Back in 2012 the Florida Attorney General filed a lawsuit to stop Fidelity Land Trust from continuing to sell services to consumers.

For more information read this post.

As part of that case an anonymous tipster (send in your tips here) has forwarded me a copy of the deposition of Larry Diodato from February 19, 2013. Below are excerpts of that deposition I thought were interesting and shed some light on the Fidelity Land Trust mess.

In his deposition Diodato appears to throw Greenspoon Marder under the bus and is unsure who is business partners are. He says that Paul Gallenbeck gave incorrect information about Fidelity Land Trust on the record and does not know what he’s talking about, and he says Ed Cherry lied during Cherry’s bankruptcy questioning.

Deposition of Lawrence Diodato

Q. The address on the bottom of the document is 902 Clint Moore Road, suite 202, Boca Raton, FloridA. Are you familiar with that address?

A. That’s my address.

Q. How long has that been your address?

A. Eight years.

Q. Are you familiar with all the activities, all the commercial activities that occur at 902 Clint Moore Road, suite 202, Boca Raton?

A. I try to.

Q. Can you tell me what other commercial activities, besides August Belmont and the two Esquire entities, use the space at your office for commercial activities?

A. We have rooms in the spaces for attorneys to use, that are on the panel of referring attorneys.

Q. Anything else?

A. That’s it, sir. I mean, that’s to my, the best of my knowledge. I hope there’s no other businesses behind my back.

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Q. Does August Belmont and Company, and the people who work for August Belmont and Company, under your supervision and control, use this document in their dealing with consumers?

A. Well it says August Belmont on it, so it might have been. I’m not sure. It might’ve been.

Q. Who would know for sure in your organization, whether these documents are used by August Belmont in their dealings with consumers?

A. It would be me.

Q. It would be you? Can you please enlighten me as to the reasons Greenspoon Marder would submit these documents ending in Bates numbers 01 through 12, in response to paragraph two of the October 12, 2012 order from Judge Gates?

MR. LISS: I’m going to object, to foundation.

THE WITNESS: These I am not privy to, like I said before.

BY MR. GENTILI:

Q. Can we agree that these documents were submitted on your behalf by Greenspoon Marder in response to paragraph two of the October 12, 2012 order from Judge Gates?

A. Yes, sir. If Greenspoon Marder produced them, yes.

Q. Is it your testimony that Greenspoon Marder produced these without your knowledge?

A. Well, I didn’t see the specific documents. No, I didn’t.

Q. So you had no participation in the production of these documents?

A. No, I didn’t.

Q. And therefore you have no — is it a fair statement you have no reason to know why Greenspoon Marder would submit these documents him on your behalf?

A. I could say yes. Yes.

Q. Yes, you have —

A. I didn’t have any knowledge of them submitting these documents.

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Q. What did you do next for employment?

A. I went to jail.

Q. Okay. And where did that occur, sir?

A. New York City. No, actually I was sentenced in Newark, New Jersey.

MR. LISS: Just let me get a standing objection on relevance to anything dating back on a criminal conviction. You can proceed but I don’t want keep badgering you with every question.

MR. GENTILI: Sure.

BY MR. GENTILI:
Q. And how long were you in jail, sir?

A. Over a year.

Q. And what were the facts that led you to incarceration?

A. The year I was sentenced, I was the first case sentenced under the conspiracy law for stock fraud. So I was the first case ever sentenced in that state. So it was conspiracy for stock fraud, which I still have not figured out what it is.

Q. After you were released from prison, was that federal prison or state prison?

A. Allenwood, PennsylvaniA.

Q. And is that a state prison?

A. Federal.

Q. After you were released from prison, what did you do next for employment, sir?

A. I became a personal trainer.

Q. And where was that, sir?

A. New York City.

Q. And how long were you a personal trainer?

A. For about a year and a half.

Q. What did you do next, sir?

A. I worked at physical therapy centers, called The Ultimate Image.

Q. And where was that, sir?

A. In New York City.

Q. And how long did you do that?

A. I would say three to four years.

---

Q. What did you do next, sir?

A. Good question. I got into the debt settlement industry.

Q. All right. You got into the debt settlement industry?

A. With a company called Fresh Start Advisors.

Q. What year was that, sir?

A. I’d say 2004.

Q. And how did you get into debt settlement?

A. I was just helping friends of mine out, manage their company, and they were doing that settlement.

Q. And who were those friends?

A. Albert Auer, A-U-E-R, and Doug Gass, G-A-S-S.

Q. And can you describe what the debt settlement industry is?

A. At that particular time?

Q. Yes.

A. Of that year?

Q. Yes.

A. It was basically helping people get out of debt by helping them resolve their debt in partial payments, by negotiating with the creditors or the banks.

Q. How long did — what were you doing in the debt settlement industry, sir? What were your personal job duties?

A. I was the manager.

Q. Had you ever been in the debt settlement industry before?

A. No.

Q. How long did you stay in the debt settlement industry?

A. Up to three years ago. Up to three years ago, yes.

Q. That would make it about 2010?

A. That’s when — I think it was October or November the government put out strict guidelines the debt settlement industry. So, it was about six months prior to the ruling. I mean the enforcement of the law, but we service our clients for the next year and a half, because it was our contractual obligation to see them through to the end, which we did.

Q. All right. Let’s go back to when you were in the debt settlement business, went into the debt settlement business, and you were in it for approximately six years; from 2004 to 2010?

A. Yes, sir.

Q. All right. What was your background that qualified you to be a manager of a debt settlement company?

A. Because I was a manager of a stock brokerage house.

Q. And how is that related to debt settlement?

A. Debt settlement is dealing with clients on the phone. It’s a telemarketing business

Q. Who did you work with in the debt settlement industry, when you first started in Boynton Beach in 2004?

A. Boynton Beach, no. The first that settlement company I worked for it was in Delray Beach.

Q. Sorry.

A. The movie company was in Boynton Beach. It was called Fresh Start Advisors.

Q. And who did you work with in that company?

A. Doug Gass and Albert Auer. They were the owners.

Q. Who else did you work with in that company?

A. And I knew them from the stock market.

Q. Who else did you work with in that company?

A. You mean employees?

Q. Yes.

A. Wow. A gentleman at the time — at Fresh Start Advisors? Oh my God. Mr. Ed Chestnut, God. Bernie Dippolito, Jason Destasi. My God that was so long ago. I don’t recall.

Q. How long did you stay with Fresh Start Advisors?

A. For about a year.

Q. And you are the manager?

A. Yes, sir.

Q. Were there other managers?

A. Not at that office. No.

Q. And this is in Delray Beach?

A. Delray, Hidden Valley. Hidden Valley was the name of the road. It just came to me.

Q. So that takes us up to about 2005; you said about a year?

A. Uh-huh.

Q. What did you do next in the debt settlement industry?

A. I started Elimidebt, E-L-I-M-I-D-E-B-T.

Q. And where was that located, sir?

A. It was on the same street, Hidden Valley, Delray Beach.

Q. And did you start Elimidebt alone or with someone else?

A. With a partner at the time. Yes.

Q. And who was your partner?

A. Preston, and I cannot spell his last name. It Shoebloom, and good luck with that.

Q. It’s a phonetic. How long was your partner?

A. For about a year.

Q. And what happened?

A. He was released.

Q. Did you buy him out, or did he buy you out?

A. No. He was let go for financial reasons.

Q. After you separated from Preston, did you run Elimidebt by yourself, or with somebody else?

A. By myself, yes.

Q. And you owned it completely?

A. Yes, sir.

Q. Were there any other companies that you associated with Elimidebt?

A. No.

Q. Did you create any subsidiaries, or affiliate companies?

A. Not me, no. I didn’t have subsidiaries.

Q. Did somebody create subsidiaries?

A. Preston had probably ten other companies on the side.

Q. And what were the names of those companies?

A. I don’t recall. I mean, it was just a number of them.

Q. So you and Preston separated, terminated relationship sometime in 2006, 2007?

A. Yes, 2006.

Q. And then you ran Elimidebt alone; you owned it alone after that period of time?

A. Yes, sir.

Q. Until 2010?

A. Until the end. Yes.

Q. And can you tell me what Elimidebt did in that four-year period; from roughly 2006 until 2010?

A. We help consumers negotiate their debt with their creditors and their banks, collection agencies and banks.

Q. What happened in 2010 that changed the business?

A. Well Greenspoon Marder, also at that time was my law firm.

MR. LISS: Make sure you don’t disclose any communications that you had with your attorneys. They’re privileged.

A. Okay. Mr. Birnbaum was an a committee called TASC, it’s the Association of Settlement Companies, and he was constantly advising us about the status of debt settlement. And he had told us prior, about a year to a year and a half — no, actually longer, about two years prior to the government coming in and curbing upfront fees, and all the other things they curbed about it. We knew that the window was short, so we started winding down our business.

Q. Upfront fees. Can you tell me how Elimidebt operated with upfront fees?

A. Fees were collected by Elimidebt and, say there was $500.00 collected. Out of the $500.00, $250.00 would go to Elimidebt, and $250.00 was to be held so the client could accumulate that money so we could settle that. So 50 percent of the fees were designated to settlement of the debt, which was totally the opposite of everybody in the country who collected all the fees upfront, and made the client save their own money and kept all the money. We had a different model. It was very advantageous to get out of debt.

