Videotape Deposition of John Thomas — Blue Flame Medical LLC v. Chain Bridge Bank, N.A. (E.D. Va., Dkt. 130-2)
Summary
Exhibit 2, Case 1:20-cv-00658, Document 130-2, filed 05/06/21 (E.D. Va.): excerpts from the remote videotape deposition via Zoom of John Thomas, taken Monday, January 11, 2021, marked CONFIDENTIAL, in Blue Flame Medical LLC v. Chain Bridge Bank, N.A. Gary Orseck examines for Chain Bridge Bank, N.A., and Peter H. White of Schulte Roth & Zabel represents the witness. Thomas testifies that he graduated from Southern Methodist University and has worked in politics, founded Thomas Partners Strategies, Thomas Partners Research and the healthcare real estate company Thomas Partners Properties, and worked for iHeartMedia and CNN. Later questions cover conversations with the Rams, Chargers and Patriots and a Bank of America account that Blue Flame no longer has open.
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“Videotape Deposition of John Thomas — Blue Flame Medical LLC v. Chain Bridge Bank, N.A. (E.D. Va., Dkt. 130-2).”
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Case 1:20-cv-00658-LMB-IDD Document 130-2 Filed 05/06/21 Page 1 of 30 PageID#
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EXHIBIT 2
John Thomas CONFIDENTIAL 1/11/2021
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1 IN THE UNITED STATES DISTRICT COURT
2 FOR THE EASTERN DISTRICT OF VIRGINIA
3 (Alexandria Division)
4 - - - - - - - - - - - - - - - X
5 BLUE FLAME MEDICAL LLC, :
6 Plaintiff, :
7 v. : Civil Action No.
8 CHAIN BRIDGE BANK, N.A., : 1:20-cv-00658
9 JOHN J. BROUGH and DAVID M. :
10 EVINGER, : CONFIDENTIAL
11 Defendants. :
12 _____________________________ :
13 CHAIN BRIDGE BANK, N.A., :
14 Third-Party Plaintiff, :
15 v. :
16 JPMORGAN CHASE BANK, N.A., :
17 Third-Party Defendant. :
18 - - - - - - - - - - - - - - - X
19 Remote Deposition
20 Monday, January 11, 2021
21 Videotape Deposition via Zoom of JOHN
22 THOMAS, a witness herein, called for examination by
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1 counsel for Defendant/Third-Party Plaintiff in the 1 APPEARANCES (Continued):
2 above-entitled matter, pursuant to notice, the 2
3 witness being duly sworn by MARY GRACE CASTLEBERRY, a 3 On behalf of the Defendant/Third-Party Plaintiff
4 Notary Public in and for the District of Columbia, 4 Chain Bridge Bank, N.A.:
5 taken at 10:07 a.m. EST, Monday, January 11, 2021, 5 GARY A. ORSECK, ESQ.
6 and the proceedings being taken down by Stenotype by 6 CAROLYN FORSTEIN, ESQ.
7 MARY GRACE CASTLEBERRY, RPR, and transcribed under 7 MATTHEW M. MADDEN, ESQ.
8 her direction. 8 Robbins Russell Englert, Orseck,
9 9 Untereiner & Sauber
10 10 2000 K Street, N.W., 4th Floor
11 11 Washington, D.C. 20006
12 12 (202) 775-4500
13 13
14 14 On behalf of the Third-Party Defendant JPMorgan
15 15 Chase Bank:
16 16 ALAN SCHOENFELD, ESQ.
17 17 ALBINAS PRIZGINTAS, ESQ.
18 18 Wilmer Cutler Pickering Hale & Dorr LLP
19 19 1875 Pennsylvania Avenue, N.W.
20 20 Washington, D.C. 20006
21 21 (212) 663-6981
22 22
Page 3 Page 5
1 1 APPEARANCES (Continued):
APPEARANCES:
2 2
3 3 On behalf of the Third-Party Defendant JPMorgan
On behalf of the Plaintiff Blue Flame Medical
4 4 Chase Bank:
LLC:
5 5 GABRIEL TORRES, ESQ.
PETER H. WHITE, ESQ.
6 6 JOSHUA GLICK, ESQ.
GREG KETCHAM-COLWILL, ESQ.
7 7 JPMorgan Chase
BILL GUSSMAN, ESQ.
8 8 Assistant General Counsel
JASON MITCHELL, ESQ.
9 9 383 Madison Avenue
KENI UKABIALA, ESQ.
10 10 New York, New York 10179
Schulte Roth & Zabel
11 11 (212) 270-6000
901 15th Street, N.W., Suite 800
12 12
Washington, D.C. 20005
13 13 ALSO PRESENT:
(202) 729-7476
14 14 JASON AQUI, Videographer
and
15 15
ETHAN BEARMAN, ESQ.
16 16
The Bearman Firm
17 17
10250 Constellation Boulevard, Suite 100
18 18
Los Angeles, California 90067
19 19
(747) 344-1004
20 20
21 21
22 22
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1 PROCEEDINGS 1 going to start by asking you if you can see me and
2 THE VIDEOGRAPHER: We are now on the 2 hear me clearly.
3 record in the matter of Blue Flame Medical LLC versus 3 A. Yes.
4 Chain Bridge Bank, N.A. Today's date is January 4 Q. Where are you physically sitting today?
5 11th, 2021. The time on the video monitor is 10:07 5 A. I'm sitting in Washington, D.C. in my
6 a.m. This is the video recorded deposition of John 6 attorneys' offices.
7 Thomas being taken virtually. 7 Q. Are you sitting in the same room as your
8 I'm the camera operator. My name is Jason 8 attorneys?
9 Aqui in association with Trustpoint/Alderson 9 A. Sorry, could you repeat that?
10 Reporting. The court reporter is Mary Grace 10 Q. Yes. I'm trying to find out where you all
11 Castleberry also in association with 11 are. Are you sitting in the same room as Mr. White?
12 Trustpoint/Alderson Reporting. 12 A. Yes.
13 Will all attorneys please identify 13 Q. And you're at the offices of Schulte in
14 themselves and the parties they're representing 14 D.C.?
15 beginning with the party noticing this proceeding. 15 A. Correct.
16 MR. ORSECK: Hi. This is Gary Orseck from 16 Q. Mr. Thomas, I'm certain your counsel has
17 Robbins Russell representing Chain Bridge Bank and 17 prepared you for this so I'm not going to run through
18 the Chain Bridge Bank defendants. And my partner, 18 a list of instructions, but I will remind you of
19 Matthew Madden, is in the room with me and Carolyn 19 certainly one at the outset and that is that because
20 Forstein is also on the video link. 20 we're doing this virtually, if we speak over each
21 MR. WHITE: This is Pete White with 21 other, it will be difficult to make a clean record
22 Schulte Roth & Zabel representing the witness, John 22 and it will be difficult for the court reporter to
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1 Thomas. With me in the room is Greg Ketcham-Colwill. 1 record my questions and your testimony.
2 On the phone, other attorneys with my firm, Jason 2 So I will do my best not to speak over you
3 Mitchell, Bill Gussman and Keni Ukabiala. They may 3 and I will ask you to try your best to let me finish
4 come and go as time goes on. Ethan Bearman, who is 4 my questions before you begin to answer. Is that
5 legal counsel to the firm who's the defendant, is on 5 acceptable to you?
6 as well. 6 A. Yes.
7 MS. SCHOENFELD: This is Alan Schoenfeld 7 Q. And I typically take a break maybe every
8 for third-party defendant, JPMorgan Chase Bank, N.A. 8 hour to hour and a half, but if you need to take a
9 at WilmerHale. I am joined by my colleague, Albinas 9 break for any reason, just let me know and unless
10 Prizgintas. 10 there's a pending question, we'll just take a break
11 THE VIDEOGRAPHER: Will the court reporter 11 if you need to do that, okay?
12 please administer the oath. 12 A. Okay.
13 Whereupon, 13 Q. Mr. Thomas, would you please, at a fairly
14 JOHN THOMAS, 14 high level of generality, run through your
15 was called as a witness by counsel for 15 professional experience beginning from the time you
16 Defendant/Third-Party Plaintiff, and having been duly 16 graduated from college. Where did you graduate from
17 sworn by the Notary Public, was examined and 17 college?
18 testified as follows: 18 A. Southern Methodist University.
19 EXAMINATION BY COUNSEL FOR 19 Q. What year was that?
20 DEFENDANT/THIRD-PARTY PLAINTIFF 20 A. I believe 2007. I could be off by a year.
21 BY MR. ORSECK: 21 Q. What did you do professionally from 2007
22 Q. Mr. Thomas, my name is Gary Orseck and I'm 22 through the present?
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1 A. Several things. Let me see if I can 1 commentator?
2 recant them all. I worked in politics running 2 A. That's correct.
3 campaigns all over the country. I've worked for 3 Q. You mentioned a healthcare real estate
4 several real estate developers. I founded a company 4 company called Thomas Properties; is that right?
5 called Thomas Partners Strategies that is a political 5 A. Thomas Partners Properties, yes.
6 consulting, marketing, public affairs and crisis 6 Q. Tell us a little about that. What does
7 management firm. 7 that company do?
8 I founded a company called Thomas Partners 8 A. It was designed to create, to identify,
9 Research that is a public opinion research company. 9 entitle and sometimes build healthcare real estate
10 I founded and run a healthcare real estate 10 projects for different users all over the
11 development company called Thomas Partners 11 United States, whether they're, you know, acute
12 Properties. 12 facilities, outpatient, mixed-use wellness villages,
13 I've worked for a company called 13 but to build healthcare projects.
14 iHeartMedia. I've worked for a news organization 14 Q. Did that company provide health care or
15 called CNN. Do you care to know the board 15 help to develop real estate or something else?
16 affiliation I've had? 16 A. Well, it was a little bit of both in the
17 Q. Sure. 17 sense of one of our projects was pretty
18 A. I've served on Pepperdine's School of 18 groundbreaking where we created a concept called a
19 Public Policy board of visitors for multiple years. 19 wellness village. And essentially that's where you
20 I served on the board of trustees of the House Ear 20 blend outpatient facilities, retail and other uses
21 Research Institute, which is a healthcare research 21 together adjacent to acute facilities owned by
22 group specifically around auditory issues both from a 22 hospitals.
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1 clinic side as well as a research side. 1 And so I worked hand in glove with a major
2 Q. I couldn't hear the name of that entity. 2 healthcare system, not just to figure out the built
3 A. Oh, the House Ear Research Institute. 3 environment, but specifically how the built
4 Let's see. I've served -- on my 4 environment would deliver healthcare services.
5 undergraduate at SMU, I was the president of the 5 Q. Okay. So --
6 alumni chapter for more than four years for LA. I 6 A. That means, you know, loading docks to
7 earned -- in addition to my bachelor's, I earned my 7 storage of medical supplies, et cetera.
8 master's from Pepperdine School of Public Policy. 8 Q. You had involvement in designing the
9 And that's all that comes to mind. 9 storage for medical supplies?
10 Q. What was your undergraduate degree in? 10 A. Yeah. Essentially you'd think through how
11 A. Advertising. 11 these healthcare users are going to utilize the built
12 Q. You're a commentator from time to time on 12 environment.
13 Fox or Fox News; is that correct? 13 Q. You may or may not remember this, but on
14 A. Correct. 14 March 13th, the President declared an emergency
15 Q. What's your affiliation with CNN that you 15 relating to the Coronavirus pandemic.
16 mentioned? 16 Does that date sound about right to you?
17 A. I worked for them as a commentator for 17 A. I don't recall that specific date.
18 approximately two years. 18 Q. As of March 1st of this year, did you have
19 Q. What years were those? 19 any specialized knowledge in the supply chain for
20 A. Roughly between 2015 and 2017, 20 PPE? Do you know what I mean by PPE?
21 approximately. 21 A. Feel free to define it for me if you like.
22 Q. And that was an on-air role as a 22 Q. Personal protective equipment, are you
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1 familiar with that term? 1 A. Yes.
2 A. Yes. 2 Q. What was that?
3 Q. All right. So my question was, as of the 3 A. I imported fireworks from China.
4 beginning of March of this year, did you have any 4 Q. When was the first time you learned what
5 specialized expertise in the supply chain for PPE? 5 an N95 mask is?
6 A. Yes, I had relationships with PPE 6 A. I don't recall the specific day, but, I
7 suppliers. 7 mean, they're very commonly used masks. So most of
8 Q. Tell us what that was. 8 my life.
9 A. You know, I've been cultivating 9 Q. Really? Most of your life, you've known
10 relationships obviously my whole life, but -- you 10 what an N95 mask is?
