if we could move over to the other
smaller boxes, let's just go to the right from where we were.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 68 of 258
69
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
What is the first one?
A.
The first one is a 10,000-square-foot Bahama Breeze
restaurant, which is a restaurant operated by the Darden
companies.
Q.
And the next box over, what is that?
A.
It's vacant land.
Q.
Okay. At some point -- and we'll get to that -- what was
going to be built there?
A.
At that time, we were negotiating with one of those
urgent-care-type places, but we ended up not moving forward
with them and doing something with JPMorgan Chase to build a
JPMorgan Chase branch.
Q.
A bank? A bank branch?
A.
Yeah. A bank.
Q.
Okay. And then further over to the right, the next little
box area, in the corner, apparently, undeveloped still,
correct, at least at this point?
A.
At this point, yes. It's called an outparcel.
Q.
What do you refer to as outparcels?
A.
Outparcels are like these little -- you know, the large
buildings in the back are like -- for lack of a better word,
big-box centers. But then the outparcels, which was my main
business, was these little outparcels in front.
Q.
Like Bahama Breeze and --
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 69 of 258
70
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Bahama Breeze. It's usually right in front on the road.
So a smaller -- much smaller buildings but with not a lot of
height, so you can see the back.
Q.
And then over on the further right, the last outparcel on
the right, at some point, what was that going to become?
A.
Starbucks.
Q.
And then now we've got -- you see the part that's built in
and then the part that's green. What is the rest of the area
that's green here?
A.
Well, a portion of it is part of this property. And then
the other portion is -- is another conservation easement to be
developed at a later date.
Q.
Could you describe generally what is still part of this
property.
A.
Adjacent to the Toys "R" Us, Babies "R" Us Superstore,
there's those two buildings right there. That's part of the
improved property. When I say: "Improved," the parking lot
and -- the parking lot area. And then the rest of it is part
of what they call the phase 3 section.
Q.
And when you say: "Phase 3," what is that generally
referring to?
A.
I don't understand what you mean.
Q.
So did -- phase 3 was a part of the development?
MS. JIMENEZ: Objection.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 70 of 258
71
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
What was phase 3?
THE COURT: Overruled.
THE WITNESS: Phase 3 -- it's called a master plan.
So you have -- like, in a master plan -- when you get approved,
you have a master plan. That was the third part of the
project, but you had to get -- it had to be incorporated into
the phase 1 and 2. So it wasn't -- at this particular moment
in time, it wasn't approved to do anything yet, until the
owners of phase 1 and 2 got the approvals to add to the
property.
Q.
So the approval process was staggered to be a little later
after what was already built here, right? Or is that wrong?
A.
It's partially right. I think like it was very tough
because we had to get approval. There was a lot of people
against it, I guess. So it didn't get staggered on purpose.
It got staggered because of just the government doing approvals
and stuff like that.
Q.
Took a long time?
A.
Yeah. Like five years.
Q.
All right. We'll get to that.
MR. ETRA: And then can we put -- take this down and
for the witness only, because it's not in evidence, M, as in
Mary, 50, 50. And I want to put up the second page, too, for
the witness as well.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 71 of 258
72
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Do you recognize -- it's not in evidence. Describe
generally what M-50 is.
A.
It's an email from Jeff Graff to me.
Q.
And what is the attachment?
A.
Is this the one part of it?
Q.
We got a lot of pages. It's the first page? Why don't we
skip through --
A.
But I'm saying the screen is like two different documents.
Are you talking about on the 50 one?
Q.
Well, the next page is the attachment. So I'm asking you
what the attachment is which is on the right side --
A.
Oh. I'm sorry. I understand.
Q.
Okay.
A.
It's the Declaration of Reciprocal Easements, Rights and
Maintenance Covenants for Shoppes at Alafaya.
Q.
In your business, what do you refer to that kind of
document --
A.
An REA.
Q.
And what is this the REA for?
A.
That is for the property that HM-UP and all them own.
Q.
The development?
A.
The development, yeah.
Q.
In Orlando that we just looked at?
A.
Correct.
MR. ETRA: The Defense offers M-50.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 72 of 258
73
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Any objection?
MS. JIMENEZ: Can we see the signature on this other
document, please?
MR. ETRA: Your Honor, I believe I've made the
predicate without having to see the signature.
THE COURT: I think it's just a matter of courtesy, if
you could provide just a showing of the complete document.
MR. ETRA: That is on.
THE COURT: All right. Any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit M-50 received into evidence.)
MR. ETRA: Let's go back to the first page. We could
take down the cover email and just focus on the first page of
the REA.
BY MR. ETRA:
Q.
So on the upper right-hand corner, what does that indicate
generally?
A.
That is the recording of the document in the public record
at Orange County that's required.
Q.
So this is publicly available to anyone who looks for it,
correct?
A.
Correct.
Q.
And does it indicate the date that it was filed on the
second line? Do you see that?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 73 of 258
74
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
September 27th, 2011.
Q.
Okay. And then on the left -- on the other side, what
entity filed that?
A.
HM Eight, LLC.
Q.
And if we can go to the first paragraph in the declaration
and focus on the words "HM Eight Management" and then how it's
defined on the fourth line.
A.
HM Eight Management? There's not an --
Q.
Sorry. HM Eight, LLC. My apologies, Mr. Sheppard.
A.
No worries.
Q.
Thanks for catching that.
It's says: "HM Eight, LLC, a Florida Limited
Liability Company, Developer." Is that correct that HM Eight,
LLC was the -- had the role of the developer in this document?
A.
In 2011, that's what it says.
Q.
Okay.
MR. ETRA: And if we can go to Page 3 of the document,
focus on the bottom paragraph "Collection Fees."
BY MR. ETRA:
Q.
What does that refer to in the context of the REA?
A.
It's the collection -- if the owners or tenants or somebody
is not paying their CAM, that you have the ability to collect
it, and different methods how you can collect it.
Q.
Why don't we go to the next page and then I'll ask you to
focus on the word "Common Areas" at the top. You used the term
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 74 of 258
75
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
CAM, okay. Please explain what -- well, first of all, what
does it stand for?
A.
CAM stands for common area maintenance.
Q.
And generally, what does that refer to in this business?
A.
Well, generally, it's basically all the areas of a shopping
center -- or it can be office too, but -- that are outside the
four walls of the building. So the roads, the sidewalks, the
landscaping, the offsite improvement, everything outside the
four walls where the tenant occupies is called a common area.
It's separate.
Q.
And under this document, who is responsible for that?
A.
Under this specific document, HM Eight, LLC.
MR. ETRA: If we go to Page 13 of the document, first
to "Common Area Improvements."
BY MR. ETRA:
Q.
And generally speaking, what is that referring to?
A.
(No verbal response.)
Q.
What is common area improvements?
A.
Common area improvements is the improvements in the common
area -- the developer, HM Eight, at this point, they're the
party that is responsible to do everything outside the four
walls of the building to build, the parking lot -- it's called
the infrastructure, the lights, the parking lot.
Q.
Well, I put that up on the screen. Do you see that,
referring to parking and lighting?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 75 of 258
76
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Oh, yes.
Q.
Is that part of the common area responsibilities of HM
Eight?
A.
Yeah. They're the party that actually has to -- they build
it and sometimes they modify it, they alter it, because the
counties sometimes make you do stuff. So they're in charge of
that area, and none of the owners of the buildings can do it.
The developer is the only one who has the ability to go into
that area and do any work whatsoever.
MR. ETRA: Page 23 of the document.
BY MR. ETRA:
Q.
And let's focus on "Developer's Responsibilities as to
Common Areas." And generally speaking, what does that
basically set out from your perspective as a businessperson?
A.
The developer's responsibility is to, like I said before,
maintain it. You do all the repairs. It's your responsibility
to keep it in a first-class manner so the whole entire shopping
center can function. I mean, if it's -- I'm sorry.
Q.
Sorry. I didn't mean to cut you off. Were you done?
A.
Yeah. That's fine.
MR. ETRA: Go to the next paragraph below that.
BY MR. ETRA:
Q.
It says: "Maintenance Contracts." What does that
essentially provide from your perspective as a businessperson?
A.
That means the developer has the right -- it's really the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 76 of 258
77
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
obligation to enter into some type of management, operation,
maintenance, to facilitate the work. I mean, you have to have
a contract with someone to facilitate the work and do the work.
Q.
And did that happen in this case? Did HM Eight enter into
a contract with another entity to perform these services and
undertake these responsibilities?
A.
At that particular moment in time, in 2011, yes, they did.
MR. ETRA: Let's show -- can we put up in evidence
Government Exhibit 58.
BY MR. ETRA:
Q.
Let's -- do you see the document in front of you?
A.
I do.
Q.
Let's go to the signature page.
MS. MARTINEZ: Your Honor, I think it would be helpful
for the record just to state the Bates numbers because it's a
composite.
MR. ETRA: Oh. Fair enough. That's fine.
THE COURT: All right. Certainly.
MR. ETRA: That's fine. I didn't realize that. So
it's SHEPP -- it's 032151 to 032158.
BY MR. ETRA:
Q.
I've got the first and last page here. Do you see that?
A.
I do.
Q.
Do you recognize this document?
A.
I do.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 77 of 258
78
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
What is this document?
A.
This document is a management agreement between HM Four and
HM Eight.
Q.
And what's the year of this document?
A.
2014.
Q.
And generally speaking, who's the -- looking at the
signature block, who's the owner here?
A.
It says: "HM Eight."
Q.
And who's the manager?
A.
It says: "HM Four."
Q.
And generally speaking, what does this contract provide for
from your perspective as a businessperson?
A.
It just -- again, you have to have an agreement, and it's
HM Eight and HM Four just signing the rights to HM Four from HM
Eight to operate the REA, the management of the shopping
center.
Q.
So I've got a section highlighted here, 1.1. What does
that provide?
A.
"Owner hereby appoints manager and manager hereby accepts
the appointment to manage the property in accordance with the
terms of this agreement."
Q.
And essentially, in English, what does that mean?
A.
Essentially, you have to have a document that says that
they have the right and authority to do the management, as I
described before, of the CAM, the common area -- maintenance
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 78 of 258
79
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
area and stuff like that.
Q.
Do what HM Eight has to do under the REA?
A.
Correct.
MR. ETRA: And if we can go to Paragraph 3.1 just
right below that.
BY MR. ETRA:
Q.
You see it provides -- what does that provide, in your
words as a businessperson?
A.
It has the -- again, it describes exactly what the
manager -- what they're allowed to do, the authority, what
they're supposed to do, and the expectations and requirements
that you're -- how you're going to maintain and stuff of that
nature.
MR. ETRA: Go to Section 3.5, please.
BY MR. ETRA:
Q.
What does that provide?
A.
The manager is supposed to collect all of the rents from
the tenants and other charges that become due. So...
Q.
And did HM Four actually perform this role?
A.
They did.
Q.
Now, in all this time before COVID, did HM Four have its
own bank account?
A.
No.
MR. ETRA: I'd like to put up for the witness only
Exhibit X-31.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 79 of 258
80
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
And without going through it -- without describing it in
detail, because it's not in evidence, could you look at the
first -- it's three pages -- and then I'll ask you questions.
A.
I can do that.
Q.
Okay. Tell me when you're ready for the next page.
A.
I'm ready for the next page.
Okay.
MR. ETRA: Next page, please.
THE WITNESS: I see that.
BY MR. ETRA:
Q.
Let's go back to the first page. What are you looking at
here, sir, in these three pages? I'm asking you generally --
let me state it differently.
Did you -- were you involved in the preparation of
these charts?
A.
Me?
Q.
Yes.
A.
No.
Q.
Did you review these charts?
A.
No.
MR. ETRA: Let's take the chart down for now.
THE WITNESS: Well --
MR. ETRA: Keep it up for a -- let me go back up and
do this again.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 80 of 258
81
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Do you recognize these charts?
A.
I do.
Q.
What do you recognize them to be? And I'm asking you
generally and not the specifics because it's not in evidence.
A.
It is the rental funds per the documents that we spoke
about, and how the cash flow works as far as the tenants to the
owners, the REA. And then it shows you exactly how the
maintenance -- the cash flow actually works.
Q.
And do the three charts accurately show the cash flow
under -- in different ways?
A.
Yes.
Q.
Okay.
MR. ETRA: Your Honor, we offer X-31.
THE COURT: Is there any objection?
MS. JIMENEZ: I don't think he's laid a proper
foundation.
THE COURT: Can you advise specifically -- Mr. Etra,
why don't you -- the objection is sustained. Let's ask the
necessary questions.
BY MR. ETRA:
Q.
Okay. Well, let's start with the first page. But again
going without the detail, could you describe what generally --
generally -- does the first page describe, without going into
how it describes it.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 81 of 258
82
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
It describes that the property -- where the tenant --
Q.
No. I'm asking you the topic that's covered by the first
page.
A.
Oh. It's the -- without reading it, is that what you're
asking me?
Q.
In your words, what does the first page cover?
A.
I'm sorry. I just -- it's just how the funds from the
rents are distributed throughout to the landlord, and also for
the CAM. And it delineates between what the rent is and what
the CAM is, and then how the CAM is spent, and who spends it,
and to be in compliance with all the documents, I mean, as far
as CAM is concerned.
MR. ETRA: Let's go to look at the second page. Still
not in evidence.
BY MR. ETRA:
Q.
Generally speaking -- generally speaking, what does the
second page show -- topic?
A.
And this shows -- this basically shows the tenant, how they
pay to the landlord, and how it actually gets done in the real
world. Considering that I control all the entities as far as
the managing member, it shows exactly how that actually is
distributed in my world, in our administrative world of running
the properties.
Q.
Okay. And the third, last, page, generally -- in the same
general way that you just did it for the other two, what does
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 82 of 258
83
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
this show?
A.
This shows a chart where -- if the tenant is not paying and
you have shortfalls, it shows what the owner -- the majority
owner of the shopping center -- how they cover the shortfall,
where it gets put into in order to maintain the REA and be in
compliance with all lease terms and loan documents. So it
shows you how it actually gets into the property from an
equity/execution of the common area.
MR. ETRA: Defense offers Exhibit X-31.
THE COURT: Any further objection?
MS. JIMENEZ: Same objection.
THE COURT: Overruled. The exhibit will be admitted
into evidence, X-31.
(Defendant's Exhibit X-31 received into evidence.)
MR. ETRA: Could we start with the first page and
publish to the jury.
BY MR. ETRA:
Q.
It's basically repetitive, but now we have it in front of
us. So could you describe -- first of all, could you
describe -- the title is Flow of CAM Rental Funds Per
Documents. Do you see that?
A.
I do.
Q.
Let's start with the basic concept of CAM rental funds.
Generally speaking, in your leases, is it typically broken down
in different ways, the lease payment?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 83 of 258
84
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes.
Q.
In what way is it broken down?
A.
It's broken down so you have base rent, and then -- there's
the gross rent, but you have the base rent and then you have
CAM, common area maintenance. So there's funds for that, then
there's funds for insurance, and there's funds for real estate
and taxes. And each one has a category that goes -- that's in
the leases.
Q.
Is there a category for CAM --
A.
Yes.
Q.
-- typically?
Okay. And so -- and then it says: "Flow of CAM
Rental Funds Per Document." So could you take us through this
flowchart about how the flow is supposed to work if you just
follow the documents strictly?
MS. JIMENEZ: Time period, please.
MR. ETRA: This is generally when things are working
properly.
MS. JIMENEZ: He's testifying for the witness.
Objection. There's no time frame.
MR. ETRA: I'm sorry. I'll --
THE COURT: All right. Let's sharpen in terms of the
time frame, please.
MR. ETRA: Fair enough. I apologize, Your Honor. I
should be asking the witness.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 84 of 258
85
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Mr. Sheppard, what time period does this cover?
A.
Well, it says: "REA." So -- and the REA is from 2011.
Whenever the REA is filed, that's how you're supposed to
operate the REA with the owners of the property. But this
particular document is showing Burlington, so it would be from
the time Burlington was there. That's how I look at it.
Q.
What about the fact that HM Four is there? What does that
also tell you about time frame?
A.
That time frame is from 2014, when HM Four became the --
was assigned the responsibility in the REA from HM Eight.
Q.
All right. So with that explained, and -- by the way, is
this chart dependent on who the tenant is or is it more general
than that?
A.
It doesn't matter who the tenant is. It's for all the
tenants, not just -- it's all the tenants in the shopping
center.
Q.
Okay. So then, with that in mind, could you just explain
how the flow of funds is supposed to work as shown on the first
page or just your testimony.
A.
If you look at the chart, it's -- where it says:
"Burlington," that's really the collection of all of the
tenants in the shopping center. And when they pay their rent,
they are -- they pay their contractual obligations with HM-UP.
And HM-UP is supposed to distribute the money for the CAM
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 85 of 258
86
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
portion only to HM Four on the top. And that -- that would
satisfy the REA where HM-UP pays HM Four for their advance
monies for the CAM charges.
Q.
And what happens next after that per the documents?
A.
Per the documents, then HM Four drops down and they pay
the -- HM Management. And then HM Management, they pay the
workers, they pay -- if they have individual workers that work
for them, they pay them or -- or -- and they pay like Waste
Management and, you know, companies like that.
Q.
And then the work gets done, right?
A.
Correct.
MR. ETRA: Let's go to the second page now.
BY MR. ETRA:
Q.
This says: "Flow of CAM Rental Funds in Reality." So in
terms of how it actually worked with the flow of funds, what
was different from the documents?
A.
Well, the difference is that I'm the managing member of HM
Four, the managing member of HM-UP, and HM Management. So the
tenants -- and HM Four is the 99 percent owner. HM Four owns
HM-UP. So they're the 99 percent owner of HM-UP. Right? So
that's connected because they're the majority owner.
So the tenants pay HM-UP. And because HM Four is the
99 percent owner, to go to there and all the way around is a
little bit -- doesn't make any sense in reality. So then it
skips from HM-UP, and it goes -- I'm sorry. It skips to HM
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 86 of 258
87
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Four, and then it goes to HM Management. And then HM
Management, pursuant to an annual budget -- you have a budget
every year that's approved by the tenants and the banks, and
then they pay the bills for the workers, for electric, and
everything else that goes along with that.
MR. ETRA: All right. Now, let's go to the -- let's
go to the next page.
BY MR. ETRA:
Q.
It says: "Flow of CAM Rental Funds When Shortfall." Could
you explain what's being shown here and what actually happens
in a shortfall?
A.
A shortfall comes when a tenant -- for instance,
Burlington, when they weren't open, or other tenants aren't
paying, they're not paying rent, or something happens, there's
still -- no matter what, HM Four has the financial
responsibility pursuant to the REA to make sure they maintain
it, maintain the shopping center.
So what happens is, is that if the -- if a tenant's
not paying, then the owners of HM Four -- Eric Sheppard, and my
wife, Jennifer Sheppard, in TBE, joint ownership -- they
contribute the money from HM Four to HM-UP or to HM Management,
just to make sure that the -- everything is maintained -- I
mean the property maintenance and on -- this parcel is 20 --
about 20 acres. So all of that is maintained.
MR. ETRA: For the witness only, could we pull up
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 87 of 258
88
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Exhibit X-16.
BY MR. ETRA:
Q.
Do you see that, sir?
A.
I do.
Q.
Without going into the details, because it's not in
evidence, could you explain generally what X-16 is.
A.
Yes. This is the budget. It's an annual budget that's
required by the bank and by tenants, by the -- it's 60 days
prior to the next year.
Q.
And what time period is this budget for?
A.
This is from January through December 2019.
Q.
Is this the -- does this include the CAM?
A.
Yes. It includes the CAM, insurance, taxes. And it's the
annual budget for -- so the owners of the properties have it.
MR. ETRA: Defense offers Exhibit X-16.
THE COURT: Is there any objection?
MS. JIMENEZ: Objection. Foundation. Where does it
come from? Is it a business record? Is it a bank record?
THE COURT: Lay the foundation as a business record or
the basis for the introduction.
BY MR. ETRA:
Q.
Who creates and maintains this document?
A.
The property management company is the one who creates the
document, and the developer, HM Four, is responsible to create
it. And they give it to the owners of the property for them to
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 88 of 258
89
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
approve. And then the owners give it to their banks, whichever
their banks may be, and they give it to their bank.
So it originally starts with the property management
company gives it to the owners. The owners then give it to the
banks. Everyone approves the annual budget. That budget now
becomes the budget for the year. And that is the -- the
document that says you cannot go past any of these line items
without approvals.
Q.
So these companies that's listed here, who was the project
management company, which company?
A.
This would be -- the project is HM Four as the REA. This
is what the REA person is supposed to have -- not person, the
company. So between HM Four and HM Management, they work
together to create the budget to present to the owners.
Q.
And they created this?
A.
Correct.
MR. ETRA: The Defense offers -- reoffers Exhibit
X-16.
MS. JIMENEZ: Same objection.
THE COURT: Overruled. It will be admitted as X-16
into evidence.
(Defendant's Exhibit X-16 received into evidence.)
BY MR. ETRA:
Q.
Okay. So now that we're looking at it, if we could -- this
is the 2019 budget, and it's got -- it says on the top HM
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 89 of 258
90
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Development Trails and TRU, right?
A.
Correct.
Q.
Because they own different properties?
A.
They do.
Q.
And this does include CAM?
A.
I'm sorry?
Q.
Does it include the common area maintenance budget?
A.
Yes.
Q.
If you look at the bottom right-hand corner, you see the
number of about 700,000. Do you see that?
A.
I do.
Q.
There was evidence in the HM Four EIDL application of cost
of goods sold being put there -- I think about $250,000. Do
you recall seeing that?
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Can you roughly work through for this what the CAM was
for -- that HM Four was responsible for based on this document?
A.
I can.
Q.
Would you please do that.
A.
Okay. If you go down to the -- if you go down to the line
item, which is Property Taxes, because you have large tenants,
the property taxes are paid directly by the tenants. So that
would eliminate the $232,000.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 90 of 258
91
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
And then you have to eliminate -- not eliminate. Then
you have -- you have multiple owners. So you have HM
Development Alafaya Trails, LLC, you have HM-UP TRU, LLC, and
there's also a Darden. Darden is not on here because they get
a separate budget. And those -- they all take their -- they
take their portion. So it comes down to $500,000. Then it's
50/50. And then that's where you get 250.
Q.
Roughly?
A.
I mean, 50 divided by two is 50 -- I'm sorry -- 250.
Sorry. Did I explain that well? I don't know. Sorry.
Q.
Just -- okay. There's no question pending.
MR. ETRA: We could take this down.
BY MR. ETRA:
Q.
I just want to cover the -- you mentioned the financial
documents for a loan that was securitized. Do you recall
saying that?
A.
Yes.
Q.
What loan were you referring to?
A.
That was the first mortgage on the property.
Q.
What's the lender for that?
A.
Basis Capital.
Q.
And is that the one that had these interest payments
throughout COVID?
A.
Yes.
Q.
What was the approximate annual interest payment for the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 91 of 258
92
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Basis loan?
A.
I don't know the monthly payment. It was around 90. I pay
90 or 91,000 dollars per month.
Q.
Let's talk about the Toys "R" Us bankruptcy and what
happened thereafter. So Toys "R" Us goes bankrupt. What's the
next step for you to resolve that?
A.
They went bankrupt. And you go through -- they kept the
store for a while. It was one of the last stores to -- it was
one of the top stores in Florida, according to them.
And somewhere near the end of 2018, I believe, that's
when they like -- when they liquidated their whole company,
they got rid of all their assets, so they had to close the
store, and they closed the store. So that impact was about
$1.2 million per year in income by them not paying. So
therefore there's a big hole in the financial model.
Q.
What did you do to deal with that big hole in the financial
model?
A.
We called our financial wealth advisers and said: "There's
a problem," and we were figuring out ways to fund the hole,
because you have to maintain the common area and you have to
maintain certain things. You have to pay the interest. So we
figured out a way to do that by funding it ourselves.
Q.
What does that mean, "Funding it ourselves"?
A.