Q. And what were the rules that were enacted the federal government that Greenspoon Marder brought to your attention?

A. I don’t know the rules per se, the numbers and the law, but I know that you are not allowed to collect a fee until the debt was settled and then, supposedly you were entitled to a fee, but it wasn’t an advantageous model for us to continue business.

Q. Once you became aware that your business model was no longer — you could no longer conduct business in your prior model of collecting upfront fees, as you just testified, what did you do with Elimidebt?

A. I worked all the clients, meaning that I settled all the debts of the contracts that were fully paid for until every client was finished of settling their debt, or resolving their debt. So we had to keep in business pretty much about a year to a year and a half after the government made their ruling, but we never took on a new client about six — we stopped taking on new clients six months prior to the ruling, because we understood what was going on.

Q. Who were your principal employees at Elimidebt?

A. A gentleman named Amjad Haydin, A-M-J-A-D, H-A-Y-D-I-N. And some of the other gentleman, Mr. Ed Chestnut worked for us, Mr. Bernie Dippolito, Mr. Don Callahan. They’re still with me today. Selena Connolly. I just can’t recall.

Q. What about administrative, what administrative personnel did you have with you at Elimidebt?

A. We had a lot of administrative personnel. We were a very customer service orientated business, were we outbound the clients twice a month to make sure everything was okay, and make sure they were saving the appropriate money to settle debts, and then getting their offers to them, as many as we could, and hopefully they could afford settlements.

Q. What do you mean outbound?

A. The administration would outbound calls twice a month. We had a 15 day schedule. We would call the client every 15 days to make sure they were okay, because debt settlement is just, you know, it’s just scary when people are behind on their bills. So we wanted to comfort them, so we did a lot of that.

Q. How did you get the clients for Elimidebt?

A. We purchased leads from marketing companies.

Q. Can you tell me the name of a few of those marketing companies?

A. I wouldn’t know where to begin. It’s been so long ago, because that debt settlement is gone.

Q. Did you have a telemarketing license?

A. Yes, I did.

Q. With Department of Agriculture and Consumer Affairs?

A. Yes, sir.

Q. Through the state of Florida?

A. Yes, sir.

Q. Do you still — does Elimidebt still have a telemarketing license?

A. No. There was no need after the government ruling, no. We didn’t renew our bonds.

Q. Government ruling. Are you talking about the FTC regulation that came into effect in approximately 2010?

A. Yes, sir.

Q. Did you have any affiliated companies, or subsidiaries of Elimidebt?

A. Me, no.

Q. Did someone else have —

A. No.

Q. Did someone else use the name of Elimidebt and any type of business enterprise?

A. No. Not to my knowledge, no.

Q. What did you do next after Elimidebt, after you stopped doing business as Elimidebt?

A. I opened up a lawyer referral service.

Q. Back up on one question. You said Elimidebt was originally based in Delray Beach. Where was Elimidebt based when it stopped doing business in 2010?

A. 902 Clint Moore Road, 200 and 202, the suites.

Q. In Boca Raton?

A. Yes, sir.

Q. When did you move from Delray Beach to that address in Boca Raton?

A. It had to be 2005, 2004, in that areA. I don’t know, I could look at my leases, but around that areA.

Q. When you ended the business known as Elimidebt, you said something about a lawyer referral service. Can you tell me what you did immediately after ending with Elimidebt?

A. Well actually, it was prior to the end of Elimidebt and we needed another — we tried to get involved in another business, and we opened up a lawyer referral service.

Q. And what was the name of that lawyer referral service?

A. The Center for Legal Justice, and almost simultaneous, not too far behind it, I’m not sure when the dates were, but August Belmont was opened not too far behind it.

Q. The Center for Legal Justice, who did you open that up with?

A. Mr. Ed Cherry.

Q. I want to show you the Articles of Incorporation for the Center for Legal Justice. It’s the only one I have.

MR. LISS: Do you want to have this marked?

MR. GENTILI: Yes. That would be 24.

BY MR. GENTILI:

Q. I want to show you exhibit number 24, which is the Center for Legal Justice incorporation papers.

Do you that, sir?

A. Yes.

Q. About halfway down that says who the registered agent is, and it identifies — who is the registered agent on that document?

A. JessicA.

Q. And what’s her last name?

A. Jacucci.

Q. Is that Mr. Cherry’s wife?

A. Yes, sir.

Q. And that’s Edward Cherry’s wife, correct?

A. Yes, sir.

Q. Next page, I think it’s the next page, shows the manager of the Center for Legal Justice as
10 TCFLJ Partnership. Did I say that correctly?

A. TCFLJ.

Q. Is that correct?

A. Yes, sir.

Q. Who is TCFLJ Partnership?

A. I don’t know.

Q. And you said you opened up the Center for Legal Justice after you left Elimidebt, I believe?

A. Uh-huh.

Q. You did?

A. No, no. During.

Q. During. Did you have an ownership interest in the Center for Legal Justice?

A. I’m assuming I have an ownership in the partnership.

Q. So is TCFLJ Partnership the partnership that owns the Center for Legal Justice?

A. That’s what it says. Yes.

MR. LISS: Testify to what you know only.

THE WITNESS: Okay.

BY MR. GENTILI:

Q. And you’re a partner in the partnership?

A. I’m assuming, yes.

Q. And who is the other partner in the partnership?

A. I think Mr. Cherry.

Q. You think or you know?

A. I think.

Q. Why don’t you know if you own the business?

A. Well, Mr. Cherry took care of the partnerships and the filings and everything for us.

Q. Do you have any reason to believe that Mr. Cherry and you don’t own the Center for Legal Justice?

A. No.

Q. The Center for Legal Justice was located at what address, sir?

A. 902 Clint Moore Road.

Q. It’s the same address as —

A. The old Elimidebt.

Q. — Elimidebt and the same address where August Belmont and the Esquire companies are now operating?

A. Yes, sir.

Q. I want to show you another document, this is the next exhibit, 25. (Thereupon, a copy of the Articles of Amendment to Articles of Organization for The Center for Legal Justice were marked as Plaintiff’s Exhibit 25 for identification)

BY MR. GENTILI:

Q. And I’ll represent to you that we took this off the sunbuz.org from the Florida Department of Corporations. I would ask you to go to the last page, and down at the bottom where it says page two of two, and above that it has Lawrence Diodato, manager typed?

A. Yes, sir.

Q. Is that your signature, sir?

A. Yes, sir.

Q. Now, the preceding page in, down at the bottom it says page one of two, and it says new registered agent, and it has a name written in, Edward Cherry. Do you see that, sir?

A. Yes, sir.

Q. And this is the Articles of Amendment to the Articles of Organization for the Center for Legal Justice, LLC. Did I read that correctly, sir?

A. Yes.

Q. Now, at some point in 2010 you designated — you signed, as manager, the designation of Edward Cherry as registered agent for the Center for Legal Justice; is that correct, sir?

A. Yes, sir.

Q. Now, at the bottom of page one of two, there is a signature, and above the line it says, signature of new registered agent. Is that the signature of Edward Cherry?

A. I don’t know.

Q. Have you had dealings with Edward Cherry?

A. Yes, sir.

Q. Have you had a chance to see his signature in various capacities?

A. A couple, yes.

Q. Is there any reason for you to believe that that is a forged signature of Edward Cherry?

A. No.

Q. All right. Is the Center for Legal Justice still in business, sir?

A. No.

Q. Can you tell me what happened with the operation of the Center for Legal Justice, after it was organized sometime in 2010?

A. In December 2011, we received a letter from the Bar, taking back our license as a registered referral agent.

Q. Can you tell me what the Center for legal justice did, from the time it was organized until December 2011?

A. We helped consumers with debt.

Q. Can you tell me how you did that?

A. By getting them to an attorney, after finding their qualifications, what kind of attorney they needed, then referring them to an attorney.

Q. And how did the Center for Legal Justice get paid for its services?

A. As referral fees.

Q. Referral fees from the attorneys?

A. From the attorneys.

Q. How much did the Center for Legal Justice get paid as a referral fee from the attorneys?

A. There was a grid. There’s no set amount. We didn’t work off percentages.

Q. How did the Center for Legal Justice get consumers to refer to attorneys?

A. How did we get them?

Q. Yes.

A. We purchased the opt-in data from marketing companies.

Q. And tell me, from which marketing companies did the Center for Legal Justice?

A. I’m guessing right now. It could — I don’t recall. I mean I’d just be guessing.

Q. Where are the records that indicate the marketing companies from whom the Center for Legal
Justice purchased leads?

A. They’d be on invoices.

Q. And where are those invoices located?

A. In my offices.

Q. Are they still in existence?

A. I do not know.

Q. If they are still in existence I’m asking you to preserve those, and not destroy them, as of
today.

A. Okay.

Q. Where did the marketing companies — I think they can also be called lead generators, correct?

A. Yes, sir.

Q. Where did the lead generators get the identity of the individuals that were referred to the Center for Legal Justice?

MR. LISS: Objection. That is calling for speculation. If you know —

THE WITNESS: I don’t know.

