WILLIAMS v. FANNIE MAE — Entry #33: MOTION for Summary Judgment by FANNIE MAE, RICHARD LAWCH, GRACE HUERSCHER
Case: WILLIAMS v. FANNIE MAE dcd · 1:05-cv-01483
filed July 28, 2005
What this document is
Docket entry #33 · filed June 21, 2007
MOTION for Summary Judgment by FANNIE MAE, RICHARD LAWCH, GRACE HUERSCHER (Attachments: # (1) Memorandum in Support of Motion for Summary Judgment# (2) Exhibit Exhibit A - Declaration of Grace Huebscher and Deposition Excerpts# (3) Exhibit Exhibit B - 3-28-2007 Williams Dep and Exhibit# (4) Exhibit Exhibit C - Fannie Mae's Interrogatory Responses# (5) Exhibit Exhibit D - Declaration of Richard Lawch# (6) Exhibit Exhibit E - 3-21-2003 Williams Deposition Excerpts# (7) Exhibit Exhibit F - 5-7-2007 Williams Deposition and Exhibit# (8) Exhibit Exhibit G - DC Certificate# (9) Exhibit Exhibit H - Jones Deposition and Exhibits# (10) Exhibit Exhibit I - CAM Amended Complaint# (11) Exhibit Exhibit J - CAM Dismissal Order# (12) Exhibit Exhibit K - Williams Interrogatory Responses# (13) Exhibit Exhibit L - 3-17-2003 Williams Deposition# (14) Exhibit Exhibit M - DC License Document# (15) Exhibit Exhibit N - Draft Complaint# (16) Exhibit Exhibit O - 5-5-2003 Williams Deposition Excerpts# (17) Exhibit Exhibit P - 5-6-2003 Williams Deposition Excerpts# (18) Exhibit Exhibit Q - Westover Declaration# (19) Exhibit Exhibit R - Production Document# (20) Exhibit Exhibit S - Ott Deposition Excerpts# (21) Exhibit Exhibit T - Production Document# (22) Affidavit Declaration of K Grundeman# (23) Statement of Facts Statement of Undisputed Facts# (24) Text of Proposed Order # (25) Certificate of Service)(Goldfrank, Sarah)
Who is involved
- FANNIE MAE
- WILLIAMS
Why we have it
We follow this case because it names a company we track, although that company is not a party:
- Marathon Digital: its subsidiary “Sullivan Company” appears in a filing in this case.
…recruited away by another firm known as John 19 F. Sullivan Company in Philadelphia, 20 Pennsylvania. 21 Q.…
A free copy from the RECAP archive of federal court filings (mirrored at the Internet Archive), retrieved November 07, 2026. Federal court filings are public records.
Document text
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Full text
Case 1:05-cv-01483-JDB Document 33-4 Filed 06/21/2007 Page 1 of 54
EXHIBIT B
Case 1:05-cv-01483-JDB Document 33-4 Filed 06/21/2007 Page 2 of 54
Marialice Williams
Page 1
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
------------------------- X
MARIALICE BATHRUS )
WILLIAMS, ) Civil Action No.
Plaintiff, ) 1:05CV01483
vs. ) Judge John Bates
FEDERAL NATIONAL MORTGAGE)
ASSOCIATION, et al., )
Defendants. )
------------------------- X
Videotaped Deposition of
Marialice Bathrus Williams
Wednesday, March 28, 2007
Washington, D.C.
Pages 1 - 131
Volume 1
Job No.: 179392
Reported by: Deborah Larson Hommer, RPR
Esquire Deposition Services MD - 1-800-539-6398
D.C. - 1-800-441-3376 VA - 1-800-752-8979
af779bd1-e112-4d83-87a0-2544073c0e93
Case 1:05-cv-01483-JDB Document 33-4 Filed 06/21/2007 Page 3 of 54
Marialice Williams
Page 2 Page 4
1 1 Fannie Mae
2 2 3900 Wisconsin Avenue, N.W.
3 Wednesday, March 28, 2007 3 Washington, D.C. 20016
4 10:30 a.m. 4 (202) 752-6167
5 5 jonathan_griffith@fanniemae.com
6 6 BY: Jonathan Griffith, Esquire
7 Videotaped Deposition of MARIALICE BATHRUS 7
8 WILLIAMS held at the offices of: 8 Also Present:
9 9 Robert Cherouny, Videographer
10 O'Melveny & Myers LLP 10
11 1625 Eye Street, N.W. 11
12 Conference Room 10D 12
13 Washington, D.C. 20006 13
14 14
15 Pursuant to notice, before Deborah Larson 15
16 Hommer, Registered Professional Reporter and 16
17 Notary Public in and for the District of 17
18 Columbia. 18
19 19
20 20
21 21
22 22
Page 3 Page 5
1 APPEARANCES: 1 INDEX
2 On Behalf of Plaintiff MARIALICE WILLIAMS 2
3 Law Offices of Harley Jay Daniels 3 EXAMINATION OF WILLIAMS BY PAGE
4 5511 Second Street, N.W. 4 Ms. Becker 7
5 Washington, D.C. 20011 5
6 (202) 468-7737 6 WILLIAMS DEPOSITION EXHIBITS: PAGE
7 harleydaniels@hotmail.com 7 1 - E-mail and attachment from Jones to
8 BY: Harley Jay Daniels, Esquire 8 Noble, et al., dated 5/15/01 33
9 9 2 - Unsigned letter from Williams to
10 On Behalf of the Defendants FEDERAL NATIONAL 10 Huebscher 75
11 MORTGAGE ASSOCIATION, et al. 11 3 - E-mail from Williams to Newman,
12 O'Melveny & Myers LLP 12 et al., dated 5/3/01 79
13 1625 Eye Street, N.W. 13 4 - Unsigned letter from Jones to
14 Washington, D.C. 20006-4001 14 Williams dated 8/6/00 79
15 (202) 383-5300 15 5 - E-mail and attachments from
16 ebecker@omm.com 16 Hartsfield to Grove dated 6/14/02 80
17 kgrundeman@omm.com 17 6 - Mutual non-disclosure agreement 87
18 sgoldfrank@omm.com 18 7 - Defendants' first set of requests
19 BY: Evelyn L. Becker, Esquire 19 for production of documents 90
20 Kyra A. Grundeman, Esquire 20 8 - Deposition of Marialice Williams
21 Sarah Alexander Goldfrank, Esquire 21 dated 3/17/03 109
22 22 (Exhibits retained by the reporter.)
2 (Pages 2 to 5)
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Marialice Williams
Page 6 Page 8
1 PROCEEDINGS 1 Q. Good morning, Ms. Williams.
2 THE VIDEOGRAPHER: This is tape 2 A. Good morning.
3 number 1 of the videotaped deposition of 3 Q. My name is Evelyn Becker. I am
4 Marialice Williams taken by the Defendant in 4 going to ask you some questions today. Could
5 the matter of Williams versus Fannie Mae. 5 you please state your name for the record.
6 This case is taking place in the United States 6 A. Marialice Bathrus Williams.
7 District Court for the District of Columbia. 7 Q. What is your current address?
8 It's case number 1:05CV01483. This deposition 8 A. 1922 First Street, Northwest,
9 is being held at the offices of O'Melveny & 9 Washington, D.C., 20001.
10 Myers, 1625 Eye Street, Northwest, Washington, 10 Q. How long have you lived at that
11 D.C. Today's date is March 28, 2007, and the 11 address?
12 time indicated at the lower portion of the 12 A. A little over -- two years and
13 television screen currently reads 10:30 a.m. 13 three months.
14 And my name is Robert Cherouny from 14 Q. What was your address immediately
15 the firm of Esquire Deposition Services. I am 15 prior?
16 the certified legal video specialist. And the 16 A. 5722 First Street, Northwest,
17 court reporter is Deborah Hommer, also in 17 Washington, D.C., 20011.
18 association with Esquire Deposition Services. 18 Q. How long did you live at that
19 And will the counsel please introduce 19 address?
20 themselves and indicate which party they 20 A. Since 1980 -- the last time I lived
21 represent. 21 there -- it was a rental property of mine, and
22 MS. BECKER: My name is Evelyn 22 I moved into it. I think for a couple of --
Page 7 Page 9
1 Becker. I represent Fannie Mae, Grace 1 just a couple of years the last time.
2 Huebscher and Richard Lawch. 2 Q. What was your residence immediately
3 MS. GRUNDEMAN: Kyra Grundeman, 3 prior to that?
4 representing Fannie Mae, Grace Huebscher and 4 A. I know this is crazy. I'm nervous,
5 Richard Lawch. 5 so I can't remember the -- oh, 700 New
6 MS. GOLDFRANK: Sarah Goldfrank, 6 Hampshire Avenue, Northwest, Washington, D.C.,
7 representing Fannie Mae, Grace Huebscher, 7 20037, I believe.
8 Richard Lawch. 8 Q. How long did you live at that
9 MR. GRIFFITH: Jonathan Griffith 9 address?
10 from Fannie Mae. 10 A. Just about six years, I think.
11 MR. DANIELS: Harley Daniels for 11 Q. You have been deposed before; is
12 Plaintiff Marialice Bathrus Williams. 12 that correct?
13 THE VIDEOGRAPHER: And will the 13 A. Yes.
14 court reporter please swear in the witness. 14 Q. How many times?
15 Thereupon, 15 A. Oh, I don't -- I don't recall. You
16 MARIALICE BATHRUS WILLIAMS, 16 mean overall, like in your life?
17 the Witness, called for examination by counsel 17 Q. Yes.
18 for the Defendants, and, after having been 18 A. Maybe five times, three -- three or
19 sworn by the notary, was examined and 19 four times, I think. I'm 61. I haven't
20 testified as follows: 20 really been in the law much in the last few
21 EXAMINATION BY COUNSEL FOR THE DEFENDANTS 21 years.
22 BY MS. BECKER: 22 Q. You were deposed in the course of
3 (Pages 6 to 9)
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Marialice Williams
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1 the CAM Financial litigation; is that correct? 1 General Motors dealer, and it was never
2 A. Yes. 2 corrected. And the car eventually basically
3 Q. Other than the depositions that you 3 blew up.
4 testified at in the course of the CAM 4 Q. Did you receive any money as a
5 Financial litigation, have you been deposed in 5 result of that litigation?
6 any other matters? 6 A. Yes, I did. I'm -- it was -- I
7 A. Yes. 7 think it was whatever was determined to be the
8 Q. What were those matters? 8 value of that automobile, and it was not an
9 A. The members of the board of 9 expensive automobile -- it was 9 or $10,000 or
10 directors of -- the advisory board of WPFW 10 something like that.
11 radio station sued the Pacifica Network on an 11 Q. Did a lawyer represent you in that
12 issue involving governance, and I was deposed 12 case?
13 in that matter. 13 A. Yes.
14 Q. Have you been deposed in any other 14 Q. Who was the lawyer?
15 matters? 15 A. Harley Daniels.
16 A. I'm thinking. I -- I just can't 16 Q. Other than the lawsuits that you've
17 remember if there was any other -- I'm just 17 already testified about, have you been
18 trying to remember. Oh, there was a -- I 18 involved in any lawsuits as a witness?
19 believe there was a deposition at Fannie Mae 19 A. No.
20 in a Fannie Mae case regarding a multi-family 20 Q. Have you been involved in any other
21 securitization between Fannie Mae and a west 21 lawsuits as a party?
22 coast savings & loan, and I thought it was 22 A. No.
Page 11 Page 13
1 Coast Savings Bank, which I don't think now 1 Q. You're a lawyer; is that correct?
2 has the same name. I think it has changed 2 A. Yes.
3 names. 3 Q. Are you currently licensed to
4 Q. Have you given testimony in any 4 practice?
5 other depositions? 5 A. Yes, I am.
6 A. Not that I can recall right now. 6 Q. Where?
7 Q. Have you ever given testimony in 7 A. In the District of Columbia.
8 court? 8 Q. Do you currently have an active
9 A. Yes. 9 practice?
10 Q. When was that? 10 A. No.
11 A. In New Mexico I had a suit 11 Q. When is the last time that you had
12 against -- I believe it was General Motors. 12 an active law practice?
13 This was a very long time ago. And I had to 13 A. It would be 1980 -- maybe '81 or
14 testify as to the facts in the case. 14 '82.
15 Q. Can you give me an estimate of the 15 Q. Were you practicing in the District
16 year? 16 of Columbia at that time?