You're coming out of pocket to actually -- you have to make
sure that the mortgage is maintained monthly, and then you have
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 92 of 258
93
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to make sure -- that whole chart you showed of the common area,
there's no money coming in to pay for all that. So someone has
to pay for it; otherwise, you're in default of all your other
leases that are people that are still there.
Q.
What are the challenges to finding a new tenant for that
space?
A.
That's why I started with the small shopping center
business with 10,000 square feet. It's a 60,000-square-foot
building and it's unique. It's a Toys "R" Us. And it's hard
because there's only so many big buildings. And if you have to
divide the building, it's very costly to -- I'm boring
everybody, right? But it's costly, you know, to divide the
spaces. It's 24-foot high. It's a problem. So you want to
try to find one tenant for that building.
Q.
What about having an anchor tenant? Was that important
too?
A.
Yes. You don't want to have another tenant that comes and
goes. It doesn't look -- it's not great. So -- and it's very
costly to convert a building. So thank God there was a
Burlington down the street and the location is a very good
location. And so we were able to secure -- start negotiating
with Burlington in beginning of 2019. So...
MR. ETRA: For the witness only, put up -- please put
up -- I apologize. It's in evidence -- Government Exhibit 27.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 93 of 258
94
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Do you recognize that, sir?
A.
I do.
Q.
What is that?
A.
This is the lease agreement between HM-UP Development
Alafaya Trails and Burlington Coat Factory.
Q.
And this is what you were able to negotiate to resolve the
problem with the hole with Burlington -- hole with Toys "R" Us.
Excuse me.
A.
Well, it didn't solve the problem. It was one step to
solving the problem because --
Q.
Why didn't it solve the problem to sign the lease?
A.
What?
Q.
Why was it only one step to solving the problem?
A.
Because it was a great step because you had the lease, but
now you actually -- as the landlord, you have to actually
construct the -- you got to completely gut the building of
60,000 square feet, take it down to concrete, and then
reconstruct this Burlington store.
Q.
And the lease is dated late October 2019. Do you see that
on the right-hand side, upper --
A.
I do.
Q.
Okay. And generally speaking, how complex was -- what were
the nature of the specifications for this building, generally
speaking?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 94 of 258
95
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
It was a turnkey build, where we had to build not only
the -- what they call -- not only just the walls and the
bathrooms and stuff, but we had to build actually like where
you check out, the little counters and stuff. We had to build
all that stuff as well. And then you had to do stuff outside
of the building, which makes it more complicated, because you
don't control the outside. So we had to build the outside of
the building, too, with the parking lots and all kinds of
stuff. So...
MR. ETRA: Go to Bates Number 31840.
BY MR. ETRA:
Q.
Focus on "Landlord's Work" and the first paragraph there.
What does that provide in your words?
A.
They will accept delivery of the space -- as long as you
pay for all the construction and you actually do all the
construction, they will take acceptance of the space and move
their store to your location.
MR. ETRA: Let's go to Page -- much further down --
31884.
BY MR. ETRA:
Q.
What's on that page, sir?
A.
This is the -- what they call landlord's work. So this is
what you have to do. And because they're national companies,
they have to have -- as you know, you go into every store, they
look the same. So you have to strictly -- I mean strictly --
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 95 of 258
96
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
abide by the exact detail of their plans so their store, you
know, the national company, in this case Burlington, they
maintain, you know, the integrity of their design on all their
stores.
MR. ETRA: For the witness obviously, M, as in Mary,
59.
BY MR. ETRA:
Q.
Do you recognize this document?
A.
Yes.
Q.
What is -- generally speaking, without giving the details
because it's not in evidence, what is this?
A.
This is from Burlington and the architect, what they call a
spec, a prototypical spec for their remodeled stores.
Q.
And was this provided by Burlington for your companies?
A.
Yes. By Burlington and the architect that we hired,
CASCO -- oh, sorry.
Q.
So was your architect that you hired involved in the
preparation of this document?
A.
Yes.
Q.
And did you ultimately receive it from Burlington as a
finished -- and do you ultimately receive it and use it as
specifications for the construction?
A.
Yes.
Q.
As part of your business?
A.
Correct.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 96 of 258
97
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: We offer -- oh. It's already in evidence,
apparently.
MS. JIMENEZ: What exhibit number is this, please?
THE COURT: Exhibit number, please.
MR. ETRA: M-59. I apologize. I didn't realize it
was in evidence.
BY MR. ETRA:
Q.
How detailed, from your perspective, are these
specifications?
A.
It is extremely detailed and -- very detailed.
MR. ETRA: Could we go through the first few pages.
BY MR. ETRA:
Q.
Cover a lot of topics?
A.
Yes.
MR. ETRA: Let's go through the first few pages after
this.
Let's go three or four more pages in.
BY MR. ETRA:
Q.
Cover pretty much every area for the construction?
A.
Well, it covers more than that, but --
Q.
How so?
A.
Well, there's not only construction, but it's how you
construct. It's a typical national -- I've built Walmart
stores as well. It's the same thing. It's not just
construction. It's how you have to act, what kind of workers
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 97 of 258
98
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
you have. I mean, it's a whole -- it's beyond the
construction. It's how you have to operate the business and
construct their store to do business because they're a public
company and they have expectations. And they try to put it in
this manual. It's like a manual.
MR. ETRA: Let's take this down.
BY MR. ETRA:
Q.
What were the time requirement demands -- let me start
again.
What were the time obligations for your companies to
provide a finished product for Burlington to move in?
A.
They were very, very tight, meaning --
Q.
How so?
A.
Because they were -- they were a store down the street, and
their lease was up. And the owner of the building was going to
build student housing, so they were evicting them. So they had
to be in -- I believe it was March, April. It was around April
2020. And we signed the lease on November 1st and we didn't
have our building permit yet. So it was a very, very intense
schedule for that size of building.
Q.
And under the lease agreement, what were the consequences
of not meeting Burlington's deadline?
A.
A liquidated damage of $3,000 per day.
Q.
Could they also terminate?
A.
And they can terminate -- or they can terminate.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 98 of 258
99
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Let's talk about Mr. Jeff Vasilas. Okay?
A.
Okay.
Q.
How did you first meet Mr. Vasilas?
A.
I met him through the law firm representing me, I guess
representing him for something, and they introduced us.
Q.
From your perspective, what was the purpose of the
introduction to Mr. Vasilas?
A.
That he was an owner of a building in Miami, near Miami
Gardens Drive.
Q.
King of Diamonds?
A.
The King of Diamonds place.
Q.
And what was the purpose of the meeting?
A.
The purpose was for me to see if I had any interest in
buying the building because he was trying to sell it.
Q.
And did you come to terms?
A.
I did.
Q.
So do you -- have you actually entered into a contract to
buy the building from the company --
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
How far did you get in terms of trying to buy the property?
A.
We negotiated a contract and put a deposit down to acquire
from his company K-O-D-R-A N-Y-C or something like that.
Q.
K-O-D for King of Diamonds?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 99 of 258
100
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I imagine. That was its name.
Q.
What was your purpose -- what were you going to do with the
building if you got it? What was the purpose?
A.
Twofold. One, it was a great location off the highway, and
I thought it would be a great place to have a billboard and put
a billboard there. And also -- so I was going to do a digital
billboard there, along with my other property down in Miami.
So I was looking at doing billboards on both of those
properties.
And then, secondly, was to go through the process of
Miami-Dade County to get to do affordable housing to do a
16-story affordable housing building right off the highway
overlooking towards the ocean. I thought it would be a great
project.
Q.
Were you an owner of King of Diamonds?
A.
No.
Q.
Were you a partner of Mr. Vasilas in King of Diamonds?
A.
I was not.
Q.
Do you have any ownership interest in any adult
entertainment business?
A.
I do not and never have.
Q.
Do you have any desire to go into that business?
A.
No. It's not my -- I'm in the development and construction
business. I'm not in that kind of business.
Q.
Now, while waiting for the deal to -- did the deal ever
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 100 of 258
101
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
close?
A.
No.
Q.
Never got the land?
A.
No.
Q.
While waiting for it, did you get involved in something
called Mala, M-A-L-L-A-H [sic]?
A.
M-A what?
Q.
Mala?
A.
Mala. Yes, I did. Not me, but the company.
Q.
What company -- well, what was Mala?
A.
King of Diamonds wasn't paying rent and they had issues.
They had issues with their lender. So he asked me did I have
any ideas.
Q.
Who? You said "he."
A.
Jeff Vasilas asked me if I had any ideas. And you know, he
just finished construction of the place. He just -- he
literally just built 40,000 square feet. And I said: "Why
don't you make it more of like an entertainment where it's like
for" -- because it's a Latin community in South Florida -- to
make -- have a concert series and do concert venues, and then
you can have parties and stuff like that. But do a concert
venue and bring singers, young, up-and-coming singers for that
kind of -- I think it's called reggaeton -- or reggaeton -- or
something like that, some kind of -- I thought that was a good
idea, he thought it was a good idea, and so that's -- to get
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 101 of 258
102
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
cash flow.
Q.
Were you part of Mala?
A.
I was part of the idea of Mala, and I put in some money
into it, but I also lent workers for him to set it up in the
proper manner.
Q.
Could you identify any of the workers you recall working on
that. Vanessa Gonzalez?
A.
Yeah. Vanessa Gonzalez was one of the workers, yeah.
Q.
So eventually -- let me put for your eyes only Exhibit
X-29. Without describing in detail, because it's not in
evidence, could you describe generally what X-29 is?
A.
It's an advertisement for the summer concert series to
open -- the grand opening on a certain date at that place.
Q.
And by the way, I realized I misspelled the name Mala. How
did you spell Mala?
A.
It's M-A-L-A.
Q.
Okay. And is this -- so this is an advertisement of --
from the Mala company for a concert series?
A.
Yes.
MR. ETRA: Your Honor, we offer X-29.
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
MR. ETRA: Let's take it down.
BY MR. ETRA:
Q.
Generally, did Mala have any performances?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 102 of 258
103
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes. Multiple.
Q.
Do you recall the artists?
A.
Oh, my God. Yes.
Q.
Can you --
A.
De la Ghetto was the first one July 12th. Then there was a
guy named Bad Bunny -- Bad Bunny. And then there was -- I
don't remember all their names. There was multiple -- there
was multiple performances.
MR. ETRA: Your Honor, I'd like to reoffer X-29. The
relevance is the 404(b) issue that is the main issue we had
discussed before trial that has come up in trial.
THE COURT: The objection was sustained, sir.
BY MR. ETRA:
Q.
What happens with your deal and with King of Diamonds
generally?
A.
It fell apart because I understand Mr. Vasilas had a
partner in New York. And I met with the partner, and I thought
it was both of them and I was unaware that there was a silent
partner that controlled everything at the end of the day. And
it just was so confusing and messy that I just -- I had too
many other things going on, so I had to walk away. It was too
complicated.
Q.
So what happened? Did you continue to have any dealings or
contact with Mr. Vasilas after that?
A.
I think at first no. For the first few months I was a
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 103 of 258
104
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
little -- I was a little upset, I think, just because it was a
waste of time and money. But then, you know, he came to me
after that couple of months and started talking to me in
2000 -- in the end of 2018, 2019, and he seemed like a
different person. And he started talking to me and calling me.
And we met a few times and he was just different. I felt like
a weight was lifted off his shoulders and he was acting like a
normal person, so I met with him.
Q.
You said: "Lost money." Did anyone owe you money from all
those dealings?
A.
Yes.
Q.
Who owed you money?
A.
Jeff.
Q.
You lent him money?
A.
I lent him money -- well, I advanced money. I advanced
money by a loan for his -- for the deposits and stuff like that
to buy the building and that kind of stuff.
Q.
You said: "Jeff." Which Jeff?
A.
I'm sorry. Jeff Vasilas.
Q.
No problem. Okay. So he comes back and he's dealing with
you. Did you start to do any work with him?
A.
Yes.
Q.
What was the first thing that you did with Mr. Vasilas with
respect to your real estate business?
A.
He start -- he wanted to be in the real estate business.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 104 of 258
105
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
And I understand but, like, he was construction. He wasn't
real estate. So I said -- I let him go start working on the
Flagler project in Miami with the people at a project because
he was a very hard worker. I mean, we worked very hard and he
had a lot of contacts with the subcontractors, and he was a guy
that worked hard and just knew a lot of people.
So I said: "Why don't you go down there?" We had a
build-out, a company called Blue Dental -- I don't know. It
was a dental office over on the Flagler site. So he worked on
that, and there was problems with the parking lot. He knew how
to fix problems and worked hard. He wasn't lazy.
Q.
How did he do with the assignment you gave him on the
Flagler project?
A.
He was great. He was a different person. And he was very
good at construction, facilitation, and getting things done,
very -- he was a little aggressive, but he's an aggressive guy.
But I'm more laid back, and he's very aggressive. So he did
his thing.
Q.
All right. Now let's talk about Burlington. How was it
that Mr. Vasilas gets involved with the Burlington project?
A.
In November we signed the lease. Originally I was working
with a general contractor who I knew and in an Orlando office.
And they were working on the plans and specs and -- meaning
they were what they call value engineering. They were going
through that and trying to get the approvals and plans to build
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 105 of 258
106
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
on a quick track.
And then Jeff came in my office one day, he saw the
plans, and he said: "Hey, what's that?" And I said: "It's
the Burlington." He goes: "Really? Oh, my God. I want to do
that." And he goes: "How can I get involved?" I said:
"Well, maybe you can bring some subs and the subs that you
worked with when you built the King of Diamonds. You can bring
some subs from the construction there, and give me a price, see
what it's going to cost."
And so he started, you know, late November, early
December 2019, and I said: "If the GC doesn't work out, then
we can do something together."
Q.
And did he end up putting together a package for you or
budget at least?
A.
Yes. He brought me -- he actually brought the actual sub
in my -- he brought the sub into the office. We went through a
bunch of numbers. And simultaneously there was demolition
going on at the property, so he went up there and he was
actually -- he actually was staying up there. You know, he was
staying up there somewhere, he told me, in Orlando.
And so he would go see the property and the
demolition. And Jeff Graff at the same time was working on it.
So between the both of them, that was November, December.
Q.
What year?
A.
2019.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 106 of 258
107
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Did you give Mr. Graff the opportunity to be the project
manager or project executive on the construction?
MS. JIMENEZ: Objection. Leading.
THE COURT: Overruled.
THE WITNESS: Yes. He was the original one. He was
the original project executive since 2015. So he was already
there but nothing was moving forward. So he was working with
Burlington. And then I gave him the opportunity -- I said:
"Do you want to go to Orlando and build this," and I gave him
that opportunity.
Q.
And what was his response?
A.
He said he doesn't want to go to Orlando and, you know, he
can't stay long in Orlando and be on the construction site.
Q.
So what kind of financial arrangement did you make with
Mr. Vasilas for him to be -- well, at some point, do you
have -- what role did Mr. Vasilas ultimately have with the --
for Burlington?
A.
He became the project executive of Burlington project, and
also project executive. He was also quasi -- he was
superintendent, project executive. And then there were some
other people that were along with him. And we ended up -- when
we ended up deciding to actually build the project ourselves
and self-perform it, instead of using the contractor, because
the contractor was -- it just didn't work out with this guy
because of the time -- the time frame, meaning when to deliver
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 107 of 258
108
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the actual store was so compacted. I didn't want to trust the
contractor. Because the liquidated damages was 32 or 3,600,
some -- over $3,000 a day, I didn't want to take the risk. So
I knew what Jeff can do, and that's why I put him as the
project executive.
Q.
What was the financial arrangement you worked out with
Mr. Vasilas for him to have the role as project executive up in
Orlando?
A.
He was an owner of a company -- a bunch of companies, and
he lost millions of dollars, according to him, in the King of
Diamonds. And he just wanted to -- he wanted -- he didn't
really have the money at the time, and he asked if I can pay
him a salary and then if he can buy out the job for less. I
said: "Look, I'll give you 50 percent of whatever -- the
savings that you can cause. But the most important thing, you
have to meet the deadline of May. Because if you don't, it's a
real -- it's a problem. They can terminate the lease. It's a
big problem." And so that's what we worked out.
Q.
Did you offer any other incentives or opportunities for him
down the road for future work?
A.
Well, it wasn't just him. I didn't let him just take a
60,000-square-foot building. There's another guy named Carlos
De Leon at Waterhouse Construction. So he's more like a
technician and engineer -- a technical guy. So I had him and
Jeff. I said: "Look" -- they recognized that I have the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 108 of 258
109
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
relationships with the national tenants. And I said -- and we
have -- after this, we have the Chase Bank and we're working
with a bunch of other tenants that already had leases to build
Marshalls, HomeGoods, Ross Dress for Less --
Q.
Is that phase 3?
A.
Yeah. And Amazon. "And so you guys -- if you do well
here, you can build from 20 through 23 -- you can build all
these builds and you would be -- we'll build it, but you'll run
the construction company."
Q.
Any other incentives for Mr. Vasilas with respect to
dealing with these national tenants?
A.
Well, the incentive was that he would have the inside
track -- if he does it successfully, he would have the inside
track to build -- because national companies want -- whether
it's restaurants or whatever, they want to have a company that
actually can deliver. They don't like to reinvent the wheel
every time they build a building. They select preferred
contractors. So that's what we were trying to achieve.
Q.
What about the loan you had with Mr. Vasilas? How was that
going to get worked out?
MS. JIMENEZ: Objection. Leading. What loan?
THE COURT: Sustained. Let's rephrase.
MR. ETRA: Sure.
BY MR. ETRA:
Q.
What role, if any, did the loan -- the money that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 109 of 258
110
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Mr. Vasilas owed you, was that taken into account in your
financial arrangement in some way?
A.
It wasn't part of my decision at all, I mean, about the
loan. It had nothing to do with the loan, as far as having him
work the construction. Because I saw what he did at King of
Diamonds. I thought it was really impressive. He had the sub
base. He had that guy Carlos.
So the loan had nothing to do with that part. But the
financial side of it, I told him in the 50 percent of savings,
if he was able to accomplish that, that I would write off a
portion -- I would write off the loan up to whatever savings
there were. "And then everything above that, you can have, you
know, the balance for yourself."
Q.
When you hired Mr. Vasilas and gave him this
responsibility, did you trust him?
A.
Yes.
Q.
Why?
A.
Because I just did. I don't know. You get the -- look, to
me, he was always a, you know, hardworking guy. When people
are hardworking people like that, you just -- there's something
about people that work really hard. I just trust that.
Because, you know, he had an interesting story and coming-up in
life, and I can relate to some of it. And I just felt that he
was being sincere.
Q.
Did anyone else in the organization express concern about
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 110 of 258
111
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
your working -- about the responsibility you were giving to
Mr. Vasilas?
A.
Yes.
Q.
Who did?
A.
Jeff Graff didn't particularly, you know, like his style.
I think Jeanette -- I mean, I don't know. People tell you some
things. Jeanette didn't like him so much, but she didn't --
Jeff Graff did not like him at all. And Jeanette was like --
she was in between. And I think that's about the people that I
talked to about it.
Q.
Why were you comfortable giving him the responsibility
notwithstanding whatever concerns Mr. Graff or Jeanette
Gonzalez provided?
A.
I think in life you just -- for me at least, I give
everybody an opportunity. I mean, I don't judge someone
because someone tells me something about someone. So whenever
I look at a person, a man, woman, or whatever, and if in my
heart I believe they're -- they may have had a bad break or
they need a second chance, because they all need it. I just
look at people that way. I say: "I believe this guy can do
something or not."
And I'm not going to take -- I know maybe -- well, I'm
sitting here -- it's not always correct. But for me, I like to
give people a chance based upon how I grew up. You know, it
was tough for me in my life. It was very tough. And I wanted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 111 of 258
112
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to make sure -- if I believe in someone and I think they
were -- I'm not going to listen to the noise, and I thought he
can do the job.
Q.
So what was the plan for construction? Did you have a plan
for construction -- let me start again.
Did you have a plan with respect to which subs you
were using?
A.
Yeah. I mean, every job, before you start the job, you
analyze and see -- like I said before, when -- my first job,
you know, the most important thing, you get the guy who's going
to run the job, who's in charge. That's the guy who is the
superintendent. That's the guy who he makes the thing -- he's
the glue. Then you have a guy who will do the details as far
as how many workers, how much time. You have to do a
construction schedule. You have to provide this to the
national tenant. You have to have a schedule. You have to
have the cost of the project. Every detail is pages of details
that someone has to put together.
Q.
Who was involved in putting all that together for the
Burlington project?
A.
Jeff Graff, Jeff Vasilas, Carlos De Leon, Vanessa Gonzalez.
They were all -- had their own role in the intricacies of
doing -- when you self-perform the work and bringing it
together.
Q.
And what was the plan with respect to how many people would
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 112 of 258
113
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
be working on the site?
A.
The plan was just take each specific trade -- this is in
January, right, before COVID. So it's like starting January
1st, HM-UP Development Alafaya Trails became the contractor to
construct this facility. In that time frame we had a
schedule -- option A was a normal list of all the workers that
we needed and also the third-party independent contractors we
needed. And B was an accelerated schedule to make sure how
much overtime we had to pay, how many workers had overtime to
deliver prior to the termination date.
Q.
How many workers did you anticipate having when you started
the project?
A.
We had jobs for 80 to a hundred people starting January.
MR. ETRA: Put up for the witness only, please,
Exhibit M, as in Mary, 60.
BY MR. ETRA:
Q.
Please, just because it's not in evidence, could you take a
look at M-60 and tell me if you generally recognize the
document. We can go through the other pages if you want.
A.
This is the -- what they call project kickoff call, and
just defining everyone's role, who's who, what they do, what
their, you know, participation is, meaning the tenants, the
owner, the contractor, all that kind of stuff.
Q.
Was this the Project Kickoff Call List for this project?
A.
Correct. It's called Store Number 425, Burlington Stores,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 113 of 258
114
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
which is --
Q.
And were your companies involved in putting this together
and working with Burlington to put it together?
A.
Yes.
Q.
Is this a business record of your company?
A.
It's a business record of my company and also Burlington's.
MR. ETRA: Offer Exhibit M-60.
MS. JIMENEZ: Your Honor, I object. We were provided
this binder of exhibits for the case in chief. We have an M-60
which is not even in this binder, which goes to --
THE COURT: Is that correct?
MR. ETRA: They got this Friday night, right?
MR. CAVALLO: Yes.
MR. ETRA: And we gave it electronically Friday, over
the weekend.
MS. JIMENEZ: So this is Sunday, the night --
MS. MARTINEZ: One in the morning on Monday.
THE COURT: All right. Hold on. Was M-60 included in
the binder?
MR. CAVALLO: It should be, Your Honor. Yes.
THE COURT: Well, was it, Ms. Martinez or Ms. Jimenez?
MS. WEINTRAUB: Judge, could we have one of the
Government lawyers? They've both been objecting to different
things.
THE COURT: All right. Well, they're sharing a binder
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 114 of 258
115
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
so it's appropriate to share.
MS. WEINTRAUB: Are they sharing the examination?
THE COURT: No. Ms. Weintraub, let me address this
issue, please.
MR. CAVALLO: It's here, Your Honor. They're looking
at the wrong one.
THE COURT: All right. Is there any objection?
MS. JIMENEZ: Yes. Objection to foundation as a
business record.
THE COURT: Overruled. M-60 admitted into evidence.
(Defendant's Exhibit M-60 received into evidence.)
MR. ETRA: May we publish it, please?
THE COURT: You may.
BY MR. ETRA:
Q.
This indicates a Kickoff Call List. It says: "March 2nd."
Do you see that?
A.
I do.
Q.
Is that March 2nd, 2020?
A.
Yes, it is.
MR. ETRA: And if you go to "Contractor Information,"
could we blow that up.
BY MR. ETRA:
Q.
What company name is listed as the contractor?
A.
HM-UP Development.
Q.
Was HM development the actual construction contractor on
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 115 of 258
116
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
this project?
A.
Well, it is, but there's also Waterhouse Construction as
well, Carlos De Leon's company. So both companies are
involved, but the named company is HM-UP Development.
Q.
And you see -- who is listed as the contact for HM-UP
Development on this deal?
A.
Jeff Vasilas.
Q.