BY MR. GENTILI:
Q. But you purchase leads, you being, in this sense I refer to the Center for Legal Justice, purchase leads from marketing companies?

A. Yes, sir.

Q. How many leads, on a monthly basis, were purchased from the marketing company?

A. It depended on our budget, and it depended on the price of the lead.

Q. The various lead generators charge different fees for their leads?

A. Yes, sir.

Q. Typically, how did the lead generator charge for a lead?

A. It was charge for a higher price for exclusivity of the lead. So if a lead was to come in as, say a live transfer once they qualify a lead, which we didn’t have in our budget to ever do, but live transfers, at that time, anywhere. It could be from $30.00 to $100.00 a lead.

Q. What do you mean by live transfers? Did you say transfers?

A. Yes, sir. We didn’t do it, but live transfer, do you want the definition?

Q. Yes, please.

A. A definition of a live transfer is a marketing company that has some type of a LANI page that creates a caller to their company. They qualify the need of the caller and then get it to a company that is looking for that specific client, and then they call the company that’s looking for that specific client, and then they confirm all the information with them and then they accept that lead. Once they accept that lead they have to pay for that lead.

Q. Is that done in real time?

A. Yes, sir. Real time, yes sir. And they are very expensive.

Q. What is the other type of lead that — what other type of leads to the Center for Legal Justice purchase?

A. We buy aged leads. So it could be that specific lead to months from the day it was a live transfer.

Q. Any other type of leads bought by the Center for Legal Justice?

A. No.

Q. Is that the same source of leads that August Belmont uses today?

A. Yes, sir.

Q. Has anything changed between the way the Center for Legal Justice acquired its clients — acquired the leads and the way that August Belmont and Company acquires the leads?

A. No, sir.

Q. Once the leads are acquired — once the leads were acquired by the Center for Legal Justice, how did the center pay the lead generator?

A. Most of the time via wire.

Q. With regard to August Belmont, is that the same way it pays for the lead generators today?

A. Yes, sir. Either a debit card or wire. Yes, sir.

Q. And those are bank transfers?

A. Yes, sir.

Q. From the bank of the Center for Legal Justice and/or August Belmont to the lead generator?

A. It’s currently just August Belmont. Yes, sir.

Q. What bank is that, sir?

A. PNC.

Q. And what bank did the Center for Legal Justice use?

A. I am assuming it was — I’m guessing it was Chase. That’s the original bank we started with.

Q. Once the Center for Legal Justice, and I guess from what you’re saying — is that a fair statement that the operation of the Center for Legal Justice and August Belmont and Company, it’s the same method of operation?

A. I would say yes.

Q. Once the lead is acquired by the Center, or today August Belmont, was done with the lead?

A. The procedure?

Q. Yes.

A. Once the data comes into the management, the leads are distributed equally for reps, for either legal insurance license reps or the DOA license reps, or some have duly licensed reps, and they are sent to these representatives and then they make outbound call them.

Q. What are the licensed reps you’re talking about?

A. These are the, not employees but the contract — we have contract labor with an August Belmont. Everyone is contract labor.

Q. So everyone is an independent contractor?

A. Yes, sir.

Q. They don’t work for August Belmont?

A. No.

Q. They didn’t work for the Center for Legal Justice?

A. They were contract labor for the Center for Legal Justice.

Q. So these people were all independent contractors working for themselves?

A. Yes, sir.

Q. Using leads generated by the Center for Legal Justice for August Belmont?

A. Not generated, purchased.

Q. Purchased excuse me. Purchased, correct?

A. Yes, sir.

Q. And then these independent contractors were housed at 902 Clint Moore Road?

A. Yes, and also 214. That’s where August Belmont is now. It’s not at 902. I think it’s 214, that’s the address of August Belmont. It’s been there over a year.

Q. You’re talking about the suite number?

A. Yes, sir.

Q. But the physical address is —

A. 902. The suite has changed.

Q. Suite number, second floor?

A. One floor.

Q. One floor?

A. It’s across the hallway and back.

Q. Do you have a whole floor?

A. No, no. It’s a corporate plaza, so you can take individual offices. We try to keep everything kind of close together.

Q. So, correct me if I’m wrong now. Independent contractors were licensed by, you said two licenses. What were the two licenses?

A. Legal expense insurance licenses.

Q. From the Department of Insurance?

A. Yes, sir. And also Department of Agriculture licenses.

Q. And those are the telemarketing licenses?

A. Yes, sir.

Q. Any other licenses?

A. No.

Q. So is it a fair statement the Center for Legal Justice and August Belmont do not have telemarketing licenses?

A. You lost me.

Q. The companies. Is it a fair statement that the Center for Legal Justice did not have a telemarketing license?

A. It did have a telemarketing license.

Q. Well I thought you said the —

A. They do also.

Q. They do. So there’s duplicate?

A. Yes, sir. We have to register the Center for Legal Justice, post a bond to get approved, and once we are approved we are allowed to register agents under that bond.

Q. And the same thing for August Belmont?

A. Yes, sir.

Q. So is it a fair statement that both August Belmont and the Center for Legal Justice did not have any employees, except perhaps for yourself and Mr. Cherry?

A. Yes. I would say that’s safe to say

Q. Is there anybody else who was an employee of the Center for Legal Justice, besides you and Mr. Cherry?

A. No. Just the people who worked directly for August Belmont.

Q. Anybody else besides — who worked for the Center for Legal Justice, besides you and Mr. Cherry, were independent contractors?

A. Yes.

Q. What about the administrative, secretarial staff; things of that sort?

A. They didn’t work for those companies.

Q. They didn’t work for either one of those 5 companies?

A. No, sir.

Q. Were there administrative personnel, secretarial staff, for the Center for Legal Justice and August Belmont?

A. Not directly paid by those companies, no.

Q. Who were they paid by?

A. Esquire Litigation.

Q. August Belmont, aside from you and Mr. Cherry, were there any other employees employed by August Belmont?

A. No.

Q. Everybody else who worked for August Belmont was an independent contractor?

A. Yes, sir.

Q. Now I’ll get to the administrative staff. You just testified that the administrative staff was paid by Esquire Litigation Support?

A. Staff support, yes.

Q. Were they employed by Esquire litigation

A. .com.

Q. By the .com?

A. Yes, sir.

Q. All the administrative staff were employed by the — let’s call it esquire.com, for brevity, okay?

A. Uh-huh.

Q. You agree with me?

A. Yes, sir.

Q. All the administrative staff was paid by esquire.com?

A. Uh-huh.

Q. Is that a yes sir?

A. Yes, sir. I’m sorry.

Q. Was the administrative staff paid by — was the administrative staff for the Center for Legal Justice also paid by esquire.com?

A. Well, in essence, all the Center for Legal Justice are referral agents. That’s the — and they are all independent contractors. So is August Belmont, all referral agents. So they are all independent contractors. So there are no administrative staff, per se. Once — well I’m sorry.

Q. Well, explain to me, there is no administrative staff needed for August Belmont or the Center for Legal Justice?

A. No.

Q. And why is that?

A. Because it’s referred to attorneys.

Q. What about bookkeeping and tax returns and things of that nature?

A. That will be done by esquire.com.

Q. The lead comes in, and you’re describing the process, the lead is purchased and you’re describing the process, it’s provided to an independent contractor who then makes contact with the consumer, correct?

A. Yes, sir.

Q. At some point the organization of the Center for Legal Justice — is the Center for Legal Justice still doing business today?

A. No.

Q. When did it stop doing business?

A. In December 2011.

Q. And it all its work it transferred to August Belmont and Company?

A. There is no work after it was — stopped working, because all it does is just qualify people and move it over. So once it stopped, that was that.

Q. The ones that were in progress at that point, that had been qualified and were being referred, the ones that had just been purchased, where they transferred to August Belmont where they just left in the — or were they —

A. I don’t know. It was around Christmas time, so I don’t know.

Q. When the Center for Legal Justice was in operation, before December 2011, was August Belmont also operating as a legal referral —

A. It was not operating, but it was open.

MR. LISS: Just let him finish his question before you answer.

BY MR. GENTILI:

Q. When did it start — when did August Belmont start doing the operation of legal referral?

A. In January 2012.

Q. So it’s a fair statement it started operations referring consumers to attorneys after the Center for Legal Justice closed its doors?

A. Yes.

Q. In both scenarios, the Center for Legal Justice and August Belmont, how did you and Mr. Cherry acquire money to pay for the operations and to compensate the independent contractors?

A. Can you rephrase that?

Q. The Center for Legal Justice, when it was in business, purchase leads and then gave the leads to independent contractors who did the contact with the consumer, correct?

A. Yes, sir.

Q. How did — those independent contractors were paid for their services by the Center for Legal Justice, correct?

A. Yes, sir.

Q. How much was each independent contractor paid on a weekly basis by the Center for Legal Justice for the independent contractor services?

A. For the center?

Q. By the center?

A. It could range from $200.00 to $300.00 a week, plus a commission on the referral fee.

Q. Where did the commission on the referral fee come from?

A. From the attorneys.

Q. So the Center for Legal Justice was paid —

A. Would get a referral fee.

Q. I’m trying to — bear with me please. The Center for Legal Justice provided a lead to an independent contractor, who did the telemarketing to contact the consumer?