17 A. Approximately 19 -- 1987. 17 A. Yes.
18 Q. Did you sue General Motors? 18 Q. What was the nature of your
19 A. Yes, I did. 19 practice?
20 Q. For what? 20 A. Oh, I'm sorry. I was assistant
21 A. I had an automobile that had a 21 general counsel of the Office of Management
22 major defect, and I had been taking it to the 22 and Budget. It wasn't private practice. I'm
4 (Pages 10 to 13)
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Marialice Williams
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1 sorry. 1 position?
2 Q. How long did you serve in that 2 A. No.
3 capacity? 3 Q. What was your next position?
4 A. Only about two years. Maybe less 4 A. My next position was -- when I left
5 than that. 5 there, I went to -- I worked at HUD, Housing
6 Q. Outside of that position, was there 6 and Urban Development. And I worked as a
7 any other time that you practiced law 7 senior legislative assistant to Patricia
8 actively? 8 Roberts Harris who was the Secretary of HUD at
9 A. Only with the government when I 9 the time.
10 graduated from law school and I went to the 10 Q. Did you practice law in that
11 Department of Justice. 11 position?
12 Q. What was your first position at the 12 A. No.
13 Department of Justice? 13 Q. What was your next position?
14 A. I believe it was just -- they 14 A. I went to OMB and I was the
15 called it just attorney. It was on, I think, 15 assistant director of the civil rights office.
16 a separate schedule from if you were like a -- 16 And then, when David Stockman came in, the
17 some other type of position. 17 titles were changed to -- my title was changed
18 Q. Was that also in the Office of 18 to assistant general counsel. I believe
19 Management and Budget? 19 that's the title.
20 A. No. That was in the civil rights 20 Q. When your title was assistant
21 division in the employment section. 21 general counsel, were you still in the civil
22 Q. How long did you practice in the 22 rights division?
Page 15 Page 17
1 civil rights division of the employment 1 A. Yes.
2 section at the Department of Justice? 2 Q. Were you practicing law in that
3 A. Eighteen months. 3 capacity?
4 Q. After that position, did you go to 4 A. No.
5 OMB? 5 Q. Other than the 18 months that you
6 A. No. I went to the Equal Employment 6 were at the civil rights division practicing
7 Opportunity Commission as special assistant to 7 in the employment section, is there any other
8 the chairman. 8 time that you were actively practicing law?
9 Q. How long were you in that position? 9 A. Between working at the
10 A. Just about 18 months there, I 10 administrative office of the U.S. courts and
11 think. 11 before -- no. I'm sorry. I should have
12 Q. What was your next position in the 12 brought my resume.
13 government? 13 My father was an attorney in the
14 A. I worked at the administrative 14 District of Columbia, and from time to time I
15 office of the U.S. courts for the Supreme 15 would practice in his office. When I came
16 Court. 16 back from New Mexico in 1988 before I worked
17 Q. What did you do there? 17 at Fannie Mae I worked with my father in his
18 A. I was -- I performed management 18 office.
19 studies of the east -- of the eastern district 19 Q. How long --
20 of Virginia federal court and the Connecticut 20 A. In his law office.
21 court. 21 Q. How long did you work there?
22 Q. Were you practicing law in that 22 A. Just a few months.
5 (Pages 14 to 17)
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Marialice Williams
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1 Q. Between the few months that you 1 A. No.
2 worked in your father's office and the 2 Q. Did you meet with your attorney?
3 18 months that you worked in the civil rights 3 A. No, we didn't meet -- well, we had
4 division, are those the only times that you 4 one phone conversation.
5 actively practiced law? 5 Q. When was that?
6 A. I have in the last five years had 6 A. Yesterday.
7 an occasional instance where I've practiced. 7 Q. How long was the conversation?
8 For example, I think I may have done a will 8 A. Five minutes.
9 for someone, for one person -- two people. I 9 Q. Did you bring any documents with
10 represented, as a favor to a friend -- the 10 you today?
11 National Association of University Women had a 11 A. No, I did not.
12 dispute with their interior designer of their 12 Q. Other than your attorney, did you
13 new building. 13 discuss your deposition with anybody else?
14 I'm trying to remember if there are 14 A. No.
15 any other matters. And that's pretty much it. 15 Q. What is Risk Mitigation
16 Q. Were you paid for those 16 Strategists, LLC?
17 representations? 17 A. It doesn't exist anymore, but what
18 A. I was paid by -- yes, I was paid. 18 it was was a company that was formed when I
19 Q. I got a little bit of ahead of 19 left Fannie Mae to continue to pursue the
20 myself in some of those questions, but let me 20 business that I had been doing at Fannie Mae
21 go back and ask if there is any reason that 21 prior to my departure.
22 you're not able to give full and truthful 22 MS. BECKER: Can you read back her
Page 19 Page 21
1 testimony here today? 1 answer.
2 A. No. 2 (The reporter read the record as
3 Q. Are you on any medication that 3 requested.)
4 would preclude you from giving complete and 4 BY MS. BECKER:
5 full testimony today? 5 Q. When was it formed?
6 A. No. 6 A. 19 -- I believe in 1988.
7 Q. Did you do anything to prepare for 7 Q. You said it no longer exists. When
8 your deposition today? 8 did it stop existing?
9 A. Yes. 9 A. It still exists, but not as an LLC.
10 Q. What did you do? 10 Q. What does it exist as currently?
11 A. I reviewed a number of the 11 A. I have a person with whom I have
12 information -- a number of -- some of the 12 been working over a number of years who, along
13 information that was provided by O'Melveny & 13 with myself, we still get a show of interest
14 Myers as a result of a request for documents. 14 from people who want to pursue the product
15 Q. These were documents produced by 15 that I developed at Fannie Mae.
16 Fannie Mae? 16 Q. What type of entity is it
17 A. Yes. 17 currently?
18 Q. Did you review all of those 18 A. It's just my own business. It's
19 documents? 19 under sole proprietorship.
20 A. I reviewed a great deal of it. 20 Q. Who is this other person that you
21 Q. Did you do anything else to prepare 21 were referring to?
22 for your deposition? 22 A. I work with Harvey Hartsfield.
6 (Pages 18 to 21)
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Marialice Williams
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1 Q. How is it that it stopped being an 1 A. No, not the LLC.
2 LLC? 2 Q. Has anyone else been associated
3 A. When I moved out of my offices in 3 with RMS since its LLC status lapsed?
4 the Watergate office building and moved 4 A. Yes.
5 into -- my office into my home at 5722 First 5 Q. Who was that?
6 Street, I just don't think I paid the annual 6 A. Tim Webb worked with me as RMS on a
7 fee. And then your -- you know, the -- the 7 project at the Department -- D.C. Department
8 District of Columbia government regulates 8 of Mental Health, attempting to procure
9 that. It just lapsed. 9 financing for the new St. Elizabeth's
10 Q. When did you move out of the 10 Hospital.
11 Watergate? 11 Q. When did that occur?
12 A. I think it was 2001. 12 A. That was three years ago, I
13 Q. What month? 13 believe. Let's see. 2007...
14 A. I believe -- it was May or June, I 14 Q. During both the time when RMS was
15 believe, of that year. 15 an LLC and the time when it was not an LLC,
16 Q. Do you know when the status of RMS 16 can you identify the clients of RMS?
17 as an LLC lapsed? 17 A. RMS worked with Red Mortgage
18 A. I really don't recall exactly. 18 Capital. It was a DUS lender of Fannie Mae.
19 Q. Do you have any documentation from 19 They worked with Aries Capital. We worked
20 the government indicating that its status as 20 with, for a short time, Washington Mortgage.
21 an LLC lapsed? 21 Oh, goodness. We worked with Countrywide. We
22 A. No. 22 worked with First Atlantic Guarantee
Page 23 Page 25
1 Q. Are there any documents that could 1 Corporation. We worked with Swiss Re. We
2 identify when the status of RMS as an LLC 2 worked with Marsh Mac.
3 lapsed? 3 We worked with -- we worked with
4 A. I don't think so. 4 Lend Lease Bovis. We worked with -- we worked
5 Q. When is the last time that you paid 5 with Pinnacle Mortgage. We worked with the
6 the annual fee for the LLC? 6 Thurgood Marshall Center. We worked with
7 A. I don't recall. 7 Zurich AIG Insurance Companies. We worked
8 Q. Was it sometime in 2001? 8 with quite a few reinsurers. Morgan Stanley,
9 A. I don't recall. 9 Metropolitan Savings. We worked for Eric
10 Q. Who were the officers of Risk 10 Rosenfield, investment banker.
11 Mitigation Strategists, LLC? 11 We worked with -- that's not a
12 A. Myself and Harvey Hartsfield. 12 complete list, but that's a lot of them. Some
13 Q. What was your title? 13 of them were short relationships and didn't --
14 A. President. 14 you know, I just, you know, can't recall all
15 Q. What was Mr. Hartsfield's title? 15 of them, sitting here.
16 A. Vice president. 16 We worked with Fannie Mae. I think
17 Q. Were there any employees -- 17 I said that. We worked with CAM Financial. I
18 A. No. 18 forgot to put them in there, I think.
19 Q. -- of RMS? 19 Q. Can you recall any other clients of
20 A. No. 20 RMS?
21 Q. Was there anyone else associated 21 A. We worked with -- oh, goodness.
22 with RMS? 22 Just -- what's his name? Let's see. That's
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Marialice Williams
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1 about all I can -- I know there were other 1 to insure -- the risk is what they call
2 people. I can even see some of them. I just 2 pari passu so that when you're reaching
3 am not able to put names to them. If they 3 through the second level of risk, it's shared
4 come out later, I can -- I will write them. 4 by Fannie Mae and the lender. And the cost
5 Q. What was the nature of the work 5 was going to be much less expensive if Fannie
6 that you did with Red Mortgage Capital? 6 Mae would join with the lender and also lay
7 A. We were pursuing the possibility of 7 off that same -- its portion of that secondary
8 laying off risk associated with pools of 8 risk level.
9 mortgages and individual loans that had been 9 BY MS. BECKER:
10 originated by a number of DUS lenders. And I 10 Q. How long were you in discussions
11 don't know if you're familiar with how the 11 with Red Mortgage Capital?
12 structure works on the DUS loans, how the risk 12 A. For about two years, I believe.
13 is borne between the parties or split between 13 Q. What time frame was that?
14 the parties. Are you familiar with how that's 14 A. It would be beginning in 1998.
15 done on that? 15 Q. So it would have been 1998 to 2000,
16 Q. I'm sorry. This is your 16 approximately?
17 deposition. 17 A. It could have been longer than
18 A. Well, I was -- 18 that. The -- yes, it could have been longer
19 MR. DANIELS: We have a question -- 19 than that. 2001, perhaps.
20 THE WITNESS: -- just asking so 20 Q. Do you have any recollection of any
21 that -- 21 discussions with Red Mortgage Capital that
22 MR. DANIELS: Go ahead. 22 extended beyond 2000 or 2001?
Page 27 Page 29
1 THE WITNESS: -- I could answer 1 A. There could have -- could have been
2 your -- I didn't want it not to make sense to 2 communication on my part because I did
3 you. 3 prepare, from time to time, updates about
4 In Fannie Mae DUS transactions, 4 things that were going on in the marketplace
5 often there is -- not often, but there is 5 with respect to insurance vis-a-vis the
6 always some level of risk associated with the 6 risk -- laying off of risk.
7 loan that's either being securitized or being 7 And I would -- and there were also
8 purchased. And the way that that risk breaks 8 a lot of issues pertaining to how certain
9 out is that the first level of risk belongs to 9 forms of collateral were perceived by
10 the Red Mortgage or the Lend Lease or whoever 10 regulatory -- regulatory entities. And so I
11 the DUS lender is, and then there is another 11 would try to keep my people up to date through
12 level of risk that is shared by Fannie Mae and 12 a newsletter or an e-mail or whatever, and I
13 by the DUS lender. 13 often did that. I just can't tell you exactly
14 And Fannie Mae had, at that time, 14 when the last time is I did that.
15 over $90 billion worth of DUS product. And I 15 Q. Do you have a recollection of any
16 had been asked by Red Mortgage and Lend Lease 16 specific communications with Red Mortgage
17 and others to try to come up with an insurance 17 Capital after 2000 or 2001?
18 that would, in fact, absorb that -- either the 18 A. No, I don't.
19 primary or the secondary level of risk for 19 Q. What was the time frame of your
20 those individuals. And ultimately what we 20 discussions with Lend Lease?
21 uncovered when we did our research was that 21 A. Let's see. I flew to Dallas to
22 the insurance companies would have preferred 22 meet with them 2001, I believe.
