Court filing
Transcript of Trial Day 14 as to Eric Dean Sheppard held on 01/08/2024 — USA v. Sheppard (Dkt. 320, 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. 320 · 2025-02-25 · Docket on CourtListener
Full text
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO. 1:22-cr-20290-BB-1
UNITED STATES OF AMERICA,
Plaintiff,
January 8, 2024
9:04 a.m.
vs.
ERIC DEAN SHEPPARD,
Defendant.
Pages 1 THROUGH 249
______________________________________________________________
TRANSCRIPT OF TRIAL DAY 14
BEFORE THE HONORABLE BETH BLOOM
UNITED STATES DISTRICT JUDGE
And a Jury of 12
Appearances:
FOR THE GOVERNMENT: UNITED STATES ATTORNEY'S OFFICE
AIMEE C. JIMENEZ, AUSA
ANA MARIA MARTINEZ, AUSA
99 Northeast 4th Street
Miami, Florida 33132
FOR THE DEFENDANT: SALE & WEINTRAUB, PA
JAYNE C. WEINTRAUB, ESQ.
2 South Biscayne Boulevard, 21st Floor
Miami, Florida 33131
NELSON MULLINS
JONATHAN ETRA, ESQ.
CHRISTOPHER C. CAVALLO, ESQ.
2 South Biscayne Boulevard, 21st Floor
Miami, Florida 33131
COURT REPORTER: Yvette Hernandez
U.S. District Court
400 North Miami Avenue, Room 10-2
Miami, Florida 33128
yvette_hernandez@flsd.uscourts.gov
ALSO PRESENT: Special Agent Sarah Halleran
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I N D E X
Certificate..................................... 249
W I T N E S S
ON BEHALF OF THE DEFENDANT:
PAGE
ERIC DEAN SHEPPARD
CONTINUED DIRECT EXAMINATION BY MR. ETRA
12
CROSS-EXAMINATION BY MS. JIMENEZ
96
E X H I B I T S
GOVERNMENT'S EX. NO.: OFFERED ADMITTED
79-2, Page 33
224 225
79-2, Page 101
226 227
79-3, Page 64
228 228
79-3, Pages 88 through 90
232 232
DEFENDANT'S EX. NO.: OFFERED ADMITTED
X-46
17 18
X-38
30 31
X-32
33 35
X-25
51 51
X-27
52 52
X-61
52 52
X-47-1
58 59
X-47-2
61 61
M-55
70 70
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
(Call to order of the Court, 9:04 a.m.)
THE COURT: Go ahead and have a seat.
How is everyone this morning?
MR. ETRA: Good, thanks.
THE COURT: All right. We had a flurry of motions
that were filed. I believe there is one more to address.
Do we have any issues to address this morning before
we continue?
MR. ETRA: Your Honor, we want to offer records
through the business records custodian Declaration --
Declaration of Jeanette Gonzalez.
We had submitted a version of this before trial
started, and it included at the time B-1 through B-12, which
are credit card statements maintained by Ms. Gonzalez with
checks and Xs about business expenses that Mr. Bouchner is
going to rely upon. And even though he's allowed to -- we
don't have to have it offered into evidence, we wanted to have
it for the jury.
And B-14 through B-20 are QuickBooks records she
maintained, which I think are probably identical to what was
admitted through Mr. Cupersmith. We updated it last night
because we also wanted to include a -- Your Honor may recall
there was testimony in 2019 there were no W-2s filed, and --
MS. JIMENEZ: That's not the testimony about W-2s.
MR. ETRA: And we located, and Ms. Gonzalez certified,
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
not only W-2s but communications with the government agency to
confirm that she had filed them. So those are the other
business records. And that's Y-1 --
THE COURT: Is she going to be testifying?
MR. ETRA: We don't plan on calling her, Your Honor.
She's been someone who is on both witness lists. The
Government has already immunized her. They've already had a
chance to speak to her, but we're not planning on calling her.
MS. JIMENEZ: Your Honor, the Government has an issue
with any declaration submitted by Ms. Jeanette Gonzalez.
The Defendant is providing counsel for her. She has
asserted the Fifth Amendment privilege as to everything after
her name, and she has a joint defense agreement with the
Defense. We don't believe -- I mean, if they want to call her
and she wants to talk about those records, you know, I mean,
that's their choice. But I think that the -- any business
record certification by her has serious credibility issues and
I don't think they should be relied upon.
MR. ETRA: Your Honor, they immunized her. They had a
full chance to speak to her. We're not aware of that
exception. They can call her if they want to and rebut it,
but we believe we've met the standard --
THE COURT: But she's providing no facts other than
she's certifying that these are business records?
MR. ETRA: Yes, Your Honor.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: So that's the extent of the declaration,
correct?
MR. ETRA: That's the extent, yes.
THE COURT: So I'm not understanding -- if she's --
and obviously I would agree with you that if there was
additional testimony -- but if, in fact, the declaration is
that these are the true and correct copies, then how does that
not satisfy the exception with regard to any claim of hearsay?
MS. JIMENEZ: Well, yes. I mean, true and correct is
what she would be certifying about, and that is her
credibility. And so we think her credibility is at issue in
this case.
THE COURT: But you're not questioning, and certainly
the testimony has supported, that she, in fact, is qualified
and competent to testify that these are the business records.
So the only argument that's being made is the credibility of
the certification that they are true and correct.
MS. MARTINEZ: Your Honor --
THE COURT: Ms. Jimenez, let me just -- is that
correct?
MS. JIMENEZ: One moment, Your Honor.
(Pause in proceedings.)
MS. JIMENEZ: Right. So my colleague, I think,
correctly pointed out that Jeanette Gonzalez -- so one, they
have a joint defense agreement. But Jeanette Gonzalez is
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
providing the Defendant documents and the Defendant is pointing
the finger at her as being involved in some sort of fraud on
his behalf. And so I think, again, her credibility is at issue
and the certification is meaningless.
MS. MARTINEZ: Your Honor, would the Court allow me to
add -- for example, with respect to the first loan, the PayPal
loan, the first one, my recollection from the Defendant's
testimony is that the first time he saw those documents were
during discovery in this case. So he is pointing the finger
at, quote/unquote, his accounting department, quote/unquote,
Ms. Jeanette Gonzalez, who is the only person -- and he said
Jeanette Gonzalez -- as the person who is providing and
uploading false documents to the lenders.
In that context, he himself is saying that -- alleging
as part of his defense that this woman is submitting false
documents. And then on the other hand he wants to turn around
and, without her testifying, suppose that she is a normal
regular disinterested records custodian to certify in a routine
way the reliability of business records.
It just is completely contrary to the intent of the
rule of having disinterested business custodians who have no
interest, who created contemporaneous records to certify, and
then for a certification to be timely provided under the rules
to the other side, and to allow under the rules a reasonable
amount of time to object, and then to allow this.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
So on many, many, many levels this is extremely
problematic, even to the level of fraud upon the court, in my
view.
THE COURT: All right. Mr. Etra?
MR. ETRA: Your Honor, we met the requirements. They
don't like Ms. Gonzalez. They don't like the fact that they
haven't proven exactly what happened in the accounting
department, which includes more than one person. He's allowed
to defend himself. We've met the requirements. There's no
exception because the Government's not happy. There's no case
law -- they were on notice that she was a custodian as of
before trial -- before trial started. We just added one
document last night.
THE COURT: This witness is no different than any
other witness that is competent to testify that these are the
true and correct records of the particular corporation. And to
that extent -- you're not questioning whether she's competent
to do so. You're questioning the extent of the records that
she states are true and correct. And to that extent, I believe
that the hearsay exception would apply and the records can come
in.
And with regard to any immunity or any assertion of
the Fifth Amendment privilege, if you wanted to call her in
rebuttal with regard to whether they are true and correct
copies, you can certainly do so. But I believe that the
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
certification -- as it was sufficient for the Government with
regard to the multitude of exhibits that have been introduced
into evidence, it would be sufficient for the Defense. So the
objection is noted. It is overruled.
What other issues do we have?
MR. ETRA: Your Honor, we just have an issue that I
could put on the record when we have more time. I don't want
to keep the jury waiting. We didn't get the documents from the
Vasilas phone in an opportunity that we were able to review
them. We got them and we printed them out -- the chronology --
I'll cut through the chronology. We didn't get them till
Thursday. We didn't get them printed out on Relativity till
Friday. On Relativity, you have to go document by document,
and didn't print it out till yesterday.
There's basically two boxes of documents. The text
messages are just text messages. I don't think it's -- I think
most of it's not attachments. We emailed on Friday saying:
"Please tell us which documents you're planning on using."
They never responded. So I know Your Honor has ruled. I'm not
rearguing. I'm just putting those points on the record. And
we still have a continuing objection, but I'm not rearguing --
MS. JIMENEZ: I would note that they received it when
the phone extraction was completed on Wednesday. I received it
from the FBI on Friday. And so, you know, that's --
THE COURT: Well, has the Government provided the
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Defendant with notice of what documents within that forensic
examination that you're seeking to introduce?
MS. JIMENEZ: I have not. And it depends on the
Defendant's testimony, Your Honor. I don't know what he's
going to say.
THE COURT: All right. Let me ask: With regard to
the direct examination, how much longer do you have, Mr. Etra?
MR. ETRA: Probably about two hours.
THE COURT: All right. Then it may be appropriate --
at that time, we will take an appropriate break. And then
Ms. Jimenez, you can advise Mr. Etra.
So Mr. Sheppard, if you'll come forward, sir.
MS. MARTINEZ: Your Honor, may I just alert you to two
issues? I will not argue them. I just want to alert you to
them.
THE COURT: Certainly.
MS. MARTINEZ: The Defense filed Saturday night an
amended -- a fifth amended expert disclosure, with quite a
number of revised and additional summary charts. The United
States objects to the lateness of that. We still have not --
obviously, I'm in court. It's difficult to review that. So I
will argue that later, but I just wanted to alert you to that.
And second, on Sunday, just yesterday, they filed an
additional notice of a brand-new expert relating to data
digital forensics, and we have not been provided yet with an
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
adequate digital copy of what it is that the witness is going
to testify to. And also, for a variety of reasons, including
that there is no basis stated in the notice, it's incomplete.
So we can revisit that as we go, but I'm just alerting
you that we received these late notices, and we do object to
them.
MR. ETRA: We don't need to deal with that for today,
Your Honor.
THE COURT: All right. If Mr. Sheppard will come
forward.
We have all of our jurors?
And are we still on the same timetable of two more
days for this trial, Ms. Jimenez?
MS. JIMENEZ: Your Honor, I don't know who they are
going to be calling. I mean...
THE COURT: Mr. Etra?
MR. ETRA: Your Honor, I think so. We're calling --
we advised counsel last night that if we finish Mr. Sheppard
today, we'll have Glenn Sheppard available as well today. And
then the other witnesses -- we don't think Glenn Sheppard will
be terribly long. The other witnesses that we're planning on
calling are Mr. Robert Kallman, K-A-L-L-M-A-N. He's going to
be on for tomorrow, as well as -- hang on -- sorry. One
moment.
MS. WEINTRAUB: Judge, I don't know if we're going to
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
get past that. After Mr. Kallman, there will be potentially
two very quick witnesses.
THE COURT: All right. Then we'll have time to
address the expert.
MS. WEINTRAUB: And then Mr. Bouchner -- excuse me.
THE COURT: Hold on. Let me hear from Ms. Weintraub,
and then you can respond.
MS. WEINTRAUB: And this Mr. Bouchner, who will be
testifying, obviously, who is our forensic accountant, and the
expert witness that we were compelled to go find and add as a
result of being accused of manipulating documents.
THE COURT: All right. Response?
MS. JIMENEZ: Your Honor, so Mr. Sheppard, Mr. Glenn
Sheppard, and then tomorrow they've indicated Mr. Robert
Kallman. So that's one witness for the entire day -- and
Mr. Bouchner. We would simply like to know at this late stage
who else they intend to call tomorrow.
THE COURT: I think you said Glenn Sheppard, Robert
Kallman, Bouchner, and then your second expert would be --
MS. WEINTRAUB: And there might be one or other two
other quick ones, and John Jorgensen --
THE COURT: All right. As I've required the
Government, I will require the Defendant in its case in chief,
moving forward, to provide the names of the witnesses. So I
think that with these three witnesses, including Mr. Sheppard,
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
who is still in his direct examination -- I believe that that
will take us through the day, putting aside the Court's
concerns as to whether we're going to finish with the time that
the jury has for us. But certainly today at the end of the day
I will ask the Defendant what witnesses it intends to call
tomorrow.
All right.
COURT SECURITY OFFICER: All rise for the jury.
(Before the Jury, 9:16 a.m.)
THE COURT: All right. Welcome back, Ladies and
Gentlemen.
Please be seated, everyone.
I hope you had a lovely holiday and Happy and Healthy
New Year to each of you.
We are ready to get right back to work. Thank you for
being so prompt.
Let me remind you that we were within the direct
examination of Mr. Sheppard.
And Mr. Sheppard, let me remind you, you were
previously placed under oath.
And let us continue.
MR. ETRA: Thank you, Your Honor.
DIRECT EXAMINATION [CONTINUED]
BY MR. ETRA:
Q.
Mr. Sheppard, when we finished, we were talking about the
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
cancer and treatment and the effects January to March of 2021.
I just want to go forward from there. Did you have any other
ailment that affected your work in that time period?
A.
Well, I had COVID. I think I said it the other day or a
few weeks ago. I had COVID simultaneously.
Q.
I want to focus on the forgiveness for the first PayPal
loan. Okay?
A.
Okay.
Q.
All right. From your perspective, what was the reasoning
in seeking forgiveness for the first PayPal -- first PayPal
loan?
A.
I'm sorry. When you say "reasoning" --
Q.
What was the rationale? What was the justification?
A.
I received emails from the PayPal company multiple times
saying that you should -- you're supposed to apply for
forgiveness of debt or of the loan. And so, following that, I
forwarded it to the people that take care of it.
Q.
And did you feel you qualified with the payments you
made --
A.
Oh, yeah. I mean, it was -- it was like I think four or
five times as much that was paid out than actually was
received, so I was way over. What they provided of the
$146,000 was way over what I paid the workers, or the companies
paid the workers, so I didn't think about it.
Q.
What about -- let's talk about all the other loans right
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
now. Have you been paying them back?
A.
Yes.
Q.
I want to again focus on the time period of January to
March of 2021. And notwithstanding the challenges you had that
you testified about already, what was on your plate to focus
on? What were you actually focusing on workwise in that period
of time? Could we start with phase 3?
A.
Sure. Well, the Burlington was opened on
October 31st, 2020. After that, I focused on the phase 3 and I
started working on the tenant leases, financing. So I was
working with financing, leasing, budgeting for construction for
the new phase.
Q.
Let's talk about the leasing. Prior to COVID, did you have
a grocery-type store signed up and ready to go in phase 3?
A.
Yes.
Q.
Which store was that?
A.
A company called Earth Fare. It's like a organic health
food out of North Carolina.
Q.
And then, in the course of COVID, what happened to Earth
Fare?
A.
I'm not sure what happened to them as a company, but they
had financial difficulties, from what they told me. And so
they were just not expanding as quickly and they wanted to wait
to see what was going to happen -- like everybody else, what
was going to happen with COVID. So they were on hold.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
So what did you do about that gap in the phase 3, that
hole?
A.
During what time period?
Q.
Well, I'm focusing from January to March of '21, but if you
need to go beyond that, please do so.
A.
Well, clearly the world changed as far as how you looked at
things. So construction-wise, we made a decision not to go and
build all of it. So -- I mean the whole entire phase 3. So we
made a deal with Amazon Fresh, their new concept, the Amazon
Fresh and we -- I negotiated a lease with them through
November, December, January, February, March, and executed on
April something. And then a company called Floor & Decor. So
I was negotiating a lease with them. So the tenant had changed
and the construction became a little bit less --
Q.
Why did the construction become less with those changes?
A.
It became less because we self-performed construction, so I
didn't want to have the risk of building so much. So one was a
ground lease with Floor & Decor of an 80,000-square-foot
building. They were going to build the building and we were
going to do the site work. And then --
(Phone ringing.)
MR. ETRA: Hang on, Mr. Sheppard. Hand on a second,
please.
THE COURT: Thank you. All right.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Please proceed.
A.
And then the other one was Amazon Fresh, which is their new
44,000-square-foot building, and we were going to construct
that. So we were building 44,000 square feet, and then we were
doing all the site work, which we started already anyways, you
know, during COVID, and that's it.
Q.
So just in simple terms, why was the new tenant, the
replacement -- well, let me go back to Floor & Decor for a
minute. Did that replace also a tenant, just like Amazon did?
A.
Yes.
Q.
What tenant did Floor & Decor replace?
A.
Well, they were 80,000 feet, so they replaced Marshalls,
HomeGoods, and a company called Crunch Fitness. It's like --
it's a fitness like an LA Fitness type of business.
Q.
With Marshalls, who was going to build the vertical-up
construction, the building?
A.
Our company.
Q.
And with Floor & Decor, who was going to build the vertical
up construction?
A.
The what?
Q.
Who's going to do the vertical construction for Floor &
Decor, the replacement tenant?
A.
Vertical construction. They were.
Q.
Is that one way that it was less construction, less work?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yeah. It mitigates the risk because of obviously the
environment in the world. It mitigated the risk. But the site
work was very complicated, so we were going to concentrate on
just doing the site work.
MR. ETRA: For the witness only, please could we put
up Exhibit X-46.
MS. MARTINEZ: Counsel can't see it.
THE COURT: It's not up yet.
BY MR. ETRA:
Q.
I have the first page of X-46 in front of you. Do you
recognize X-46?
A.
Yes.
Q.
And what is that?
A.
This is the front page of the lease.
Q.
For?
A.
Amazon.
Q.
Amazon being what in this case?
A.
They were the tenant, Amazon Retail, LLC, the tenant.
Q.
And what store was that for?
A.
The Amazon Fresh.
Q.
The grocery store we talked about?
A.
The 44,000-square-foot build-to-suit.
Q.
Is this the lease you worked on and finally had executed?
A.
A hundred and fifty-five pages, yes. I remember it.
MR. ETRA: Your Honor, we offer Exhibit X-46, business
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
record.
THE COURT: Any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-46 received into evidence.)
BY MR. ETRA:
Q.
As between you and Mr. Vasilas, who was qualified to handle
the intricacies of dealing with a tenant like Amazon, the
grocery store?
A.
Me.
Q.
As between you and Mr. Vasilas, who was qualified to handle
the dealing with Floor & Decor as well?
A.
Myself. Me.
Q.
So whose job was it between you and Mr. Vasilas to handle
the issues with replacing tenants and negotiating leases?
A.
That's my job.
Q.
Okay.
MR. ETRA: While we have the exhibit up, could we go
to PDF Page 94.
BY MR. ETRA:
Q.
Do you see that page in front of you, sir?
A.
Yes.
Q.
Can you explain generally what's going on, what this page
shows.
A.
This is a signature page from the landlord for this
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
development.
Q.
And landlord, that's your companies?
A.
That's part -- it's a new LLC. It's a new LLC, but it's my
company, along with some other people.
Q.
Tell me why there's a new LLC. What changed here for the
landlord for Amazon?
A.
Well, like I said, every new development or construction is
always set up in a brand-new LLC. It doesn't stay -- and there
was a buyout of my partner in that from the old company, so it
was a brand-new LLC.
Q.
What kind of -- was this a joint venture of some kind?
A.
Yes.
Q.
Could you explain what that was.
A.
Yes. There's a group out of North Carolina that, because
of what was going on in my personal life health-wise and other
things, I just started to do a joint venture with them. And
the biggest reason why is because they were what they call a
preferred developer for Amazon. And Amazon likes to have their
same, you know, developers and stuff like that. And so I was
going to do construction, they were going to do the
development, and that's why we created the joint venture.
MR. ETRA: We could take this down.
BY MR. ETRA:
Q.
Were you also -- again, focusing on the period of
January 2021 to March 2021, I think you mentioned financing.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Were you working on any private financing during that time
period?
A.
Yes.
Q.
And for which part of this development were you focusing on
private financing?
A.
We were working on -- or I was working on phase 3
construction loan and --
Q.
At this point did you have any construction loan for phase
3 compared to the other parts of the project?
A.
No. There was no debt.
Q.
And did the Amazon play a role in getting -- did working
with Amazon play a role in trying to get financing?
A.
Yes.
Q.
Could you explain that.
A.
Well, Amazon is Amazon, and they have great credit. And
during the pandemic there wasn't really a lot of financing
available for just regular retail stores at least from a
construction standpoint. And with Amazon, their credit and the
concept of having the new grocery store with a guarantee from
Amazon of a lease, a lot of lenders wanted to do that, only
with Amazon. The other part, meaning the rest of the property,
they were not financing. It was the Amazon and site work.
Excuse me.
Q.
Were you able to get financing even with Amazon during
COVID?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I'm sorry. Can you repeat that?
Q.
Even with what you said about Amazon, were you able to get
a construction loan -- a private financing construction loan
during COVID?
A.
We had -- I had multiple term sheets and then some
commitments, and I was choosing between those two. Actually,
it was like three.
Q.
But none ended up taking place?
A.
No.
Q.
I want to change topics to the applying for PPP loans in
2020 and 2021. Okay?
A.
Yes.
Q.
Leading into that time period, how was your experience
dealing with the portals and the SBA and these different
entities that would pop up on your screen?
A.
Well, it was very -- as I stated before, two weeks ago, it
was a nightmare. I don't know if it was user error, but it was
very difficult for me to navigate the portal, the Internet, the
system that they have in place. So it was very difficult. It
was very frustrating, you know, frustrating.
Q.
Did you enjoy doing it?
A.
I hated it.
Q.
Did you feel like you were particularly good at it?
A.
At what?
Q.
Working with these government programs through the portals
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
and the like in 2020.
A.
I don't think I'm very good at working through government
portals or any portals for that matter. I'm just not -- that's
not my -- I'm not really well educated in that world.
Q.
How about working with Nationwide? How did you find that
experience?
A.
I thought the lady Nelly was very nice. She was a nice
lady. And Daniel Sheps. But I just thought that -- you know,
I don't know what they were doing, and it was a little bit
frustrating because they were calling me in the middle of the
day: "Can you get on a phone call?" It was just not normal.
I'm not used to -- I'm used to going through a lender and a
bank and dealing with banks and major companies. I'm not used
to doing it like that. Talking to people -- I like to talk to
people, not -- I talk too much.
Q.
How did the idea of applying for PPP loans in 2021 -- how
did that come up?
A.
How did it come up?
Q.
Yeah.
A.
It came up based upon -- the forgiveness is what triggered
the whole thing with the forgiveness of debt with the PayPal.
And when Jeanette and Jeff were doing -- putting together the
workers, whatever, the schedules or something, I had a
conversation with Jeff about the PPP. He suggested that: "Why
don't you -- there's like this second round thing going on.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
You can get that or you can increase the PPP loan from the
people you paid in 2020," something like that. Just --
Q.
Which Jeff are we talking about?
A.
Jeff Vasilas.
Q.
At this point in time, where is Jeff Vasilas's office?
A.
His office is at my house because we closed the office, as
I told you, sometime in 2020, and I was working in my house.
So he was no longer in Orlando because we finished the CO. So
then he started migrating back to Miami and he was in my house
most of the time.
Q.
So how did this conversation lead to the application for
PPP loans in 2021?
A.
I don't understand the question.
Q.
What happened next? Mr. Vasilas raises the issue with you.
How does it go from there to applying for loans?
A.
He said he knows how to do it. He had some accounting guy,
this guy Tim, and that he knows how to do it and: "It's
available. Why wouldn't you do it?" I said: "Look, I'm not
dealing with these" -- "I'm not dealing" -- not people. The
computer -- "I'm not dealing with this. If you know how to do
it, great. You have all the data. You have all the
information. You and Jeanette, you figure out whatever you got
to figure out. If you need me, let me know."
Q.
Tim's last name, is that Kenna?
A.
Kenna, yes.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And who is Tim Kenna, as you understood it?
A.
He was his accountant for his -- he owned multiple
businesses before. He had troubles, as far as his King of
Diamonds business. And he was his accountant that did his work
for him with his workers and his tax returns and stuff like
that.
Q.
So what happened as a result of the conversation and his
offering to do it? What was your response to that?
A.
I said: "Just get whatever data that I have available" --
not I but the company has available. "If we get the
forgiveness -- and good luck. If you need me, let me know. I
have a million other things to do. Go do it."
Q.
At the time did you feel like you were doing something
wrong in delegating that to Mr. Vasilas?
A.
No.
Q.
Why not?
A.
I mean, the guy did build a 60,000-square-foot building
during COVID. And I mean, I was pretty -- I thought -- I mean,
I thought he could do it, but I really didn't know if he could
do it kind of in the back of my mind. So he actually did it,
and he was doing some other things that he was doing. Somehow
he was getting things done.
Q.
Any time before COVID had Mr. Vasilas focused at all on
credit applications or loan applications in any way?
A.
(No verbal response.)
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Let me ask you this: How did you learn about Nationwide?
A.
Through Jeff Vasilas.
Q.
At what time period?
A.
I don't know the exact, but some time I think in January or
February of 2020.
Q.
Did you think it was weird at the time that he was
suggesting financing for you when he was a construction guy, or
whatever his background was?
A.
No.
Q.
Why?
A.
Well, he had his own business. He dealt with -- I mean,
not that he -- I don't know how much he dealt with banks, but
he had to deal with banks when he owned a building and stuff.
So he -- if you say one thing, it's like: "Can you go do it,"
"Yeah, I can go do it."
That's how his personality was. And he said: "I got
these people that" -- he always connected with people somehow.
And he was like: "Okay. Here's this guy Daniel Sheps, and he
can do the financing for your projects."
Q.
As between you and Mr. Vasilas, from your perspective, who
was best qualified -- from what you understood and believed,
who was best qualified to deal with these PPP loans?
A.
Oh. By far, him and Jeanette a hundred percent. It has to
do with, you know, stuff that I don't deal with. They
understand it. I don't understand it. That's their
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
wheelhouse.
Q.
Why not reverse it? Why didn't you do the PPP loans and
let him do the dealing with Amazon, Floor & Decor, and these
construction loan finance companies?
A.
That wouldn't work because he's -- my expertise is dealing
with site development tenants, that side of the business. I'm
not on the -- you put a wall. I'm on the other side. They're
more qualified to deal with that. They could not -- neither
one of them could deal with Amazon and stuff like that. I've
been doing it for 25 years. That's what I do.
Q.
So what was your role in this -- what was your role, if
any, for these 2021 PPP loans?
A.
My role? What do you mean my role?
Q.
Did you just say: "Go handle it yourself," or did you have
any role -- were you available to help Mr. Vasilas if he needed
it?
A.
Oh, no. I said: "If you have any questions about, you
know, anything you need that I could help, let me know.
Otherwise" -- he had all the data because everything's coming
out of Orlando from all the workers that he hired. I don't --
you know, he hired the people. He did everything in Orlando to
build the project. It's --
Q.
Sorry. I didn't mean to cut you off.
A.
No. That's okay.
Q.
By the way, back to Burlington that you were talking about.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Before the move-in, before the -- Burlington was able to move
in, so we're talking the main part of 2020 or the year 2020,
where was your AmEx card, the physical card?
A.
My AmEx card was in Orlando.
Q.
With whom?
A.
I'm not sure exactly whom, but Jeff had it. But I know
other people -- I found out recently that other people have had
that card and they used that card for dealing with the project.
Q.
Why did you send -- why did you allow Mr. Vasilas or others
to use your card in Orlando?
A.
Because during COVID supply houses, vendors, I mean,
everybody, the world -- everyone was a little freaked out and
they wouldn't take checks. There was a mess. So they needed
something that they had available credit limits -- not --
credit lines on it -- on my card, which they could afford to
just go whatever -- buy whatever they had to buy to get it
done. But people would not accept like checks, anything. You
couldn't go to a bank to really wire stuff because banks were
closed, they were open. It was a mess. So that was the reason
why I allowed that to happen. But listen, he would tell me if
he was using it. He wouldn't just randomly do things.
Q.
But you trusted him with your card, right?
A.
Yeah.
Q.
I don't think I asked you. When you moved to your home
office -- and you said Jeanette didn't join you, and she stayed
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
at her home in Hialeah, correct?
A.
Correct.
Q.
Why did she not join you in the home office?
A.
According to what she told me, and which is true, that she
has something -- what do you call it -- asthma and lung -- or
something with her lungs or asthma. And her husband has very
significant -- he's a diabetic and some other -- and they were
concerned about, you know, obviously, like everyone else,
contracting COVID.
Q.
In, again, the period of January 2021 to March of 2021,
were you always at your house, whether it's the home office or
elsewhere in your house?
A.
Was I always there?
Q.
Were you always there?
A.
No. I mean, I was there when I slept and when I was with
my family, yes. But I mean, no, I wasn't sitting in my house
all day.
Q.
Was Mr. Vasilas allowed to be in your house when you were
not there?
A.
Yes.
Q.
To your knowledge from talking to him and working with him,
did that happen? Was he there when you weren't there?
A.
Yeah.
Q.
In -- on February 26th, 2021, which -- I'm not going to
discuss with you why I'm asking you that date. But on that
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
date, do you know where you were, February 26th, 2021?
A.
I mean, I remember it, because that was the time we were
in -- my wife, myself and my daughter, we were in
Orlando/Lakeland -- I don't mean slash -- Lakeland, Florida.
Q.
What were you doing there?
A.
Well, my daughter plays -- actually, at the time -- now
she's in college. But at the time she played for Miami Country
Day girls basketball team, and we were at the state
championship finals in Lakeland, and we were there for the
finals.
Q.
And how long were you there -- what time period were you
there? Do you recall?
A.
I don't know the exact time frame, but I think it was -- I
want to say 24th, 25th -- 25th through the 27th. Thankfully,
they won the first game and they ended up winning the
championship. So you have to wait a few days. So I'm not sure
exactly the date. I know we got there on the 24th or 25th and
left on the 27th, or something like that.
MR. ETRA: For the witness only, could we please put
up Exhibit X-38.
BY MR. ETRA:
Q.
Do you recognize Exhibit X-38?
A.
I do.
Q.
Without elaborating specifically what the information is,
because it's not in evidence, generally speaking, what is X-38?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
This is a picture of the warm-up of the first game of my
beautiful daughter shooting something -- shooting a basketball.
Q.
Where was this picture taken?
A.
This was at the -- it's in Lakeland. I forget the name of
the place. It's where the Orlando Magic has their --
Q.
In Orlando?
A.
No. It's Orlando. This is in Lakeland. The Orlando Magic
has like a -- what do you call it -- like minor team or
something. It's called RP Funding -- RP Funding or something
like that.
Q.
Who took the picture?
A.
I did.
Q.
And did you take it at the time indicated on the date stamp
there?
A.
Yes.
MR. ETRA: Your Honor, we offer X-32 [sic].
THE COURT: Any objection?
MS. JIMENEZ: One moment, Your Honor.
(Pause in proceedings.)
MS. JIMENEZ: Yes, Your Honor. I object. Relevance.
It's on a different day. It's also a purported alibi not
disclosed previously.
MR. ETRA: The alibi disclosure rule does not apply
here, Your Honor, for reasons --
MS. JIMENEZ: It's on a different day, Your Honor.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. With regard to relevance, the
objection is overruled. X-32 will be admitted into evidence.
MR. CAVALLO: Sorry, Your Honor. I believe this is
X-38.
THE COURT: Oh. I'm sorry. I thought you labeled it
32. X-38 is admitted into evidence.
(Defendant's Exhibit X-38 received into evidence.)
MR. ETRA: My apologies, Your Honor. I read the wrong
part of my outline.
BY MR. ETRA:
Q.
Basically, what does this show in terms of where you were
in this time period?
A.
I was staying in Orlando but going to Lakeland for the
first game and the following game for the championship for the
period of time.
Q.
And you were there you believe through February 26th?
A.
Oh, yes.