A. Uh-huh.

Q. Correct?

Yes, sir.

Q. The independent contractor was paid you said $200.00 to $300.00 a week, directly by the Center for Legal Justice, correct?

A. Yes, sir.

Q. And the independent contractor also received a commission from the attorney to whom the referral was made?

A. No. From the Center for Legal Justice. Yes, sir.

Q. Was there ever a direct payment from the attorney to the independent contractor?

A. Never.

Q. The attorney paid, obviously — the Center for Legal Justice had to have capital to underwrite its operation, correct?

A. Yes, sir.

Q. How did it get paid for the services it was rendering?

A. From whom? You mean how the company started?

Q. How and from whom. Not who invested money in the company, who paid the Center for Legal Justice in its business operations for the services that the center was providing in referring consumers to independent contractors within — who would use those leads to contact and refer to attorneys?

A. Esquire Litigation.

Q. Esquire paid the Center for Legal Justice?

A. Yes.

Q. Is that Esquire Litigation Support, LLC or esquire.com?

A. LLC.

Q. Where did Esquire, LLC get the money to pay the Center for Legal Justice?

A. You mean the process of the monies; is that what you’re asking me?

Q. Yeah. Where did it get its revenue? How did Esquire get its revenue to pay to transfer over to the Center for —

A. Esquire Litigation Support is a finance company that acquires the fees and distributes the
money appropriately.

Q. You’re talking about consumer fees?

A. Consumer fees, yes.

Q. I’m talking about — well how did the attorneys pay the Center for Legal Justice for the referrals that were provided to the attorneys?

A. How did the attorneys —

Q. Earlier you testified that the attorneys paid a commission.

A. Well it’s the referral fee for the client.

Q. You can call it anything you want. The money that was paid by the attorneys, how was that determined and how was —

A. It was paid from Esquire Litigation Support.

Q. It was paid to Esquire Litigation Support?

A. Right, and that the money was distributed.

Q. And it was paid by the attorney, correct?

A. To Esquire. Esquire —

Q. Esquire collected the money from the attorney?

A. Uh-huh.

Q. Is that a yes?

A. Yes.

Q. And then Esquire would pay the Center for Legal Justice the money it receives?

A. Yes.

Q. And then the Center for Legal Justice would pay the commission to the independent contractor, al, along with the $200.00 to $300.00 per week?

A. Yes.

Q. How much did the attorneys pay Esquire for the referral of the consumers?

A. It varies.

MR. LISS: And are you still talking about the CLJ?

BY MR. GENTILI:

Q. Still talking about the Center for Legal Justice.

A. Again, one more time. I’m sorry.

Q. How much did the attorneys pay Esquire for the referrals of the consumers?

A. Again, it varies. There is grids on consumers. Every consumer is different. Every product is different.

Q. Who would have that information as to how much — who would have the financial information as to how much was paid?

A. Esquire Litigation.

Q. And those records still exist, correct?

A. Yes.

Q. I’m asking you to preserve those records as of today, and not to destroy them. To understand that Mr. Diodato?

A. Yes.

Q. Now, is there any other source of income the Center for Legal Justice had in its business operations? And by income, I’m talking about revenue that are received from its business operations.

A. No.

Q. Now, that was the procedure through the end of 2011, the financial arrangements through the end of 2011 for the Center for Legal Justice, correct?

A. Yes, sir.

Q. And I think you’ve testified, in January 10 2012, August Belmont entered into or embarked upon the legal referral business, correct?

A. What date?

Q. January 2012.

A. Yes.

MR. LISS: And can we go off the record for just a second?

MR. GENTILI: Sure.

(Thereupon, a brief recess was taken)

MR. GENTILI: Okay. Back on the record.

BY MR GENTILI:

Q. We had a question pending. Before I guess there are just one ask you a question going back to the end of the Elimidebt, and you’re going into the Center for Legal Justice. How did it come about that — you’re not an attorney by training, right?

A. No, sir.

Q. How did it come about that you had the idea, or someone had the idea to start the Center for Legal Justice?

A. I didn’t have the ideA.

Q. Well who did have the idea?

A. Mr. Cherry.

Q. Tell me the circumstance — how did that — how did you guys come together to start the Center for Legal Justice?

A. About legal justice?

Q. Right.

A. Edward had an idea about formulating, registering as a lawyer referral service, and getting clients over to attorneys to help consumers with different types of problems that they had from, you know, taxes, medical bills, student loans, things of that search, credit card debt.

Q. And you had no — is a fair statement you had no experience in the lawyer referral business?

A. Yes, sir.

Q. You, personally, had no experience in that?

A. I had no experience.

Q. So this was a novel idea to you?

A. Yes, sir.

Q. And you and he — is a fair statement that you when he then entered into a partnership, that we’ve identified earlier, to start the Center for Legal Justice?

A. Yes, sir.

Q. Was there anybody else involved in the partnership, who was an equity owner in the Center for Legal Justice?

A. No.

Q. Okay, thank you. Before we broke for lunch, there was a question pending, and I would ask Daisy to repeat it so that I know we broke off. (Thereupon, the question was read back)

A. Yes.

Q. What was the origin of the idea to start August Belmont and Company?

A. We started August Belmont — we had registered it prior to starting it, of course. The Center for Legal Justice was given a letter from the Bar that we were no longer registered with the Bar. So, we had another lawyer referral service that we had registered, and we used that one.

Q. I’ll refer you to exhibit number four, which is before you.

A. Yes, sir.

Q. According to exhibit number four, which is copies of documents from the Florida Secretary of State’s Office, August Belmont and Company was organized on on or about October 15, 2010.

A. Yes, sir.

Q. And I’d like you to look through the rest of the documents on there, just to identify the other documents that are appended to it, the electronic articles of organization from August Belmont.

A. Right here?

Q. Yes.

(Thereupon, a copy of the electronically filed Articles of Organization for August Belmont were marked as Plaintiff’s Exhibit 4 for identification)

BY MR. GENTILI:

Q. It says you are the registered agent, correct?

A. Yes, sir.

Q. And it says the manager is August Belmont Partners.

A. Yes, sir.

Q. And it has an electronic signature, and is that Lawrence Diodato, authorized rep. That your electronic signature?

A. Yes.

Q. Who are August Belmont Partners?

A. Myself and Edward.

Q. That’s Edward Cherry?

A. It’s myself and a trust, I think it’s Ion Trust.

Q. Which is?

A. Again, I’m not sure.

Q. But it’s either you and Edward Cherry or you and one of Edward Cherry’s trusts?

A. Yes.

Q. Now, this was organized in — August Belmont was organized in October 2010. What did it do during that period of time, from October 2010 until January 2012?

A. Nothing.

Q. Why was organized in October 2010?

A. We just felt we should have another lawyer referral service.

Q. What you mean by that? Why would you have a competitor, competing with the Center for Legal Justice?

A. Well it wouldn’t have been a competitor.

It would have been the same type of business, and I just thought personally it also — it would be good to have two. And this was prior to the Center. Like I said, it was done on 10-15, and the center got a letter from the Bar at the end of December.

Q. 2011?

A. Now, 2010. Then, you know something —

Q. Let’s get the chronology right.

A. Yeah. I mean I’m just —

Q. The organization records, and if you let me finish I think it would be a lot easier —

A. I’m sorry.

Q. — for Daisy and for the record. The Articles of Organization for August Belmont and Company were filed October 15, 2010, correct?

A. Yes, sir.

Q. And you got the letter, that you’ve testified earlier, you being the Center for Legal Justice, received the letter from the Florida bar in December 2011, correct?

A. I hope I don’t have my dates wrong.

Q. You can refresh your recollection very quickly.

A. Okay.

Q. I’m showing you a letter that was marked exhibit R in the affidavit of Ama Douglas that was filed in this proceeding, and it’s a letter to Greenspoon Marder dated December 18, 2011. I’ll let you take a look at this letter.

A. Okay.

Q. Does that refresh your recollection?

A. Yes, sir.

Q. What was the date of the letter from the Florida Bar regarding the termination of the registration of the Center for Legal Justice with the Florida Bar?

A. December 18, 2011.

Q. And for the record, August Belmont and Company was organized pursuant to exhibit number four, which is before you, October 15, 2010?

A. Uh-huh.

Q. In the 13 month period between organization

in December 2011, what did August Belmont do?

A. Nothing.

Q. And in front of you, exhibit number four, I’d like you to look at the second to the last page in exhibit number four, the change of registered agent. Do you see that?

A. Yes, sir.

Q. Down at the bottom lower left-hand corner, there’s a signature above the typed name Larry Diodato; is that your signature, sir?

A. Yes, sir.

Q. Okay, thank you. And, just to go over old ground to make sure it’s absolutely clear, August Belmont’s current address is 902 Clint Moore Road, Boca Raton, suite 202, correct?