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Marialice Williams
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1 Q. Do you remember when in 2001? 1 negotiation with Sid Gett from Aries Capital
2 A. It was in the summer, but I'm -- I 2 as recently as two years ago, I believe. 2004
3 believe it was August. 3 or '5.
4 Q. Is that the only communication you 4 Q. Did the nature of the business that
5 ever had with Lend Lease? 5 you were attempting to do with Aries Capital
6 A. No. I had daily contact with all 6 relate to Fannie Mae?
7 of these people. When you're doing product 7 A. I'm sorry?
8 development, you always have to -- it's very, 8 Q. Did the nature of the business that
9 you know, by the book. You have -- there are 9 you were attempting to do with Aries Capital
10 so many issues, so you're constantly dealing 10 relate to Fannie Mae?
11 with issues regarding their portfolio or their 11 A. Yes.
12 originating, what's going on in the insurance 12 Q. Explain that.
13 side, because there is no compatibility 13 A. My expertise is in product
14 between the insurance industry and the 14 development, and all investment banking firms
15 mortgage industry on that level. 15 and mortgage companies are looking for
16 Q. What was the time frame of your 16 solutions to the issue of risk associated with
17 daily communications with Lend Lease? 17 their portfolios. And most people -- a lot of
18 A. Probably through that same time 18 people were trying to find less expensive ways
19 through until 2001. Maybe some communication 19 to lay off that risk or not have to post,
20 in 2002. 20 quote/unquote, collateral that consisted of a
21 Q. Do you have a recollection of any 21 portion of their mortgage-backed securities or
22 specific communications after 2001 with Lend 22 their REMIC securities.
Page 31 Page 33
1 Lease? 1 So I was always attempting to find
2 A. Not specifically, no. I can't 2 insurance companies that would work with these
3 recall a specific communication with them. 3 lenders to come up with products based in
4 Q. What was nature of RMS' 4 large part on what I had developed at Fannie
5 relationship with Aries Capital? 5 Mae.
6 A. I had a very close relationship 6 Q. In previous discovery and in some
7 with Aries Capital. I was invited on an 7 of the court papers there has been discussion
8 annual basis to their annual meeting which 8 of a May 2001 proposal. Do you understand
9 they generally held -- since they were from 9 what that term means?
10 Chicago, they generally held it someplace 10 A. I am just trying to remember -- no.
11 warm. And we stayed -- we're actually still 11 If you can give me a little -- I could --
12 in contact with one another. 12 MR. DANIELS: I didn't hear the
13 Q. What type of business, if any, did 13 term.
14 you do with Aries Capital? 14 MS. BECKER: May 2001 proposal.
15 A. We tried to do DUS business. We 15 THE WITNESS: I don't know why I'm
16 tried to do some more generalized 16 blocking on it. I just -- I know that -- I
17 securitization transactions, but we did not 17 know that it's there. I know that I responded
18 close any deals at all. 18 to it. I'm just blanking right now on what it
19 Q. What was the time frame in which 19 is. So if you could tell me, I could tell you
20 you were attempting to do DUS business and 20 about it.
21 other business with Aries Capital? 21 (Deposition Exhibit No. 1 was
22 A. Let's see. I had lunch in 22 marked for identification.)
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1 BY MS. BECKER: 1 Mitigation Strategists, LLC; is that correct?
2 Q. I am going to hand you what has 2 A. I'm not certain if we were still an
3 been marked as Exhibit 1. Do you recognize 3 LLC then or not. I would have to see.
4 this document? 4 Q. If I could direct --
5 A. I see what it is. 5 A. Unless we put LLC on it -- I mean,
6 Q. What is it? 6 we stopped using it after a while.
7 A. It's an e-mail, it appears, from 7 Q. If I could direct your attention to
8 Bob Jones at CAM Financial to Steve Noble at 8 the top --
9 Zurich and myself and Danny Groves. 9 A. Yes, I see it.
10 Q. And what is it discussing? 10 Q. -- of the first page. Does that --
11 A. It discusses a structure for 11 A. Risk Mitigation Strategists, LLC,
12 providing insurance that I really just 12 yes.
13 described to you about the mezzanine tranche 13 Q. Does that refresh your recollection
14 of risk associated with Fannie Mae's DUS 14 as to whether the May 2001 proposal was made
15 loans. 15 by Risk Mitigation Strategists, LLC?
16 Q. And what's the date of this e-mail? 16 A. Yes.
17 A. May 15, 2001. 17 Q. And was the proposal made by Risk
18 Q. There is an attachment to the 18 Mitigation --
19 e-mail; is that correct? 19 A. It was made by Risk Mitigation
20 A. Yes. 20 Strategists, LLC, I believe.
21 Q. And what is the attachment? 21 Q. Did any of the discussions that you
22 A. The attachment is a description 22 had with Aries Capital relate to the May 2001
Page 35 Page 37
1 written by me, I believe, about how to 1 proposal?
2 actually -- it's a description of what Bob 2 A. Yes.
3 is -- it's a broader description of what Bob 3 Q. What was the time frame of the
4 is describing in the front of the e-mail. 4 discussions that you had with Aries Capital
5 MR. DANIELS: I'm sorry. How was 5 that related to the May 2001 proposal?
6 that marked for identification? 6 A. All of those individuals that I
7 MS. BECKER: Exhibit 1. 7 previously stated I was working with at the
8 BY MS. BECKER: 8 exact same time. When I would send a message
9 Q. Does this e-mail and the attachment 9 to Lend Lease, it would go to Red Mortgage, it
10 refresh your recollection as to your May 2001 10 would go to Aries, it would go to the cadre of
11 proposal to Fannie Mae? 11 people that were looking for relief.
12 A. Yes. I now know exactly what 12 Q. And what was the time frame of
13 you're talking about. 13 those discussions?
14 Q. Can you explain for the record so 14 A. From 1998 until the present time,
15 it's clear what your May 2001 proposal to 15 but not actively -- I mean, I am still now
16 Fannie Mae was? 16 working with not those lenders but other
17 A. I was attempting to assist DUS 17 lenders to look at those options as well.
18 lenders and others in their efforts to 18 That's still an ongoing thing that I do. But
19 eliminate the risk associated with selling or 19 not related to the DUS proposal because that
20 securitizing multi-family mortgage loans with 20 only affects DUS lenders.
21 Fannie Mae. 21 Q. When is the last time that you had
22 Q. This proposal was made by Risk 22 communications with Aries Capital relating to
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1 the DUS proposal? 1 forgot to tell you something earlier. You
2 A. I don't recall. 2 asked me a question and I left out something
3 Q. Would it be fair to say any 3 important. When I went to Fannie Mae, I went
4 communications that you had with Aries Capital 4 to the general counsel's office, so I was
5 relating to the DUS proposal would have been 5 there for just about six months, I think,
6 in the same time frame that you were having 6 before I transferred to the multi-family
7 communications with Fannie Mae regarding the 7 division.
8 DUS proposal? 8 Q. And you were practicing law while
9 A. Yes and no, because Fannie Mae does 9 you were at Fannie Mae?
10 not facilitate or work directly with -- was 10 A. I reviewed documents, so I guess
11 not working -- I was trying to come up with a 11 you could call that practicing law. But there
12 way to lay off cap -- to lay off risk with 12 was no courtroom or court appearances or
13 these -- with this group of people -- of 13 anything of that nature.
14 lenders. When I thought there was a need to 14 Q. Do you recall any communications
15 involve Fannie Mae further in the discussion, 15 that you had with Fannie Mae relating to Aries
16 we might contact them or say something to 16 Capital after 2001?
17 them, but it did not mean that we were not 17 A. I don't recall. I believe there
18 working on pursuing our end of the -- of the 18 were, but I do not -- I can't tell you the
19 deal. 19 exact date.
20 In other words, Fannie Mae was not 20 Q. Who were those communications with?
21 paying me to do product development for them. 21 A. When I talked to Fannie Mae, I
22 I had to develop the product and then go to 22 generally spoke to either Rhoda Newman or
Page 39 Page 41
1 them. 1 Richard Lawch, or I spoke to someone in the
2 Q. When is the last discussion that 2 credit policy office or I spoke to someone in
3 you recall with Aries Capital relating to the 3 the counsel's office, just depending on what
4 DUS proposal -- 4 the issue was.
5 A. I really don't -- 5 Q. Who in the credit policy office did
6 Q. -- to Fannie Mae? 6 you talk to?
7 A. I don't remember. 7 A. I can describe him, but I am
8 MR. DANIELS: Can we go off the 8 blanking on his name -- yes, I can remember
9 record for a moment? 9 his name. His name was Jeff Arpin, I believe.
10 MS. BECKER: Sure. 10 Q. Who did you talk to in the
11 THE VIDEOGRAPHER: The time is 11 counsel's office?
12 11:25. We're going off the record. 12 A. It was usually Paul van Hook or
13 (Recess.) 13 David Kalinsky or Kathy Miles. Oh, and also
14 THE VIDEOGRAPHER: The time is 14 Dan -- I can't recall his last name, but he
15 11:36. We're back on the record. 15 was specifically assigned to handle insurance
16 BY MS. BECKER: 16 matters.
17 Q. Ms. Williams, when is the last time 17 Q. Is it fair to say that you don't
18 that you communicated with Aries Capital -- 18 recall any communications with anyone at
19 I'm sorry. When is the last time that you 19 Fannie Mae regarding Aries Capital after 2001?
20 communicated with Fannie Mae regarding Aries 20 A. No, that's not fair to say. I
21 Capital? 21 don't recall at this time. I just am not
22 A. I really don't recall. Oh, I 22 remembering when the last time is I spoke with
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1 them. 1 I have an appointment Friday, for
2 Q. So can you remember any specific 2 example, with someone who wants to look at the
3 communications with anyone at Fannie Mae 3 possibility of doing some variation on the
4 regarding Aries Capital after 2001? 4 insurance product and possibly use Fannie Mae.
5 A. I can't specifically remember them, 5 Q. Who is that appointment with?
6 no. 6 A. I cannot disclose that at this
7 Q. Do you have any documentation that 7 time.
8 would show any communications with Fannie Mae 8 Q. Can you tell me what the nature of
9 regarding Aries Capital after 2001? 9 your last communications with Fannie Mae
10 A. I don't think so. I don't -- it 10 regarding Aries Capital would have been?
11 would have been phone calls, and I didn't 11 A. No, I can't. I can't tell you. It
12 record phone calls. 12 would have been something related to
13 Q. Do you have any recollection of 13 attempting to either do the DUS business --
14 with whom you might have spoken at Fannie Mae 14 some form of credit enhancement would have
15 regarding Aries Capital after 2001? 15 been what the discussion would have been
16 A. I think I answered that, which 16 about.
17 would have been all of those people I 17 Q. What business did you do with
18 described. 18 Washington Mortgage?
19 Q. Are you saying that you believe you 19 A. Washington Mortgage called me
20 spoke to all of those people? 20 almost immediately after I left Fannie Mae to
21 A. I may have spoken to them. I just 21 pursue the possibility of laying off their DUS
22 cannot remember the day, the time or the hour 22 risk.
Page 43 Page 45
1 or anything like that. But we were ongoing 1 Q. That would have been in 1998?
2 with our attempting to do our product 2 A. That's correct.
3 development, and I believe I spoke with some 3 Q. How long were you in communication
4 of those people or one of those people or one 4 with Washington Mortgage?
5 or more of those people after 2001. 5 A. I don't recall. Months. Maybe a
6 Q. And what is your recollection based 6 year. Not long. Not very long.
7 on? 7 Q. Did you ever do any business deals
8 A. My own head. 8 with Washington Mortgage?
9 Q. Is there anything specific that 9 A. No, I didn't, because Richard Lawch
10 makes you believe that you had a conversation 10 called Shekar Narassiman and told him I was
11 with anyone at Fannie Mae regarding Aries 11 stupid or something like that. It was a
12 Capital after 2001? 12 very -- it was not a nice thing. And I
13 A. I never stopped pursuing the desire 13 stopped working with them. They were very
14 to do business with Fannie Mae. I never 14 thick.
15 stopped the desire to do additional and 15 Q. The time frame in which Mr. Lawch
16 further development of a concept which I was 16 would have made this statement would have been
17 solely responsible for and thought I would be 17 1998; is that correct?
18 making my living from pursuing with promises 18 A. No. I understand he repeated it
19 from people from Fannie Mae. So I was always 19 more or less frequently from that point
20 out there looking to do business that would 20 forward, probably through until this day.
21 specifically take me back to Fannie Mae 21 Q. What's the basis for your belief
22 portfolios and risk. 22 that Mr. Lawch referred to you in that way?