Q.
And --
A.
27th, I believe.
Q.
-- where was Mr. Vasilas while you were in Lakeland --
instead of going to Orlando, Lakeland?
A.
What's that?
Q.
Where was Mr. Vasilas when you were in Lakeland?
A.
He was at my house. He was working there, and he was
also -- at nighttime, he would stay there. He was also doing
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
some work on the gate. There was -- something happened with a
truck with one of the gates at the house, and he was working on
that. And he was also working on other -- I don't know what he
was doing. I can't tell you exactly what he was doing because
I wasn't there.
MR. ETRA: We could take this down.
For the witness only, now X-32. I had the wrong
number before.
BY MR. ETRA:
Q.
I'm going to go through the first few pages for you, sir,
and then let's go to the third page. And then I'm going to ask
you if you can tell me generally, without getting -- because
it's not in evidence what this is.
A.
It says -- well, it's a proposal from a company made out to
Mr. Vasilas. And it has a picture of my house on it -- you
know, the exterior of my house on it.
Q.
Let me take a step back away from this. Did Mr. Vasilas
have authority to stay overnight at your house?
A.
Yes. He's a big animal lover. He loved my dogs.
Q.
All right. Going back to X-32, just what are the general
circumstances of this document? Could you explain the
circumstances without discussing the specifics of this
document, please.
A.
I don't understand. Say that again.
Q.
How is it that -- did you task Mr. Vasilas with anything
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
with respect to the gate at your house?
A.
Yes. A truck or something ran into it -- a working truck
ran into the gate or something. So it was broken, so he was
going to -- as usual, I told him, and he said: "Okay. I'll
take care of it. Okay. Okay. Okay. I'll take care of it."
So he was working with some company, I guess. And he
said he was going to work with him, and he was going to take
care of it. That's what he does.
Q.
And that's the place where you have your home office?
A.
Home office, yes.
Q.
And is this an email where Mr. Vasilas is providing you
information about the task -- the business task you gave him to
fix the gate in front of your home -- your house and your home
office?
A.
Yes.
Q.
Okay. Is this -- in your -- is this a -- was Mr. Vasilas
acting in the course of his business duties with respect to
your companies in doing this work?
A.
Yes.
MR. ETRA: Your Honor, we offer X-32 as a business
record.
MS. JIMENEZ: Your Honor, I object. I've never seen
this before. Were we provided this before?
MR. ETRA: It was provided long ago.
THE COURT: Has that been listed on the Defendant's
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
exhibit list?
MS. JIMENEZ: No. No. I mean, we got an exhibit list
at, what, eight p.m. last night.
THE COURT: Is this the first time that it was
provided?
MR. CAVALLO: No, Your Honor. X-32 was provided
before the break, before Mr. Sheppard began testifying.
MS. JIMENEZ: We got an exhibit list last night at
eight p.m.
THE COURT: You want to provide the Court with some
justification with regard to that? Ms. Jimenez is stating that
she did not receive it.
MR. CAVALLO: I'll verify the upload to USAfx, their
system. It may take me a second to log in.
THE COURT: Ms. Jimenez, is that correct? Did you
just receive this last night?
MS. JIMENEZ: Well, it's the first time I've seen it,
Your Honor.
THE COURT: Well, I'm not asking whether it's the
first time you've seen it. You may not have looked at it, but
when was the first time you received it?
MR. CAVALLO: I will confirm hopefully in two
minutes --
MS. JIMENEZ: If I haven't seen it before, I can't
confirm when it was provided, Your Honor.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: When was the Government provided with
X-32?
MS. JIMENEZ: We were provided an exhibit list last
night for the first time --
MS. WEINTRAUB: Judge, I object.
THE COURT: When was the Government provided with
X-32, Ms. Jimenez? I'm asking the question, and Mr. Cavallo
will justify that with giving the Court some indication by way
of the upload.
MS. JIMENEZ: I don't know, Your Honor.
MR. CAVALLO: Your Honor, the document was uploaded to
USAfx on December 20th.
THE COURT: Ms. Jimenez, did you want to look at what
Mr. Cavallo is looking at?
MS. JIMENEZ: Certainly.
(Pause in proceedings.)
THE COURT: Ms. Jimenez, is that, in fact, when the
Government received it?
MS. JIMENEZ: It appears to be, Your Honor.
THE COURT: All right. The objection is overruled.
X-32 will be admitted into evidence. I believe -- is it --
yes. X-32.
(Defendant's Exhibit X-32 received into evidence.)
THE COURT: All right. Let's continue.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Okay. Could we just focus on the second
page -- sorry -- the one on the right-hand side.
BY MR. ETRA:
Q.
Could you indicate what this gate is and the vantage point,
what you're seeing here?
A.
That is the gate that you would face the front of the
house, and like the -- like I'm sitting at the front of the
house and looking forward, that's the gate.
Q.
So the person taking this picture is on your property?
A.
Yeah. Is on the -- I don't know where on the property, but
yes, he's near the front of the entranceway where the house is.
Q.
And do you see at the bottom right -- who does it say this
proposal was prepared for?
A.
Jeff Vasilas.
Q.
At your house?
A.
Yes.
MR. ETRA: If we could turn to the very last page.
If we could blow up the top part.
BY MR. ETRA:
Q.
Who does it indicate signed -- DocuSigned this proposal?
A.
Jeffvasilas@solutionz100@yahoo.com.
Q.
What date is there?
A.
February 19th, 2021.
Q.
Could you please read the IP address.
MR. ETRA: And blow that up, please.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE WITNESS: How do I do that?
BY MR. ETRA:
Q.
Could you see it now?
MR. ETRA: Take out the highlight, please.
THE WITNESS: No, I can see it. I can't see far. I
can see close. It says: "72.28.217.129," which is the IP
address -- or it says: "IP." I think that says: "IP."
MR. ETRA: Could we take that down, please.
BY MR. ETRA:
Q.
We talked a little about the -- earlier you talked about if
you didn't complete Burlington, in addition to financial
penalties, they could terminate the lease. Do you recall that
topic?
A.
Yes.
Q.
I don't know that I asked you specifically: What would
have been the consequences of Burlington terminating the lease
for late delivery or failure to deliver as they wanted on time?
A.
It would have been pretty catastrophic, as far as --
Q.
Be specific, please. What would have happened?
A.
Oh. The lender would have just foreclosed on the property
because they're half of the property and they would have
foreclosed on it through a default.
Q.
The lender being?
A.
Basis Capital.
Q.
And what effect would that have on the project as a whole?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
It would be a big problem because there's a lot of things
that happen when that happens, with the other tenants, with the
future leasing, with everything. It's just -- it's a disaster.
Q.
Staying on Basis for a moment, approximately how much were
your companies paying a month? I know there's some
variability, but approximately how much?
A.
For which --
Q.
The Basis loan.
A.
Okay. Basis, around $91,000 per month --
Q.
And how large was the loan as a whole?
A.
20,950,000.
Q.
Approximately 20.1?
A.
Twenty million -- 21. Okay. It was 20,950,000.
Q.
And how long had your companies been paying that mortgage
on a monthly basis?
A.
Prior to Basis, it was a different lender. And so I would
say approximately 2012, around 2012, summer of 2012.
Q.
Okay. I want to talk about the idea of applying for PPP
loans in 2021 both for HM-UP and HM Management in the same time
period. You got that?
A.
Yes.
Q.
Okay. Whose idea was that? Whose idea was that?
A.
When you say "idea," what do you mean by "idea"? I don't
understand --
Q.
To your recollection, where did the idea come from to apply
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
for both at the same time?
A.
Oh. That came from Jeff, based upon his -- his analysis of
what was -- occurred.
Q.
From your perspective, was there any logic or rationale for
applying for both in the same time period?
A.
Yes.
Q.
What was that justification in your mind?
A.
Well, HM-UP was -- did the construction for the Burlington,
and -- which, it did make sense. What he said is that there
was a huge punch list and there was other items that had to get
completed throughout 2021. And HM Management and Development,
they don't own the property. They are managing. So they have
obligations to do other construction -- not obligations. They
have to do other construction outside of the Burlington
physical structure. Everything outside the building is a
different company. Everything inside is HM Management and
Development, if that explains it.
Q.
And with respect to what was going to get done in 2021 for
HM-UP, you mentioned the punch list. What about Mattress1One
transitioning to FedEx? Would that be something that HM-UP had
to spend time and money on?
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
What role, if any, did FedEx have in your justification --
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
in your mind for applying for loans for both companies?
A.
Well, it wasn't in my mind. It was what he presented to
me. The construction activity for 2021 for HM-UP -- and he
presented it as the FedEx construction to convert from
Mattress1One, the 55-page punch list for Burlington --
that's -- yeah.
Q.
And what about the -- in terms of -- what role, if any, in
your thinking did the road -- I forgot the name of the road
that you had to build. Could you remind me, please.
A.
Indianhead Trail.
Q.
The obligation to construct the Indian Trail Road, did that
play any role in your mind in justifying applying for both?
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained. Rephrase.
BY MR. ETRA:
Q.
What role, if any, did the Indian Trail Road play in your
thinking with respect to PPP loans in 2021?
A.
It wouldn't be loans. It would be one loan. It would be
on the HM Management side because that's what they call the
common area. So to build the road, that would be on the HM
Management side. HM-UP I already described. So it wouldn't be
the loans. It would be one loan. That's why you separate it.
He actually made sense that it should be separated.
Q.
And what about the construction to put Chase in the
outparcel? Did that play -- it have any impact in your
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
thinking with respect to the PPP loans --
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
What -- could you please indicate which construction
projects related to HM Management at that time.
A.
You had the Indianhead Road, which was a requirement by the
Orange County. It was the -- they came later and said: "You
have to build it in order to get a CO on the Chase Bank." So
therefore, Chase Bank, all the parking lots, the lights, the
infrastructure underneath, the FPL transformers, and also the
other common area, we had to make adjustments on the phase 3
side. There was work being done with the phase 3 common
area -- not in phase 3 but common area for that. Anything you
do outside.
There was three different projects at that
particular -- four different projects. And the Starbucks pad
that -- we had to bring all the infrastructure there. And only
HM Management -- or HM Four would have to hire HM Management to
do all of the work because the other owners, HM-UP, are not
allowed to go in that common area and do work. So that's why
it was separated like that.
Q.
Did you use the term "CO" in your answer?
A.
Yeah.
Q.
What is CO?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Means a certificate of occupancy, when the building
department signs off -- all the departments in a certain county
signs off on a building project.
Q.
I want to talk about the email -- some of the email chains
that were introduced in evidence in the Government's case for
the 2021 PPP loans. Okay? I'm focusing on that. Okay?
A.
Okay.
Q.
All right. I want to talk about the email with respect to
that, the email eric.sheppard10@gmail.com. Whose email is
that?
A.
That's my email.
Q.
So generally speaking, do you recall whether you sent and
received the emails that went to and from the ericsheppard10
with respect to these PPP loans? Do you have any recollection
of sending or receiving those emails?
A.
I don't have a -- what time frame? What year? What --
Q.
Talking in the January to March 2021, the emails that were
shown in court from PayPal and -- I don't remember exactly
which ones, but I think Cross River and Northeast, but I could
have some of that wrong.
A.
Well, in that time frame, what I saw on the screen at the
time, I don't recall receiving those emails or reviewing -- I
should say reviewing those emails.
Q.
Okay. Does anyone else -- from January '21 to March '21,
did anyone else have access to your email
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
eric.sheppard10@gmail.com?
A.
Yes.
Q.
Who had access -- who besides you had access to the email?
A.
A, my computer is not locked. It's -- there's a computer
in the office that has my email, plus a lot of other people's
emails. My kids, Jeff, obviously myself, whoever was in my
office at the conference room table, they can access --
MR. ETRA: Your Honor, for the record, X-9 in evidence
is now on the screen.
BY MR. ETRA:
Q.
Go ahead. I wanted to do that for the record.
A.
I'm just trying to think who else. But also remotely --
Jeanette has access remotely. I guess they can -- a lot of
times I don't know how to do things. So they like -- there's
some way they can get on the computer, and the mouse, the
little pointer, it starts moving around the screen and they do
stuff because I can't do it. They help me with that. So that
guy -- there's an IT guy that did that.
Q.
Focusing on X-9 on the screen, which computer that you're
referring to had your email, the eric.sheppard10 email?
A.
It's where the oval desk is there. There's --
Q.
Is that where the green arrow is?
A.
That computer that was there, that's the main computer that
people use.
Q.
And in January to March 2021, whose spot was that?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
That was -- this was Jeff's spot.
Q.
What about other people like Jeanette Gonzalez? Did she
have access to your eric.sheppard10 Gmail account?
A.
Yes.
Q.
At this time period, she's in Hialeah. How did she have
access to your email?
A.
Because she has access to almost everything. She has
access to everything.
Q.
Could you be more specific how she can get access to your
email when she's in Hialeah.
A.
I don't know how that actually works technically. But like
I said, like you can just go on a computer and you log in, or
they -- sometimes if I can't figure it out, they -- they -- I
can watch them actually physically do stuff on my computer
remotely.
Q.
Did she have login access to your --
A.
Yes. Yes. Of course.
Q.
Now, I think there's some emails -- in all the emails that
were shown to the jury, that says: "Sent from iPhone."
Without necessarily remembering --
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
MS. JIMENEZ: Counsel is testifying.
BY MR. ETRA:
Q.
Okay. Generally speaking, did those individuals have
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
access to your phone to respond to -- to send a "Sent by
iPhone" email?
A.
I mean, yes, technically, they could have access to my
phone. I mean, I -- but I had my phone too. I mean, I use my
phone. I'm usually using my phone for -- I'm a phone call kind
of guy or maybe a text guy or something.
Q.
Now, if you had seen some of the emails at the time that
said, for example, 940s, 941s, and things like that, at that
time period, how would you have handled --
MS. JIMENEZ: Objection. Leading.
THE COURT: Overruled. I'll allow it.
THE WITNESS: I'm sorry. I got confused.
BY MR. ETRA:
Q.
Sure. Some of the emails talk about 940s, 941s, things
like that. I'm not going to go through all of them with you
now. If you had seen that at the time, if that actually was
you reading or sending email, what would you have -- how would
you have responded to that? How would you have known how to
deal with --
A.
I would -- depending on what it was about, what you just
described, I would just -- whoever handles that kind of stuff,
I would call them and say: "Hey, can you take care of this?"
Q.
What if Mr. Vasilas was sitting next to you? What would
you have done?
A.
I would have turned to him and said: "Do you know what
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
this is? Yes or no." And if he said: "Yes" --
MS. JIMENEZ: Objection. Calls for hearsay.
THE COURT: Overruled.
BY MR. ETRA:
Q.
Now, at the time, if -- did you understand that 940 and
941s were only for W-2 and that your people didn't have W-2 or
didn't have a lot of W-2? Did you understand that at the time?
A.
I did not.
Q.
I want to talk about the DocuSigning of the loans. The
actual loans come in and there's DocuSigning in March. Do you
know where I am, Mr. Sheppard?
A.
Yes.
Q.
Okay. Who actually DocuSigned the loan applications in
March?
A.
Like what day in March? Which day?
MR. ETRA: Well, why don't we put up Exhibit 20-23 in
evidence. Let me go to the first page, so we can see what this
is.
Is it only the last page we have?
Oh. It is the first page.
Why don't we go to the next page so everyone knows
which loan this is.
Could we keep going until we find something? I don't
have a copy with me.
(Pause in proceedings.)
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
All right. It says: "The loan source," which would be
Northeast -- which would be -- I believe the evidence is
Northeast second round --
MS. JIMENEZ: Objection. Testifying.
THE COURT: Sustained. Let's get to the document.
MR. ETRA: Let's go back to the DocuSign page.
BY MR. ETRA:
Q.
Who did this DocuSigning?
A.
Who did it?
Q.
Yeah.
A.
I don't understand. Who did it, like...
Q.
Did you -- the email comes into wherever it came in.
Someone had to click the "Eric Sheppard." Was that you?
A.
Oh. I did.
Q.
Okay. And it indicates here on the right-hand side that --
well, let me ask you: Why were you comfortable DocuSigning
this when you had delegated what you delegated -- or were you
comfortable DocuSigning this when you had delegated what you
had delegated to Mr. Vasilas?
A.
Because it was the second round of the original PPP loan,
so I was comfortable with that. And he also discussed it with
me prior to it. He told me what he was doing, so I was fine
with it.
Q.
Did you have any reason to believe he was doing something
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
improper or submitting fraudulent documents?
A.
No.
Q.
And if you go to the time stamp on the right-hand side, it
indicates sent on March 17th, 2021, but not viewed until eight
days later, on March 25th. Do you see that?
A.
I do.
Q.
How is it that you would receive this email with the
DocuSigning on March 17th but waited eight days to open it up?
A.
I really don't look at my emails that often. I have a lot
of unopened emails, and I don't really look at my emails. So I
don't typically look at my emails.
Q.
What about the -- there's another one that day. We can
load it up, I guess, if we need to. Do you recall whether you
did the DocuSigning as we discussed here for this loan -- did
you also do it for the other loan?
A.
For the HM Management, yes. I executed that as well.
Q.
And again, were you comfortable in doing so at the time?
A.
Yes.
Q.
Why were you comfortable in doing so?
A.
Why? Because he told me what he was doing, and he did it,
so I was comfortable. The second one was a little different
than the first one, I think, because, I mean, I think I -- I
think I looked at it longer or something because -- just to see
what it was, I think. Because the first one I knew because it
said HM-UP, and the second one said HM Management. And I knew
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
he divided it, so I just maybe took I think a little longer to
look at that one.
Q.
At the time when you were DocuSigning it, did you feel you
did anything wrong in relying on Mr. Vasilas?
A.
No.
MR. ETRA: Why don't we take this down.
BY MR. ETRA:
Q.
By the way, how many unopened emails do you have in your
ericsheppard10?
A.
I think around 200-and-something thousand -- 202,000 or
something.
Q.
All right. What construction -- now that we've talked
about these loans, what construction actually got done, say,
with HM-UP broadly in this time period and going forward?
A.
Well, the parking lot. We were required to redo all of the
parking lots as far as the leases were concerned. So that work
got done.
Q.
Could I divide this between HM-UP and the HM Management?
Could we start with HM-UP?
A.
Sure. HM-UP, we finally got the mattress guy out. He
finally left in I think March, April, something like that. So
then we were able to start construction on the FedEx. So we
built the FedEx. And we built -- we finished the punch list
for Burlington. There was something else -- I don't remember,
but there was something else we had to do. Anyhow, those two
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
projects --
Q.
And then HM Management, what work got done in that time
period?
A.
In the common area for HM Management's jurisdiction was --
we finished Indianhead Road Trail. We had to finish it in
order to open the -- the county put a requirement that you had
to finish the Indianhead Trail Road prior to getting the CO of
Chase. So we finished the road, and Chase -- we built the
Chase Bank building and all the common area, all the new
lighting. Then we had to repave all the 600-and-some-odd
parking spaces. Had to redo those. Then we had to do some
work in between the Burlington and the Chase common area. We
had to redo that.
MR. ETRA: If I could put up for the witness only
X-25.
BY MR. ETRA:
Q.
I'm just going to go through each picture with you alone,
Mr. Sheppard.
That's all of them.
Generally speaking, because it's not in evidence, what
is this Exhibit X-25? What are these pictures of?
A.
This is the parcel of land where we were doing the Chase
Bank -- in the common area for Chase Bank.
Q.
Done during this time period?
A.
It was around -- I believe it's March or April of 2021.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Your Honor, we offer X-25.
THE COURT: Any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-25 received into evidence.)
MR. ETRA: Could we just put the first one up on the
screen.
BY MR. ETRA:
Q.
And just describe what we're seeing and all the work that
goes into it that we're not -- it's hard to -- maybe you can't
see on these pictures.
A.
Well, this is just the beginning part. This is just where
you -- you're put in -- so the heavy machinery and trucks can
get through, you put a certain type of rock down in order for
it to be stable. And then you also have to put the silt fence
in to make sure there's no drainage from the environmental
concerns.
Q.
All right.
MR. ETRA: Let's take that down. And could we put up
Exhibit -- on one side X-27, on the other side M, as in Mary --
sorry. I apologize. Only for the witness. I apologize.
Only for the witness, X-27 on one side and M-61 on the
other. If we can just go through X-27 briefly for the witness
only.
And then M-61 I think there's a few pictures.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Generally, without the details, what does X-27 and M-61
show?
A.
This is the finishing the road in between -- it's the
construction part of the end part of the road and the other
side -- the Indianhead Trail Road.
Q.
Done after the loans?
A.
Done sometime in 2021 -- again, middle or the end of '21,
'22, something like that.
MR. ETRA: Your Honor, we had offered this before, but
we're laying more of a predicate now. So we now offer again
Exhibit -- I don't know if we offered both. I know we offered
at least one. So for disclosure, we're offering X-27 and
M-61 --
THE COURT: Any objection?
MS. JIMENEZ: Objection. Relevance.
THE COURT: If that is the basis, the objection is
overruled. It will be admitted into evidence.
(Defendant's Exhibits X-27 and M-61 received into
evidence.)
MR. ETRA: Could we just publish the front page of --
BY MR. ETRA:
Q.
So X-27, could you describe generally what we're seeing
here.
A.
This is the last part of the road. If you can look at the
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
picture, this is where the road starts, where the yellow lines
are at the top of the screen. And where the sidewalks stop --
we had to put in a brand-new road from where the sidewalks
stopped, and we had to go all the way to connect our property
because we have the traffic light and it was required by Orange
County. They required us to do this. And that's what it is.
It's just -- it's not finished yet in this picture, but that's
what the work is.
MR. ETRA: Could we go to M exhibit.
BY MR. ETRA:
Q.
Could we go through each page, and as we're going describe
generally -- not each picture, but just describe generally what
we're seeing, and we could flip through these pages for the
jury.
A.
This is just some underground work. Because when you have
a road, you have to have drainage and you have to put a
concrete casing around pipes in order to make sure that the
cars go over it, they don't crush the drain underneath. So
that's the workers doing that. And on that -- and then
there's -- there's some curbing or something like that. Looks
like they are doing the curbing. So when you drive in, you
have curbs and sidewalks.
MR. ETRA: Let's take that down.
THE WITNESS: And that's in the common area of the
shopping center.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Do you recall any individuals who worked on the road
project? Do you have any recollection?
A.
Yes.
Q.
How do you know who would have done the road project?
A.
Well, I -- my brother worked on it.
Q.
How do you know?
A.
I was there. I physically was there. I had a moment where
I wanted to go play in the mud, I guess, but I felt like I
wanted to do that, so I was actually physically there. So I
know exactly who was working there.
Q.
Who was working?
A.
Myself, Kleef, my brother, a guy named Mo Wimbley was doing
the electric, and seven or eight other guys -- I didn't know
who they were -- that were brought in to do some of the other
work, but -- so yeah, I was definitely there.
Q.
Did you say Kleef?
A.
Kerby Kleef. Sorry.
Q.
Who is Kerby Kleef?
A.
Kerby Kleef is this nice gentleman who was working at the
Burlington, and he still works for the property. And he's a
great guy and he works for the property today -- still works at
the property.
Q.
All right. Let's go back to -- let's talk about
Mr. Vasilas. What ultimately happened to Mr. Jeff Vasilas?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
He's deceased.
Q.
What did he die of?
A.
COVID.
Q.
Approximately when did he pass?
A.
I don't know the exact date, but some time in August 2021.
Q.
What was your last communication with him before he passed?
A.
What kind of communication?
Q.
Were you --
A.
Physically or like on -- I mean...
Q.
Well, what was your last time you saw him in person before
he passed?
A.
Sometime in July. He -- it was very hot. We all know it's
hot. It was like a hundred degrees outside, and he came into
the -- he came in -- he was at the -- he wanted to come into my
house in the back -- this back way he gets into the office of
the house. And he was wearing like a thing -- a hoodie and
sweatpants, and he was like sweating. And I was -- he was
like: "I need to go over some stuff with you" --
MS. JIMENEZ: Objection. Hearsay.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Just -- you recall the last time you saw him, right? Yes?
A.
Yes.
Q.
Was there any connection between that and his illness?
A.
Yes. He didn't look so well. I told him he needs to go to
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the hospital because he looks like --
MS. JIMENEZ: Objection. Hearsay.
THE WITNESS: -- bad.
THE COURT: Overruled with regard to that statement.
BY MR. ETRA:
Q.
At some point did you learn of additional expenses at the
project that you were not informed of by Mr. Vasilas?
A.
Yes.
Q.
Just very generally, could you describe that.
A.
The project was CO'd, and I started getting calls from
people. And then -- that said that there was like liens or
something. And I was like: "Liens?" That's it. They said
there was some liens on the property from some vendors that he
hired, I guess. So I was a little shocked.
Q.
So let's -- who were the -- were there any equipment
vendors, people where -- companies that were -- that you
approved to rent equipment for construction?
A.
Yes.
Q.
Who were they?
A.
Two companies, Sunbelt Rentals and Ahern.
Q.
Did you later learn that another equipment company was
used?
A.
Yes.
MR. ETRA: For the witness only, Exhibit X-47.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Very generally, could you describe what X-47 is.
MR. ETRA: For the record, Your Honor, we have a
certified -- it's a certified copy, in case you're wondering.
The full certification is the last page, so just for the
record.
Would you like me to go there first?
THE COURT: Yes. Thank you.
MR. ETRA: Okay. So let's go to Page 6 of the
document -- well, it's -- the full certification is on Page 6.
(Pause in proceedings.)
MR. ETRA: May I proceed?
THE COURT: Yes, you may.
BY MR. ETRA:
Q.
Generally speaking, what is X-47?
A.
This was a complaint filed in some court against the
company, and actually against me personally.
Q.
And the vendor that sued, did you -- had you -- was this a
vendor you knew about during the course of the work?
A.
No.
MR. ETRA: And Your Honor, we offer X-47.
MS. JIMENEZ: Objection. Relevance.
THE COURT: The objection is sustained.
MR. ETRA: Could we go to -- still with the witness
only. Go to PDF 8.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Do you see your apparent signature there?
A.
Yes.
Q.
Did you sign that document?
A.
No.
Q.
And do you see the name at the bottom there?
A.
Which name at the bottom?
Q.
The very bottom of the person filling it out.
A.
Yes.
MR. ETRA: Your Honor, we re-offer the exhibit. I can
go further. I'm just -- I'm not sure how far to go --
THE COURT: On that one page? Are you seeking to
introduce --
MR. ETRA: Well, it's the page -- there are other
pages too. And I want to be careful how much I get into on the
record, and I don't want to violate the rule about talking
about a document not in evidence yet.
THE COURT: So at this point you're just seeking to
introduce the page that's on the screen, correct?
MR. ETRA: Okay.
THE COURT: What's the identification number?
MR. ETRA: Well, I guess we'll make it X-47-1.
THE COURT: Is there any objection?
MS. JIMENEZ: No. No objection.
THE COURT: Admitted into evidence.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
(Defendant's Exhibit X-47-1 received into evidence.)
THE COURT: And if this might be a good time to give
the jurors a short recess.
MR. ETRA: Sure. Sure.
THE COURT: Ladies and Gentlemen, let's take a
10-minute recess, please.
COURT SECURITY OFFICER: All rise.
(Jury not present, 10:26 a.m.)
THE COURT: All right. We're on a 10-minute recess.
(Recess from 10:26 a.m. to 10:41 a.m.)
THE COURT: All right. Welcome back.
Could we see if they're ready to go.
(Pause in proceedings.)
(Before the Jury, 10:41 a.m.)
THE COURT: All right. Welcome back, Ladies and
Gentlemen.
And please be seated, everyone.
And we'll continue with the direct examination.
BY MR. ETRA:
Q.
So on the screen is X-47-1 in evidence. When is the first
time you saw this document?
A.
Sometime --
Q.
Approximately -- sorry.
A.
Sometime around late '22 -- 2022, 2023.
Q.
How did you come to see this document? How did it get to
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
you?
A.
Because I was sued personally on this guaranty.
Q.
And the name -- you see the name Eric Sheppard there?
A.
Yes.
Q.
And the apparent signature?
A.
Yes.
Q.
Did you -- did you sign that?
A.
No.
Q.
Did you know about this vendor, Herc?
A.
No.
Q.
Was Herc one of the equipment rental companies you
discussed with Mr. Vasilas and approved?
A.
No.
Q.
And we see at the bottom it's got an apparent signature --
signature or apparent signature of Mr. Vasilas of whatever --
maybe 8/ -- or maybe not -- 26/20. Do you see that?
A.
Yes.
Q.
Did you give him authority to sign personal guaranties?
Did you give Mr. Vasilas authority to sign personal guaranties?
A.
Nobody -- a personal guaranty, no. No.
MR. ETRA: Why don't we take this down, and now for
the witness only, please, go to PDF 15. For the witness only
because it's not in evidence.
BY MR. ETRA:
Q.
Again, it's not in evidence, so I want to ask just
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
generally: Do you recognize this page as well?
A.
Yes.
Q.
And how did you come to see this page as well --
MR. ETRA: Which we should identify this, Your Honor,
as Exhibit X-47-2.
THE WITNESS: Should I answer?
BY MR. ETRA:
Q.
How did you come -- I'm sorry. How did you come to see
this page? Maybe you answered it. I may have missed it.
A.
It was attached with the other documents that I received
regarding the company HM-UP Development and me personally.
Q.
Who is listed as the owner of the company here?
A.
Jeff Vasilas.
Q.
Did you give authority for Mr. Vasilas to identify himself
as the owner of any of your companies?
A.
No.
MR. ETRA: Your Honor, we offer Exhibit X-47-2, just
this page.
THE COURT: Any objection?
MS. JIMENEZ: No objection.
THE COURT: Admitted into evidence.
(Defendant's Exhibit X-47-2 received into evidence.)
MR. ETRA: Middle of the screen.
BY MR. ETRA:
Q.
Okay. I want to go through this page somewhat carefully.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I want to start with the text in the middle where it describes
the equipment, which is -- I guess it's quantities, one, five,
and four. And could you describe generally -- and if you could
use plain terms for those of us who don't know construction --
the kind of equipment that was apparently rented.
A.
It was a -- it's a pump. It's typically used for a
dewatering method of earth, you know, on ground. So basically
to suck out water.
Q.
Was this something that needed to -- this kind of
equipment -- is this equipment that you believed, before you
received this, needed to be done on your properties -- on these
properties?
A.
Not that I was aware of.
Q.
Is there anything you learned about later where this
equipment could be useful for?
A.
Yes.
Q.
What would that be?
A.
Well, when Jeff took the machinery from Sunbelt and he put
it into the muck, and it was stuck in the muck sometime in
2020, July 2020.
Q.
And at the time did Mr. Vasilas tell you he was renting
more -- spending more money to fix that problem?
A.
No.
MR. ETRA: And if we can go to the very top --
actually, why don't we go back to where we were before, the
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
same blowup we had before.
BY MR. ETRA:
Q.
Do you see the estimated start date and return date on the
very top?
A.
Yes.
Q.
What dates are those?
A.
June 29th through August 6th.
Q.
And do you see below that the "ordered by"? Do you see the
name there?
A.
Ordered by Jeff.
Q.
Okay.
MR. ETRA: Now, let's go to the very top portion of
the document and blow that up, please.
BY MR. ETRA:
Q.
You've got Herc on the left-hand side and you have HM-UP
Development -- well, it's got a typo there. Do you see that,
HM-UP Development?
A.
I see HM-UP -- Development is spelled incorrectly, but --
Q.
What address is listed here for HM-UP Development in the
middle section?
A.
1200 Biscayne Boulevard, Suite 508.
Q.
Did your companies ever have an office at 1200 Biscayne
Boulevard?
A.
No.
Q.
Where was the office on Biscayne Boulevard?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
It was 12000 Biscayne Boulevard. It was 12000.
MR. ETRA: And go further to the right.
BY MR. ETRA:
Q.
And the address indicated for the shipping? What address
is listed there?
A.