11 know, particularly with my healthcare real estate 11 A. Yeah. I grew up in the real estate
12 development company, it allows me to meet a variety 12 development world. Construction workers use them all
13 of businessowners from major healthcare systems to 13 the time.
14 PPE manufacturers to pharmacy owners. Just a wide 14 Q. As of March 1st of 2020, did you have any
15 variety of businessowners. So, yes, I did. 15 contracts or pricing agreements with any
16 Q. So beginning -- as of March, what PPE 16 manufacturers of N95 masks?
17 suppliers did you have relationships with? 17 A. No.
18 A. Can you say that again? 18 Q. What about -- the same question, but
19 Q. Yes. As of March 1st of this -- of last 19 suppliers of N95 masks. Did you have any contracts
20 year, excuse me, of 2020, what PPE suppliers did you 20 or pricing agreements with suppliers?
21 have relationships with? 21 MR. WHITE: You mean as of the same
22 A. And you're referring -- could you define 22 date --
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1 the "you"? 1 MR. ORSECK: Yes.
2 Q. Yes. You, John Thomas. You, John Thomas. 2 MR. WHITE: -- just for clarification?
3 A. Sure. I had a relationship with Great 3 MR. ORSECK: Let me do that -- let me do
4 Health Companion. 4 that again. That was a mess.
5 Q. Any others? 5 BY MR. ORSECK:
6 A. Yeah. I had a relationship with William 6 Q. As of March 1st of 2020, did you have any
7 Lee. I had a relationship with Phoenix Medical. You 7 contracts or pricing agreements with suppliers of N95
8 said -- these are healthcare manufacturers or PPE 8 masks?
9 manufacturers; is that what you're asking? 9 A. I don't specifically recall.
10 Q. I said -- 10 Q. As of March 1st, 2020, do you believe that
11 A. Sorry. I just wanted to be clear. 11 you had the ability to examine an N95 mask and make a
12 Q. I said suppliers, but manufacturers -- you 12 determination about its quality?
13 can tell us if you had relationships with PPE 13 A. Can you say that again?
14 manufacturers as well. 14 Q. Yes. As of March 1st, 2020, did you,
15 A. I would imagine there are more, but those 15 Mr. Thomas, have the ability to examine an N95 mask
16 are all that come to mind. 16 and make a determination about its quality?
17 Q. Prior to March 1st of 2020, were you 17 A. No. That's a job for a third-party
18 directly involved in importing any medical supplies? 18 inspection company.
19 A. No. 19 Q. I'm going to jump ahead then in response
20 Q. Were you directly involved with the 20 to your question, Mr. Thomas. You formed an entity
21 importing of any kind of manufactured goods prior to 21 called Blue Flame Medical; am I right?
22 March 1st of 2020? 22 A. Uh-huh.
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1 Q. Yes? 1 certifications. No one -- when you're a medical
2 A. Yes. 2 distributor, you typically don't touch the product to
3 Q. And you worked from time to time with an 3 inspect it yourself. You typically use a third-party
4 entity called Velox as well; is that right? 4 inspection company that does spot testing.
5 A. Can you define the "you"? 5 Q. How --
6 Q. When I say you, I'm talking about you, 6 A. It's an expertise into itself, if that's
7 Mr. Thomas. If I mean something else, I'll try to be 7 what you're getting.
8 more specific about it, okay? 8 Q. Which entities was Mr. Bearman, in March
9 A. Okay. Could you say that one more time 9 of 2020, the chief legal officer for?
10 then? 10 A. I believe Blue Flame Medical.
11 Q. Yes. Did you, Mr. Thomas, have a business 11 Q. Was it part of Mr. Bearman's job at Blue
12 relationship with an entity called Velox? 12 Flame Medical to examine or inspect medical supplies?
13 A. Another company of mine did, yes. 13 A. Examine or inspect? I'm happy to restate
14 Q. What company of yours? 14 so you understand the business a little bit better.
15 A. Blue Flame Strategies. 15 Medical distributors don't typically touch
16 Q. Okay. So you had a -- you had a company 16 the product. That's -- that's something that you
17 called Blue Flame Strategies, right? 17 would use for a third-party inspection agency where
18 A. Yes. 18 they randomly open up a box in the case of an N95,
19 Q. And you had another company called Red 19 they cut a mask to check for the layers, and then
20 Line Strategies? 20 they give it a stamp prior to a medical distributor
21 A. Yes. 21 accepting the product from a factory.
22 Q. Which of the three companies, Blue Flame 22 So I'm not -- I'm not sure -- you're --
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1 Medical, Blue Flame Strategies and Red Line 1 are you asking if our legal officer was entrusted to
2 Strategies, had a relationship with Velox? 2 go cut the product? Is that what you're asking?
3 A. I believe Blue Flame Strategies. 3 Q. When you use the term "medical
4 Q. Did anyone -- as of March 2020, did 4 distributor," are you referring, in this context, to
5 anybody employed by Blue Flame Medical, Blue Flame 5 Blue Flame Medical?
6 Strategies, Red Line Strategies or Velox, to your 6 A. Yes.
7 knowledge, have the ability to examine an N95 mask 7 Q. And you're saying it wasn't the job of
8 and make a determination about its quality? 8 Blue Flame Medical to inspect the product; is that
9 A. I'm unclear what you mean by examine. 9 right?
10 Q. There's no special meaning I'm ascribing 10 A. That's not what I'm saying. I'm saying
11 to that verb. I mean, could you tell anybody at 11 it's not the job of Blue Flame Medical to -- I'm
12 those four companies, did anybody -- let me start 12 unclear because you're not defining inspect, so I'm
13 again. 13 not sure if you mean inspect to physically inspect,
14 Did anyone at any of the four companies I 14 inspect to check certifications.
15 just mentioned have the training or expertise to make 15 If you're asking about checking
16 a determination about the quality of an N95 mask? 16 certifications, yes, Ethan did that, I did that, a
17 A. Yes. 17 variety of people, our global supply chain manager,
18 Q. Who? 18 does that.
19 A. Our chief legal officer, Ethan Bearman. 19 Q. I wasn't asking about certifications.
20 Q. Anyone else? 20 What I'm getting at is was it the job of Blue Flame
21 A. You know, you'd have to ask Velox. I 21 Medical or anybody employed by Blue Flame Medical to
22 can't speak for their -- their training 22 determine whether the product was what it purported
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1 Mr. Wong take? 1 BY MR. ORSECK:
2 A. A variety of forms. 2 Q. Mr. Thomas, we've marked as Defendant's
3 Q. Some by text? 3 Exhibit 2 a set of interrogatory responses that Blue
4 A. Yes. 4 Flame served on Chain Bridge Bank on the 13th of
5 Q. Some be email? 5 October 2020. It's quite a lengthy document and for
6 A. Yes. 6 present purposes, I'm not going to ask you questions
7 Q. Did the communications between the parties 7 about the substance of the responses, but I would ask
8 include also your communications with Mr. Kim, Daniel 8 you to scroll to page 33 of 34 in the PDF and you'll
9 Kim? 9 see the word "verification" on the top.
10 MR. WHITE: Counsel, are you asking 10 A. Okay.
11 regarding this particular sentence or in general? 11 Q. Are you there?
12 MR. ORSECK: I'm asking with respect to 12 A. I'm here.
13 this sentence. 13 Q. And is that your signature on October
14 MR. WHITE: Thank you for the 14 13th, 2020?
15 clarification. 15 A. Yes.
16 BY MR. ORSECK: 16 Q. The verification says, among other things,
17 Q. It reference -- let me make the question 17 that you've reviewed the foregoing interrogatory
18 clear, if I can, Mr. Thomas. 18 responses and the statements set forth therein are to
19 This refers on page 4 of the Mayer Brown 19 the best of my knowledge, information and belief,
20 letter to communications between the parties, and I'm 20 true and correct.
21 asking if those communications referenced here 21 Was that in fact your belief at the time?
22 include your communications with Mr. Kim. 22 A. Yes, to the best of my knowledge.
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1 A. You know, I don't specifically recall, but 1 Q. I couldn't hear that.
2 I would imagine it would most likely be relating to 2 A. Yes, to the best of my knowledge.
3 my conversations with Michael Wong. 3 Q. Thank you. Mr. Thomas, as of March 2020,
4 Q. And same question with respect to Betty 4 did you consider yourself to be a healthcare
5 Yee. Do the communications referenced here include 5 specialist?
6 your texts with Betty Yee? 6 MR. WHITE: Objection. Vague. You can
7 A. No. 7 answer if you understand.
8 Q. You can put that aside for -- well, we're 8 THE WITNESS: Yeah, I'm not sure what that
9 not putting things aside. It's all virtual. But I'm 9 means.
10 done with that one for the moment. 10 BY MR. ORSECK:
11 MR. ORSECK: Carolyn, can you pull up, 11 Q. Did you hold yourself out to be a
12 please, the Blue Flame interrogatory responses from 12 healthcare specialist in March 2020?
13 October? We'll mark that as Defendant's Exhibit 2. 13 A. I'm not sure what you mean by -- can you
14 MS. FORSTEIN: Okay. I just dropped that 14 define healthcare specialist?
15 into the chat. 15 Q. No. Did you circulate materials publicly
16 (Defendant's Exhibit No. 2 was marked 16 claiming that you were a healthcare specialist?
17 for identification.) 17 A. Well, forgive me, but if you can't define
18 BY MR. ORSECK: 18 healthcare specialist, I'm just not sure -- like did
19 Q. Do you have that one, Mr. Thomas? 19 I verbatim use the word "healthcare specialist"?
20 MR. WHITE: I have a hard copy of that 20 I'm -- can you define what you mean by that?
21 one, Gary, so you can go forward as soon as 21 Q. Fine. Did you verbatim hold yourself out
22 Mr. Thomas has had a chance to look at it. 22 as a healthcare specialist?
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1 A. On a particular date range? 1 Q. An accurate statement.
2 Q. Same, March and April of 2020. 2 A. Yes.
3 A. I don't recall if I used those specific 3 Q. And on what basis would it have been
4 words. 4 accurate to call yourself a healthcare specialist?
5 Q. Do you consider yourself at any point 5 A. Well, likely on multiple fronts. I've
6 during 2020 to have been a healthcare specialist? 6 successfully run a healthcare real estate development
7 MR. WHITE: Objection. Vague. Answer. 7 company for a number of years with an expertise in
8 THE WITNESS: Yeah, I would need you to 8 healthcare. And I run Blue Flame Medical, which is a
9 define what that means. I don't -- I need to 9 medical supply company that works in the healthcare
10 understand what you mean by that. 10 space. So I think that would be fair.
11 BY MR. ORSECK: 11 Q. Any other bases besides those two?
12 Q. Mr. Thomas, I don't mean anything. I 12 A. Yes.
13 don't know what the words mean. I'm asking you if 13 Q. What are those?
14 you publicly held yourself out at any point in 2020 14 A. Well, I served on the board of trustees
15 as a healthcare specialist. Did you or did you not? 15 for the House Ear Research Institute, which is a
16 Or don't you remember? 16 healthcare organization, one of the top in the
17 A. I'm having difficulty understanding what 17 nation.
18 you mean by healthcare specialist. It would be 18 Q. Anything else?
19 really helpful if you could define what that means. 19 A. Yes.
20 Q. I have no idea -- I have no idea what it 20 Q. I just wanted to hear all of them. So
21 means. I'm asking you if you publicly stated in 2020 21 tell me everything you think supports the statement
22 that you are a healthcare specialist. The answer is 22 that you're a healthcare specialist.
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1 yes, no or I don't remember. 1 A. Well, I've studied and been involved in
2 A. I don't recall. 2 crafting healthcare policy over the better part of a
3 Q. If you had publicly stated that you were a 3 decade.
4 healthcare specialist, would that have been an 4 Q. What is that about?
5 accurate statement? 5 A. I took courses sometimes involving
6 MR. WHITE: Objection. Vague. That 6 healthcare policy in my graduate program as well as
7 depends on the definition of healthcare specialist. 7 crafting healthcare policies for a variety of
8 THE WITNESS: I'd need to hear your 8 candidates and elected officials.
9 definition of healthcare specialist. 9 Q. Okay. How did you come to know Mike Gula?