Okay. And is that his phone number and his email?
A.
That's -- the phone number, I believe, is the office phone
number because I think his phone number starts with a 312. But
the email is his email.
MR. ETRA: Okay. We could take that down, and let's
find Mr. De Leon on this. Take that blow-up down and look at
the middle email address.
BY MR. ETRA:
Q.
Do you see Mr. De Leon's email, along with Mr. Vasilas's?
A.
I do.
Q.
So what business was HM-UP in during this time frame
heading into COVID?
A.
Well, actually, starting in November 2019, and also through
2020, '21, HM-UP was in the construction business to build
these stores to self-perform the construction of these stores.
MR. ETRA: Could we go to Exhibit M-14, a video
already in evidence.
Could we play the video, please. And while we're
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 116 of 258
117
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
playing it, could you describe what you're seeing here.
(Video played, no sound.)
THE WITNESS: Yes. This was the old Toys "R" Us
store. Those are the offices that they had. And -- I'm sorry.
Those are the bathrooms. And then we were doing the demolition
of the 60,000-square-foot building. This shows just the walls,
but obviously there's a lot more demolition in the floors and
everything else.
BY MR. ETRA:
Q.
And when was that done, approximately?
A.
That was done through December -- like in December,
starting a little bit November, Thanksgiving, because I was
there with my wife and kids who had a basketball game. So we
had to go there to go check this out. I remember this. And
then it stopped around the end of December, right before we
pulled the permit for the actual -- the full construction
permit.
MR. ETRA: Could we put that down. And for the
witness only put up Exhibit X-22, and just flip through these
pictures for the witness so we can get this identified.
(Pause in proceedings.)
BY MR. ETRA:
Q.
Mr. Sheppard, have you seen these pictures before?
A.
I have.
Q.
How did you get -- how did you get these pictures?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 117 of 258
118
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Jeff Vasilas sent me these pictures, and I believe Glenn
Sheppard sent me these pictures, some of the pictures.
Q.
Were these pictures provided to you in the course of the
business of your HM-UP company?
A.
Correct.
Q.
Are they business records of HM-UP?
A.
Yes, they are.
MR. ETRA: We offer --
BY MR. ETRA:
Q.
And are they -- what are these pictures of generally?
A.
They're -- generally they're the pictures of the -- when we
started converting the building to a Burlington from a Toys "R"
Us. They are construction from the various components, metal
studs, drywall --
Q.
Approximate time period --
A.
This is January.
Q.
Of?
A.
2020.
MR. ETRA: Defense offers Exhibit X-22.
THE COURT: As a composite, any objection?
MS. JIMENEZ: Objection. The pictures are not a
business record.
THE COURT: Is that the basis?
MS. JIMENEZ: Yes.
THE COURT: Overruled. The exhibits as a composite,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 118 of 258
119
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
X-22, admitted into evidence.
(Defendant's Exhibit X-22 received into evidence.)
THE COURT: Just let me know when it might be a good
time to give the jurors a lunch break.
MR. ETRA: Any time, Your Honor.
THE COURT: All right. Then, Ladies and Gentlemen,
this might be a good time. It's twelve o'clock. Let's take a
one-hour lunch recess, and I'll see you back here at one
o'clock.
COURT SECURITY OFFICER: All rise.
(Jury not present, 12:02 p.m.)
THE COURT: All right. Have a pleasant lunch and I'll
see you back here at one o'clock.
Same admonition, sir. Mr. Sheppard, the same
instruction I had provided that you are not to discuss your
anticipated testimony, the testimony of any individual, or any
aspect of the case still applies as you're on the witness
stand.
THE WITNESS: Can I go to lunch with my family or no?
THE COURT: Mr. Sheppard is asking if he can go to
lunch with his family. Certainly you may do so. That's the
only admonition the Court gave you.
Have a nice lunch.
MR. ETRA: Come back on time.
(Recess from 12:02 p.m. to 1:02 p.m.)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 119 of 258
120
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. Welcome back.
Mr. Sheppard, if you'll come on over here.
Both sides ready to continue?
MS. WEINTRAUB: Yes.
THE COURT: On behalf of the Government?
MS. MARTINEZ: Yes, Your Honor.
THE COURT: All right.
MS. WEINTRAUB: Judge, I am concerned about one
admonition the Court keeps giving, and I'm bringing it up
because I don't want to forget. I forgot it yesterday and
today already.
The Court has admonished Mr. Sheppard that he can't
discuss any aspect of this case. Our admonition has been that
he cannot discuss his testimony, and that's our ethical --
that's our understanding ethically. However, I disagree with
the Court, respectfully, with regard to not being able to
discuss other aspects of the case, and witnesses that are
coming, and strategies, and preparation of the rest of the
case. Because we're going to have two weeks, and to be frank,
I can't do it without my client.
THE COURT: Yes. And that admonition may change,
depending upon where we are with this witness. But that was
the lunch recess, and that was the admonition that was
appropriate.
MS. WEINTRAUB: Oh, okay. Okay. Of course.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 120 of 258
121
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. Ready to bring the jury in?
MS. WEINTRAUB: No problem. Thank you, Judge.
COURT SECURITY OFFICER: All rise for the jury,
please.
THE COURT: I do wish to remind you that we have a
matter at 4:30, so we are going to end at 4:30 today.
(Before the Jury, 1:03 p.m.)
THE COURT: All right. Welcome back, Ladies and
Gentlemen.
Please be seated, everyone.
I trust you had a pleasant lunch, ready to get back to
work.
And we'll continue with the direct examination of
Mr. Sheppard.
MR. ETRA: Thank you, Your Honor.
BY MR. ETRA:
Q.
Mr. Sheppard, we're still pre-COVID, and I want to switch
gears from Burlington to phase 3. Okay?
A.
Yes.
Q.
All right.
MR. ETRA: Put up on the screen for the witness only
the first page of two documents, M-56 and M-57.
BY MR. ETRA:
Q.
Do you recognize -- let's -- what's in front of you as M-56
and M-57?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 121 of 258
122
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes.
Q.
Without going into detail, because it's not in evidence,
generally speaking, what is it?
A.
It was a Joint Venture Partner Memorandum.
Q.
For what project?
A.
For the Alafaya Trails Shoppes at Alafaya Orlando.
Q.
And which part of that project?
A.
This was for phase 3.
Q.
And generally speaking, when you say: "Joint Venture
Memorandum," in plain terms what was the purpose of these
documents?
A.
A couple people approached me about wanting to do a joint
venture on the phase 3 parcel. At the time I was buying out my
partner, so therefore I was putting information together --
standard operating business where you put together the package
and stuff of that nature for the joint venture.
Q.
And essentially, is it a way to get funding?
A.
It's a joint venture. It's a source of funding, but
there's also other ways as well.
Q.
And essentially -- we're looking at two pages, but
essentially two large binders?
A.
Correct.
MR. ETRA: Your Honor, offer 56 and 57 as a business
record.
THE COURT: Any objection?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 122 of 258
123
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Objection. Relevance.
THE COURT: The Court finds it's marginally relevant.
The objection is overruled and it will be admitted into
evidence.
(Defendant's Exhibits M-56 and M-57 received into
evidence.)
MR. ETRA: If we could go on to 56 and look at the --
I have it as Page 13.
BY MR. ETRA:
Q.
And I want to focus on the schedule there, Zoning/Permits.
A.
Yes.
Q.
Generally speaking, what information is there?
A.
This is the development and approval schedule and the
different steps of the approvals from the government, and just
outlining, you know, what the steps are and when the approvals
are anticipated. But again, it's based upon the government
approvals, so just letting someone know what the process is to
actually go through to start construction.
Q.
Does this chart help you put a time frame on these binders?
A.
Yes.
Q.
What time frame could you put on the binders based on this
chart here?
A.
Based on the dates, it's '16 -- October-- I mean 2016.
Q.
In other words, the first step had taken place of -- in
October of -- of October 2016, right?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 123 of 258
124
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Correct.
Q.
But the rest of the steps had not taken place. Is that
fair to say?
A.
Correct.
Q.
Okay. And according to this, at least this time period,
when did you expect final -- finally being able to actually go
through the whole process and turn over the phase 3 buildings
to the tenants?
A.
We were hoping February 2018.
Q.
And who initially was working in Orlando with you to try to
get the zoning and all the permitting done?
A.
Jeff Graff and Joe Beirne.
Q.
Did they get the job done?
A.
No.
Q.
And who ultimately did you hire to help with the process?
A.
For phase 3, myself -- I didn't hire myself, but I got
actively involved at a certain point to get this done.
Q.
Anyone help you locally there?
A.
Yes. There's a zoning lawyer, an engineer called
Kimley-Horn.
Q.
What about Mercedes Fonseca? Was she involved?
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Was anyone else involved at this point in helping you get
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 124 of 258
125
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
this done?
A.
In that time frame, Mercedes was not involved. She was
involved with the Burlington permits, not with the other
permits, not this permit.
Q.
Now, this was supposed to be -- supposed to be turned over
you thought by early February 2018. When did you finally get
approval for the whole phrase 3 project?
A.
Not until January -- January 27th or 28th, 2020.
Q.
Few months before -- little before COVID, correct?
A.
Correct.
Q.
Now, if you go to M-57, look at the first page.
MR. ETRA: And blow that up, please.
BY MR. ETRA:
Q.
What was the status of getting leases in place at this time
in -- you know, late 2016 or so?
A.
There was a lot of interest, and we had leases in place
with Marshalls, HomeGoods, which is owned by the same company
called T.J.Maxx, and we had -- Earth Fare is a grocery store
out of North Carolina, Crunch Fitness, Petco, Ross. And the
CareNow was for the outparcel. It was not for -- it was part
of phase 3 approvals, but it's not part of that parcel.
Q.
And if you go to the second page -- I won't go through the
whole thing, but the second page of M-57, what do you have
there?
A.
I'm sorry. It's the same page.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 125 of 258
126
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
But essentially -- we won't do it visually, but essentially
what's contained behind this page here in the binders?
A.
What's contained -- I don't --
Q.
Are the leases in the binders?
A.
Oh, yes. The leases, the REAs, everything related to
the -- so someone could understand all the components of the
development and project and the contiguous lands next to it.
MR. ETRA: We can take this down.
BY MR. ETRA:
Q.
You mentioned that CareNow was going to be an outparcel.
Did you say that?
A.
Yes.
Q.
This regulatory approval that didn't get done till late
January 2021, did it include the outparcels?
A.
I think it was '20 and not '21.
Q.
I'm sorry. You corrected me. Thank you.
Did it include the outparcels?
A.
Yeah. The approval process was called the Land Use Plan
Amendment, that was approved. But the phase 1 and phase 2
outparcels were part of that approval.
Q.
Heading into COVID, before COVID, what were the tenants for
the outparcels?
A.
Chase Bank, and I forget the other tenant. It was -- oh.
It was CareNow. We moved CareNow to the other parcel -- moved
before COVID.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 126 of 258
127
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Okay. So what was going to be in the other outparcel?
A.
JPMorgan Chase.
Q.
And?
A.
And then we had a retail. It was either Starbucks Coffee
or the urgent care. But the urgent care backed out in January,
and so we replaced them with Starbucks.
Q.
Okay. Why did you need regulatory approval for the
outparcels as part of this process? What was the issue?
A.
The issue is, is that they were already in the market
across the street and you needed a drive-through. And the
drive-through is big to their business and we had to get
special permission to put drive-throughs in.
MR. ETRA: For the witness only, could we put up X-41.
BY MR. ETRA:
Q.
Do you recognize X-41?
A.
I do.
Q.
What is it?
A.
It's the JPMorgan Chase Bank lease.
Q.
With?
A.
HM-UP Development Alafaya Trails TRU, LLC.
Q.
And for what location was that?
A.
That was for Outparcel Lot 3.
Q.
And was that before or after COVID?
A.
Before.
MR. ETRA: Defense offers X-41.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 127 of 258
128
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Could we see the signature? We've never
seen this.
(Pause in proceedings.)
THE COURT: Any objection?
MS. JIMENEZ: We're trying to locate the exhibit.
(Pause in proceedings.)
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-41 received into evidence.)
MR. ETRA: May I publish it, please?
BY MR. ETRA:
Q.
So is this the lease -- lease with Chase for the outparcel,
right?
A.
Yes.
Q.
And dated -- that's the date, March 10?
A.
Yes.
Q.
So as of March 10, and before COVID hit, what obligations
did your companies have under this lease with respect to
construction?
A.
You're talking about when the lease is executed; is that
correct?
Q.
Right.
A.
We, as the landlord, are required to get approval from HM
Four who controls the master association. And then next to do
site work infrastructure, bring in what they call a
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 128 of 258
129
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
transformer, bring the transformer for electric for the
services, electrical, plumbing, sewer, do infrastructure, do
the parking lots, and also connect a road called Indianhead
Trail Road that the county -- a condition of the approval was
to build a new road for the county that connected the road of
our property to the adjacent property.
Q.
Could you explain the Indian Trail Road, how that comes up
in the approval process or the requirement.
A.
Orange County, when they approve a project -- or any
county -- there's always some type of conditions you have to
meet before you can get what they call a certificate of
occupancy. And part of that was to build a road adjacent that
connects my property compared to the other property. That's
what it was, which -- because we have the traffic light. We
have the traffic light. No one else did. So they wanted us to
have them -- give them access to the traffic light.
Q.
Was that an obligation that you had before COVID?
A.
Yes.
MR. ETRA: For the witness only, if we can split the
screen of X-27 and M -- X-27 and M, as in Mary, 61.
BY MR. ETRA:
Q.
While we're waiting for the other document, do you
recognize X-27?
A.
Yes. That was the part where we were finishing the road,
basically the end of the road, but the road started at -- on
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 129 of 258
130
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the yellow lines.
MS. JIMENEZ: What road? What time frame? Can we
have a time frame for this, please?
BY MR. ETRA:
Q.
Mr. Sheppard, what was the time frame of the work being
shown on X-27?
A.
Which one?
Q.
X-27.
A.
Sometime in '21. I'm not sure exactly when -- later '21.
Later '21 -- 2021.
MR. ETRA: And could we just run through the pictures
for the witness on X-27.
MR. CAVALLO: There's only one picture for X-27.
MR. ETRA: All right. And if we can go back to the --
sorry.
BY MR. ETRA:
Q.
M-61 again, generally, because it's not in evidence, what's
the picture there?
A.
Did you say 61?
Q.
Right. Sixty-one. It's the right side of your screen,
sir.
A.
That's when the -- sorry.
Q.
We're flipping through the pictures.
A.
Oh. That's doing the underground drainage, because the
roadway, you have to go deeper with the drainage and cover it
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 130 of 258
131
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
with concrete so the pipes don't break. So that's what they're
doing, and they are forming the curbs.
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
MR. ETRA: Your Honor, it's the work that was done.
THE COURT: Yeah, I know. I know what it is. The
objection is sustained on grounds of relevance.
MR. ETRA: Your Honor, we offer X-27 and M-61.
THE COURT: Is there any objection?
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Who did the work on the -- on this road?
A.
Well, the only one that could do the work was HM Four, and
they hire the -- they hire HM Management and Development to do
the actual work. And then there's also other people involved
with that as well, other workers and companies.
Q.
Do you recall the individuals?
A.
Kerby Kleef, Mo Wimberly, Glenn Sheppard, Mercedes -- she
didn't do the work, but she did the permitting -- Mercedes
Fonseca.
Q.
How about you?
A.
Yeah. I was actually -- I actually was out there for a
little bit.
Q.
Okay. Let's talk about COVID. COVID hits. What happens
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 131 of 258
132
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to your office?
A.
The office is -- everyone goes home and everyone's working
out of their house.
Q.
Okay. Where did you work as of COVID -- what happened to
the office after COVID?
A.
At what time period?
Q.
By April -- by the beginning of April.
A.
The beginning of April was just -- it was there, but no one
was in -- physically in the office.
Q.
So where did you go to work?
A.
I worked at -- from my home.
Q.
And where did -- did Jeanette go work with you at home?
A.
No.
Q.
Where did Jeanette go?
A.
She went to her home.
Q.
And where did Mr. Graff go?
A.
He only worked up until March 31. But actually he left
March 15th, so he wasn't in the office. He was working outside
the office from March 15th, when he was leaving the company.
Q.
Let's talk about Burlington. COVID hits. What happens to
the Burlington project?
A.
It's a problem, meaning it's --
Q.
What happens to the work?
A.
Everything comes to a screeching halt.
Q.
Before we go further, why does it come to a screeching
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 132 of 258
133
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
halt?
A.
Because there was a like a shutdown, a mandatory -- what do
you call it -- stay-at-home orders. You weren't allowed to do
anything. So the workers and the subcontractors of -- the
subcontractors informed us they couldn't continue operating, so
they took their workers off the site.
Q.
Before we get further into how you dealt with that, what
happened -- what effect did COVID have with your other
properties?
A.
My other properties -- the main property in Miami, we had
an issue where a lot of tenants other than Walmart and, you
know, Chick-fil-A, AT&T, and Comcast -- they were still paying
rent but the other larger tenants like LA Fitness and
Carrabba's, and all these tenants stopped paying rent.
Q.
How about DICK'S in Orlando?
A.
They stopped paying rent as well.
Q.
And what happened with your phase 3 tenants? What was
going on with your phase 3 tenants when COVID hit?
A.
I was informed that they don't know what's going on and
everything's on hold until they figure out what's going on with
the world, like everybody else in the world was doing, and
that's what was happening.
Q.
What were you focusing your time on in the beginning of
COVID?
A.
Beginning of COVID?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 133 of 258
134
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Yeah.
A.
My family.
Q.
Workwise?
A.
Oh, workwise. At first, workwise, I was worried about the
Miami project to work with the tenants to try to do agreements
with them because they all asked -- they weren't paying rent,
but they were all asking for a -- how do you call it -- like a
deferral rent, where they'll pay it a year from now or
something like that.
So I was negotiating with all those tenants, with LA
Fitness, and Carrabba's, Discovery, La-Z-Boy. All those
tenants, I was heavily involved with negotiating with their
real estate managers, directly with them, trying to work on
documents to figure out -- you know, what was reasonable. I
was meeting with my partner to make sure that he understood
what was going on with regards to the deferral of rents and
stuff to that nature.
And then, in Orlando, I was working on phase 3. I was
talking to all those tenants and the representatives. Because
most tenants, national tenants, they have preferred brokers
that represent them, and you call them and try to work out --
they all wanted to get extensions of their lease till like
2020 -- I think maybe '21 or '22.
So I was working with that. And I was also --
clearly, I was very, very, very focused also on the Burlington
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 134 of 258
135
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
because we had a deadline to meet before they can terminate our
liquidated damages. So that was very heavily intense with the
executive group at Burlington.
Q.
What about -- were you also dealing with a potential sale
in Flagler?
A.
Yes. We -- we had a sales contract for our project in
Flagler. And my partner and I, on a Friday we agreed to a
bunch of changes, and then on Monday the world just shut down,
and they backed out of that contract. So we were trying to
figure out that, what we were going to do next.
And then we were handing the management of the Flagler
project, the property management, to another company. So I was
working on that trying to hand the property manager to a local
company to manage the property for us. We were focused on
Orlando, so I didn't want to focus on Flagler, so we had a
property management company. And my partner and I agreed on a
management company.
Q.
The things that you were describing now that you were
working on, what time period were you working on that?
A.
From March -- middle of March -- I think it was like the
middle of March, March 12th, to -- until sometime May,
June-ish.
Q.
Now, what was the -- did you come up with a solution to
deal with the fact that all the subs left in Burlington?
A.
Yeah. I mean, the Orlando market was basically shut down
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 135 of 258
136
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
construction wise. And Jeff actually did a great job with a
couple other guys. And I went up there on March 30th or 31st,
around there, and we sat -- and workers actually that wanted to
work, like everyday tradesmen, they said they got fired from
their job -- not fired. It was not the subcontractors' fault,
but the world shut down, and they needed to work, and they
wanted to get paid on a weekly basis, can they come work for
us. And that's what I was told by Jeff.
So then I drove up there and I met with all -- a bunch
of people, and they wanted to know if I was going to continue
on with the project, even though the world came to an end and
everything stopped. And I said: "Yes. We're going to commit
to finish the project, like I always do," and --
MS. JIMENEZ: Objection. Can we just not have a
narrative answer every time?
THE COURT: Sustained.
THE WITNESS: I'm sorry. What does that mean?
BY MR. ETRA:
Q.
Let me ask you this question, Mr. Sheppard: What was the
solution that you came up with?
A.
Hired -- we hired the workers from the -- the
subcontractors' workers, they came to work for us.
Q.
For whom?
A.
For HM-UP Development Alafaya Trails, LLC, the contractor.
Q.
What -- now, in COVID now, who was handling the checkbook
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 136 of 258
137
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to pay workers and things like that?
A.
I handled a certain amount of checks. Jeanette sent me a
bunch of checks from her house. Mary brought them to me so I
can pay the workers. So she sent it to me.
Q.
And what was the system in place to pay workers? How did
you know who to write the checks to? How did that work?
A.
I didn't know any of the new workers. I had no idea who
they were. But Jeff Vasilas, who was running the project and
who was hiring everybody, he was producing me -- I guess what
you call like a report every week of who we had to pay, as far
as workers, their names, their hours, and some information. So
he gave me that report.
Q.
Showing you --
MR. ETRA: For the witness only, Exhibit X-10.
(Pause in proceedings.)
MR. ETRA: We have an issue with that exhibit. So let
me just put up -- M-11 is in evidence?
MR. CAVALLO: Yes.
MR. ETRA: If we could put up M-11, which is in
evidence, Mary-11.
If you could flip ahead, please, to -- no, not that
one.
Could we go a little lower.
BY MR. ETRA:
Q.
Whose shoes are those?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 137 of 258
138
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Those are mine.
Q.
All right. So let's look at the picture here. What
were you doing up --
MR. ETRA: If we could just get the regular picture.
BY MR. ETRA:
Q.
When did this picture -- did you take this picture?
A.
Yes.
Q.
What was the time period in this -- that you took this
picture?
A.
Either March 30th or March 31st, 2020. That's when I took
the picture.
Q.
At the time you were trying to figure out a solution?
A.
Well, I took the picture because my wife wanted to make
sure I was social distancing from everybody. So I wanted to
prove to her I was social distancing. But that's when we
started to figure out what laborers -- with those two gentlemen
by the door, about, you know, how do we get workers to come
work for us directly.
MR. ETRA: Go to the picture that shows the two
gentlemen at the door a little closer.
BY MR. ETRA:
Q.
Do you -- do you recognize those individuals?
A.
Yeah. The guy on the left, that's Brad Schleper -- not
Sheppard but Schleper. And the other guy was -- I forget this
guy's -- I don't remember his name.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 138 of 258
139
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
There was discussion -- well -- could we go back to the
picture with your feet in it, please. Can you identify any of
the people in that picture?
A.
The guy in the blue shirt by the door is Jeff Vasilas and
the other guy is Bradley Schleper.
Q.
I want to talk about funding at this point. Okay?
Generally, before COVID starts and you're doing
self-construction on HM-UP, what was the plan for funding?
A.
We were self-funding -- meaning the entity, the members, my
wife, myself, we were funding the project on a monthly basis or
actually a weekly basis.
Q.
And why not go to a bank to get a loan? I'm talking
pre-COVID.
A.
Because there was already a loan in place. You can't go
get another loan on top of another loan. So there was a loan
in place. So we were providing funds because that's how you
had to do it.
Q.
When you say: "Loan in place," you mean --
A.
The permanent mortgage on the property. It prohibits you
from going and adding another loan to the property. You just
can't do that without the bank's permission, which we didn't --
we weren't going to do.
Q.
That's the Basis loan?
A.
The Basis loan.
Q.
How large a loan -- what was the dollar amount on that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 139 of 258
140
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
loan?
A.
20,590,000. That was done in 2016. Yeah.
Q.
Before COVID did you ever apply for any government funding?
A.
Never.
MR. ETRA: Take a step back and pull up Exhibit X-10.
For the witness only, please, X-10.
And I want to go a few more pages in and take a look
at them for the witness.