A. This is?

Q. August Belmont.

A. The suite number is not 202.

Q. 214?

A. 214, yes. In the same areA.

Q. But it’s been physically in the same building, 90 —

A. No. It’s in the building next door.

Q. Okay, building next door, but it’s at 902 Clint Moore Road, correct?

A. Yes, sir.

MR. GENTILI: What was the question right before we started all this digression; right before the break? (Thereupon, the question was read back)

BY MR. GENTILI:

Q. Forgive me if I’m going over old ground, but whose idea was it to start August Belmont and Company?

A. Both of ours.

Q. Exhibit number five in front of you, it’s Esquire Litigation Support, LLC, the Articles of Organization and other documents from the Secretary of State’s Office.

(Thereupon, a copy of the Articles of Organization for Esquire Litigation Support, LLC were marked as Plaintiff’s Exhibit 5 for identification)

BY MR. GENTILI:

Q. I’d like you to take a look at that. According to exhibit number five, is Esquire Litigation Support, LLC was organized on or about September 23, 2010?

A. Yes, sir.

Q. What was the purpose in organizing Esquire litigation support?

A. To be a finance company.

Q. Whose idea was it to organize Esquire Litigation Support?

A. Mr. Cherry’s.

Q. You said it was to organize a finance company?

A. Yes, sir.

Q. Can you explain to me exactly what was intended by organizing a finance company called Esquire Litigation Support, LLC?

A. Esquire Litigation Support is the company that collects the fees for everybody, the support companies, the paralegal support, the referral agents and the attorneys, and distributes the appropriate monies to the appropriate sources.

Q. Earlier you testified that Esquire Litigation Support, LLC collects money — it receives payment from attorneys for the referral —

A. That was this one. It shouldn’t — LLC is — right, support. I’m sorry. I’m confusing myself right now. I’m sorry. That was the .com.

Q. Which is the —

A. The .com is what I just explained. I’m sorry.

Q. Collecting the fees?

A. Yes, sir.

Q. Okay. All right so —

A. And now were on again on this —

Q. Yes.

A. — support, yes, sir.

Q. We’ll get to the .com in a minute but —

A. Okay.

Q. — the LLC company, let’s call it Esquire, LLC. What is its purpose?

A. It is a legal support staffing company.

Q. And whose idea was it to organize Esquire, LLC?

A. Mr. Cherry’s.

Q. Now, what was — how was it going to function as a support entity?

A. It gives backup, paralegal support, legal assistance support, for the attorneys that are on the panel of August Belmont, and the attorneys that are as of counsel throughout the states the panel does business in, in other states.

Q. Why would these attorneys, who are independent practitioners, correct?

A. Yes, sir.

Q. Are they employed by either Esquire, LLC, or August Belmont?

A. No, sir.

Q. They have their own offices?

A. Yes, sir.

Q. They have their own staff?

A. Yes, sir.

Q. Why would they need staff support from Esquire, LLC?

A. They contracted LLC. I don’t know the reason for, you know, hiring staff support but it gives proper staff support. It gives a different type saw as a business owner’s lawyers have a very bad tendency of taking care of their clients. So the staff support system we worked on together was basically giving the clients the right amount of attention they need when going through the processes, so they are very attentative, and the lawyers contracted us to do that.

Q. Esquire Litigation Support, LLC, does it do more than simply provide administrative support with regard to filing papers and keeping records; does it do more than that?

MR. LISS: Objection. I don’t recall the predicate of them filing papers.

MR. GENTILI: Let’s clarify this.

BY MR. GENTILI:

Q. Esquire Litigation Support, what services does it provide to the attorneys?

A. It does outbound calling to the clients. The consumer protection programs the attorneys supply to the clients are participating also with the clients. Meaning that, if violations are created through phone calls or letters or mail or things of that such, is a log that’s generated with the legal support company, Esquire Legal Support, and the clients to provide to the attorneys.

Q. So the administrative support, is it a fair statement the administrative support that Esquire Litigation Support, LLC provides is not simply manning computers and doing, for lack of a better word, typing and processing of papers and filing papers with the court. It’s beyond that, correct?

A. Yes, sir.

Q. It really involves customer service, correct?

A. Tremendous amount.

Q. And it involves telemarketing with the consumer, communicating with the consumer?

A. They communicate. Not telemarketing. The consumer is accepted already by the law firm, and then the legal assistants and paralegals are allowed to speak to them.

Q. They call the consumers over the phone —

A. Yes, sir.

Q. — through e-mail, they communicate over the phone?

A. And accept the calls, and they have a 24-hour return call policy. So they’re very attentive.

Q. So, if a consumer has a problem they call Esquire Litigation Support staff to rectify the problem?

A. Yes, sir.

Q. What oversight is the attorney have over Esquire Litigation Support?

A. They are direct with the legal assistants or paralegals that are dealing with their clients. Total oversight.

Q. Those attorneys are in-house, or are they —

A. They have their own offices out and, like I said before, we provide office space for them when they want to be in the office.

Q. Who are the attorneys that use the office space on site?

A. Let’s see, it varies. Tracy Long used our office on site. Mr. Peter Schneider, Mr. Paul Herman, Mr. Howard Feinmel. I don’t know if I’m leaving anybody out.

Q. So basically the Esquire Litigation Support provides customer service; is that a fair statement?

A. Yes, sir.

Q. To the consumer?

A. Yes, sir.

Q. And does the callback, and things of that sort?

A. Yes, sir.

Q. Now Esqlitigationsupport.com, LLC, is the purpose of organizing that entity?

A. To be the company that captures it’s a finance company that captures the fees, and distributes the fees to the legal support company, to the referral agent, to the attorneys.

Q. I want to go back to exhibit number five, which is before you.

A. Yes, sir.

Q. And go to the last page. It shows that the manager is Esquire Litigation Support Partners. Do you see that?

A. I’m sorry.

Q. The last page?

A. Yes, sir.

Q. And it’s signed by, not by an individual, but by Esquire Litigation Support Partners. Who is Esquire Litigation Support Partners?

A. I don’t know the entities.

Q. Are you one of them? Are you one of the partners at Esquire Litigation Support?

A. I’m assuming so.

Q. And is Mr. Cherry the other partner?

A. I’m assuming so.

Q. Is there any other person who is involved in these businesses, besides you and Mr. Cherry?

A. No, not to my knowledge.

Q. And I’ll ask you to go to the next page forward. It has a signature down at the lower left-hand corner, Larry Diodato, a change of registered agent.

A. Yes, sir.

Q. Is that your signature?

A. Yes, sir.

Q. In the incorporation article, the fourth and fifth pages in, the Articles of Incorporation shows you where the registered agent at that point, article number four?

A. Yes, sir.

Q. And next page shows that the manager, again, is Esquire Litigation Support Partners, correct?

A. Yes, it does.

Q. At the same address, 902 Clint Moore Road, Boca Raton, and that your electronic signature, correct?

A. Yes, sir.

Q. And you filed these documents on or about September 23, 2010, correct?

A. That’s what it says. Yes, sir.

Q. Was there any discussion of any other person being a partner with you and Mr. Cherry and this Esquire Litigation Support?

A. Not to my knowledge.

Q. Thank you, you can put that aside. All right. I direct your attention to article number six here, exhibit number six before you.

(Thereupon, a copy of the Fictitious Name Registration form for Esquire Litigation Support Partners was marked as Plaintiff’s Exhibit 6 for identification)

BY MR. GENTILI:

Q. And it’s a fictitious name registration form from the state of Florida for Esquire Litigation Support Partners, child August 25, 2011 according to the stamped received from the Secretary of State’s Office. Do you see that?

A. Yes, sir.

Q. And it says the owners of the name Esquire Litigation Support Partners are Mr. Cherry and you, correct?

A. Yes, sir.

Q. And Mr. Cherry signed that is the general partner, correct?

A. Yes, I see that.

Q. And you’re aware that he filed this document with the Secretary of State’s office, correct?

A. Yes, sir. Now I am, yes.

Q. I’d like you to take a look at exhibit number seven, and we can get now to esqlitigationsupport.com, LLC. We started talking about this a little earlier, about being the finance company. Did I recall that testimony correctly?

A. Yes, sir.

Q. Explain to me in detail what the purposes of this finance company would be.

A. It’s to help the consumer with a retainer agreement that spread over a period of time, so they can afford the retainer agreement proposed to by the attorneys to them.

Q. So is it a fair statement this company provided financing, the Esquire.com company provided financing to consumers?

A. Yes, sir.

Q. To finance the legal fee payable to the attorney?

A. Yes, sir.

Q. At minimal interest rate, or no interest rate?

A. Zero.

Q. Where did the idea come from for the organization of this company?

A. Mr. Cherry.

Q. Who are the partners in this company?

A. I’m saying myself and Mr. Cherry.

Q. Is there anybody else who a partner in this company with you?

A. No.

Q. With regard to exhibit number seven, that references this company, it shows the manager as Esqlitigationsupport.com Partners, and that’s you and Mr. Cherry, correct?