10 BY MR. ORSECK: 10 A. Well, Mike and I have known each other
11 Q. What's your definition of healthcare 11 personally and professionally for a number of years.
12 specialist? 12 First, we were introduced by a mutual friend of ours,
13 MR. WHITE: Objection. Vague. You may 13 Matthew Robbins, who unfortunately passed away due to
14 answer. 14 COVID. We became acquainted with each other on a
15 THE WITNESS: It would be relating to 15 personal basis and then worked together
16 someone with some kind of expertise in healthcare. 16 professionally for a few years on -- he worked with
17 BY MR. ORSECK: 17 my company, Thomas Partners Strategies. We formed a
18 Q. And if you said that about yourself in 18 close relationship, and then decided to open Blue
19 2020, would that have been an accurate statement? 19 Flame Medical together.
20 A. Did you say would that have been an 20 Q. And can you give us some color around the
21 accurate statement or did you say an accurate 21 launching of this PPE supply business? How did that
22 statement? 22 come about?
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1 A. Which entity are you talking about? 1 A. As well as others.
2 Q. Blue Flame Medical. Let me start again. 2 Q. Who other -- who else at the time you
3 How did you come to found Blue Flame Medical? 3 founded Blue Flame was in the supply chain for N95
4 A. Sure. Mike and I were -- well, we were in 4 masks that you were aware of?
5 close communication with one another, personally and 5 A. I don't recall the full list, but here are
6 professionally, around March, even prior, of course, 6 a few. William Lee had been in the procurement
7 and we were watching, like the rest of the world was, 7 business and supply chain business. He put us in
8 public reports that there was a shortage of PPE and 8 touch with a variety of PPE manufacturers.
9 that healthcare providers were unable to access 9 Suuchi was a large supplier with access to
10 adequate amounts of PPE supplies. I was reading 10 hundreds of factories that submit -- produced medical
11 public reports of that and chatting with Mike about 11 equipment. Phoenix Medical. NeVap. Glymate. I
12 it. He was hearing the same thing. 12 know there were more. I just don't recall all of the
13 Then I wanted to confirm that that in fact 13 specifics.
14 was the situation, it wasn't reporters who got it 14 Q. Did you or Mr. Gula or both of you invest
15 wrong. And I started calling up friends of mine that 15 capital in Blue Flame Medical when you founded it?
16 work -- you know, CEOs of hospital systems, local 16 A. Yes.
17 elected officials and others to in fact confirm that 17 Q. How much did you invest?
18 that was the case. And they said, yes, that's the 18 A. I believe more than $80,000 a person.
19 case. In fact, major healthcare systems could not 19 Q. And what were your respective ownership
20 even get a return phone call from their longtime 20 shares in the company?
21 medical supply companies that they regularly 21 A. 50/50.
22 purchased from because those companies were maxed 22 Q. Did you prepare a business plan?
Page 51 Page 53
1 out. Mike Gula was hearing the same thing. 1 A. We had in-depth conversations about how
2 So then I started calling several 2 the business would work. Is that what you're asking?
3 relationships of mine, one being Henry Huang at Great 3 Q. Is there a written document that is a
4 Health Companion to further confirm and understand 4 business plan?
5 why it is that there were potential shortages. And 5 A. No. We had cash flow projections, P&L
6 once I understood that -- verified that in fact there 6 statements, in-depth conversations about the
7 were real shortages to healthcare systems, the public 7 business, the future plans and growth of the
8 and the private sector were having difficulty 8 business.
9 procuring these supplies, I negotiated with Henry 9 Q. You had written cash flow projections and
10 Huang, among others, to allow us to work with them 10 P&L statements at the time of founding the company?
11 and procure high quality medical supplies from them. 11 A. That or shortly thereafter, uh-huh.
12 So Mike and I had a discussion and thought 12 Q. Have those been supplied to your counsel
13 that, in this moment in time, we were uniquely 13 in this case?
14 qualified and situated with my relationships in the 14 A. Yes.
15 supply chain, with my business background and with 15 Q. What employees did you have, let's say, in
16 Mike's connections to buyers, that we could bring 16 March of 2020?
17 buyers and suppliers together and successfully 17 A. You know, I have to go back and look at
18 deliver lifesaving medical supplies. So we formed 18 the -- I'm not familiar with the exact dates of the
19 Blue Flame Medical. 19 employment agreements, but I can tell you kind of
20 Q. You just referred to your relationships 20 roughly who worked for the company.
21 with the supply chain. Are you referring to 21 Ethan Bearman was our legal officer. Marc
22 Mr. Huang? 22 Serrio was our chief financial officer. I'm trying
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Case 1:20-cv-00658-LMB-IDD Document 130-2 Filed 05/06/21 Page 11 of 30
Page 17 (62 - 65)
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1 A. I don't recall. 1 hadn't sent you proof of life?
2 MR. ORSECK: Carolyn, can you put up tab 2 A. You know, I'm not sure because I believe
3 154, please, and that will make Defendant's Exhibit 3 our primary communication was telephonically. I seem
4 4. 4 to recall we had extensive conversations. And you've
5 MS. FORSTEIN: I just dropped it in the 5 got to remember back at that -- back in the month of
6 chat. 6 March, you know, an hour felt like a month. So a lot
7 (Defendant's Exhibit No. 4 was marked 7 of things were happening. So I can't actually say by
8 for identification.) 8 the end of the day. You know, I was working
9 MR. WHITE: Do you have that, Mr. Thomas? 9 sometimes 22-hour days and so that would leave three
10 THE WITNESS: Yes, I do. I'm sorry. I'm 10 and a half hours left in the day, which is a long
11 looking at it. 11 time.
12 BY MR. ORSECK: 12 Q. I haven't seen -- okay. I'm sorry to
13 Q. All right. We've marked as Exhibit 4 a 13 interrupt. I haven't seen any correspondence of any
14 two-page email string and I'll direct you on the 14 sort in which Mr. Lee sent you a picture of the
15 first page to the second -- third email down. It's 15 product. Do you have any reason to think that he did
16 from you at 8:10 p.m. to Jason Lee. Are you there? 16 that at some point later on on March 19th?
17 A. I'm here. 17 A. You know, I don't recall if that was on
18 Q. And you say, "Jason, can you get us a 18 March 19th. I don't recall.
19 picture of the product immediately? The team needs 19 Q. Did you physically go to the Port of Long
20 proof of product. Just a few snaps of the mask is 20 Beach to see them yourself on the 19th?
21 good," right? 21 A. You know, I attempted to do it several
22 A. Correct. 22 times, but I don't -- I don't know about March 19th.
Page 63 Page 65
1 Q. And did you want a picture of the -- well, 1 Q. Did you ever see these masks yourself?
2 why did you want a picture of the product? 2 A. What do you mean, in person?
3 A. That's fairly standard. It's one of the 3 Q. Did you ever see them in any way?
4 mechanisms that we use to verify the integrity of the 4 A. I believe I did see proof of life. I was
5 product. It's called proof of life. And that can be 5 unable to physically visit them in person.
6 with a picture. 6 Q. How do you believe you saw proof of life?
7 Q. So you yourself hadn't seen them by this 7 A. I seem to recall that I was sent proof of
8 time, by the evening of March 19th, right? 8 life.
9 A. You mean hadn't seen them, you mean in 9 Q. You seem to recall, but you don't have a
10 person; is that what you're asking? 10 specific recollection; is that right?
11 Q. At all. Had you seen them at all by the 11 A. Correct.
12 end of the day on March 19th? 12 Q. You think he sent you photos?
13 A. You know, I don't recall the specific date 13 A. I seem to recall that, yes.
14 of when I received a proof of life confirmation. So 14 Q. You may not have the timeline in mind, but
15 it's hard for me to say. 15 we'll get there through the documents. But I'll
16 Q. He writes you back just above that and 16 represent to you that the next day, March 20th, you
17 says, "I do not have access to the product until we 17 began to engage with California about a potential
18 fund escrow." 18 transaction. That's Friday, March 20th.
19 Do you see that? 19 Do you have that date in mind?
20 A. I do. 20 A. Can you be a little more specific? What
21 Q. Does that refresh your recollection that 21 do you mean engage with California? I'm not quite
22 at least as of the end of the day on March 19th, he 22 sure what that means.
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Case 1:20-cv-00658-LMB-IDD Document 130-2 Filed 05/06/21 Page 12 of 30
Page 18 (66 - 69)
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1 Q. I'm going to withdraw it. It makes no 1 A. It means that he -- well, actually, he did
2 difference. 2 two things for Blue Flame Medical. He was a referral
3 As of March 20th, 2020, had you or any of 3 partner and at one point he was a salesperson. But
4 your affiliated entities delivered any N95 masks to 4 it means that he -- we had an agreement with him to
5 any customers as of March 20th? 5 introduce us to prospective buyers that might need
6 A. What do you mean by affiliated entities? 6 medical equipment.
7 Q. Did you or any of your companies in which 7 Q. Did you have some sort of written referral
8 you were an owner, an employee, an investor, deliver 8 agreement with him whereby he would be entitled to
9 any N95 masks to anyone on or before March 20th? 9 some compensation for referring you to partners who
10 A. Just to be clear, you're not referring to 10 ended up doing deals with you?
11 our supply chain. You're referring to Blue Flame 11 A. Yes.
12 Medical. Is that -- 12 Q. And have you provided that to counsel?
13 Q. Well, I don't know all your -- I don't 13 A. Yes.
14 know all your companies. So you keep asking me these 14 Q. What was -- do you remember the terms of
15 questions, but you're the one who knows the answers. 15 that; in other words, what was Mr. Littman entitled
16 Here's what I know. You had Blue Flame 16 to?
17 Strategies, you have Blue Flame Medical and you had 17 A. You know, we had a bunch of those
18 Red Line Strategies. I don't know what other 18 agreements with different referral partners. I could
19 companies you may have had. 19 speak more generally to the terms which were he would
20 What I'm asking you is whether any of your 20 receive a fee upon successful completion if he were,
21 companies, any of the three that I just mentioned or 21 you know, essentially the procuring cause or maybe
22 any others, had delivered any N95 masks to anybody by 22 introduction. That was a referral agreement.
Page 67 Page 69
1 March 20th? 1
I think for his sales agreement later on,
2 A. Any companies that I had ownership in, no, 2 I think he was offered a retainer as well as a
3 not prior to March 20th. 3 commission of some sort on sales closed, but I'm a
4 Q. As of March 20th, did you have written 4 little -- I can't speak to the exact numbers, but I
5 supply agreements with any suppliers of N95 masks? 5 think that was the general structure.
6 A. I don't recall the specific date that we 6 Q. With respect to the referral partner
7 started putting together paper with supplier 7 agreement, was he entitled to a percentage of any
8 agreements. It was a brand-new company, so I'm not 8 sale that came to fruition?
9 sure when the paperwork started getting put together. 9 A. Yes.
10 MR. ORSECK: Carolyn, can you please pull 10 Q. And you don't know what the percentage
11 up the text chain at BFM 20058 and we'll mark that as 11 was?
12 Defendant's Exhibit 5. 12 A. You mean a percent -- a percentage of the
13 THE WITNESS: It's downloading. 13 profit, yes.
14 (Defendant's Exhibit No. 5 was marked 14 Q. What percent?
15 for identification.) 15 A. You know, I don't recall the specifics.
16 BY MR. ORSECK: 16 By the way, the file has downloaded.
17 Q. Do you have it? 17 Sorry. Go ahead. I didn't mean to cut you off.
18 A. About 25 percent, yes. 18 Q. You don't remember the percentage he was
19 Q. While you're waiting for it to download, 19 entitled to; is that right?
20 who is Matt Littman? 20 A. I don't.
21 A. He was a referral partner of ours. 21 Q. How did you first come to meet Mr. Littman
22 Q. What does that mean? 22 or to become acquainted with him?
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1 A. Matt Littman and I have known each other 1 A. I believe the manufacturer.
2 for years. He's a public affairs consultant. He 2 Q. And had Jason Lee told you that that was
3 works for government entities, private entities. 3 the type of masks that he had in Long Beach?
4 He's a community activist. I think he used to be a 4 A. Yes.
5 speech writer for Joe Biden. We've known each other 5 Q. You say near the bottom that, "These are
6 personally and professionally for a number of years. 6 the gold standard masks and I've locked them down
7 Q. Is he a registered lobbyist, to your 7 here." What did you mean by "I've locked them down"?
8 knowledge? 8 A. Meant I had access to them.
