Email, FRB/Benworth (3:23-cv-01034-GMM) April 24 M&C — Mitchell Kohles (Document 238-2)
Summary
Email dated Monday, April 28, 2025, from Mitchell Kohles to counsel, subject "FRB/Benworth (3:23-cv-01034-GMM) - April 24 M&C," setting out the Reserve Bank's follow-up questions on outstanding discovery items and a summary of the April 24, 2025 meet and confer discussion. The Reserve Bank proposes to withdraw the request for the strings in Row 2 in exchange for Defendants' review of a portion of the strings in Row 1, which it says collectively return 1,152 unique hits per the January 23 hit report. It states that the Reserve Bank understands Mr. Navarro executed promissory notes evidencing at least $77 million in indebtedness owed to Benworth PR. The summary says the Reserve Bank represented that the parties are at an impasse on QuickBooks database access.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
- Date
- 2025-04-28
Cite this document
“Email, FRB/Benworth (3:23-cv-01034-GMM) April 24 M&C — Mitchell Kohles (Document 238-2).”
Original at ecf.prd.uscourts.gov, dated 2025-04-28. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2025-04-28-kyc-company-litigation/
, SHA-256 12d87c3287f735edec3dd5ef50e063bed327caa34dd6c0a85983fcc2bdcb6624.Full text
Case 3:23-cv-01034-GMM Document 238-2 Filed 05/05/25 Page 1 of 6
From: Kohles, Mitchell
To: Michael Lorigas; Rasheed Nader; "Roberto Camara Fuertes"; "Jaime Torrens Dávila"; "Monica Ramos Benitez";
Carla S. Loubriel Carrión; "Ricardo Casellas"
Cc: "antonio.roig@oneillborges.com"; "ubaldo.fernandez@oneillborges.com"; "anibal.roman@oneillborges.com";
Kessler, Thomas; Team-FRB-Benworth-Associates-CGSHOnly
Subject: FRB/Benworth (3:23-cv-01034-GMM) - April 24 M&C
Date: Monday, April 28, 2025 12:27:05 PM
Counsel,
Following our discussion on Thursday, April 24, 2025, please see the Reserve Bank’s questions
regarding outstanding discovery items followed by a summary of our discussion.
Follow-Up Questions for Defendants:
A. Claudia Navarro documents
As we discussed, we have not identified any emails from Mrs. Navarro in prior
productions, and only a few dozen for which she is a custodian.
How does Mrs. Navarro communicate as a member of Benworth PR senior
leadership?
Does Mrs. Navarro conduct business using any email other than her
@benworthcaptial.com email?
Please confirm all email accounts Mrs. Navarro uses and which of Mrs. Navarro’s
email accounts were collected.
We see Mrs. Navarro’s @hotmail.com account on emails in the production related to
the PPP business (e.g., Defendants_00076150).
Why was this account not collected?
It appears that Mrs. Navarro’s email was collected from Office 365 exchange, whereas
other Benworth custodians’ data was collected from Microsoft Exchange.
Can you explain the reason for the difference in collection?
B. ESI Search String Proposal
While reserving rights to request additional discovery, the Reserve Bank is willing to
compromise on the remaining search strings we discussed on March 31. Specifically,
the Reserve Bank will withdraw its request for the strings in Row 2 in exchange for
Defendants review of a portion of the strings in Row 1, as set forth in the below table.
Based on Defendants January 23 hit report, these searches collectively return 1,152
unique hits, significantly fewer than our prior proposals). Please let us know if you
agree to review these documents and produce any that are responsive.
Reserve Bank Proposal Reserve Bank Proposal Reserve Bank Proposal
(December 16) (February 11), as sampled (April 28)
by Defendants
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Case 3:23-cv-01034-GMM Document 238-2 Filed 05/05/25 Page 2 of 6
(wire OR transf*) w/10 (wire OR transf*) w/10 (wire OR transf*) w/10
(“Benworth Capital (“Benworth PR” OR “BCP (“Benworth FL” OR
Partners PR” OR PR” OR “BWC PR” OR “PR” “Benworth PR” OR
“Benworth PR” OR “BCP OR “Puerto Rico” OR “Bernardo” OR “BWC PR” OR
PR” OR “BWC PR” OR “Benworth Capital Partners” “BWC” OR “Claudia” OR
“PR” OR “Puerto Rico” OR OR “Benworth FL” OR “BCP” “Puerto Rico”)
“Benworth Capital OR “BWC” OR “Bernardo”
Partners” OR “Benworth OR “Claudia”)
FL” OR “BCP” OR “BWC” 1,152 unique hits (per 1/23
OR “FL” OR “Florida” OR report)
“Navarro” OR “Bernardo” 5,106 unique hits (per 1/23
OR “Bernie” OR “Claudia”) report)
13,634 unique hits (per
1/23 report)
C. Promissory Notes
At our March 31 M&C, Defendants represented that all promissory notes between the
Navarros and BW affiliates had been produced, but that additional communications to
which the notes were attached would be produced in an April 11 production. Have
these additional communications been produced, or are you still reviewing them for
inclusion in a future production?