BY MR. ETRA:
Q.
Do you recognize Exhibit X-10?
A.
Yes.
MR. ETRA: And for the record, Your Honor, Exhibit
X-10 is Bates range Defense 323 to 930 and 1131 to 1180.
BY MR. ETRA:
Q.
Generally speaking, what is X-10?
A.
What's -- it looks like a report and a bunch of checks.
Q.
Do you recognize the document?
A.
Yes.
Q.
Well, what is it?
A.
Oh. It's the report that Mr. Vasilas provided to me to --
with the backup of the monthly report or whenever he gave the
report.
Q.
Is it all of them or some of them?
A.
No. No. Each -- no. He gave a lot of reports.
MR. ETRA: Your Honor, we offer X-10.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 140 of 258
141
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Any objection?
MS. JIMENEZ: Yes. It's not a business record.
Foundation.
THE COURT: You want to lay that foundation, please?
BY MR. ETRA:
Q.
Tell me the process of getting these reports.
A.
When we decided to -- we were always the contractor. But
then when the subs left, and we had to hire everybody, it
wasn't like sending a check to a company. Right? And then
when COVID hit, we actually hired these people -- or not we,
but Jeff hired these people to come work for the company.
So then we had to have actual reports so I could pay
the actual individuals. Because we were no longer paying a
company, we had to pay the individuals. So that was provided
to me, along with pictures, to show progression of what's going
on in the project. And we went through it and other businesses
when he came to my house, and -- in 2020. And that's where
this comes from. Well, it came from him to me to verify
everything.
Q.
What's the time period of these reports generally?
A.
As soon as we converted the people from their old company
to us, March 2020 through the end of the year.
Q.
And during that time period, generally where was
Mr. Vasilas?
A.
In 2020?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 141 of 258
142
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Yeah.
A.
He was in Orlando mostly.
Q.
So how did this -- how did he communicate -- provide these
reports to you?
A.
He was a little nuts. He would drive -- bring reports,
pick up checks, and drive right back the same day.
Q.
Keep these records in the ordinary course of business at
HM-UP?
A.
Yes. I have copies of them, and then he had -- in his
office up there and also in his storage place up there, he had
copies as well.
MR. ETRA: We offer -- Defense offers X-11 -- excuse
me -- X-10. I apologize.
THE COURT: Is there any objection?
(Court reporter interruption.)
MS. JIMENEZ: Foundation, business record, hearsay.
THE COURT: Overruled. It will be admitted into
evidence, X-10.
(Defendant's Exhibit X-10 received into evidence.)
MR. ETRA: Your Honor, may I publish it to the jury?
THE COURT: You may.
BY MR. ETRA:
Q.
Mr. Sheppard, is this a typical business -- typical style
of business record in your firm as a developer?
A.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 142 of 258
143
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Well, in what way is it not typical?
A.
It's not typical because contractors, or us as a
contractor, we don't -- this format is not what we would use.
We use a more -- I don't want to say professional but more a --
an AIA type of contract -- payment method.
Q.
Did you say -- did you say: "AIA"?
A.
Uh-huh.
Q.
Could you explain what that is.
A.
It's just a form contract. I mean, what happens every
month, you get what they call -- like people give you progress
payment requests, and it's -- but it's all laid out, if there's
progression, how much you paid, how much is owed, and what's
been done. And it's a whole -- it's a -- it's like a form
that's a little bit more professional than this, but --
Q.
Why were you willing to accept, say, a less professional
form of report from Mr. Vasilas?
A.
Because the world was shut down, and it was terrible. So
like -- he was putting it together. I told him: "There's no
way I'm going to make any payroll payments unless I know who
I'm paying." And so that was the only choice I had. I mean,
we had to finish the job, and he was the guy.
Q.
Now, in this case it says checks -- for this particular
page we're looking at, it's got the name Jeff Vasilas under
that column. And then on the right it's got "Dollars," and on
the right it's got "Notes." Can you explain what the request
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 143 of 258
144
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
from Mr. Vasilas was with respect to this part of the report.
A.
Well, I've never done a payroll report. I've never
produced one before. So I didn't understand it. So I said:
"Look, you need to get me who you're paying, what's the gross
wage, show me what they're doing, and show me pictures."
And -- and at the beginning, I was explaining what these
particular people do and stuff like that and -- that kind of
stuff. So I told him: "You have to put that in a format. I'm
just not going to write a check to you blindly. That would be
crazy."
Q.
Did you always -- did you write the check to the workers
individually or to Mr. Vasilas to pay the workers?
A.
A mixture of both. Sometimes -- most of the time, it was
really just the workers directly, but sometimes he already
advanced their check if it was on a Friday and he couldn't get
back to Miami.
So if it was a Friday, he would advance the check, and
then I would pay him back. I didn't pay him back -- I would
reimburse him for doing that. And it was just strange times.
It was just weird. It was not normal.
Q.
And you recall testimony about -- I think Mr. Beirne said
that he got a check from a Diamonds company. Do you recall
that?
A.
I'm sorry?
Q.
Do you recall testimony I think from Mr. Beirne that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 144 of 258
145
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
said --
MS. JIMENEZ: Objection to the form of the question.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Did Mr. Vasilas have authority to write checks from his own
business in this process?
A.
Yeah. I mean, he was -- it was understood he had authority
to do that and for me to reimburse him for payroll.
Q.
Okay.
MR. ETRA: Let's take this down and go back to the
funding where we were before.
BY MR. ETRA:
Q.
So before COVID, you're self-funding. In your -- prior to
COVID, had you ever requested or sought any government funding?
A.
Prior to COVID?
Q.
Correct.
A.
Not that I'm aware of.
Q.
Why not?
A.
I just dealt with the private sector and just never thought
about it. I didn't even know there was government funding
available out there.
Q.
I want to talk about the evidence about -- well, what
happened with the -- Mr. Graff's involvement in some kind of an
application for HM Four. Okay?
A.
Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 145 of 258
146
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
All right. Approximately when did that take place, to your
recollection?
A.
Well, when he left, between March 15th and March 31st.
Q.
So his final day -- his final day of employment or work was
when?
A.
March 31st.
Q.
So when you say he left, what happened in -- March 15th
with respect to leaving?
A.
He was making a transition in careers to go work as
executive director of the temple so he asked me if he can go
make that transition and work out of their offices. And I
said: "It's not a problem as long as you keep in communication
if I need something."
Q.
How did the subject of this potential loan application
first come up?
A.
I called him about another matter about my business, and he
said he was very busy working on some government programs or
something.
Q.
And how did that lead to a discussion of one of your
companies applying for government funding?
A.
I asked him what the government program -- "What are you
working on," and he explained it kind of, sort of. I mean, I
didn't understand what he was talking about, but he says -- you
know, I asked if -- "Does that apply for what we're doing in
Orlando," and he said: "Yeah."
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 146 of 258
147
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And how did that -- where did those discussions go
ultimately?
A.
I asked him -- he said he'll look into it. He'll see --
MS. JIMENEZ: Your Honor, all these questions are to
elicit hearsay. I object.
THE COURT: Sustained.
MR. ETRA: Your Honor, it's not for the truth of the
matter. It's for the information he received. We've heard
Mr. Graff testify --
THE COURT: I understand what we heard. The objection
is sustained.
MR. ETRA: Your Honor, may I sidebar? This is state
of mind. This is critical to the case.
THE COURT: The objection is sustained.
MR. ETRA: For the witness only, putting up -- could
we please put up Exhibit X-15.
BY MR. ETRA:
Q.
Mr. Sheppard, do you recognize what's in front of you as
X-15?
A.
(No verbal response.)
MR. ETRA: Could we --
BY MR. ETRA:
Q.
Are you able to look at it the way it's presented at this
time?
A.
Well, there's like a bunch of stuff going on here.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 147 of 258
148
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Why don't we take away that little box and
let the witness look at the document.
THE WITNESS: Yes. I see it.
BY MR. ETRA:
Q.
Okay. Is this a correspondence between you and Mr. Graff
in late March of 2020?
A.
Yes, it is.
Q.
Is this pursuant to the business of your HM companies?
A.
Some of them, yes.
Q.
Or other companies?
A.
Yes.
Q.
Okay. Is it a business record of your companies?
A.
Yes.
MR. ETRA: We offer X-15 with the attachments.
THE COURT: Is there -- are you seeking to introduce
it at this time?
MR. ETRA: Yes, Your Honor.
THE COURT: Is there any objection?
MS. JIMENEZ: I object. The attachment is not what's
being shown next to it. The attachment is something else.
MR. ETRA: It's the first page of the attachment, is
it not?
THE COURT: Hold on. It appears to be inconsistent
with what's listed on the first page of X-15. So are there
additional pages other than Bates 2309?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 148 of 258
149
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Yes, Your Honor. It goes for several
pages.
THE COURT: Okay.
(Pause in proceedings.)
MR. ETRA: Is that the end?
THE COURT: Any further objection?
MS. JIMENEZ: No, Your Honor.
THE COURT: X-15, with the attachments, is admitted
into evidence.
(Defendant's Exhibit X-15 received into evidence.)
MR. ETRA: And just put up the first page at the
moment only.
BY MR. ETRA:
Q.
Why are you sending these materials to Mr. Graff on
March 25, 2020?
A.
Because he asked me for them, and I was sending it to him
to -- he needed -- and he was going to upload them into a
system.
Q.
Did you tell Mr. Graff that HM Four had to be the company
that would apply?
A.
No.
Q.
Did -- what, if anything, did you say to Mr. Graff about
what company should apply?
A.
I wrote and -- he told me who should apply. I didn't
really know. But I sent HM-UP Development Alafaya Trails's tax
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 149 of 258
150
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
return. And then the owners of that company -- I sent their
information as well for this 4506-T thing.
Q.
Why did you send the HM-UP tax return to Mr. Graff at this
time?
A.
Because that's who I thought was applying for this
particular -- I didn't actually know what I was applying for
because I didn't understand what it was, but he said that's
what it was.
Q.
Okay. Now, do you see the page on the screen?
A.
Yes.
MR. ETRA: If we can go to the page after that too, so
he can --
BY MR. ETRA:
Q.
What is that?
A.
That's the tax return for 2018 for HM-UP Development
Alafaya Trails, LLC.
Q.
Okay. Who chose what company to apply for the -- that
loan, whatever it is that Mr. Graff was applying for?
A.
Jeff Graff.
Q.
Did you care whether it was HM-UP -- at that point, HM-UP
or HM Four applying?
A.
I just took direction. I had no idea what this program
was, and I took his direction because he was heavily involved
with it for the -- for the temple. So I figured he knew what
company made sense.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 150 of 258
151
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Did you ever see an application filled out from Mr. Graff
that indicated a hundred employees?
A.
No.
Q.
The one that was shown in court?
A.
No.
Q.
At the time, how many workers did you think there would be
at Burlington?
A.
Well, from the beginning in January through then and on,
between 80 to a hundred workers to build a 60,000-square-foot
building.
Q.
Do you have any recollection of discussing with Mr. Graff
the number of workers or employees in connection with the loan?
A.
There was -- we never discussed about employees.
Q.
And was Mr. Graff involved in those early discussions --
planning discussions for number of workers or employees?
A.
I don't know what that means. What do you mean? What time
frame?
Q.
Earlier, when you sat down and mapped out how many workers
were going --
A.
Yeah. November, December, January 2019 to '20, yes, him
and others were involved with that discussion to -- again, on
every other job you have to know how many workers are going to
be working on the job.
Q.
Did Mr. Graff ever tell you that HM Four was not eligible?
A.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 151 of 258
152
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Did he ever tell you any of the other companies weren't
eligible?
A.
When you say: "Other companies," what do you mean by that?
Q.
Like HM-UP, say?
A.
No.
Q.
If he had told you they were not eligible, what would you
have done?
A.
I would have just continued on funding and moving on with
the project.
MR. ETRA: Your Honor, I'd like to put up a document
in evidence. We have it as Q-25. I believe it's in evidence.
It's Q-25, Your Honor.
THE COURT: All right.
MR. ETRA: Let's go back a few -- let's go back a few
pages to the bottom of it.
Yeah, the last part.
BY MR. ETRA:
Q.
Do you see the last email in the chain?
A.
Yes.
Q.
Did you send that email on March 30th to Alex Zaslow?
A.
Yes.
Q.
And did you indicate to him that you applied for some
government programs, the way it says like that?
A.
Yes.
Q.
And did you get a response from Mr. Zaslow, to your
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 152 of 258
153
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
recollection?
A.
Did I get a response?
Q.
Yeah. Let me rephrase the question. Did he ever get back
to you to say: "You can't do this. You don't have W-2
employees," or "You're not eligible for PPP program" or
anything like that?
A.
No.
MS. JIMENEZ: I'm sorry. Can you identify the exhibit
number, please.
THE COURT: Q-25.
MS. JIMENEZ: Q-25.
BY MR. ETRA:
Q.
And what was Mr. Zaslow -- where did Mr. Zaslow work at
that time?
A.
Neal Cupersmith's office.
Q.
Throughout the PPP loan process, Mr. Sheppard --
MR. ETRA: We could take this down.
BY MR. ETRA:
Q.
Throughout the PPP loan process, did you ever see any --
were you -- did you ever see anything that told you that it's
only for W-2 -- that payroll is only W-2 payroll and not 1099ed
workers?
A.
No.
Q.
Did anyone ever tell you that?
A.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 153 of 258
154
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
If they had told you that, what would you have done?
A.
If it didn't qualify, I wouldn't apply and I would just go
on continuing doing what I was doing.
Q.
How would you do that?
A.
I would just continue funding the project as we started in
January. We already committed to the project, so we just
continued on.
Q.
Where would you get the money?
A.
We would -- we had the money available, and we would just
write the check to do that. I mean...
Q.
I want to talk about the first PPP loan with PayPal.
A.
Okay.
Q.
How did -- to your recollection, how did that process
start?
A.
It started because somehow I had a PayPal account and there
was a small bill or something due. And I went online and
looked, and there was -- something popped up on the PayPal
account and said: "We now have PPP loans," "PayPal," or
something.
Q.
And what happened next?
A.
I pushed the little button in the box -- I mean on the
computer -- and it transferred me over to this PayPal
section -- I mean PPP section.
Q.
And what happened next?
A.
I pushed another box and went to LoanBuilder -- I think
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 154 of 258
155
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
it's called LoanBuilder -- and pushed that. And then all of a
sudden these prompts came up.
Q.
Do you recall seeing prompts when the PayPal witness was on
the stand?
A.
I do.
Q.
Does it seem like those are prompts that you were looking
at at the time?
A.
I mean, I don't -- I knew they were prompts. I can't tell
you exactly what it looked like. It looked similar to it, but
I don't -- it was a long -- three years ago but looked similar.
Q.
Who was the human being that was actually filling out those
prompts on the first PPP loan with PayPal?
A.
Myself.
Q.
And I want to ask you just a few questions about those.
Okay?
A.
Okay.
Q.
Do you recall seeing that there was a d/b/a for HM
Management? Do you recall that?
A.
I do.
Q.
Okay. Did you type that in?
A.
Yes.
Q.
Do you know what a d/b/a is?
A.
Yes.
Q.
And is HM Management really a d/b/a?
A.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 155 of 258
156
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
So why did you put that in there?
A.
Because I wasn't -- because HM Management and HM-UP were
involved with the project. I didn't -- and there was -- I had
to put it somewhere, and there was nowhere else to put it. So
I was trying to get advice, like is it HM Management or HM-UP
because they're both on the same project doing different
things. So I didn't know, so I put it -- I just -- so --
because there was nowhere else to put it. There was no other
section.
Q.
Why not go to a place where they say: "Anything else you
want to ask us?" Did they have one of those?
A.
No. There was -- I mean, I'm not great with computers, but
I didn't see anything that I can just type in: "Hey, can you
call me" or something like that. There was nothing like that.
Q.
Before COVID, did you ever apply for a loan through an
automated process with a portal like this before?
A.
No.
Q.
I want to talk about the industry that you picked,
construction. Why did you pick that industry?
A.
It said: "Pick what you're doing," and we were actively
doing construction, so I picked construction. That was one of
the options they had.
Q.
I want to talk about the number of employees. Why did you
put 80, eight zero, there?
A.
Because in 2020 we were constructing a building, and there
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 156 of 258
157
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
was -- it was approximately 80 employees. But when you're in
construction, it varies from month to month. So it was hard to
tell. So I put 80 because that was the total. And some months
it's 70, sometimes it's 40. It moves, but I just put 80
because on our -- on our spreadsheet it said 80 workers.
Q.
On your planning documents?
A.
On the planning documents. Because we took over
everybody's workers, so I said 80. So I pushed 80.
Q.
When you were typing in the PayPal portal, and it asked
about employees, what time period in your mind were you
responding to?
A.
I thought the whole thing was intended for 2020 because
you're supposed to be getting it to pay the workers in 2020.
So I just thought it was 2020.
Q.
What about the fact that -- what about the issue of W-2
versus 1099? At what part of -- did that go into your thinking
at all when you were typing in 80 for employees?
A.
Not for a second. I don't think about that kind of stuff.
Q.
Why?
A.
It's just not -- again, it's employees. They're working on
the project. Jeff was converting these people. So I just
think about employees that are working directly for us, so
that's what I looked at.
Q.
I want to talk about the next series of prompts after you
fill out all information and there's a place to fill in the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 157 of 258
158
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
payroll period and the dollar amounts. Do you recall that?
A.
I do.
Q.
Okay. And you recall seeing that earlier, a while ago in
the case?
A.
I do.
Q.
Okay. When you filled that -- do you recall what you
picked for time period for the payroll calculation?
A.
Well, first I pushed "Submit" for the first part. It's
like one of those video games where you go to the next level
thing, like a Mario Bros. And so I submitted that, and then
another thing pops up. And then it says all these questions
about actual physical payroll or what time period or something.
And that's when I looked at that payroll time period or
something.
Q.
And do you recall -- and we could put it on the screen, if
you want me to, but do you recall what time period you picked?
A.
Yes. It was -- the only one you can pick was 2019.
Q.
And do you recall putting in the dollars in response to the
prompts on that page?
A.
Yes.
Q.
Where did you get the information to put in the dollars in
response to the prompts on that page?
A.
I called Jeanette and I said: "In 2019 -- can you give me
the employees for 2019? What's the number," and she told me
what the number was, and I just typed it while she was talking
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 158 of 258
159
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to me.
Q.
Now, they ask for proof -- how are you going to
substantiate the payroll, I should say. We saw you clicked the
bank records. Did you upload bank records to PayPal?
A.
Me personally?
Q.
You, sir, personally.
A.
No. I couldn't do that.
Q.
So do you recall who you spoke to about uploading the
documents?
A.
I don't remember exactly who I speak to. I don't know if
it was Jeanette, it was Jeff, it was Mary. Somebody who knew
how to upload something. I don't exactly know which particular
person, just someone who had the -- the physical bank
statements and I think it was also the health insurance -- the
health insurance payments for the -- 2019. So whoever had
those documents, to gather those things and upload it into
the -- into the thing, in the air, or the portal -- or yeah,
portal.
Q.
When you say: "Jeff," which Jeff are you referring to?
A.
At that point, it would be Jeff Vasilas, not Jeff Graff.
It would be Jeff Vasilas, Mary Ataca that was here, or
Jeanette.
Q.
And generally speaking, with respect to getting assistance
for the first PayPal loan, who did you speak to for help
generally?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 159 of 258
160
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I'm sorry. Repeat the question.
Q.
In terms of getting assistance generally for the first
PayPal loan application process, who did you speak to to get
help? Who do you recall speaking to?
A.
Well, I spoke to Neal Cupersmith, Alex Zaslow, and I was
taking information from what Jeff Graff told me.
Q.
In terms of helping you get information and give it to
PayPal, who did you speak to?
A.
Oh. Again, I spoke to Jeff, Jeanette, and that's it.
Q.
What was Jeff's reaction to being asked to help on the PPP
loan?
MS. JIMENEZ: Objection. Calls for hearsay.
THE COURT: Overruled.
THE WITNESS: His reaction is like he always does.
"Okay. Where do I go? Where do I go? Okay. Great. Great.
Great. Great." I mean, like he's a very aggressive guy. He
looks to do things. He was, you know --
MR. ETRA: I'd like to put up -- please put up in
evidence Government Exhibit 17-10. I want to focus in on the
language in the information part towards the top.
BY MR. ETRA:
Q.
Let me ask you generally, Mr. Sheppard, what was it like
communicating with PayPal -- let me take a step back and not
look at the screen, if you don't mind for a minute.
What was it like communicating with PayPal on this
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 160 of 258
161
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
loan?
A.
I mean, I can't blame them a hundred percent, but it was
very, very difficult. But again, I'm not -- might be user
error from a computer standpoint, but it was impossible.
They'd say: "Reset. Reset. Log out. Reset." It was very
difficult. There was no one to talk to, no one to speak to.
It was just a very strange -- you know, maybe it's an age
thing. But I just -- it was very strange. They never respond.
You call -- I mean, not call. I mean you type stuff in there.
They don't call you back or email you back. It was terrible.
I really didn't enjoy it.
Q.
You see the note here? "I'm the owner of multiple
companies, so I need to change the application to reflect
self-employment" -- excuse me -- "to reflect self-employed with
employees, and the LLC needs to be changed. How do I do this?"
Did you write that?
A.
Yes, I did.
Q.
And the date on this is -- it's February 22 -- sorry --
April 22 of 2020. Does that sound about right?
A.
That's what it says.
Q.
I want to focus on: "The LLC needs to be changed." Why
did you think the -- why did you write that about the LLC
needed to be changed?
A.
Because when I was back in the portal part, you couldn't go
like back. Like, you were doing the front part, where they do
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 161 of 258
162
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the payroll number accounts, and you couldn't go back to go
change anything.
So when I saw the 2019, then I realized that, oh,
geez, that's really HM Management and there's not 88 people.
There's 11 to 15 -- I don't know the exact number, but there's
X amount of people. Because they didn't want the information
going forward for 2020, which I thought that's what the whole
program was for, to pay people in 2020.
So I had to go -- so I wanted to -- that's why I wrote
HM-UP and the d/b/a for HM Management because I was confused.
So I figured it out, spoke to some people, and they said: "No.
You have to put it for HM Management because that was 2019 --
those people are from 2019." And that's why I wrote them, so I
can somehow change it, because you couldn't change it inside
the thing, the portal thing.
Q.
I want to ask about something slightly different, if you
don't mind me keeping it on the screen. I want to talk about
the payroll report that, according to PayPal, was submitted in
this time frame of -- for this application, where it has a
column for withholdings. Do you recall seeing that document in
this case?
A.
I do.
Q.
Did you recognize the document?
A.
I recognized it because I saw it in the case in '22 and
'23. That's when I recognized the -- by looking at it a lot of
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 162 of 258
163
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
times, that's why I recognize it now.
Q.
Meaning after you were arrested?
A.
After, yeah.
Q.
Did you prepare that document?
A.
No.
Q.
Did you ask anyone to prepare that?
A.
No.
Q.
Do you know how it got created or uploaded?
A.
Again, I never saw it until that moment in time when all
this happened. That's my first time I saw it.
Q.
Okay. Staying on this -- let's go to the next -- next
communication here. Did you get a response to that note?
A.
No.
Q.
Okay. I want to go to the -- we're now April 23rd, and you
write -- well, did you write this: "I needed to add more
documentation from my CPA to the submittal, but the site will
not let me. Thank you"? Did you write that?
A.
Yes.
Q.
Did you get a response to that?
A.
No.
Q.
Do you recall seeing -- do you recall the evidence earlier
about a conference call --
MS. JIMENEZ: Objection.
THE COURT: I'm sorry. The basis?
MS. JIMENEZ: Leading. Asking -- it was leading, Your
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 163 of 258
164
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Honor.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Okay. Did you have -- did you speak to the accountants
around this time period?
A.
Yes.
Q.
What do you recall about that?
A.
I recall they emailed -- we emailed back and forth about
setting a time to call because I'm trying to get guidance about
this application. And we set up a phone call and had a phone
call regarding that on the -- I believe it was the 22nd or
23rd. I don't remember which date.