1100 North Alafaya Trail.
Q.
And is that typically the address you would use for that
development?
A.
No.
Q.
What address would you typically use for the development?
A.
1250 North Alafaya Trail.
MR. ETRA: And if we could open up the document and go
to the right-hand side. It says: "PO 1250 Alafaya Trail"
there, right?
A.
Yes.
Q.
Indicating that's actually where it was delivered, correct?
A.
Correct.
MR. ETRA: We can take that down.
I want to put up exhibits that are already in evidence
from the Government, 30 -- I think 30-6 and 30-7.
BY MR. ETRA:
Q.
By the way -- I could put it back up -- do you know how
much the cost was for that Herc equipment?
A.
I don't recall.
MR. ETRA: Could we just put that --
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE WITNESS: I believe it was around 16 or 17,000 for
that portion.
(Pause in proceedings.)
MR. ETRA: If I could just put up X-47-2 for one more
second. I apparently missed some points.
BY MR. ETRA:
Q.
Okay. Does this indicate --
MR. ETRA: No. No. This is not -- this page is
not -- okay.
You can't do that -- you can't go through pages. Only
some of them are in evidence.
BY MR. ETRA:
Q.
Mr. -- focusing on the bottom here, what's indicated here
at the bottom of the page?
A.
Customer name is -- signature Jeff Vasilas as the owner, on
-- I can't -- I don't understand the date.
Q.
Okay.
A.
It's 2020. I don't know what -- is it 7 or --
Q.
And again, did you give authority to Mr. Vasilas to
identify -- sign himself as an owner of one of your companies
with respect to a vendor or otherwise?
A.
No.
Q.
Okay.
MR. ETRA: Put it down.
Put up Exhibits 30-6 and 30-7 in evidence.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
We have 30-6 and 30-7. They're Government exhibits in
evidence. And do you recall this being shown I think to
Mr. Cupersmith when he testified some time ago?
A.
I do.
Q.
And does this show -- well, let me ask you something. Let
me just ask you -- we talked about how it says this is accrual.
Do you recall that?
A.
Yes.
Q.
Even from an accrual basis, did you do better in 2020 than
2019?
A.
No.
Q.
Why not, from an accrual basis?
A.
From an accrual basis, it's because of COVID and tenants
did not pay rent -- like, DICK'S Sporting Goods did not pay
rent for two years -- I mean -- I'm sorry. Not two years --
for two months. And some of the other tenants didn't pay rent.
And there was significant additional cost within 2020, and --
Q.
What are you referring to when you say: "Significant
additional costs" --
A.
Well, the impact of COVID -- there was the liquidated
damages for 1.166 because of the delays that COVID caused that,
unfortunately, we had to burden that cost.
Q.
What about the cost of the workers in doing Burlington?
Was that reflected in here?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
No. There's no cost for the workers.
Q.
Well, from a cash basis -- forget accrual. Let's not get
stuck into the accrual world. Just from your world, your cash
basis world, what are the reasons why you didn't do better in
2020 than 2019 -- the reasons you didn't do better in 2020 than
2019?
A.
Well, there's a big difference between accrual and cash,
right? So if someone doesn't pay rent, it will still show in
accrual like you made money, but you really didn't from a cash
perspective. Just -- that's how it works.
Q.
And how about the actual cost of the constructions?
A.
The cost of the construction was millions of dollars, and
it doesn't show that there. It doesn't show the liquidated
damages that's there. That doesn't show on the screen in '20.
It's not included here. So there's a lot of -- there's things
that are not on here.
Q.
Okay.
MR. ETRA: Take that down, please.
BY MR. ETRA:
Q.
I want to refer back to a long time ago in this case when
Mr. Joe Beirne testified. Did you give him a PPP loan -- a
package of documents to apply for a PPP loan?
A.
No.
Q.
Did you -- did you do anything with him with respect to any
kind of attempted loan?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Attempted loan, you mean...
Q.
Did you ask him for any help for any kind of a loan?
A.
I never asked him to help. He volunteered -- in about
November 2019, he volunteered that he has a buddy that does --
a banker -- he's a CEO of a bank or something. So that was --
he volunteered to me prior to COVID.
Q.
And what happened with that? Did the loan go anywhere?
A.
No. He wanted to do -- he wanted to know if I wanted a
credit line. When I signed the lease with Burlington, and we
had to self-perform construct it, he goes: "My friend owns a
bank in Orlando. Do you want to meet with him and have lunch?
And you got to open up a credit line for a credit facility for
this construction." I just -- I talked to to the guy maybe
once or twice, but I didn't really follow up with the credit
line.
Q.
I want to talk about the letter to the lawyer for HM
Management on the issue of the visa application. You got me?
A.
Yes. Uh-huh.
Q.
Who was involved in drafting that letter?
A.
Drafting it, myself and Jeff Graff.
Q.
And what was Jeff Graff's role in drafting that letter?
A.
He was the -- let's say the ghostwriter. He was explaining
what I should detail in the letter from his perspective, and so
some of the portions was directed at him. I actually
physically typed the letter, from my recollection. And he
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
was -- sat there and just told me: "I want this there. I want
that there." I said: "It's not a problem." So I just said
what he wanted.
MR. ETRA: Just for the witness only, putting up
Exhibit M, as in Mary, 55.
BY MR. ETRA:
Q.
Just before I go further, because it's been a while, what
was the general subject matter of that letter?
A.
(No verbal response.)
Q.
Sorry. I'm not putting that up right now. Just ignore
what's in front of you or I'll take it down if you can't. The
letter you just testified about, what was the general -- what
was Mr. Graff -- why was he involved in the letter? What did
it have to do with him?
A.
That's when he called me and told me about the whole thing
with this application, and that -- and he wanted to -- he told
me about it. I didn't know about it and then he told me about
it. And he wanted me to immediately address the situation with
this law firm that's been representing my company since 2007.
So I -- that's how I got involved, and said: "Okay, I
will take care of it immediately. Let's get this thing fixed
immediately because I don't want any misunderstandings," and
that was it. And we sat there. He told me what he wanted to
write. I was writing this paragraph and it got expanded. And
that was the gist of it, and then it was never discussed again.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Did you sign Mr. Graff's name on any of those documents?
A.
No. I wouldn't sign anybody's name on a document.
Q.
Did you direct anyone to sign his name without his
permission on any document?
A.
No.
MR. ETRA: Let's go back to -- for the witness only,
Exhibit M-55, and I just want to do this briefly.
BY MR. ETRA:
Q.
Could you just briefly identify what this is.
A.
This is a biography Mr. Graff sent to me on March 22, 2017.
Q.
Was this done as part of your business responsibilities in
communicating with Mr. Graff?
A.
Yes.
MR. ETRA: Your Honor, we offer M-55. We thought this
was in earlier, but we couldn't find that it was actually
offered and accepted into evidence, M-55.
THE COURT: Is there any objection?
MS. JIMENEZ: Objection. Relevance.
THE COURT: The objection is overruled. I'll allow
it.
(Defendant's Exhibit M-55 received into evidence.)
MR. ETRA: Just put it on the screen for the jury.
BY MR. ETRA:
Q.
And generally speaking, what was going on where Mr. Graff
would send you his biography in this time period of
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
March 22, 2017?
A.
I can't go back to 2017 and remember what was -- like, what
this was for. But I mean, I can say that from time to time in
our business everyone updates their biography every few years
because it's important. That's --
Q.
Does information like this get shared with lenders and
potential investors?
A.
Yes. It's shared with lenders, with a lot of different
people we do business with.
MR. ETRA: Let's highlight the last three sentences
starting with: "In April of 2000," or pop them up.
THE WITNESS: Yeah.
BY MR. ETRA:
Q.
While we're waiting for that, it indicates -- it indicates
that he joined WSG as a CFO in April of 2000. Do you believe
that's correct?
A.
Yes.
Q.
And then, at some point after that, I think he testified he
started to do development work, right?
A.
Correct.
Q.
But then, as of this time period at least, which we saw the
date, it says his "duties currently include management of and
accounting for the company's existing commercial properties."
Do you see that?
A.
Just give me a second.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Yes.
Q.
Was that accurate at the time in March of 2017?
A.
Yes.
Q.
Even though he was still -- he was on the development side
as well?
A.
Correct.
Q.
And then the next sentence: "Mr. Graff is also responsible
for coordinating and accounting for the projects and
acquisition, development, and construction phases." Was that a
true statement as well?
A.
Yes.
MR. ETRA: We can take down that.
Could we put up -- it's in evidence and admitted this
morning, Your Honor, Exhibit Y-1.
(Pause in proceedings.)
MR. ETRA: Why don't we move on to something else and
we'll get back to that.
BY MR. ETRA:
Q.
Mr. Sheppard, do you know someone named Scott Bouchner?
A.
Yes.
Q.
What is his involvement in this matter, to your knowledge?
A.
He is an expert in forensic accounting, and he is -- did a
complete analysis of all the --
Q.
Just generally. I want you to do generally and not
describe the specifics of what he did, but just generally.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I don't understand what you mean by "generally." He's an
expert accountant.
Q.
What was he retained for in this case, generally speaking?
A.
He was retained to go through all the books and records,
every detail of every part of an audit that they do to make
sure he -- I guess I don't know what they actually do. I don't
know what he does like technically. But he basically puts all
of the numbers together to see where the money went, sources
and uses, for lack of a better word.
Q.
Did you personally assist him in his work?
A.
I don't think I'm qualified to personally assist him.
Q.
As a fact person, did you personally assist him?
A.
Yes. I mean, he would ask me questions about certain
things in his analysis -- not his analysis, but certain things
about -- you know, questions about -- I don't know -- who this
person may be or something like that.
Q.
Go through expenses and payments to workers?
MS. JIMENEZ: Objection. Leading.
THE COURT: Sustained.
BY MR. ETRA:
Q.
What type of topics did you cover with him?
A.
Construction costs, separation of individual workers from
third-party companies, the progression of the project as far as
in 2020 and 2021, personal expenses versus business expenses,
who prepared the business expenses versus personal expenses.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
And he wanted to detail the invoices of verification for -- for
backup for the business expenses, meaning for construction
materials, supply houses, stuff like that.
Q.
Okay.
MR. ETRA: I want now do Exhibit Y-1, which, as I
indicated, was admitted this morning into evidence, for
everyone, please.
I want to go to the second page -- third page.
BY MR. ETRA:
Q.
Mr. Sheppard --
MR. ETRA: And let's look at the other pages as well.
The page after this.
Keep going.
Okay. Now let's go back to the third page.
BY MR. ETRA:
Q.
How did -- are you familiar with these documents in any
way?
A.
Yes.
Q.
How did you come to be familiar with these documents?
A.
After I heard testimony from the IRS guy that was there for
the Government that certain forms that the IRS was supposedly
certifying that they didn't get -- that it was never filed with
the Government, I thought that was strange. So I called
immediately Jeanette Gonzalez and said: "How is that
possible?" And she says --
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Objection.
THE COURT: Sustained.
THE WITNESS: Sorry.
BY MR. ETRA:
Q.
How did you get to -- well, where did you find these
records?
A.
I found them in storage.
Q.
And who directed you -- direction -- who directed you to
these records?
A.
I asked --
Q.
Just who directed?
A.
Jeanette Gonzalez directed me to go look in storage.
Q.
Thank you. Okay. And reading it now, what does this page
indicate?
A.
It's a communication regarding W-2s -- the W-2s.
Q.
That they were filed?
A.
They were filed with the IRS.
MR. ETRA: We can take this down.
BY MR. ETRA:
Q.
You testified that -- earlier -- early in the Burlington
project you had calculated 80 to 180 workers or jobs. Do you
recall that?
A.
Yes.
Q.
In the end of the day, when it all got done, did you have
that many workers working on Burlington?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I can't tell you exactly how many, but not as many -- it
turned out it wasn't as many as 80 to a hundred. It was less.
Q.
How do you account for the discrepancy?
A.
Well, because during COVID there was mandates where --
first of all, you're only allowed to have so many workers in
the building. And then there's -- there was 80 -- it was about
a little over 80 jobs prior to COVID. And then we were trying
to get people back because they got fired from another company.
So we were hiring them -- not we, but Jeff was hiring directly
these people. And not everyone would come, and it would be
shut down one day. Someone would get COVID, and we'd have to
do the sequestering -- what's it called -- where you have to
go -- quarantine, I think. So it was off and on. But people
had to actually do -- certain workers had to actually do
multiple jobs. So a guy was hired for one job, he may be doing
three jobs now because we just had to do what we had to do to
build the building.
Q.
Can you think of any examples of people who did multiple
jobs?
A.
Yeah. I mean, you heard from the guy. Joe Beirne. Joe
Beirne, he was opening the gate in the morning. Usually you
have a gate guy. There's all functions within a job. There's
800 jobs. So he did the gate. He was doing some drywall. He
was doing some painting. And people he mentioned -- everyone
was kind of chipping in and really they were doing three jobs
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
that normally would be by somebody else. But we had no choice,
because you --
Q.
What does social distancing have to do with how many people
were hired?
A.
Because normally in construction you have trades, and -- I
don't know how to -- one person -- one trade is doing this --
you try to have the trades follow each other. And you can't do
it because Orange County says you have to be at least I think
15 or 20 feet apart. So a guy doing a ceiling, and some guy
down here, you weren't able to do that. That's like strange.
So you'd have to buy all these lifts, put a person up there,
and the lift had to go on this side. It was just -- it was
crazy. Like, you -- that's why you say -- that's why it
took -- instead of finishing in May, it finished in
October 31st. That's the reason, unfortunately.
Q.
Let's talk about the use of the funds. What did you use
the government money for?
A.
I used the government money for workers.
Q.
Anything else?
A.
For -- I can't give you the whole list, but there was a lot
of -- for materials, for workers, for health insurance for
workers, for -- used it for a hotel, for Holiday Inn. We had
to quarantine. People couldn't go home to their families. So
it's hard to delineate because there was a lot more money that
was put in other than what -- the government money was there.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
There was millions of dollars over that I put in to pay
everyone. So I can't delineate how it all -- each category.
Q.
There was testimony from the FBI agent about a purchase of
jewelry for $4,800 or so. Do you recall that?
A.
The FBI agent?
Q.
Do you recall that from Mr. -- from the FBI agent?
A.
Oh. The financial guy?
Q.
Yes.
A.
Yeah, I do.
Q.
Okay. Where did that -- logistically, what's -- how did
that get purchased? Was it from a bank account or credit card
or what?
A.
It was just a credit card payment -- a credit card
purchase.
Q.
Whose credit card was it?
A.
It was on AmEx under -- I believe it was under my wife's
AmEx.
Q.
Would you just explain when you say your wife's AmEx, so we
understand what you're talking about.
A.
On my American Express card, I have my wife and my
daughter. They are under my account. Right? And so they have
a different card number, but they do what they do with their
card, and I have my card, but it all goes to me. At the end of
the day, it goes to my account.
Q.
What was the purchase for?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
As they said, it was for a bracelet for my daughter.
Q.
For what? Why?
A.
It was her --
MS. JIMENEZ: Relevance.
THE COURT: Sustained.
BY MR. ETRA:
Q.
How could you say the government money didn't pay that?
A.
I'm sorry. What?
Q.
How can you say that the government money wasn't used for
the jewelry for your daughter?
A.
Government money wasn't used for that. It was cash flow
that comes in on a monthly basis, has nothing to do with --
it's non-government funds. I mean, it has nothing to do with
the government money. It's non-government funds.
Q.
How much money did you put into these accounts outside of
the government -- or the PPP or the EIDL?
A.
I think non-government funds is approximately $4.3 million.
Q.
Let me go through this more carefully. How much was the
entire -- let's even go pre-COVID. How much the entire
project?
A.
Thirty -- around $30 million.
Q.
And the -- you talk about how large the Basis loan was,
20 -- almost --
MS. JIMENEZ: Objection. Testifying.
THE COURT: Sustained.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
How much of that was the Basis loan?
A.
20,950,000.
Q.
Where did the rest of that money come from?
A.
From myself and my partner.
Q.
Who put up most of it?
A.
Me -- well, sorry. My wife and I, as tenancy by the
entireties, we both put up money.
Q.
Focusing on the -- you were shown a chart of the flow of
funds with HM Four, why it didn't need a bank account. Do you
recall that?
A.
Yes.
Q.
There's one chart about what happens when there's no inflow
of money and it has to come from the owners, right?
MS. JIMENEZ: Objection.
MR. ETRA: Just setting up the --
THE COURT: The objection is sustained. Rephrase,
please.
MR. ETRA: Sure.
BY MR. ETRA:
Q.
When there was no rent pay coming in from -- even
pre-COVID, from Toys "R" Us, and then through COVID, until
Burlington moved in, where was the money coming for the CAM?
A.
From Eric and Jennifer Sheppard, tenancy by the entireties.
We were funding a hundred percent of that money.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Are you familiar with the bank called One Florida Bank?
A.
Yes.
Q.
Did you -- did that play a role in funding the project
during COVID?
A.
Excuse me? Did it play a role?
Q.
Yeah.
A.
Yeah. I mean --
Q.
Okay. The answer is yes?
A.
Indirectly, yes.
Q.
How so?
A.
One Florida Bank is -- the banker there and I have a
long-term relationship, and it was a personal credit line. It
had nothing to do with the company or the project. It was a
personal line of credit.
Q.
Meaning what?
A.
Meaning that based upon assets of myself and my partner,
Mr. Kallman, it was a personal line of credit where you can --
there's no restriction on what you do with the funds at all. I
chose to take the money and put it into the project. That's
why I say indirectly. I took the money from a personal line of
credit, then I loaned it to HM Development Alafaya Trails, LLC,
which then paid the workers and paid for supplies during COVID.
Q.
How much money from the personal line of credit did you put
into the companies during COVID?
A.
I think $593,000, approximately.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And did the companies pay you back any of that at any time?
A.
The companies? I believe the companies -- didn't pay me.
It paid me to pay the line I think around a hundred thousand
dollars maybe, a hundred and change.
Q.
And did anyone pay the difference to make -- pay back the
line of credit to make One Florida Bank whole?
A.
Yes. I paid back a hundred percent of the loan of the --
the 539 minus the hundred and something. So I paid the balance
off in 2022.
Q.
Okay. I want to go back to the loan. I think you
testified that Mr. Vasilas owed you money before all this
happened with the project, correct?
A.
Yep.
Q.
Did that play a role in funding the project?
A.
Can you repeat that question?
Q.
Did the loan that Mr. -- the money that Mr. Vasilas owed
you before COVID, was that utilized in any way to fund --
contribute money during COVID?
A.
I think a portion of it he would -- he advanced some money,
and then I paid him back, and there was back-and-forth. And --
but some of it went in, and I -- you know, I -- how do you call
it -- I -- a portion, I wrote down some of his -- what he owed.
But it was back and forth. Like, he would advance money. I
would give him money to pay people. It was very confusing.
But some of it did go to the project -- a write-off of his
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
debt. Not all of it, obviously.
Q.
So of that money, did he -- the paying down the loan, did
he pay you or did he pay someone else?
A.
No. No. He didn't pay me. He paid directly the workers.
Because he was in Orlando. So to go back and forth -- and he
did it a lot, but sometimes he would just, on a Friday, on
payday, he would pay workers or other things and just pay it
because he didn't want to drive back and forth. So he would
just pay people. He didn't pay me anything back personally at
all.
Q.
Using your accounts to pay personal expenses, like your
home mortgage or Florida Prepaid, was that done only during
COVID?
A.
No.
Q.
How was that treated generally, those payments for personal
purposes from the company accounts?
A.
That's -- would be treated as either distribution or
equity. That's been since like 2010. That was set up by
Mr. Cupersmith and the accountants based upon the equity that I
had into the project. All the companies -- that's been going
on since 2010. So it's always been like that, because I don't
take a salary.
MR. ETRA: Could we put up Exhibit 19-13.
COURTROOM DEPUTY: Counsel, is that in evidence?
MR. ETRA: It is, Your Honor [sic]. I apologize.
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Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Do you see this document 19-13?
A.
I do.
Q.
So you see the apparent -- well, does this purport to be a
2020 tax return for HM-UP?
A.
It does.
Q.
Do you see the place for the taxpayer to sign?
A.
Yes.
Q.
Did you sign a name there?
A.
No.
Q.
You see a place for the preparer to sign?
A.
Yes.
Q.
Did you sign Mr. Cupersmith's name?
A.
No.
Q.
Or initials?
A.
No.
Q.
And you see the spelling of Mr. Cupersmith at the bottom
there "KH"?
A.
Yes.
Q.
Do you know how to spell Neal Cupersmith's name?
A.
Yes. After 25 years, I do.
Q.
And when is the first time you saw this document -- when is
the first time you saw this document?
A.
After I was arrested, and they did -- they gave us -- the
month after that, they gave us like discovery of the documents,
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
and that's the first time I saw that, amongst other things, and
the first time I ever saw that in my life.
Q.
Did that apply to the other forged Cupersmith returns?
A.
Yes. It's...
Q.
Did you have anything to do with the preparation of these
fake returns?
A.
No. First time I saw these, again, was like in 2022,
August or September, something like that, '22.
Q.
Did you direct anyone to do these?
A.
No, and I never would.
Q.
Did you know they were being done?
A.
No.
Q.
In February of 2021, to your knowledge, what year tax
returns had been filed?
A.
I'm sorry. I didn't hear you.
Q.
As of February of 2021, right, did you -- which years' tax
returns would have already been done and filed?
A.
2019 were filed sometime in I think September, October,
around there, 2000 -- 2020. The 2019 taxes would have been
filed in September or October of 2020. So only '19 would be
filed.
Q.
And generally, what time of year would the tax returns get
done in the course -- in your businesses?
A.
Generally -- for the last 20 years, pretty much, they get
filed sometime in August, September, October for corporate
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
filings. That's when they're usually filed.
Q.
Who had access to company -- to legitimate company returns?
Who in your business had access during this time period of the
first few months of 2021?
A.
Multiple people and businesses.
Q.
Could you identify anyone?
A.
Yes. Jeanette Gonzalez, Jeff Vasilas, Nationwide Lending
had the tax returns, obviously, the accountants. Anyone
really -- anyone that has access to my storage and any other
lenders. Because remember, we were doing a lot of financing
there. So in financing there's mortgage brokers out there, and
so they collect the information. So there was probably -- I
don't know -- seven, eight different people.
Q.
How would Mr. Vasilas have access to your returns?
A.
How?
Q.
Yeah. The legitimate returns, yeah. In what way?
A.
I mean, he has access to all my -- he has access -- he has
access to the old office, but he had access to the storage.
And he had access through -- I know Jeanette sent him -- when
they did -- what do you call it -- for vendors, when you have
to get credit facilities for the construction, you have to go
to the vendor. The concrete guy, not only do you have to send
him an application, but you have to send him tax returns for
the company. So he handled that -- him and Jeanette. So he
had it in multiple ways.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
How did you feel about these kind of documents -- false
documents being submitted on behalf of your companies?
A.
I felt disgusted. I felt like -- starting with nothing, I
feel disgusted that that's in the universe. I mean, that's
something that -- to start with nothing in your life and build
something, and see this situation, it's sickening to me. And
to sit here and listen to this is sickening to me, to be honest
with you. It's just -- it's beyond. And that's how I felt,
and it's disturbing and surreal.
Q.
Looking back, Mr. Sheppard, do you fault any of the way you
handled dealing with these loans or dealing with Mr. Vasilas
with these loans?
A.
As a person, as the owner of the company, yes. You --
it's -- I feel -- mistakes, you know, you just -- trust is
fragile. I'm a little bit naive sometimes. But ultimately,
I'm the one that put him in and said: "Go do" -- you know, "Go
do this," or "build a building," "go do that," "build a
building." And I trusted him -- and not just him, but there's
some other people I trust with everything, and that's my fault.
And it's a horrible lesson to learn, but that's real.
And I can't go back, but I can acknowledge that I
should have -- like, I -- on my side of the business, when I do
development or construction, I know it. I know it. I'm not an
accountant. I never wanted to be on that side, and I rely on
it. But I should have, with these applications -- they are
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
brand new, never been done before. I regret that I didn't
aggressively understand it, review it, and be on top of people,
because that's what I should have done, but I -- I didn't take
a cavalier attitude. I just took an attitude of that he knows
what he's doing or she knows what she's doing. Okay. That's
not acceptable now that I look at it. That's a different
fundamental flaw that I think I had in this situation. It's a
horrible lesson to learn, where I'm at. So...
Q.
What was your intention with respect to these loans?
A.
My intention. The first loan that I was involved with, the
first PayPal loan, my intention was: It's an opportunity. The
government's doing a great thing. The government was doing a
great thing, I thought, and it was a great plan. And if you
took the money, you gave it to the workers. I know there's all
these other categories. But when you go down the list, every
worker got paid a hundred percent of that money that came in.
And so, you know, my intent was to keep people
working, help my business that was struggling because the world
came to an end. We were all there. We can sit here three,
four years later, but that's what I -- that's my intent. And
my intent wasn't to just go to the government and get a PPP
loan, and then spend $1.1 million in payroll with my own money
and insurance for people to -- it doesn't make logical sense.
My intent was to just build a building, pay people,
keep people employed, and have a future to build phase 3 and
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
all that other stuff. And that was the main intent and that's
what the -- the bank statements show that. It's like I just --
I can tell you one thing. My intent in no shape or form -- not
just during COVID, ever -- was to sit here in a criminal trial.
That was never my intent. My intent was to do the right thing.
And I still believe in my heart that I did the right thing,
with regards to where money is concerned.
Managing people? Managing people, I failed. And I
regret that. I should have been more active, and that's how I
feel about it. I mean, it's a tough thing to answer, but
that's how I feel about it.
MR. ETRA: Could we put up Exhibit 50-7 in evidence.
BY MR. ETRA:
Q.
You see Exhibit 50-7 in front of you?
A.
Yeah. I see it.
Q.
Who is Mr. Steve Waserstein?
A.
He is a attorney. He's a tax lawyer, and I've known him my
whole life, along with Jeff Graff -- known each other. But
he's an attorney in South Florida.
Q.
Okay. And did you receive this -- this email from
Mr. Waserstein on March 30th, 2020?
A.
Yes.
MR. ETRA: Could we go to the attachments.
BY MR. ETRA:
Q.
You see that there are some attached documents there?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I do.
Q.
Do you see that?
A.
I do, yeah.
Q.
Now let's go to the very first page, where you're
forwarding this. I think this was shown to another witness.
Let me ask you: Why are you forwarding this to
Mr. Graff? Looks like --
MR. ETRA: Let's go back a second. Let's see the time
difference.
BY MR. ETRA:
Q.
Soon after you received the email from Mr. Waserstein,
looks like within 10 minutes or so, why are you forwarding this
to Mr. Graff?
A.
Because it has to do with this government programs and I
don't know anything about it. I don't know -- so I'm saying:
"Jeff, here's all the information. I want to clearly make sure
that -- review it. Tell me if there's anything we need to
change, anything we need to do. I want to make sure it's done
properly, that there's no issue," because I had never done a
government loan. I didn't know what it is. And this program
was so -- it was like three days old. And I'm like: "Please
look at all this," basically is what I'm saying. Because he
has already submitted some application or something like that.
So I just want to make sure it's done right or if we have to
make any changes.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And did Mr. Graff ever get back to you and say: "No" --
the loan application that he testified about that we saw --
heard about in this case, did he ever get back to you and say:
"We can't do this"?
MS. JIMENEZ: Objection. He's testifying.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Okay. Did you hear anything -- did you have any reason to
believe after you sent this email to Mr. Graff that the loan
application he was working on could not be -- there was a
problem with it?
A.
No.
MR. ETRA: Your Honor, I think I should be allowed to
ask these questions about people warning him and his reactions
to them. I think that's part of what I should be able to do.
THE COURT: Mr. Etra, I've ruled on the objection.
Let's continue.
BY MR. ETRA:
Q.
Had Mr. -- if Mr. Graff had told you you couldn't do this,
what would you have done?
MS. JIMENEZ: Objection.
THE COURT: Sustained.
BY MR. ETRA:
Q.
If anyone told you you couldn't do this, what would you
have done?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Objection.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Did anyone tell you that you couldn't do -- you were
ineligible for the loan that Mr. Graff was working on?
MS. JIMENEZ: Objection.
THE COURT: I'll allow that. Overruled.
THE WITNESS: No.
MR. ETRA: Could we put up on two sides of the
screen --
(Pause in proceedings.)
MR. ETRA: Putting up exhibits, already in evidence,
Q-25 and Q-31.
BY MR. ETRA:
Q.
Mr. Sheppard, I think you testified that you reached out to
the Cupersmith firm at this time period in April about the
government programs, correct?
A.
Correct.
Q.
If the Cupersmith firm had told you you were not eligible,
what would you have done?
A.
I would --
MS. JIMENEZ: Objection.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Did Mr. Cupersmith's firm tell you you were not eligible?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Objection.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Did anyone tell you following this email that you were not
eligible for the loans?
A.
No.
MR. ETRA: We could put this down.
BY MR. ETRA:
Q.
Mr. Sheppard, you talked about -- earlier about reaching
out to PayPal through their system and corrected application,
and all that, correct?
A.
Yes.
Q.
Did PayPal ever get back to you and tell you you were not
eligible for these loans?
MS. JIMENEZ: Objection.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Did anyone get back -- contact you at that time period to
say you were not eligible for these loans?
MS. JIMENEZ: Objection.
THE COURT: Overruled.
THE WITNESS: No. Not that I'm aware of, no.
BY MR. ETRA:
Q.
Had they told you you were not eligible, what would you
have done?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
If they told me I was not eligible?
Q.
Yeah.
A.
I wouldn't have applied for a loan if I wasn't eligible.
Q.
Did any of the people that you reached out to tell you that
you have to have W-2s and that you don't have W-2s for the
loan?
MS. JIMENEZ: Objection.
THE COURT: Sustained.
BY MR. ETRA:
Q.
If you had been told that you had to have W-2s, and you
don't have them, would you have applied for the -- what would
you have done?
MS. JIMENEZ: Objection.
THE COURT: Sustained.
MR. ETRA: Your Honor, this is the mirror image of the
questions they asked the loan officers --
THE COURT: You may continue, Mr. Etra.
BY MR. ETRA:
Q.
You testified about being in contact with North -- sorry --
Nationwide, correct?
A.
Yes.
Q.
Did they ever tell you you were not eligible for these
loans?
MS. JIMENEZ: Objection.
THE COURT: Sustained.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MR. ETRA:
Q.
Well, at the time frame that you were reaching out to
Nationwide, did anyone tell you you were not eligible for those
loans?
A.
No, they did not.
Q.
Had they told you that, what would you have done?
MS. JIMENEZ: Objection.
THE COURT: Sustained.
BY MR. ETRA:
Q.
You were in contact with the SBA on the HM Four loan, the
EIDL, right?
A.
Yes.
Q.
Did the SBA indicate anything to you to suggest that you
were not eligible for these loans?
MS. JIMENEZ: Objection.
THE COURT: Sustained.
BY MR. ETRA:
Q.
Did anyone indicate to you during that time frame you were
not eligible for that loan?
A.
I mean, when you say anyone, what does that mean, like the
world?
Q.
Anyone that you were in contact with during that time
period tell you you were not eligible for the loan?
A.
Not that I'm aware of.
Q.
And then you communicated, as you said today, with
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Mr. Vasilas about PPP loans, correct?
MS. JIMENEZ: Objection. Leading.
THE WITNESS: Correct.
THE COURT: Overruled. I'll allow it.
BY MR. ETRA:
Q.
Did he tell you you were not eligible for those loans?
MS. JIMENEZ: Objection.
THE COURT: Overruled.
THE WITNESS: He did not.
BY MR. ETRA:
Q.
Had he told you you were ineligible for those loans, what
would you have done?
A.
I clearly wouldn't have applied for them.
Q.
Mr. Sheppard, did you ever intend to defraud anyone out of
money?
A.
No.
MR. ETRA: No further questions, Your Honor.