9 A. Not to my knowledge. 9 Q. And did you have access to them?
10 Q. Do you have Exhibit 5 open now? 10 A. Yes.
11 Defendant's Exhibit 5? 11 Q. If you go down several entries, there's
12 A. Yes. 12 one from you at 7:50 a.m., 7:50 and 10 seconds, it
13 Q. If you look at the very top of the first 13 says, and you say, "Sitting in containers here right
14 page, Bates 58, there's a text from you to him. The 14 now. I've inspected the product myself. It's real."
15 way this is set up, just to take a step back, is that 15 Do you see that?
16 the ones that say "sent" are ones that you sent, and 16 A. I do.
17 the ones that say "received" are the ones that you 17 Q. Had you in fact inspected the product
18 received back. Okay? 18 yourself by 7:50 a.m. on the 20th?
19 A. Okay. 19 A. Yes, I believe I had.
20 Q. So at 7:45 a.m. on the 20th of March, 20 Q. How did you do that?
21 which is a Friday, you say, "Hey, Matt, I have 100 21 A. Proof of life from Jason Lee.
22 million 3M masks sitting here at the port. Can you 22 Q. You recall that he emailed you the night
Page 71 Page 73
1 reach out to Newsom's people," right? 1 before around about 8:00 p.m. and said that he
2 A. Correct. 2 couldn't send you any photos, right?
3 Q. And Newsom refers to Governor Gavin 3 A. I do.
4 Newsom? 4 Q. So what makes you think you saw proof of
5 A. Yes. 5 life between then and when you texted Mr. Littman in
6 Q. So you were -- you were asking Matt 6 the morning?
7 Littman to make some contacts with California state 7 A. Well, I remember in a multitude of phone
8 officials with respect to PPE; is that right? 8 calls I had with Jason Lee, I pressed him and said,
9 A. Correct. 9 you know, I can't -- I need access -- I need to be
10 Q. And at the bottom of that first text from 10 able to get proof of life that these exist. I need
11 you, you say, "We'll kick you a percentage of our 11 you to make that happen. And I remember he made it
12 net. Mind making that call?" 12 happen.
13 Do you see that? 13 Q. So it's your testimony that he sent you
14 A. I do. 14 photos at that point?
15 Q. And did that refer to your referral 15 A. Yes.
16 partner agreement with him? 16 Q. Do you know why none of those have been
17 A. You know, I don't know if the agreement 17 produced?
18 was in place at that point. But it would refer to an 18 A. I don't know why.
19 eventual agreement, yes. 19 Q. Did anybody else at Blue Flame Medical see
20 Q. The text at the top says that there are 20 this proof of life you're referring to?
21 100 million 3M masks. Do you know what a 3M mask 21 A. I don't recall.
22 refers to? 22 Q. And did you intend for him to convey to
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Case 1:20-cv-00658-LMB-IDD Document 130-2 Filed 05/06/21 Page 14 of 30
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1 There are some others that are not on this document. 1 that we signed our office lease.
You may not be
2 During the time that you were having text 2 aware, but the entire state of California was on
3 exchanges with Ms. Yee, did you ever speak to her on 3 lockdown with mandatory stay-at-home orders at that
4 the phone? 4 time. It was virtually impossible despite repeated
5 A. I believe I did. 5 attempts to secure office space in the month of
6 Q. What's your recollection? 6 March.
7 A. Yes. 7 Q. Did you have an office on March 20th?
8 Q. Well, okay. What do you remember about 8 A. You know, I believe I was utilizing, but I
9 those -- was it one conversation or multiple 9 don't recall on the exact date, but I think it was in
10 conversations? 10 the month of March, multiple conference rooms in the
11 A. I believe multiple. 11 Langham Hotel in Pasadena as that was the only
12 Q. Do you recall when the conversations 12 available gathering place that was still open.
13 occurred? 13 Q. Did you tell Betty Yee that Blue Flame
14 A. Sometime in late March. 14 Medical did not have an office of its own?
15 Q. What was the subject of any of the 15 A. You're referring to an office space?
16 conversations? 16 Q. Did you tell Betty Yee that you didn't
17 A. I don't recall. 17 have an office of your own?
18 Q. Do you recall anything at all that you 18 A. Can you define "your"? I'm -- I'm
19 talked about with her? 19 confused. Had offices? I believe, Mr. Orseck, just
20 A. Yes. 20 to be -- if you want to be technical, the legally
21 Q. What did you talk about? 21 registered address for the LLC, I believe, was in --
22 A. You're speaking on the phone or -- 22 it was a Delaware LLC, but I believe Capital Place
Page 95 Page 97
1 Q. Yes. 1 was the legally registered address, which I believe
2 A. -- via text? 2 my partner physically occupied at that time for Blue
3 Q. No, I have the texts. I'm asking you what 3 Flame Medical. So --
4 you ever spoke to her about on the phone if you 4 Q. Did you tell Betty Yee anything about the
5 recall. 5 office space out of which you were operating,
6 A. The only phone call I remember having with 6 Mr. Thomas?
7 her was that she was running into a meeting and 7 A. To be clear, you want to know if I, John
8 couldn't talk. And that she texted me. 8 Thomas, in my personal capacity, told Betty Yee
9 Q. Did you ever, between March 20th and March 9 during mandatory stay-at-home orders where I was
10 27th -- well, let me back up. 10 operating out of? Is that what you're asking?
11 Did you ever tell Betty Yee that prior to 11 Q. I don't think I said any of that. My
12 March 20th, Blue Flame Medical had not ever supplied 12 question is, did you discuss the topic of office
13 an N95 mask to any customer? 13 space at all at any time with Betty Yee?
14 A. Could you say that again? 14 A. Let me think. I believe I did. I think I
15 Q. Yes. Did you ever tell Betty Yee that 15 told her I was based in Pasadena, California.
16 prior to March 20th, Blue Flame Medical had not ever 16 Q. Anything else?
17 supplied an N95 mask to any customer? 17 A. I'm not sure why that would be a pertinent
18 A. No. 18 topic in a mandatory stay-at-home order in the state
19 Q. Did you have an office on or around March 19 of California. But no, I don't believe so.
20 20th? Let me back up. Did Blue Flame Medical have 20 Q. I'm going to ask you -- I'm going to ask
21 an office on March 20th? 21 you to answer the question. Did you discuss office
22 A. You know, I don't recall the exact date 22 space with her at all?
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1 MR. WHITE: Objection. Asked and answered 1 her by text on March 20th, that Blue Flame Medical
2 already. But you may answer again. 2 did not yet have a bank account?
3 THE WITNESS: Well, as I said before, I'm 3 A. I don't recall.
4 confident I told her I personally was based in 4 Q. Look, please, at Defendant's Exhibit 6.
5 Pasadena, California and I'm not sure why we would 5 That's your email exchange with her. And --
6 discuss any office space or the status of the leases 6 A. You mean text?
7 I was looking to procure for our company given we 7 Q. That's what I meant. Thank you. Your
8 were on mandatory stay-at-home orders. So no. 8 text exchange with her.
9 BY MR. ORSECK: 9 The second from the bottom on the first
10 Q. So no. What does no mean? 10 page is a text sent by you at 5:40 p.m. and you say,
11 MR. WHITE: Objection. Do you really need 11 "We've almost sold all of this first shipment but
12 to know what "no" means? 12 will have 100m units every week being delivered to
13 MR. ORSECK: Well, look, I'm getting these 13 Long Beach." Is that right?
14 long answers about the rationale of the 14 MR. WHITE: Objection to the
15 conversations. 15 characterization. You can answer.
16 BY MR. ORSECK: 16 THE WITNESS: It appears to be, yes.
17 Q. I'm simply asking you if you remember 17 BY MR. ORSECK:
18 discussing office space with Betty Yee. Yes, no or I 18 Q. You used the notation 100 with a little M
19 don't remember? 19 in that sentence. Does that little M refer to
20 A. No, I don't think she doubles as a leasing 20 million?
21 agent. Sorry for the humor. But no. 21 A. I believe so.
22 Q. Okay. Blue Flame Medical incorporated in 22 Q. You say, "We've almost sold all of this
Page 99 Page 101
1 Delaware on March 23rd. Do you agree with that? 1 first shipment." Does that refer to the 100 million
2 A. You know, I don't recall the specifics, 2 3M masks at the Port of Long Beach that you
3 but that sounds about right. 3 referenced several texts above that on page 1?
4 Q. It says that in the complaint. I could 4 A. Yes.
5 show it to you, but I suggest you take my word for 5 Q. Who did you sell almost all of that first
6 it, that that's when the articles of incorporation 6 shipment to?
7 are dated and the LLC agreement is dated. They all 7 MR. WHITE: Objection to the
8 say March 23rd. 8 characterization. It says almost sold all of this
9 Can we agree on that? 9 first shipment. Go ahead and answer.
10 A. Yes. 10 THE WITNESS: My partner and I were having
11 Q. Did you tell Ms. Yee, when you were 11 a variety of conversations in the selling process
12 emailing with her on March 20th, that Blue Flame 12 with some very large buyers all over the
13 Medical didn't exist yet? 13 United States and the world. At the time, I'm sure I
14 A. I don't believe we had a conversation 14 was referencing several deals that appeared to be
15 about the legal status of the LLC in Delaware. But I 15 imminent of very large magnitude.
16 do know that I had been operating under the 16 BY MR. ORSECK:
17 assumption that Blue Flame Medical did exist for, I 17 Q. Did Blue Flame Medical sell any of the 100
18 believe, several weeks at that point in time. But 18 million 3M masks at the Port of Long Beach?
19 was the paperwork filed? Did we have a discussion 19 A. No.
20 about that? I don't believe we did, but I don't 20 Q. Did you have negotiations in place with
21 specifically recall that. 21 one or more entities to sell those Long Beach masks?
22 Q. Did you tell Ms. Yee, when you spoke to 22 A. What do you mean by you?
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1 Q. I'm sorry, I didn't understand what you 1 N95 masks to Blue Flame Medical?
2 said. 2 A. No.
3 A. I'm trying to understand. You said did 3 Q. What came of the 100 million that you
4 you have agreements in place with several entities to 4 anticipated being delivered every week?
5 sell those masks. I'm just not sure exactly -- 5 A. You know, I don't know. We didn't have a
6 Q. Sure. 6 need to procure those because after your client
7 A. -- what you -- 7 destroyed my bank account, destroyed my credibility,
8 Q. You -- you said a moment ago that you 8 our demand for that level of volume dramatically
9 had -- 9 decreased. So I don't believe I ever followed up
10 A. "You" being me, John Thomas? 10 with Mr. Lee to procure any of his products.
11 Q. Mr. Thomas, you answered me a moment ago 11 Q. To your knowledge, those materials were
12 and said that at the time, I'm sure I was referencing 12 available. You just had no demand for them. Is that
13 several deals that appeared to be imminent of very 13 what you're saying?
14 large magnitude. 14 A. Correct.
15 So my -- my question for you is, did Blue 15 MR. ORSECK: Carolyn, can you put up tab
16 Flame have deals that appeared to be imminent with 16 10, please. We'll mark that as Defendant's Exhibit
17 respect to these 100 million 3M masks at the Port of 17 8.
18 Long Beach? 18 THE WITNESS: I'm downloading it.
19 A. Yes. 19 (Defendant's Exhibit No. 8 was marked
20 Q. And with whom did you have deals that 20 for identification.)
21 appeared to be imminent? 21 THE WITNESS: Okay. I have it open.
22 A. You know, I don't specifically recall, but 22 BY MR. ORSECK:
Page 103 Page 105
1 you'd have to ask my partner, Mike Gula. 1
Q. Exhibit 8 is a five-page PDF that consists
2 Q. You go on to say in your 5:40 p.m. text, 2
of a series of emails. And I will direct your
3 "We'll have 100 million units every week being 3
attention to the first page where you email Bill
4 delivered to Long Beach." 4
Simonson at 8:08 p.m. on March 20th.
5 Do you see that? 5
Do you see that?
6 A. I do. 6
A. I do.
7 Q. What was your basis for that statement? 7
Q. Who is Bill Simonson?
8 A. Jason Lee had told me that there was a 8
A. I believe he works in the office of risk
9 weekly delivery of that size coming into Long Beach. 9
and insurance management, but in the emergency
10 Q. Did he tell you that by text or on the 10
management department.
11 phone or by email or in some other mechanism? 11
Q. The state of California, right? I
12 MR. WHITE: Objection. 12
couldn't hear you.