Q.
And what do you recall about the discussion with the
accountant about -- as reflected here -- or about this?
A.
I don't remember all the conversation --
MS. JIMENEZ: It calls for hearsay.
THE WITNESS: Oh. I'm sorry.
MS. JIMENEZ: That's what he's doing.
MR. ETRA: Your Honor, it's advice -- they asked why
he didn't call the accountant. So what advice he got is state
of mind --
THE COURT: Yeah. The objection is overruled. I'll
allow it.
THE WITNESS: I asked him about the 2019 compared to
2020, and that's when they said: "You have to use 2019
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 164 of 258
165
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
workers." And he said: "You can get" -- "Jeanette knows all
about this stuff," and I said: "Okay." And he also said
from a -- how do you call it -- an LLC, he was telling me that
it really should be HM Management.
MS. JIMENEZ: Can we identify who -- who he is talking
about?
THE WITNESS: I'm sorry. I apologize. Neal
Cupersmith and Alex Zaslow were on the phone, and they
specifically told me: "You can't use" -- "HM-UP is 2020. Like
I told you before, it's 2019. You have to use those people
from then," and that was the end of the conversation. And that
was it, I mean, from my -- that's what I recollect of this
particular moment here.
BY MR. ETRA:
Q.
At any point in the conversation, did either CPA tell you:
"Eric, what are you talking about? You don't have W-2. You
shouldn't be doing this"?
A.
No.
Q.
Had they told you that, what would you have done?
A.
If my accountants told me that it was W-2, then I would
just have gone back to my normal business.
MR. ETRA: I'd like to put up for -- put on the screen
Exhibit C-14 in evidence.
This is a Salesforce from April 27th, and the subject
is: "Open opportunity already exists with" --
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 165 of 258
166
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Sorry. What Government exhibit is
this -- Government number?
MR. ETRA: I don't know. It's our C-14.
Do you know, Chris?
THE COURT: Let's identify the exhibit number, please.
MR. CAVALLO: Your Honor, the -- pursuant to the
Government's exhibit list, 17 -- Government's Exhibit 17 is all
PayPal records. I haven't identified it within there, but
that's all PayPal records.
THE COURT: May I see the Bates stamp, please?
MR. ETRA: First page is 338, and the last page --
could we get to it -- 341 is the last page.
THE COURT: All right.
MR. ETRA: May I proceed?
THE COURT: Yes, of course.
BY MR. ETRA:
Q.
Okay. Reading from the screen, from the page, on
April 27th the system says: "Open opportunity already exists
with email," and it's got "eric.sheppard10@gmail.com." Do you
see that?
A.
I do.
Q.
By the way, what is your regular most-used email?
A.
Eric.sheppard10@gmail.com.
Q.
Did you do anything beyond the -- did you get a response to
the second message we saw that came after you spoke to the CPA?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 166 of 258
167
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
No.
Q.
Okay. What did you do next to try to communicate with
PayPal?
A.
Since I didn't get anything back, I just had somebody do
the application the proper way, and based upon not 2020 but
2019, and to submit it to PayPal and attempt to make sure that
they had the information that I was advised that I should
provide them.
MR. ETRA: For the witness only, can we please put up
Exhibit X-12.
Could we put the first and second page next to each
other, please.
BY MR. ETRA:
Q.
Do you recognize Exhibit X-12?
A.
I do.
Q.
And generally, without getting into the details because
it's not in evidence, what is X-12?
A.
This is the -- the PayPal application adjustment filed in
April 27th, 2020.
Q.
Was this done at your direction?
A.
Yes.
Q.
Was this done to submit to PayPal as part of the business
of your HM companies?
A.
Yes.
Q.
And was it kept and maintained by the business?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 167 of 258
168
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes.
MR. ETRA: The Defense offers Exhibit X-12.
THE COURT: Any objection?
MS. JIMENEZ: This would be a PayPal business record,
not a Defendant's business record, so yes, I object.
THE COURT: Is this -- I'm not quite understanding the
qualifier. What would be the basis of any objection? This is
the Defendant's X-12 into evidence. Is there any objection?
MS. JIMENEZ: Yes. Objection. Business record.
THE COURT: The objection is overruled. It will be
admitted into evidence.
(Defendant's Exhibit X-12 received into evidence.)
MR. ETRA: Could we look at the page on the left.
MS. JIMENEZ: What is the number? I'm sorry.
THE COURT: X-12.
BY MR. ETRA:
Q.
Mr. Sheppard, if we can look on the left side of the
screen, what is that?
A.
This is the -- the -- or from -- it's the document that --
scanned, forwarded to the PayPal people.
Q.
Where is the scanning going on on the left side? Could you
please explain. From where to where? Where is it going?
A.
It goes -- I'm not sure exactly how to describe it. But
it's in the -- it's the actual physical office of -- at 12000
Biscayne Boulevard. It is the system where it gets put into
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 168 of 258
169
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the PayPal portal.
Q.
Okay. Is this the correct -- the application you submitted
to PayPal?
A.
Yes.
Q.
Okay. And who physically uploaded it into the portal?
A.
I'm not sure who specifically did it, but it would probably
only be the people I mentioned before -- actually, one other
person. It would be Vanessa, Jeanette, Mary, or Jeff.
Q.
After April, when we say "Jeff," we mean...
A.
Jeff Vasilas. Sorry.
Q.
That's okay. You're not doing anything wrong.
All right. And who actually physically found the
application and typed in on the computer on the PDF?
A.
Someone -- one of them who actually does -- knows how to
work the computer like that, and -- one of those people.
Q.
Now, if you look at number of employees, it says: "11."
Why did you direct that it have 11 there?
A.
Because the accountants told me that it was in 2019, even
though it's for 2020 people you're paying. But they told me it
was for 2019. You have to use the numbers from then. And
that's why -- like I told you before, that was why it was
adjusted to the proper core people of the business.
Q.
And if we look at the business legal name left and then up?
MR. ETRA: You can highlight that, please.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 169 of 258
170
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
What business legal name did you direct put there as the
actual applicant?
A.
I told them to put CJUF III Flagler, because it goes
through the same process where the -- HM Management is
providing workers for self -- self-performing workers work at
the Flagler project along with something at HM-UP. So again, I
was confused. That's -- I wanted to get someone to call me and
say: "Hey" to make sure it's done properly, and there was
nowhere else to put the information.
MR. ETRA: Let's go to the middle of the page.
There's a Question 3. If we can blow that up.
BY MR. ETRA:
Q.
All right. Do you see here it's asking about -- in its own
way, something about common management or affiliates? Do you
see that?
A.
I do.
Q.
And it's checked --
MR. ETRA: Thank you.
BY MR. ETRA:
Q.
It's checked "Yes," correct?
A.
Yes.
Q.
And it refers to the --
MS. JIMENEZ: Objection. Can we not lead? Leading.
THE COURT: Leading. Sustained.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 170 of 258
171
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Which box is checked for affiliates?
A.
"Yes."
Q.
And is there any indication here about -- well, I'll just
read it. It says: "If yes, list all such businesses and
describe relationship on a separate sheet identified as
Addendum A." Do you see that?
A.
Yes.
MR. ETRA: Let's go to the last page of the document.
Let's blow that up.
BY MR. ETRA:
Q.
It says: "Exhibit A, Common Ownership and Management," and
it lists HM Management and Development, CJUF Flagler, and
HM-UP, correct?
A.
Yes.
Q.
Why did you direct that this be created?
A.
Just to explain the -- you know, the common -- it says:
"Managing all three companies." So I just wanted to make sure
that they understand and to communicate to make sure I was
doing it the right, proper way. And to the best of my
knowledge, they wanted to know, and I dictated it and they
typed it out, and that's what it looks like.
Q.
Now, from your understanding, once this was uploaded, what
was your understanding as to whether you had communicated the
affiliate information to PayPal?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 171 of 258
172
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
It's part -- they have it. They have the information, so I
assume they keep it and store it.
Q.
What was your understanding about whether that information
was communicated to the Small Business Administration?
A.
I can't tell you what I thought. I mean, between their
relationship, I just thought that PayPal is part of the SBA, as
far as it's an SBA program. So I thought they communicate
together somehow.
MR. ETRA: Let's go to the signature block on the --
let's go to the bottom there.
BY MR. ETRA:
Q.
Do you recall whether you signed that document?
A.
I did.
Q.
Going --
MR. ETRA: You could take that down now.
BY MR. ETRA:
Q.
Now, at some point, do you get an email or a notification
for a DocuSign, for what we now know is the formal application?
A.
Yes.
Q.
Was it you the person that opened it and pressed the
DocuSign?
A.
Yes. I received it. Well, my email box received it.
Q.
And -- well, did you open it? Are you the human being that
actually pressed on the DocuSign?
A.
Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 172 of 258
173
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
What do you remember reviewing or noticing about the
application when you DocuSigned it?
A.
Can you be more specific? Like, what I viewed?
Q.
I'll ask it differently. Did you read any of it?
A.
Yes.
Q.
What did you read?
A.
I looked at the -- the monthly number -- the monthly
payroll number, and I went through the certifications because
it takes you to a place for you to sign. You have to like push
the button to sign -- you don't sign it, I guess. You -- I
don't know how you do it. You push the button or you do
something with the DocuSign. And looked at those specific
certifications that were saying: "Hey, this is what you" --
"This is this. This is that." And there was like, I don't
know, eight, 10, something like that, certifications.
And then there was the -- then there's like a
signature block or a signature part. And it drops you -- it
just keeps moving, moving, moving. And then it goes down to
the bottom, and then you push that. And then it says:
"Complete," or something like that, and you send it.
Q.
Did you believe that you had provided accurate information
in good faith?
A.
Did I provide the accurate information? Yes, I do.
Q.
Do you have any reason to believe there was any information
that was incorrect?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 173 of 258
174
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
From what I knew of a program that just started and
reading, I thought that that would be -- everything was
accurate.
Q.
I want to segue -- I want to move us forward, but I got to
talk about what's going on on the business side, and let's go
back to the business. What is going on -- now we're in
COVID -- I want to set the time frame. Post-COVID, you know,
towards, say, November or so. We're in 2020. Okay?
A.
Yeah.
Q.
What's going on with phase 3?
A.
In November 2020?
Q.
In that period. In that period from the beginning of COVID
through November 2020.
A.
Well, we started doing a little bit of some site work on
the property, meaning with some trees and in the common area of
the phase 3. It was kind of actually phase 1, phase 2
property, but we were just starting to clear trees and start
getting ready to start doing some type of construction in the
area to move things along.
Q.
What was your relationship between that work and those
leases for phase 3?
A.
The leases were still in flux at the time because tenants
were extending it out. But I was negotiating with Amazon
Fresh, Amazon Markets, the new concept. So the leases -- I was
negotiating with them. So I started to do some construction.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 174 of 258
175
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Did that need to get done before you could start eventually
with the leases, build up the buildings?
A.
Yeah, because it's muck. It's not like, I mean, you have
to go down 20 feet, but you have to do these -- you have to go
and do probes and stuff like that to figure how deep the muck
is and all that stuff. So we started that process, and it's --
that kind of site work takes, you know, six to eight months
because it's a very -- it's dangerous and it's also --
MS. JIMENEZ: Objection. Relevance.
THE COURT: Overruled. You may continue.
MR. ETRA: Sorry?
THE WITNESS: What do I do?
MR. ETRA: Did Your Honor rule?
THE COURT: Yes. I said: "Overruled."
You may continue.
THE WITNESS: So in the common area section, you have
to do all that to prepare the site and move the site work
ahead.
BY MR. ETRA:
Q.
By the way, going back to the PPP money that came in on the
PayPal, how did you use that money?
A.
Well, I contributed money as well, and -- but
simultaneously we paid one hundred percent -- one hundred
percent of the dollars went to a worker on the jobsite who did
construction or other things; one hundred percent, every
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 175 of 258
176
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
dollar, every nickel.
MR. ETRA: For the witness only, please, we can
show -- or at least put on the beginning of X-26, which is a
short video.
Why don't we just freeze it for the moment and ask the
witness.
BY MR. ETRA:
Q.
Do you recognize this video?
A.
Yes.
Q.
And in broad terms, what is the video?
A.
This was in the common area between the phase 3 owner and
the phase 1, 2 owner, the common area. And this was a
machinery that got eaten by the muck, meaning sucked in by the
muck. And this was the people trying to get it out --
MS. JIMENEZ: Just -- objection. Relevance.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Who was involved in trying to clean up the muck and do the
horizontal construction -- well, what time period is this, by
the way?
A.
This was, I would say, about end of June, July 2020. And
this was Jeff Vasilas doing the common area where HM Four is in
control of and doing the actual physical work because it's a
common area. And he --
Q.
What happened? What happened? What was the issue?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 176 of 258
177
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
He didn't hire somebody. He tried to operate the machinery
himself and caused a major problem on the site because he's
operating machinery himself. And this is just a video showing
what he did and trying to fix the issue how he would fix the
issue.
Q.
And did -- the video that's on the screen, that's not in
evidence, did you --
THE COURT: Mr. Etra -- yes, the jurors are in need of
a break. Let's go ahead and take a 10-minute recess.
MR. ETRA: Thank you, Your Honor.
COURT SECURITY OFFICER: All rise.
(Jury not present, 2:24 p.m.)
THE COURT: All right. If we could take that all off
the screen. I think it's still on the screens.
We're on a 10-minute recess.
MR. ETRA: Your Honor, could I be heard on a
proffer on the prior --
THE COURT: On which issue, sir?
MR. ETRA: The prior pictures on the roadwork and the
video here, which I'm going to still make my record at some
point. Obviously, if Your Honor orders me to move on, I will.
But this is -- they got the government money, and this is what
the government money is for. And he's getting more government
money because he's got to pay for these things.
So this is what -- the Government has said we're
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 177 of 258
178
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
misusing government money, and we're showing what we used the
government money for. It's a core part of our defense. And we
can actually prove it with pictures and videos that the jurors
can follow relatively easily, and we think it's core defense
evidence, and we'd like to show it to the jury.
MS. JIMENEZ: He said that he used the government
money one hundred percent to pay his workers. That's fine. I
mean, this video is a waste of time. It doesn't add anything.
It's irrelevant. It's somebody operating a tractor.
THE COURT: I agree in terms of the video. The
testimony as to how he might have used those loan proceeds,
certainly he can testify to that, but I believe that this video
is extraneous and irrelevant.
MR. ETRA: Your Honor, also, I believe Mr. Vasilas is
in the video too. I'd like him to be able to identify that
Mr. Vasilas is there --
THE COURT: But what would be the import of
identifying an individual for the jury? Why is that important
to this case?
MR. ETRA: Because the Government views this as a
document case and we view this as a human case. And we have a
right to put on our defense and show exactly what's going on.
It's not -- respectfully, it's not peripheral. It's the
reality of what life was like. And it's our job as lawyers to
bring this to bear for our client, and we should be able to
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 178 of 258
179
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
show the jury exactly what was going on through actual video,
contemporaneous evidence. It's the government loans -- and I
think it's entirely appropriate.
THE COURT: And you can certainly ask with regard to
the loan proceeds.
All right. Your record has been made. I'll see you
back here in 10 minutes.
MS. WEINTRAUB: Judge, also, I just want the Court to
remember that the Government was arguing that a jewelry expense
from June 4th, the same week that this video was taken -- that
was relevant but this is not, and we object.
THE COURT: And again, that was with reference to an
exhibit and with regard to a summary -- again, the record has
been laid. The Court is ruling on the objections as they are
presented, and I'll see you back here in 10 minutes.
(Recess from 2:27 p.m. to 2:42 p.m.)
THE COURT: All right. Welcome back.
I do intend to let the jury know that for January 8th
and 9th that we will proceed at nine a.m. and conclude at five
p.m. I do wish to advise you that on Tuesday, January 9th, I
do have a calendar call. So our lunch will be extended from
12:30 to two so I can address that in the courtroom.
MS. WEINTRAUB: Judge, do we have the 10th as well
for --
THE COURT: Well, we have the --
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 179 of 258
180
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: -- closings? I'm not sure -- I'm just
seeing the way this is going, and -- like everything in this
case, and I'm just asking the Court.
THE COURT: Well -- so are you advising that -- well,
let me ask you: How much more time do you need with the direct
examination of Mr. Sheppard, Mr. Etra?
MR. ETRA: I'd by surprised -- I'd be pleasantly
surprised if we finished by 4:30, which is when we're breaking
today.
THE COURT: All right. So how many days do you
anticipate that you're going to need to present your witnesses?
MS. WEINTRAUB: I think probably a full day. And then
I think that closings --
THE COURT: Well, this was -- what I had anticipated
was the full day. So you're saying another full day?
MS. WEINTRAUB: Mr. Etra, I think -- do you disagree?
Oh. He doesn't disagree. He's saying worse.
THE COURT: All right. So realistically, because it's
only fair to this jury --
MS. WEINTRAUB: That's why I'm bringing it up.
THE COURT: So how much time do you think you're going
to need to complete all of the Defendant's witnesses?
MS. WEINTRAUB: I think that we will need another full
day, but that does not take into consideration cross of the
Defendant, obviously.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 180 of 258
181
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
So I think that it will be -- I think that we'll take
the 8th and the 9th. Right? That's what I think. That's the
worst-case scenario. Then we would need a day to do closings
and jury instructions. That's why I asked if the Court was
available on the 10th.
MS. MARTINEZ: And then deliberations.
MS. WEINTRAUB: Yeah, but we don't need the Court for
that.
THE COURT: Well, for now, I'm going to tell them the
8th and the 9th, since I'm not quite sure on our end with the
10th. So --
MS. WEINTRAUB: Okay.
THE COURT: All right. Let's bring the jury back.
COURT SECURITY OFFICER: Remain standing for the jury.
(Before the Jury, 2:44 p.m.)
THE COURT: All right. Welcome back, Ladies and
Gentlemen.
Please be seated, everyone.
And we'll continue with the direct examination.
MR. ETRA: Thank you, Your Honor.
Put up for the witness only X-37.
BY MR. ETRA:
Q.
Mr. Sheppard, take a moment to review that and tell me if
you recognize that.
(Pause in proceedings.)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 181 of 258
182
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE WITNESS: Yeah.
BY MR. ETRA:
Q.
Okay. Is this a communication from you to Burlington and
others early on March 18th or so about moving forward?
A.
Yes.
Q.
Is this an email sent in the ordinary course of the
business of the HM-UP company?
A.
Yes.
MR. ETRA: Your Honor, we offer X-37 as a business
record.
MS. JIMENEZ: It's an email from the Defendant. It's
hearsay. Object.
THE COURT: Overruled. X-37 will be admitted into
evidence.
(Defendant's Exhibit X-37 received into evidence.)
BY MR. ETRA:
Q.
Mr. Sheppard, who are you emailing here?
A.
I'm emailing the executive of construction real estate and
the project manager for Burlington. That's the Burlington
side, and then to -- copying Mr. Vasilas.
Q.
And what -- generally, what are you trying to -- why are
you including Mr. Vasilas on this?
A.
Because it's regarding the -- the Burlington construction
because of COVID and everything happening. So I'm trying to
explain that -- what's going on with everything that I've been
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 182 of 258
183
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
trying to work on and the business between us and Burlington.
Q.
Was there a specific issue with the vendors?
A.
Yes. There was vendors that they -- normally, with
national companies, you have to use specific vendors. And they
were -- I was trying to explain my -- with everything going on,
this is the issues I had with the vendors.
Q.
You mean suppliers, essentially?
A.
I'm sorry -- well, vendors/suppliers. It's kind of the
same thing.
MR. ETRA: Your Honor, I neglected to cover something
else. So let's put this only -- if we could put this only for
the witness and go to the attachment after. It's already only
to the witness. I neglected to cover that.
BY MR. ETRA:
Q.
Do you recognize the attachment to the email?
A.
Yes. This is the project schedule for the Burlington
build-out for us from a construction standpoint given to the
tenant.
Q.
Is this also a business record from this time period?
A.
Yes.
Q.
Of HM-UP?
A.
Yes.
Q.
And was it attached to the email to Burlington and
Mr. Vasilas?
A.
Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 183 of 258
184
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Your Honor, this is really part of --
THE COURT: Of X-37?
MR. ETRA: Yeah. I should have covered it before.
THE COURT: It will be admitted into evidence.
MR. ETRA: Thank you, Your Honor.
(Attachment to Defendant's Exhibit X-37 received into
evidence.)
BY MR. ETRA:
Q.
What was the time frame in March 18th when you thought for
your planning purposes that you would have the building ready
for the -- for the tenant to move in -- for Burlington to move
in.
A.
What was my what?
Q.
What was your time frame when you thought at this point --
when you thought Burlington would be ready?
A.
Oh. I was still trying to shoot for the May -- the
May date and -- May 27th, 2020. We were trying to. But again,
that was just when COVID was starting, so there was so many
unknowns at this particular moment. I was doing my best effort
to give them what our plan was.
MR. ETRA: If we could take this down. And for the
witness only, please, can we show the witness X-20.
BY MR. ETRA:
Q.
And since this is not in evidence, could you take a look at
it and tell me if you recognize X-20.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 184 of 258
185
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
It's an email from me to a Burlington construction manager
and copying our construction partner on this job.
Q.
When you say: "Construction partner," what do you mean?
A.
The person on the email is the person that was paid to
supervise and also provide expertise from a technical
construction compliance with the plans, codes, and all that
kind of stuff.
Q.
Was this an email you sent in the ordinary course of
HM-UP's business in connection with the Burlington project?
A.
Yes.
MR. ETRA: Your Honor, we offer X-20.
MS. JIMENEZ: Same objection.
THE COURT: On grounds of?
MS. JIMENEZ: Hearsay. It's not a business record.
THE COURT: Overruled. It will be admitted into
evidence.
(Defendant's Exhibit X-20 received into evidence.)
BY MR. ETRA:
Q.
And let's go through this email. It's -- in the first
paragraph you say: "Yes, work is going on; however, we are
figuring out schedules for people to be in the building at the
same time because of the current crisis." What was the issue
with having people at the same time -- people in the building
at the same time?
A.
It was very important in construction to have staging. I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 185 of 258
186
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
mean, have -- trades working with each other. But Orange
County limited the people allowed inside the building, and then
you had to social distance with each other between workers.
Like one worker would stand here, another 15, 20 feet away. It
was very complicated to get work done when workers can't stand
next to each other.
MR. ETRA: Let's highlight the second sentence,
please, and second only.
BY MR. ETRA:
Q.
And the second sentence says: "The people at Orange
County" -- excuse me -- you're right -- "has instructed us that
we cannot have large amounts of employees in the building at
once."
I want to focus on the word "employees." Who are you
referring to when you said: "Employees" -- "large amounts of
employees"?
A.
The people that we hired directly to come work for us to
build the building -- to -- to continue building the building.
Q.
At the time, did you know if they were W-2 employees or
technically 1099ed independent contractors?
A.
I had no idea what they were.
Q.
So why do you use the word "employees"?
A.
Because we -- Jeff went ahead, hired these people to come
work for us because the other people laid them off. So we
hired them because they were already on the job, so they became
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 186 of 258
187
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
our employees. So he had a deal with people that were working,
as far as --
Q.
This is March 23rd, 2020, right?
A.
Yes.
Q.
Had you even heard of the PPP program at this time?
A.
No.
MR. ETRA: Let's go to -- for the witness only,
please -- Exhibit X-23.
BY MR. ETRA:
Q.
By the way, do you know if PPP even existed
March 23rd, 2020?
A.
I didn't even know what it was at that time, so I wouldn't
be...
MR. ETRA: Could we just click for the witness only
through Exhibit 23, sufficient for the witness to be asked
questions. This document is not in evidence.
MS. JIMENEZ: Your Honor, I object. This is
cumulative about the Burlington worksite.
THE COURT: Let me look at the extent of the
photographs.
BY MR. ETRA:
Q.
If I could ask the witness while we're looking: What time
period is covered by these photographs?
A.
It was between March through -- 2022 through about
October looks like -- well, the end of October -- October 2022.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 187 of 258
188
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I'm sorry. 2020.
Q.