THE COURT: All right. Cross-examination.
MS. JIMENEZ: Yes, Your Honor.
(Pause in proceedings.)
CROSS-EXAMINATION
BY MS. JIMENEZ:
Q.
Good morning, Mr. Sheppard.
A.
Good morning.
Q.
Mr. Sheppard, do you drive?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Do I drive?
Q.
Yes.
A.
Yes.
Q.
Do you drive?
A.
Yes.
Q.
So you have a driver's license that you keep in your
wallet, sir?
A.
Yes.
Q.
In 2020 and 2021, you were working from your home, right,
out of 180 Bal Cross Drive in Bal Harbour, Florida?
A.
A portion of '20 -- the beginning of 2020 I was at the
office -- at the 12000 Biscayne Boulevard, and then later at
the home, yes.
Q.
So starting in late March of 2020 and 2021, you were
working out of your home, correct?
A.
I'm not sure of that exactly. But around that time frame,
yes.
Q.
And you're still working from your home, correct?
A.
I am.
Q.
Your email address, obviously, eric.sheppard10@gmail.com,
right?
A.
Correct.
Q.
You also have hmfourmanager@gmail.com, which you opened in
2020?
A.
Correct.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Your phone number, (305)582-5529?
A.
Correct.
Q.
You've got a landline with AT&T out of your home that
you've had for many years, which is (305)861-0088?
A.
Yes.
Q.
Right? That was used on some of your applications as well,
correct?
A.
I don't recall. I've seen the number -- obviously, the
phone number on some papers. If you say it's on the
application, then --
Q.
But that's your landline?
A.
That's a landline, correct.
Q.
And you've had Internet service with Breezeline for a
number of years, right, going back to 2008?
A.
I don't know the answer to that question. I don't know
what the name of the carrier is. I don't know if it's
Breezeline or AT&T U-Verse. There's been a few different
Internet -- I don't know the names of each company.
Q.
Right. So -- but the company that came here and testified
that they provided Internet service out of your home, and
supplied a modem to your house that provides Internet service
in your home, that's the provider of your Internet service at
your home, correct?
A.
That's correct. Breezeline is the Internet service for my
home. I don't know about the modem thing, but Breezeline is
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the Internet company that provides service to the house.
Q.
Right. And the modem thing is a thing in your house that
allows your computers to connect to their Internet, correct?
A.
If that's what it does. I'm not an expert at that. I
don't know.
Q.
All right. Mr. Sheppard, you've testified about your
projects. It's fair to say you're a real estate developer,
right, sir?
A.
I'm a businessman that does real estate. I do development
and the other components that go within the development
business.
Q.
You buy pieces of land?
A.
Do I buy it? No. But a company may acquire land, yes. I
mean, the company itself, not me personally. That's all I'm
saying.
Q.
Right. But these are companies that you own or you own
with partners, right?
A.
Yes. LLCs I own -- there's a portion of my business that
does land acquisition.
Q.
And then, with respect to that land acquisition, you line
up commercial tenants to occupy -- ultimately occupy the space
on that land, right?
A.
Which land are you talking about?
Q.
Let's talk about the land in Orlando.
A.
Okay.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Right? HM-UP Development Alafaya Trails.
A.
Yes.
Q.
You lined up tenants for the structures that ended up on
that land, correct?
A.
At what time frame, because it was formed a long time ago.
So I'm just -- which time frame are you talking about?
Q.
Well, in 2020 you had HM-UP Development Alafaya Trails,
right?
A.
Yes.
Q.
And it had buildings on that land already, right?
A.
Buildings, correct.
Q.
And you had tenants that occupied those buildings, right?
A.
Not all the buildings. The building which is the former
Toys "R" Us, Babies "R" Us, that building wasn't occupied. It
was under construction. But the other buildings had tenants in
it.
Q.
Okay. And those tenants pay you rent -- pay HM-UP rent?
A.
Correct.
Q.
Right. And so, when you are developing that land, let's
say the HM-UP property, you had tenants -- tenants' leases to
finance the build-out of that property, right?
A.
I'm sorry. I don't -- can you -- I don't understand the
question regarding the lease build-out. I'm not sure what
the -- can you just -- ask that again, please. Let me --
Q.
Sure. The commercial space that's at HM-UP Development
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Alafaya Trails -- which is the Alafaya shopping center, right,
the Shoppes at Alafaya?
A.
Yes.
Q.
You had -- you had buildings put on that location, financed
through the leases that you had lined up for that location,
right? I mean, you talked about lining up the leases so that
you can get your loans so you can build the space. Generally
speaking, yes?
A.
I mean, from a general perspective you're correct, but it's
not what happened here. It's a little different than that
because it was acquired a long time ago and built prior to
these leases. So it's a little bit different, but it's -- the
general concept, it's...
Q.
All right. And tenants like Burlington, right, that you've
talked about, you previously had Toys "R" Us at that location,
right?
A.
Correct.
Q.
And then you needed to reconfigure that space for the
Burlington Coat Factory; is that right?
A.
I didn't reconfigure it. We demoed -- in November 2019 we
demoed the entire space except for the walls and the ceiling.
So it wasn't reconfigured. It was demoed.
Q.
It was completely demolished?
A.
When I say demo, I mean demo like all the interior of the
building and all the glass exterior was removed, the flooring
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
was removed, everything inside the building. All you had was
concrete block walls and a streel structure roof, is what was
remaining at that particular time.
Q.
Right. And Burlington provided you the specifications to
put the walls back up or put the floors back up in a certain
way, right?
A.
Yes.
Q.
All right. And then when that was completed, your tenant
moved in and continued to pay HM Development Alafaya Trails
rent, or did they start to pay rent after they moved in?
A.
They started to pay rent once they received their CO and
opened for business in November -- sometime late November 2020.
Q.
All right. So they moved in and they started paying you
rent?
A.
Correct.
Q.
Right? Started paying HM-UP Development Alafaya Trails
rent?
A.
Correct.
Q.
And that company gained rental income from Burlington,
right?
A.
I'm sorry. You say they gained -- what did you say? They
received. They received? Yeah, they received income. Sorry.
Q.
And DICK'S Sporting Goods pays rent to HM-UP Development
Alafaya Trails, right?
A.
Correct.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And all of the other tenants at that shopping center pay
rent -- rental income to HM-UP Development Alafaya Trails,
right?
A.
No. That's not true.
Q.
You just have -- you just have companies located at these
locations that don't pay rent?
A.
I'm just trying to answer your question. They don't --
they pay rent to whoever they're contractually obligated to pay
to, and some of them are different than HM-UP Development
Alafaya Trails, LLC.
Q.
All right. When we were here last, three weeks ago, you
testified that you had the money available for the Burlington
build-out and you could have just continued to fund that
project without government funds; is that right?
A.
(No verbal response.)
Q.
I mean, that's what you testified to.
A.
I testified that if -- I don't remember -- I can't tell you
what I testified. I'd have to look at what actually was said.
But are you asking me do I have the money available? Is that
what you said?
Q.
Well, you testified that you had the money available and
you didn't need the government funds to build out the
Burlington project, right?
A.
I don't believe I said I didn't need the government funds.
What I think I probably said was that in the event I couldn't
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
qualify for the government funds I would find other sources to
get the money to construct it, and we did have money available
at the time. In April, May of 2020, we had money available.
Q.
You had money available from other sources, right?
A.
Yeah. Yeah.
Q.
And was one of those sources the One Florida Bank
personally guaranteed loan that you obtained in May of 2020?
A.
That was -- that was a source. That was one of the
sources.
Q.
Right. That was $600,000 that you got in May of 2020,
right?
A.
Well, I didn't get the money. It was progression, as -- as
the company needed money. And therefore, I would release money
from the personal line of credit to HM-UP, and they would give
it to whoever they were paying.
Q.
All right. And you've gotten other commercial loans from
private banks, it's fair to say?
A.
From private banks, yes. Not me personally but company
loans.
Q.
You mentioned when we were here last that -- you talked
about the Lehman Brothers bankruptcy, and you said it didn't
affect your ability to fund your project; is that right?
A.
I don't -- I don't remember saying that, that it didn't
affect -- the Lehman bankruptcy affected my whole business. I
mean, I don't understand what you mean by the projects. What
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
projects specifically because --
Q.
Well, I think you were talking about the Burlington
project. It didn't affect your project.
A.
The Lehman bankruptcy was in 2009, '11, '12. This project
was in 2020. So if I said that, it's because it was not part
of -- it was over with. I mean, it wasn't part of the 2020 --
Q.
But it did affect you financially, correct?
A.
The Lehman Brothers bankruptcy? Yes. For sure.
Q.
You defaulted on more than $200 million in Lehman Brothers
loans?
A.
I defaulted on it?
Q.
Yes.
A.
No.
Q.
No?
A.
You said I defaulted on --
Q.
Yes. From Lehman Brothers?
A.
That's not true.
Q.
Okay. In applying for loans with financial institutions,
you've provided them financial records, right?
A.
Correct.
Q.
You've never provided them audited financial statements of
your company; is that right?
A.
In what time frame? What period of the world?
Q.
Ever.
A.
Ever?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Right.
A.
I can't -- I don't recall. I think -- I don't want to
guess. I don't know.
Q.
Your accountants for 25 years never once audited the books
of your business; isn't that right?
A.
I could not tell you over 25 years what they've done. I
don't get involved with what they do.
Q.
You would have no awareness -- if your accountants came in
and inspected invoices and bank statements, you would have no
awareness that that was going on with your business?
A.
Well, I assume when they prepare tax returns that they're
actually looking at bank statements and stuff of that nature to
verify tax returns with whoever is giving the information in
accounting.
Q.
And Mr. Cupersmith testified that his company, which has
been your accountant for 25 years, never once audited your
books.
A.
I can't tell you -- I don't recall his testimony about
that. But he's been involved with my company for 25 years, so
I don't know how he prepares or does things. I can't -- I'm
not an expert or -- I rely on him to prepare everything
properly and accurately.
Q.
Tax returns. Just tax returns, correct?
A.
Uh-huh.
Q.
So you never once presented to a lender your companies'
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
books and records that had been audited by your accountants,
correct?
A.
Again, I can't tell you. There's been times where Neal
Cupersmith and his companies have provided financial
statements. So I don't know -- I can't answer your question as
far as how he would have prepared it or if he did or did not
prepare something for somebody. I can't --
Q.
So you have no awareness whether your accountants would
have checked your books, your lenders, your QuickBooks, your
entries? You have no awareness of that, right?
A.
Oh. That's -- I wouldn't -- are you asking me do the
accountants not look at my general ledgers and books?
Q.
No. I'm asking whether you're aware that your accountants
have never once audited your financial statements.
A.
I can't tell you what they -- when you say: "Audit," if
you're telling me that they have never gone through my -- they
don't go through every single thing, like the general ledgers
and the bank statements, and all that, I just would find that
hard to believe that they would be involved with the financial
of my business with not going through all that. That would be
like negligence if they didn't.
Q.
All right. Now, you were working from home in -- starting
at the end of March of 2020, right?
A.
I don't know the exact month of that particular time frame.
March, April, May. I'm not sure exactly what date -- or month,
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I should say.
Q.
And you have -- you showed a picture of your office.
You've got a computer in your office at your home, right, that
accesses the Internet through your Breezeline account, correct?
A.
I can't tell you the computer. I have a computer at my
house in that picture. That's all I can tell you. I don't
know about accessing -- how that does -- how it accesses it,
but I get on the Internet. I push -- the thing goes on the
Internet.
Q.
So you access the Internet from your computer that's in
your office in your home, right?
A.
Correct.
Q.
And it's through the Internet service that's provided at
your home by the company that was here, Breezeline?
A.
Again, Breezeline is a provider. I'm not sure about the
technical how it works -- how the computer works with the
Internet --
Q.
Well, sir, I'm not asking you how it works. I mean, is it
the case that you access the Internet at your home from your
computer, and that's the Internet service that Breezeline
provides?
A.
Breezeline provides the Internet service at my house, yes.
Q.
And you access the Internet at your home through your
computer, correct?
A.
I access -- I go on my computer and I can go onto the
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Internet at my home, yes. I mean...
Q.
Now, when you went home, the office that you had, HM
Management, was permanently closed; is that right?
A.
Yes.
Q.
Okay. So the documents you had in your office at HM
Management were transferred -- some to your home, right, to
your home office?
A.
My personal stuff was brought to my home, and the -- and
all the filing cabinets and all that stuff were put into a
storage facility initially.
Q.
All right. But some office records made it to your home,
right?
A.
I can't tell you -- what time -- are you talking about when
the office closed? Is that what you're asking me?
Q.
After the office closed, yes.
A.
Yes. When the office closed, again, whatever was in my
office -- my office, meaning my personal office in the office
thing -- those records were put into my house, and everything
outside of that was gone to storage. That's the way it was
done in 2020.
Q.
And then, as you needed things from storage, Mary -- Maria
Ataca would retrieve them from the storage facility and bring
them to your home, correct?
A.
If I needed -- if I asked her to do that, yes.
Q.
And if you needed something retrieved from Jeanette
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Gonzalez, that she could not email to you, you would have Maria
Ataca go to Jeanette Gonzalez and bring that to you as well,
right?
A.
I lost -- you lost me. I apologize. Say that again.
Q.
Yes. Jeanette Gonzalez was working out of her home at that
time. Yes?
A.
Yeah.
Q.
And if you needed to retrieve something from Jeanette
Gonzalez that she could not email to you, Ms. Mary Ataca would
pick it up from her; is that right?
A.
If I asked her for something, I don't know exactly who
would get it. Most -- Mary did get a lot of things. I don't
know who else I've asked to get things. But Mary would be one
of the persons I would ask, yes.
Q.
Okay. And at your home, talking about 2020 -- you had --
in addition to yourself, and your wife, and your immediate
family, Mary Ataca would come to your house in the afternoons?
Yes?
A.
Yeah.
Q.
And you had Elva Baluarte who worked out of your house?
A.
Correct.
Q.
Now, Elva Baluarte, she was your -- was she your cleaning
lady? Was she your cook? What did she do at the house?
A.
What time period?
Q.
2020.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
2020, when we moved the office, she was more -- she was
both. She worked -- the phones rang a lot, and she was
working, you know, part of like a business portion. And then,
in addition to that, she was also doing things at the house
that would -- cleaning stuff and stuff of that nature.
Q.
And 2019, Ms. Elva Baluarte worked out of your house before
COVID, right?
A.
Yes.
Q.
What was she doing at the house in 2019?
A.
In 2019?
Q.
Yeah.
A.
She was doing -- she was cleaning and doing the same stuff.
And if I ever -- again, I worked between my house and the
office at 12000 Biscayne Boulevard. So she would clean up my
office sometimes, but she would just be doing that kind of
stuff.
Q.
Okay. So in 2020 were those the people who were in your
home on a regular basis?
A.
In 2020?
Q.
Yes. Outside of your immediate family?
A.
They were some of the people, yes.
Q.
They were some of the people?
A.
You asked me: "Were they people in your home?"
Q.
Yeah. So in 2020, and during COVID, was it the case that
your wife and yourself were careful about who came over because
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
of COVID?
A.
That's correct.
Q.
All right. You have that picture that you showed the jury
of you at that big empty space at Burlington. You said you
took that picture to show your wife you were social distancing,
correct?
A.
That's correct.
Q.
So you didn't have people coming through your house, it's
fair to say, in 2020; is that right?
A.
Well, that picture was taken on March 30th, 2020. And so,
from the beginning of March -- I mean, March through a certain
point. And then it changed towards the latter part of 2020.
People started coming -- they came to the house, but
they would -- they would be -- they had to sit -- in 2020 they
came to the house. That's not true. They came to the house in
2020, but I wouldn't -- they wouldn't go physically inside of
the house. We had to sit outside, and my wife made -- there
was a chair over there and a chair over there in front, and
then we had to sit like a certain amount, and she'd look
through the window and make sure we weren't like talking close
to each other. So they came to my house, not inside the house
for a while, in 2020.
Q.
Right. So people met you outside of your house -- outside
of the physical structure that was your house?
A.
The patio.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
On your property?
A.
On the property, on the patio, they would have -- we would
have meetings. We'd have to have social distancing meetings
with my mask and all that. And she would sit there and
watch -- in a loving way, she would sit there watching and
making sure that I wasn't too close to somebody.
Q.
And your wife was not involved in the operation of your
businesses, correct?
A.
No.
Q.
Mr. Sheppard, you've hired a lot of contractors for
different projects over the years; is that right?
A.
My companies have, yes.
Q.
And your company, HM Management and Development, is a
company that manages the properties that are owned by other
entities, yes?
A.
Other entities that I'm the managing member of.
Q.
All right. And for HM Management, your office
manager/bookkeeper has been Jeanette Gonzalez for a number of
years; is that right?
A.
When you say: "A number of years," I'm just -- how many
years are you talking about?
Q.
Well, how many years are we talking about?
A.
Since probably 2016 maybe. 2016.
Q.
And she -- Ms. Gonzalez still works for you today, correct?
A.
Yes.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
So 2016. And before that, she was working for your
projects, right? I mean, you've worked with her for a number
of years and before 2016, correct?
A.
Correct.
MR. ETRA: Objection. Multiple compound questions.
THE COURT: Sustained. Let's rephrase, please.
BY MS. JIMENEZ:
Q.
Jeanette Gonzalez has worked for you since before 2016,
correct?
A.
For my companies, yes.
Q.
And Ms. Gonzalez has been, over the years, very loyal to
you, correct?
A.
What do you mean by loyal? I don't understand.
Q.
You don't know the word loyal? Trustworthy. Somebody
you've trusted for many, many years, correct?
A.
Yes.
Q.
And Ms. Gonzalez does your bookkeeping, but she does not
have an accounting degree?
A.
What time period is this?
Q.
The time period of ever. She does not have an accounting
degree?
A.
She does not have an accounting degree. But you said she
does the bookkeeping, so I'm just trying to split apart the
questions. Yes -- she does not have an accounting degree, no.
Q.
She does not have an accounting background by way of
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
training before she started working for you?
A.
I don't remember. I mean, she started working for me back
in 2006 in a different area. So I don't -- I'm trying to
answer your question, but...
Q.
Well, I think you've testified that she learned on the job,
right? She learned the bookkeeping on the job?
A.
Correct. Over the period of time when she originally
started at a completely different building of our offices to
today, she's progressed and learned from others accounting --
whatever she does.
Q.
And I think you testified that Jeff Graff sometimes would
help her out and answer her questions, right?
A.
Correct.
Q.
And for the people who were laborers, Jeanette Gonzalez
would -- she would cut the checks to pay the laborers when you
were still working at the office?
MR. ETRA: Objection. "Office" meaning not home
office.
BY MS. JIMENEZ:
Q.
Your HM Management office.
THE COURT: All right.
THE WITNESS: So you're talking about prior to COVID,
in the physical setting of an office, would she pay people?
BY MS. JIMENEZ:
Q.
Yes.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes. She was -- again, you got to give me a time frame.
Because, again, there's other people that did that. So I don't
know --
Q.
Sure. 2017, 2018, 2019.
A.
Correct. In 2017, '18 --
Q.
2020, up until COVID, right?
A.
In 2016 through -- until -- and going forward, she's the
one that would handle the processing and -- of -- put into the
computer and printing out checks and stuff like that.
Q.
And these were checks that you would authorize her to pay
people with, correct?
A.
Technically, that's partially correct, partially not,
because it depends what the checks were for.
Q.
What checks did Ms. Gonzalez write to laborers that you did
not authorize her to write?
A.
Again, if it's construction, and we are building something,
it's different because you have a project executive that goes
ahead and actually has a budget, and they pay based upon -- if
it's a third-party company, it's part of a budget, it's
authorized because it's part of your construction budget.
So workers, same thing. If an individual worker --
she would have authority based upon a budget. So I don't see
that going to every worker: "Hey, you got to pay this person,
that person." So this is a little bit different than that when
you're doing construction or even property management. When
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
you self-perform property management as well. So it's a little
different as well.
Q.
Okay. So are you aware of her ever cutting checks to
people that she wasn't authorized to pay?
A.
I'm not -- I mean, I'm not aware of that.
Q.
And is it -- well, Ms. Gonzalez understands that you're the
boss of HM Management, correct?
A.
I'm the owner of HM Management. I'm not the boss of HM
Management. I'm the owner of -- the 99 percent owner of HM
Management.
Q.
You're her boss, correct?
A.
She reports to me.
Q.
Is that yes, you're her boss?
A.
With regards to HM Management and Development, she reports
to me, yes. That's correct.
Q.
Okay. So you are her boss, correct?
A.
Yes. I'm her boss with regards to HM Management and
Development. Each project -- everything -- each project is
different. That's why. I'm not trying to be difficult. I'm
just saying when there's separate LLCs there's different
functions of each LLC at different times.
Q.
She works for you?
A.
She works for the company. Actually, technically, she
works for the company. She works for me. She works for the
company.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
She works for the company, which is the entity that you
control. And so you're her boss, correct?
A.
Correct. I'm the managing member of the entity.
Q.
Fair to say Ms. Gonzalez doesn't decide what contractors
you hire for projects, right?
A.
Correct.
Q.
She doesn't make decisions about what leases you negotiate
with tenants, right?
A.
That's correct. She does not.
Q.
She doesn't decide who the laborers are, the -- either you
or the contractors decide who those laborers are going to be on
various projects, right?
A.
That's correct. When it comes to construction or whatever
city the parties and the workers that do the day-to-day
working, the common area working, she doesn't get in that
decision-making process.
Q.
She doesn't decide for HM Management who is going to be a
W-2 employee or a 1099 contractor, right?
A.
That's not true. She does.
Q.
She does decide?
A.
For HM Management?
Q.
Yes. For HM Management.
A.
Yeah. She's on that -- she or whoever is hiring the person
is the one that determines how they identify the employee.
Q.
So at HM Management, which is your company, that you
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
manage --
A.
Uh-huh.
Q.
-- where you're the boss, Jeanette Gonzalez does not decide
who is a W-2 employee or a 1099 contractor, correct?
A.
That's not true.
Q.
That's not true. She decides?
A.
She or somebody. I'm not involved with that
decision-making process. I can't say whether she -- or she
talks to the accountants or she talks to the project executive.
I don't know who she speaks to or who they speak to. I'm not
involved with that process myself, so I can't tell you how it
actually the -- the process works.
Q.
Somebody whom you cannot identify decides for your company
who is a W-2 or a 1099 contractor; is that right?
A.
Somebody who HM Management has a contract with to do the
work -- whoever is overseeing the work is the one who
determines whether someone -- what they are.
If it's an independent contractor, that's hiring a
third-party company -- the -- if you're hiring Carrier
air-conditioning, and it's part of a budget, if it's an
individual person and what they do, that would be whoever --
whoever hires them, they do a package and they hire them.
That's how it normally works, from my understanding.
Q.
So at HM Management, Jeanette Gonzalez did not decide if
she was a W-2 or a 1099?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Objection, Your Honor. It's the third
time -- asked and answered and argumentative.
MS. JIMENEZ: It's a different question.
THE COURT: Overruled.
THE WITNESS: Can you repeat that question, please?
BY MS. JIMENEZ:
Q.
Sure. At HM Management, Jeanette Gonzalez did not decide
if she was a W-2 or a 1099 worker?
A.
She did not.
Q.
She did not decide that?
A.
No. At that time, no.
Q.
And you decided that?
A.
No, I did not.
Q.
Somebody else whom you cannot identify decided that?
A.
Well, you just said when she started at HM Management. So
at HM Management --
Q.
I'm sorry. I'm sorry to interrupt you, Mr. Sheppard. I
didn't say when she started. I said: "At the company."
MR. ETRA: Objection, Your Honor. I think she did say
that.
BY MS. JIMENEZ:
Q.
At the company, who decides?
THE COURT: Overruled.
THE WITNESS: Okay. What specific time period are you
speaking about?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. JIMENEZ:
Q.
I'm speaking about let's say 2017, 2018, 2019, 2020, 2021.
Did Ms. Jeanette Gonzalez decide if she was going to be a W-2
or a 1099 for herself?
A.
I don't know what she decided she was going to be. Again,
when someone -- I don't deal with this, so I'm going to try to
answer the question to the best of my ability. But like, when
she started for HM Management, whatever day she started,
whoever filled out the paperwork, they decided whatever she was
going to be. I wasn't involved with that process. However she
started with the company, she -- someone -- whether it was --
it was probably either Steve Faloso, or Denise, or Addy. Those
are the only three people that could have made those decisions
when she started.
Q.
All right. So let me go back to 2016. Because you just
testified that she came to join your specific company -- she
was previously working -- well, she was previously working with
another affiliated company of yours, right, before 2016?
A.
Yes.
Q.
All right. 2016, she started working directly for HM
Management, correct?
A.
Let's just go through -- I don't want to --
Q.
In 2016 she started working directly for HM Management --
MR. ETRA: Your Honor, objection. She's cutting him
off. He said he --
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. Let the witness answer the
question.
Mr. Sheppard, have you answered the question?
THE WITNESS: I have not.
THE COURT: All right. Go ahead and answer it, sir.
THE WITNESS: I want to try to be clear so we can go
through this. When I said she started with the company, she
was -- back in 2003 or '04, okay, so somewhere in that general
area. That was a different company.
You asked me when did she start doing the accounting
stuff, and I said 2016, right? But prior to doing the
accounting stuff in 2016, she still worked for HM Management in
2009 in a different capacity. So when she started in 2009,
'10, that is whoever -- either Denise or Steve Faloso, or
whoever took care of that kind of stuff, that's when she
actually determined who -- someone determined that's what it
was.
What I thought you asked me was when she started doing
accounting -- is when Addy left the company, she was trained by
Addy and she started taking over Addy's role in 2016. That's
what I was trying to explain to you, and that's what I thought
you asked me. So...
BY MS. JIMENEZ:
Q.
So -- and before 2016, or before 2012, you had WSG
Development. That was also your company, right?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
It still is my company. But yes, it was until 2008 or
'09 -- around 2008 or '09 is when WSG was still existing. But
HM Management and Development I think it was -- 2009 I believe
is when it started.
Q.
So at WSG Development, Jeanette Gonzalez joined WSG
Development. Is that what you're saying? She joined that
company.
A.
Frankly, I don't know how it was structured because she was
working offsite at a specific project, on that project. How it
happened, I can't sit here and recollect how that all
transpired. She was at the Canyon Ranch project prior to that.
So she was -- like at every big project, they get paid at that
project, so I don't know how that paperwork worked. So I can't
remember back 2009.
Q.
So somebody made the decision, you don't know who?
A.
Whoever deals with administration and payroll, that's who
made the decision. I assume that's how it works. I mean, I
don't know how they make these decisions. But that's
what they -- whoever was doing it at the time.
Q.
All right. Now, in 2020 Ms. Gonzalez was working from her
home after COVID started, right, late March of 2020?
A.
Around that time frame.
Q.
And in 2020 Ms. Gonzalez did not go to your house, correct?
A.
I think she was at my house a few times, but she did not go
there on a -- like a -- on a regular basis.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
In 2020 -- I'm just saying in 2020 Ms. Gonzalez did not go
inside of your house, correct?
A.
I don't know about that. I think she did come a few times,
but I was sensitive to -- she's had lung issues. And so I
didn't want to -- I didn't force her to come to my house, but I
think she did come a couple times. Don't know exact -- what
dates, but she did. But beyond that, she was at her home and
it was acceptable to me. I had no problem with that.
Q.
In 2021 Ms. Gonzalez was working out of her home?
A.
Correct.
Q.
She's still working out of her home, correct?
A.
Correct.
Q.
In 2021 Ms. Gonzalez did not come inside of your house,
correct?
A.
That's not true. She was in my house. I can't tell you
when. But she was -- after -- in '21 she was more frequently.
'20 it was like maybe twice because '20 was very strange. But
'21 she started to slowly come by. Not often. She's still
working out of her house, but she started coming by.
Q.
And that was in the latter part of 2021?
A.
I can't tell you exactly specifically when. I don't
remember when, but in 2021 she was definitely coming to the
house more frequently.
Q.
And Ms. Gonzalez, working from her home, would send you
things by email, correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Yes.
Q.
And when you asked Ms. Gonzalez for information or for
records, she would send them to you by email, correct?
A.
What kind -- she sends me emails, yes. I don't know what
specific -- I don't know what she sends or doesn't send, but
she sends some things on email.
Q.
And you asked her to email you things like QuickBooks
ledgers, correct?
A.
QuickBooks ledgers?
Q.
Yes.
A.
Yes. I mean, sometimes it was required for something.
Yeah, I would ask for it if it was required for me to forward
to someone or something like that. Yes.
Q.
You would have her email you bank statements. Yes?
A.
Bank statements?
Q.
Yes.
A.
I mean, I would imagine, yeah. I mean -- because I didn't
have bank statements, so she would have to email me bank
statements because I don't keep the bank statements. She keeps
them in her files.
Q.
And she would email you records showing payments to
laborers, to contractors, right?
A.
Yes. Well, hold on. Say that again.
Q.
Payments to laborers, contractors.
MR. ETRA: Objection to the question.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. Sustained. Let's rephrase.
BY MS. JIMENEZ:
Q.
She would email you records showing payments to laborers?
A.
Which project, which time --
Q.
In 2020?
A.
I'm just asking.
Q.
Yes. In 2020, after you were home.
A.
In 2020?
Q.
Yes.
A.
I don't recollect if she sent me labor contracts. I mean,
I don't know what she would -- I don't --
Q.
Well, she had payments to laborers, for instance, on
QuickBooks ledgers, right?
A.
Yeah. But you said 2020, right? I don't know about 2020,
because she wasn't really controlling that. That was really
out of Orlando. So I don't know -- in 2020, that was the
Orlando job. So I don't -- I mean, she may have. I don't
know. But I don't recollect that, because in 2020 that was
controlled by Jeff. He's the one that does all of the -- he
was the project executive in Orlando. From January 1st, 2020,
he's the guy who was in charge of all that. So I don't -- I
don't believe she would be sending me labor reports for that.
Q.
QuickBooks ledgers, though. She did send you ledgers?
A.
I don't know. Sitting here, I can't tell what year or date
she sent me. I can't tell you.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Leases?
A.
Leases?
Q.
Yes. She sent you leases by email, right?
MR. ETRA: Objection. 2020?
MS. JIMENEZ: In 2020.
THE COURT: All right.
THE WITNESS: I just can't sit here telling you what
she sent by email. I can't -- I don't really look at my email
that much. But I can't tell you exactly what she sent me. But
she emails me. But I don't know specifically what she emailed
me.
BY MS. JIMENEZ:
Q.
Tax documents. She emailed you tax documents?
A.
Again, I can't tell you what she sent. I don't know what
she sent me. She emails me. I can't tell you specifically
what she sent to me.
Q.
I mean, you would request, for instance, tax documents and
she would email them to you. Yes?
A.
You're asking me to guess what she emailed me in 2020.
Q.
No. I'm not asking you to guess, sir.
A.
I don't know.
Q.
You would ask her to email you -- you would ask her for tax
documents and she would email them to you?
MR. ETRA: Objection. Asked and answered.
Argumentative.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: He hasn't answered the question.
THE COURT: The objection is overruled.
THE WITNESS: What type of tax documents are you
talking about? I don't understand. Like, what sort of tax
documents? What does that mean?
BY MS. JIMENEZ:
Q.
You don't know what tax documents are?
A.
Well, there's multiple type of tax -- what do you mean when
you say: "Tax documents"?
Q.
Well, generally speaking, you requested tax documents and
she provided you tax documents by email.
A.
I can't tell you what -- listen, I cannot tell you sitting
here today. If I could, I would because I don't see a big
deal. But I don't know, and I'm not going to say something
that I don't know the answer to. That's like -- she emails me
things. People ask me for stuff. I have to ask her for stuff
because she has it. I don't have it. So if I asked her for
something in 2020, okay -- or for '21, or 2015, or '12,
whatever it is, if she -- it's in her department, in her world,
I'm going to ask her for it. That, I do, if I need it.