13 THE WITNESS: On the phone. 13
A. Correct.
14 MR. WHITE: Mr. Thomas, you have to wait 14
Q. And you write to him, "Just about to click
15 until he finishes so that the court reporter -- and 15
send. Sorry I was talking to one of my main
16 until I finish because the court reporter can't take 16
manufacturers asking him to speed up delivery on
17 down both at the same time. 17
masks. Regarding N95 masks, I can deliver one
18 BY MR. ORSECK: 18
million units in the air in three days so that you
19 Q. Jason Lee is with an outfit called First 19
can see a trial and then I can deliver 15 to 25
20 Alta or he was at the time. Does that ring a bell? 20
million in a month and this is just from one of our
21 A. It does ring a bell. 21
core suppliers," and then you go on from there.
22 Q. Did Mr. Lee or his company ever supply any 22
Do you see that?
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1 Q. Okay. I hear you now. I don't know what 1 N95 masks and 500K COVID-19 at testing kits to
2 that was. Are you at page 121? 2 Florida. Just came in. The other states seems to
3 A. I am. 3 move faster. No offense. LOL."
4 Q. There's an entry at the top at 11:18 a.m. 4 Do you see that?
5 on March 21st sent by you to Ms. Yee in which you 5 A. No, I --
6 say, "Thank you so much for your help birddogging 6 MR. WHITE: Actually, Gary, can you --
7 this." 7 THE WITNESS: No, I don't.
8 Do you see that? 8 MR. WHITE: -- reorient me to where that
9 A. I do. 9 is as well? I lost you.
10 Q. She responds, "Got it. Will press 10 MR. ORSECK: We're on Defendant's Exhibit
11 governor's folks. All okay with the nurses?" Right? 11 6.
12 A. Yes. 12 MR. WHITE: Yeah, I've got that.
13 Q. What is the reference to the nurses? 13 MR. ORSECK: And I wasn't finished. And
14 A. Hang on one second. May I look at this 14 on Bates BFM 200121, which I think is the third page
15 document just briefly? 15 of this exhibit, there is a text message from
16 Q. Sure. 16 Mr. Thomas at 3:20 p.m. That's what I'm referring
17 MR. WHITE: You can always look back and 17 to.
18 forth through the document if you need to. 18 MR. WHITE: I understand. We both have it
19 THE WITNESS: Okay. Okay. Sorry. Go 19 now. Thank you.
20 ahead. Can you ask your question again? 20 BY MR. ORSECK:
21 BY MR. ORSECK: 21 Q. Mr. Thomas, does your reference to 100M
22 Q. Yes. Can you tell us about the reference 22 units mean 100 million?
Page 115 Page 117
1 to the nurses? And I'll note there are references 1 A. You know, I don't specifically recall, but
2 throughout this text exchange to the California 2 that looks correct.
3 Nurses Association. Is that what that refers to? 3 Q. Do you think it might mean something else?
4 A. I think so, yes. 4 A. I'm unsure.
5 Q. Did you -- were you trying to do a 5 Q. Well, you wrote it. Do you have any
6 transaction with the California Nurses Association? 6 reason to think it means anything other than 100
7 A. I believe I had spoken a few times with 7 million?
8 somebody from the association, but it was very 8 A. No, but it -- no.
9 preliminary. Never went anywhere. 9 Q. No?
10 Q. Okay. If you go to page 122, there is a 10 A. No.
11 text from Ms. Yee to you at 11:14 p.m. and she twice 11 Q. What was the basis for your reporting to
12 says within the text, "I will keep pushing." 12 the controller that you were delivering 100 million
13 Do you know why Ms. Yee was birddogging 13 units of N95 masks to Florida?
14 and pushing along the prospects of a deal between the 14 A. Well, that would be that my partner was
15 state of California and your business? 15 negotiating and almost closing, I believe at that
16 A. I mean, you'd have to ask her. I would 16 time, talks for very large quantities, sometimes in
17 imagine -- I really can't speculate on her intent, 17 the quantities of 100 million, to other buyers in
18 but probably because she lives and cares about the 18 other states.
19 state of California and wants them to get lifesaving 19 I think in Florida, there were several
20 medical supplies. 20 private and I think one public buyer in Florida. And
21 Q. Back on page 121 at 3:20 p.m., you write 21 I think I'm also saying, in reference to this chain,
22 to Ms. Yee, "We are delivering another 100M units of 22 it appears that we're speaking about a lack of
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1 responsiveness from procurement officials to begin 1 the state of Florida? By you in this instance, I
2 negotiations with me in the state of California, and 2 mean Blue Flame.
3 other states seemed to move more quickly in being 3 A. I don't believe we did. We very well
4 responsive to tell us what they need. 4 might have, had we had a bank account to transact and
5 Q. Was it Mr. Gula who was having the 5 had your client not destroyed my California
6 negotiations with Florida over the 100 million units? 6 transaction that allowed us to fulfill a lot of
7 A. I seem to recall that, yes. 7 orders all over the country. Some of these customers
8 Q. And what entity was he negotiating with? 8 were in Florida. They were unable to take because
9 A. You'd have to ask him. I don't remember. 9 the California transaction was blown up.
10 Q. Did you know at the time? 10 Q. Did you ever deliver any N95 masks to any
11 A. I would imagine I did, but I don't recall. 11 purchaser in the state of Florida?
12 Q. It says that you're delivering another 100 12 A. You know, I don't recall. There were some
13 million units of N95 masks. Was there an earlier 13 smaller orders in Florida. I don't recall if they
14 delivery of 100 million units? 14 ordered N95s or not. I can't recall.
15 A. Well, I think the term "delivering" in 15 Q. Did you ever advise Ms. Yee that there in
16 this text message is likely referring to closing a 16 fact would not be a delivery of 100 million or any
17 sale for those masks. And I do know there were 17 masks to the state of Florida?
18 several very large different buyers in the state of 18 A. Can you say that again?
19 Florida that wanted a variety of things. 19 Q. Yes. You say here on page 121 that Blue
20 Q. You weren't physically delivering 100 20 Flame is delivering another 100 million units of N95
21 million N95 masks to the state of Florida, were you? 21 masks to Florida. Did you ever amend or retract in
22 A. Do you mean that I personally was going to 22 any way that statement to her?
Page 119 Page 121
1 lift the masks myself? What do you -- unclear. 1 A. I don't recall. I'm sure if she had
2 Q. When you say "we" in that sentence, who 2 asked, I would have updated her to the status. But
3 are you referring to? 3 because Chain Bridge Bank accused us of fraud to our
4 A. Blue Flame Medical. 4 client and tortiously interfered with my contract, we
5 Q. Was Blue Flame Medical physically 5 didn't have conversations after that point. So I
6 delivering 100 million N95 masks to somebody in the 6 wasn't able to update her on the status of our other
7 state of Florida? 7 clients.
8 A. Well, as I stated earlier, we're using 8 Q. You didn't update her between March 21st
9 delivering in this instance as language to say that 9 and March 27th, did you?
10 we are closing, we are finalizing contracts to 10 A. I don't recall. And I don't recall the
11 deliver large quantities of masks and COVID-19 kits. 11 status of those other orders at that time.
12 Q. So by delivering, you did not mean to 12 Q. If you go further down that page, you say
13 convey that you were transporting the masks from one 13 at 7:03 p.m., "Right. Thanks, Betty. I'm about to
14 place to the state of Florida? 14 unlock a bunch of U.S.-based manufacturers too, so if
15 A. You know, I don't recall specifically. In 15 we need to made in America goods too. But we can
16 this instance, it appears that I'm referring to the 16 fill and need the state" -- I think you probably
17 sales process, but I don't recall specifically. 17 meant any need the state has immediately; is that
18 Q. Did Blue Flame ever in fact physically 18 right? Did I read it correctly?
19 deliver or cause to be delivered 100 million N95 19 A. Sorry. I'm reading it. Yes.
20 masks to the state of Florida? 20 Q. What did you mean to convey when you said
21 A. No. No, I don't believe we did. 21 that "I'm about to unlock a bunch of U.S.-based
22 Q. Did you ever deliver one million masks to 22 manufacturers"?
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1 A. Well, at that time our supply chain was 1 hire the labor, to sign a long-term lease to increase
2 continuing to expand. On or about that time, I 2 our insurance requirements. All of that was planned
3 remember working out agreements with suppliers in 3 to use seed capital from the 100 million-unit mask
4 different parts of California that could make large 4 order from California to grow the company to which we
5 quantities of everything from hand sanitizers to 5 did not have.
6 COVID kits to gowns and masks, a variety of things. 6 And the second, Mr. Orseck, is given that
7 And we had plans internally at Blue Flame 7 we were a preferred supplier with the state of
8 to create our own N95 manufacturing facility in 8 California, we anticipated that as our reputation
9 Indiana and expedite that to be able to provide 9 grew, so would the demand for our products and that
10 customers that require made in America goods. 10 we would have increased demand. We -- our demand was
11 That -- that idea blew up when we lost our seed 11 dramatically decreased when it was leaked by media
12 capital that was the California deal. 12 outlets that a bank accused us of fraud to one of our
13 Q. Did Blue Flame Medical ever reach any 13 clients and that dramatically reduced our company's
14 supply agreements with U.S.-based manufacturers? 14 ability to secure customers.
15 A. You know, I believe we did, but I 15 Q. Did you have -- sorry. Were you finished?
16 certainly had -- I had verbal agreements from 16 A. Yes.
17 several, yes. 17 Q. Did you have a written business plan or
18 Q. Who were they? 18 pro formas for this manufacturing facility you'd
19 A. Oh, goodness. Let me see if I can 19 intended to develop?
20 remember. I'm not sure if I remember the -- oof, 20 A. You know, I know I spent substantial
21 maybe I do remember the business names. Steve -- one 21 amount of time talking about how to revive the
22 of the owner's names was Joseph Choi, I -- no. Hold 22 concept and some specific numbers with my chief
Page 123 Page 125
1 on, Mr. Orseck. Let me remember. 1 financial officer. And we came to the conclusion for
2 One was called Integrated -- I can't 2 the before mentioned reasons that we had to drop
3 remember the name of the LLC out of, I believe, 3 those plans.
4 Fontana, California. I physically inspected that 4 Q. You referenced that you had developed
5 manufacturer. Another one, I can't seem to recall 5 business plans and pro formas. I'm asking if they
6 the exact name of the company, was out of Santa 6 were reduced to writing.
7 Monica, was one of the largest providers of aerosol 7 A. Correct, yes.
8 sprays, gels in America. And we had a variety of 8 Q. They were?
9 others that I had spoken to and had understandings 9 A. Uh-huh.
10 that we were going to be able to procure from them 10 Q. Do you have them somewhere?
11 and order from them if needed. 11 A. Well, they would have been in emails to
12 Q. Did Blue Flame Medical ever obtain any N95 12 and from my chief financial officer.
13 masks from any U.S.-based manufacturer? 13 Q. Is that Mr. Serrio?
14 A. I don't believe we did. 14 A. Yes.
15 Q. Did Blue Flame Medical ever move forward 15 Q. You referenced to the California
16 to create its own manufacturing facilities for N95 16 transaction providing you seed capital. What do you
17 masks? 17 mean by that?
18 A. No. But we had business plans in place, 18 A. Well, there's a couple of things I mean by
19 pro formas in place. We decided not to pursue that 19 that. One was, you know, as we were speaking with
20 for two reasons. One was the seed capital required 20 dozens and dozens and dozens of very large customers,
21 to buy the equipment which I had sourced, the 21 private buyers, public buyers, many of these buyers
22 equipment that I would get, would come from China, 22 could not prepay for product. Meaning, Mr. Orseck,
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1 That will be DX-12. Tell me when you're ready. 1 Q. What about Mexico. You mentioned in
2 THE WITNESS: I'm ready. 2 Defendant's Exhibit 12 that you have inventory in
3 (Defendant's Exhibit No. 12 was 3 Mexico. What was that a reference to?
4 marked for identification.) 4 A. William Lee had put together a network
5 BY MR. ORSECK: 5 through him of suppliers across the globe. One of
6 Q. DX-12 is a two-page document, Bates BFM 6 them was in Mexico.
7 66185. The first page is a 6:38 p.m. email from you 7 Q. Did you ever obtain any supply of N95
8 to Michael Wong. You say, "Pleasure texting with 8 masks from Mexico?
9 you. Here's our sales sheet for today." 9 A. No.