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1 A. What is the basis for it? I 1 and said, please do not disclose to Fannie Mae
2 overheard a conversation between Alan 2 that we are having these discussions. I asked
3 Greenwald and Shekar Narassiman in which the 3 you not to do that.
4 question of my intelligence was raised, and 4 And I immediately called that
5 that was prior to my departure from Fannie 5 person and said, I sincerely apologize. I did
6 Mae. 6 not mean to -- and I didn't mean to -- why
7 Q. Other than the conversation that 7 would I sabotage myself? I did not mean to
8 you overheard before 1998, do you have any 8 say anything -- did not mean to put the cc on
9 other basis for your belief that Mr. Lawch 9 there; it was an accident. And if you would
10 made comments about you? 10 like for me to call Fannie Mae and explain to
11 A. Yes. When I was dealing with Red 11 them, I will do that.
12 Mortgage Capital, they indicated that they had 12 Q. What was the time frame of that
13 had conversations with Mr. Lawch and they were 13 e-mail?
14 afraid to let him know the extent to which 14 A. I would think sometime in 1999 or
15 they were involved in doing some things 15 2000, perhaps 2001.
16 because -- and I don't know for what reason, 16 Q. Did anyone at Red Mortgage Capital
17 but I think there was some concern that they 17 tell you that Mr. Lawch had made disparaging
18 had that had to do with their relationship to 18 comments about you?
19 Richard Lawch. 19 A. Yes. That person I was just
20 Q. Who did you talk to at Red Mortgage 20 referring to. And I think that's -- I don't
21 Capital about the conversation between them 21 know if he spoke directly to David or not.
22 and Mr. Lawch? 22 Q. What disparaging comments were you
Page 47 Page 49
1 A. I can't remember his name right 1 told that Mr. Lawch made about you?
2 now. I could probably find it, but it was 2 A. Just that I may or may not be able
3 through David -- David -- the person in 3 to do what it is I was attempting to do with
4 charge. I'm just blanking on his last name. 4 them and -- more innuendo than specifically --
5 A very tall gentleman who is a vegetarian. 5 it wasn't as direct as what he said to Shekar.
6 And he had someone who he had assigned to me 6 It was not of that nature. But it was clear
7 to work on this project. And I had an 7 that he was discouraging them from doing
8 independent relationship, meaning I had worked 8 business with me.
9 directly with this person without Mr. Lawch's 9 Q. And when did you learn that
10 knowledge. And he assigned this other person 10 Mr. Lawch was discouraging Red Mortgage
11 to work with me on this -- in pursuing this 11 Capital from doing business with you?
12 type of situation. 12 A. Sometime between 1998 and 2001.
13 Q. When did you have this conversation 13 Q. What was the nature of the business
14 with David? 14 you did with Countrywide?
15 A. I didn't have it with David. I had 15 A. Hal Potter, who had been a
16 it with the person he assigned to me, and it 16 multi-family staff person -- actually, he was
17 was in an e-mail. And he said, I told you not 17 the director of multi-family, I believe, in
18 to -- I know what happened: I cc'd -- I did 18 the California region -- had gone to
19 not mean to cc Fannie Mae on an e-mail in 19 Countrywide to establish a multi-family
20 responding to more than one customer. And 20 program for them. You probably know that most
21 when I did -- and it was on there, and it was 21 of their business is single-family.
22 an accident. And this person e-mailed me back 22 And because the market --
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1 everything is driven by the market and the 1 when you flew to California?
2 spreads were so narrow, Countrywide was 2 A. No.
3 looking for a cost-effective way to provide 3 Q. Can you identify the time frame any
4 for credit enhancement and do its own 4 more precisely than 1998 to 2001?
5 securitization so that it didn't have to rely 5 A. No. I can't. I just can't. I was
6 on Fannie Mae because there was so little 6 working every day, 10 hours, 11 hours,
7 profit and they did not want to sell to a 7 12 hours a day, trying to do this product
8 conduit as well. So they were attempting to 8 development. I was working with different
9 form their own program. 9 types of assets, different insurance
10 And I flew to California to meet 10 companies, different insurance brokers,
11 with Hal Potter to discuss it. And sometime 11 different insurance concepts, reinsurers,
12 thereafter Countrywide abandoned their 12 people who were holding automobile loans,
13 decision to do multi-family. I don't know if 13 people who were holding credit card loans,
14 they do it now, but they abandoned it. I 14 because securitization had become that much
15 believe Hal went to another company. 15 more pervasive in the marketplace.
16 Q. Did you ever do a deal involving 16 So that is why it is so difficult
17 Countrywide? 17 to say on March 1, 1998, I did one thing or
18 A. No. 18 another because my days were consumed by that.
19 Q. When did you fly to California? 19 I also relied heavily, mistakenly
20 A. Sometime between 1998 and 2001. I 20 perhaps, on my computer as the source of my
21 believe it was -- sometime between 1998 and 21 calendar. I've had two computer crashes of
22 2001. I flew to California several times. 22 major proportion from which I could not
Page 51 Page 53
1 Q. And when did they abandon -- 1 retrieve any information since I left Fannie
2 A. Oh, I don't know that. I don't 2 Mae. And so it's very, very difficult for me
3 know that specifically. 3 to go back and recapture specific dates
4 Q. You said sometime after you flew to 4 associated with specific individuals. I have
5 California they abandoned their decision to do 5 some general idea. I know absolutely what I
6 multi-family; is that correct? 6 did, and I did it daily, as did
7 A. Yes. After I met with Hal, several 7 Mr. Hartsfield, but...
8 months, I believe, went -- and I'm not exactly 8 Q. What type of business did you do
9 certain when they made the decision that they 9 with First Atlantic?
10 were not going to move forward. I don't know 10 A. First Atlantic is a face amount
11 that. 11 certificate company. There are only three in
12 Q. When did you become aware that they 12 the country. And they have a very unique
13 made that decision? 13 structure which enables them to issue
14 A. Sometime after I went to 14 certificates backed by certain types of assets
15 California. I cannot tell you the specific 15 but unique to the certificate structure. Some
16 date. 16 of the limitations that apply to securities
17 Q. Would it have been within a couple 17 and to REMICs as well did not apply to the
18 of months of your traveling to California? 18 certificates. And it looked as if this was
19 A. No, I believe it was maybe as much 19 going to be -- and I still believe it is -- a
20 as a year later. I'm not certain, but it 20 major way to be able to do the types of
21 could have been up to a year later. 21 business with smaller companies so they don't
22 Q. Do you have any records indicating 22 get ripped off by conduits and to do business
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1 with people who have -- who lend in areas that 1 probably recall this -- when suddenly
2 are not popular, to do affordable mortgages 2 insurance companies, banks, lenders and
3 and that kind of thing, because you can remove 3 everyone began to work together to seek new
4 the asset from the pool and replace it with 4 ways to provide credit enhancement that did
5 something else, which you cannot do in a 5 not conflict or provide issues with respect to
6 mortgage-backed security, and only on a 6 the various aspects of the accounting
7 limited basis in a REMIC, and it has to be 7 regulations which had to be adhered to because
8 predetermined when you're going to make those 8 of the nature of the securities.
9 decisions. 9 And when those rules would change,
10 Q. Did you close any transactions 10 it would change the way you could do business.
11 involving First Atlantic? 11 So you had to constantly go back and look at
12 A. No. 12 new ways to modify, you know, your credit
13 Q. What was the time frame in which 13 enhancement vehicle.
14 you worked with First Atlantic? 14 Q. Did the communications you had with
15 A. I still work with them. I'm 15 Swiss Re relate in any way to RMS' May 2001
16 actually on their board. 16 proposal?
17 Q. Did you ever have any 17 A. Yes, absolutely.
18 communications with Fannie Mae about First 18 Q. What was the time frame of those
19 Atlantic? 19 communications?
20 A. Yes. 20 A. Actually, I had a continuing
21 Q. When was that? 21 dialogue with quite a few insurance companies
22 A. I believe it was between 2001, 22 from 1998 all the way through to the current
Page 55 Page 57
1 2002. 1 time. I am meeting with an insurance company
2 Q. What was the nature of those 2 also this week.
3 communications? 3 Q. Which insurance company?
4 A. To inform them that I had yet again 4 A. I can't tell you that. I have a
5 discovered a product that I thought could be 5 confidentiality agreement.
6 helpful to Fannie Mae in fulfilling their 6 Q. When is the last time that you
7 mission to do affordable housing. I spoke 7 communicated to Fannie Mae about Swiss Re?
8 with Rob Levin. I spoke with Rhoda Newman, 8 A. Oh, goodness. Prior to 9/11. I do
9 Grace Huebscher about First Atlantic and the 9 know that because that part of Swiss Re, I
10 concept. 10 believe, was shut down after 9/11.
11 Q. Did these discussions relate to 11 Q. And by 9/11, you mean September 11,
12 RMS' May 2001 proposal? 12 2001?
13 A. No, not at all. It could have been 13 A. Yes.
14 adapted, but no, this was a new concept. 14 Q. What was the nature of the business
15 Q. What was the nature of the business 15 that you did with Marsh Mac?
16 that you did with Swiss Re? 16 A. I worked with Marsh Mac for several
17 A. To attempt to -- they had opened a 17 years trying to find an appropriate insurance
18 section of their company called something -- I 18 company to do the Fannie Mae business.
19 just can't remember the exact name, but it was 19 Q. What were those years that you
20 something associated with risk, almost like a 20 worked with Marsh Mac?
21 risk mitigation unit. And it was the time 21 A. From 1998 through, I believe, 2002.
22 when the insurance companies -- I am sure you 22 Q. When in 2002?
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1 A. Actually, I have to change my 1 concept would become clear.
2 answer. I still talk to Marsh Mac. But 2 And it was always -- there was
3 you're saying about the May 1 -- May 2001 3 always a regulatory issue involving the nature
4 proposal? 4 of being the owner of the captive insurance
5 Q. Yes. 5 company and the validity of that captive
6 A. I think that was probably around 6 insurance company. And that was clarified --
7 the same time. September 11, 2001, created, 7 and I wrote a newsletter about that decision
8 as you know, a crisis in the insurance 8 once that decision was made. It was several
9 industry. And much negotiation and discussion 9 years after I left Fannie Mae. So that
10 with companies for that specific type of 10 concept, which had been tentative, then became
11 business was limited or stopped entirely after 11 a true possibility.
12 9/11. 12 Q. Did you ever have any
13 Q. And when you say that type of 13 communications with Pinnacle Mortgage about
14 business, what do you mean? 14 the May 2001 proposal?
15 A. You asked me about the May 2000 15 A. Oh, no. They were not a DUS
16 proposal, yes. 16 lender, yes.
17 Q. And just to clarify for the record, 17 Q. What is the nature of the business
18 you mean the May 2001 proposal? 18 that you did with the Thurgood Marshall
19 A. Proposal, yes. 19 Center?
20 Q. What is the name of the business 20 A. I was their point person for the
21 that you did with Pinnacle Mortgage? 21 coordination for their bond issuance. They
22 A. Pinnacle Mortgage was looking for a 22 got an industrial revenue bond issued by the
Page 59 Page 61
1 way to come to Fannie Mae with its own credit 1 District of Columbia to complete financing for
2 enhancement rather than relying on Fannie Mae 2 their facility, which is the first
3 because of the cost. And so I went to Florida 3 African-American YMCA built in this country.
4 to meet with Pinnacle about the possibility of 4 Q. Did that work have anything to do
5 utilizing a captive insurance vehicle, renting 5 with Fannie Mae?
6 a captive cell, and providing their own credit 6 A. No.
7 enhancement so that they could come to Fannie 7 Q. What's the nature of the business
8 Mae with a full package rather than coming 8 that RMS did with Zurich?
9 just with their loans and being required to 9 A. Did with?
10 rely on Fannie Mae and paying the fee. 10 Q. Zurich.
11 Q. When did you go to Florida? 11 A. The same thing. It had to do with
12 A. I went with Tim Webb, and it was -- 12 the May 2001 proposal and also with respect to
13 I believe it was in 2002. 13 reinsurance for a potential captive insurance
14 Q. Did the meeting that you had in 14 execution.
15 Florida with Pinnacle Mortgage relate to the 15 Q. Who at Zurich did you deal with?
16 2001 May proposal? 16 A. I do not recall the names off the
17 A. Oh, no, not at all. It related to 17 top of my head.
18 a captive insurance concept which I had 18 Q. What is the time frame in which you
19 initiated with Fannie Mae prior to my 19 were in communications with Zurich about the
20 departure. And I actually had people who were 20 May 2001 proposal?