Q.
And she would provide them to you. Yes?
A.
Depending on what it is. A lot of people provide me
information. I get stuff from accountants. I get stuff from
all kinds of people. It's too general of a blanket of a
statement to say: "She sends you" -- she sends you -- if I ask
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
her for something, and she has it, and -- she will provide it
to me, like any -- that's it.
Q.
Now, you testified that when you were in the office
Jeanette Gonzalez would bring you stacks of papers to sign. Do
you remember that?
A.
Yes.
Q.
And you signed them because you trusted her, correct?
A.
Yes.
Q.
And you never knew her when she brought you stacks of paper
to sign in the office -- HM Management office -- you never knew
her to like slip a false document in a stack of papers for you
to sign, correct?
MR. ETRA: Objection. How would he know?
THE COURT: Overruled. If the witness knows.
THE WITNESS: Have I ever seen her -- have I ever
signed something, then I saw her slip it in? Is that what
you're asking -- slipping a piece of paper in?
BY MS. JIMENEZ:
Q.
No. That's not what I'm asking.
A.
I'm sorry.
Q.
I'm asking: Did you ever -- let me ask it this way: Did
you ever learn that among the stacks of paper that Ms. Jeanette
Gonzalez would bring you to sign -- did you ever learn that she
had slipped in a false document for you to sign?
A.
I don't recollect that happening.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
It's something you would recollect happening, right? It's
kind of a big deal.
A.
If one -- I'm sorry -- if Jeanette Gonzalez did that, I
would definitely know about it. And if I knew that -- if I saw
that's what happened, yeah, of course I would know about it. I
would definitely say something about it, if someone --
Q.
Right. So it's fair to say that during all those times she
brought you stacks of papers to sign that you never learned
later that she had slipped in a false document for you to sign,
correct?
A.
To this date I don't know if she's given me a false
document to sign or not. I can't tell you if she slipped
anything in or not. I don't know. To this date I haven't seen
it, but --
Q.
You have never been made aware, correct, that she slipped
in a false document for you to sign when she brought you stacks
of paper to sign, correct?
A.
To the best of my knowledge, sitting here without looking
at anything, I don't -- off the top of my head, I don't recall
some slipped paper in a document. I don't recall it. No.
Q.
Well, you would recall it, correct, because it's kind of a
major event if your staff person brings you a false document to
sign. You would remember if you had been made aware of that,
correct?
A.
I think sitting here is a major event. So my mind's really
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
focused on this, not -- I can't go back every single time. I
mean, not just her, but many people bring me stuff all the
time. A lot of people brought me stuff to sign. So I can't --
sitting here, like, concentrating to answer your questions
about this particular moment in time in my life, I can't recall
her -- not to say it never happened. I don't know. But to the
best of my knowledge, I don't recall it sitting here right now.
Q.
When you were working from home after COVID, it's fair to
say that Ms. Jeanette Gonzalez did not personally bring you a
stack of papers for you to sign, correct, in 2020?
A.
In 2020? I don't know what she's brought me or not brought
me. Again, I said 2020 she was only there a few times. So I
don't know what we -- what we even discussed. I don't even
remember what it was about. But she's been there a few times
only in 2020. So I don't know anything about when she was
there. I don't recall that. Except that she was there. I
don't remember what she brought or didn't bring, or whether I
signed something or didn't sign it.
Q.
All right. Then the first part of 2021 Ms. Gonzalez did
not come to your house with a big stack of papers for you to
sign, correct?
A.
In '21?
Q.
In the first -- the first quarter of 2021.
A.
Okay. What about it?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
She did not bring a big stack of papers for you to sign,
correct?
A.
I have no idea what she's brought me to sign or -- she
gives me stuff to sign. She may physically not have brought me
something, but she may have sent it to me to sign. That might
be. But I don't recall -- I can't recall like when I signed
something or didn't sign something in 2021.
Q.
All right.
THE COURT: Ms. Jimenez, just let me know when it
might be a good time for us to take a lunch recess.
MS. JIMENEZ: Sure, Your Honor. I'm not going to
stand in the way of lunch.
THE COURT: Is this a good time?
MS. JIMENEZ: Yes, Your Honor. That's fine.
THE COURT: All right. Then Ladies and Gentlemen,
it's 12:30. We will take a one-hour recess for lunch. I'll
see you back here at 1:30.
Have a pleasant lunch.
COURT SECURITY OFFICER: All rise.
(Jury not present, 12:31 p.m.)
THE COURT: We're on a one-hour recess for lunch.
Have a pleasant lunch.
MS. WEINTRAUB: Judge, just for scheduling, I'm kind
of curious if I should have a witness here or it's not
necessary.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Ms. Jimenez?
MS. JIMENEZ: Your Honor, I do have a ways to go, I
think. But I mean, that's not to say that -- I mean...
THE COURT: Do you believe that you will take the rest
of the afternoon?
MS. JIMENEZ: I will take at least a couple of hours
of the afternoon.
THE COURT: All right. Then I would have a witness
ready to go.
MS. WEINTRAUB: Yes, Your Honor.
Thank you.
(Recess from 12:32 p.m. to 1:33 p.m.)
THE COURT: Right. Welcome back.
MR. ETRA: Your Honor, let me get them.
THE COURT: Yeah. Thank you.
(Pause in proceedings.)
THE COURT: All right. Let me acknowledge the
presence of the Defendant.
Are both sides ready to continue?
MS. WEINTRAUB: Yes, Your Honor.
MR. ETRA: Your Honor, we never got the impeachment
material -- remember we discussed this morning -- from the
Vasilas phone.
THE COURT: Oh, yes. The documents that you're
seeking to introduce.
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Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Your Honor, I don't know why I would
have to show them impeachment material when we were never
provided any impeachment material until it was on the screen.
And they have the Cellebrite report, which they have used in
asking questions to the witness.
THE COURT: Well, the -- as I understand it, by way of
the briefing, is the Cellebrite report was produced as a
report. Are there individual pages that the Government is
seeking to introduce or are you seeking to introduce the entire
report?
And why don't we have a seat.
MS. JIMENEZ: At this point, I'm not seeking to
introduce the entire report. But I don't see why they need to
be provided anything additional ahead of time.
MS. WEINTRAUB: Judge, just to be clear, the report is
not really a report as we know it, or --
THE COURT: What is it? What was provided?
MS. WEINTRAUB: The report is 7,000 pages. And it is
not -- it is in a PDF, so you have to go one by one through the
text message and the email and then the attachment. So there
could be like nine pages -- I'm not counting the separate for
the attachment. It is thousands and thousands of pages. And I
spoke with the FBI agent myself on Saturday. She was kind
enough to talk to me, and I said: "I thought there was a
report," and she said: "Well, no, when we say report, we mean
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Miami, Florida 33128
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the extraction." So I just wanted to clarify for the Court.
THE COURT: All right. Thank you. I appreciate that.
But with regard to these extractions, let me just ask,
Ms. Jimenez, are they identified by way of any kind of Bates
stamp?
MS. WEINTRAUB: They are not identified in any way at
all.
MS. JIMENEZ: So the extraction report -- when you go
into the extraction, it is only communications between the
Defendant and Mr. Vasilas, and Mr. Vasilas and Jeanette
Gonzalez. You go in and you can click on chats. And you've
got like -- like, you know, just a history of chats. You click
on IMs. You got a history of IMs. You click on emails. It's
not -- again, I received it after they received it on Friday.
I looked at it, and they have the same chats, the same
emails --
THE COURT: I understand. But you're seeking to
introduce portions of those extractions. So my question is:
How are you intending to identify those particular exhibits?
MS. JIMENEZ: At this point, I haven't had a chance to
even assign them a number. But we would assign them the next
exhibit number, if they get -- you know, if they are shown to
the witness and they are moved in.
THE COURT: But is it correct that it consists of
thousands of pages?
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MS. JIMENEZ: I'm not aware of any thousands of pages.
THE COURT: Well, am I looking -- and I just want the
record to reflect -- three full binders. Does that consist of
the extractions that were provided by the Government?
MS. JIMENEZ: Your Honor, I did not -- I reviewed a
Cellebrite report on my computer. I didn't print thousands of
pages, nor did I have time to review any thousands of pages.
THE COURT: But you have pages in front of you that
you're seeking to introduce of those thousands of pages. So my
question is: How are they going to be identified to this jury
and shown to the witness if they are just pieces of a very
voluminous --
MS. JIMENEZ: It would be a specific communication on
a specific date.
THE COURT: That's part of an exhibit. So...
MS. JIMENEZ: That would be its own exhibit.
THE COURT: Right. But as I understand the
extractions -- or maybe I shouldn't say that. I would expect
that the extractions would be done chronologically, correct?
MS. JIMENEZ: The extraction -- the chats do appear
chronologically, yes.
THE COURT: All right. So to that extent, if you're
seeking to take some of the conversations out of sync, so to
speak, how is the jury going to understand, unless they are
specifically dated?
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Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Each communication has its own date and
time.
THE COURT: All right.
MS. JIMENEZ: So it would appear like a WhatsApp chat,
I suppose, or --
THE COURT: Okay. And I haven't seen it. So if it
has its own date and time --
MS. JIMENEZ: Yes, it does.
THE COURT: -- then for purpose of identifying and
introducing it into evidence, what is the exhibit number that
the Government is assigning these extractions?
MS. JIMENEZ: Eighty. Exhibit Number 80.
THE COURT: All right. So then each particular page
that you can identify consistent with the exhibit of the date
and time will be 80-1, 80-2.
So to that extent, if the Defense has all of the
extractions, then just give the Defense an opportunity to move
to the particular date at the time that you're seeking to
introduce it. All right? So everybody, in fairness, has the
opportunity to review the particular page.
MR. ETRA: Your Honor, that's only part of the
printout. And we did give them, I mean, 80 percent of our
impeachment in advance. Sometimes we came up with things on
the spot. But I thought we were supposed to do that, and Your
Honor wanted us -- we took breaks so they would have a chance
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to review them, so that we wouldn't have time to -- so they
would have time to review the documents. We're just asking
them to give us the ones they have already identified.
MS. JIMENEZ: I have -- I mean, each -- you know, the
communications are very small because it's a particular
conversation on a particular day. They provided -- at the
time -- and Your Honor may recall, at the time that witnesses
were testifying and were purportedly impeached, we were being
supplied binders of documents.
THE COURT: That's why I'm not requiring that we go
through a laundry list if, in fairness, the Defense was given
all of the extractions.
So to that extent, just give Mr. Etra, or
Ms. Weintraub, whoever may be reviewing the particular
document, an opportunity to either scroll through --
Mr. Cavallo, do you have Government's Exhibit 80 that you can
easily scroll through with the time -- the date and time?
MR. CAVALLO: Your Honor, yeah, we have it printed
out. Unfortunately, it's not -- it may take me a few extra
seconds because it's not all chronological, the way it was
printed. I'm not blaming the Government for that, but we'll do
what we can.
THE COURT: But on your screen, if the Government
provided that electronically, are you able to do that so that
you can review it ahead of time as Ms. Jimenez is using that
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Miami, Florida 33128
(305) 523-5698
exhibit?
MR. CAVALLO: If I had words, I could maybe search it.
But I don't know sitting here right now, because I don't know
how they are going to use it. We have the data. It's true.
THE COURT: But you have the data. But it's also
delineated by way of the date, correct?
MS. WEINTRAUB: We had to put it in Relativity, Judge.
In other words, the way the Government produced it, we could
not just print it out. It had to then -- we had to call our
computer company. They had to then load it into a specific
product -- software product called Relativity, and we could
search it there.
We still could not put it all in Relativity and press
control P. That wasn't happening. That's why it took them an
entire day to load and print what's in front of you, which, for
the record, are five-inch binders filled to the brim. There
are three of them, and that is not the complete set.
MR. ETRA: Your Honor, if I may, I think Mr. Cavallo
can answer your question about the date because I did ask him,
and I think he can clarify why he was having a hard time
answering the question.
MR. CAVALLO: So obviously there's -- sometimes
there's multiple communications on the same date and even
seconds apart. So for example, if a communication is
October 14th, I can even do down to the minute. But I'm
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Miami, Florida 33128
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looking at my screen, there's nine communications on
October 14th at 6:14 p.m. -- I'm going to -- it's just going to
take me a second to go through and find --
THE COURT: Understood.
MS. JIMENEZ: I can provide them a copy of the
specific --
THE COURT: Well, let's do that. But before we
question the witness, let's give -- as the Government was
provided an opportunity to review the exhibit, let's give the
Defendant an opportunity to review it before we proceed.
MS. JIMENEZ: Well, I don't know which items I'm going
to be showing --
THE COURT: I know. But before it's presented to the
witness, let's just let counsel know.
MS. JIMENEZ: Yes. Of course.
THE COURT: Okay. All right. Let's bring in the
jury.
COURT SECURITY OFFICER: All rise for the jury.
(Before the Jury, 1:43)
THE COURT: All right. Welcome back, Ladies and
Gentlemen.
Please be seated, everyone.
I trust that you had a pleasant lunch and ready to get
back to work.
And we'll continue with the cross-examination.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Thank you, Your Honor.
BY MS. JIMENEZ:
Q.
Mr. Sheppard, I was asking you about the stacks of
documents that Ms. Gonzalez would bring you to sign when you
were at the -- physically located at the office of HM
Management.
Let me ask you about Jeff Graff, because you testified
on direct that he also is someone who would bring you stacks of
documents for you to sign that you would maybe review, maybe
not review before you signed. Do you remember testifying about
that?
MR. ETRA: Objection. Improper impeachment. Improper
predicate for impeachment.
THE COURT: The objection is overruled at this point.
If the witness recalls.
THE WITNESS: I recall me speaking about loan
documents for final execution that Mr. Graff brought me, if
that's what you're asking me.
BY MS. JIMENEZ:
Q.
I'm asking you about your comment that Mr. Graff, in
addition to Jeanette Gonzalez, would bring you stacks of paper
for you to sign when you were in the office -- the HM
Management office.
A.
And what's the question?
Q.
The question is, sir: Did you ever become aware of an
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
instance in which Mr. Graff provided you a stack of documents
where he had slipped in a false document?
A.
I have no recollection of that occurring.
Q.
Presumably, you would have presented that to this jury if
it had occurred?
A.
Well, Mr. Graff wasn't in the office in 2020 and '21.
Q.
Right.
A.
So I don't think it -- I don't think we'd present anything
to the jury --
Q.
Right. And with respect to Ms. Gonzalez, you would have
presented to the jury, had you become aware at any point, that
she had slipped in a false document for you to sign?
A.
That I would present it to a jury?
Q.
Yeah. Through your attorneys.
A.
I can't answer that question. I can't answer the question,
what would be presented to a jury.
Q.
So going back to Mr. Graff, you never became aware that he
had put a false document among the stacks of papers that he
would bring you to sign, correct?
A.
As I sit here right now, going back 15 years, I don't
recall that happening.
Q.
You testified on direct examination when we were here last
that Jeanette Gonzalez might have been someone who provided you
Forms 941, and the Forms 940, and the Florida Department of
Revenue RT-6 forms that were -- that appeared in the loan
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Miami, Florida 33128
(305) 523-5698
documents in this case. Do you recall that?
A.
I don't recall that being my testimony.
MR. ETRA: Objection. Improper impeachment, asking
that way about prior testimony.
THE COURT: Overruled. If he recalls his testimony.
THE WITNESS: I don't recall --
MS. WEINTRAUB: Mischaracterizing the testimony in the
question.
THE COURT: Overruled. You'll have an opportunity to
redirect.
THE WITNESS: I don't recall me saying that. I said I
don't recall ever seeing these documents before in my -- that's
what I think I said. I just never seen them before. So that's
what I remember. It was three weeks ago, though. So...
BY MS. JIMENEZ:
Q.
You remember that your attorney admitted to this jury that
those documents were false, right?
A.
Which documents are you talking about?
Q.
The 941s, the 940, the Florida Department of Revenue forms
that were in the loan documents.
A.
I don't -- I don't recollect exactly what they specifically
said. That, I don't recollect.
MS. JIMENEZ: If I may just have a moment, Your Honor.
THE COURT: All right.
All right. Let me just -- if you're conferring,
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(305) 523-5698
Ms. Weintraub and Mr. Etra, if you'll turn off the microphone
because we're getting that noise and it's interfering. Thank
you.
(Pause in proceedings.)
BY MS. JIMENEZ:
Q.
Mr. Graff [sic], just to refresh your recollection, when we
were here last, the morning session of the last day of trial,
Page 39, you were asked: "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?"
Answer: "Sure."
"Do you have a memory of ever signing any of those
documents?"
"I do not."
"If they were given to you by Jeanette Gonzalez or
Jeff Vasilas, would you have signed them?"
"Yes."
So my --
MR. ETRA: Objection, Your Honor. First, you referred
to him as Mr. Graff, which is an accident. Second, if she's
reading prior testimony, the proper method is to say page and
line, page and line, so we could follow it and potentially
object.
THE COURT: All right. It was Page 39. It was three
weeks ago, so it's appropriate. If you want to remind the
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Miami, Florida 33128
(305) 523-5698
witness with regard to testimony of Mr. Sheppard, you may do
so.
Page 39.
BY MS. JIMENEZ:
Q.
I'm sorry. Page 39, Line 14, and then going to Line 18,
you were asked: "Do you have a memory of ever signing any of
those documents?" And you did not.
And then: "If they were given to you by Jeanette
Gonzalez or Jeff Vasilas, would you have signed them?"
"Yes."
So my question to you is: Did Jeanette Gonzalez --
are you testifying that Jeanette Gonzalez emailed you false
941s, or false 940s, or false Florida Department of Revenue
forms which are RT-6?
A.
I can't testify about that because I never saw these
documents until after I was arrested, so I never would have
seen it before. So I can't even talk about even where they
came from, if that makes any sense.
Q.
All right. So when you said that you thought they might
have come from Jeanette Gonzalez or Jeff Vasilas, you're
speculating because you have no idea where they came from; is
that right?
A.
I don't think that was my intention of what I said. I said
my recollection is that it would come from somebody who handled
that type of work, meaning who would do that kind of -- who --
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Miami, Florida 33128
(305) 523-5698
that's their expertise department. That's who I would get --
those are the only people I would probably get them from, would
be either him or his assistant on site, or our -- or Jeanette.
That's who takes care of it. I don't take -- I never take care
of that kind of processing.
Q.
Jeanette Gonzalez never emailed you a false 941, or a false
940, or a false Florida Department of Revenue form?
A.
I have no idea if she has or not. I've never checked.
MR. ETRA: Objection. She's not letting him answer
the question.
MS. JIMENEZ: I'm sorry. Go ahead.
THE COURT: If you'll let the witness answer the
question.
BY MS. JIMENEZ:
Q.
Well, let me ask you this --
MR. ETRA: Your Honor, I think you are allowing the
witness to answer the question.
THE COURT: Yes. If the witness will answer the
question, please.
THE WITNESS: I'm sorry. Can you just repeat that,
because everyone is talking at once.
BY MS. JIMENEZ:
Q.
Ms. Jeanette Gonzalez never emailed you false 941s, or
false 940s, or false RT-6s that you can remember, correct?
A.
I have no idea because I've never researched or looked for
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that. So I have no idea if she has or hasn't.
Q.
Did she, in 2020 or the first three months of 2021, email
you 941s, or 940s, or RT-6s?
A.
Again, I have no recollection or no idea because I've never
like looked for it. I mean...
Q.
If she would have emailed you those documents, it would
have been because you requested them, correct?
A.
No. When you say: "These documents," what documents are
you talking about, just general documents?
Q.
The three that I'm referring to, the 941s, 940s, RT-6s.
A.
I would never request someone to email me fraudulent
documents or prepare fraudulent -- that would never happen. I
didn't even know what the documents are, first of all, until
after I got -- after this whole thing happened. So the answer
is absolutely not. I would never do that in a million years.
Q.
Or real ones? She never emailed you -- during COVID, she
never emailed you real ones that had been prepared from the
past?
A.
I have no idea what she has or hasn't. I just don't know
because I've never like actually gone through my email. I have
two-hundred-and-something-odd unopened emails. I can't tell
what someone's -- her or anybody, what they've sent or not sent
to me.
Q.
When you were still working at the office, Jeanette
Gonzalez was the person who -- back when you were still
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claiming wages, she was the person who prepared the Forms 941s,
correct?
A.
You have to -- I don't mean to be difficult. I just want
to make sure we're clear on time frame. Are you talking about
like from 2000, 2015, '17? What years specifically because
she's --
Q.
For 2018.
A.
2018, she was preparing -- well, I don't know if she
prepares them, but she was the one who was responsible for
doing that.
Q.
Also, with respect to the Forms 940 and the Florida
Department of Revenue RT-6s, up until 2018, she was the person
who handled that, correct?
A.
From 2018 through as she works today, she handles all
accounting matters regarding payroll, forms. Anything to do
with the -- what she is experienced to do, that's what she
does.
Q.
Mr. Sheppard, I'm asking you specifically as to those types
of tax documents. Ms. Gonzalez, in 2018, would handle those
tax documents and -- correct?
A.
I can't sit here and tell you what she handles.
Whatever -- if those are in her job function, absolutely she
would do that because that's in her job function. I don't
know if -- how she -- I don't know enough about those
documents.
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(305) 523-5698
Again, I'm not -- that's not -- I don't understand.
If you ask me a development question, I can tell you. This, I
don't know how it even happens or processes. I don't know if
it's through -- the computer does it itself or -- I don't know
how that works. You're asking me a question I can't -- I want
to be able to give you the proper answer that I understand, but
it's hard to do that because I don't understand the documents
themselves in the first place. So --
Q.
You were never made aware -- during the time she's worked
for you, you were never made aware that -- either through some
IRS notice or some other way, you were never made aware that
Ms. Gonzalez had filed, for instance -- had filed false Forms
941, or false Forms 940, or false Florida Department of Revenue
forms, correct?
A.
I have not -- I'm not aware of anything that's been false
that I'm aware of. I don't get that -- I don't open the
mail -- I get the mail. But that's got to me? I'm not aware
of anything that I've been notified by the government that I
actually opened myself and looked at.
Q.
You don't open IRS emails either? Is that what you're
saying?
A.
IRS emails?
Q.
Yes.
A.
Emails, you say?
Q.
Notifications.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Well, notifications goes -- it goes to accounting,
administration. They go through it and then they go file it.
I don't get involved at all with that. The only thing I deal
with, my stuff, development, tenants, construction, financing.
I don't deal with anything with accounting, unless it somehow
comes to my attention, which I can't recollect. But from time
to time it does. And I won't even call Jeanette. I'll call
Neal Cupersmith.
Q.
All right. So it's never come to your attention that
Jeanette Gonzalez has prepared and filed a false Form 941, or a
false Form 940, or a false Florida Department of Revenue form.
It has never been brought to your attention, correct?
A.
When I say never, I can't always say never. To the best of
my knowledge as I sit here, I am not aware of it until now that
I have -- in 2022, when you guys forwarded me -- not forwarded
me, forwarded the attorneys the documents and they showed it to
me. That's the first time I've ever seen something that's
completely like -- looks nuts.
Q.
I just want to clarify for this jury, Mr. Sheppard. Are
you telling this jury that Jeanette Gonzalez prepared --
provided to you in some way the false Forms 941, the false
Forms 940, the false Florida Department of Revenue forms that
you found and that you reviewed later and that appeared in the
loan documents that relate to this case?
A.
I think you said three different things there, but I'm
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
going to try to answer you. I'm not aware of anything -- I'm
not saying that she did anything yes or no. What I
specifically said was: I've never dealt with these kind of
things, okay, through my whole career, my whole life.
However, when I -- after I was arrested, then I was
put -- then they gave discovery. It was the first time I've
ever seen those documents. So when you said some of the loan
documents or something like that -- that, you know, what
you're -- what people have said is that that was attached to
the loan stuff.
So no, I'm not saying yes/no. I don't know who, what,
or where did that. I know who's responsible to do these
documents, and that's what I know.
Q.
So I mean, you mentioned Jeanette Gonzalez, or you were
asked about Jeanette Gonzalez's involvement with the false
documents that were submitted to the lenders and the SBA in
this case. So my question to you is: Sir, did you ever
confront Jeanette Gonzalez about this, since she still works
for you?
A.
Did I confront her?
Q.
Correct. Did you ask her about it?
A.
Well, I've asked her about it, and I said: "What the heck
is this?" That, I did.
Q.
What did she tell you?
A.
She said in 2020 she was not involved. That came from
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Orlando, and she wasn't involved with that in 2020. And that
was the conversation. And I asked her: "Are you sure?" She
says: "With Mr. Vasilas" --
MR. ETRA: I think we're in the hearsay realm, Your
Honor.
THE COURT: Are you objecting, Mr. Etra?
MR. ETRA: Yes -- I'll withdraw the objection.
THE COURT: All right, then.
BY MS. JIMENEZ:
Q.
And then, in 2021, did she say anything about 2021 either?
A.
What about 2021? About what?
Q.
Did you ask her about 2021? Did she provide you any false
Forms 941, Forms 940, Department of Revenue forms?
A.
No. I've never talked to -- I don't talk to her about how
she does her job in '21. I haven't talked to her about that,
no.
Q.
Right. But you learned at some point that there were false
tax documents in your loans, correct?
A.
I learned what I just said before. I received the stuff in
August, September of 2022, and I looked at it. And I -- first
I saw what was there. I said: "What is it?" That's when I
learned.
Q.
So you mentioned her name in your direct testimony, but you
don't think that she was involved in preparing any false
documents in your -- that made it to your loans, correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
What I'm saying is: I do not know exactly who would have
prepared something of that nature. I know I didn't prepare it.
And I know the only people that were involved with that was
Orlando and Miami in those departments, either Jeff Vasilas or
her. That's all I'm telling you. I'm not trying to be
difficult. I don't know because I don't understand this stuff.
I never did it. I don't know.
Q.
But you think she could have done this behind your back and
not let you know about it, and ultimately this money went to
you, correct?
A.
It did not go to me. No.
Q.
The money went to your companies, correct?
A.
It went to the companies, yes.
Q.
They are not Jeanette Gonzalez's companies, correct?
A.
They are not.
Q.
But if she had done this, she never told you she did this,
right? She never told you she did anything like this, correct?
A.
She never -- she never told me she did anything. She said
that Jeff is the one who was working on the loans, and Jeff's
the one who handles all that because he handled payroll, and
she was frustrated with him that he would not give her all the
information, Social Security numbers, and all the stuff for
something she had to put in her system. And that's what she
told me, that: "I can't answer you. Jeff Vasilas is the guy
who handles all the employees. He hired everybody. He was the
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
front contact in Orlando on the jobsite. He hired every worker
from the people that actually fired people during COVID because
they couldn't pay them, which we did." That's what she told
me.
Q.
All right. Thank you.
Now, you hired a lawyer to represent Jeanette Gonzalez
in this matter, correct?
A.
I did not.
Q.
Your companies did?
A.
A company did.
Q.
Your company?
A.
A company that I'm the managing member of, correct.
Q.
And Ms. Maria Ataca, she works for you, right?
A.
She works for the company.
Q.
She works for your company.
A.
You keep saying me. I mean, the company. I'm not trying
to be hard. I'm just trying to be technical. It's -- she
worked for the company that I own, correct.
Q.
And it's your company?
A.
Which company?
Q.
HM Management is your company.
A.
HM Management is my company, correct.
Q.
She works for HM Management, which is your company?
A.
She does -- she worked for HM Management, but she also did
allocation for other companies as well because she does -- she
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
works for other -- she does work for other companies that I
own. So she technically -- her allocation of time goes to
other companies as well.
Q.
You are Maria Ataca's boss; is that right?
A.
No.
Q.
You're not her boss?
A.
I am not.
Q.
Who's her boss?
A.
Jeanette Gonzalez.
Q.
So you have nothing to do with whatever Maria Ataca does or
doesn't do in relation to your company?
A.
I'm sorry. Repeat that again. Can you say that again?
Q.
You don't -- I mean, whose money pays her salary?
A.
Money that's either put in by me or my wife -- my wife and
as owners of a company. If it's a company different than HM
Management, or whatever revenues the companies bring in, she
gets paid.
Q.
So Ms. Maria Ataca is paid by HM Management, correct?
A.
I believe, again, some of her funds come from HM
Management. Others come from other companies as well. Again,
there's allocation. When you have multiple properties, and
they do stuff for that, you have to allocate their time, and
you pay -- and you're supposed to distribute it throughout the
companies.
Q.
These are your companies, correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
They're not all my companies. I'm the managing member, but
sometimes I have partners in other companies. So to be fair to
a partner, you can't charge a partner a hundred percent of
someone's salary if they're only doing 30 percent of the work
for that particular company.
So this company has a partner, and it's 30 percent, if
that's what the time is, and it gets allocated, and that's all.
A lot of people get allocated. That's why you have -- that's
how you have to do it.
Q.
Mr. Sheppard, do you not have authority to fire Ms. Ataca?
A.
Authority?
Q.
Yes.
A.
Yes. I own the company.
Q.
So during COVID, and to this day, she's been working from
your home, correct, Ms. Ataca?
A.
You said from COVID?
Q.
From COVID, yes. March, April of 2020.
A.
Well, I think she stayed on -- she was involved with the
office actually until I think June of 2020, but she has been
working at my home. Again, she's had the same schedule many,
many years. She comes in at three, or two, or something like
that, and she leaves like at six. And she does filing, and she
does other things, she does the bank deposits. So she's worked
for the company for a long time pretty much the same hours, two
to six or something like that.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
All right. So since about June of 2020, her jobsite is
your house, correct?
A.
Yes, where I moved my office to. My office became my
house.
Q.
And Ms. Ataca still works for you?
A.
I'm sorry? Yes. She works for the company, yeah.
Q.
She helped set up Excel spreadsheets on your computer at
home, correct?
A.
Spreadsheets, no.
Q.
Yes. During COVID. Excel?
A.
Not during COVID. In 2022 she set up a template once.
Once this whole thing happened, in '22, she set up a template
because I don't know how to work the computer. I said: "Do
you know how to work the green thing here," and she set the
thing up, and said: "Here's a template," and I said: "Okay.
Thank you."
Q.
Well, during COVID, in 2020, Ms. Ataca helped set up Excel
spreadsheets for you, correct?
A.
Absolutely not. Never ever in '20, '21, or any time prior
to that. It was just in '22 after I was arrested and I wanted
to understand what was going on.
Q.
You know that's what she told the FBI when they interviewed
her, correct?
MR. ETRA: Objection. That's not -- impeaching him an
out-of-court statement she made, that's not appropriate.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Does he know?
BY MS. JIMENEZ:
Q.
Do you know that's --
THE COURT: All right. Whether he knows what was
stated is the predicate. The objection is sustained. Let's
rephrase, please.
MS. JIMENEZ: The objection is sustained as to: "Do
you know?" The question is does he know that that's what
she -- that that's what she told the FBI.
MR. ETRA: Your Honor, there's no basis --
THE COURT: Yeah. The objection is sustained.
BY MS. JIMENEZ:
Q.
You hired an attorney for Ms. Ataca --
MR. ETRA: Objection, Your Honor.
BY MS. JIMENEZ:
Q.
-- after the FBI went to speak with her, correct?
MR. ETRA: Objection. Relevance.
MS. JIMENEZ: What's --
THE COURT: Overruled.
THE WITNESS: When the FBI started their investigation
talking to people, a year after this whole thing happened --
after I got indicted, a year later, they first started talking
to people all of a sudden, that's when the corporation said
anybody who needs an attorney -- because they don't have money
to protect themselves, as far as when the FBI comes walking in.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
They're hardworking people. I said: "The company will provide
you with an attorney -- even though it's a year later, we'll
provide you with an attorney so you can protect yourself," and
that's it.
BY MS. JIMENEZ:
Q.
So the answer is yes, after the FBI spoke with Ms. Ataca,
you paid for a lawyer for her, correct?
A.
Not me. The company --
Q.
Your company did?
A.