10 You then say, "I have some inventory in 10 Q. And then the next page of this exhibit
11 California, some in Mexico, and a huge global supply 11 attached on Defendant's Exhibit 12, that's the
12 chain that can service any need you have going 12 same -- that's the same chart you had sent to Abby
13 forward." 13 Browning, right?
14 What was the inventory in California you 14 A. I'm not sure if it's the exact same
15 were referencing? 15 because it was -- this document was being updated
16 A. I mean, it was likely a myriad of things. 16 regularly. But, I mean, if you'd like me to do a
17 I put together several suppliers, like I mentioned to 17 line-by-line comparison I could, but -- I mean, it's
18 you, out of Santa Monica, Riverside, Fontana, as well 18 a similar document, yeah.
19 as Long Beach. 19 Q. Okay. Let's go to tab 21, which will be
20 Q. Who was the supplier in Santa Monica? 20 DX-13.
21 A. You know, I'm trying to remember. I don't 21 (Defendant's Exhibit No. 13 was
22 remember his name. I don't recall his specific name. 22 marked for identification.)
Page 143 Page 145
1 Q. Did the Santa Monica supplier ever supply 1 BY MR. ORSECK:
2 you with any N95 masks? 2 Q. Defendant's Exhibit 13 begins at BFM
3 A. No. 3 66417.
4 Q. Who was the supplier in Riverside? 4 A. Okay.
5 A. That was this group I mentioned. It was 5 Q. I'd like you to turn, please, to page
6 Jimmy -- hmm. The last name escapes me. But the 6 66423.
7 company is something like Integrated -- I can't 7 A. 423.
8 remember the full company name. I physically 8 MR. WHITE: Counsel, give me a second.
9 inspected that -- that manufacturer. 9 It's taking me a while to open it up on my computer.
10 Q. Did they ever supply you any N95 masks? 10 What was the Bates number again?
11 A. No. 11 MR. ORSECK: 66423.
12 Q. Who was the supplier in Fontana? 12 THE WITNESS: Sorry. I'm scanning. One
13 A. That was the same Integrated group. They 13 second here.
14 had facilities in Riverside and Fontana. 14 BY MR. ORSECK:
15 Q. Okay. And you never got supplies from 15 Q. Take your time.
16 Fontana either, correct? 16 A. Okay. This is 423 you said?
17 A. I went and picked up samples from them. 17 Q. Yes.
18 I'm trying to -- I don't know specifically if we 18 A. Okay.
19 ended up placing an order with them or not. 19 Q. Just to orient you, Mr. Thomas, at the
20 Q. And Long Beach, you never got any N95s 20 very bottom of 423 and carrying over to 424 is the
21 from Jason Lee at all, right? 21 very email between you and Mr. Wong we were just
22 A. No. 22 discussing a moment ago, but the way these were
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1 produced is that they're -- they're sort of broken 1 A. Of course.
2 up. 2 Q. You go on to say, "Also, I just got word
3 So there is then an email back to you at 3 from my lead manufacturer that we need to place an
4 the top of 423 and it says, "John, do you have 4 order for 100 million N95 masks or they will sell
5 specification sheets for the N95 masks and the 5 them to the UK."
6 COVID-19 test kits? Also, what other options do we 6 Who is the lead manufacturer that you had
7 have for payment to manufacturers?" 7 just gotten word from?
8 Do you see that? 8 A. You know, that's a good question. I don't
9 A. Yes. 9 specifically recall. It was likely Great Health
10 Q. And then moving back to page 422 is your 10 Companion. It also could have been Glymate. I do
11 response to him, right? Do you see that at 9:43 11 know that both of those groups were selling product
12 p.m.? 12 and capacity to the UK.
13 A. Yeah, sure. Uh-huh. 13 Q. Great Health Companion was in fact your
14 Q. And you say, "Thanks, Michael. Yes, I 14 lead -- lead supplier according to the Mayer Brown
15 have all the specs sheets I'll package up," right? 15 letter submitted to the House committee, right?
16 A. Yes. 16 A. You know, at that moment in time, it was
17 Q. Did you send him the spec sheets? 17 probably a split between Glymate and Great Health
18 A. I'm fairly certain I did, yes. 18 Companion.
19 Q. You go on to say, "We can do a 75 percent 19 Q. Where is Glymate based?
20 prepayment and the balance upon receipt." 20 A. California.
21 Why did you offer a 75 percent prepayment 21 Q. Where?
22 at that point rather than the 100 percent upfront 22 A. I'd have to check, but I want to say Bell,
Page 147 Page 149
1 that you's mentioned earlier? 1 California or some -- southern California. Somewhere
2 A. Because we felt that actually, we were 2 in LA county.
3 giving California a pretty good deal because 3 Q. Does Glymate manufacture N95 masks?
4 essentially we were putting off a portion of our 4 A. Yes.
5 profit until we had successfully delivered the masks. 5 Q. Did Glymate ever supply Blue Flame with
6 So we were saying that what we needed was California 6 N95 masks?
7 to pay much of the costs and we would delay some of 7 A. No.
8 our profit because we were so confident that we would 8 Q. You were trying to get Mr. Wong to move
9 be delivering to the state of California. There was 9 quickly, weren't you?
10 no risk for us there. 10 A. I think I was trying to express to him the
11 Q. You continue on, "I have to give them 11 market conditions on the ground.
12 prepayment, but you have the 48-hour inspection 12 MR. ORSECK: Carolyn, can we do tab 28,
13 period or you can reject the goods and you get a 13 please, which will be Exhibit 14.
14 refund." 14 THE WITNESS: Okay.
15 Do you see that? 15 (Defendant's Exhibit No. 14 was
16 A. I do. 16 marked for identification.)
17 Q. You were reiterating that the policy was 17 BY MR. ORSECK:
18 that they could reject the goods, right? 18 Q. Exhibit 14 is a text from you to Betty
19 A. Yes. 19 Yee. Again, they're not all captured in the
20 Q. Could they reject the goods if the goods 20 received/sent document we've been looking at. Some
21 turned out to be something other than what they had 21 of them are not on there. And this is one of those.
22 expected to receive? 22 The Bates stamp is very tiny on the bottom. I'm not
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1 even sure what it says. 1 had copied, it looked to be, numerous vendors about a
2 But this is a text from you to Betty, 2 call about PPE. I was not on that call, but it was
3 which I think is a screenshot from your phone, which 3 pretty clear, when I started Googling all of the
4 is why it was produced by BFM. And if you look at 4 email addresses, that I knew a few of those potential
5 the third paragraph, you say to Ms. Yee, "Payment 5 suppliers and I was trying to look after the state
6 options are pretty straightforward. 75 percent 6 saying, you know, don't do business with these
7 upfront. The balance on delivery and you can inspect 7 people. That's what I was saying.
8 and reject to get 100 percent back if you don't like 8 Q. Who were the suppliers?
9 it/want the product," right? 9 A. Oh, gosh. I don't recall. I don't
10 A. May I read the whole document first? 10 recall. I just remember what happened in the moment.
11 Q. Of course. 11 Q. Had any of them called you up and asked
12 A. Okay. 12 you for product?
13 Q. In the third paragraph that I referenced, 13 A. I believe several had, yes.
14 am I right that you were making clear to Ms. Yee, 14 Q. How did they even know you were in the
15 just as you had made clear to Mr. Wong, that your 15 business?
16 policy was that they could inspect and reject and get 16 A. Word travels very quickly. You know, we
17 back 100 percent if they didn't like the product or 17 were making hundreds of calls to different groups and
18 didn't want the product, right? 18 people knew that we had a fantastic and reliable PPE
19 A. Correct. 19 supply chain. So of course people were going to be
20 Q. Okay. I'm jumping back and forth a 20 reaching out to us.
21 little, but that's the order they're in. If you 21 I also think there was an article in
22 would turn back to Defendant's Exhibit 6, which is 22 Politico that said we were in the business. So --
Page 151 Page 153
1 the compendium of texts between you and Betty Yee and 1 MR. ORSECK: Okay. Carolyn, I'm not sure
2 turn to page 126. 2 which tab this is, but I think I'm looking for 12560,
3 A. Okay. 3 BFM 12560. Ah, yeah, it's tab 25. Tab 25 is going
4 MR. WHITE: Which exhibit number again, 4 to be DX-15.
5 Counsel? I'm sorry. 5 THE WITNESS: Okay.
6 MR. ORSECK: Exhibit 6. 6 (Defendant's Exhibit No. 15 was
7 MR. WHITE: Thank you. 7 marked for identification.)
8 BY MR. ORSECK: 8 THE WITNESS: Okay.
9 Q. Page 126. The second text in this chain 9 BY MR. ORSECK:
10 is from you to Betty at 9:50 p.m. on the 23rd and you 10 Q. Exhibit 15 is a March 24th, 1:35 p.m.
11 say, "Lastly" -- I think you meant to say saw, not 11 email from you to some internal folks. And you say,
12 sad, but you'll tell me if I'm wrong. "I saw the 12 "Baby steps." And just below that is an email from
13 list of vendors California is talking to. None of 13 you from 1:34 p.m. to Mike Wong and you say, "Hi
14 them have inventory. I know because they're all 14 Michael, to be transparent, here's our inventory list
15 asking me for product." 15 for one of my many manufacturers."
16 Do you see that? 16 And you repeat the inspect/reject point,
17 A. I do. 17 right?
18 Q. How did you see the list of vendors 18 A. Yes.
19 California is talking to? 19 Q. If you would scroll down then to the last
20 A. I believe I was copied on emails from Abby 20 page of this document, 12560, you'll see the
21 Browning. And in that email thread down below, 21 attachment, the inventory list. Do you have it?
22 they -- the details are foggy, but essentially they 22 A. I'm getting there. Sorry. Okay.
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1 Q. Is this the Great Health inventory list? 1 discussions with Great Health Companion.
2 A. Yeah, it was the products that they had 2 Great Health Companion pledged that they
3 available at that moment in time to procure. 3 could fulfill any amount I needed in part of the
4 Q. And at that moment in time was March 24th, 4 California order, for instance. All they have to do
5 right? 5 is spin up more factories. So that's how that works.
6 A. I believe so, yeah. Uh-huh. 6 So the monthly capacity there is really not an
7 Q. I was trying to interpret this document, 7 applicable number. It's more the numbers, the model
8 and you'll tell me if I've gotten it wrong. But the 8 numbers.
9 first section is entitled masks and if you go to the 9 Q. This document indicates a monthly capacity
10 bottom of that section, the last six or so entries 10 of 11 and a half million N95 masks, true?
11 are for N95 masks; am I right? 11 A. The document indicates that, yes.
12 A. Yes. 12 MR. ORSECK: Carolyn, can we put up tab
13 Q. And then the fourth column over says 13 38? This will be DX-16.
14 monthly capacity. And I tallied up Great Health 14 THE WITNESS: Can I have a bathroom break
15 Companion's monthly capacity for N95 masks and I get 15 in a couple of minutes? We can get through this
16 to 11.5 million. If you want to check my math, go 16 exhibit.
17 ahead. 17 BY MR. ORSECK:
18 A. Okay. 18 Q. Sure, sure, sure. I do not mean to impose
19 Q. Does that appear correct? 19 suffering.
20 A. No. Is it correct it was on the sheet or 20 A. Well, not that kind of suffering.
21 is it correct that that's their capacity? 21 Q. Well, right. Exactly.
22 Q. First of all, I'm just reading the sheet. 22 A. Sixteen?
Page 155 Page 157
1 Does this indicate that his monthly capacity for N95 1 Q. Yeah.
2 masks was 11.5 million? 2 A. I'm downloading it.
3 A. This was more of a guide for what brands 3 (Defendant's Exhibit No. 16 was
4 of masks and product types Great Health Companion 4 marked for identification.)
5 could procure at that moment. Less of an actual 5 THE WITNESS: Okay.
6 capacity. Would you like me to explain why? 6 BY MR. ORSECK:
7 Q. Are you asking me? 7 Q. Okay. The bottom of the first page, which
8 A. Yes. 8 is Bates stamped 116156, is a March 24th email from
9 Q. You should explain whatever you think you 9 you to Michael Wong. And you say, "Michael, here's
10 should explain. 10 what we can do."
11 A. Okay. So the way a supplier like Great 11 Do you see where I am?
12 Health Companion works is they contract out with -- 12 A. I do. Uh-huh.
13 here. Let me -- they contract out with 13 Q. The first says, "2 million units - ready
14 manufacturers' facilities. 14 in three days - arrive in California on day 7 -
15 And Great Health Companion is owned by a 15 Henry."
16 company called Hakim. It's a very large publicly 16 Is that a reference to Henry Wong from
17 traded company. It's a quasi state-owned company, 17 Great Health Companion?