Based on the produced list of transfers from Benworth PR to the Navarros
(Defendants_00240127), the Reserve Bank understands that Mr. Navarro executed
promissory notes evidencing at least $77 million in indebtedness owed to Benworth PR.
We have identified only one such promissory note dated October 18, 2021, evidencing
$30 million owed from Mr. Navarro to Benworth PR. Are there other promissory notes
in the productions we are missing?
Summary of April 24, 2025 Meet and Confer Discussion:
1. Additional Written Discovery
Both parties agreed that Defendants’ Answers opened the potential for additional
discovery requests and both parties anticipated serving additional requests.
2. Navarro Entity Production
Defendants confirmed that their Monday, April 21 production was the complete and final
production related to Navarro Entity documents, but that additional quality control and
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Case 3:23-cv-01034-GMM Document 238-2 Filed 05/05/25 Page 3 of 6
privilege review is ongoing. Defendants represented that a privilege log is forthcoming
within 10 days from production.
3. QuickBooks Database Production
The Reserve Bank repeated its view that the Court’s order does not give Defendants the
unilateral right to elect the mode of production of QuickBooks data and asked whether
Defendants had any additional detail to share other than that sessions would be
conducted via Zoom. Defendants explained that each time the Parties coordinate to
schedule a QuickBooks database access session, the representative for the Reserve Bank
would be provided a one-time username and password that day and would access the
database through their computer and share their screen in a Zoom meeting with
Defendants’ representative, who would observe. The Reserve Bank explained why this
does not address the burdens previously discussed or answer key questions raised during
the parties’ March 31 discussion on this topic, including (1) the difficulties of scheduling
multiple rounds of supervised access with an undetermined number of individuals, (2) the
uncertainty around how many access sessions would be needed, given incomplete and
ongoing discovery by Defendants and future fact discovery by the Reserve Bank, (3) the
uncertainty around how much time will be required to access and review the database,
given the Reserve Bank’s lack of knowledge about the type and volume of data, and (4)
Defendants’ failure to describe their position on what and how data may be retrieved as a
result of the supervised Zoom access session. When the Reserve Bank asked Defendants
how the Reserve Bank could retrieve the data, Defendants did not answer the question
but asked the Reserve Bank to propose exactly what the Reserve Bank “envisioned with
remote access” and what the Reserve Bank is “going to do with the data,” but to do so
without sharing privileged information. The Reserve Bank explained that it is difficult to
share with Defendants what access the Reserve Bank will need for the reasons previously
described and again asked Defendants’ position on data retrieval. The Reserve Bank
represented that the Parties are at an impasse and intended to raise this issue with the
Court.
4. Accountant-Client Privilege
The Reserve Bank informed Defendants that some subpoenaed third parties are
withholding engagement letters. The Reserve Bank asked Defendants if it was their
position that engagement letters are privileged. Defendants represented that their
position is not that engagement letters are privileged and followed up by asking which
third parties are not producing engagement letters. The Reserve Bank shared that Forvis
has not produced anything, including the engagement letters, because Forvis thought
Defendants were withholding consent to produce these. Defendants were not aware of
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Case 3:23-cv-01034-GMM Document 238-2 Filed 05/05/25 Page 4 of 6
this and agreed to revert about whether they have any remaining objection to production
of engagement letters, but objected to the Reserve Bank representing to third parties that
Defendants agreed engagement letters were not privileged and could be produced.