21 very knowledgeable about captives speak 21 A. We were in contact with most of
22 directly to Fannie Mae staff so that the 22 these insurers and reinsurers throughout the
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1 entire period of 1998 through 2001, 2002. 1 to the May 2001 proposal?
2 Q. Do you remember when the last 2 A. You said the date? The date?
3 contact that you had with Zurich related to 3 Sometime after May 2001. I know that.
4 the May 2001 proposal was? 4 Q. Can you be any more specific?
5 A. I don't recall. We're calling this 5 A. No, I can't.
6 the May 2001 proposal -- I think it's because 6 Q. Did you remain in communications
7 it's the first time someone saw it in writing, 7 with AIG for several months after May 2001?
8 but it started before I left Fannie Mae, so it 8 A. I am still in contact with them.
9 wasn't new in May 2001. 9 Q. Are you still in contact with them
10 Q. When is the last communication you 10 regarding the May 2001 proposal?
11 had with Fannie Mae regarding Zurich? 11 A. No. That's because I haven't had
12 A. It was sometime after May 15, 2001. 12 an opportunity to raise it with them, but I
13 Q. Can you be any more specific? 13 intend to try to raise it with them again.
14 A. No, because, as I said, you're 14 Q. When is the last time that you
15 constantly back and forth. Zurich has a 15 recall having a discussion with AIG regarding
16 question, then someone in their shop has a -- 16 the May 2001 proposal?
17 it's just -- it's -- product development in 17 A. Oh, about the May 2001 proposal? I
18 the securitization field is a very lengthy 18 just cannot remember. It would be probably
19 process and -- just takes a long time and a 19 December 2002 to -- I just don't know. I
20 lot of detail. 20 mean, I can't be absolutely certain when that
21 Q. Did you close any deals with 21 could have been.
22 Zurich? 22 Q. What makes you think it might have
Page 63 Page 65
1 A. No. 1 been December 2002?
2 Q. What was the nature of the business 2 A. I'm just thinking about a trip that
3 that you did with AIG? 3 I made to New York, and I know that it was in
4 A. AIG was the insurer that was used 4 December of 2002, and I believe I spoke to --
5 in the first multi-family credit risk 5 I know I spoke to AIG, but I don't know if I
6 insurance transaction and they were brought to 6 spoke to -- about the 9 -- about the May
7 Fannie Mae by Bob Jones and Danny Groves. And 7 proposal. I just don't recall.
8 once I left Fannie Mae, we resurrected a 8 Q. Who at AIG did you talk to in
9 relationship there to look at these other ways 9 December 2002?
10 of using their insurance, and I am in contact 10 A. I don't recall. But I may -- I
11 with them even now. 11 just remembered something else from earlier.
12 Q. Have you closed any deals with 12 So if that pops back in, I will write it down
13 AIG -- 13 definitely. And I believe he has a Hispanic
14 A. No. 14 name, and I will try to remember it.
15 Q. -- since you left Fannie Mae? 15 Q. When is the last time that you
16 A. No. 16 discussed anything relating to AIG with Fannie
17 Q. Did the communications that you had 17 Mae?
18 with AIG since you left Fannie Mae relate to 18 A. With Fannie Mae, I really don't
19 the May 2001 proposal? 19 remember. I really don't. I'm -- I don't
20 A. Yes. 20 recall discussing anything about AIG. You
21 Q. What was the time frame of the 21 don't do that. You don't go to Fannie Mae and
22 communications that you had with AIG relating 22 discuss what you're discussing with an
17 (Pages 62 to 65)
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1 insurance company unless you've got a deal 1 deal? It's -- you understand. They don't
2 that's hopping. You just don't do it. 2 realize their mortgages became a commodity;
3 Q. So would it be fair to say that you 3 they were no longer mortgages.
4 never had a deal that you considered to be far 4 Q. What is the nature of the business
5 enough along to make it appropriate for you to 5 that RMS did with Morgan Stanley?
6 discuss? 6 A. Morgan Stanley was very interested
7 A. Well, Fannie Mae would never 7 in looking at as many options as possible for
8 consent to its lenders -- or authorize them to 8 credit enhancement. It's always about credit
9 utilize the insurance for the May 2001 9 enhancement and laying off risk. So Liz
10 proposal. So it never -- there was never 10 Haberkorn Cowherd -- what a name -- and I used
11 any -- I mean, you can see on here there is no 11 to meet periodically in New York and talk and
12 one from Fannie Mae designated on this May 15, 12 e-mail and so forth about potential new
13 2001, message to Steve Noble at Zurich. You 13 transactions with -- I had done a number of
14 just don't -- you don't do it that way. 14 transactions with Morgan Stanley when I was --
15 And Fannie Mae has to decide how 15 in fact, Morgan Stanley was the one that
16 they want to use the product. So you may 16 helped me to create the first -- what is known
17 have -- for example, I created the 17 in the marketplace as ACES. I named it ACES,
18 multi-family credit risk insurance 18 the alternative credit enhancement structure.
19 specifically to assist affordable lenders 19 Q. Did any of the discussions that you
20 because it works with them. When I left, 20 had with Morgan Stanley relate to the May 2001
21 Fannie Mae did not pursue that in that venue. 21 proposal?
22 They used it for their priority lenders in 22 A. No.
Page 67 Page 69
1 their aggregation program and other places. 1 Q. What was the nature of the
2 Q. So would it be fair to say that 2 communications or business that you did with
3 after you left Fannie Mae you had no 3 Metropolitan Savings?
4 communications with Fannie Mae about AIG? 4 A. For quite some time after --
5 A. No, that's not true. We did have 5 Metropolitan Savings is the institution for
6 some, but I think it was limited to a large 6 which -- for which I was essentially -- no,
7 extent by the disagreement I'm sure you're 7 that's not true. Let me start over.
8 aware of between AIG and Fannie Mae where 8 Metropolitan Savings was the first
9 Fannie Mae refused to provide certain 9 mortgage holder that utilized the multi-family
10 information and documentation which I knew 10 credit risk insurance. And because I had met
11 existed in a box in Tim Howard's office under 11 so many times with them, I continued my
12 somebody's desk. And ultimately it was 12 relationship with them far beyond my tenure at
13 compiled and put together, and some of it was 13 Fannie Mae because they had not only
14 disclosed. 14 additional business they wanted to do under
15 But there was a lot of conflict 15 the MCRI structure, they also had -- it was
16 between AIG and Fannie Mae over the concept of 16 kicking around at Fannie Mae at the time, but
17 multi-family credit risk insurance. Because 17 Larry Small didn't understand how Freddie Mac
18 insurers don't understand that real estate may 18 had been able to securitize some commercial
19 be thriving, but the market for a 19 loans along with some residential loans in a
20 mortgage-backed security may not be. 20 pool of securities. The REMIC was done
21 So, duh, why is this property not 21 outside of Freddie Mac. It was not issued off
22 defaulting but I'm not making more on this 22 the shelf or anything like that. It was
18 (Pages 66 to 69)
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1 issued by one of the major -- I think it was 1 MR. DANIELS: Excuse me. Are you
2 Morgan Stanley. 2 about to go in a different line? Because this
3 So when I left Fannie Mae, I 3 may be a good place for a lunch break.
4 believe Eric Rosenfield did close a deal with 4 MS. BECKER: Okay. Let's go off
5 Metropolitan Savings involving some 5 the record.
6 commercial, but they had a lot more because 6 THE VIDEOGRAPHER: The time is
7 they do the very small multi-family deals, 7 12:26. We're off the record.
8 between 5 and 50 units in the properties, 8 (Recess.)
9 which is not standard in the multi-family 9
10 business. 10
11 And so it's a little more 11
12 difficult -- it's kind of a hybrid mortgage, 12
13 and so I was working with them on different 13
14 ways to securitize their portfolio. 14
15 Q. Did the work you did with Morgan -- 15
16 I'm sorry -- with Metropolitan Savings relate 16
17 in any way to the May 2001 proposal? 17
18 A. No. They were not a DUS lender. 18
19 Or they weren't then. I don't know if they 19
20 are or are not now. 20
21 Q. Did the work that you did with Eric 21
22 Rosenfield relate in any way to the May 2001 22
Page 71 Page 73
1 proposal? 1 AFTERNOON SESSION
2 A. Eric Rosenfield was the investment 2 (1:34 p.m.)
3 banker whom Bob Jones and I used to test every 3 THE VIDEOGRAPHER: The time is
4 single theory that we had about potential new 4 1:34. We're back on the record.
5 structures. So Eric was very familiar with 5 Whereupon,
6 this May 2001 proposal as well as everything 6 MARIALICE BATHRUS WILLIAMS,
7 else we were doing. 7 was recalled as a witness and, having been
8 Q. Did you close any deals with Eric 8 previously duly sworn, was examined and
9 Rosenfield? 9 testified further as follows:
10 A. No. He closed deals I worked on, 10 EXAMINATION BY COUNSEL FOR THE DEFENDANTS
11 but he did not pay me. 11 BY MS. BECKER:
12 Q. Would it be fair to say that 12 Q. Good afternoon.
13 Mr. Rosenfield was acting in more of a 13 A. Good afternoon.
14 consulting capacity relating to the May 2001 14 Q. Before we broke for lunch, we were
15 proposal? 15 talking about the relationship between CAM and
16 A. No. He was just a business 16 Risk Mitigation Strategists, LLC. Has there
17 associate, and we just ran things by him. 17 ever been a formal relationship between those
18 Q. Has there ever been any 18 two entities?
19 relationship between Risk Mitigation 19 A. Before -- before I left Fannie Mae,
20 Strategists, LLC, and CAM Financial? 20 I was offered a job by CAM Financial. That is
21 A. No. No relationship in the formal 21 the reason I left Fannie Mae, to work with CAM
22 sense. Excuse me. I change that. 22 Financial and Fannie Mae. We had an
19 (Pages 70 to 73)
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1 understanding, we thought, with Lou Hoyes, who 1 ownership, and we did not have an interest in
2 was the then senior vice president for 2 each other's business.
3 multi-family, that we would just continue to 3 Q. Does this document refresh your
4 do business. And for one reason or another, 4 recollection as to whether the joint broker
5 it turned out that the best relationship -- I 5 agreement was between Risk Mitigation
6 then became an insurance broker myself, and 6 Strategists and CAM Financial Services?
7 signed a joint broker agreement with CAM. And 7 A. I'm certain -- listen to me. I am
8 then Fannie Mae asked me to write them a 8 almost certain that it was just between myself
9 letter that said I was not doing business with 9 because RMS can't be -- couldn't be a partner
10 CAM Financial -- in order to get business from 10 of anyone in a brokerage capacity because that
11 them, I would not be able to do business with 11 wasn't what Risk Mitigation Strategists was.
12 CAM Financial. 12 I was just a licensed broker. But my
13 And so I wrote a letter to Fannie 13 company -- I couldn't have done that legally,
14 Mae saying that -- which was true, I did not 14 I don't think. I don't think.
15 have -- I was not doing business with them. I 15 Q. I would like to direct your
16 was in a joint venture agreement in the event 16 attention to the third paragraph of the letter
17 that we did this insurance stuff together. 17 in the second sentence beginning, "However."
18 But that was the extent, up to that point, of 18 It states, "However, CAM and RMS have a broker
19 our relationship, although we still continued 19 agreement that is common in the insurance
20 to talk and dialogue and meet jointly with 20 business."
21 people, and I still had the expertise, and 21 Was that an accurate statement?
22 Bob's company had the cash to move forward 22 A. It's probably a misstatement of --
Page 75 Page 77
1 with the marketing. 1 I do have a copy of the agreement. I can
2 Q. Was there a joint broker agreement, 2 check it and I can let you know. I just am
3 then, between CAM Financial and Risk 3 not looking at it right now. It does say that
4 Mitigation Strategists, LLC? 4 there, but I don't think -- I don't think the
5 A. No, it was just between myself -- 5 agreement reads between -- I think it was
6 oops. I have to look at it, but I think it's 6 between CAM and Marialice Williams, I believe.
7 just between me and CAM. I don't think 7 But I think you all have a copy of it.