18 which means Great Health Companion can procure 18 A. Correct.
19 essentially as much PPE as they want. All they have 19 Q. The next one says, "6 million units -
20 to do is go reach out to manufacturers of PPE and 20 ready immediately - have to ship - SU."
21 they can up their capacity. So the monthly capacity 21 Who does that refer to?
22 that was on that sheet really wasn't pertinent to my 22 A. I believe it's Suuchi.
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1 Q. The next says, "25 to 30 million units - 1 A. Correct.
2 delivered within 30 days - Henry." Henry Wong again? 2 Q. So those weren't additional manufacturers,
3 Right? 3 were they?
4 A. Yes. Uh-huh. 4 A. Well, no. But if you look in -- I can
5 Q. And the last one says, "25 additional 5 source the other 37 million, but I need to hear back
6 units within 30 days," and then again Suuchi. And 6 from my other manufacturers before I can quote exact
7 you say, "We can deliver 63 million masks within 30 7 capacities.
8 days for sure," right? 8 Q. Yeah. I'm first asking you about the 63
9 A. Correct. 9 million. That was going to come, according to you,
10 Q. And you ask -- you say you assume you 10 all from Henry and from Suuchi, right?
11 cannot accept KN95s. And he responds to you above 11 A. Correct.
12 that they can accept only approved N95s, right? 12 Q. And then you -- you anticipated my next
13 A. That's correct. 13 question. When you say I can source the other 37
14 Q. If you flip to the next page, 157, you go 14 million, who are you referring to there?
15 on to say, "I can source the other 37 million, but I 15 A. Like I said, I was building out my supply
16 need to hear back from my other manufacturers before 16 chain, waiting for other manufacturers. For
17 I can quote exact capacities," correct? 17 instance, LG, out of South Korea, was going to be a
18 A. Yes. 18 potential manufacturer that had a large capacity.
19 Q. Now, a few days before this, we'd seen you 19 And Henry Huang at Great Health Companion, you know,
20 told Abby Browning that you could do 15 to 25 million 20 was making additional phone calls to new factories to
21 in a month. That was on Friday and we're here now on 21 ensure that he could lock them down if we had this
22 Tuesday. How did you manage to get that number up 22 order.
Page 159 Page 161
1 from 15 to 25 all the way up to 63 million in two 1
Because you've got to remember, look, 100
2 business days? 2 million masks is quite a few masks, which means
3 A. Sure. So a couple of ways. One, like I 3 there's quite a bit of profit for Great Health
4 may have mentioned, at that point in time, Blue 4 Companion. And it means they had serious buying
5 Flame, we were working 22-hour days, further 5 power in some cases to jump to the front of the line
6 expanding and building out our supply chain. So I 6 and literally bump out other people that had placed
7 had been adding additional -- many additional 7 existing orders with other manufacturers.
8 manufacturers with more capacity. So that's how. 8 So over the weekend, you would imagine --
9 And we worked weekends. So quite a few days had 9 well, no, not you would imagine. It's true that
10 elapsed. 10 Henry Huang was live in the moment expanding his
11 And the second is, I was having live 11 capacities to ensure that I could properly deliver to
12 conversations with Great Health Companion about the 12 the state of California. But I don't think the state
13 needs not just of California, but of other potential 13 had committed to 100 million. But anyway.
14 customers. And Henry, to his -- testament to his 14 Q. Did LG from South Korea ever provide you a
15 capabilities, agreed that he would help fulfill up 15 written commitment of its ability to provide masks,
16 to, as relates to the California order, up to 100 16 N95 masks?
17 million units to ensure that we satisfactorily 17 A. No. But we had conversations and
18 delivered for the state of California. 18 assurances that they could -- that they did have
19 Q. You say that in the interim, you had found 19 ability -- remember, the California deal never
20 additional manufacturers, but the only ones you're 20 happened which dramatically reduced our --
21 referencing here to Michael Wong are Henry and 21 unfortunately, our company's need to procure from,
22 Suuchi, right? 22 you know, multiple manufacturers.
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1 A. Not that I recall. 1 Q. Right. So by 7:00 p.m. on Tuesday the
2 MR. ORSECK: Carolyn, could we pull up the 2 24th, you understood that California wanted you to
3 document that consists of, I think, what was tab 56 3 fill a purchase order for 100 million masks, right?
4 and 85A? And I'll identify it for the record. 4 A. Yes.
5 That's going to be DX-17. 5 Q. And at that point, Blue Flame Medical has
6 MS. FORSTEIN: Yep, Gary, those are 6 not yet opened its bank account, right?
7 actually two separate emails. I can put them both 7 A. I don't know the exact date the account
8 up, but I think they would be two separate exhibits. 8 was open.
9 They are consecutive Bates numbers, but they're 9 Q. And Blue Flame Medical had no reseller
10 separate documents. 10 agreements with Great Health Companion or Suuchi or
11 MR. ORSECK: With consecutive Bates 11 anybody else by that point?
12 numbers. Well, okay. Let's just start with tab 56, 12 A. You know, I can't speak to the paperwork.
13 then. That will be DX-17. 13 But I know definitively I had verbal agreements from
14 MS. FORSTEIN: Okay. The first in time 14 all of them.
15 one is tab 85. Sorry. 15 Q. All right. Now let's go back to Exhibit
16 MR. ORSECK: All right. Let's do that 16 17.
17 first then. 17 A. Okay.
18 MS. FORSTEIN: Okay. 18 Q. If I'm at the right place, Mr. Thomas,
19 BY MR. ORSECK: 19 there is an email from you in Exhibit 17 that's at
20 Q. Let me know when you have that downloaded, 20 1:55 a.m. in the morning on March 25th and it's
21 Mr. Thomas. 21 addressed to, "Team, I realized we need to do quite a
22 A. I'm working on it. 22 bit of work tomorrow to get the wire through."
Page 171 Page 173
1 (Defendant's Exhibit No. 17 was 1 Do you have that in front of you?
2 marked for identification.) 2 A. Yes, I do.
3 THE WITNESS: I have it. Sure. 3 Q. You go on to say, "Need to source
4 MR. WHITE: Give me one second, Gary. My 4 inventory amounts to tell California what we'll be
5 computer is being -- I have it now. Thank you. 5 sending them."
6 MR. ORSECK: Now, I'd like to just put 6 What did you mean by that?
7 this one aside. I skipped one that comes before it 7 A. I think it was we needed to make sure that
8 that I'd like to do. Let's come back to this and 8 I talked to all my suppliers to see exactly what's
9 make Exhibit 18 should be, Carolyn, tab 50. 9 available and by when now that it looks -- now that
10 (Defendant's Exhibit No. 18 was 10 we have the specificity we were looking for from
11 marked for identification.) 11 California because prior, you know, we didn't know
12 BY MR. ORSECK: 12 exactly what they wanted. Now we know the quantity,
13 Q. Tab 50 is DX -- Defense Exhibit 18. We're 13 we know the price and we know the models.
14 still on Tuesday. And on the bottom of page 110967, 14 Q. And when you say "need to source
15 Mr. Huang says to you, "Yes, we would like a PO for 15 inventory," that means you haven't yet sourced
16 100 million. I'll work the 75 percent payment piece 16 inventory by that time, right?
17 first thing in the morning." 17 A. No, no. It just means we need to put a
18 Do you see that? 18 little finer point on the matter. Remember, there
19 A. I do. 19 potentially were several potential strategies of how
20 Q. He was referring to N95 masks, right? 20 we were going to fulfill the California order. Part
21 A. Yes, specifically for models per his exact 21 of how you keep your supply chain alive is by feeding
22 request. 22 them, right?
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1 So even though Henry had agreed that he 1 17.
2 could fulfill the entire order along with Suuchi, I 2 A. Six. You mean 4?
3 had put together a large supply chain and I wanted 3 Q. I'm sorry, you're probably right. I have
4 them to stay with me and be responsive. And so I 4 a different page. 12804, uh-huh.
5 wanted to touch base with all of them so that we 5 A. Okay. Let me look real fast here. I want
6 could decide internally, you know, perhaps we spread 6 to make sure I'm with you.
7 some of the California order to several other 7 MR. WHITE: Gary, can you reorient him and
8 manufacturers to keep them fed. 8 get him where you were, what sentence you were asking
9 Q. But at that point, you -- you knew you had 9 about?
10 the ability to provide 100 million masks. 10 MR. ORSECK: Yeah.
11 A. Yes. 11 BY MR. ORSECK:
12 Q. Do you have experience prior to this time 12 Q. This is a two-page document. The first
13 in supply chain management? 13 page is a March 25th email and the fourth sentence in
14 A. No. 14 your email says, "I think we are still short, but I
15 Q. The next sentence says, "Gula has Henry's 15 have other sources."
16 latest numbers." 16 Do you see that?
17 A. Hold on for a second. 17 A. Yep.
18 Q. Sorry. 18 Q. And my question was, did you mean you were
19 A. I'm sorry. I was just going to add 19 still short of 100 million masks?
20 something to that. 20 A. No, because I -- I'm not sure what I was
21 Q. Oh, sure. 21 referencing there. But I had every confidence and
22 A. I was going to say as a businessperson, 22 belief that Henry as well as our other suppliers
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1 when you have a multitude of vendors, whether they're 1 could have fulfilled the California order.
2 manufacturers or service providers, it's pretty well 2 So I'm not entirely sure other than, you
3 recognized that you have to spread the love. You 3 know, it also could have been that my partner was
4 have to keep them fed, to make sure that they're 4 talking to a bunch of other potential customers. I
5 available for when you need them for other projects. 5 just wanted to make sure that we had capacity for all
6 So this was -- this strategy was no 6 of those orders. Could have been, but it's not
7 different to supply chain management as it is vendor 7 specific or I'm not certain.
8 management in any other business. 8 Q. I want to make sure you have a chance to
9 Q. You'd never managed the supply of millions 9 explain clearly in response to my question. You said
10 of anything before, had you? 10 in reference to -- right after you said we need to
11 A. Well, millions of dollars, yes. 11 source inventory amounts to tell California what
12 Q. I'm of course talking about products, 12 we'll be sending them, you say, "I think we are still
13 widgets of any sort. 13 short." And it's your testimony that that does not
14 A. No. 14 refer to your ability to procure 100 million masks;
15 Q. If you look back at page 12806, another 15 am I right?
16 sentence down in your 1:55 a.m. email says, "I think 16 A. Correct.
17 we are still short, but I have other sources." 17 Q. Okay. And what do you think it refers to?
18 You meant we're still short of being able 18 You're short on what?
19 to fulfill the 100 million mask requirement, right? 19 A. I'm not entirely sure, to be honest. I
20 A. One second. I'm looking. What -- what 20 know my partner was talking to a bunch of customers.
21 page is this? 21 So I'm not sure what he had promised. But I know,
22 Q. This is page 12806 and we're in Exhibit 22 based upon my conversations with Great Health
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1 Companion and other manufacturers, there was no doubt 1 Q. He didn't even tell you roughly how many
2 that we could fulfill that order. 2 of each brand he would deliver to you, right?
3 Q. You're not sure what we're still short 3 A. I don't recall.
4 refers to? 4 Q. He didn't tell you anything at all one way
5 A. No. 5 or the other on that topic, did he?
6 Q. But you are sure that it does not refer to 6 A. I don't recall. We had extensive
7 the 100 million masks? 7 conversations about his ability to deliver the
8 A. Yeah. Because I know for 100 percent 8 approved four models of N95 masks.
9 confidence and certainty that we could have delivered 9 Q. During the days from March 20th to March
10 for California for all of their needs. 10 27th, how frequently did you speak to Henry Huang on
11 Q. The next sentence says, "I need your guys' 11 the phone?
12 help to figure out how to write the invoice with 12 A. Between what dates?
13 flexibility." Do you see that? 13 Q. March 20th, when you first exchanged texts
14 A. Yes. 14 with Betty Yee, and March 27th, which is the day
15 Q. And the next sentence says, "Perhaps we 15 after the wire transaction.
16 just list the models and say 100 million units in any 16 A. Oh, very frequently.
17 mix of these models," right? 17 Q. The next sentence here says, "Perhaps we
18 A. Yes. 18 just list the models and say 100m units in any mix of
19 Q. What did you mean when you said you wanted 19 these models," right?
20 help to figure out how to write the invoice with 20 A. Yes.