A. To the best of my knowledge yes, sir. (Thereupon, a copy of the electronically filed Articles of Organization for Esqlitigationsupport.com were marked as Plaintiff’s Exhibit 7 for identification)

BY MR. GENTILI:

Q. Where does the money come from to provide financing to the consumers through Esqlitigationsupport.com, LLC?

A. The money come from?

Q. Earlier you testified that Esquire.com receives money from attorneys.

A. Yes, sir.

Q. And distributes that to the independent contractors and to the referral company, correct?

A. There’s an agreement with the attorneys and Esquire.com to collect the fees and distribute the fees.

Q. Two different issues here. The attorneys pay Esqlitigationsupport.com for the referral, correct?

A. No.

Q. Earlier you testified that the attorneys paid Esq —

A. For back end support, yes.

Q. Earlier you testified that there’s a commission that’s paid for the referral of —

A. There’s a referral fee.

Q. Referral fee. A referral fee paid by the attorneys, correct?

A. No. It’s paid by Esqsupport.com to the referral company and to — their fees to the attorney and then their fees to the support company.

Q. What do the attorneys — you testified earlier, Mr. Diodato, that the attorneys pay a referral fee for the —

A. And it was a misquote, because that’s the way it’s done.

Q. And I’ve asked you to preserve those documents.

A. Yes, sir.

Q. The attorneys are getting referrals for free; yes or no?

A. No.

---

Q. The last line of that paragraph says, neither I nor any of these three companies is involved in a “land trust” business, or is engaged in filing “quite title” actions as alleged in the AG papers. Did I read that correctly?

A. Yes, sir.

Q. What do you mean that you are not involved in any land trust business; can you explain that in greater detail?

A. Yes, sir. We are a referral agent. We don’t do land trusts. We refer clients to attorneys to do what they see fit with the client. We don’t do any land trusts with August Belmont, or Esquire Litigation or Esqlitigationsupport.com. We do nothing with that. We refer.

Q. You have no involvement in the land trusts of any kind?

A. No.

Q. Personally?

A. I opened a corporation, yes.

Q. Which one is that?

A. Fidelity.

Q. What does Fidelity do?

A. Fidelity Land Trust?

Q. Yes.

A. Land trusts.

Q. Is that what it is, is that which it opened, Fidelity Land Trust?

A. I’m not totally correct but I’m —

MR. KUVIN: So the record is clear, are we talking about now, then; at what point in time?

MR. GENTILI: We will get there.

MR. KUVIN: Okay.

MR. GENTILI: We’ll get there.

MR. KUVIN: Thank you.

BY MR. GENTILI:

Q. So when you signed this document on 3rd October, 2012, saying that you had no involvement, personal involvement in land trust business, that was true to the best of your knowledge?

A. Yes, sir.

Q. What is a land trust business, if you know?

A. To the best of my knowledge, a land trust was created a long time ago to shelter property.

---

Q. You operate August Belmont, correct?

A. Not full-time.

Q. How much time do you spend there?

A. A quarter of my time.

Q. Who operates it?

A. We have managers.

Q. And who are the managers?

A. Stephen Portello.

Q. Who else?

A. That’s it.

Q. Who else; that’s it?

A. That’s it.

Q. You know what they’re — your keeping track of policy and what is being disseminated on behalf of your company?

A. The best of my knowledge yes, I do.

Q. And do they have to get approval for what they do for disseminating information?

A. Most of the time, yes. Sometimes they don’t. They just sent out their independent contractors.

Q. Who provides — well I thought — but you said Portello is the manager?

A. He is the manager.

Q. He works for you?

A. Yes, sir.

Q. Who provides Portello direction, policy and direction, on behalf of the August Belmont entity?

A. Myself.

Q. And Ed Cherry?

A. Sometimes.

Q. You and Ed Cherry own August Belmont, correct?

A. Yes, sir.

Q. Does anybody else on it?

A. No.

Q. Who develops the material that’s being used with — being provided with this image?

A. Edward would help us with that.

Q. Who else, besides Edward Cherry?

A. No. Pretty much Edward. We look at it all together.

Q. You and he?

A. Every — pretty myself, Steve, we look.

Q. Steve who?

A. Portello.

Q. Who has control and authority over everything that goes out from the company?

A. Myself and Edward.

---

Q. Okay. When was the last time you looked at the August Belmont website?

A. Since we had the TRO.

Q. And that would’ve been at the end of September, 2012?

A. Yes, sir because now it’s an F.

Q. Excuse me?

A. My company is rated F. I don’t want a look at it.

---

Q. In the second sentence Mr. Gellenbeck writes, there are in fact to Fidelity land trust companies: One operated and controlled by me (Fidelity South) and one operated and controlled by defendant Lawrence Diodato and other defendants (Fidelity North). Did I read that correctly?

A. Yes, sir.

Q. Did you operate and control a company —

A. It’s a false statement.

MR. LISS: Let him —

THE WITNESS: No, I’m just —

BY MR. GENTILI:

Q. All right. That’s what I was going to ask you. Why is that a false statement?

A. I didn’t operate that on a daily basis, not at all.

Q. Did you ever operate Fidelity Land Trust?

A. No.

Q. Where did Mr. Gellenbeck, if you know, and I know this is — you’re not Mr. Gellenbeck, where would Mr. Gellenbeck get the information or the impression that there were two Fidelity’s; one controlled by him in one controlled by you?

MR. LISS: Let me note an objection to hearsay, and it will call for speculation. Do you know where he got that information? Answer the question.

THE WITNESS: Sunbiz, because it’s not me.

BY MR. GENTILI:

Q. Did you ever have any dealings, business dealings, with Paul Gellenbeck?

A. Never.

Q. Did Mr. Cherry ever have any business dealings with Paul Gellenbeck, if you know?

A. I don’t know.

Q. Are you familiar with the company that’s run by Mr. Gellenbeck called Fidelity Land Trust Company?

A. I know of the company. I’m not familiar with his procedure.

Q. Do you have a company that’s similar to that?

A. Not at all.

Q. Paragraph number six, page three, the second sentence reads “rather Fidelity provides land trust services pursuant to the Florida Land Trust Act, none of which is intended or designed to stop, avoid or delay foreclosure proceedings.” Did I read that correctly?

A. Yes, sir.

Q. Do you provide any services pursuant to the Florida Land Trust Act?

A. I’m not sure.

Q. What would you need to —

A. I don’t know what the land — yeah. I don’t know the — okay.

Q. What would you need to make yourself sure whether you personally provide any land trust services?

A. I’m not familiar with the Land Trust Act.

Q. I’m not asking you — you’re not a lawyer. I understand that.

A. Exactly but —

Q. I’m not asking you about the Land Trust Act.

A. Okay.

Q. I’m asking you about land trusts.

A. In the question was, again? I’m sorry.

Q. Have you provided any services to a land — as a land trust?

A. Myself, no. No.

Q. Personally, I’m asking, have you provided any services to a land trust?

A. No, sir.

Q. Are you sure about that?

A. I’m very vague on the question.

Q. Excuse me?

A. I don’t know what you mean. I had a part ownership in Fidelity.

Q. Have you acted as a representative of any land trust?

A. No.

Q. You mentioned Fidelity Land Trust, Exhibit 14, which is documents from the Florida Secretary of State’s Office show The Fidelity Land Trust Company, LLC was organized on or about December 9, 2011 by Edward C. Tudor.

A. Yes, sir. (Thereupon, a copy of the electronically filed Articles of Organization for The Fidelity Land Trust Company, LLC were marked as Plaintiff’s Exhibit 14 for identification)

BY MR. GENTILI:

Q. You are familiar with that, correct?

A. Yes, sir.

Q. And you know who Edward C. Tudor is, correct?

A. Yes, sir.

Q. And who is Edward C. Tudor?

A. Mr. Cherry.

Q. And the manager of Fidelity Land Trust is organized, pursuant to Exhibit 14, is Fidelity Land Trust Partners, correct?

A. Yes, sir.

Q. Who are Fidelity Land Trust Partners?

A. What was the day, sir?

Q. December 9, 2011.

A. Okay. Yes, sir.

Q. Who is Fidelity Land Trust Partners?

A. Myself and Mr. Cherry/Mr. Tudor.

Q. Mr. Cherry, not Mr. Tudor?

A. I’m assuming yes. That’s to the best of my knowledge, yes.

Q. To the best of your knowledge, why was the name Edward Tudor used to organize Fidelity Land Trust and not Edward Cherry or Lawrence Diodato?

A. I do not know.

Q. Whose idea was it to organize Fidelity Land Trust Company?

A. Edward Tudor Cherry.

Q. And what was the purpose of organizing Fidelity Land Trust Company?

A. Initially it was to — it was a safe haven for real estate property.

Q. That was initially. How did that develop in time?

A. I —

Q. Where did it go from there?

A. I don’t know.

Q. Last page of that document is an annual report dated June 18, 2012, and that’s your electronic signature down at the bottom as manager, correct?

A. Yes, sir.

Q. How come there’s no registered agent — how come there’s no manager, member manager on record today?

A. For Fidelity?

Q. Yes.

A. I resigned.

Q. When did you resign?

A. Sometime in the summer of 2012, before the TRO, I would say about — I’m not sure, but around three, to four, to five months prior to the TRO.

Q. Why did you resign?

A. We had gotten a letter from The Fidelity Insurance Company telling us to cease and desist using their names. That was one reason. And it was brought to my attention, it was a piece of marketing material with the name Fidelity on it being used somewhere in Broward or Miami with information that I have never seen before to the public, and I did not want to be a part of that. So I decided to resign for both of those reasons.