You meant 2020, not 2022?
A.
Yeah. I'm sorry. October '20 -- October 2020.
Q.
And what is the -- generally, what's being depicted here in
the most general way because it's not in evidence?
A.
It's the progression of work from the COVID -- COVID
situation through the end of October, until we received the TCO
on the building in October 2020.
Q.
TCO is what?
A.
The temporary certificate of occupancy, so they can open
the store to the public.
MR. ETRA: Your Honor, Defense offers Exhibit --
excuse me -- Exhibit X-23.
THE COURT: As a composite. Is there any objection?
MS. JIMENEZ: Yes. It's cumulative of other things
we've seen over and over again.
THE COURT: And the Court has reviewed the
photographs, and I find that there are many that are not
cumulative. The objection is noted. It's overruled. It will
be admitted as a composite exhibit.
(Defendant's Exhibit X-23 received into evidence.)
MR. ETRA: If we can look at the first page.
BY MR. ETRA:
Q.
What are we seeing here, sir?
A.
This is the brand-new lights that we had to bring in, that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 188 of 258
189
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
we purchased and installed. Not we, but the electrical worker
installing lights.
Q.
Were there any particular challenges in particular with
respect to the electricians and that trade in this project?
A.
Yes, because the original electrician was a company and
they were from Pompano Beach, Florida. And they -- for COVID,
they decided they didn't want to go to Orlando anymore. So
therefore, we had to find individual electricians for 60,000
square feet and to install 600 lights. So we had to find
electricians to hire that wanted to work.
MR. ETRA: And could we jump to Page D-2390.
Let's actually stop. Let's go back to that one there.
I apologize.
Let's stop here at 406.
BY MR. ETRA:
Q.
What are we seeing here?
A.
Again, trying to social distance everybody, which is crazy,
but the inlays of the flooring, something called a shooter.
And then the white tiles there, you had to do that throughout
the whole sales floor area. It was about 40,000 square feet of
laying that, and also social distancing at the same time and
having limited -- it was back and forth with the amount of
people you were allowed to have in the building. So it was
very hard to do that.
MR. ETRA: Can we jump to 2390.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 189 of 258
190
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
What are we seeing there?
A.
Burlington specced out a -- they were making their district
office here. So part of the deal was we had to build all these
offices for their district office for the Burlington
operations. And this is the ceiling HVAC ductwork and putting
in the drop-in ceilings for the offices.
MR. ETRA: And if we jump to Page 2404.
BY MR. ETRA:
Q.
What kind of lighting was required for this job?
A.
I don't know what you mean by that.
Q.
Well, let me ask you this: Generally, what do you see
being done here?
A.
Well, again, this is a portion. This is one-half of the
store. There is another half. But that is what they're doing.
Again, they're doing the inset lays of material there, the
worker is. And then where that red -- if you look at the wall
on the side, the red, that's the entrance to the district
offices. And then they're -- they're running low voltage as
well because low voltage is different than the electric, so low
voltage for the cameras for the store and stuff of that nature.
That's a whole different -- you have to run all these conduits
all the way to the back of the store for connections. It's
like a hundred thousand linear feet of conduits.
MR. ETRA: Go to 2418, please.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 190 of 258
191
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
What do we see here, Mr. Sheppard -- sorry. What do we see
here, Mr. Sheppard?
A.
These are the checkout areas and all the cabinetry work
that we had to construct and build and install.
Q.
Do you recall which individuals were involved in that part
of it?
A.
Yes. Carlos De Leon had, or has, a place here in Miami
where he does a lot of this work, as far as cabinetry work. So
he was the one who installed -- or his team is the one that
installed the cabinetry work and produced it.
MR. ETRA: Let's go to the last page, 2424.
BY MR. ETRA:
Q.
Why are -- what's going on outside during this time period
with respect to the -- outside the four walls for Burlington
with respect to this work?
A.
Outside the four walls, this is in the common area. So
this was the common area that -- we had to redo all the common
area for the whole site, as required by the lease, and put in
all new islands. We had to run new electrical poles,
connections. And then, as you see the parking lot, the parking
lot's not finished so we had to redo I think about 12 acres of
parking, about 600 spaces. But that's in the common area.
It's not -- you know, it's not part of the HM-UP job.
Q.
Well, whose job is it to work common area?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 191 of 258
192
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Objection. Relevance.
THE COURT: Sustained.
MR. ETRA: Your Honor, this is one of the companies in
the loans at issue.
THE COURT: All right. Then let's -- why don't we
just narrow the question then, with regard to the loan.
MR. ETRA: Sure.
BY MR. ETRA:
Q.
With respect to the loans for HM Four, was there any
connection between that and the common work --
A.
Yes.
Q.
-- common area? What was the connection?
A.
The connection there was that we were in charge of the REA.
And the REA is the one that has to do all the -- only one that
can do and approve the site improvements and alterations to the
existing landscaping, parking lots, and common area -- common
area only.
MR. ETRA: Could we take this down and only for the
witness, please, put up X-42 next to X-43, please. And then
for both, would --
BY MR. ETRA:
Q.
First of all, have you had a chance to look at the first
page?
A.
Yes.
Q.
And would you look at the last page, and then I'll ask you
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 192 of 258
193
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
appropriate questions for something not in evidence yet. Last
page of both, please.
MR. ETRA: Okay. Now let's go to the first page.
BY MR. ETRA:
Q.
Start with, on the left, do you recognize X-42?
A.
Yes.
Q.
What is X-42?
A.
It's the Second Amendment to the lease with Burlington.
Q.
And was it executed?
A.
Yes.
Q.
And then what's the difference between X-42 and X-43?
A.
One's redacted, one's not.
Q.
Okay.
MR. ETRA: Your Honor, we offer X-42 and X-43.
THE COURT: Is there any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibits X-42 and X-43 received into
evidence.)
BY MR. ETRA:
Q.
So let's talk about what happened when you were done
with -- getting to the point where Burlington could move in.
Did that happen in October -- what happened in October? What
happened in November?
A.
The beginning of October, they started moving their --
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 193 of 258
194
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
doing training inside there. But it was not open to the public
until other parts of the property were open -- I'm sorry --
finished. And October -- at some point at the end of the month
of October, a temporary certificate of occupancy allowing them
to actually open to the public and open their store, that
occurred then prior to the CO.
Q.
Now, when we talked about the Burlington lease at the
beginning, we talked about the deadline for delivery and the
penalties for being late. Do you recall that?
A.
Yes.
Q.
How did that ultimately get resolved when they moved in?
A.
It got resolved by the communications with them. And they
decided that the liquidated damage provision was -- they
weren't going to waive off of that because it was late despite
having -- despite the COVID and the pandemic in the world, they
exercised that, and that's what happened, unfortunately.
Q.
And what is X-42?
A.
I'm sorry. What?
Q.
So what is this document on the left, X-42?
A.
This is the document you have to -- when you do something
like this, you have to amend the lease and describe the terms
and conditions. And then that's what that was describing.
MR. ETRA: And if we look on the right-hand side
without the redactions. Could you just highlight the language
that would be redacted at the bottom.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 194 of 258
195
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE WITNESS: "Landlord shall pay amount of
$1,166,000, the settlement amount for liquidated damages."
BY MR. ETRA:
Q.
So that was the outcome of being late?
A.
Unfortunately, yes.
Q.
And nevertheless, what was your assessment of --
MR. ETRA: We could take this down.
BY MR. ETRA:
Q.
What was your assessment of Mr. Vasilas's performance when
he was able to deliver this in October, November?
A.
I thought he did a great job under the conditions. I mean,
I don't think anybody -- you know, he personally and all the
hard work and every single worker that was on that jobsite
risked their life during COVID and -- to feed their families.
And he did what he could. And I mean, I wasn't happy that it
was late, but there was nothing you could do. Just -- the
world changed. He did a great job. At that point, I thought
he was -- he did a great job.
Q.
How did you feel about your decision to take a chance on
him?
A.
Well, I -- at that time, I think I was -- made the right
decision. Compared to what people thought I should or should
not have done, I thought I did the right thing.
Q.
And what effect, if any, did that have on the trust and
faith you had in him?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 195 of 258
196
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I mean, he got a 60,000-square-foot building open. It was
great. I mean, to me, he was like a rock star. So I was like:
"This is great." Did I doubt that he could actually do it? I
was worried. But he did it somehow.
MR. ETRA: For the witness only, could we please put
up Exhibit X-13 on the left side and X-34 on the right side.
I want to take down X-34. I want to do one at a time.
It's going to make it too complicated.
BY MR. ETRA:
Q.
Sir, do you recognize the document on your screen as
X-13 -- the document on your screen that is Defendant's X-13?
A.
Yes.
Q.
What is X-13?
A.
This is the -- when you get a TC on a building, the
national tenants provide you a punch list of items to correct.
Q.
Correct what?
A.
Correct -- it's something -- punch list means to go through
items that they don't think are done correctly, it's not
installed pursuant to the plans and specs, or something's off,
every little detail of the building. So before they -- before
they let you off the liability of doing any more construction,
this is a necessary part.
Q.
So was the work done for HM-UP when you hand over the keys
to Burlington?
A.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 196 of 258
197
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And did you use and rely upon this punch list in the
ordinary course -- did you receive this punch list in the
course of the business of HM-UP?
A.
Yes.
Q.
And did you use it in the course of your business for
HM-UP?
A.
HM-UP used this to -- based upon the lease agreement, yes.
MR. ETRA: We offer Exhibit X-13 as a business record.
THE COURT: Any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-13 received into evidence.)
MR. ETRA: If we could just look at the whole first
page and maybe the second page as well.
BY MR. ETRA:
Q.
How detailed was this punch list?
A.
It was very detailed.
Q.
How significant or insignificant were some of the items?
A.
I mean, some were -- I thought were insignificant. A
bathroom that the holder was -- it was three feet -- it was
like 12 inches off. You have to move it. And then there was
significant stuff that there was damage in areas. But as the
contractor, you're responsible to, you know, fix these things.
That's what the contractor does.
MR. ETRA: Could we take that down and for the witness
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 197 of 258
198
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
only, please, put up Exhibit X-34.
BY MR. ETRA:
Q.
Could you take a look at X-34, please. It's not in
evidence, so just read it and let me know when I can ask you a
question about it.
A.
Yeah. I read it.
Q.
Okay. Generally speaking, is this a communication between
your company -- are these communications between Burlington and
your company HM-UP with respect to the punch list?
A.
Yes.
Q.
As part of the business activity and business records of
HM-UP?
A.
Yes.
MR. ETRA: Your Honor, Defense offers Exhibit X-34.
THE COURT: Any objection?
MS. JIMENEZ: Hearsay. Relevance.
THE COURT: Overruled. Admitted into evidence.
(Defendant's Exhibit X-34 received into evidence.)
BY MR. ETRA:
Q.
How long did it take you to finish the punch list?
A.
I personally did not do the punch list, but --
Q.
HM-UP.
A.
HM-UP. It was a 55-page punch list. So it took quite some
time and -- quite some time.
Q.
As shown here, Mr. -- I don't know how to pronounce it. It
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 198 of 258
199
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
starts with a P. Do you know who that is?
A.
I do not.
Q.
Well, let's go to the email above that. Mr. Valentine, do
you recognize that name?
A.
Yeah. He was the project manager for construction for
Burlington, who I know.
Q.
You mean working on the Burlington side?
A.
Correct. He's the representative of Burlington. He worked
for the Burlington company.
Q.
And he's writing this on June 14th, 2021, right?
A.
Correct.
Q.
And he writes: "Would you provide an update for the items
noted below for Orlando Burlington Store 425. Thanks."
Do you see that?
A.
Yes.
Q.
Which store was Orlando Burlington Store 425?
A.
The one at 1250 North Alafaya Trail, the property we've
been talking about.
Q.
So as of mid-June 2021, was the punch list -- were the
punch list items completed?
A.
No.
Q.
Do you recall when they were?
A.
I don't remember. I was really not involved with the punch
list. That was really in Jeff's world, not mine. Because I've
already moved on from this.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 199 of 258
200
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
All right. Let's put this down and go back to the funding
issues and talk about Nationwide and the EIDL loans. Okay?
A.
Yeah.
Q.
How did you first come to deal with Nationwide for these --
for the EIDL loan applications?
A.
Prior to COVID, I was speaking with Daniel Sheps, who I
guess is the owner of Nationwide, and he was trying to do
financing for some of the phase 3 project. And so that's how I
originally met the Nationwide Lending people.
Q.
Phase 3 didn't yet -- have a mortgage lender yet, like a
secured lender, right?
A.
There was no secured lender, no.
Q.
And how did the subject -- well, how did it come to these
general discussions -- how did the subject -- let me start
again.
When did you start to talk to Nationwide about EIDL
loans?
A.
I'm not exactly sure, but I would say somewhere around
June, July -- June, July somewhere -- maybe July of 2020.
Q.
And do you recall how the subject came up?
A.
He -- yes, I do. That, I do. He called and we were
speaking about -- I said: "The tenants are on hold for phase
3. I'm not sure we're doing it because of everything that's
going on in the world." And he says: "Well, do you have any
other companies that are actively still doing business and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 200 of 258
201
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
doing construction or whatever" -- I mean -- whatever -- I mean
"some type of business?" And I said: "Yeah." And he said --
MS. JIMENEZ: Your Honor, I object to the continuation
of his answer. It's hearsay.
MR. ETRA: It's not for the truth of the matter.
THE COURT: Overruled. I'll allow it.
THE WITNESS: He said: "Just give me the list of some
properties that are actively just doing business because
there's this program that we offer with the government that you
get a loan and you can -- it's like a 30- or 35-year loan," or
something like that, "and reasonable interest rates, and
they're looking to help companies," you know, "through the
pandemic."
BY MR. ETRA:
Q.
When that was said to you by Mr. Sheps, did you
understand -- did you know what loan program he was talking
about?
A.
No idea.
Q.
Did you know if that was just a Nationwide program versus
something anyone could have clicked on the Internet to find?
A.
I don't understand the question.
Q.
In other words, was it presented as a government loan
program or a Nationwide government loan program?
A.
It was represented that Nationwide was like a platform for
the SBA loan program, and it had nothing to do with the PPP
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 201 of 258
202
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
loan so it was just a separate program.
MR. ETRA: For the witness only, can we please put up
exhibit -- actually, this is in evidence, from Government
Exhibit 67, Bates Number 34296 in evidence.
BY MR. ETRA:
Q.
Focus on the middle of that email from Mr. Sheps. Did
you -- it's a little hard to read -- follow it, but were you on
this email from Mr. Sheps on July 14?
A.
Yeah. The 12:43 p.m. email from Mr. Sheps to me.
Q.
Are you?
A.
Am I what?
Q.
Did that email go to you?
A.
Yes.
Q.
Okay. What are you -- how did this email come about,
with -- that talks about HM Management 1.5 million, HM-UP
Development Outfit two million, and HM Six five million? How
did that -- what led to that email?
A.
He asked me what companies are involved with -- that were
active businesses with regards to -- I told him about the
construction, obviously, in Burlington, and he asked what
the -- what the approximate gross revenues were for those
companies. And he was writing to me telling me -- what we
talked about, basically. He said the numbers there.
Q.
How did you determine which companies to talk to him about?
A.
Well, he asked about a bunch of companies, and -- and I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 202 of 258
203
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
guess he wrote me about these particular ones. But we talked
about multiple companies, and he was trying to explain to me,
you know, how it works, and I didn't understand it. I was --
so I just gave him the answers to certain companies and that
was it.
Q.
Throughout dealing with Nationwide, did either Mr. Sheps or
Nelly Palancar indicate to you that your companies were not
eligible?
A.
No.
Q.
What did you understand your role and Nationwide's role to
be in this process of working with Nationwide?
A.
I'm sorry? My role and Nationwide's role?
Q.
Right. What were you doing and what was Nationwide doing?
A.
Oh.
Q.
What did you understand their role to be?
A.
Oh, okay. My role -- or their role was the representative
with the -- they were dealing with the SBA in some shape or
form, and I was to provide information to them so they can
review it and tell me what I qualify for. And then I just give
him the information and they were forwarding it to it. And for
that, I would have to pay a success fee of I think it was like
7,000 or 7,500 dollars or something like that, and that was --
that was it.
Q.
Were you getting advice from Nationwide?
A.
Well, they gave me advice of what I qualified for -- which
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 203 of 258
204
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
companies qualified. I mean, of all the companies I have, they
said about four companies, three companies -- I'm not sure the
exact amount, but they told me which company qualifies and
which don't.
Q.
Who actually filled -- did you think you did anything wrong
in working with Nationwide?
A.
No.
MR. ETRA: For the witness only, please, Exhibit X-44.
BY MR. ETRA:
Q.
Please take a moment and tell me if you recognize the
document.
A.
Yeah. I remember this.
Q.
Generally speaking, what is this document?
A.
This is communication to the SBA portal service.
Q.
From?
A.
From me, eric.sheppard10@gmail.com.
Q.
Do you recall there being an issue with the processing of
the HM-UP EIDL loan that Nationwide assisted with?
A.
Yes.
Q.
Okay. And did you write to SBA about that loan at this
time?
A.
Yes.
Q.
Was that done in the course of the business of HM-UP?
A.
Yes.
MR. ETRA: Your Honor, Defense offers Exhibit X-44 as
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 204 of 258
205
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
a business record.
THE COURT: Is there any objection?
MS. JIMENEZ: No objection.
What number is it again, please?
MR. ETRA: X-44.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-44 received into evidence.)
BY MR. ETRA:
Q.
Do you recall discussion about these different email
addresses that Nationwide Lending Direct came up with for each
application?
A.
Yes.
Q.
And what was your -- what was that like working that way
with Nationwide?
A.
Again, I didn't understand the program, and they were the
experts. So they were telling me that -- I didn't understand
why they couldn't use my email. And they said: "You can't.
You have to use a separate email for each application," and
they would set up the -- and they set up a bunch of -- they set
up emails, like this RS, or ES, SFH, all kinds of emails --
Q.
Sorry. Keep going. I didn't mean to cut you off.
A.
That's fine.
Q.
And who controlled those emails?
A.
They did.
Q.
And here, why are you writing through your Sheppard 10 --
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 205 of 258
206
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
sorry -- eric.sheppard10@gmail.com. Why are you writing from
that email to the SBA?
A.
Because Nelly asked me to. She said: "You have to tell
them." Because there was so much confusion with that portal,
it was impossible. It was -- all she did was tell me how bad
it was, and I was -- you know, I didn't know enough about it.
So I said: "Okay. Do you want me to write an email? What do
you want me to write?" And she told me because her email was
having a problem with their portal and Social Security numbers
were wrong. All kinds of stuff was wrong. And so she asked me
to write them and, you know, see if I can change it to my email
or some other email.
Q.
Were you trying to hide your involvement from the SBA?
A.
No.
Q.
Okay.
MR. ETRA: Take that down.
BY MR. ETRA:
Q.
Let's talk about the HM Four EIDL application. Okay?
A.
Yes.
Q.
Okay. Did you use Nationwide for that?
A.
No.
Q.
Why not?
A.
Well, because they are charging $7,500, and I realized that
the SBA program is open to everybody that has a business, and I
don't really need them to go, you know, apply. I knew that you
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 206 of 258
207
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
had to have a separate email, you had to have a separate bank
account, and you had a -- I knew what she told me. It wasn't
complicated, so I'd rather just do it myself at that point.
Q.
So how did you go about applying for the -- for HM Four for
the EIDL loan?
A.
I just went online to the SBA portal and typed in
information. And I thought after the PayPal thing I would
never do that again, to try to use the computer to type
information, but I did. The SBA portal is a little easier than
PayPal, but -- so that's what I did.
Q.
So who was the human being that was inputting information
into the SBA portal for the HM Four loan application?
A.
I was.
Q.
Did you open a new bank account for that?
A.
I did.
Q.
Why?
A.
I didn't want to, but I had to because I had to -- based
upon what Nelly and everyone was telling me, that I had to have
a separate email and separate bank account in order for them to
verify the business.
Q.
And you got to my second point. Did you open an email
separately just for this application?
A.
Yes. I opened up the HM Four Gmail account and I opened up
the SunTrust Bank account so I would comply with -- because I
didn't want to get in the same problems with that email you
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 207 of 258
208
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
showed me before with the email address and this address, and
everything was all messed up. So that's why I did that.
Q.
Why not use your Sheppard Gmail for your HM Four
application? Please explain.
A.
Twofold. One is, in the PayPal -- it was already used in
the PayPal, eric.sheppard10. And then, for this, they said:
"You have to use" -- you know, "Whatever that company the loan
is for, you have to use a separate email and separate bank
account."
Q.
You said "they said."
A.
I'm sorry.
Q.
Who said?
A.
Twofold. One, that's what Nelly explained to me from
Nationwide. She said that's the way it works. And two, when
we were on the phone -- she used to call me all the time and
put me on the phone with the SBA when she was talking with
them, that I would give permission for her to speak to them.
And when we were speaking to them about this email problem,
they were explaining to me you're supposed to have a separate
email for each application, and that's what the SBA
representative actually said to me. So I remembered that and I
said: "Okay." That's why I did that.
MR. ETRA: Could we put on the screen -- this is in
evidence. It's from Government Exhibit 58, Bates Number 31143.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 208 of 258
209
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Mr. Sheppard, do you recognize this document?
A.
I do.
Q.
First of all, before I ask how it came about, I just want
to go through the language in the letter. Okay?
A.
Yes.
Q.
The first sentence says: "Eric Sheppard and Jennifer
Sheppard are valued customers of SunTrust Bank." Do you see
that?
A.
I do.
Q.
I can't speak for "valued" for the -- we can't speak of
value for someone else, but were both of you, you and Jennifer,
individual account holders at SunTrust?
A.
We both had our own individual account. Plus we had a
house account there as well just in our names. And then we
had -- then there was also business accounts, multiple business
accounts at SunTrust Bank.
Q.
All right. And the next sentence says: "The account HM
Four, LLC is in good standing at this time." So I guess I'll
ask you: To your knowledge, was that account in good standing
at the time?
A.
At the time of this letter it was because we just opened up
the account just recently. So it was -- according to him, it
was in good standing.
Q.
Next sentence: "They," meaning you and Jennifer, "are
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 209 of 258
210
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
members and owners of HM Four, LLC." I'll stop there. Was
that statement true?
A.
Yes.
Q.
And in what way were you and Jennifer members and owners of
HM Four, LLC?
A.
We are member -- we own it -- what they call tenancy by the
entireties, and it's a joint ownership between a husband and
wife who have been married for over 20 years. And so we own
the entity together as tenancy by the entirety -- a portion of
the entity as tenancy by the entireties.
Q.
And then the next part of that sentence: "And have been
clients of SunTrust for over 10 years," referring to you and
Jennifer, obviously. Is it true that -- or not, that you and
your wife were clients of SunTrust for over 10 years?
A.
Yes. We were over-10-year customers with SunTrust.
Q.
All right. Then it goes on to say: "Can be reached for
questions."
Let me take a step back now. Do you know Mr. Barrios?
A.
I know him.
Q.
How do you know him?
A.
He's the branch manager at the Bal Harbour branch in -- of
SunTrust.
Q.
Did you meet with him from time to time to deal with your
various banking needs?
A.
Yes. I've met with him on multiple occasions -- on a lot
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 210 of 258
211
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
of occasions, inside and outside of the bank.
Q.
What do you mean "inside and outside the bank"?
A.
Well, his job at SunTrust, but I've also gone to lunch with
him outside of the bank as well -- I mean in his capacity at
SunTrust Bank, outside the building, for lunch and stuff like
that.
Q.
What was the -- how did this letter come about?
A.
Typically, in my business, you get reference letters from
banks when you do loans, construction loans. So I just thought
it would be -- they asked me questions, meaning -- "they" --
the government asked me questions if I can provide them
information regarding the bank accounts. And I thought it
would be simple just to get a regular reference letter from all
of the deposits I've had for the years that Mr. Barrios was
there.
Q.
How specifically, I mean as a matter of logistics and
mechanics, did this letter come about?
A.