8 it's -- I'm just not remembering completely. 8 Q. So you believe that the letter you
9 And I think I gave it -- in the documents that 9 wrote to Ms. Huebscher mischaracterizes the
10 I provided, I believe I gave a copy of it. 10 nature of the broker agreement?
11 (Deposition Exhibit No. 2 was 11 A. No. I think that it does not say
12 marked for identification.) 12 RMS, LLC, first of all, and it doesn't say
13 BY MS. BECKER: 13 CAM, LLC, or whatever they are. So I would
14 Q. I am handing you Exhibit 2. Can 14 say it doesn't misrepresent. I don't think
15 you identify that document? 15 anybody had any question about it at the time,
16 A. Yes. This is the letter that I 16 and I'm -- I'm just -- I would have to look at
17 wrote to Grace Huebscher after I met with her 17 the agreement, and I could do that, but I'm
18 and I was told that Rhoda Newman was going to 18 not going -- no, I don't think I
19 be assigned to me. I think that's what this 19 mischaracterized anything.
20 was about. And describing some of the things 20 Q. Let me direct your attention to the
21 that we did, but also saying that CAM and RMS 21 last sentence of the first paragraph. It
22 do not have any connection with respect to 22 says, "I welcome the opportunity to clearly
20 (Pages 74 to 77)
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1 define the relationship between my company, 1 A. This is dated August 6, 2000, and
2 Risk Mitigation Strategists, LLC (RMS) and CAM 2 it is an unsigned and never was signed letter
3 Financial Services, Inc." 3 from Bob Jones to Marialice Williams about
4 Do you see that? 4 sharing commissions.
5 A. So are you asking me -- I mean, 5 Q. And who was this letter set up to
6 what's the question? Did I mischaracterize 6 be between?
7 it? I don't think so. I think it was 7 A. Risk Mitigation Strategists and CAM
8 referring to myself as RMS, you know -- I 8 Financial.
9 don't know. I don't know what happened in the 9 Q. Why was this letter never signed?
10 letter or why I wrote it that way. I have no 10 A. Because -- probably because I
11 idea, because I -- I will show you the joint 11 didn't want to sign it as Risk Mitigation
12 venture agreement, and I don't believe it's 12 Strategists and probably because there was so
13 between CAM and RMS. I think it's between CAM 13 much going on at the time that was
14 and Marialice Williams as a broker because I'm 14 conflicting, I didn't know who was telling me
15 the only one who could -- RMS was not a 15 the truth about anything, whether Bob was
16 broker. 16 telling me the truth -- I now know Bob wasn't
17 Q. Do you know what the time frame is 17 telling me the truth, too. And so I was
18 in which the letter to Ms. Huebscher was 18 reluctant to sign it. My -- I was reluctant
19 written? 19 to sign it and did not sign it. And if I did,
20 A. It was during the summer of 2000, 20 I don't remember. I don't.
21 2001 or 2002. I just really do not precisely 21 (Deposition Exhibit No. 5 was
22 remember. 22 marked for identification.)
Page 79 Page 81
1 Q. Was it your understanding that 1 BY MS. BECKER:
2 Fannie Mae required you to clarify the 2 Q. I am handing you --
3 relationship between RMS and CAM prior to your 3 A. This is not the one I was referring
4 doing business with Fannie Mae? 4 to.
5 A. Yes. 5 Q. I am handing you what's been marked
6 (Deposition Exhibit No. 3 was 6 as Exhibit 6 -- I'm sorry, 5. Do you
7 marked for identification.) 7 recognize this document?
8 BY MS. BECKER: 8 A. Uh-huh.
9 Q. I would like to hand you what's 9 Q. What is it?
10 marked as Exhibit 3. Does this refresh your 10 A. No -- actually, I don't recognize
11 recollection as to the time frame of the -- 11 this at all. I don't even recall seeing it.
12 A. Yes. 12 Q. Do you recognize --
13 Q. -- correspondence? 13 A. Oh, I remember the scenario
14 A. It appears that I sent it on -- 14 perfectly.
15 sometime in May of 2001. 15 Q. Do you now recognize the document?
16 MR. DANIELS: This is 3? 16 A. I recognize the document. I don't
17 MS. BECKER: That was 3, yes. 17 recognize this particular e-mail.
18 (Deposition Exhibit No. 4 was 18 Q. I would like to direct your
19 marked for identification.) 19 attention to what's been marked as page 10547.
20 BY MS. BECKER: 20 Do you see that?
21 Q. I am handing you what has been 21 A. Uh-huh.
22 marked as Exhibit 4. What is that document? 22 Q. What is that?
21 (Pages 78 to 81)
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1 A. That is the -- 47 -- an 1 only signed by me. I believe that. I can
2 out-of-order page of -- it looks like it's out 2 check.
3 of order somewhere. 3 Q. So your testimony is that there is
4 THE VIDEOGRAPHER: The time is 4 a co-brokerage agreement --
5 1:47. This is the end of tape number 1. 5 A. Uh-huh.
6 We're going to go off the record to change to 6 Q. -- between --
7 tape number 2. 7 A. Was.
8 (Pause.) 8 Q. There was a co-brokerage agreement
9 THE VIDEOGRAPHER: The time is 9 between you, Marialice Williams, and CAM; is
10 1:49. This is the beginning of tape number 2. 10 that correct?
11 We're back on the record. 11 A. I believe that's the way it is.
12 BY MS. BECKER: 12 Q. And, separately, your testimony is
13 Q. Ms. Williams, can you identify the 13 that there was a limited joint venture
14 document marked 104 -- 10547 in Exhibit 5? 14 agreement between you, Marialice Williams, and
15 A. It appears to be page 2 of 2 of a 15 CAM?
16 proposed joint venture agreement between CAM 16 A. I'm sorry. I didn't understand --
17 Financial Services and Risk Mitigation 17 what was the prior question?
18 Strategists. 18 Q. The first question was whether
19 Q. At the bottom of the page there is 19 there was a co-brokerage agreement between
20 a signature. Do you see that? 20 Marialice Williams and CAM?
21 A. Yes. 21 A. I believe it was called -- no. I'm
22 Q. Whose signature is that? 22 not sure whether it -- you know, I have to be
Page 83 Page 85
1 A. That's Harvey Hartsfield. 1 honest with you, from 1998 in June until, as
2 Q. So Mr. Hartsfield is signing this 2 you can see, two -- several -- two years later
3 joint venture agreement on behalf of Risk 3 at least, we know that I was attempting to
4 Mitigation Strategists; is that correct? 4 work out something with CAM Financial.
5 A. Yes, he signed it on behalf of Risk 5 Nothing ever worked out that would have
6 Mitigation Strategists. He, too, is an 6 reflected anything that I would have
7 insurance broker. He is still actively 7 contemplated before I left Fannie Mae.
8 licensed. It was never consummated. No 8 But because we all kept going at
9 agreement was ever consummated with CAM. 9 trying to do this business, since I had
10 Q. So there never was a joint venture 10 created it, there was a point at which I
11 agreement with CAM; is that correct? 11 believe Bob actively had an insurance company
12 A. There was a limited joint venture 12 in Baltimore, and -- Fidelity, I believe it
13 agreement that is not these documents that we 13 was -- that wanted to hear a presentation
14 have been looking at. These are all attempts, 14 jointly -- jointly. And at that time, because
15 prior to the discussions with Fannie Mae 15 the relationship was with CAM, the --
16 telling me not to do business with them. And 16 Fidelity's relationship was with CAM, in order
17 then after Fannie Mae said you can't do 17 for me to ensure, because Bob had not paid me
18 business with them directly, that is when -- 18 or shared -- and I didn't know until later how
19 or I guess we did wind up signing -- I believe 19 much money he was making from Fannie Mae until
20 it's three paragraphs, and it simply says that 20 I saw those tapes and stuff -- I thought the
21 we agree to share commissions if we both work 21 only way I could ensure that I could -- would
22 on the transaction. But I believe that one is 22 be on there was to get something signed.
22 (Pages 82 to 85)
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1 Because I've had the experience with Eric 1 signatory.
2 Rosenfield in Metropolitan -- you know, 2 BY MS. BECKER:
3 everybody seemed to be kind of not honoring 3 Q. I would like to direct your
4 what they were saying. 4 attention to the first paragraph of the mutual
5 So I believe that the small 5 non-disclosure agreement. Do you see where it
6 agreement was one to ensure that I would 6 says that, "This mutual non-disclosure
7 receive commissions if that company was used 7 agreement is made and entered into as of the
8 to do any Fannie Mae business or any other 8 date set forth below by and between Fannie Mae
9 business. That's why you don't see two 9 and the entity whose name and address are set
10 signatures on anything. 10 forth below (the Company)"?
11 Q. You believe that there were two 11 A. Uh-huh.
12 signatures on a co-brokerage agreement? 12 Q. Who is the entity whose name and
13 A. I believe there was on this one 13 address are set forth below?
14 document, but it's none of these -- there is 14 A. Mine. My company and -- RMS.
15 no language anywhere like this in the document 15 Q. The company that's identified below
16 I'm referring to. I believe it's just a 16 with their address is Risk Mitigation
17 little three-paragraph thing that says we will 17 Strategists, LLC; is that correct?
18 share the commissions in this deal or 18 A. That's correct.
19 something like that, and that happens all the 19 Q. Did Risk Mitigation Strategists,
20 time. 20 LLC, ever file tax returns?
21 Q. And is it your testimony that the 21 A. I don't remember -- no. No, I'm
22 three-paragraph document indicating that you 22 filing them now. I don't -- I mean, I'm not
Page 87 Page 89
1 would share commissions with CAM is the only 1 even sure. I don't think so. We had no
2 formalized agreement between you and CAM? 2 income, so we didn't file any tax return.
3 A. I know that. And I now know why. 3 Q. Was the income from Risk Mitigation
4 Q. I would like to show you what will 4 Strategists, LLC, zero?
5 be marked as Exhibit 6. 5 A. Yes.
6 (Deposition Exhibit No. 6 was 6 Q. I believe you just testified that
7 marked for identification.) 7 you are currently filing tax returns for Risk
8 BY MS. BECKER: 8 Mitigation Strategists, LLC?
9 Q. Can you identify that document? 9 A. No, not for Risk Mitigation
10 A. This is a mutual non-disclosure 10 Strategists. Well, I guess we are to the
11 agreement. 11 extent that it's one of the noted companies
12 Q. What was your understanding of the 12 that I had during that time. I haven't seen
13 purpose of this document? 13 the new returns. You don't want to know the
14 A. The purpose of this document was to 14 story.
15 ensure that Fannie Mae did not take my ideas 15 Q. Did Risk Mitigation Strategists,
16 and go to another insurance company. 16 LLC, have any operating expenses?
17 Q. Who are the parties to the mutual 17 A. Yes. Yes, it did.
18 non-disclosure agreement? 18 Q. What were those?
19 MR. DANIELS: I'm sorry. I lost 19 A. They were typical office expenses
20 track of this. Is this 6? 20 that anyone would have that's in business:
21 THE WITNESS: Yes. Marialice 21 Rent, telephones and so forth. They were --
22 Williams and Fannie Mae, Grace Huebscher 22 none of them were in the name of Risk
23 (Pages 86 to 89)
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1 Mitigation Strategists. They were just all in 1 correct?
2 my personal name. 2 A. Yes.
3 Q. Did Risk Mitigation Strategists, 3 Q. Where else did you search?
4 LLC, have a payroll? 4 A. That's the only place I searched.
5 A. No. 5 It's the only place I have documents.
6 Q. Were there ever any financial 6 Q. Did you contact Julia Williams?
7 statements for Risk Mitigation Strategists? 7 A. She's dead.
8 A. No. 8 Q. Do you have documents related to
9 (Deposition Exhibit No. 7 was 9 the CAM litigation?
10 marked for identification.) 10 A. You sent me a lot of documents from
11 BY MS. BECKER: 11 the CAM litigation.
12 Q. I am handing you what's been marked 12 Q. Other than documents that Fannie
13 as Exhibit 7. Do you recognize this document? 13 Mae has produced to you, do you have any
14 A. Yes. 14 documents in your possession related to the
15 Q. What is it? 15 CAM litigation?
16 A. It's a complaint filed in the 16 A. I don't think so, but I had a
17 District Court by me against Fannie Mae. 17 storage area -- unit on U Street, Northwest,
18 Q. Do you recognize this document as 18 the 1300 block, and I was traveling a lot and
19 Fannie Mae's request for production of 19 they changed the rate by $10, and by the time
20 documents directed to you in this litigation? 20 I got the notice, they had sold all the
21 A. Do I recognize it as -- 21 contents of that. And that's the only other
22 Q. Fannie Mae's request for production 22 place where I had documents in boxes and stuff
Page 91 Page 93
1 of documents in this litigation. 1 like that, and a mink coat and, you know,
2 A. Oh, I don't -- I don't know. 2 things -- old stuff, but, you know, it's gone.
3 Q. Have you seen this document before? 3 I don't know where it is and I can't get it.
4 A. Yes. 4 Q. What documents do you believe were
5 Q. What is your understanding of what 5 in the storage area on U Street?
6 this document is? 6 A. I really -- I can't say. I would
7 A. It's a complaint. It's a complaint 7 have gone through it if it would have been
8 with these various -- oh, I'm sorry. I 8 available and I would have disclosed them to
9 apologize. I wasn't reading it. I was just 9 you.