-- paid for a lawyer for anyone who wanted it. It was
their option to either have a lawyer or not.
Q.
And after you got a lawyer for Ms. Ataca, you know that she
refused to speak to the FBI thereafter, correct?
A.
I have never spoken to her about this. She's -- I never
asked. I know I'm not allowed to ask. I never did ask. I saw
her testify. I saw her testify that day, and I heard what she
said that day. So...
Q.
And that day she didn't know who was paying her lawyer's
fees. Did you hide that from her?
MR. ETRA: Objection, Your Honor.
THE COURT: Rephrase.
MR. ETRA: Argumentative and --
THE COURT: Rephrase. Sustained.
BY MS. JIMENEZ:
Q.
Did you let her know that you were paying for a lawyer for
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
her?
A.
I told her that the company -- actually, I didn't even tell
her. I'm not sure who told her. Because I didn't really -- I
didn't talk to her about this. But what -- someone told her
that all workers are allowed to have a lawyer so they can
protect themselves because lawyers are expensive. So we're
trying to just protect people, that's all. And that's what
happened.
Q.
And you were also protecting Jeanette Gonzalez, correct?
A.
I'm not protecting them. Okay? I'm giving them an
opportunity to have legal representation in the United States
of America, because the FBI, a year later, started knocking on
people's doors asking what they do for the company, I guess, or
something. And I said: "You got to hire a lawyer," and that's
where a lawyer came from.
Q.
And Jeanette Gonzalez also refused to speak to the FBI
voluntarily after she had an attorney hired for her, correct?
MR. ETRA: Objection, Your Honor.
THE COURT: If the witness knows. Overruled.
THE WITNESS: I don't know what Jeanette Gonzalez did.
I know that she testified for the Government. She testified
for the Government in some grand jury or something like that.
But after that, I don't know what happened. But I know she had
a lawyer.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. JIMENEZ:
Q.
All right. In 2019 and 2020, the companies that you
managed that were -- where you were the managing member that
earned -- or that generated income, were HM-UP Development
Alafaya Trails, correct?
A.
Yes.
Q.
CJUF III Flagler?
A.
Yes.
Q.
And that's the company that owns the -- or owned the
Fontainebleau shopping center in Miami, correct?
A.
Yes.
Q.
HM Management and Development, your management company,
correct?
A.
Yes.
Q.
The active project you had going in 2020, it was the
Burlington refitting of the Toys "R" Us, correct?
A.
In 2020 -- or it started in 2019. But yes, that was one of
them in 2019 on the -- not the site. There was the other
project I mentioned earlier.
Q.
The project you mentioned that in 2021 -- about April 2021
or so, you got a lease agreement with Amazon, correct? Is that
what you're talking about?
A.
What I'm talking about is that the lease agreement was done
prior. But 2019, maybe the beginning, January, February 2020
the lease agreement was done, but we had to go through the
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
approval process. We didn't start construction till 2021
because there was delays with Orange County because they didn't
have hearings for the approval of the plans.
Q.
All right. So in 2020 -- if I can ask you about 2020 --
A.
Uh-huh.
Q.
-- the project you had, the active project you had was the
refitting of the Toys "R" Us into the Burlington Coat Factory,
correct?
A.
That was one of them, yes. And there's other -- again,
like I said, there was other activity as well. But yes, that
was the main project to -- not refitting, to completely gut the
building, a 60,000-square-foot building, which is a pretty big
project.
Q.
And after COVID started, you were writing the checks to
those laborers in Orlando that were working on that Burlington
project, correct?
A.
I was writing checks. Jeff Vasilas was writing checks. I
think Jeanette was writing some of the checks, not many. And
those were basically the three people that were paying people.
Q.
You were writing checks that you would provide to Mr. Jeff
Vasilas, who would take back to Orlando to pay the laborers,
correct?
A.
Correct.
Q.
And all those laborers were 1099ed contractors, correct?
A.
I don't know what they were. They're workers. That's up
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to Jeff. I just went off payroll reports, the payroll report.
I don't know what they were. I never said what they were when
I wrote a check. It says: "Payroll." It says: "Payroll,
payroll, payroll." So payroll check, that's what I wrote. I
mean, I didn't write -- I got a payroll report. I just didn't
write a check. I had a report, I looked at it, and I write
checks to the individuals.
Q.
Right. And you are a savvy, experienced businessman,
Mr. Sheppard. You agree with me?
A.
I wouldn't call me savvy. I work very hard. I do the best
I can on what I know. I wouldn't say savvy. I would say I'm
just a normal simple person that works hard and does what I
can, but I'm no expert in a lot of areas.
Q.
You do know what withholdings are, right?
A.
Withholding? Yes. I know what withholdings are.
Q.
And you know that withholdings is money that is taken out
of wage employees' paychecks, right?
A.
Okay.
Q.
Yes?
A.
No. I know what withholdings are. It's when you pay an
employee, there's -- when someone goes and does it, and where
there's withhold -- that's what I know. I mean, I used to get
a paycheck back in the day.
Q.
Right. And the withholdings are -- it's money that the
employer keeps for Medicare, taxes, for Social Security taxes,
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
for income taxes, right?
A.
(No verbal response.)
Q.
Yes? Those are withholdings?
A.
I know what withholdings are. I'm not sure how the
distribution -- I don't process that, so I don't really exactly
how -- I know what the term -- what you're saying are the
terms, but I don't process it myself personally, so I don't
exactly how that specifically works. I know what they mean
because --
Q.
And you also know that for wage employees the employer has
his or her own tax responsibilities to contribute Social
Security and Medicare taxes as well when they have a wage
employee, that that's part of the withholdings mix-up, if you
will?
A.
I mean, I know you pay someone a gross wage and how it's --
whether the worker sends it to them or the employer -- I know
there's a gross wage and then certain things are taken out,
whatever they are. I mean, I know I've heard the terminology.
Again, I don't process it, but I understand what you're
saying -- what it means.
Q.
Right. But there's an employer portion to that, right,
that the employer also has to contribute Social Security and
Medicare taxes? I mean, that's what you have to pay, right,
when you have wage employees from whom you withhold part of
their wages?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
If it's -- I can't really comment. I know there's
something you have to withhold. I don't know what that is.
But there's a gross pay and someone calculates what you
withhold. That's -- if that's what you're asking me. I know
there's withholdings. Yes. I understand there's withholdings.
Q.
Right. And you know that with withholdings there is an
employer contribution to the IRS as well, Medicare and Social
Security taxes?
A.
I don't understand the employee contribution. I don't deal
with that. But I mean, if you're holding somebody's -- if
someone gives -- if you pay a person, they get X. And you're
supposed to hold it and forward a portion of it to them,
whatever you're holding back from the person. You don't give
them the full check of the gross.
If you pay gross check and a net, and then the other
part of the net you're supposed to send or something like that.
But I never do the process, so I don't really understand how
that would actually work, but I understand the concept.
Q.
Right. Well, you've been an employer, Mr. Sheppard, right?
A.
I have.
Q.
And as an employer, you withhold part of the employee's
wages and you also -- which comes out of your business's
pocket -- pay the employer contribution for that. I mean, you
heard the testimony. That must have refreshed your
recollection as to those kinds of payments, correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I heard the testimony a lot. Again, my involvement with
any type of payroll is there's a gross amount. It goes into a
payroll account. And then whoever is dealing with that, they
do -- however they do -- they cut people's checks on Friday
and: "Here's a payroll check on Friday."
I only know for me personally it's a gross amount. On
a monthly basis or a weekly basis, it's a gross amount.
Somebody takes it and they do whatever they're going to do.
It's been -- I haven't had a paycheck in 12 years.
Q.
I'm trying to understand from you -- I'm just trying to get
an answer to my question, Mr. Sheppard, which is that there is
an employer portion that goes to the IRS for Social Security
and Medicare taxes for your employees.
A.
Again, I said I know there's an employment tax that goes to
the government in some shape or form. I can't tell you how
that's delineated because I just don't know. You're asking me
specific questions about how that gets delineated. I know
there's an employment tax for an employee, an employee tax,
whatever it is, that goes -- the employment tax goes to the
government. That's what I know.
Q.
Is that, yes, you know that the employer has a contribution
as well?
A.
When you say: "Contribution," I don't -- that's a --
Q.
Payments.
A.
My world a contribution is like equity. Like, I don't deal
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
with that kind of contribution word. So I don't want to say
the wrong word. I'm telling you I know there's withholdings
and it goes to the government. And how it's determined and how
it's allocated, that's not in my -- my educational background
or experience because I don't do that part of my business.
Someone does that, Jeanette Gonzalez or whoever.
Q.
So if you don't understand the term "contribution," let me
try to rephrase my question, Mr. Sheppard, which is: You
withhold a certain portion of the employee's pay. That's their
withholdings for Medicare, Social Security, income tax. And
then, in addition, the employer has to pay out of the
employer's account, or the employer's pocket, money to the IRS
for an additional amount for Social Security and Medicare.
You're aware of that. Yes?
A.
I'm aware what you just described to me. Am I aware how
that goes? Again, it's a little confusing to me that you give
someone a check and you take money out of the check as you
explained. You're just forwarding. You're not -- I don't know
about contribute. You're just forwarding is -- what you sound
like you're saying, you just forward -- you hold back and you
forward -- one person forwards -- the employer forwards it and
the employee forwards their portion. That's what I think
you're saying. That's what I'm getting out of it at least.
Q.
So when you were writing checks during COVID to the
laborers in Orlando, it was just a flat check -- I mean a flat
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
amount. You, your company, HM-UP or HM Management, was not
keeping any portion of the amount that was owed to that
laborer. That's my question?
A.
I have no idea. I got a report. I wrote a check to an
individual based upon -- because we usually use a computer. It
was always done by computers. Because of COVID, there was no
computer. Either I wrote it or Jeff Vasilas wrote it. And
whatever the payroll report says, I just wrote a check.
Q.
Whatever the amount was to the payroll report is the amount
that you wrote, right? And that payroll report did not have
any withholdings for people who were not your employees,
correct?
A.
I'm sorry. People that are what, not my employees? I got
confused with the last part.
Q.
The payroll report that you saw on the computer that had
payments to laborers, it did not have withholdings for laborers
who were not your employees, correct?
A.
I have no idea what the payroll report says. I -- four
years ago, I don't know what the payroll report says. It was
not --
Q.
That was not the only time you ever saw a report, a payroll
report in 2020. You've seen those reports, right?
A.
I've seen the reports, but I don't -- this is different
than our normal business. Our normal business is very
organized. It's all like computers and everything's in
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
spreadsheets, and this is just like a -- you know, a
chaos-created report by Mr. Vasilas, who just hired all these
people. And I just -- I remember the people's names, what they
did. I looked at the pictures to see if they did the work.
And they sent me the pictures, and that's it.
Most of the checks -- some of the times the checks
were prepared before I even walked into the room. So it
doesn't -- I don't know like how it was actually -- I can
visualize it, but I don't know how it was actually processed by
him. I have no idea.
Q.
You don't recall seeing any withholdings on those reports
that told you how much to pay those laborers because you were
writing the checks?
A.
Well, I don't recall -- just sitting here, I don't recall
exactly how they were -- they were just checked, so they were a
dollar amount. So I don't know what was held, what was not
held. I don't know -- I don't know anything. I just: "Here's
a person. Here's the name. Here's what they did," and if a
check was made out already, or if it wasn't. If I wrote the
check, then I signed it. But that's how it worked during the
COVID world.
Q.
All right. At HM Management, you paid wages to people for
a time, right?
A.
For a time?
Q.
Yeah. Up through 2018. Yes?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Nope. Through 2019.
Q.
Okay. And none of your other companies paid wages to W-2
employees?
A.
None of my other companies paid --
Q.
HM Management HM-UP Development Alafaya Trails --
A.
Right.
Q.
-- never paid any wages to any W-2 employee, correct?
A.
I don't know what they've done. I mean, I know how it's
set up where HM Management doesn't own any of these -- they
don't own it. So again, it's allocation. I mean, what I was
instructed by -- not I -- what I was told was the right way to
do it was allocation for each specific project, if someone
works 20 hours a week here -- and everyone gets a separate
allocation.
Q.
Mr. Sheppard, I need you to try to focus on my question.
HM-UP Development Alafaya Trails never paid wages to any W-2
employee?
A.
I have no idea how that's processed.
Q.
You --
A.
I know they paid people. I don't know how it's processed.
I've never looked at that.
Q.
You signed a tax return each and every year for HM-UP
Development Alafaya Trails, correct?
A.
Correct.
Q.
You signed those tax returns under penalty of perjury,
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
correct?
A.
Correct.
Q.
And the tax returns for HM-UP Development Alafaya Trails
never reported any wages, correct?
A.
I have zero idea how to answer that question because I'm
not an accountant. I didn't prepare the tax returns, and
there's 30 tax returns. I don't go through the tax returns. I
just -- Neal Cupersmith is there 25 years. I don't know how he
allocates where he puts people's wages. I don't even know
where to look. So I can't answer that question. I can say I
signed the tax return, but I can't tell you what's in it.
Q.
So you never noticed? You never noticed that it did not
report any wages?
A.
I never looked through a tax return because I didn't even
think about looking at the tax return. I relied on an
accountant for 25 years to prepare a tax return however he sees
fit. I don't know. That's not my -- I didn't get involved
with that.
Q.
Same for CJUF III Flagler, the company that owned the
Fontainebleau shopping center in Miami, never reported any
wages, correct?
A.
I have no idea how they reported -- well, when you say:
"Wages," I don't know what they reported, how they paid people.
I'm not sure how they classified people, but I know there was
workers. There was workers there. There was workers -- I
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
don't know how they prepare a tax return. I'm not qualified
for that. I rely on others to do that.
Q.
All right. So you have paid a lot of laborers over the
years, right, contractors, engineers, electricians, painters,
right?
A.
I've paid people over the years, yes.
Q.
They invoice you, right? So you could pay them, they send
you an invoice?
A.
Well, you got to -- that's a very blanket statement. Do
you mean individual workers that are employees of ours that are
working directly for us or you're talking about -- the people
that invoice are third-party contractors that actually have
their own workers. Those people, they invoice us. They give
us a contract. But workers that are working directly for us at
our direction, they don't invoice us from my recollection.
Q.
Right. Right. So the ones who were not your employees,
they invoice you, and you pay them, right? Whenever you can, I
suppose, you pay them. Yes?
A.
I don't understand your question. Whenever you can --
Q.
Well, the contractors who are not your employees, they
invoice you and you pay them. You pay that invoice, right?
A.
The third-party contractors that provide invoices, we pay,
correct. Assuming that they've done what they're supposed to
do. I mean, if they've done their job properly and upon
progression.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
The employees, as you just mentioned, when they are
employees, they don't invoice you. It's you, the employer's
responsibility to pay them periodically, however it's set up,
every week, every other week, right?
A.
However it is they get paid, yes.
Q.
And you withhold their taxes every week or every other
week?
A.
I have no idea how they -- again, I do not -- I'm not going
to guess at how Jeanette or anyone prior to her -- how they --
how they do their job. I just don't do that job --
Q.
You don't do that job, and you know that there's a
withholding and that that has to go to the IRS every month,
every so often, correct?
A.
I do not -- I do not -- I know -- I explained what I know.
That's what I know. I mean, I don't -- I'm not -- I don't --
I'm not ever involved with that. I'm not --
Q.
And are you saying, Mr. Sheppard, that you -- before this
case came along, and before you were arrested, you had never
heard of or seen Forms 941 and the Forms 940? That's something
you had never seen before?
A.
I have never looked at a 940 or 941 with regards to like --
sat there and looked at it or understood it, because I never
was involved with the accounting side of the business or the
administration side of the business. I am a -- I'm on the
development side. That side. That's what I do. They do their
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
side. I do mine. There's a wall.
So to answer your question, no, I do not get involved
or never looked at these 940 or 41s to analyze it prior to the
day when I received the information after I got arrested.
Q.
And is that the case for the Florida Department of Revenue
RT-6s? You never heard of it or you've never seen it before --
A.
I never heard what an RT-6 is. I don't know what that is.
I know there's some kind of reporting. Every government agency
has some kind of reporting, whether it's called RT-6. I
wouldn't know what that would mean.
I know -- an AIA contract, I know what that means.
But RT-6s, that I've learned now, and these other things, 941,
actual numbers and terminologies, what they actually do and
are, I would in no way before that -- I never dealt with that.
MS. JIMENEZ: Can we just show Exhibit 16-1, please.
Could we go to the next page. Is there a next page?
No?
For the jury.
Can we just go down to 20-18, please -- 20-17, or
20-18.
Okay. 20-17.
Okay. Go to the next screen.
BY MS. JIMENEZ:
Q.
So did you know that your company -- did you know before
this case -- did you know before you were arrested that your
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
company HM Management, say, in 2017, in 2018, had three
employees? Did you know this?
A.
For which company, HM Management?
Q.
HM Management. Yes.
A.
I don't know. We had more than three employees. But
that's what I'm looking at, three employees.
Q.
So you're saying before this case you did not know that
your company HM Management had three employees in 2017 and
2018?
A.
I never thought about what they had or didn't have in 2017,
prior to this case -- or even during this case I didn't even
know about 2017. Never looked that far back.
Q.
You never saw any report that Jeanette Gonzalez submitted
to the State of Florida?
A.
I have never looked at a report from -- I don't want to say
never. I've never -- never. I have not looked at reports that
she's filed or -- even if I looked at it, I wouldn't even
understand what it is anyways. But I don't recall ever just
like saying -- or looking at whatever the report is.
Q.
Okay.
MS. JIMENEZ: Can we go to 2018.
BY MS. JIMENEZ:
Q.
Same 2018 -- 2018, you had three employees at HM
Management. Did you know that before this case?
A.
Three employees?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
Yeah.
A.
I mean, that's what it says. I know there's more. So I
don't know why there's only three here. But I know there's
more employees than that, that's for sure. So I'm not sure
what this is.
Q.
So Jeanette Gonzalez is someone -- you're her boss, right?
I think you've told us you're her boss, right?
A.
She -- she reports to me, yes. Correct.
Q.
And Vanessa Gonzalez, you are her boss, right?
A.
No.
Q.
Well, no longer because she's no longer working for you.
But in 2018, 2019, 2020, you were her boss, right?
A.
No.
Q.
You didn't have the authority to fire her?
A.
You asked me if I was her boss. Jeff -- she worked -- on
the development side, she was with Jeff Graff, and she worked
with him. And then, on the other side of the business, she was
with Jeanette Gonzalez, which is her mother. So she had dual
roles.
Q.
My question, Mr. Sheppard, is not who was her direct
supervisor. My question to you is: Who was her ultimate boss?
You were her ultimate boss, correct? You hired her?
A.
If you want to classify it as a boss. I mean, I'm a
managing member of a company. I mean, I'm not her boss. To be
able to -- when I think about a boss, someone who I talk to on
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
a daily basis and I report to.
Q.
You paid her salary, correct?
A.
The company pays her salary.
Q.
Your company pays her salary?
A.
Multiple companies pay her salary. There's a -- there's
money that comes from -- again, the same thing. Whatever
projects are in that particular year, whatever they are working
on, it gets allocated.
Q.
From your companies?
A.
From my companies that I manage, correct. Exactly.
Allocation. So when you say --
Q.
And Ms. Elva Baluarte, who was at your home, was also paid
by you through your companies?
A.
She's paid through -- that, she's paid through HM
Management, Elva.
MS. JIMENEZ: Can we show 12-2 and 12-3.
BY MS. JIMENEZ:
Q.
2018, Mr. Sheppard, as you know, the last year your company
submitted Forms 941 and Forms 940 to the IRS, on the 941, which
is on Exhibit 12, the right side -- 12-1 -- 12-2 -- 12-3. I'm
sorry. 12-3 -- it reports that -- three wage employees for
your company, HM Management and Development. But your
testimony is that you would have never seen this kind of
document. Is that your testimony?
A.
When you say I would have never seen it, I've never put my
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
eyes on the document to look at it, ever looked at a document
like this. I don't get involved with these type of documents'
preparation, no.
Q.
All right. Then they have a signature?
MS. JIMENEZ: Can we go to the signature page for both
of them, please.
BY MS. JIMENEZ:
Q.
So the signature page --
MS. JIMENEZ: Go to -- the left one also has the
signature. That is -- stop. Stop. Just at the signature page
for both documents.
I'm sorry. 12-2 as well.
I can't see.
BY MS. JIMENEZ:
Q.
So it's got a signature which purports to be your
signature, and that is -- is that Jeanette Gonzalez signing on
your behalf?
A.
I don't know who signed it. I'm not sure. I mean, I'm not
sure who actually signed it. Doesn't really look like my
signature, but --
Q.
Is that Jeanette Gonzalez signing on your behalf?
A.
I can't tell whose signature -- or there's a stamp in
the -- a stamp, a signature, or -- I mean, I don't know. I
can't tell who would sign it. But yeah, it's a --
Q.
And on the right side of the signature, Mr. Sheppard, it
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
has your name as a managing member, correct?
A.
It does.
Q.
So did you authorize Jeanette Gonzalez to file these tax
documents with the IRS?
A.
If they were filed, then she would have authority. I
wouldn't have -- if she prepared it, I wouldn't have a problem.
I rely on her to prepare it properly -- or whoever prepared it,
I relied on it. And if she signed it, then it's in the course
of ordinary business. Then I wouldn't have a problem with it.
Q.
You don't have a problem with it because you authorized her
to do it, correct?
A.
Respectfully, I didn't say -- respectfully, I didn't say
that. You asked me a question. I'm trying to answer.
Q.
Okay.
A.
Okay. So when you say: "Authorize" -- again, I don't
review these forms or look at these forms to the best of my
knowledge. Now, if someone put a stack of 20 things in front
of me, could I sign something? Yes. But I'm not going to look
at something in accounting. Like, I've been doing this for 20
years --
Q.
I just want you to answer my question, and then you can
explain as you wish. My question to you is: These are
documents that get filed with the IRS for wage employees,
correct -- or you're aware of that now, correct?
A.
I'm aware that this is the employer's federal tax return --
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
employer's federal tax return to the federal government.
That's what I know.
Q.
So Mr. Sheppard, I just -- so my next question is -- and
I'd like you to answer, and then you can explain if you think
you need to explain. My question is: You authorized Jeanette
Gonzalez -- every quarter of every year that these documents
were submitted to the IRS, you authorized her to submit them to
the IRS on your behalf, on your companies' behalf?
MR. ETRA: Time frame, years, Your Honor.
MS. JIMENEZ: 2018.
THE COURT: All right.
THE WITNESS: I guess when you say the word
"authorize," the answer is: She's authorized to do her duties,
whatever those duties are. And if that includes that, yes,
that would be authorized to do it.
Did I know this particular -- what you're showing me
on 2/4/19? She didn't call me and ask me for authorization.
She just does her job, like she's supposed to do. Do I know
that she's signing that? I didn't know she was signing it.
But if she's signing I'm not going to be mad if it was correct,
obviously. But I didn't authorize like: "Hey, you're allowed
to sign this" --
BY MS. JIMENEZ:
Q.
All right. And you know that filing these forms --
withholding employee wages and filing these forms implicates
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Miami, Florida 33128
(305) 523-5698
tax liabilities for HM Management. HM Management owes the IRS
money when you have wage employees that you file taxes for.
A.
Again, I don't know what these forms actually -- you know,
the details of them.
Q.
I'm sorry. So you don't know. You don't know that HM
Management has tax responsibilities that relate to filing these
forms?
A.
These particular forms, I don't understand -- I know that
HM Management has tax responsibilities. Everyone has tax
responsibilities. But for this particular form, how they work
and how that operates as far as tax, that I'm not -- don't
understand that process. I know HM Management and everyone
else in America has tax responsibilities. That, I do know.
But I don't know how it works, like --
Q.
And HM Management has tax responsibilities as it relates to
wage employees?
A.
Again, I think I've already said this. Employees --
Q.
My question --
A.
There's tax responsibilities. Yes, there's tax
responsibilities for employees. How that's, you know --
Q.
Mr. Sheppard, please answer my question. And then if you
need to explain, you can explain. My question is: You know
that HM Management has tax responsibilities to the IRS relating
to wage employees?
MR. ETRA: Asked and answered, Your Honor.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: He didn't answer.
BY MS. JIMENEZ:
Q.
Yes or no, do you know?
THE COURT: Overruled.
THE WITNESS: Again, are you saying --
BY MS. JIMENEZ:
Q.
No. Sorry --
A.
No. Hold on a second. Are you saying today or like back
in 2019? Because I'm more educated now because of sitting
here. But are you talking about this particular juncture when
you're showing me the document or today?
Q.
In 2018, in 2019, in 2020, did you know that HM Management
had tax responsibilities to the IRS relating to wage employees?
A.
That's correct. I know that they have responsibility to
the IRS in some shape or form -- whatever that may be, to the
IRS. That's what I do know. What that is, I don't know, but I
know there's always responsibility.
MS. JIMENEZ: Could we show 12-2 and 12-3, please.
No. That's what we have.
12-5 and 12-6.
BY MS. JIMENEZ:
Q.
Do you know, Mr. Sheppard, that in 2019 HM Management and
Development no longer paid the IRS any taxes for its three wage
employees? In 2019, HM Management no longer paid the IRS taxes
for its three wage employees. You know that, correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I don't know that. That's according to who? Like, why --
I don't believe that's an accurate statement, so I'm not --
when you say that, how is that -- according to who?
Q.
Mr. Sheppard, is that no, you're not aware?
A.
I'm aware that in 2019 -- to be clear, in 2019, that it's
my understanding that W-2 workers were paid and reported and
paid to the IRS in 2019. That's what I understand. You're
saying not, but I do understand it was done.
Q.
Let me ask you, sir, if you could just listen to my
question. There were withholdings of your three wage employees
in 2019, correct? Your company withheld part of their pay,
correct?
A.
I have no idea what the company did. I didn't do it.
Q.
So you don't know. And then my question, though,
specifically is: The payment from HM Management to the IRS for
the wage employee taxes, that stopped in 2019. In other words,
you no longer paid that in 2019, correct? If you know, yes or
no?
A.
I do not know the answer to that question.
Q.
So you're saying that it was not -- are you saying it was
not your decision in 2019 to not pay the IRS taxes for the wage
withholdings that were taking place of your three HM Management
employees?
MR. ETRA: Objection. He said he doesn't know
anything about the topic.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
Someone else at your company made the decision to not pay
payroll taxes to the IRS in 2019?
MR. ETRA: Same objection. Personal knowledge.
THE COURT: The objection is sustained.
BY MS. JIMENEZ:
Q.
Mr. Sheppard, you don't know why it is -- you don't know
why it is that in 2019 your company did not pay employee
taxes -- payroll taxes to the IRS?
A.
I don't know if they did or did not, but I was told that
they did pay the 2019 taxes as you just set forth. It's my
understanding that was paid, filed, and confirmed with the IRS.
That's what I know.
Q.
You were told that they did. Who told you this?
A.
Jeanette Gonzalez told me and sent me to the storage. Like
I talked about earlier, I went to the storage to go look and
see exactly what she was talking about. After I heard some
testimony -- the IRS guy was here saying it wasn't paid. I
said: "What do you mean it wasn't paid?" So I said:
"Jeanette, what do you mean," and she said: "I paid it. It's
in storage."
MS. JIMENEZ: Okay. Objection. This is hearsay.
MS. WEINTRAUB: Objection, Judge. She's cutting him
off and not letting him finish.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Has the witness completed his answer?
THE WITNESS: No, Your Honor.
THE COURT: All right. You may continue.
THE WITNESS: So when I heard it in court, like
everyone else heard it, I was puzzled. I said: "So you're
telling me that the company didn't pay any payroll taxes," and
she said: "Of course we did. Go to the file. I can't find
the file, but it's in storage."
I went to the storage, and I sat there for hours going
through boxes after boxes, and I found it because I was just
like stunned. I went there, and I found it, and I said:
"Here. What does this mean?" Okay, to my -- "What does this
mean," to my legal counsel, and he said: "You paid it. You
did it, and it's confirmed by the IRS."
And that's when I say -- when you tell me I didn't,
no, I don't take care of it. I don't even know how it gets
paid or what gets paid. But I was shocked that it wasn't paid.
That's why I looked into it when we were all sitting here
together. That's what I did.
And there was some like email confirming from the IRS
saying yes, it was paid. So this says -- this document here,
Exhibit 12-5, says it wasn't paid and another IRS agent says it
was paid. I don't know. But of course I'm going to pay the
taxes. That's --
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. JIMENEZ:
Q.
What you showed this jury was W-2s, correct?
A.
I don't know what I showed them. I showed them what was
given by the IRS that shows a specific conversation on the
computer -- on the chat thing, that Jeanette Gonzalez herself
showed that it was paid and they confirmed it was paid. In
January 2020 it said: "Your 2019's paid. We received it.
Everything's" -- I'm paraphrasing, but everything is completed
for 2019 for your company, and I was like relieved. I was
like: "Oh, thank God. I thought it wasn't paid." That's all.
Q.
So all those penalties that the IRS imposed on your company
in 2019, those went by the wayside because nobody realized that
they -- what, that they weren't actually paying what they
thought they were paying?
A.
I don't even know what you're talking -- I'm sorry. I'm
not being -- what you're saying -- all I'm telling you is -- I
don't know what you're talking about, penalties. I don't know.
I don't understand what you mean by penalties. All I know is I
saw something that was paid from the IRS agent directly. And
this IRS agent, this other guy, says: "Oh. It wasn't
certified for this case. It wasn't paid." But an IRS person
in 2020, in January, said it was. I don't know. It's very
confusing to me.
Q.
So your testimony is that -- do you decide whether Maria
Ataca is a W-2 employee or a contractor, an independent
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
contractor?
A.
I don't decide how someone's classified. Whoever they're
hired by or work for directly, that's who decides how they're
doing it. I don't -- I don't decide.
Q.
Elva Baluarte, who works in your home, has always worked in
your home, you don't decide if she's a W-2 or a 1099?
A.
I don't know how she was designated, you know, years and
years and years ago. She gets a gross pay. How it's done, I
don't know. I typically just pay the account, the payroll
account, whether it's ADP or to the company. That's how it
usually works. I don't know how she's classified.
Q.
You didn't have any involvement when she was hired, and you
have no idea whether she's paid as a W-2 or a 1099? You have
no idea?
A.
(No verbal response.)
Q.
Right? You have no idea?
A.
Can I just think for a second, please. Thank you so much.
MR. ETRA: Could we have a time frame whether he knew
then or knows after the evidence?
THE COURT: Is the question do you have any idea --
MS. JIMENEZ: Before he was arrested.
THE COURT: All right, then.
THE WITNESS: She's been working with me for 25 years.
I can't tell you how originally she started through different
companies. But she's been working for me for over 25 years. I
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
don't know how she was started, what she started with.
Clearly, 25 years ago is a lot different from today. So I
don't recall exactly how she was paid as far as a designation
for an employee.
BY MS. JIMENEZ:
Q.
Same as Jeff Graff. You had no involvement whether he was
a W-2 and then became a 1099? You have no idea about that
either?
A.
Well, I heard him testify. So -- and I've known him for 40
years, and --
Q.
Before you were arrested, Mr. Sheppard, you had no idea if
he was a W-2 or a 1099?
A.
Before now?
Q.
Yes. Before you were arrested.
A.
I never -- I never thought about it. But then when he
testified, then I refreshed my recollection because he
changed -- he was always a W-2 employee. Then he wanted to be
a 1099 employee. And as I testified three weeks ago, he's a
CPA, an accountant. So if that's what you want to do -- that's
in like 2009, when the financial crisis with Lehman happened,
and I said: "Sure. Whatever you want to do." And I testified
against -- for that, and that's what happened.
Q.
Okay.
MS. JIMENEZ: Can you put that down.
Can we show 50-5, please.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Can you highlight the first -- can you bring out the
first paragraph, since I can't see very well.
BY MS. JIMENEZ:
Q.