21 flexibility? 21 Q. And the little M again means million,
22 A. Well, in some cases, certain manufacturers 22 after the number 100?
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1 make a particular brand and might have a much larger 1 A. Yes.
2 capacity of one brand or model of masks and fewer of 2 Q. And I don't want to put words in your
3 the others. 3 mouth, so correct me if I'm not getting it right.
4 So to most quickly get to the 100 million 4 But is the idea here that you would achieve the
5 units, we wanted to have it flexible so that if we 5 flexibility by simply saying we'll provide you 100
6 want to deliver more of one model and less of the 6 million units of the models you want, but not to
7 other in order to get California these lifesaving 7 state in the invoice how many of each you were going
8 masks the fastest, we have that flexibility to do so. 8 to supply?
9 Q. And that's because at that point, you 9 A. Yes.
10 didn't have certainty about how many of each of the 10 Q. If you go further down on that page, two
11 brands of masks California wanted you could supply, 11 paragraphs down, there's a sentence that begins,
12 right? 12 "Once the wire is cleared."
13 A. Could you say that again? 13 Do you see that?
14 Q. Yeah. Isn't it true that the reason you 14 A. Yes.
15 wanted the flexibility is because at that point, you 15 Q. The next sentence says, "Also, let's lock
16 didn't have certainty about how many of each of the 16 down our office space. I can't stand working
17 brands of masks California wanted you could supply? 17 remotely." Does that refresh your recollection
18 A. I had not had the specific conversation 18 whether you had an office as of March 25th?
19 with, for instance, Henry Huang about how many 19 A. I know that I had been -- well, not
20 exactly of each model number he would be delivering 20 necessarily. I know we operated out of a conference
21 other than that he would deliver 100 million units of 21 room at a hotel for several weeks. I don't remember
22 the approved models. 22 when we began that versus when we formally signed an
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1 Q. Did anybody -- did anybody in words or 1 "Hi, Betty, I'm sure you heard about my bank bouncing
2 substance from the state of California say to you 2 payment hours after it went through. Unbelievable.
3 that the deal was off or canceled? 3 However, I've come up with a workaround for the
4 A. It was clear to me that the deal was 4 product I have en route."
5 canceled by their actions. 5 Do you see that?
6 Q. Okay. No one ever said that to you? 6 A. I do.
7 A. It was clear to me by their actions that 7 Q. And again, was there product en route at
8 the deal was canceled. 8 that time on the 27th?
9 Q. You're declining to answer my question? 9 A. You know, I know that several suppliers
10 A. I'm not declining. I'm answering your 10 were getting things in motion.
11 question. 11 Q. Okay. You go on to say, "Just to keep you
12 Q. Okay. Did you come up with a workaround, 12 in the loop, here's what I'm trying to get of Dan Kim
13 you or Mr. Serrio or anybody at Blue Flame, whereby 13 about. I can take payment upon receipt, inspection
14 Blue Flame would require no prepayment from 14 and acceptance for each delivery. This should make
15 California and instead demand payment only upon 15 the state feel comfortable." Right?
16 delivery? 16 A. I see that.
17 A. You know, I know we were working on a 17 Q. Does that refresh your recollection that
18 variety of different scenarios, none of which came to 18 that was your workaround or one of your workarounds?
19 fruition because California, the deal was blown up. 19 A. You know, I know that after Chain Bridge
20 So we -- I know we struck a deal with a credit 20 blew up our transaction and lied about us, I tried a
21 company later on, Atlas something or other. I can't 21 multitude of ways to have the California deal
22 remember the full name. But, you know, we tried 22 reinstated. This might have been one of those.
Page 239 Page 241
1 repeatedly to come up with scenarios to revive the 1 Q. My question was, do you recall or does
2 deal after Chain Bridge blew it up. 2 this refresh your recollection that that was one of
3 Q. Did you tell California, within the day of 3 your proposed workarounds?
4 two after March 26th, that you had a workaround by 4 A. It appears to be.
5 which they would have to pay no money upfront? 5 Q. Do you have any recollection of it?
6 A. Is there a document you're referring to? 6 A. Vaguely.
7 Q. I'm asking for your recollection. Do you 7 Q. If you flip the page to 133, Ms. Yee
8 recall any such thing? 8 responds to you at 8:50 a.m. and says, "John, please
9 A. You know, I tried repeatedly to get ahold 9 communicate with Dan directly and please cease to
10 of the state of California. I don't recall 10 keep me in the loop. It is not helpful," right?
11 everything I said to them. 11 A. I see that.
12 Q. All right. I'll show you what I have. 12 Q. And then she says, "I'm sure if he takes
13 Defendant's Exhibit 6 is your text exchange with 13 your call, he will rightfully ask why you required
14 Betty Yee. And if you go to Bates 200132, I'm going 14 prepayment of the state but now can take payment upon
15 to ask you about the two texts at the bottom. 15 receipt and inspection."
16 A. One moment. Okay. I'm on that page. 16 Do you see that?
17 Q. At 3:30 on March 26th, you send Betty a 17 A. I do.
18 text that says, "Hi, Betty, sorry to bug you, but I 18 Q. Did you answer her question in that
19 have an issue that I need your help with. Can you 19 regard?
20 call me when you have a moment?" Right? 20 A. Well, I think --
21 A. Uh-huh. Yes. 21 MR. WHITE: In terms of what?
22 Q. The next morning at 8:05 a.m., you say, 22 Clarification. What question are you talking about?
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1 BY MR. ORSECK: 1 marked for identification.)
2 Q. Did you respond, Mr. Thomas, as to why you 2 THE WITNESS: Downloading it.
3 were now able to take payment upon receipt and 3 BY MR. ORSECK:
4 inspection? 4 Q. Exhibit 27 is a two-page document Bates
5 A. I believe I followed her instructions in 5 stamped BFM 72285 and 86.
6 the sentence prior, which was please cease to keep me 6 A. I'm reading it. One second here.
7 in the loop. So why would I have -- 7 Q. Are you ready?
8 Q. Sorry. 8 A. Almost ready. Okay. I'm ready now.
9 A. -- further. 9 Q. On Wednesday, April 8th, you email Michael
10 Q. What is the answer as to why you were able 10 Wong and you began by saying it was a pleasure
11 to receive payment only upon receipt? 11 speaking with you today. Do you remember speaking
12 A. Well, we had come up with a variety of 12 with Michael Wong? And I mean this as a yes or no
13 potential workarounds that were not ideal, but only 13 question.
14 because at the time, we had no idea that it was 14 A. Yes.
15 greedy bankers that tried to blow up our transaction 15 Q. Was it in fact a pleasant call?
16 to save their own asses -- sorry, pardon for my 16 A. I believe so.
17 language -- accuse us of fraud to the state of 17 Q. Professional and cordial?
18 California. We had no idea. So at the time, we were 18 A. Yes.
19 trying to come up with something that made the state 19 Q. Did Mr. Wong say to you on that call that
20 comfortable. 20 Chain Bridge Bank had accused you of fraud?
21 Q. All right. None of the -- none of the 21 A. I don't believe we discussed it.
22 circumstances of the financing or logistics had 22 Q. Did Mr. Wong ever tell you that Chain
Page 243 Page 245
1 changed. It's just that you were willing to accept a 1 Bridge had accused you of fraud?
2 less ideal option at this point; is that right? 2 A. I don't recall.
3 A. We were coming up with creative solutions 3 Q. Did anybody from California ever tell you
4 to solve a problem that we had no idea was created by 4 that Chain Bridge had accused you of fraud?
5 the bank that had nothing to do with the state of 5 MR. WHITE: I take it you mean an official
6 California. 6 with the state of California or something like that?
7 Q. Okay. After March 26, did you continue to 7 MR. ORSECK: Thank you.
8 have exchanges with Michael Wong in an attempt to 8 BY MR. ORSECK:
9 revive this transaction? 9 Q. Did any California state official ever
10 A. I believe we spoke, yes. 10 tell you that Chain Bridge had accused you of fraud?
11 Q. Do you recall telling Mr. Wong on April 11 A. Well, there was public testimony in the
12 8th that you're confident you can provide the 100 12 state legislature to that effect.
13 million masks and that you might be able to get help 13 Q. You're talking about Ms. Ma, Fiona Ma?
14 from the Rams and the Chargers and Fed Ex? 14 A. Correct. And I think I recall -- is it
15 A. Vaguely. Is there a document you have 15 Mark Ghilarducci? I can't pronounce his last name.
16 that I can examine? 16 But I believe he gave similar testimony.
17 Q. You could, but I'm just asking if you 17 Q. And you think Ms. Ma testified that Chain
18 remember that exchange. 18 Bridge Bank accused you of fraud? Is that your
19 A. Vaguely. 19 recollection?
20 MR. ORSECK: Carolyn, can we put up 301, 20 A. My recollection is that she, in news
21 which will be Exhibit 27. 21 reports, reported that bankers from Virginia said
22 (Defendant's Exhibit No. 27 was 22 something to the state of California that was so
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1 egregious that it caused them to break our contract 1 lent their jet to procure some PPE from China, so we
2 and claw the money back. 2 wanted to piggyback on that idea.
3 Q. That's your recollection of Ms. Ma's 3 And as it related to FedEx, oh, gosh, it
4 testimony; is that right? 4 would likely have been Mike Gula and Brielle
5 A. You know, I don't remember whether it was 5 Appelbaum from our company that were in high-level
6 Ma or Ghilarducci or a combination. 6 discussions. I know that I had several discussions
7 Q. Have you ever personally spoken to Ms. Ma? 7 with a senior person at FedEx to provide us a drastic
8 A. No. 8 discount for any PPE to the state. So I hope that
9 Q. Or corresponded with her in any way? 9 puts a little bit of color on it.
10 A. No. 10 Q. Sure. You never reached any final
11 Q. Same questions for Mr. Ghilarducci. Ever 11 agreements with them, I take it?
12 spoken to him or corresponded with him in any way? 12 A. You'd have to --
13 A. No. 13 Q. I'm going to withdraw the question. I'm
14 Q. Did any California state official ever say 14 going to withdraw the question, okay? I don't want
15 to you that Virginia bankers or Chain Bridge Bank 15 to wade through it.
16 accused you of fraud? 16 You say in the third paragraph, "Our
17 A. I'm thinking. No, but it was quite 17 account manager at Bank of America is Josh Gross."
18 obvious that's what happened. 18 Do you see that.
19 Q. If you look further down this Exhibit 27, 19 A. I do.
20 in the middle of the second paragraph, you say, "Two 20 Q. By April 8th, had you opened an account
21 options we have been exploring are with the Rams and 21 at -- had Blue Flame Medical opened an account at
22 Chargers about loaning us their team jets as well as 22 Bank of America?
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1 working with Fred Smith, owner of FedEx, to provide 1 A. Yes.
2 at-cost air freight to the states." 2 Q. When did that happen?
3 Who had had those conversations with the 3 A. I believe the Saturday after Chain Bridge
4 Rams and the Jets and FedEx? 4 Bank blew up our transaction, Bank of America moved
5 MR. WHITE: I believe it's Rams and 5 at breakneck speed over the weekend to open up an
6 Chargers. Is that the part you're talking about? 6 account for us and -- go ahead. I'm done.
7 MR. ORSECK: That was a -- that was a 7 Q. Did the Bank of America account have the
8 Freudian slip there. 8 capability to allow you to receive wires and send
9 MR. WHITE: I'm so sorry. 9 wires?
10 BY MR. ORSECK: 10 A. Yes.
11 Q. The Rams and the Chargers and FedEx, who 11 Q. And has Blue Flame ever sent and received
12 had those conversations? 12 wires through that bank?
13 A. Benny and the Jets? 13 A. Yes.
14 Well, several people. I believe Matt 14 Q. Do you still have that account open? Does
15 Littman had had high-level conversations with 15 Blue Flame? I interrupted you. Does Blue Flame
16 corporate officers at the Rams about their 16 still have that open?
17 willingness to do this. I think the Chargers was 17 A. No.
18 actually Marc Serrio, our CFO's connection. I think 18 Q. No. When did it close?
19 he had had some preliminary conversations. 19 A. You know, I don't specifically recall. I
20 And this came to light because I want to 20 want to say approximately two months after it was
21 say a week or two before -- it wasn't the Eagles. It 21 open.
22 was -- it was the Patriots. I believe the Patriots 22 Q. Why did you close that one?
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