Q. On the Articles of Incorporation, article four, the registered agent is Real Property Consulting, LLC, 5944 Coral Ridge Drive, suite 136, Coral Springs. First of all, who is Real Property Consulting, LLC?

A. I have no ideA.

Q. And 5944 Coral Ridge Drive, Coral Springs, whose office is that?

A. I have no — I do not know.

Q. Now, you’re aware that Mr. Cherry filed bankruptcy and was deposed, has been examined in the Bankruptcy Court?

A. Yes, sir.

Q. And are you aware that, in that proceeding, he said he works for you through a company called Zion, one of the Zion trusts?

A. Yes, sir. If that’s how he stated it.

Q. In fact, he doesn’t work for you; you’re partners, correct?

A. In what?

Q. In the various entities in which you’re involved?

A. Yes, sir.

Q. He said he worked for — and he said he didn’t know who — he identified Fidelity Land Trust Partners owning Fidelity Land Trust Company and that was — and he identified that as being owned by you and your wife. Do you understand that?

A. Excuse me?

Q. Okay, Exhibit 15 is part of the testimony.

A. Okay. (Thereupon, a copy of the 341 Meeting of Creditors Re: Edward Cherry was marked as Plaintiff’s Exhibit 15 for identification)

BY MR. GENTILI:

Q. Page 19 and 20, where he says he works for you.

A. Do you mean question 19 and 20?

Q. Page 19 and 20.

A. This only has a couple of pages.

Q. That’s all it will have. Page numbers.

A. Oh, I’m sorry. I’m sorry. Got you. Go ahead.

Q. On page 19 it says Fidelity Land Trust Company, bottom of 19, beneficial owners are Fidelity Land Trust Partners, and Fidelity Land Trust Partners are you and Mr. Cherry, correct?

A. Yes.

Q. On the following page, number 20, he indicated that you and your wife for Fidelity Land correct?

A. I’m assuming, yes. I believe it is incorrect.

Q. He also said he worked for you through Zion, on page 20, halfway down, lines six through ten.

A. Got you.

Q. And that’s also an incorrect statement that he doesn’t work for you. You and he are partners, correct? You’ve testified repeatedly about —

A. He’s a —

MR. LISS: Let me just note an objection on comparative hearsay. You’re asking him to opine on a hearsay matter and call for speculation.

MR. GENTILI: Okay.

BY MR. GENTILI:

Q. You and he or partners, correct? He doesn’t work for you; you don’t give him a paycheck, do you?

A. I pay Zion.

Q. You pay Zion for him?

A. Yeah. He doesn’t work for me, I pay Zion, the trust.

Q. But you pay the Zion trust and you —

A. Yes.

Q. — and he are partners and you — are you 50/50 partners?

A. No. I’m majority.

Q. How much do you own?

A. 51.

Q. And he owns 49?

A. Yes.

Q. He owns 49 through Zion?

A. I don’t know.

Q. His interest — he has 49 percent of —

MR. LISS: Of which entity are we speaking?

MR. GENTILI: We’re getting there.

BY MR. GENTILI:

Q. He owns 49 percent of August Belmont?

A. Yes.

Q. He owns 49 percent of Esquire Litigation Support, LLC?

A. Yes.

Q. He owns 49 percent of Esquirelitigation.com, LLC?

A. To the best of my knowledge, yes.

Q. Are there any other businesses, aside from the Center for Legal Justice, in which you’ve been involved with — have been or are involved with Mr. Cherry?

A. Besides Fidelity?

Q. Besides Fidelity and Center for Legal Justice?

A. No.

Q. When you were in the Center for Legal Justice, your partnership, was it still 51/49 or were you 50/50?

A. I don’t know.

Q. I’ve already marked this, so I’m going to show it to you, exhibit number 16?

A. Yes, sir. (Thereupon, a copy of the Resignation of Managing Member from The Fidelity Land Trust Company, LLC was marked as Plaintiff’s Exhibit 16 for identification)

BY MR. GENTILI:

Q. Last page. Fidelity Land Trust Company, resignation of Fidelity Land Trust Partners. That’s the resignation we were talking about earlier, correct, as manager?

A. August 12, yes sir.

Q. Is that your signature or Mr. Cherry’s signature?

A. It’s not my signature.

Q. So it must be Mr. Cherry signature, correct?

A. I don’t know.

Q. Is there anybody else who had signatory authority over the Fidelity Land Trust Partners, besides you and Mr. Cherry?

A. I do not think so. No.

Q. I want to show you the — you mentioned earlier representations about the Fidelity name?

A. Yes, sir.

Q. I want to show you a website capture of the Fidelity Land Trust, which is marked as Exhibit 17.

A. Yes, sir. I see it. (Thereupon, a copy of website capture for Fidelity Land Trust was marked as Plaintiff’s Exhibit 17 for identification)

BY MR. GENTILI:

Q. Okay. What were the representations, or what did you see as being a misrepresentation that caused the resignation of you and Fidelity Land Trust Partners, as manager of Fidelity Land Trust in August 2012?

A. First I saw a mailer that was — I don’t have the mailer. I saw — I haven’t seen it since I saw it that day, but the information on it I didn’t like, or I didn’t approve, so it had nothing to do with my company, and nor did it have my phone numbers on it to my company or mailing addresses for anything of my company, Fidelity in Boca Raton.

Q. Who sent it out?

A. I do not know.

Q. How did you come to see it?

A. It went to an employee — a person that is employed to me, Richard Weiner, who is in foreclosure right now. It went to one of my employees of the August Belmont Group, and he brought it to my attention.

Q. And who mailed it; do you know?

A. I don’t know.

Q. Do you know what entity; was a regarding Paul Gellenbeck?

A. It wasn’t mine. So, it had nothing to do with the Fidelity in Boca Raton.

1 Q. Did you have anything to do with the preparation of this website, which is described in Exhibit 17?

A. I’ve never seen this website before. I’ll be honest with you, never. It is not my 800 numbers. These are not anything I —

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Q. Form of deed, goes on for a few pages, between the consumer, Gail Powell, and the Sunshine Land Trust Company, LLC. What is your relationship — what is your involvement in Sunshine Land Trust Company, LLC?

A. I was a part owner.

Q. Are you still a part owner?

A. Yes, sir.

Q. And who is the other part owner of Sunshine?

A. I’m not sure.

Q. Mr. Cherry?

A. It could be, yes.

Q. Anybody else?

A. Not to my knowledge.

Q. Are there any other businesses or entities that you are involved with Mr. Cherry, besides the ones we have identified previously, and now the Sunshine Land Trust Company?

A. Florida Land Trust.

Q. Is there anybody else besides you and

Mr. Cherry in Florida Land Trust Company — Land Trust Services?

A. Not to my knowledge.

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Q. And is there anybody else in that partnership, specifically Florida Land Trust Partners, besides you and Mr. Cherry?

A. To the best of my knowledge, no.

Q. Now what is your percentage ownership of that partnership?

A. I don’t even know.

Q. Is it 50/50 or 51/49; do you know?

A. Again, I don’t know.

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Q. All right. The first one ending in 01, we’ll just say the last two numbers, 01. We can skip that and go to 02. It’s a deed by Mr. And Mrs. Mayo to Levy County Partners. Who is Levy County Partners?

A. I don’t know.

Q. Let’s go to 04. If they deed from Levy County Partners to Fidelity land trust Company, LLC, signed by the grantor, Edward Cherry, nominee of Levy County partners. Have you seen that before; have you seen this deed before?

A. No, sir.

Q. You’ve seen Nicole Pacheco sign documents, correct?

A. Yes, sir.

Q. Okay.

A. No, I’ve never witnessed her sign a document. No.

Q. Have you seen her signature on documents?

A. Yes, sir.

Q. Is that her signature as a witness?

A. The best my knowledge, yes sir.

Q. Is that Ed Cherry’s signature, to the right of that?

A. Best of my knowledge, that’s who it is.

Q. Next one, document 06. A deed from Fidelity Land Trust to Sunshine Land Trust; do you see that, dated July 24, 2012?

A. To Sunshine? Okay.

Q. Okay. Let’s flip the page to 07. It says the grantor. Is that your signature on behalf of Fidelity Land Trust Company, LLC?

A. Yes, sir.

Q. What was the purpose of the transfer from Fidelity Land Trust to Sunshine Land Trust Company in July 2012?

A. I don’t recall.

Q. And let’s go to number 08. It’s a deed from Vanessa Walter of Fidelity Land Trust Company regarding unit 809 Summerbreeze Condominium. Let’s go to the next document, ending in 10 regarding a deed —

A. Beginning in 10?

Q. Yeah, beginning in 10, from Fidelity Land Trust Company to Sunshine Land Trust Company regarding unit 809 Summerbreeze Condominium; do you see that?

Do you see that transaction?

A. Yes, sir.

Q. Next page, 11. The grantor, Fidelity Land Trust Company by Nicole Pacheco, manager; do you see that?

A. Yes, sir.

Q. When did Nicole Pacheco become a manager of Fidelity Land Trust Company?

A. I don’t know.

Q. Is that Nicole’s signature right there?

A. It looks similar.

Q. Now we can go to 12. A deed dated November 12, 2012 by the Sunshine Land Trust Company as trustee to Vanessa Walter of unit 809 Summerbreeze Condominium; do you see that?