Well, it was COVID, and the bank was shut -- that
particular branch was shut down a lot. They had a big COVID
problem at that particular branch. So I touched base with him
the week before this and said: "Hey, can you get this for me,"
and a bunch of other things. And he said: "We're closed right
now on that Friday because of COVID, but you can come in on the
following week." I said: "Sure." I said: "I'll come in."
And he asked me what I wanted, and he told me: "Don't worry.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 211 of 258
212
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I'll take care of it."
Q.
And what happened?
A.
I went over there -- I don't know -- I don't know. I think
it was 12th -- the 12th of November. And he already had
everything done. And I said: "Great." And he opened -- he
physically opened the door with the little key, because people
weren't in -- he opened the door with the key. I walked into
his office, like I always do, and he gave me this. And then
he -- and that was it. And he said: "I'm going to email you a
copy of this, and see -- if anything is wrong with this letter,
let me know," and that was the end of the conversation, and
that was it.
Q.
Did he explain why he was emailing it to you at all where
there weren't any logistical issues?
A.
Well, he said in case he was going to leave town or -- he
was leaving town, or I don't remember the exact story. But he
was leaving town, so he just wanted me to have a copy of the
letter, and if I -- if I had any problems with it. And I --
you know, I looked at it. There was no problems with it. So
it was fine.
Q.
Did you sign this name?
A.
Did I sign it? No.
Q.
Did you have any reason to believe that this was not an
accurate signature from Mr. Barrios?
A.
I have no idea what his signature is. I've never seen him
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 212 of 258
213
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
sign anything, so I assume it was his signature.
Q.
Because it was located in what and given to you how?
A.
It was given to me in an envelope. I walked in the bank,
he gave it to me, and we talked. I mean, I live literally
across the street. It was literally like a minute-and-a-half
drive. So I talked to him all the time. So it wasn't -- I
mean, I knew the guy. It wasn't -- I heard him testify. I
knew the guy. I mean, I know him.
Q.
From your perspective, given your dealings with bankers, do
you have any concern that he wouldn't sign a letter like this?
A.
I just -- there would be no concern. I mean, it's a
reference letter. I mean, I deposit a significant amount of
money in the bank every year, and I don't understand. It's a
reference letter.
MR. ETRA: I'd like to please put this down and put
in -- in evidence Exhibit M, as in Mary, 19.
BY MR. ETRA:
Q.
Do you recognize M-19?
A.
I do.
Q.
And the attachment?
A.
I do.
Q.
Could you explain what it is.
A.
It is the letter -- oh, wait. M-19. I'm sorry. It is the
email that he sent me on November 12th, 2020.
Q.
And then on the right-hand side is the attachment?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 213 of 258
214
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Correct.
Q.
Okay.
MR. ETRA: We can put that down.
BY MR. ETRA:
Q.
I want to talk about Mattress1One and Mr. Maged Salem and
those issues.
MR. ETRA: Could we put up the original lease, GX-25.
I have it as GX-25.
BY MR. ETRA:
Q.
Do you recognize GX-25?
A.
I do.
Q.
What is GX-25?
A.
This is the original lease of SOS Furniture and HM-UP
Development Alafaya Trails, LLC.
Q.
And what was -- how long -- what was the term of the lease?
A.
I'm not sure. I have to look at the...
Q.
That's all right.
MR. ETRA: Let's go to -- we'll take a look at what's
Page 2 for the initial term.
THE WITNESS: Yes.
BY MR. ETRA:
Q.
What was that term of the lease?
A.
Five years.
Q.
And did the lease expire at some point in or about 2017 or
'18?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 214 of 258
215
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes.
Q.
When I say that because -- when -- under these leases, even
though you sign it on a certain date, when does the term
actually start?
A.
It starts when you finish construction and give delivery to
the tenant.
Q.
Okay. And I'm not finding the language that was on the
screen when Mr. Salem testified, but do you recall looking at
the language when he testified about extensions?
A.
Yes.
Q.
You recall that it required written notice?
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Did you ever get -- was this lease ever extended?
A.
This particular lease?
Q.
Yes.
A.
Not to my knowledge.
Q.
Did you ever receive written notice of an extension?
A.
I personally would not receive it. The administration
department in the office would receive it. But according to
the file that I reviewed, there was no extension.
MR. ETRA: Could we go to Page 10 of the lease.
Could you blow up the bottom which says: "Term
Extension Options."
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 215 of 258
216
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Do you see where it indicates that -- first of all:
"Provided the tenant is not in an uncured default." Do you see
that?
A.
Where are you reading that?
Q.
The beginning of what's highlighted. So in other words, to
get an extension, do you need to be not in default?
A.
Correct.
Q.
Was -- in or about 2018 and '19, was Mattress1One in
default?
A.
Sitting here without it in front of me, I can't tell you.
I know they were in default many times. I just don't -- can't
give you exact, you know, actual month or date. But there was
a point in time they became in default often, monetary default.
Q.
And the highlighted language says: "Such options shall be
exercisable by tenant giving written notice to landlord of its
intention to exercise the same," and it gives a deadline.
To your knowledge, did your companies ever receive
written notice from the tenant -- I say Mattress1One, but it's
really SOS -- for seeking an extension?
A.
To my knowledge, after reviewing the communication in the
file, they never provided any type of extension.
Q.
When is the first time you heard anyone from -- I'm just
going to say Mattress1One without the companies -- ever suggest
they had an extension on this original lease?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 216 of 258
217
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
When he testified. I'm not sure what date he testified.
Whatever date I heard him testify.
MR. ETRA: Go to the next page, Page 11.
BY MR. ETRA:
Q.
Referring to Paragraph 4 in Paragraph 402, could you very
generally explain what's going on there with respect to the
rent, the differences.
A.
Yes.
MR. ETRA: Could you put them both up at the same
time, 401 and 402.
BY MR. ETRA:
Q.
Could you explain the difference between these two
paragraphs.
A.
Yes. One is the -- it separates how the rent is supposed
to be divided. One -- a portion is for the minimum base rent,
which is the base rent. And then there's additional rent,
which is the common area maintenance expenses, and the real
estate taxes and insurance, which is -- when you combine them,
it's called gross rent. But then when you separate it, it just
separates what's common area and what's minimum base.
MR. ETRA: Let's take this down. And for the witness
only, please, Exhibit M, as in Mary, 88.
And if we can look at the last page as well. It's a
three-page document. If you can put up the first and last
page.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 217 of 258
218
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Sir, do you recognize generally what Exhibit M, as in Mary,
88 is?
A.
Yes.
Q.
Generally speaking, what is it?
A.
It is called a Tenant Estoppel Certificate.
Q.
And generally speaking, what is a Tenant Estoppel
Certificate?
A.
It's required by lenders for financing. It's also required
within the lease agreement that this be provided by the tenant
to the landlord and to the lenders, that you're promising and
swearing that this is exactly the relationship as far as rent,
how much you're paying, where the lease term is, and all of
that. And it's a very important document for financing for the
lender.
Q.
Is this a business record of your companies?
A.
It is.
MR. ETRA: Your Honor, we offer Exhibit M-88.
MS. JIMENEZ: No objection.
THE COURT: All right. Admitted into evidence.
(Defendant's Exhibit M-88 received into evidence.)
BY MR. ETRA:
Q.
Could we just focus on the last page --
A.
Yes.
Q.
-- the signature, according to his testimony, of Mr. Salem.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 218 of 258
219
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Sure.
Q.
Okay. And you see the language where he's writing: "The
undersigned," and then it says, second line, "hereby affirms to
lender and its successors, and/or signs and agrees with
lender" -- and it has more language -- "to be bound by tenant's
statements and agreements set forth herein above." Do you see
that?
A.
I do.
Q.
In the context of a Tenant Estoppel letter, what does that
mean?
A.
It's -- you're basically -- not basically. The tenant is
signing a document guaranteeing that the -- that this
particular lease document is collateral for the loan on the
real estate. So therefore everything you're saying is true and
correct and we're relying on your saying that it's true and
correct.
Q.
Is this page a stand-alone document, separate -- this
guarantor page, separate from the rest of the letter?
A.
No.
Q.
Why not?
A.
Because that's the way it works. In this particular
instance, there's three pages. And you have someone from the
company, there's a tenant, and then there's a guarantor, and
that's how it works.
Q.
Well, the tenant space we saw is blank. So is it still
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 219 of 258
220
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
stand-alone or not?
A.
The tenant is not the issue in this estoppel. It's
guarantor for the company so the company can -- that is a
guarantor for the company, which is Mr. Salem, and it runs
together.
Q.
Do you see Mr. Salem's initials on the bottom of this page?
These pages?
A.
No.
Q.
Okay.
MR. ETRA: Could we put that down and put up Exhibit
58 that is in evidence.
I think it's a cover email and then the first -- oh.
Maybe it's not a cover email. That's the wrong document.
Could we put next to that the attachment.
BY MR. ETRA:
Q.
Okay. Do you recognize -- these are select pages, but I
can go to any page you want. Do you recognize Exhibit 58?
A.
I do.
MR. ETRA: Why don't we take down the cover email and
just put up the first page of the lease agreement.
BY MR. ETRA:
Q.
What led to this draft and revisions of a potential new
lease agreement with -- here it's still SOS Furniture?
A.
SOS Furniture was in the building where DICK'S Sporting
Goods is at, and they wanted to have a more high-profile
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 220 of 258
221
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
location and an outparcel. Where -- now, where JPMorgan Chase
is presently. And they wanted to do a new lease for a
freestanding building. And it's the time they were actually
paying rent on time every month and they were a good tenant, so
this was a negotiation on their lease, their form lease.
Q.
The original lease we looked at, whose form was that?
A.
The original one?
Q.
Yeah. The one we looked at before.
A.
I'd have to look at it again.
MR. ETRA: Let's put up next to it -- next to this
exhibit Government Exhibit 25.
BY MR. ETRA:
Q.
So the one on the right which is the original exhibit,
which is Government's Exhibit 25, whose -- is that a form of
some kind?
A.
Yes. That's a form of my company. Of my -- the landlord.
Q.
And then the one on the left, is that your form or is that
the national tenant's form?
A.
That's the national tenant's form.
Q.
How does it work? Do you use your form or the national
tenant's form?
A.
Mostly the national tenant's form because if you have a lot
of stores and you have a lot of landlords, they didn't want to
have to negotiate every single lease with the landlord's forms.
The standard is that national companies use their form on their
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 221 of 258
222
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
system because they don't want to negotiate every lease over
and over again.
Q.
So it's your form unless the national tenant says
otherwise?
A.
Correct. But my form was done by Mr. Scott Fish. So it
was -- I mean, I didn't even sign that form.
Q.
Okay. So the form on the left, who suggested -- which side
came up with that first draft of this form?
A.
Mattress1One.
Q.
All right.
MR. ETRA: Let's take that down.
BY MR. ETRA:
Q.
Tell me about Mattress1One -- or I guess SOS paying or not
paying in 2018, 2019, and into COVID.
A.
Tell you about what? I don't understand.
Q.
Were they paying regularly or not?
A.
No.
Q.
And what was the -- when they were supposed to pay, what
was the monthly rent, approximately, under the original lease?
A.
Oh. I don't know off the top of my head. But from the
research, and what I saw the other day in his testimony, it
looked like it was $11,000 a month.
Q.
Okay. So did you give any directions to Mr. Vasilas with
respect to -- and when COVID hits, what, if any -- what's your
plan to deal with this tenant that's not paying? What's
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 222 of 258
223
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
your -- what are you trying to do?
A.
Well, before COVID hit, we were trying to evict him and get
him out of the space because he wasn't paying rent and he had
close to $70,000 that he owed in back rent. So before even
COVID started we were trying to get rid of him.
Q.
And then, after COVID started, what was your plan to do
with that spot, with that place?
A.
Started to negotiate with FedEx because they were across
the street. And FedEx, Starbucks, and Chase were all across
the street in another shopping center, and I was able to get
them to move to this spot. So I was going to put -- try to get
the guy out -- he wouldn't leave -- but get him out and build a
FedEx store.
Q.
So now we're in COVID and you have Mr. Vasilas in Orlando.
Did you give him any directions with respect to dealing with
Mattress1One?
A.
Yeah. I said: "Just try to find a solution to get the guy
out because he doesn't have a lease, and he needs to get out,
and he's not paying rent. The lease is expired. You have to
get him out so we can do the FedEx. Because FedEx had a very
short window where they can get out of their store, and I was
trying to rush him to get Mattress1One out.
MR. ETRA: For the witness only, with no volume,
please. For the witness only put up Exhibit X-45.
And could you play it with no volume briefly before I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 223 of 258
224
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
ask the witness some questions.
(Video played, no sound.)
MR. ETRA: Why don't we stop there.
BY MR. ETRA:
Q.
Again, this is not in evidence, so I'm just going to ask
you very generally, do you recognize Exhibit 45?
A.
I do.
Q.
And generally speaking, did you receive Exhibit 45 from
someone?
A.
Yes. Jeff Vasilas sent this video to me on May 12th, 2020.
Q.
Was it in connection with his duties -- well, was it in
response -- was it in connection with your directions to him on
work -- trying to figure out how to get Mattress1One out?
A.
I did not direct him to do this video or what I just saw,
but what I did direct him to do was to work out something
reasonable and legal to get him out of the space. And he's not
really a real estate person or understands real estate so he
did this video.
Q.
Well, I don't want to say more without it being in
evidence.
A.
I'm sorry.
Q.
But did you receive this from Mr. Vasilas in connection
with his duties as HM-UP, even if he didn't follow your
directions the way you would have liked?
A.
Correct.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 224 of 258
225
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Your Honor, we offer Exhibit 45 as a
business record.
THE COURT: Any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-45 received into evidence.)
MR. ETRA: May I publish and play it?
THE COURT: You may.
MR. ETRA: With the sound, please.
(Video:)
"MR. VASILAS: Today, Tuesday, May 12th. I, Jeff
Vasilas" --
MS. JIMENEZ: The sound is hearsay.
(Video stopped.)
MR. ETRA: I'm sorry?
MS. JIMENEZ: What is this? First, it's --
THE COURT: I'm sorry?
MS. JIMENEZ: We haven't heard what the sound is.
MS. MARTINEZ: We had no idea --
MS. WEINTRAUB: Judge, they have a copy of it.
THE COURT: All right. Then perhaps you could publish
it without the sound, and you can ask the -- Mr. Sheppard
questions with regard to what's taking place in the video.
MR. ETRA: Fair enough. Why don't we do that for now.
(Pause in proceedings.)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 225 of 258
226
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: I will do that, Your Honor.
Thank you.
Could you do that please, Brian, without the sound.
Let's start with the beginning. Well, I guess we've
been doing that.
(Video played, no sound.)
MR. ETRA: I think we could stop the video now, if
that's okay.
BY MR. ETRA:
Q.
Mr. Sheppard, who's the person whose reflection you're
seeing in the glass?
A.
Jeff Vasilas is the person who recorded this video and was
the person shooting this video.
Q.
And whose voice is heard on this?
A.
Jeff Vasilas. He identifies himself -- his voice and then
he says who he is and what he's doing, and that's what the
video was.
Q.
Did you tell him to lock up the doors?
MS. JIMENEZ: Objection. Hearsay.
MR. ETRA: Direction, Your Honor.
THE COURT: Overruled.
THE WITNESS: No. In fact, I told him: "Jeff, I know
you're aggressive in trying to get things -- do it your way,
but this is -- you need to go back to the guy's office and
unlock the door. That's just not -- even though the guy is
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 226 of 258
227
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
trespassing, you just can't do that. It's not part of like the
law. You need to take the locks down immediately and go up to
the office and sit there as long as you want, figure it out."
That's what I said. I said: "That's crazy."
MR. ETRA: Let me take this down and put up in
evidence Exhibit M, as in Mary, 33 -- no. I have the wrong
doc.
I apologize, Your Honor. M, as in Mary, 35.
BY MR. ETRA:
Q.
And do you recognize --
MR. ETRA: Well, let's put on the last page as well.
Sorry. The last -- yeah.
Let's now go back to the first page. Pull up the
first part, please.
BY MR. ETRA:
Q.
Do you recognize this document?
A.
I do.
Q.
All right. How -- to your knowledge -- from your -- based
on your knowledge, involvement, how did this new lease come
about?
A.
After that video you showed on May 12th, I guess he upset
somebody over there, and whoever the person is from
Mattress1One, the corporate office down the street, and they
said: "Okay. We" -- Jeff said they wanted to negotiate a new
lease, and that's where this came about.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 227 of 258
228
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
What direction specifically did you give Mr. Vasilas for
the -- to do the new lease?
A.
I said: "I need to have a specific time frame, six months.
Extend it for six months. That's" -- not extend it. "Do a new
lease for six months, and that's it," because I have to put --
I have to start construction on the FedEx store and I want it
point A to point B. And because the guy is so in arrears, that
I said: "Look, I want upfront money towards this lease. And
if you do that, I will forget all the money that he owes and
we'll be done with each other; 'you go your way, we go our
way,' and that's it."
MR. ETRA: Let's go to Page -- second page of the
lease. Let's focus on the lease term and the rent.
BY MR. ETRA:
Q.
What exactly was the -- well, first of all, what was the
business reason that you wanted a new lease -- a short-term
lease for a tenant that was beyond its lease?
A.
I didn't want any attachment with the old lease because the
guy was a little bit unscrupulous from the way he was acting.
So I wanted something that was new, clean, and well-defined.
Meaning, if he didn't do what you're supposed to there's
provisions that would say: "You have to leave immediately."
Q.
And let's focus on the economic terms. What was the
business decision -- essentially, what was the pitch through
this lease why this would be advantageous for a tenant to sign
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 228 of 258
229
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
from your perspective?
A.
What do you mean "advantageous"?
Q.
Approximately, how much was owed by the tenant at this
time?
A.
It was close to 70,000 dollars, 68 to 70, somewhere in that
general area.
Q.
Why did you only ask for 22,800 up front?
A.
That had nothing to do with the prior -- it was very clear.
"From May 18th, 2020, the day, to June 30th, you are to pay
$22,800." It had nothing to do with the past. I was -- if he
executed this lease, I would just -- we wouldn't sue SOS
Furniture. We wouldn't get involved with that. And the courts
were closed. You know, you couldn't evict people. There was a
moratorium on evicting people. So I told him: "May 18th to
June 30 pay up front."
Q.
And what incentive in terms of the -- were you offering in
terms of the following of the monthly rent thereafter?
A.
I wasn't offering. He said: "Can I take the original rent
and reduce it by three or four thousand a month?" And I said:
"Okay. That's fine," and I reduced it per his
request/proposal.
Q.
Well, to be clear, who were you communicating with at this
time?
A.
I'm sorry. I was communicating with Jeff, because I don't
even know these people. Jeff to talk to the guy at
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 229 of 258
230
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Mattress1One, whoever the guy was at Mattress1One.
Q.
Do you have any recollection of meeting Mr. Salem, the
individual who was on the stand?
A.
I never heard his name, seen the guy my whole entire life.
Q.
Do you have any memory of speaking to that individual?
A.
Never spoke to him. The guy that was here, Mr. Salem, I've
never spoken to him in my life.
Q.
So your dealings during COVID with this tenant was through
whom?
A.
Through Jeff Vasilas. And also actually Joe Beirne,
because Joe Beirne was friends with the manager of the store.
This guy Rich Bank or Rich --
MR. ETRA: All right. Now let's go to the first page,
the very top, the identification of the parties to the lease.
BY MR. ETRA:
Q.
Okay. Now, the tenant in the original lease was what?
A.
HM-UP Development Alafaya Trails, LLC.
Q.
I'm asking about the tenant.
A.
I'm sorry. I'm just tired. The tenant is Pacific MS
Management, Inc.
Q.
Is in the original lease, who was the tenant?
A.
SOS Furniture.
Q.
Now, here, who was the tenant?
A.
Pacific MS Management, Inc.
Q.
Between you -- from your -- why did Pacific -- why is that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 230 of 258
231
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
person -- why is that new entity here?
A.
Because they are the ones who requested to -- they said
part of the lease they wanted to change the name of the tenant
to the specific company Pacific MS Management -- meaning --
"they" meaning Mattress1One demanded it be changed.
Q.
Now, as a landlord, did that raise any concerns in your
mind having this new tenant for -- as the real tenant, as the
entity, for Mattress1One?
A.
Yes.
Q.
What concerns did that raise in your mind?
A.
When you have a national tenant, with a lot of stores,
called a corporate lease. So you get the whole corporation --
if it defaults, the whole corporation you can go after. And
considering they haven't been paying rent, they owe all this
money, and all of a sudden they change it to a name called
Pacific Management, where I asked them: "Do you have any
financials," they say: "No," you don't know what it is. You
don't even know who owns the company. I mean, I have no idea
what the tenant is. So that was definitely -- is a very big
red flag for anybody.
Q.
So did that have any impact on your thinking of who the
landlord should be?
A.
Absolutely.
Q.
Why?
A.
Because HM-UP -- HM-UP Development Alafaya Trails, LLC is a
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 231 of 258
232
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
borrower on a $20 million loan with a lender during COVID,
mayhem happening. The last thing I want to do is enter into an
agreement with some random company I have done no due
diligence, they won't give me any information. So the owner of
HM-UP 99 percent is HM Four, LLC, and they were also in charge
of all the common area. So I said: "Okay. Then if you want
to put Pacific Management, then we're going to put HM Four."
Q.
What specifically was the concern with having HM-UP as the
landlord, given the circumstances of Pacific Management and the
history with this borrower?
A.
Because I didn't want them to sue me -- not me, the
company -- and with litigation where the courts are closed, and
then it's a default of my loan with the lender for just a
3,000-square-foot tenant within a 140,000-square-foot shopping
center. I did not want to have that aggravation and be in
default of my mortgage.
Q.
Was there any business justification to use -- instead of
HM-UP, which was on the mortgage, to use HM Four instead?
A.
Yes.
Q.
What was the legitimate -- what was the business
justification?
A.
As we talked before, HM Four takes care of all the common
area. And in the REA HM Four has the legal right to collect
all money owed to it by either the owners of each property
and/or their tenants. But I controlled the companies, so HM
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 232 of 258
233
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Four doesn't -- I don't have to foreclose. I can assess a lien
against that company.
So that's why HM Four was very important, because they
are in charge of the REA. In order to collect the money that's
owed, that's the mechanism. Instead of suing -- I can't sue
myself, that -- to go sue Mattress1One or Pacific MS
Management. So that's why I went with a direct relationship
between HM Four and Pacific MS. And I told Jeff to explain
this to this guy, and my understanding, they agreed to that.
Q.
What was your understanding about whether this lease was
executed?
A.
I was informed by Mr. Vasilas that the guy --
MS. JIMENEZ: Hearsay. Object.
MR. ETRA: Your Honor, it's for state of mind, not for
the truth of the matter asserted, in terms of what his intent
was with respect to this lease.
THE COURT: The objection is overruled. I'll allow
it.
BY MR. ETRA:
Q.
You want me to re-ask the question?
A.
Yeah. I forgot what the question was.
Q.
What was your understanding with respect to whether this
lease was executed?
A.
My understanding, it was executed.
Q.
Based on information from whom?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 233 of 258
234
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Based upon a text message from Mr. Vasilas that said:
"Lease done and lease signed, executed." Then he had a check
for the -- that was required for this lease agreement of
$22,800 that -- the guy cut a check from -- the check was
actually not from SOS Furniture or Mattress1One. It was
actually from this Pacific Management, Inc. So I see:
"Pacific Management." I see 22,800 in the text message, and
I'm like: "Okay. Great. Go deposit it."
Q.
You heard Mr. Salem's testimony about whether he signed
this document, correct? Did you hear that?
A.
I did.
Q.
Do you have personal knowledge whether he signed this
document or not?
A.
I have no idea. I don't know the man.
Q.
Did you have any reason to believe when you were submitting
this -- submitting this lease to the SBA that the signature
might be forged?
A.
No.
Q.
If you believed the signature was forged, would you have
submitted it to the SBA?
A.
I would have never submitted it to the SBA or anybody for
that matter.
MR. ETRA: If we go to Exhibit 39-10 in evidence.