10 seeing that. This is a request for production 10 Q. Do you have any recollection of
11 of documents to me. 11 putting documents in the --
12 Q. Have you seen that document before? 12 A. No.
13 A. Yes. 13 Q. -- U Street storage facility?
14 Q. Did you search for documents in 14 A. No. I know that there were boxes
15 response to Fannie Mae's document requests? 15 that contained legal files and records of
16 A. I searched everything I had to 16 things that I no longer have.
17 comply with this. 17 Q. Do you have any reason to believe
18 Q. Where did you search? 18 that there were any documents in the U Street
19 A. My office. 19 storage facility related in any way to Fannie
20 Q. Where is your office? 20 Mae or to CAM?
21 A. 1922 First Street, Northwest. 21 A. You know, I remember when Bob Jones
22 Q. That's at your home; is that 22 filed the original complaint in his case, and
24 (Pages 90 to 93)
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1 the original case did not involve Fannie Mae. 1 on it.
2 And I know that I saw that complaint, and I am 2 Q. They were deposition transcripts?
3 pretty sure I had a copy of it, but I don't 3 A. Yes.
4 have it now. And then, later on, Fannie Mae 4 Q. There were four pages?
5 was added as a necessary party. 5 A. Just about four pages.
6 Q. Do you have any reason to believe 6 Q. And that's the only thing, to your
7 that you had documents in the U Street storage 7 knowledge, that Ms. Williams had relating to
8 facility related to Fannie Mae or CAM? 8 the CAM litigation?
9 A. I believe there may have been some 9 A. That's as far as I know.
10 there. 10 Q. You've previously testified that
11 Q. What do you believe that those may 11 you had reviewed the documents that Fannie Mae
12 have been? 12 produced, at least in large part; is that
13 A. Oh, I couldn't tell you. 13 correct?
14 Q. Other than Ms. Williams, did you 14 A. A lot of it, yes, watching the
15 work with anybody -- with any other lawyer in 15 videos.
16 connection with the CAM litigation? 16 Q. Based on your review of the
17 A. No. At my last deposition, Michael 17 documents that Fannie Mae produced, do you
18 Beasley, Harley Daniels and Brian Lederer 18 have any present intention of amending your
19 attended the deposition with me. 19 complaint?
20 Q. Do you know where Julia Williams' 20 A. Yes. My attorney has spoken to me
21 files are? 21 about that.
22 A. No. 22 Q. I am not going to ask you any
Page 95 Page 97
1 Q. Have you made any effort to locate 1 questions about any conversations that you've
2 her files relating to the CAM litigation? 2 had with your lawyer, but I am going to ask
3 A. I'm sorry. I apologize. She had 3 you whether you currently have any intent to
4 nothing but some -- you know, when they send 4 amend your complaint?
5 you a copy of the deposition so you can check 5 A. I intend to follow my attorney's
6 it to see if that's what you really said, you 6 advice.
7 know, where you check through it after it's 7 Q. Do you intend to amend your
8 taken. That's all she had in a file. I do 8 complaint?
9 remember that. 9 A. I believe -- yes.
10 I did go to her office right after 10 Q. In what way do you intend to amend
11 her death. Her family had already boxed up 11 your complaint?
12 her entire office, and they did it in no order 12 A. I intend to amend my complaint to
13 that represented anything intelligent. And I 13 further clarify that I was denied business
14 did search through there, and I do remember 14 with Fannie Mae on the basis of my race.
15 there was a file and all it had in it were 15 Q. Is there any other respect in which
16 about four sheets of paper, and they were four 16 you intend to amend your complaint?
17 pages from a deposition, and that's all she 17 A. We really have not finished our
18 had. 18 discussions.
19 Q. Are you referring to what's known 19 Q. What do you intend to clarify with
20 as errata sheets? 20 respect to your allegation that you were
21 A. I don't know what they're called. 21 denied business with Fannie Mae based on your
22 No, they were actual -- they had my testimony 22 race?
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1 A. Until I saw certain documentation, 1 Fannie Mae, totally un -- have no clue,
2 I had been led to believe there was no 2 really, about Fannie Mae and its processes and
3 business going on between CAM and Fannie Mae 3 procedures, and yet they were given a great
4 after 1998, which turns out is incorrect. 4 deal of business using a product that I had
5 Q. What documents are you referring 5 created and had been told that I was going to
6 to? 6 be able to get business from once I left.
7 A. There is a -- let's see. 7 And it didn't make sense that Craig
8 Mr. Daniels' law clerk went to Mississippi and 8 Ott was an international broker because Fannie
9 obtained from the courthouse there, although 9 Mae wouldn't permit any of the insurance
10 it was difficult since it was part of Katrina, 10 business to be done with any international
11 the record in the -- public record in the Bob 11 firm. It had to be a firm that was from the
12 Jones case. And that was my initial -- the 12 United States and it had to be a triple A
13 beginning of when -- that was when I began to 13 rated firm, and Bob Jones and I had identified
14 understand that CAM Financial had made a great 14 and brought into Fannie Mae and had under
15 deal of money from Fannie Mae and I had made 15 confidentiality agreement every single firm
16 none, and I had done a great deal of work, 16 that had those standards at that time.
17 including creating the product itself. 17 So if Mr. Ott -- and I saw a copy
18 And then I discovered in the 18 of something that purported to be some kind of
19 depositions that what I was -- had seen 19 insurance policy or something that he wrote
20 represented only a portion of the business 20 that looked like something a third grader
21 that -- because we did not copy all the 21 would have written; I, on the other hand, had
22 records, absolutely every record, that there 22 written policy after policy -- I believe it
Page 99 Page 101
1 were, in fact -- there was a substantial 1 was up to 50 versions of it, went through all
2 amount of business that continued to be done 2 the -- went through all the language, went
3 between Fannie Mae and Bob Jones. 3 through -- worked with lawyers from AIG and
4 Q. Assuming that business was done 4 Fannie Mae who were happy they were working
5 between -- 5 with a lawyer because Bob was not. And, you
6 THE VIDEOGRAPHER: Excuse me. I 6 know, I felt I had made such a significant
7 have to go off the record real quick. The 7 contribution to Fannie Mae's bottom line that
8 time is 2:12. We have to go off the record. 8 I should have been given the business, as
9 (Pause.) 9 were -- most white people who left Fannie Mae
10 THE VIDEOGRAPHER: The time is 10 usually left and got some kind of contract or
11 2:12. We're back on the record. 11 something.
12 BY MS. BECKER: 12 I was told over and over again
13 Q. Assuming that there was business 13 there wasn't going to be any contract for me
14 between CAM Financial and Fannie Mae after you 14 because we don't pay people to do marketing,
15 left Fannie Mae, how would that affect your 15 but if you can bring something in here that's
16 complaint that you were denied business with 16 decent, we will try to do it with you. And I
17 Fannie Mae based on your race? 17 brought lots of things in, and they did
18 A. Well, Mr. Ott whom Richard Lawch 18 nothing. It turns out they did do something;
19 bragged about being a, quote/unquote, 19 they just didn't do it with me.
20 international broker and Bob Jones both are 20 Q. So the new allegation that you
21 less educated, less knowledgeable about the 21 intend to bring in your complaint is that
22 financial markets, less knowledgeable about 22 Fannie Mae did business with Bob Jones instead
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1 of with you? 1 as the affordable housing program.
2 A. And Craig Ott. 2 I did not quit my job because I
3 MR. DANIELS: Yes, we have two 3 didn't think I was going to have a lot of
4 1981s. In other words, the -- Bob Jones will 4 work. I thought I was going to have a ton of
5 be recast as a 1981, together with Craig Ott, 5 work.
6 a person of inferior qualification. 6 Q. What are agg deals?
7 MS. BECKER: Do you intend to drop 7 A. Aggregation deals? That's a
8 your claim for tortious interference? 8 program -- it's a concept that I created, and
9 MR. DANIELS: I will state for the 9 it then became a way of Fannie Mae doing what
10 record that until we take Bob Jones' 10 conduits do on Wall Street with respect to
11 deposition, I can't tell whether the tortious 11 securitizing mortgages. In other words,
12 interference claims will survive. But it will 12 instead of having an investment banker come
13 in large part depend on his deposition because 13 in, such as Morgan Stanley, and give you one
14 I have reason to believe that he isn't fully 14 pool of mortgage loans that represents one
15 being truthful about what Fannie Mae told him 15 company, their company, because they're the
16 about doing business with Marialice. I don't 16 conduit, Fannie Mae decided instead to step
17 believe it. 17 into that role and aggregate those pools like
18 BY MS. BECKER: 18 a conduit would do and then issue one security
19 Q. What specific business did Fannie 19 backed by multi -- by different lenders, pools
20 Mae do with CAM Financial that you intend to 20 of mortgages.
21 raise in your amended complaint? 21 Q. How is an aggregation deal
22 A. All of the transactions that Fannie 22 different from a DUS deal?
Page 103 Page 105
1 Mae did with Bob Jones after I left Fannie 1 A. DUS is -- it's no different. It's
2 Mae. I'm sorry. My chest... 2 just the size and difference of the structure.
3 MR. DANIELS: Hang in there a bit, 3 And it depends -- see, a lot of the DUS loans
4 Marialice. 4 are purchased; those were loans that were
5 THE WITNESS: Okay. 5 purchased by Fannie Mae as opposed to
6 MR. DANIELS: This is key. 6 securitized. Securitization is securitization
7 BY MS. BECKER: 7 is securitization.
8 Q. What are those transactions? 8 So when there was a securitization
9 A. I don't know because I wasn't 9 deal on the DUS side, it was just like one
10 involved. They're written in -- they're in 10 that we would do for any other lender.
11 the information that was provided by you that 11 Q. There are certain loans, as I
12 was stated by Bob. I didn't write it down. 12 understand it, that are characterized as DUS
13 It's in all those documents I went through 13 loans; is that correct?
14 from the Mississippi case. It's who the 14 A. Because they're done by the premier
15 people are and what they did. 15 group of lenders that Fannie Mae has ordained
16 And -- I believe that all of the 16 as fit to submit their loans without any prior
17 aggregation deals were done using the same 17 review in many instances.
18 concept because I had worked with Grace and -- 18 MR. DANIELS: Marialice, what does
19 before I left Fannie Mae on that issue, just 19 DUS mean? Maybe just for the --
20 as I had worked with Wendell Johns and Chris 20 THE WITNESS: It means delegated
21 Tawa about the possibility of using insurance 21 underwriting and servicing, the notion being
22 for the equity program of Fannie Mae as well 22 that they're good enough to do it themselves,
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1 like a brokerage, if you will. 1 is that correct?
2 BY MS. BECKER: 2 A. Yes.
3 Q. And are those different from 3 Q. What were the dates of those
4 aggregation loans? 4 computer crashes?
5 A. Aggregation loans have already been 5 A. I don't recall exactly, but I can
6 originated, and they come to Fannie Mae -- 6 tell you that the one at the Watergate -- one
7 they could be anywhere between two-year 7 was while I still had an office at the
8 seasoned up to within three years prior to the 8 Watergate. So it had to be prior to, let's
9 termination of the loan document. So that's 9 see -- on 9/11 I was still at the Watergate,
10 why they called the section where I worked and 10 so it had to be in 2001. I believe it may
11 what I ran, until Richard Lawch came, the 11 have been in the summertime.
12 negotiated transactions section because you're 12 Q. Was it before 9/11?
13 negotiating with loans that have already been 13 A. I believe -- I believe it was
14 originated. 14 before 9/11. It was after the date of the
15 The DUS loans are all originated 15 e-mail that I received notifying me -- from
16 according to a standard set of underwriting 16 the -- I think it was -- yes, I'm pretty sure
17 practices that Fannie Mae has proscribed. 17 it was -- I'm pretty sure it was the summer of
18 Q. And how is that different from the 18 2001.
19 aggregation loans? 19 Q. What did you do when your computer
20 A. Because aggregation loans have 20 crashed?
21 already been originated. They could have 21 A. I cried.