The Reserve Bank asked Defendants if they were asserting privilege over transfer pricing
study documents. Defendants represented that they are not claiming privilege over the
final versions of the transfer pricing studies, but that they are claiming privilege over some
drafts that include confidential communications or comments from a CPA, specifically
about financial advice to Benworth related to taxes. The Reserve Bank asked whether all
communications with CPAs about the transfer pricing studies were asserted to be
privileged and Defendants responded that the determination was communication-
specific. Defendants represented that they would assert privilege to the extent it involves
confidential communication related to accounting advice.
The Reserve Bank asked Defendants what the accountant relationship was between
Defendants and H&Co. Defendants represented that H&Co may have been accidentally
listed as a third party over which the privilege was being asserted. Defendants agreed to
revert to the Reserve Bank about which entities were relevant to its privilege assertion.
5. Reserve Bank Requests
• Defendant Mobile Data
o The Reserve Bank reminded Defendants of questions the Reserve Bank asked
about the Navarro’s mobile data use on April 8 (excerpted below), to which
Defendants have not responded. Defendants agreed to double check with
their clients whether multiple devices were used by the clients, such as a
corporate phone and a personal phone
“In light of Defendants’ April 4 representation regarding the Navarros’ use of
mobile data: Please clarify whether the representation applies to all mobile
devices used by the Navarros during the relevant period (as identified in the
Reserve Bank’s requests), including any personal devices. Please confirm
that Defendants are reviewing and will produce responsive mobile data from
the Navarros’ phones, including communications between the Navarros and
communications among the Navarros and other Benworth employees.”
o The Reserve Bank asked Defendants if the review of mobile data for Mr. and
Mrs. Navarro was underway and if their phones have been imaged and
collected. Defendants could not confirm but agreed that they are planning to
review, if it was not already underway. Defendants explained they were
focused on “big projects” such as the Navarro Entity productions ordered by
the Court and that they would look into mobile data production. The
Reserve Bank observed that the parties have discussed mobile data since
2024.
• Reserve Bank ESI Search Strings
o Defendants represented that they would produce documents in response to
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Case 3:23-cv-01034-GMM Document 238-2 Filed 05/05/25 Page 5 of 6
the search strings agreed to review after the March 31 M&C by mid-May.
o The Reserve Bank previewed a proposal for the remaining search strings,
specifically rows 1 and 2, and agreed to follow-up via email with that
proposal.
• Claudia Navarro Documents
o The Reserve Bank explained to Defendants that documents from Claudia
Navarro seem to be very thin and, notably, there are no produced emails
from Mrs. Navarro herself. The Reserve Bank asked Defendants about the
diligence of her collections and the apparent gaps the Reserve Bank is
seeing. Defendants represented that they could not share the diligence for
the collection at that moment as it was done last year. Defendants asked the
Reserve Bank to include this issue in its follow-up email so Defendants can
have their eDiscovery paralegal track down the diligence, and the Reserve
Bank agreed to do so.
• Volume 5 Production
o The Reserve Bank asked Defendants to confirm that the issues impacting their
Volume 5 production were identified to avoid problems in the future with
productions. Defendants represented that the Volume 5 issues were not
problems in other productions but that they cannot confirm more technical
errors will not happen in the future.
• Follow-Up Email
o The Reserve Bank agreed to follow up with Defendants via email regarding the
remainder of issues that the Reserve Bank wanted to discuss.
6. Defendant Requests
• PPP Servicing Pricing
o Defendants said they plan to revisit the discovery requests related to Search
String 6 in the Reserve Bank hit report shared on March 11, 2025 following
review of the term sheets the Reserve Bank produced on April 11, 2025.
Defendants asked Reserve Bank for assistance in identifying false hits and
agreed to share an initial proposal based on the hit report. Reserve Bank
agreed to consider a sampling review for responsiveness.
o Defendants asked the Reserve Bank the basis for the Reserve Bank’s
redactions in the term sheets. The Reserve Bank asserted that the redactions
were primarily for the sensitive names of other companies servicing PPP
loans in the term sheets that the Reserve Bank found not relevant to
evaluating the term sheets. Defendants asked the Reserve Bank to consider
re-evaluating the redactions so Defendants can understand why the names
are so sensitive. The Reserve Bank agreed to do so.
Best,
Mitchell
—
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Case 3:23-cv-01034-GMM Document 238-2 Filed 05/05/25 Page 6 of 6
Mitchell Kohles
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza, New York NY 10006
T: +1 212 225 2512
mkohles@cgsh.com | clearygottlieb.com
Pronouns: he/him/his
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