So this was --
MS. JIMENEZ: I'm sorry. Can we just go back and show
the date of this letter.
BY MS. JIMENEZ:
Q.
This is the letter after the -- the visa application
involving Mr. Graff, March 8th, 2019.
MS. JIMENEZ: Now can you show the first paragraph.
BY MS. JIMENEZ:
Q.
March 8th, 2019, Mr. Sheppard, was before this case, right?
A.
In 2018, yeah.
Q.
March 8th, 2019, was before this case?
A.
I'm sorry. I'm sorry. Yes, ma'am.
Q.
And with respect to HM Management, you indicated -- you
said: "From the first conversation, it was always represented
a hundred percent the fact that Eric Sheppard is a 99 percent
owner-member of HM Management. Eric Sheppard has complete and
unwavering authority to make all decisions and bind the
company," right? You wrote that, Mr. Sheppard?
A.
I see that, yes. I see that, yes.
Q.
Okay.
MS. JIMENEZ: Can we go to the next paragraph.
Let's go to the next paragraph.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. JIMENEZ:
Q.
All right. Paragraph 3, 2019, before this case, it was
clear to you that Jeff Graff was a paid consultant, right? And
you said Mr. Graff individually was not and is not an employee
of the company?
MR. ETRA: Compound question, Your Honor.
THE COURT: The objection is sustained. Let's break
it down, please.
BY MS. JIMENEZ:
Q.
March 8th, 2019, before this case, it was clear to you that
Mr. Graff was not an employee of your company, HM Management,
correct?
A.
That's what this says. If you want me to explain, I'll be
more than happy to explain to you.
Q.
I don't want you to explain right now.
A.
Okay.
Q.
I just want you to answer my question, and then you can
explain. You understood Mr. Graff was not an employee of your
company. Yes?
A.
This is what this document is suggesting to the law firm --
my law firm that I used. This is what was suggested, but was
also provided and told to me that this needs -- it has to say
this. According to Mr. Graff, it has to say that. He was
standing next to me helping me with this version because I
would never write -- quote Jeff -- I don't know. Quote Jeff.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
He was upset, and he was my dear friend my whole life,
so I was accommodating what he wanted. He was my dear friend
and he was upset. I was upset, too, actually. And I said:
"Whatever you need me to write, I will write to make sure that
you're comfortable in what you feel that should be," and --
okay. And that's where this paragraph came from. And if I
hadn't known him for 40 years, I wouldn't have done it.
MS. JIMENEZ: Can we take this down for a moment.
Can you pull up 50-5 please.
THE COURT: And Ms. Jimenez, just let me know when it
might be a good time for the jurors to take a 10-minute recess.
MS. JIMENEZ: Let me just show this one email, Your
Honor.
THE COURT: Certainly.
MS. JIMENEZ: I'm sorry. 50-4.
BY MS. JIMENEZ:
Q.
So you're saying that Mr. Graff had you put those words on
the page and those were not your words, right?
A.
You want me to look at the email or -- I'm sorry.
Q.
Well, the letter I was just showing you, you said that
those were Jeff Graff's words, not your words?
A.
I said portions of that particular letter were -- he was
adamant, which I had no problem because of our relationship. I
had no problem in making sure that -- I wanted him to write
what he did for his company Graffco.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
And the portion that you're talking about is his statement
that he was a consultant and was not an employee. That's the
portion that he provided to you because you were unaware?
A.
No. Word for word, that's what he told me. Because, to
me, he's an employee of multiple companies because he's working
on multiple projects, and he has an office there, and all the
stuff that an employee does. And he said: "Graffco has to be
called a consultant, and that's the way it works, and I need
you to write that for me." And I said: "I didn't even think
about it, but okay."
But he has an office there, he has a car, insurance,
everything a normal employee has. But that's the way he wanted
me to write it. And in hindsight, maybe I shouldn't have
written it. But I was so freaked out about the whole thing
that I was like: "Okay," and I wrote it. And he asked me to
do it and I did it. And whether it's right or wrong, I don't
know. But that's what I did because of our relationship for
that many years.
MS. JIMENEZ: We can take a break, Your Honor.
THE COURT: All right. Ladies and Gentlemen, let's
take a 10-minute recess.
COURT SECURITY OFFICER: All rise.
(Jury not present, 3:02 p.m.)
THE COURT: All right. Please sit down for just a
moment.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
In fairness to this jury, and certainly with regard to
our schedule, this jury believes that tomorrow is the last day
of this trial. So I do need to give the jury a clear
understanding as to what their commitment will be, and then we
obviously need to see whether they're even available.
So on behalf of the Government?
MS. JIMENEZ: Well, Your Honor, I mean, I just get
these filibuster-type answers to my questions. So I --
THE COURT: And with regard to the time that you
believe that this jury is going to be in this courtroom for
this trial?
MS. JIMENEZ: I don't know how many other witnesses
the Defense has to call. I believe Mr. Sheppard's testimony
surely will last the rest of today.
THE COURT: You believe your cross-examination will
take an additional two hours?
MS. JIMENEZ: I do.
THE COURT: All right. With regard to your redirect,
how long are we going to need with regard to the Defendant?
MR. ETRA: At this point, Your Honor, my redirect is
fairly short. But I don't know how much more --
THE COURT: All right. With regard to Kallman, the
other witnesses, if you can give me an idea.
MR. ETRA: Your Honor, Kallman's direct is 30, 40
minutes. We have two workers whose direct should be --
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: Short. Less than 15 minutes.
MR. ETRA: -- 15 minutes or so, say, for direct.
And we have Glenn Sheppard.
MS. WEINTRAUB: His brother is 20 minutes, and we have
Bouchner.
MR. ETRA: Mr. Bouchner is a few hours. Mr. Bouchner
is probably about two hours, and then the other expert is a
five-minute --
THE COURT: So realistically, how much more time do we
need from this jury?
MR. ETRA: I don't know that we would -- if we start
with new witnesses tomorrow, I don't know that we'll finish
tomorrow. We might. It's possible, but I don't want to
over -- I don't want to promise.
MS. WEINTRAUB: I think we finish tomorrow. If we
start new tomorrow, I think we finish tomorrow. And then, you
know, I think that we need a full day for closings and
instructions. But my fear is then, you know, excusing the
jury -- especially with these breaks, excusing the jury at that
point, you know, after closings and instructions, and they're
not going to be able to deliberate, you know, is problematic.
MS. JIMENEZ: Do we know what their availability is
Thursday and Friday?
THE COURT: We do not.
MS. MARTINEZ: I understood one had a doctor's
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
appointment.
THE COURT: Do you know for Thursday and Friday?
COURTROOM DEPUTY: Thursday.
THE COURT: Okay. Can you let us know. Liz, can you
get to a microphone because I'm not -- I wasn't aware of the
Thursday and Friday. So yeah, let me know.
COURTROOM DEPUTY: I can confirm again. But
Mr. Dunlop, I believe, says he has Thursday and Friday doctors'
appointments that he cannot change.
MS. JIMENEZ: Are these all-day appointments?
COURTROOM DEPUTY: I don't know. I didn't ask if it
was all day.
MS. WEINTRAUB: Judge, can I make a suggestion?
Sorry, Liz. I didn't mean to cut you off. Sorry.
COURTROOM DEPUTY: It was both days, and he said that
he cannot change them, but I can confirm again.
THE COURT: Yeah. Let's confirm the precise time
that's needed. We can always have the jury deliberate when
he's not at the doctor.
MS. WEINTRAUB: Can I ask the Court a question? No
offense, and with all due respect to Liz, I'd like to have this
on the record. You know, we have one discharged juror who did
not want to be excused, was over our objection. This is -- you
know, this is extremely problematic. And I think maybe if
he -- no offense, but I think if he hears the Court questioning
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
him, I think he might be a little more forthright and we could
narrow this down. Whereas if Liz goes in and asks, he's just
going to say: "Listen, you know, I need the afternoon for this
or the morning for that," and it's not really productive to get
where we want.
I mean, if he tells the Court he has a two o'clock
appointment, I know the Court is going to say: "Then we can
work in the morning, right?" So I just think that we'll get
something more done with the Court that way and we won't
lose --
THE COURT: Well, before I even -- whether it's
through Liz, or I can bring him into the courtroom, I need to
have a true understanding from these attorneys as to how much
more time is needed.
MS. WEINTRAUB: I think at the worst you have a day
and a quarter of testimony, and you have a full day then
because you have arguments on the Rule 29, which, you know,
we're asking for serious time on, which we believe in very
strongly. We're obviously not going to have time to do another
memorandum, and things have changed at this point. And we need
to do a charge conference.
I don't know if the Court wants to do those things
out -- you know, I mean, we're fine to do it at night or in the
morning, whenever the Court is willing to do this. But these
things take up time. And I think those two things is two
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
hours, you know, between a charge conference and the Rule 29.
And then we have closing arguments and instruction. And if
they're not going to be here Thursday and Friday, I don't want
to do closings and instructions.
THE COURT: I'm going to ask Liz if you can ask the
juror -- if it's only the one juror that we have an issue with
on Thursday and Friday -- how much time he needs to get to the
doctor and to get to the courthouse, so we know how much time
to work with. And if necessary, I'll bring him in or bring
them into the courtroom with regard to their schedule.
All right. So let's let them know we may need them
Wednesday, Thursday, and Friday.
COURTROOM DEPUTY: Okay.
MS. WEINTRAUB: Just note my objection to the deputy
clerk again speaking with the jurors, and I would ask that the
Court do it and it be on the record, please.
THE COURT: When I give the jury the schedule, then
obviously it's going to be on the record. But at this point, I
don't think it's necessary to bring all the jurors out just to
find out one juror's schedule with regard to the doctor.
MS. WEINTRAUB: Bring Mr. Dunlop out.
THE COURT: But I don't need for Mr. Dunlop to feel --
in front of the entire group of attorneys and members of the
public as to what his schedule is. So let Liz know and let's
see what it is. And then we'll see you on the other side of
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the ten minutes.
(Recess from 3:09 p.m. to 3:28 p.m.)
THE COURT: All right. Back on the record.
Let me acknowledge the Defendant.
Go ahead and have a seat for just a moment.
Liz did speak with the jurors. They do not need to
come into the courtroom because they are accommodating their
schedules and will be able to be here Wednesday, Thursday, and
Friday.
MR. ETRA: Thank you, Your Honor.
THE COURT: Okay.
MS. MARTINEZ: Thank you.
THE COURT: All right. Can we see --
MS. JIMENEZ: My cross can be longer.
THE COURT: I'm sorry?
MS. WEINTRAUB: You can keep putting them to sleep.
Wake me up when you're done.
THE COURT: Well, the parties have represented that
you anticipate that you will be done on Wednesday. So I am
advising you that we have a full day on Thursday and Friday
that we are not going to be rescheduling. So you have tomorrow
and Wednesday. You've already told the Court you have two days
for the presentation. I'll accommodate either in the morning
or in the evening with regard to any additional motions. We'll
have our charge conference, obviously.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
I've already advised that I've ruled on the proposed
instructions. I don't believe that -- given the evidence so
far, that there are additional instructions for the parties to
submit, but you certainly can. But I don't believe that we're
going to need an extended charge conference. Your objections
will be preserved if the Court does not include them in terms
of the instructions to the jury.
MS. WEINTRAUB: Judge, we will be submitting two
additional charges.
THE COURT: All right. Then I would request that
those additions be given to the Court no later than tomorrow
evening, so that I can incorporate those in the instructions.
All right. Are we ready to proceed?
MS. WEINTRAUB: Judge, I don't understand when you say
you have a full day Thursday and Friday.
THE COURT: We have a full day Thursday and Friday of
other cases.
I've asked the jury because the jury is going to need
some time for deliberation. But I've asked you in terms of
Tuesday and Wednesday. You've told me you need two more days
to try this case, but I anticipate that the jury can be
deliberating while the Court's working on other cases.
MS. WEINTRAUB: Is there any rebuttal by the
Government?
MS. JIMENEZ: There might be a brief 15-minute
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
rebuttal witness.
THE COURT: Okay. All right. Both sides ready to
continue?
We have our jurors.
COURT SECURITY OFFICER: All rise for the jury.
MS. WEINTRAUB: Judge, the prosecutor said that we
could excuse the witness that we have waiting here. So if
that's okay with the Court --
MS. JIMENEZ: Yes. I mean...
THE COURT: Do you believe you're going to take us
through the end of the day?
MS. JIMENEZ: I do.
MS. MARTINEZ: For his direct and redirect.
THE COURT: All right, then. Then of course. To that
extent, yes.
(Before the Jury, 3:31 p.m.)
THE COURT: All right. Welcome back, Ladies and
Gentlemen.
Please be seated, everyone.
And I do appreciate your patience. And we are ready
to continue.
BY MS. JIMENEZ:
Q.
Mr. Sheppard, you have a bachelor's degree in economics and
finance, correct?
A.
I have a bachelor's degree in economics with a minor in
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
finance.
MS. JIMENEZ: Can we show Government's Exhibit 12-3,
please, the second-to-last page.
BY MS. JIMENEZ:
Q.
So this is a 941 for 2018 for HM Management, the last one
filed --
MS. JIMENEZ: Can we go to this page.
BY MS. JIMENEZ:
Q.
So if you look at the top, it says: "Form Number 941
December 31, 2018, for tax period." Do you see that?
A.
Yes.
Q.
So at the bottom of the page it says: "Tax return filed."
So that's December of 2018. It was filed April of 2019, and
there was a penalty of $10,407. Do you see that at the very
bottom of the page?
A.
No, I don't see -- yes. I see the bottom of the page.
"Code 150." Is that what you're talking about?
Q.
Right. So the tax return was filed April 8th, 2019. It
was filed late and there was a penalty of $10,407. Do you see
that?
A.
I don't know what the penalty is. It says: "10,407.40."
I don't see where it says: "Penalty," but...
Q.
Oh. I'm sorry. That's what you owed at the end of the
year. And then -- I'm sorry -- the tax penalty --
MS. JIMENEZ: If we can remove that.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. JIMENEZ:
Q.
The tax penalty is in the middle of the page, as you --
your company failed to pay the 10,000 that was owed. Do you
see that?
A.
It says: "Accrued penalty," yes.
Q.
A thousand three hundred dollars in January of 2019.
A.
I see that, yes.
MR. ETRA: Your Honor, objection on 404(b) grounds.
THE COURT: The objection is noted. It's overruled.
BY MS. JIMENEZ:
Q.
And then the account balance, 14,000. Do you see that?
A.
I see that, yes.
Q.
And the --
MR. ETRA: Your Honor, may I have a continuing
objection?
THE COURT: Yes. I'll certainly grant that.
MR. ETRA: Thank you.
BY MS. JIMENEZ:
Q.
The accrued interest as of 2023 was an additional $2,000
because it remained unpaid. Do you see that, Mr. Sheppard?
A.
I see that.
Q.
So you're unaware of any of this, correct?
A.
I'm completely unaware of it.
Q.
And none of your other companies during this time period,
2018, 2019, 2020, filed any Forms 941 or Forms 940 with the IRS
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
because they had no wage employees, right?
A.
I don't know what we filed. I don't know what they filed,
except what I talked about earlier.
Q.
Right.
MS. JIMENEZ: And just so that I can clarify, if we
can pull out --
BY MS. JIMENEZ:
Q.
The 10,407 was what you owed for the fourth quarter for
that 941. So those were the employee withholdings that need to
be turned over -- in to the IRS?
A.
I don't know if they -- I don't know what this means. I'm
just telling you I see the 10,407. I don't know anything about
this or -- I don't know anything about it.
Q.
You don't know anything about it. So Jeanette Gonzalez
would have not brought this to your attention?
A.
I don't know if she would or wouldn't. But she hasn't,
according to what she's told me that -- everything was done
through 2019 is what she explained to me.
Q.
All right. Now, you paid laborers, right? Martin Joe
Beirne was a worker, a laborer for you, right?
A.
In what time period? Because he had multiple capacities of
work for me.
Q.
2019, 2020. He was a laborer? He was a contractor?
A.
He's not a contractor. He was -- he's an employee for the
company. In 2020 he was doing construction work -- he was in
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
management and labor. Like I said earlier, people had to do
multiple jobs because of COVID. So he was doing about three or
four jobs actually.
Q.
He was your contractor. He was not your employee, right?
Yes or no, if you know.
A.
He was not a contractor. No. He was not my contractor.
No.
Q.
All right. Your -- your attorneys on your behalf put in
this exhibit, Exhibit Q-36.
MS. JIMENEZ: Can we turn to the ELMO, please.
Here it is.
(Pause in proceedings.)
BY MS. JIMENEZ:
Q.
HM-UP Development Alafaya Trails for 2020, Martin Joe
Beirne, a 1099 -- a 1099 non-employee compensation. Do you see
that?
A.
I do.
Q.
You have never seen that before or had any understanding of
any of this?
MR. ETRA: Objection. Compound.
THE COURT: Sustained. Rephrase.
BY MS. JIMENEZ:
Q.
You never saw this before?
A.
Prior to seeing it the other day -- I mean, the other week,
that was the first time I've seen this particular form or this
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
specific form here.
Q.
But this is your exhibit. So you gave this to your
attorneys, Exhibit Q-36. You gave this to your lawyers to
present to this jury.
MR. ETRA: Objection, Your Honor.
THE COURT: Hold on.
THE WITNESS: Sorry.
THE COURT: The objection is sustained.
BY MS. JIMENEZ:
Q.
You gave this document to your attorneys?
MR. ETRA: Objection. Same.
THE COURT: Are you asking in the way of a question?
MS. JIMENEZ: Let me rephrase, Your Honor.
THE COURT: All right, then.
BY MS. JIMENEZ:
Q.
This is a document that your company had that you had, that
you provided in this case, correct?
MR. ETRA: Multiple -- compound question, Your Honor.
THE COURT: Let's break it down. Sustained.
BY MS. JIMENEZ:
Q.
This is a document that you provided in this case?
MR. ETRA: Objection, Your Honor. Same.
THE COURT: Overruled.
THE WITNESS: When you say: "You," if you're talking
about me, Eric Sheppard, as an individual, I did not provide
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
this document. I didn't see it until the other day. If it's
about did the company provide it through their -- with a filing
system or something of that nature, then that's -- I guess
that's how they received it. Again, I never saw it before
until that day when it was on the screens. I personally did
not give it to them. But if the company did, and that's where
they got it from, then that's where it came from.
BY MS. JIMENEZ:
Q.
Your company representative, whoever that might be on your
behalf, provided this document for this case?
A.
Sitting here, I can't tell you who actually provided it.
It's a company document.
Q.
And also the same for HM Management and Development,
Mr. Joe Beirne received non-employee compensation in 2020. Do
you see that?
A.
I'm sorry. He received what?
Q.
Non-employee compensation in 2020, a 1099.
A.
I see that this form is from a different company.
Q.
And your other company, HM Management and Development,
somebody provided that for this case.
A.
Okay.
Q.
On your behalf, for your defense, correct?
A.
Well, someone provided this document and that's all I can
tell you. I didn't provide it, because I've never seen the
document. But someone in the company records in some shape or
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
form had this document.
Q.
For you, for your defense, correct?
MR. ETRA: Objection, Your Honor.
THE COURT: The basis?
MR. ETRA: She's asking him to opine on why the
company provided documents.
THE COURT: What's the legal basis, Mr. Etra?
MR. ETRA: Personal knowledge.
THE COURT: If the witness knows. Overruled.
THE WITNESS: I have no idea why the company actually
provided this particular document, what the purpose was.
BY MS. JIMENEZ:
Q.
Carl Diaz is also a contractor for you, not an employee,
correct?
A.
That's incorrect.
Q.
He's an employee?
A.
For many, many years.
Q.
Is an employee?
A.
Yeah.
MR. ETRA: Argumentative, Your Honor.
MS. JIMENEZ: I was just trying to --
THE COURT: Sustained.
BY MS. JIMENEZ:
Q.
You've had your deposition taken before, Mr. Sheppard,
correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
I have.
Q.
In 2019, you had your deposition taken in relation to a
lawsuit brought against you by your former partner, Leon
Wildstein, correct, co-owner of CJUF and HM Six?
A.
2000 -- what year was this?
Q.
Well, the lawsuit was brought in 2018 against you, correct?
A.
Against the company and against me, yes, as the manager.
MS. WEINTRAUB: Could we have page and line, counsel?
BY MS. JIMENEZ:
Q.
And you had your deposition taken over multiple days,
correct?
A.
I don't recall how long the deposition was.
Q.
The deposition was -- the deposition was on February 25th,
2019 and February 26th, 2019. Do you recall?
A.
I remember a deposition. I don't know the dates or time or
anything of that nature.
Q.
Your deposition was taken before you were arrested in this
case, right?
A.
Correct.
Q.
And when you were deposed in that case, you gave testimony
under oath, correct?
A.
Correct.
Q.
And that was before you had this PPP problem, correct?
A.
That was before the allegations were made against me.
MS. JIMENEZ: If we can go to Exhibit 79-1, please.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
First page of the deposition, February 25th, 2019.
MR. ETRA: Could I just ask counsel a question, Your
Honor?
THE COURT: Certainly.
MR. ETRA: May I, Your Honor?
THE COURT: Yes.
MR. ETRA: Thank you, Your Honor.
BY MS. JIMENEZ:
Q.
So the next page here, it's Page 179 of the --
MR. ETRA: Your Honor, I don't think this should be on
the -- it's not in evidence, Your Honor. It should not be on
the screen for the jury.
THE COURT: Yes. It should not be on the screen.
MS. JIMENEZ: So I should say these are statements of
the Defendant, and I would like to move it in, Exhibit 79-1.
It's the statement of a party opponent.
MR. ETRA: Objection --
(Court reporter interruption.)
THE COURT: Yeah. If you'll -- the microphone may not
be working.
MR. ETRA: I apologize. She has to lay a predicate
for relevance and why.
THE COURT: That is correct. Sustained.
BY MS. JIMENEZ:
Q.
All right. So at that deposition were you asked whether
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Jeff Graff was employed by you -- or I should say you were
asked at that deposition whether Jeff Graff was employed by
you, correct?
A.
I don't know what I was asked. That was a lot of years
ago.
Q.
All right. So Page 179 of the deposition, Line 7, you were
asked: "Who is Jeff Graff employed by, if you know?"
And you gave the answer: "HM Management, you know,
from a consultant basis, not from a -- you know, he's not an
employee. He is on a consultant basis."
You gave that answer to that question, correct?
A.
Correct -- well, I mean, I'm not saying correct. If you're
telling me that's what it says, I'm relying on what you're
telling me. I don't see it. So if that's what it says, that's
what the answer was.
MS. JIMENEZ: I would like to move it in, Your Honor.
I can show it to him and I can show it to the jury too.
MR. ETRA: Well, Your Honor, she can show it to him
without -- I apologize, Your Honor. You can show it to him and
develop before it go goes to the jury.
THE COURT: Yes. And he has testified with regard to
the exhibit. Let's show the exhibit. Mr. Sheppard has asked
to see it.
MS. JIMENEZ: Well, we could show it and not display
it to the jury.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Yes, that is correct.
Can we put that on the screen.
Thank you.
MS. JIMENEZ: Go to the next page.
BY MS. JIMENEZ:
Q.
So on Page 179, Line 7, do you see you're asked: "Who is
Jeff Graff employed by, if you know?" Do you see that?
A.
I see that.
Q.
And you gave the answer: "HM Management, you know, from a
consultant basis, not from a -- you know, he's not an employee.
He's on a consultant basis." Do you see that?
A.
Give me a second to read it.
MS. MARTINEZ: Excuse me, Your Honor. I think counsel
has the microphone on. Can you turn off your microphone?
She's just -- I hear her.
THE COURT: If we could turn off the microphone,
unless you're speaking directly to the Court.
THE WITNESS: You want me to just read the first --
you want me to read the first paragraph of the answer or both
paragraphs of the answer?
BY MS. JIMENEZ:
Q.
No. I just want you to answer, Mr. Sheppard. Did you say
that in response to the question who was Jeff Graff employed
by?
A.
It looks like I answered. This is a document that was
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
taken and that was the answer that I gave at that time, yes.
Q.
All right. And then you were asked about the workers at
CJUF Flagler, the tile workers at CJUF Flagler. And you were
asked --
MS. JIMENEZ: If we can go to Page 229.
Actually, if we can back up. I'd like to show Exhibit
79-1, Page 179, to the jury.
MR. ETRA: Your Honor --
MS. WEINTRAUB: Judge, we need a sidebar.
MR. ETRA: Can we have a sidebar? It's not related to
anything that is evident from the questioning. It's an issue
we raised in the motion in limine that I thought I had resolved
with Ms. Jimenez, but now --
THE COURT: All right. Come on forward.
(At sidebar on the record.)
MR. ETRA: I'd asked counsel about Ms. Ahumada, who is
an issue we raised in a motion in limine with respect to
personal infidelities. And I was told -- we were told it
wouldn't come up unless we opened the door.
MS. WEINTRAUB: And we just asked her --
MR. ETRA: That's why I asked for a break because I
saw the name there.
MS. JIMENEZ: I am not asking about --
THE COURT: But I think it's on the screen. That's
the problem.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. WEINTRAUB: That's why he asked you.
MR. ETRA: Look. Question --
MS. JIMENEZ: Okay. I can -- we can redact that. I
mean, I don't need to ask --
THE COURT: Okay. Isn't that why Mr. Etra came up to
talk to you?
MR. ETRA: Yeah. I asked if she was going to --
MS. JIMENEZ: And I said I'm not going to get into it.
THE COURT: All right. Let's make sure it's not on
the screen. Is that the only issue?
MS. JIMENEZ: So let me -- I can pull down the page so
that it's cut off. I didn't even realize that was on the page.
MS. WEINTRAUB: As long as we're here, a deposition
doesn't get to go into evidence, and -- excuse me -- and it's
totally improper impeachment, what she's been doing all along.
The Court is well aware of what proper impeachment is.
THE COURT: A prior inconsistent statement -- the
statement itself is certainly admissible, but the deposition
going into evidence, I agree with Ms. Weintraub.
MS. WEINTRAUB: And the other thing -- excuse me.
Excuse me. Let me finish.
MS. JIMENEZ: Let's just finish this ruling. If I can
respond.
MS. WEINTRAUB: The other thing is, is that these
questions -- to impeach him, it should be: "Did you" -- or ask
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the question first. Not: "You testified before that da, da,
da, da, da, da." That's not the way you impeach a witness, and
that's what they're doing.
THE COURT: All right. Ms. Jimenez?
MS. JIMENEZ: Your Honor -- Your Honor, the prior
inconsistent statement rule has to do with witnesses, not with
a party opponent. The party opponent -- this comes in as
substantive evidence. It is an exception to the prior -- I
mean, for a witness I have to set it up: "Did you say this?
Did you" -- you know, and then based on the response, I can
bring that in or discuss it.
With respect to a party opponent, specifically, it is
an admission or a statement of the Defendant, of the party
opponent. It comes in as substantive evidence. I don't even
have to set it up as a prior inconsistent statement. It's Rule
801(b)(2).
THE COURT: Okay. With regard to that one statement
that you want to admit into evidence, all of the other items
need to be redacted. So you're just seeking to introduce that
portion of the deposition.
MS. WEINTRAUB: Judge, it hasn't properly been set up.
She's right. It has to have been set up. What she is doing is
saving -- excuse me.
MS. JIMENEZ: Go ahead. Finish.
MS. WEINTRAUB: What she has done is say: "You said
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
X, Y, and Z, and that's not true," and now wants to introduce
it as substantive evidence he was impeached? Are you kidding
me?
THE COURT: Well, it's a statement of a party
opponent, which would be different than an inconsistent
statement by a witness.
MS. WEINTRAUB: Then introduce the whole thing. It's
out of context.
MS. JIMENEZ: Well, we can introduce the whole
deposition, if you want.
MS. WEINTRAUB: It's out of context.
THE COURT: Okay. Hold on. Hold on. If it's out of
context, then the rule allows you to read something into
evidence that would give it context. But that's not what
you're asking. You're asking the Court --
MS. WEINTRAUB: It's not an inconsistent statement.
That's my point.
THE COURT: It's a statement. It's a statement made
by the Defendant, and that's --
MS. WEINTRAUB: It's not inconsistent.
THE COURT: But it doesn't have to be one, and I
agree --
MS. WEINTRAUB: Unless it's recently fabricated, it
doesn't get to go into evidence. Only a consistent statement
that is recently fabricated gets into evidence.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MS. JIMENEZ: Of a witness. Of a witness.
THE COURT: It's a statement of a party opponent,
which makes it distinguishable from a -- okay. This is a
statement from the Defendant. You can certainly introduce the
actual statement, but my concern is that it includes other
statements that I understood the parties had agreed should not
go into evidence. So let's clean that up, and we'll clean that
up outside the presence of the jury.
With regard to showing something on the screen, you
just need to cover up those items. All right?
MS. WEINTRAUB: Judge, the other thing is, is with
regard to this way this impeachment is -- these questions are
going, it's totally improper. And I'd like the prosecutor to
be instructed not to continue or ask another impeachment
question that way. Let her ask the question. Let him give an
answer. And then if it's inconsistent, then she can do
something about it and read it. "On such and such a date you
were asked the following question and gave the following
answer." Do I have to go through this?
MS. JIMENEZ: Your Honor, I don't want to have to keep
saying this, but she's arguing about a different rule. This is
a party opponent. I don't even have to set it up as an
inconsistent statement. I do not. I could have admitted this
statement in my case in chief. This is a statement of a party
opponent.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: Okay. I agree with the Government that
this is different than an inconsistent statement of a witness.
This is the Defendant. And as the Defendant, the statement can
come in.
All right. Let's continue.
(End of discussion at sidebar.)
MS. JIMENEZ: All right. I think that page -- are you
able to scroll?
Can we show Page 179 not to the jury momentarily,
please, Exhibit 79-1.
Can you bring out the portion?
MS. MARTINEZ: The jury is not seeing this.
MS. JIMENEZ: Go to Page 179. If you can bring out
Line 7 through Line 11, please.
All right. So that could be displayed to the jury.
If we can show the jury this, please.
BY MS. JIMENEZ:
Q.
All right. Now, let me ask you about --
MS. JIMENEZ: If we could take that down, and then the
next page, 229, for the witness only -- oh, the jury hadn't
seen it?
They did. Okay.
BY MS. JIMENEZ:
Q.
All right. You were asked in that same deposition,
Mr. Sheppard, about the tile work at CJUF Flagler. And you
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
were asked whether those individuals performing that work --
whether they were 1099s or not. And do you recall that
testimony?
A.
I do not.
Q.
All right.
MS. JIMENEZ: If we can show the witness Page 229 of
Exhibit 79-1.
BY MS. JIMENEZ:
Q.
So in that deposition, in Line 7, you're asked: "Where are
the 1099s for all these people?" Your answer was: "I don't
know."
And then, down to Line 17, you were asked -- or
rather, Line 14 you were asked: "So where are the 1099s?" And
Line 17 you're asked: "Why haven't they been produced?" Do
you see that? Do you see those questions?
A.
I do.
Q.
And then you gave the answer: "Why haven't they been
produced? I will ask Jeanette. When I get to the office, I
will find out where the 1099s are. I don't know why they
haven't been produced, but everyone gets a 1099." Do you see
that, sir?
A.
I do.
Q.
All right. And that is with respect to all of these
individuals who were doing tile work for CJUF, correct?
A.
I have to read it now again, because that's a totally
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
different question. We were just talking about 1099s, not
anything else. So let me read this again, if you don't mind.
(Pause in proceedings.)
THE WITNESS: Okay. I read it. Ask your question
again.
BY MS. JIMENEZ:
Q.
I'm sorry?
A.
If you can please ask your question again after I read it.
Go ahead.
Q.
All right. You're referring to the 1099s were the people
who were doing tile work for CJUF, correct?
A.
Well, for the company, the person doing -- the company
doing the tile work's owner is Mr. Zimmerman. The actual --
his -- employees of them is what I believe this is referring
to. It's a third-party company. It's not part of my company,
CJUF, or of HM Management, or any other company. So it's about
the 1099 for the third party -- so the tile company that the
guy owns. Correct.