A. Yes, sir.

Q. Next page, ending in 13. Sunshine Land Trust Company, the grantor, signed by Edward Cherry as manager. Is that Edward Cherry’s signature?

A. To the best of my knowledge.

Q. Who is Christina Pinelli?

A. She was an employee of Esquire Litigation.

Q. Is she still employed?

A. No, sir.

Q. The date of this document is November 12, 2012. The injunction was entered September 25, 2012. Why was the transfer made after the injunction froze all assets of Sunshine and Fidelity, among other people?

A. I don’t know.

Q. 14 and 15 seem to be a duplicate of 13 and 14, unless I’m — yeah, it’s unit 809 Summerbreeze, same date, everything else. That’s a typo. 14 and 15 are the same as 13 and 14. Excuse me, 12 and 13. In the book and page number are the same also. Yes, book 49257, page 1759. Yes, those two documents are duplicates. 12 and 13 and 14 and 15 are the same. Next batch of documents you have should be from Miami-Dade County. The first one has 16 and 17, Nicole Pacheco signing as manager of Fidelity Land Trust on or about July 24, 2012. Transferring property from Fidelity Land Trust to Sunshine State Land Trust Company. Do you see that, the first page on 16?

A. Yes, sir.

Q. Nicole Pacheco’s signature on page 17, notarized by Christina Patelli; do you see that?

A. Yes, sir.

Q. Next one, document ending in 18. Transfer from Fidelity Land Trust to Sunshine Land Trust Company, on page 19 signed by Nicole Pacheco as manager; do you see those? Do you see that? Do you see that?

A. Uh-huh.

Q. Do you see the transfer from Fidelity on page 18 and 19?

A. Yeah. I’m starting to think I’m pretty sure I know what it is now.

Q. And it’s signed by Nicole Pacheco as manager?

A. No. I pretty — know —

Q. Okay. We can go through these. As you can see, we have quite a few, probably close to 100 of them.

A. Okay. For some of them dated prior to the TRO? The transfer of deeds into Sunshine, because that means a lot because what had happened, when we redesigned from Fidelity, there was a mass email and letter campaign to all the clients, before the TRO, offering them safe harbor into the Sunshine Land Trust, and we also sent a letter out to say either they could move the properties over, or create a new trustee, and not use the Sunshine Land Trust.

And I’m pretty sure these came in after the TRO, but we had sent them out prior. That’s why there’s hundreds of them. That’s exactly what this is. So we gave them an option to have a new trustee, a new everything, and some chose to put their own trustee in, and some chose to use Sunshine Land Trust. That’s exactly what this is, and some came in after the TRO. Because my first signature is way before that and if — January 2012. That’s my only signature on any of these.

Q. Are you sure?

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Q. Mr. Diodato, why were these transfers occurring between Fidelity Land Trust and Sunshine?

A. When we redesigned myself and Edward from Fidelity, we had the Sunshine Land Trust available to us to, I guess it’s called transfer the deeds, or move the deeds into another land trust. I don’t know the technicalities of it all, but it gave us — we also, when we did offer them this, to move them into Sunshine, we gave them their right to assign another trustee besides Sunshine in the letter, and it was basically they could opt for their own trustee, or then go forward with Sunshine as the trustee.

Q. Were you compensated for your services as manager of Fidelity Land Trust?

A. Not a dime. No.

Q. Were you compensated for your services as manager of Sunshine Land Trust?

A. No, sir.

Q. Was Mr. Cherry compensated as manager of Sunshine?

A. No, sir.

Q. Was Nicole Pacheco compensated for her services as manager of Fidelity Land Trust and Sunshine Land Trust?

A. No, sir.

Q. Why were documents — why were titles transferred after the injunction order on October 25, 2012?

A. You the only thing I can see is that these documents came in after the injunction, but they were sent out a couple of months prior to the injunction, and they just happened to come in afterwards.

Q. And they were recorded, notwithstanding the fact that the injunction was in place?

A. That I don’t know, sir.

Q. Who would know, sir?

A. Maybe Mr. Cherry.

Q. In your affidavit, going back to exhibit 25 number nine — and for the record, 26 starts at LD0001 and goes to LD00116. Mr. Diodato, I’m going to go back to that sentence right there. Exhibit number nine, paragraph number four, and I quote “neither I nor any of these three companies is involved in the land trust business or in filing quiet title actions” it’s actually written quite Q-U-I-T-E.

A. Gotcha’

Q. That statement is not correct, is it?

A. I didn’t file a quiet title action, nor did Esquire, nor did August Belmont.

Q. No. It says that you weren’t involved in a land trust business.

A. On a daily — daily basis, no.

Q. I think we’ve established you signed —

A. One document.

Q. — numerous documents, and if you want to count them up, I’ll give them back to you.

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Q. Is there any time limitation in regard to your statement, that neither I or any of these three companies is involved in a land trust business?

A. My three companies, no.

Q. Okay.

A. Myself, I was a part owner of a land trust company. Yes.

Q. Then why didn’t you say that in the statement — in the affidavit, exhibit number nine?

A. Well it was public knowledge on Sunbiz I was a partner of a land trust company.

Q. Why was it that brought to the attention of the court by this affidavit, which Greenspoon Marder relied upon to amend the injunction?

A. I don’t know what you’re — I —

Q. Okay. You don’t know how to answer that one, do you?

A. I really don’t. I really don’t. I mean I —

Q. When this affidavit was prepared and submitted by Greenspoon Marder, was Greenspoon Marder aware of the relationship between you and Mr. Cherry —

A. Yes, sir.

Q. — and Fidelity Land Trust and —

A. Yes, sir.

Q. — Sunshine?

MR. LISS: I’m going to object, because at this point you’re asking about privileged communications.

BY MR. GENTILI:

Q. Who drafted the affidavit, exhibit number nine?

A. Where?

Q. Who drafted — who wrote that — who wrote it up for you to sign?

A. It was reviewed by Greenspoon Marder for me to sign.

Q. Do you know which attorney?

A. Probably Richard Epstein, or it could’ve been Robbie, it could’ve been Has Hadik. There’s multiple attorneys.

MS. THERILUS: One question. Did you read the affidavit before you signed it?

THE WITNESS: Yes, ma’am.

BY MR. GENTILI:

Q. Exhibit number one, the October 12, 2012 order from Judge Gates —

MR. LISS: Can you just give me a second counselor to find it?

MR. GENTILI: Sure.

BY MR. GENTILI:

Q. That order, exhibit number one, sets forth —

MR. LISS: I’m just looking at the day, if you give me a second. October 12, okay.

BY MR. GENTILI:

Q. October 12, 2012, signed by Judge Gates, page three, paragraph number two requires Mr. Diodato to provide us documentation, including but not limited to financial statements, contracts, documents demonstrating the scope, volume and revenue related to land trust services and/or litigation to cancel or avoid real estate. Do you see that provision, Mr. Diodato, on paragraph two?

A. Yes, sir.

Q. You have not provided to us any financial information regarding the land trust business of Fidelity Land Trust and/or Sunshine Land Trust. Why is that?

A. I don’t have them.

Q. You don’t have any money from those companies?

A. No, sir.

Q. What happened to all the money that was paid by consumers to those companies?

A. Those were the costs.

Q. You have not provided any financial documents that would show money coming in and money going out, irrespective of whether — where it goes.

A. Okay.

Q. Do you have those records available to you?

A. I’m not sure.

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MR. GENTILI: Well, you’ve identified it August Belmont, Esquire Litigation Support, LLC, Esqlitigationsupport.com, LLC, Fidelity Land Trust, LLC, Sunshine State Land Trust, LLC, Florida Land Trust Services, LLC. So those entities, what’s the combined revenue for those entities?

MR. LISS: And when you say revenue, do you mean gross revenue?

MR. GENTILI: Gross revenue.

MR. LISS: Do you know?

THE WITNESS: We’re doing our taxes right now. I don’t know, offhand.

BY MR. GENTILI:

Q. Those records are available, correct?

A. They will be, as soon as they are filed, and the other ones will bring my losses, because we lost hundreds of thousands of dollars with the land trust companies. There’s no money made there at all. Hundreds of thousands.

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Q. Going back to earlier when we talked about Exhibit 24, which was TCFLJ Partners, when you say that you are assuming that you are a partner, can you explain what you mean by the assumption that your partner?

A. I’ve never seen the filings of any documents. Edward did them for us.

Q. Now, are you aware of the existence of any type of partnership agreement for that partnership?

A. No, ma’am.

Q. Do you recall ever signing — do you recall signing any partnership agreement with Mr. Cherry for TCFLJ Partnership?

A. I don’t recall.

Q. And I would ask you about August Belmont — and just for the record, TCFLJ does stand for The Center for Legal Justice?

A. Yes, ma’am.

Q. Now, with respect to August Belmont, did you have any type of written partnership agreement with Mr. Edward Cherry?

A. Not that I recall.

Q. And how did you determine that you were a 51 percent partner in August Belmont with Mr. Ed Cherry?

A. Edward told me I was a 51 percent partner.