22 been, let's say -- oh, I will give you a great 22 Q. Did you replace the computer?
Page 107 Page 109
1 example. I am Fannie Mae. I am going to get 1 A. Yes. And they could not retrieve
2 50 loans from BB&T, 50 loans from PNC, 50 2 anything from the hard drive.
3 loans from Bank of America. I am going to 3 Q. When did you get a replacement?
4 aggregate them. But they have already been 4 A. Immediately.
5 originated, and I don't know necessarily under 5 Q. Would it have been within a month
6 what standards. But what I do, when I 6 of when the computer crashed?
7 negotiate the document that actually -- the 7 A. Definitely.
8 trust agreement in which the loans are 8 (Deposition Exhibit No. 8 was
9 described and so forth, the documentation, I 9 marked for identification.)
10 describe how those loans were done. 10 BY MS. BECKER:
11 In the DUS program, all you have to 11 Q. I am handing you what has been
12 do is hold up the multi-family guide and say, 12 marked as Exhibit 8.
13 this is how these loans are done, because 13 A. Right.
14 they're all done to the letter by a specified 14 Q. Do you recognize that document?
15 group of people who have applied for and been 15 A. I don't recognize it, but I see
16 accepted into this program. 16 that it is the complaint filed in 2003 -- no.
17 Q. Is there any other respect in which 17 This is my deposition -- my deposition in Bob
18 you intend to amend your complaint? 18 Jones' case.
19 A. We haven't finalized the discussion 19 Q. Dated March 17, 2003?
20 yet. To my knowledge, that's the major area. 20 A. Yes.
21 Q. Ms. Williams, you previously 21 Q. I would like to ask you to turn to
22 testified that you had two computer crashes; 22 page 42 of the deposition. Starting on
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1 line 21 you're talking about the computer 1 THE WITNESS: He doesn't need to
2 crash that occurred at the Watergate; is that 2 coach me.
3 correct? 3 MR. DANIELS: Go ahead, Marialice.
4 A. Uh-huh. 4 MS. BECKER: Then please don't.
5 Q. I would like to ask you to turn to 5 THE WITNESS: Well, no -- actually,
6 the next page which is page 43. Starting on 6 there is nothing in here that clarifies -- I
7 line 19, can you read that? 7 mean, I don't see -- would you like to help
8 A. "I have documents that I have 8 me? I don't know where to start.
9 accumulated since my new computer," yes. 9 This is just a bunch of argument by
10 Q. Can you read the whole -- 10 attorneys. I don't even see any substantive
11 A. "But at the time that I received my 11 question in here for me.
12 new computer, I had no further contact with 12 MR. DANIELS: Counsel, perhaps you
13 Fannie Mae, CAM or anyone interested in either 13 can save us time. Is there a reference to
14 of those two issues." 14 which -- that we can refer to that you're
15 Q. What were you referring to with 15 familiar with?
16 respect to "those two issues"? 16 MS. BECKER: I am asking the
17 A. I don't remember. 17 witness to clarify.
18 Q. Was this a true statement when you 18 THE WITNESS: Well, I can't. I'm
19 made it? 19 sorry.
20 A. It's out of context. I would have 20 BY MS. BECKER:
21 to look at the whole thing. I don't even know 21 Q. Okay. What did you mean by "I have
22 what it's about. 22 documents that I have accumulated since my new
Page 111 Page 113
1 Q. Feel free to read whatever you 1 computer, but at the time that I received my
2 think is necessary to put it in context. 2 new computer, I had no further contact with
3 MR. DANIELS: Frankly, given -- 3 Fannie Mae"?
4 excuse me. Frankly -- 4 A. What did I mean by that? It's a
5 MS. BECKER: If you're going to 5 whole sentence and it says "of those two
6 testify -- 6 issues," and if I could find out what those
7 MR. DANIELS: Okay. Let's see how 7 two issues are, I could tell you why I had no
8 I can do this so we can -- I object to her -- 8 further contact with anybody about them.
9 MS. BECKER: If you're going to 9 Q. I would read it as saying that
10 make a speaking objection, I object to that as 10 those two issues are Fannie Mae or CAM in the
11 well. If you want to object for the record, 11 context of that sentence. But it's your
12 you can object. 12 testimony, so I am asking you to --
13 MR. DANIELS: Okay. I object to 13 A. I don't think it refers to Fannie
14 the form of the question on the ground that 14 Mae and CAM.
15 the statement being referred to is extremely 15 Q. Okay. Was it true as of the date
16 vague, and that -- 16 of your deposition on March 17, 2003, that at
17 MS. BECKER: Counsel, you're making 17 the time that you got your new computer, which
18 a speaking objection, and I would like to ask 18 would have been sometime in the summer of
19 you to not do that, please. You're just 19 2001, that you had no further contact with
20 coaching the witness at this point. 20 Fannie Mae or CAM?
21 MR. DANIELS: I don't need to coach 21 A. Oh, no, that's not true. I have
22 Marialice. 22 given you documents on that.
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1 Q. Why would you have testified to 1 after 2001?
2 that? 2 A. I communicated and sent things and
3 A. I didn't. You're telling me that I 3 talked to CAM Financial, as far as I know --
4 testified to that. I am telling you I didn't. 4 when was Katrina? That was in 2004, '5 --
5 Q. You're saying that you didn't say, 5 2005. I can tell you that when I was on
6 "I have documents that I have accumulated 6 Martha's Vineyard -- that was 2005, I
7 since my new computer" -- 7 believe -- in the summer of 2005, I spoke with
8 A. You said. 8 Bob Jones about business. I know that.
9 Q. Excuse me. I would like to finish 9 Q. Did your discussion with Bob Jones
10 my question. 10 in 2005 relate to Fannie Mae?
11 Are you saying that you did not 11 A. Yes.
12 testify, "I have documents that I have 12 Q. In what way?
13 accumulated since my new computer, but at the 13 A. I was still speaking with people
14 time that I received my new computer, I had no 14 who had an interest in pursuing credit
15 further contact with Fannie Mae, CAM, or 15 enhancement.
16 anyone interested in either of those two 16 Q. Tell me specifically what you
17 issues"? 17 discussed with Bob Jones in 2005 relating to
18 A. "Those two issues" are not 18 Fannie Mae.
19 referring to Fannie Mae and CAM and, 19 A. How is the insurance business? Is
20 therefore, the conclusion that you are drawing 20 there any hope we're going to get back to
21 is not what I was saying nor is it what I 21 doing any of this stuff? You know, how is
22 intended to say. 22 your case going? Is there anything we can do,
Page 115 Page 117
1 Q. What did you intend to say? 1 you know, to resurrect what we were trying to
2 A. Exactly what I said, "or anyone 2 do? Along those lines, generally speaking.
3 interested in either of those two issues," 3 Q. Were there any specific business
4 which must have been something else related to 4 discussions about specific deals or specific
5 something else that I can't find in this 5 proposals?
6 document while we're sitting here. 6 A. I did not discuss specific deals
7 Q. So you have no idea what you were 7 with anyone until I had a confidentiality
8 referring to in this? 8 agreement in place and knew that I was the
9 A. I have no idea. 9 sole representation of that individual. I
10 Q. What was the further contact that 10 just -- you just don't do that.
11 you had with Fannie Mae or CAM after the 11 Q. So is it fair to say that you did
12 summer of 2001? 12 not have any discussion with Bob Jones in 2005
13 A. I believe I supplied all the 13 about any specific deals related to Fannie
14 documentation to you indicating that I did 14 Mae?
15 have contact with Fannie Mae and that I did 15 A. I had about specific deals, but I
16 have other transactions and things I worked on 16 did not reveal the names of those specific
17 that I -- 17 people to Bob Jones.
18 Q. So it would be in the documents 18 Q. What were the specific deals that
19 that you produced? 19 you were discussing with Bob Jones where you
20 A. I believe so. 20 didn't reveal the names of them?
21 Q. What was the nature of the 21 A. Oh, I just can't remember right
22 communications you had with Fannie Mae or CAM 22 now.
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1 Q. What specific deals did you have 1 person to your deal is your reinsurer because
2 going related to Fannie Mae in the 2005 time 2 the rating of the reinsurer is what attaches
3 frame? 3 to the rating of the credit enhancement which
4 A. You don't have deals related to 4 relates to the rating of the securities
5 Fannie Mae. What you have is you have 5 themselves.
6 clients, and they're looking for a way to lay 6 So there were -- because I had an
7 off risk and they're looking at their various 7 entree to the insurance commissioner in the
8 options: Should I go this way? Should I go 8 District of Columbia -- I don't recall if he
9 that way? What's cheaper? What's better? 9 was in Washington; if he wasn't in Washington,
10 What will give me a better product? What kind 10 he was on the telephone with Larry to
11 of execution? 11 discuss -- when we were discussing Tom -- it
12 That's what you talk about. You 12 was Tom Hampton, Larry -- the former insurance
13 don't talk about, I want to go to Fannie Mae 13 commissioner; Tom Hampton is now the insurance
14 and I want to do it this way. That's not how 14 commissioner, and Dana -- I can't remember his
15 it works in the marketplace. 15 last name, but he was the counsel. And then
16 Q. So you weren't having a discussion 16 the head of the insurance side was a woman.
17 with Bob Jones in 2005 about any specific 17 They were all in a room with us,
18 business related to Fannie Mae? 18 and we were all discussing this whole concept
19 A. Potential business for Fannie Mae, 19 of trying to do affordable housing mortgage
20 yes. 20 loan securitization using captive insurance as
21 Q. And what was that specific 21 the credit enhancement, and we could not move
22 potential business that you were discussing 22 forward. We were working with -- I know
Page 119 Page 121
1 with Bob Jones? 1 Pinnacle was one of them, but there were
2 A. I don't remember right now. 2 several other people. And there were some
3 Q. Other than the communication that 3 things that weren't even mortgage loan-related
4 you had with Bob Jones in 2005, what other 4 such as John Taylor at the NCRC, it's called.
5 communications did you have with CAM between 5 It's an organization that represents community
6 the summer of 2001 and the present? 6 housing organizations. And we were discussing
7 A. You said other than Fannie Mae? 7 the feasibility of using the captive.
8 MS. BECKER: Can you read the 8 We believed that at that time -- or
9 question back? 9 at least it appeared from the beginning that
10 (The reporter read the record as 10 that would be an appropriate utilization of a
11 requested.) 11 captive, a form of captive insurance. And
12 THE WITNESS: I had a lot of 12 that's -- you know, we just -- we continued to
13 conversations with Bob Jones. I probably 13 have those discussions.
14 spoke to him every week, every other week, 14 BY MS. BECKER:
15 about any number of insurance proposals. We 15 Q. Was there anytime between the
16 had a new -- in the District of Columbia, we 16 summer of 2001 and the present where you had
17 have one of the newest captive insurance -- 17 communications with Bob Jones relating to
18 we're one of the newest captive insurance 18 Fannie Mae?
19 jurisdictions. 19 A. Yes, I talked to Bob Jones about
20 And Bob Jones had the reinsurance 20 Fannie Mae every week or every other week or
21 contacts, and when you're doing a captive 21 every few days or whenever he called or
22 insurance transaction, the most critical 22 whenever I called him.
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1 Q. And what was the nature of those 1 had relating to Bob Jones, potential Fannie
2 discussions? 2 Mae transactions. I honestly cannot remember
3 A. Are we ever going to do this 3 all of -- or any right now of the -- I would
4 business again? Shall I -- you know, that 4 have to go back and make sure it was 2001.
5 kind of thing. 5 I wouldn't want to say something
6 MR. DANIELS: Asked and answered. 6 now on the record and then you come back and
7 THE WITNESS: Yes, I did answer 7 say, well, you said this and that's -- you
8 that, didn't I? 8 know, now you're changing it or whatever. So
9 BY MS. BECKER: 9 for me to answer that one, I mean, I would
10 Q. Do you need the question read back? 10 have to go back to records and look at them to
11 A. No. I said -- that's what I said. 11 answer that question to know the exact dates,
12 Q. Okay. What was the nature of the 12 which year and which specific things we talked
13 communications that you had with Bob Jones 13 about. I wouldn't be able to do that, sitting
14 related to Fannie Mae from the summer of 2001 14 here.
15 to the present? 15 Q. As you sit here today, do you have
16 A. They were personal in nature. 16 any recollection of any discussions with Bob
17 Fannie Mae we discussed. 17 Jones after the summer of 2001 relating to any
18 Q. And I am focusing you on Fannie 18 specific business proposals --
19 Mae. 19 A. Yes, I believe I've answered
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