MS. JIMENEZ: Can we show the jury, please, Page 229
of this deposition.
BY MS. JIMENEZ:
Q.
Mr. Sheppard, these were your 1099s because you said: "Why
haven't they been" -- Line 18: "Why haven't they been
produced? I will ask Jeanette. I will get to the office. I
will find out where the 1099s are. I don't know why they
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
haven't been produced, but everyone gets a 1099." That's what
you said, not some other company's 1099s, they need to produce
it to you. It's: "My office. Jeanette should have them in
the office," correct?
A.
Whoever received the 1099 from all aspects of the world, in
that particular project, yes, you're supposed to provide a 1099
to somebody to -- so you have it for your files. So that's
just normal.
Q.
All right. The next day, your deposition continued,
February 26th, 2019.
MS. JIMENEZ: Can we show for the witness only Exhibit
79-2, please.
BY MS. JIMENEZ:
Q.
I think you said that Carlos Diaz was your employee, right?
A.
He's an employee for --
Q.
CJUF?
A.
-- for multiple -- again, whatever project someone's doing
work on, they get allocated and they get multiple checks for
their allocation of time.
Q.
All right.
MS. JIMENEZ: And then, if we can go to Page 32, which
is this page of the exhibit.
BY MS. JIMENEZ:
Q.
Line 17 you're asked: "So Jeanette maintains personnel
files on all these street people who you mentioned yesterday?"
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Answer: "I don't know what she maintains or how she
maintains."
And then on the next -- the question starts at the
bottom of the page, Line 25: "You mentioned several people you
called street people, Carlito, Carlitos Diaz -- you made
reference to any number of people like that."
A.
That's not what I said.
MR. ETRA: Your Honor --
THE COURT: I'm sorry?
MR. ETRA: The objection is I don't think this is in
evidence and she's reading from the transcript.
THE COURT: Is that the basis of the objection?
MR. ETRA: Yes.
THE COURT: Overruled.
THE WITNESS: That's not what I said.
BY MS. JIMENEZ:
Q.
And then -- so you were asked, Page 33, Line 4: "So who
completed the Forms I-9 for these people?" And your answer
was: "First of all, they're laborers. They're workers. I
don't know about street people. Maybe I misspoke, if that's
what I said. Jeanette Gonzalez would have it."
And then you went on, starting on Line 14: "They're
not employees of the company. They get paid to do tasks.
Everyone's got a task that they do pursuant to a budget, and
that's what happened." That was your testimony, correct?
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Well, you're reading -- that's not what my testimony says.
What you just read, that's an incorrect statement. But I did
say some of that. But the way you characterize it was
really -- when you're talking about street people, if you'll
scroll down, I can tell you what you just said, that's not what
I said.
The guy, the lawyer, in his own way he said they were
street people. And I just repeated: "Well, this is what you
called them, street people." I don't call people street
people. He called them street people. So that's an incorrect
statement.
Q.
Right. Okay. So let me ask you this: So the question
then on Line 10, Page 33: "So there's personnel files for each
of those people?"
A.
Can you scroll down, please. Which number are you talking
about?
Q.
Line 10 on this page: "So there's personnel files for each
of these people?"
Answer: "Personnel files?"
Question: "Well, what would you call them?"
Answer: "They're not employees of the company. They
get paid to do tasks. Everyone's got a task that they do
pursuant to a budget, and that's what happens."
That was your answer, Mr. Sheppard.
MS. WEINTRAUB: Can she read the next question and
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
answer, please, to keep it in context.
MS. JIMENEZ: If that was an objection.
THE COURT: The Rule of Completeness would require --
so why don't we read that.
BY MS. JIMENEZ:
Q.
Then the next question: "Let me ask you differently. Who
was responsible for obtaining the Forms I-9 from these people?"
And your answer was: "Whatever employment that these
people have, it goes through Jeanette Gonzalez," right?
A.
I see that's what it says, yes.
Q.
So the I-9s -- what are the I-9s, by the way?
A.
I have no idea.
Q.
You seem to know when you answered these questions because
you didn't ask him: "What was the I-9," correct?
A.
That's not what I answered. I said: "Whatever employment
that these people have, it goes through Jeanette." I said
nothing of knowing or not knowing. I don't -- I wouldn't know
what a -- I mean, I still don't even know what an I-9 is. But
I just said: "Whatever employment these people have, I don't
know how it's" -- same thing I've been saying -- "how it's
classified." That's what I said. I didn't say what I knew or
do know. I just -- I mean, I know I don't know what an I-9 is.
Q.
You didn't ask the attorney who asked you the question
about the I-9s what was the I-9, correct?
A.
Did I ask the attorney that was deposing me what an I-9
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
was?
Q.
Right.
A.
No, I did not ask the attorney that.
Q.
Right.
MS. JIMENEZ: If we could publish Page 33 to the jury.
Now, on Page 101 -- and this is for the witness. Page
101, same exhibit, 79-2 --
MR. ETRA: Your Honor -- I don't know that this has
been put into evidence, Your Honor, is the objection.
THE COURT: Are you seeking to publish the one page?
MR. ETRA: I request it to be put down immediately
based on the sidebar we had, Your Honor.
MS. JIMENEZ: If you can pull out what's highlighted
for the jury, please.
THE COURT: Are you seeking to introduce this at this
time, Ms. Jimenez?
MS. JIMENEZ: Yes, Your Honor.
THE COURT: All right. Then advise the Court so the
Court can rule on it and then the jury can look at this page.
MS. JIMENEZ: Okay. I'm sorry. Yes, I'd like to
publish this -- I'd like to move it into evidence and publish
it to the jury.
MR. ETRA: Your Honor, we have the same objection
overall, but also the specific issue we discussed --
THE COURT: Okay. The specific issue that we
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
discussed, I want to make sure that we adhere to that ruling.
But with regard to the objection, the objection is overruled
and it will be admitted into evidence.
What's the exhibit number, please?
MS. JIMENEZ: It's 79-2, Page 33.
(Government's Exhibit 79-2, Page 33 received into
evidence.)
THE COURT: All right. You may publish it to the
jury.
BY MS. JIMENEZ:
Q.
All right. Now, Mr. Sheppard, going on to Page 101, which
is not in evidence, you were asked about those laborers. It
goes on, and you were asked about Carlos Diaz. And you're
asked the question: "What do you mean by he was doing stuff
for other people," referring to Carlos Diaz. You gave the
answer at Line 5 --
MS. JIMENEZ: If we could show him Page 101, the next
page. Just for the witness, yes.
BY MS. JIMENEZ:
Q.
You gave the answer: "Carlos Diaz gets paid as a
consultant. He's not a salaried employee. He gets paid a fee
for what he does. And what he does" -- and you went on to
describe what he does. Do you see that?
A.
I see that, yes.
Q.
So at the time, in 2019, you were -- your understanding as
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
to Mr. Carlos Diaz was that he was a consultant and he was not
a salaried employee, right?
A.
That's not my understanding. This is talking about a
job -- this is talking -- again, I keep trying to say this.
There's different jobs and allocations. So if HM Management or
some management company that we own provides workers to a --
this particular company, or to the company in Orlando, or in
Colorado, or wherever it is, they are almost like lending a
person to work, so they're not working for that -- they're a
consultant to that particular job, but they still work -- the
main thing -- HM Management Development is the one who directs
and tells them what to do, where to go.
So therefore they would be a consultant for CJUF or
HM-UP. That's how it works if there's an epicenter of where
they are being directed, an office, and they just go do
multiple jobs. And in this case he was doing -- 90 percent of
his time was spent on security and stuff of that nature, at
this job, required by law, that we had to have a security
company there. So he did that. So he's not a salaried
employee for that. He's a consultant for that company but for
the other company. He's been working for them for years. He
gets assigned for projects all the time. Everyone does.
MS. JIMENEZ: Your Honor, I'd like to move in Exhibit
79-2, Page 101, and publish it to the jury, please.
MR. ETRA: Same objection as before, but --
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
THE COURT: All right. The objection is noted. It's
overruled. It will be admitted into evidence. You may
publish.
(Government's Exhibit 79-2, Page 101 received into
evidence.)
BY MS. JIMENEZ:
Q.
So Mr. Carlos Diaz is being lent out to other companies.
But for HM Management, the only people you listed as wage
employees were the three people who were shown on the screen
before, Jeanette Gonzalez, Vanessa Gonzalez, Elva Baluarte.
Mr. Carlos Diaz was your contractor. He was paid --
A.
He's not a contractor. He's been working for 20 years --
20 years. He's not a contractor.
Q.
Twenty years as a contractor.
A.
No, he's not. I'm not sure where you come up with that,
but respectfully I don't think that's a correct statement.
Q.
All right. Now, same deposition, which is Exhibit 79-3,
you were asked about independent contractors and payroll taxes.
MS. JIMENEZ: If we could show the first page of 79-3,
please, same deposition.
To the witness only, yes.
BY MS. JIMENEZ:
Q.
All right. This is Page 64. You were asked a question at
Line 8: "Does HMMD," which is HM Management, "withdraw
employment taxes from the employee paychecks?"
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
And then you gave the answer: "If they're employees,
they do. If they're not, they don't. They pay payroll taxes
too."
Do you see that you gave that answer, Mr. Sheppard?
A.
I see that.
Q.
In 2019 you were not confused whether people at HM
Management -- if they were employees, they would pay payroll
taxes. It seemed like you were aware at that time. Yes?
A.
I don't look at it the way -- it's a very strange --
whoever wrote that, or articulated from what they thought I
said, it's kind of a strange sentence. But, to me, employees
are the people that work directly for my company. I don't know
how to classify it. That's not my expertise. But, to me, an
employee that takes direction from my company or people at my
company that work for the company directly as individuals, they
are employees. How they are classified -- I can't tell you
whether they are 1099s, W-2s, or what they are --
MS. JIMENEZ: Your Honor, I'd like to move Exhibit
79-3, Page 64, into evidence.
MR. ETRA: Same objection but not the sidebar
objection.
THE COURT: All right. And with the understanding as
to the secondary objection, the first objection is overruled.
79-3 admitted into evidence. You may publish.
(Government's Exhibit 79-3, Page 64 received into
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
evidence.)
BY MS. JIMENEZ:
Q.
So you said it was a weird statement, but this is your
statement. If they are employees, they do, if they are not,
they don't, with respect to whether or not HM Management
withdraws or I guess withholds employment taxes. Do you see
that?
A.
I see what it says, yes.
Q.
All right. And you were aware in 2019 that for employees
the company, HM Management, pays payroll taxes?
A.
I'm not aware what they were doing as far as -- again, I'm
not involved with that process. I've been saying it since 2019
or any time before or after. I don't know what they did in
2019.
Q.
Well, you answered that HM Management pays payroll taxes
for employees.
A.
Okay. That's what the answer says, according to what, in a
deposition, that someone wrote. I mean, again, I'm not saying
they did or didn't. I'm not trying to argue it or say
something different. I'm just saying I do not know. Sitting
here today, I can't tell you exactly what that intention was,
what I said, or what the facts were.
This was -- I don't know. This was -- I think the
deposition was at the beginning of 2019. So I don't know -- if
it was February of 2019, how would I know -- from February all
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
the way through December 30th, 2019, how would I even know what
happened? I can't -- that's forward thinking. I don't know
how they treated everyone in 2019.
Q.
But this was your answer, correct?
A.
At the time, on February 26th, this was the answer that --
to the best of my knowledge, that's what I -- that's what I
said.
Q.
That's what you said under oath? Yes?
A.
That's what's written here that I said under oath.
MS. JIMENEZ: Can we show the witness Page 88, which
is next -- 88.
MS. MARTINEZ: The witness only?
MS. JIMENEZ: The witness.
BY MS. JIMENEZ:
Q.
So the questions start at the bottom of the page, Line 21:
"Okay. So for 2016, were the only employees of HM Management
Glenn Sheppard and Jeanette Gonzalez?"
And you started to give an answer -- answer: "That
worked on the CJUF project or in general?"
And then you said -- next page, Page 89: "We had
other people. We have some laborers that aren't on this list."
And then you're asked the question on Line 7: "Were
they employees or were they independent contractors?"
And you answered: "I think they were independent
contractors. They were just paid. They weren't employees."
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
And the question was: "So there's going to be Forms
1099 for each of those people?"
Answer: "Yes".
And then you're asked the question, at the bottom of
the page: "So because those people were independent
contractors, then no payroll taxes would have been paid for
them, right, because you don't pay payroll taxes for
independent contractors?"
Answer: "Correct".
That's at the top of Page 90. Do you see that?
A.
I see what it says.
Q.
So in 2019 it was clear to you that these laborers that you
had were not employees, were 1099, independent contractors,
because that's what you explained to them. That's what you
explained in the deposition.
A.
That's not -- that's not what that says. And that's not
what I've already testified in this case for as well. To me,
in my world, in the construction world -- maybe in --
Q.
I'm sorry. I just need to focus you on the deposition. In
2019 before this case, before you had this PPP issue,
Mr. Sheppard, you were explaining in that deposition under
oath, at Page 89, that you had laborers, that they were
independent contractors, that they were getting 1099s, and that
you were not paying payroll taxes to those -- payroll taxes for
those people.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
MR. ETRA: Compound.
BY MS. JIMENEZ:
Q.
You said that?
A.
That's not what I said. But let me read this, because
you're talking very fast. So let me just take the moment. If
you don't mind, let me -- which part? Which part are you
seeing that at?
MS. JIMENEZ: Let me -- if I can move 79-3, Pages 88,
89, and 90 into evidence for the jury to follow, please.
THE COURT: Any objection?
MR. ETRA: One second, Your Honor, please.
Your Honor, same objections as before.
THE COURT: All right. I'll give you a standing
objection. The objection is overruled. 79-3, 88, 89, Page 90,
will be admitted into evidence. You may publish.
(Government's Exhibit 79-3, Page 88, 89, and 90
received into evidence.)
BY MS. JIMENEZ:
Q.
So my question is --
MS. JIMENEZ: If we can show Page 89 which has most of
the testimony --
BY MS. JIMENEZ:
Q.
-- is that in 2019, February 2019, you understood that your
laborers were not employees, that they were independent
contractors, that you provided 1099s for them, and that they --
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
that payroll taxes would not be paid for them. That's what you
testified to.
A.
Well, let me explain what you just said. That's not what I
testified to. What I testified to is in 2019 they asked me
about 2016. 2016, we were under construction. We were doing
construction at CJUF for a contractor that went bankrupt. So
when we were doing construction for them, what this is saying,
the independent contractor is a third-party company that has
nothing to do with us. Independent contractor and that
company, and their laborers that were getting paid in 2016, not
'19, during construction, they were -- they are not part of our
company because they -- you talk to the company -- the
independent contractor who is the -- who owns this company, has
his own workers. So yes, they would not be part of our
company. That's a correct statement. That's what that's
saying.
Q.
Let me just show you --
MS. JIMENEZ: Can we go to the bottom of Page 88,
please.
BY MS. JIMENEZ:
Q.
So the question began: "For 2016, the only employees of HM
Management were Glenn Sheppard and Jeanette Gonzalez that
worked on the CJUF project?"
And your answer, at Line 2 of Page 89 was: "No.
No" -- right? You corrected him -- "We had other people. We
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
have some laborers that aren't on this list." You did not say
there's some third-party contractor who hires people and it's
their contractors. You said: "We have some laborers that
aren't on this list, and they're independent contractors and
they are getting 1099s, and we don't pay payroll taxes for
1099s," as you say later on this page, Page 89.
A.
Do you want me to -- I will answer that question.
Q.
Right. And you said --
A.
Let's break it down, like you said --
Q.
Well, sir, this is my question -- you said --
MR. ETRA: Your Honor, hang on.
BY MS. JIMENEZ:
Q.
You said: "We have some laborers," correct?
THE COURT: Okay.
MR. ETRA: Your Honor, she started a new question and
I'm not going to object to the last question.
THE COURT: All right. Then let's continue.
BY MS. JIMENEZ:
Q.
You said: "We have some laborers that aren't on this
list"?
A.
Correct.
Q.
And then you were asked: "Were they employees or were they
independent contractors?" You see that question on Line 7?
A.
I see that.
Q.
All right. And that refers to your laborers that you
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
offered in response to the prior question saying you had some
laborers, and you said: "We have independent contractors."
MR. ETRA: Objection. Compound.
THE COURT: Sustained. Rephrase.
BY MS. JIMENEZ:
Q.
You said you had independent contractors, right?
A.
This is what it says. But in the way you're presenting,
that's not what that means.
MS. JIMENEZ: And then let's go down to the bottom of
the page.
BY MS. JIMENEZ:
Q.
It was clear, Mr. Sheppard, that because they were
independent contractors, that no payroll taxes would have been
paid for them because you don't pay payroll taxes for
independent contractors. And your answer was: "Correct."
Isn't that true?
A.
It is true that that answer is correct based upon the
form -- answering that particular question that was in that
particular deposition. For 2016, we were doing construction.
And the -- that project was already built. So there's two
budgets. There's a budget for -- every month there is a
budget. Okay? That is a totally different amount of people
that do this on a monthly basis.
Then there's independent contractors. When you're
under construction, you're building a part of a building,
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
they're independent contractors. So this is an annual budget
and this is a budget in a short period of time, whatever the
construction project is. This is what this -- hello? This is
what this refers to. This refers specifically to the laborers
that were working on the construction site for a -- for the
contractors. So that's what this is referring to because this
was 2016. I mean, that's what was going on. So you have to
look at it the right way.
It's one, as the manager -- a property manager of a
property. That's HM Management. CJUF is constructing a
project. And HM Management is supplying people, but they're
constructing something. And that's what that means,
independent contractors, third-party people. They're not going
to be on my pay -- they pay their own people. We pay them a
check and they pay their own people.
The people over here for CJUF, or on other projects at
that time, they are working with HM Management or directly for
the project on an annual basis. That's the difference. And
you have to understand the context of this particular -- what
they're talking about here. Now that you have showed it to me,
now I have a clear understanding of what this was about.
Q.
These were your laborers. You said --
MS. JIMENEZ: Can we show Page 89, top of Page 89.
BY MS. JIMENEZ:
Q.
-- "We have some laborers." Those were your laborers.
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
Everything I just said -- again, there's two -- you're
trying to -- you're trying to -- you're trying to mesh
something that has two distinct differences. There's inside of
a building and outside of a building. And common area people
are not -- that's not even what we're discussing here. We were
self-performing for a bankrupt entity. We had to step in to
take over a GC that went under.
So when there's laborers -- I took his
subcontractors -- not like -- subcontractors, we pay them
directly, and he had laborers. That's what I'm talking about.
That's it. You cannot combine it. You're combining, and
that's just not what -- that particular part of this
deposition, that's exactly what that meant.
Q.
All right. Let me --
MS. JIMENEZ: You can take that off the screen.
BY MS. JIMENEZ:
Q.
Let me ask you about this HM Four loan application that
Jeff Graff assisted you with before he left March -- the end of
March of 2020. Do you recall you testified about that in your
direct examination?
A.
I do.
Q.
And you said that Jeff Graff told you which company should
apply. Do you remember you said that?
A.
He recommended to me which company that should apply for
the -- for whatever government programs that were there, and
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
sometime in March 2020.
Q.
All right. So let's show the jury the emails about that.
MS. JIMENEZ: Government Exhibit 50-7, please.
MS. WEINTRAUB: Judge, I object, and I'd like the
opportunity to see these first if this is from the package --
MS. MARTINEZ: It's in evidence.
THE COURT: This is already in evidence. 50-7,
correct?
All right. Let's continue.
BY MS. JIMENEZ:
Q.
So on --
MS. JIMENEZ: Can we go to Page 4 of the exhibit.
BY MS. JIMENEZ:
Q.
So March 25th, 2020, Mr. Graff writes to you. He says:
"Eric, I have not submitted the application you asked me to
complete on behalf of HM Four, LLC." He's telling you that he
hasn't submitted the application you asked him to complete on
behalf of HM Four. Do you see that?
A.
I do.
Q.
And he's asking that you need to provide a signed copy of
the 2018 tax return for HM Four. Do you see that?
A.
No. I'm sorry. Where is that?
Yeah. I'm sorry. I see it. Okay. Number 2, yeah.
Q.
So he's telling you that you asked him to complete this
application on behalf of HM Four, correct?
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
A.
That's what -- on March 25th, 2020, that's what he said
after the prior emails in earlier March.
Q.
Right.
MS. JIMENEZ: And then can we go to -- can you go back
out. Can we go to the next email.
No. No. Hold on. Hold on.
Can you go back up to March 25th.
Oh. Right.
BY MS. JIMENEZ:
Q.
So when he says: "You will need to mail a signed copy of
the 2018 tax return for HM Four using the instructions
attached. The copy I have is not signed" -- is what Jeff Graff
says. Do you see that?
A.
I see that.
MS. JIMENEZ: And then let's go down -- now we go down
to March 26th, the next day.
BY MS. JIMENEZ:
Q.
And you see below that Jeanette Gonzalez sends an email to
Jeff Graff with -- it says: "Jeff, 2018 tax return, HM Four
and then HM Eight, Manager," right?
A.
Yes. I see that.
Q.
So that's March 23rd. So Jeff Graff is telling you his
copy is not signed on March 25th, right?
A.
I'm sorry. I lost the time and date. So the 23rd, she
sends it --
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Q.
To Jeff Graff.
A.
Okay.
Q.
Right? And then the earlier email we just saw is Jeff
Graff asking you for a signed copy of the 2018 HM Four tax
return because his copy is unsigned. That's the copy Jeanette
Gonzalez provided to him. It's your office copy unsigned.
A.
Hold on a second.
MR. ETRA: Objection, Your Honor.
THE WITNESS: He said earlier one. So March 25th --
THE COURT: The objection is sustained. Rephrase.
MS. JIMENEZ: Let's go to March 25th, please.
BY MS. JIMENEZ:
Q.
Jeff Graff writes you March 25th, right?
A.
That's what it says.
Q.
He has not yet submitted the application you asked him to
complete on behalf of HM Four, correct?
A.
Correct.
Q.
And he says: "Item Number 2, you will also need to mail a
signed copy of the 2018 tax return for HM Four. The copy I
have is not signed." Do you see that?
A.
Yes. I see that.
Q.
All right.
MS. JIMENEZ: So let's go to the next email.
BY MS. JIMENEZ:
Q.
Here, March 26th is your response. But March 23rd,
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Jeanette Gonzalez to Jeff Graff provides that 2018 tax return.
A.
I know. But I'm not copied on that email, so I don't --
it's just between Jeanette and Jeff Graff on March 23rd. And
the other one was March 25th, I believe. So when you said
earlier, I guess you meant the email earlier. I thought you
meant the date earlier. The first one, I guess, if you start
from the bottom, is March 23rd.
Q.
Right. So here Jeanette Gonzalez provides Jeff Graff a
2018 tax return on March 23rd, right?
A.
I think that's what it says. I'm not copied. So that's
what it says, though.
Q.
Right. So your email to Jeff --
MS. JIMENEZ: No. Now go up -- take that down,
please.
Right.
BY MS. JIMENEZ:
Q.
The top portion of this is your email to Jeff, right,
March 26th?
A.
That's correct.
Q.
So attached is the HM Four executed tax return, and you
provide him a signed tax return for HM Four that you signed,
right?
A.
I mean, I assume it's attached. If it says it, I assume
it's attached. I don't know, but I assume it's attached.
Q.
Right. We can show that. You provided him a signed tax
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
return for HM Four, right?
A.
Correct. After I gave him HM-UP Development Alafaya
Trails, and the owner is HM Four, then he wanted HM Four. So
first I gave him the HM-UP Development Alafaya Trails, and then
the 99 percent owner, HM Four, and the one percent owner, HM
Eight. So I don't see it in the email batch here, but like
somewhere earlier in March I gave him the HM-UP Development
Alafaya Trails, LLC. And now he wanted the partners, HM Four,
I guess -- or HM Eight is what he wanted.
Q.
So you say: "Please let this email serve as full authority
via myself as managing member that you can download this
attachment and upload and send to the government for a grant or
a loan for HM Four. WAPD Holdings" -- which is your partner
Robert Kallman, right?
A.
Correct.
Q.
-- "along with myself as the owner of HM Four. I have
discussed and approved the submittal package."
A.
Correct.
Q.
"And I'm asking you to send the return and a package as a
non-party with zero liability for any reason whatsoever as an
individual."
A.
Correct.
Q.
So you're letting him know that he doesn't have any
liability in connection with this thing he's doing for you?
A.
Yes. Because he was the managing member of HM Four. And
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
based upon what happened in 2019, I just wanted to make sure
and clear that there was no misunderstanding that: "Look,
whatever you're submitting, I don't want you to have any -- be
very transparent, there's no problem. You're not the manager
anymore. I'm the manager and I'm asking you as the guy who
deals with all the financial matters. You go ahead, but you're
not going to have any liability because you're leaving in four
more days," and I don't want to put him in that position,
because he was already working at the temple and I didn't want
to have him in any type of position -- what occurred
inadvertently.
Q.
If he's telling you what company you should be applying
for, shouldn't you be asking him to absolve you of any
liability? If he's telling you: "Listen, apply on behalf of
HM Four," and you have any issues with that, shouldn't you be
asking him to provide you some -- "Listen, I'm doing this based
on your advice and so anything goes wrong, it's on you"? No?
MR. ETRA: Compound. Misstates the testimony.
THE COURT: Overruled.
THE WITNESS: You're showing me just some parts of the
conversation, not giving the whole complete conversation. But
initially it was HM-UP Development Alafaya Trails, LLC, as I
told you. And I provided the tax returns for that, plus the
54 -- or 4506-Ts, or whatever, where you can give the
government access to your returns. That was initially.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
Then he said: "Well, it really should be HM Four."
And that was way -- that was not way. That was X amount of
days before this. So then he said HM Four because of the
managing member and the operating business, they can get an
EIDL -- not a EIDL, or -- some kind of government loan or
something. Again, I have zero clue -- no clue, with what's
going on with the world --
BY MS. JIMENEZ:
Q.
Zero.
A.
So that's what happened. Now, HM Four, after this whole
thing -- I already gave him the HM-UP Development Alafaya
Trails, LLC tax return, 2018. Then he wanted the partnership
stuff, and that's when he told me they're the operating manager
so they're the active -- I don't remember exactly what he said.
So that's how it came to HM Four. I said: "Okay." I
mean, I love the guy, and I trusted him, and he's a CPA. What
am I going to say, tell him no? I wouldn't ask him that. This
last sentence was specifically, specifically because of what
happened with that whole thing in 2019, that there was a
miscommunication where he actually wasn't even the manager of
the company. Publicly, he was record-wise, but he wasn't the
manager.
I wanted to make sure it was clear that HM Four,
LLC -- that he would never have any liability as a manager
because he was not the manager since 2016. Even though the
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
public record said 2019, he wasn't the manager since 2016. So
I wanted to be very transparent to make sure he understood,
because he was leaving the company.
MS. JIMENEZ: Can we show 50-9. Is the 2018 tax
return in that exhibit? I don't know -- does this have
multiple pages? I don't see it on our list.
(Pause in proceedings.)
MS. JIMENEZ: All right. I'm not going to waste time.
BY MS. JIMENEZ:
Q.
So you -- so it's your testimony that you -- he decided the
company, and he listed a hundred employees, and he provided all
those figures on that application on his own without your
input, right?
A.
I don't know if -- I don't know if I would characterize it
that way. From my recollection, I don't remember even talking
about all that with him, because I didn't even know what the
program was. He asked me questions sometimes, and I gave him
what he wanted. Whatever I gave him, I gave him. The whole
thing with the employees, I don't even know what that was all
about. But yeah, was there 80 to a hundred employees that are
building HM-UP Development Alafaya as a contractor in Orlando?
Yes. That was prior to COVID. But --
Q.
Right. But all of the -- these emails are about his
application on behalf of HM Four, and the application lists a
hundred employees, lost rents due to COVID of hundreds of
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400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
thousands of dollars. And your testimony, sir, to this jury is
that you did not give him any input, even though he's the one
asking you to absolve him of any liability?
MR. ETRA: Objection. Misstates the testimony and
compound.
THE COURT: Overruled.
THE WITNESS: I'll be clear. I -- he mentioned in his
testimony that we had a conversation about something like that,
and I never saw that application until actually he was sitting
here testifying and you put it on your screen. And I looked
through my emails to find the application, and I couldn't find
the application. All I found is a financial statement.
And -- and so I never saw the physical application
that you showed. And I'm saying I never saw that
application -- never, ever saw the application. And when I
left here I looked at my emails. I'm like: "Did I miss
something?" Never saw the application and didn't discuss -- I
didn't even know what the program was about. It wasn't -- it
was a government program. It didn't get -- there was nothing
there. So I don't know what it was. He was the one who told
me about the program. I didn't even know what it was.
MS. JIMENEZ: Your Honor, if he could -- if the
witness could end his answer.
THE WITNESS: Sorry.
THE COURT: I think he has.
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Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
BY MS. JIMENEZ:
Q.
Okay. Mr. Sheppard, I want to ask you some questions about
what advice the accountants gave you in or around April of 2020
regarding applying for PPP loans.
MS. JIMENEZ: Can we turn to the ELMO for a moment.
BY MS. JIMENEZ:
Q.
This was an exhibit, Q-30, put in by your attorneys that
was a letter from Cupersmith's office to the IRS, which had a
notice that came to you. Tax year 2018, notice date
March 23rd, 2020. Do you see that?
A.
I do.
Q.
And that was addressed to Eric Sheppard at your home,
right?
A.
Yes.
Q.
And the notice March 23rd, 2020, was that you had not yet
filed your 2018 1040 tax return, right?
A.
Correct.
Q.
Then you have email communication with your accountants,
which --
(Fire alarm sounding.)
THE COURT: Oh, no. All right.
Our fire marshal can see. Liz is our fire marshal.
Just give us a moment. Let's see if we need to
evacuate.
(Pause in proceedings.)
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Case 1:22-cr-20290-BB Document 320 Entered on FLSD Docket 02/25/2025 Page 247 of 249
248
Yvette Hernandez, Official Court Reporter
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
COURT SECURITY OFFICER: We've got to evacuate.
THE COURT: All right. Ladies and Gentlemen, since it
is 20 to five, we are going to adjourn for the evening, so you
can quickly gather your items.
Please remember that as you leave you're not to
discuss this case with anyone, nor permit anyone to speak with
you. Everything learned about this case is learned within the
courtroom. If you'll place your juror notebooks in the jury
room. The court security officer will escort you outside, and
I will see you tomorrow morning at nine a.m.
All right. We'll discuss the schedule for the week
tomorrow.
Have a pleasant evening.
If you wouldn't mind just escorting them, since
they're not going to be able to use the elevator. They're
going to need to use the stairs.
All right. Ladies and Gentlemen, before we leave the
courtroom, because I'm not certain how long this is going to
be -- we are going to need to evacuate. You're not going to be
able to use the elevators, unfortunately. I will have the
courtroom open. You can come back afterwards, but at this
point we will adjourn for the evening, and I'll see the parties
back here at nine a.m. tomorrow morning.
All right. Have a pleasant evening.
(Proceedings adjourned at 4:44 p.m.)
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Case 1:22-cr-20290-BB Document 320 Entered on FLSD Docket 02/25/2025 Page 248 of 249
249
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 8th
day of January, 2024, 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 - 249.
IN WITNESS WHEREOF, I have hereunto set my hand at
Miami, Florida, this 25th day of February, 2025.
/s/Yvette Hernandez
Yvette Hernandez, CSR, RPR, CLR, CRR, RMR
400 North Miami Avenue, 10-2
Miami, Florida 33128
(305) 523-5698
yvette_hernandez@flsd.uscourts.gov
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Case 1:22-cr-20290-BB Document 320 Entered on FLSD Docket 02/25/2025 Page 249 of 249File and source
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