BY MR. ETRA:
Q.
So the first document is a check in the amount of 11,479
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 234 of 258
235
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
June of 2019. Is that the approximate amount of the monthly
rent under the original lease?
A.
To the best of my knowledge, yes.
MR. ETRA: Could we turn to the next document, please.
BY MR. ETRA:
Q.
This is a check made -- from Pacific MS Management, made
out to HM-UP for 22,800, on May 22nd, 2020. Do you see that?
A.
Yes.
Q.
You were seeing an image of that at the time?
A.
An image, yes.
Q.
Okay. Now, the name of the payee, I think it's called, the
pay to the order of, is HM-UP Development. Do you see that?
A.
Yes.
Q.
Did you notice at the time whether it was written to --
that it was written to HM-UP and not to HM Four?
A.
No. I just looked at the dollar amount, and I remember
looking at the memo section. And then -- that was what I
looked at. I looked at it briefly. I didn't really look at it
that much. I had a lot of things going on at that time.
Q.
Nevertheless -- nevertheless, if you had seen the "HM-UP,"
would you have given the check back?
A.
No.
Q.
Why not?
A.
Well, because this guy actually, you know, paid the money
up front. And HM-UP would have to just forward the check to HM
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 235 of 258
236
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Four anyhow. I mean, it's just the way -- that's the way it's
structured. I mean, it's -- HM Four owned HM-UP.
Q.
Is there any other document besides the new lease that you
looked at pursuant to which Pacific MS Management would make a
check out for 22,800 in this time period to one of your
companies?
A.
I've researched the file up and down to see if there's any
other document in the world. And there's no other document in
the world that describes that terms and that specific tenant,
Pacific MS Management. I've never seen another document like
that.
MR. ETRA: Let's go to the next check, please.
BY MR. ETRA:
Q.
This is from Pacific MS Management to HM-UP in the amount
of $8,480, in July of 2020. Do you see that?
A.
I do.
Q.
Other than -- is that an amount consistent with the new
lease?
A.
Yes.
Q.
After the first payment of the reduced rent, right?
A.
Correct.
Q.
Is there any other document that you have seen pursuant to
which Pacific MS Management would be paying one of your
companies $8,000 or so in July of 2020?
A.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 236 of 258
237
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Now, Mr. Salem pointed out, if you look at the bottom in
the memo line, the handwriting is "month-to-month." Do you see
that?
A.
I do.
Q.
At the time these checks came in, did you even see these
checks?
A.
I don't get any of the checks. It goes to either Jeff or
the PO box, or Jeanette.
Q.
Had you seen the "month-to-month," would you have said:
"Sorry, Mr. Salem. I'm not taking your check"?
A.
If I saw it -- I didn't see it so, I mean, I can't tell you
what I would have done because I didn't see it.
Q.
How is it that you saw the $22,000 check but not the $8,000
check?
A.
Because he text it to me, and called me, and told me that
he accomplished his goal of getting him to execute a lease and
get the check, and now we can start with FedEx to start the
plans, because we had a six-month -- a defined period of six
months. So that's how I looked at the 22,800 check.
Q.
All right.
MR. ETRA: We could take this down, please.
BY MR. ETRA:
Q.
We're focusing on the fact that Jennifer is listed in the
HM Four EIDL application as owner. Could we focus on that for
a moment?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 237 of 258
238
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Sure.
Q.
Were you trying to hide your involvement from the SBA in
connection with that whole loan?
A.
No.
Q.
And briefly, why in the -- in the context of the time, why
did you put down Jennifer as owner?
A.
Because she is my wife and she's an owner.
Q.
What was your -- when you think of HM Four, is there any --
sorry. What about -- sorry. Let me start over again.
MR. ETRA: Could we put up for the witness only
Exhibit X-21.
Put up the whole -- for the whole screen, please.
BY MR. ETRA:
Q.
Do you recognize Exhibit X-21?
A.
I do.
Q.
Generally speaking, what is X-21?
A.
This is the original operating agreement of HM Four.
Q.
And does it disclose -- I'm just going to ask the question.
Please answer yes or no without answering further. Does it
disclose the original ownership interest of HM Four?
A.
Yes.
MR. ETRA: Your Honor, Defense offers X-21.
MS. JIMENEZ: Objection. No date, no nothing.
THE COURT: Is this the only page or is there more to
it?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 238 of 258
239
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Well, there's more to it --
THE COURT: Where is the entire document?
MR. ETRA: Okay. Let me go through the entire one.
Your Honor, the top of the first page has a date of June -- I
don't want to say it on the record if you don't want me to.
THE COURT: Yeah. I see the date. Is there any other
basis for the objection?
MS. JIMENEZ: Relevance.
THE COURT: Overruled. X-21, the entire exhibit, will
be admitted into evidence.
(Defendant's Exhibit X-21 received into evidence.)
MR. ETRA: Put the first page up, just -- only,
please. And could you blow up the bottom of it.
BY MR. ETRA:
Q.
Originally what was the percentage breakdown ownership of
HM Four?
A.
Jennifer Sheppard owned 95 percent and myself, Eric
Sheppard, owned five percent.
Q.
Okay. And in general, what was -- in your mind what was
the purpose of HM Four with respect to your world?
A.
My world. My world was to have my wife have an asset for
her nest egg for her and my children to make sure that they had
something -- back in 2011, to make sure that they were provided
for if something happened and -- to me. So that's why she has
the 95 percent.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 239 of 258
240
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And originally -- what was HM Four set up for originally
when it was first set up in 2011?
A.
It was acquiring interest in a shopping center in Maryland.
Q.
At some point -- when did it become -- have an interest in
Orlando, approximately?
A.
Sometime late 2012.
Q.
Okay. Now, at some point, did Mr. Robert Kallman become
part owner of HM Four?
A.
Yes.
Q.
And just very briefly, who is Mr. Robert Kallman?
K-A-L-L-M-A-N.
A.
He's a dear friend of Jennifer and I and our daughter. And
their family were friends, and he's from New York. And he
became partner in the HM Four entity around 2015 maybe.
Q.
And generally, with respect to all these loans that we now
know to be EIDL loans, did you hide the involvement of
Mr. Kallman and yourself generally in the other loan
applications?
A.
No, I did not.
Q.
And the tax returns show that Sheppard is 52 percent and
Kallman is under an entity as 48 percent --
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
At some point, was there an ownership interest split
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 240 of 258
241
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
between Sheppard on the one side and Kallman on the other?
A.
Yes.
Q.
And what was the split when he got involved?
A.
It was 52 percent Jennifer Sheppard and Eric Sheppard
tenancy by the entireties joint ownership, and the other side
was Mr. Kallman.
Q.
Now, why, when you applied for the EIDL loan, did you not
disclose Mr. Kallman as a 48 percent owner on that particular
loan -- for HM Four, I should say -- for HM Four?
A.
Well, he was disclosed on HM-UP.
Q.
Right.
A.
But that was a little earlier with Nationwide. He was not
disclosed in HM Four because of -- the capital structure, at
the exact -- that month of November, that's where the entity
stood in 2020, in November 2020.
Q.
Could you explain generally what you're referring to by
capital structure, and just put it in plain clear terms what
was going on.
A.
As I stated before, when you start the construction
project, you have a budget. And this was approximately
$2.78 million. And when you're not taking a loan, you're
funding it yourself, you go to the partner and you say:
"Mr. 48 percent, this is your portion. Fifty-two percent is
your portion." And that's what I did with Mr. Kallman as the
managing member. I asked -- just -- he chose that he did not
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 241 of 258
242
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
want to put up any money for any of the construction.
So as -- what is standard, from January to the month
of November, when they got the TCO of the Burlington Coat
Factory, my family provided the capital to do all this and he
did not. So he got -- his ownership interest got reduced
because we put up 98 percent and he put up two percent. So
that's why -- you know, they asked me a question. I'm being
technical. This is where we stand. At that particular
juncture in time, that's where we stand.
Q.
Was that your thinking at the time?
A.
Yeah.
Q.
And did that change thereafter with respect to Mr. Kallman
and the equity?
A.
Yes. Because we have another entity with him, and he put
money up in the other entity, which is HM-UP Development
Alafaya Trails TRU. So at that time that -- he'd get a little
bit more interest there. And here, in this particular place,
in HM Four, we -- we -- we -- we worked out an arrangement that
he put money up and then he would get back his interest. I
wasn't going to take it from him. It's just technically that's
how it's supposed to work. So that worked out some time in
2021 maybe.
Q.
The HM Four EIDL application, for employees you put down
three. My question is: Why did you do that?
A.
Well, that's how -- that's how many workers that are in our
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 242 of 258
243
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
business, because there's multiple companies. I don't work
with the other companies. But all the different companies --
if someone's working here in Miami, and they go on work in
Orlando, and they're working on the common area, they get
allocated from accountants -- in our accounting thing, they get
allocated for that job. And we have different partners in
projects. Like in the Miami project, we have a different
partner. So there's allocation of their time for that job.
There's allocation of time for this job.
So there has to be allocations. And that's what that
means. It means it's an allocation of a worker's time for that
particular year. So that's why you have three.
Q.
Okay.
MR. ETRA: Could we put up -- sorry.
BY MR. ETRA:
Q.
I want to change the topic to November 2020. The project
is basically done subject to the punch list -- the Burlington.
Okay. Are you with me?
A.
I'm with you.
Q.
Okay. Now, at this point in time, where is Jeff Vasilas
physically?
A.
In November?
Q.
November and thereafter.
A.
November, December he got the TCO and he came back to Miami
and moved back here. Still went to Orlando periodically, but
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 243 of 258
244
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
he was based here now.
Q.
Generally speaking, where was his home, meaning what
neighborhood?
A.
163rd Street, 164th Street.
Q.
In Miami?
A.
In Miami.
Q.
Where was his office in your companies in November and
thereafter in COVID -- November 2020 and thereafter in COVID?
A.
His office was at my house. Because, in COVID, we closed
the offices, my home became -- became the office, and him with
some others would work out of my house. And that's where he
started sometime in November.
MR. ETRA: For the witness only, please, can we put up
Exhibit X-9.
BY MR. ETRA:
Q.
Do you recognize Exhibit X-9?
A.
I do.
Q.
Is that a fair and accurate portrayal -- depiction, I
should say of your home office in or about November of 2020?
A.
That is.
MR. ETRA: Defense offers Exhibit X-9.
THE COURT: Any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-9 received into evidence.)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 244 of 258
245
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Mr. Sheppard, could you explain what we're seeing in X-9.
A.
This is a clean version of my office in my house.
Q.
And where did you typically sit in your home office during
COVID, when you were sitting versus walking around with your
phone?
A.
I sit in this section over here.
Q.
And where did Mr. Vasilas sit?
A.
He sits at that conference room table that was in my old
office -- at the office on 12000 Biscayne Boulevard. That's
that conference table. He sits at the conference table there.
Q.
Is that the one you can see the side of the computer?
A.
Correct.
Q.
Is that the home computer that you used in -- for your
business?
A.
Correct.
Q.
Okay. And is there any part of your -- did your home
office -- was your home office limited to this part of the
house we're looking at here?
A.
During the time periods from the time we left the office
building to about October, somewhere in October 2020, very
infrequently. We'd try not to let people in the house because
of the COVID. But then it -- my wife allowed for other people
to come and work out of there, so it expanded a little bit into
the other parts of the house.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 245 of 258
246
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Okay.
A.
The downstairs part.
Q.
What type of hours did Mr. Vasilas keep at the home office?
A.
He -- he came and go -- he works a lot, and he came and
went when he -- sometimes in the morning but mostly -- mostly
in the afternoon, late night. He's like a late-night kind of
guy from his prior business career.
Q.
Did Mr. -- sorry?
A.
No. My bad. Go ahead.
Q.
Did Mr. Vasilas have a way of getting into your house
without you assisting him?
A.
Yes.
Q.
How so?
A.
Well, not just him. Everybody. Where we lived, there's --
our doors are normally always open pretty much. And there's
also a garage where you put -- do the clicker, and it opens the
garage and you can access through the garage as well.
Q.
And is there a -- do you live in a gated community?
A.
It's a gated community.
Q.
How did Mr. Vasilas get past -- how could Mr. Vasilas get
past the guard?
A.
Mr. Vasilas can get past the guard. But he's also on the
list. He's on the list. He's on the list.
Q.
Did Mr. Vasilas have authority to come and go in your home
office as he pleased?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 246 of 258
247
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes.
Q.
Was -- were you always present when Mr. Vasilas was in your
home office?
A.
No.
Q.
Staying now in December of 2020, how were you feeling in
terms of your ability to manage your business in terms of
physically?
A.
I was not great.
Q.
Not great. And did you go and see some doctors?
A.
Yes.
Q.
Did you ultimately get a diagnosis?
A.
Yes.
Q.
What diagnosis did you get?
A.
That I had cancer.
Q.
And when approximately did you get that diagnosis?
A.
In December.
Q.
What part of December?
A.
The latter part.
Q.
Did you have any surgery?
A.
Yes.
Q.
When did you have the surgery?
A.
In January 2021.
Q.
Approximately when in January did you have the surgery?
A.
January -- I don't know the exact date. January 5th, 7th,
somewhere in that general area.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 247 of 258
248
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And after surgery, did you have any treatment?
A.
Yes. I had some radiation done for -- for about three
months in 2021.
Q.
And in terms of your ability to focus on your job in the
first few months of 2021, was there any impact from what you
have just described?
A.
I mean...
Q.
Sorry?
A.
Yes.
Q.
And how -- could you please, in your own words, describe
the impact.
A.
It's -- it's a life-changing thing.
Q.
And but -- in terms of your ability to focus, I mean, your
attention to detail, I want to ask you -- I don't want to use
words. I want to ask you, sir. Describe the impact it had in
terms of when you were focusing -- when you were thinking about
your job, what impact, if any, did all these things have on
your functioning at work?
A.
I was distracted, and I was, you know, concerned, and I was
unable to focus. You know, you're a little bit tired. And
it's just -- it's hard to focus laser -- I'm a pretty energetic
person usually. And you know, it takes a lot out of you. It
just changes your focus because you can't sit there and read
documents or you can't -- you know, I used to talk on the phone
a lot. So it's hard to focus like that.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 248 of 258
249
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
How did you get by in your job if you were impaired in the
way you say?
A.
I mean, I've been doing it for a very long time. So from a
brain capacity, you know, I'm able to understand. It's not
like I'm learning something new, but it's just the energy
level. I was able to do that and rely on other people to help
me and step in. So that wasn't really important. I had some
people that helped me in the business.
Q.
Who were they?
A.
Jeanette, Jeff Vasilas. I think Mary was a very big help.
She's very nice to me and helped me.
MR. ETRA: Your Honor, we're at a point where it's
close to 4:30, and we're at the end of the topic. So maybe
now --
THE COURT: All right. Certainly.
All right. Ladies and Gentlemen, as you know, given
your schedule, we will pick up after the new year on
January 8th, January 9th, and perhaps January 10th. I know
that Liz has spoken with each of you. Each day we will proceed
at nine a.m. and we'll conclude at five p.m.
Please remember that as you leave the building, and
before we see you on Monday, as well as any time that you are
before this Court, you are not to discuss this case with
anyone, nor permit anyone to speak with you. Everything
learned about the case is learned in this courtroom.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 249 of 258
250
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I would ask that you place your juror notebooks in the
jury room. The jury room will remain locked and will be open
on January 8th when you arrive in the morning.
I do want to wish each of you a happy holiday and a
happy, healthy, and meaningful new year, and I will see each of
you here on Monday morning, January 8th, 2024, at nine a.m.
Take good care.
COURT SECURITY OFFICER: All rise.
(Jury not present, 4:28 p.m.)
THE COURT: All right. Mr. Sheppard, you can go ahead
and sit with your counsel.
Let me make clear that you are not to discuss your
anticipated testimony; however, in order to certainly assist in
your defense, you are permitted to speak with your attorneys
and prepare for the continuing trial.
MS. JIMENEZ: Your Honor, I think this is a pointless
request, given the representations that they've made regarding
witnesses, but we would ask what witnesses they expect to call
after Mr. Sheppard.
THE COURT: Ms. Weintraub?
MS. WEINTRAUB: We expect to call Mr. Kallman, Glenn
Sheppard, Vanessa Gonzalez. We don't know about --
THE COURT: All right. Everyone can have a seat,
since there are a couple matters I do need to go over.
All right. Kallman, Sheppard, Gonzalez.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 250 of 258
251
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: There are two Gonzalezes. And Kerby
Kleef. That's who I would expect -- and Mercedes Fonseca.
Those will be the Defense witnesses that we will call -- and
Scott Bouchner. Those will be the Defense witnesses that we
will call. We will be scrambling because a couple of them are
out-of-town people. Whoever can get here in those two days,
we'll put them on in that order. They are not long witnesses,
except perhaps Scott Bouchner.
THE COURT: All right. I do want to discuss that,
recall, one of our jurors is attending the trial of her
sister-in-law [sic] who was a victim of a DUI. Liz has been
checking the state court docket. It is specially set for
January 4th. So to the extent that it does proceed on January
4th, Liz will reach out to each of you, since, as we know, that
juror wants to be present during the course of that trial, and
we will not know until the trial begins as to when it will end.
To the extent that the trial does continue into the
week of January 8th, have the parties considered whether they
would stipulate to a jury consisting of 11 members?
MS. WEINTRAUB: We have not -- we have not discussed
it among the Defense team, but I can tell the Court pretty
candidly that I would not willingly agree to that.
THE COURT: All right. Well, has the Government made
a decision?
MS. JIMENEZ: We haven't made a decision, Your Honor.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 251 of 258
252
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. Well, it requires an
agreement --
MS. JIMENEZ: We would certainly like to conclude the
trial.
THE COURT: Certainly. So Liz will be in contact with
you on January 4th to the extent that she has information as to
whether the trial has actually begun. And we will address it
on January 8th in the courtroom with regard to the continuation
of the trial.
To the extent that the parties do not stipulate, then
we would need to work on alternate dates to continue the trial
after the state court trial is concluded.
MS. JIMENEZ: I can represent to the Court that we
would be willing to proceed with 11 jurors. So it's up to
them.
THE COURT: Okay. Couple of housekeeping matters.
There are many exhibits that have been introduced into evidence
that contain a separate exhibit number. But as Mr. Cavallo has
advised the Court, they are part and parcel and the
representation is that they are part of the Government's
exhibit. However, the jurors' notes may reflect, for example,
an item of M-35 that may be part of the Government's exhibits.
So I am going to require the parties to confer during
this period of time so that the individual exhibit that bears a
different letter and/or number is alongside the Government's
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 252 of 258
253
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
exhibit. For example, if it's Government's 28 but it's also
M-35, then it should be reflected that way on the exhibit list,
and a narrative or a brief description of what the exhibit is,
Government's 35 and then Defendant's -- or Government's 28 and
then the Defendant's 35, so that it's on one exhibit list.
I have tasked the Government with preparing that
exhibit list, as well as having all of the exhibits uploaded,
but it is a huge burden for the Government to bear when there
have been many Defense exhibits that have been introduced with
the representation that they are part of the Government's
exhibits. So I'm going to require the parties to confer and
work together on that list.
MS. WEINTRAUB: Of course, Your Honor.
MR. CAVALLO: No problem, Your Honor.
THE COURT: Are there any items that we need to
address before I see you on Monday, January 8th?
MS. MARTINEZ: I just have a clarification question.
Ms. Weintraub said Vanessa Gonzalez, and it's just not clear
from her statement because -- then she repeated: "There's two
Gonzalezes." So I just wanted to ask: Is Jeanette Gonzalez
still on their list?
MS. WEINTRAUB: She's still on the list. And from
your -- from your communication, after you asked me if she's
taking the Fifth Amendment, it's clear that you conferred
immunity upon her, correct? So she can't take the Fifth. Yes?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 253 of 258
254
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I just want to make sure that's your position.
MS. MARTINEZ: I'm not handling that matter. I'll
leave that to Ms. Jimenez.
MS. JIMENEZ: So yes. My only concern is if this
witness is going to attempt to take the Fifth at any point or
on cross-examination. And so I want to be advised of that so
that I can file a motion with the Court because the Court would
then be required to order her to answer the question. And if I
need to take that step, I want to know ahead of time. That's
all.
MS. WEINTRAUB: Well, if she has immunity, then she's
not going to take the Fifth. I mean, I don't understand.
THE COURT: All right. Well, has it been represented
to you, Ms. Weintraub, that she will not testify absent
immunity and that she will assert her Fifth Amendment
privilege?
MS. WEINTRAUB: I didn't ask, actually. I don't want
to misrepresent what's going on. I did not ask. But I assume
that's accurate.
THE COURT: All right. Then that needs to be answered
and the witness needs to be questioned. It's certainly a waste
to bring her in if she's going to assert her Fifth Amendment
privilege. But if she's granted immunity, then it may be a
different --
MS. WEINTRAUB: We got an email from the Government
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 254 of 258
255
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Sunday that they did confer immunity.
MS. JIMENEZ: So Your Honor, just so that -- I mean,
it's an unusual sort of process. But we obtained authorization
from the Department of Justice to confer immunity upon this
individual whom we had subpoenaed before the grand jury. Her
counsel represented to us that, beyond her name, she would
assert the Fifth Amendment privilege. We obtained that
authorization from the Department of Justice, then turned to
her counsel, who said she would come.
So what the statute requires is that I seek an order
from the Court that compels her to testify. I did not seek
that order because then, when I told her counsel, she came to
the grand jury and she answered questions. And so I raise it
now because there is not an order in place. And the way that I
read the statute, I suppose, technically she could still, you
know, attempt to assert her privilege either on direct or my
concern is on cross-examination.
MS. WEINTRAUB: Correct.
MS. JIMENEZ: And so if I need to file a motion with
the Court to get that order, that's -- and that's why I'm
asking the question.
THE COURT: Well --
MS. WEINTRAUB: It was our understanding she had
immunity. It is now my understanding she does not have
statutory immunity.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 255 of 258
256
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: To the extent --
MS. WEINTRAUB: And Dan Rashbaum represents her. I
mean, they should be speaking.
THE COURT: To the extent that she was granted
immunity, why don't you submit a proposed order to the Court,
and I'll be more than happy to sign that.
Okay. Are there any other issues that we need to
address?
MS. WEINTRAUB: Yes, Your Honor. And I apologize.
It's my fault, but I'll really blame my client. His son has a
basketball tournament in Atlanta next week -- Atlanta and
Orlando. And I did not submit a motion and order for him to
travel to go there with his family. I would ask to have the
Court grant it, and I will submit an order by morning or by
this evening.
THE COURT: Is there any objection to that?
MS. JIMENEZ: No. No objection. I'd like to know how
long. I mean, and he needs to -- and he needs to get
permission from or check in with the Probation officer as well.
It's not --
THE COURT: Yes. Mr. Sheppard --
MS. WEINTRAUB: Of course he'll notify her.
THE COURT: Mr. Sheppard is permitted to travel
outside the district. He just needs to provide an itinerary to
his pretrial officer before he travels.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 256 of 258
257
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: Of course.
THE COURT: All right. Is there anything further?
MS. WEINTRAUB: No, Your Honor.
THE COURT: Okay. All right. Take the time that you
need. We don't need the courtroom this evening.
Happy and Healthy New Year, a nice holiday. And I'll
see you on January 8th, although Liz will be communicating with
you in the interim.
MS. WEINTRAUB: Thank you, Judge.
Judge, the conference room, can we leave --
THE COURT: Yes. You can certainly leave your items
in the conference room.
MS. WEINTRAUB: Great. Thank you, Judge.
THE COURT: Okay.
(Proceedings adjourned at 4:39 p.m.)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 257 of 258
258
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 19th
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 - 258.
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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Case 1:22-cr-20290-BB Document 319 Entered on FLSD Docket 02/25/2025 Page 258 of 258File and source
- File
- gov.uscourts.flsd.615773.319.0.pdf
- Size
- 823,551 bytes
- SHA-256
- b82fce9b9ccd36ef90a2c7d89055f7253ea974136f334fd27d42de3fca057486
- Original
- PACER (login required)