01 Unraveling The Tangled Web of Realauction Ownership

REALAUCTION BANKRUPTCY
AND OWNERSHIP SERIES

A collection of public documents from a recent patent infringement action and
related bankruptcy proceedings that show who really owns Realauction.com.

Unraveling the Tangled Web of Realauction's
Ownership and Finances

Selected Portions of Trial Transcripts Grant Street Group v. Realauction

Description:
This document contains a formal offer of proof, selected trial testimony, and other
evidence that was presented to the Court in a recent patent trial to show that
Realauction.com, LLC is controlled by Jonathan Politano of Gulf Group.
Historically, Mr. Politano was one of the most active purchasers of tax certificates
in Florida. Mr. Politano exercises control through two British Virgin Islands entities,
Adila Enterprises, Inc. and Hatchett Development, Ltd., one of which is purportedly
an equity investor in Realauction and the other a purported lender (See Tab 6 -
Realauction's customers, Tab 7 - Funding from Gulf Group, Tab 8 Realauctions 2013
year-end financial statements).

Note:
These documents were obtained from Grant Street Group, Inc. v. Realauction.com, LLC, Case No.
2:09-cv-01407-MRH, a patent infringement action in the United States District Court for the Western District
of Pennsylvania and from In re Realauction.com, LLC, Case No. 13-28260-RBR, a bankruptcy proceeding in the
United States Bankruptcy Court for the Southern District of Florida.
Document 1 of 5
1
UNRAVELING THE TANGLED WEB OF REALAUCTIONS OWNERSHIP
The relationship between Realauction.com, LLC (Realauction), one of the largest
online auctioneers of Florida tax certificates, and Gulf Group, Inc. or Gulf Group
1
was the
subject of repeated wrangling between the attorneys in a recent patent trial in Pittsburgh,
Pennsylvania. Attached are copies of portions of the trial transcripts and certain exhibits that
were submitted in the trial that relate to this issue. (Tabs 1-8).
Tab 1 is a proffer (i.e., offer of proof) that was presented to the Court by attorney Thomas
Birsic of K&L Gates, one of the lead attorneys for the plaintiff. The proffer cites a document
produced by Realauction that shows several millions of dollars of transactions involving
investments and loans and payments by and to Mr. [Jonathan] Politano [of Gulf Group] going
back as early as October 18, 2004. Tab 1 at Page 206, Lines 21-25 to Page 207, line 1.
More specifically, the document shows that Gulf Group provided the initial $100,000
capital contribution that was used to start Realauction in 2004. Tab 1 at Page 207, Lines 1-3.
These cash infusions were initially characterized as investments on Realauctions books, but
were later reclassified as loans. Tab 1 at Page 207, Lines 10-12. However, Realauction did
not make any interest payments on the loans from 2004-2011. Tab 1 at Page 207, Lines 18-19.
In 2011, the investments were rolled into a loan on the books of Realauction from a
British Virgin Islands entity called Adila Enterprises, S.A. Tab 1 at Page 207, Lines 20-23. An
operating agreement, that was purportedly executed on January 1, 2011, indicates that the owners
of Realauction are Lloyd McClendon, Marc Thomashaw, and another British Virgin Islands
Company called Hatchett Developments, Ltd. Tab 1 at Page 208, Lines 1-3. Conversely, the
financial statements of Realauction indicate that Adila -- not Hatchett -- is the controlling
shareholder. (Tab 8). There appears to be little, if any, publicly available information about
Adila and Hatchett, other than the fact that they both share the same British Virgin Islands
mailing address.
2

As noted in Tab 1, Marc Thomashaw, Realauctions CFO, testified during discovery that
he has no information allegedly about Hatchett except that it is represented by a lawyer from
Ecuador named Enrique Torbay, who he has not met and never spoken to. Tab 1 at Page 208,
Lines 4-7. Mr. Torbay is listed as a managing member of Realauction. Tab 1 at Page 208, Lines
8-11.
Tab 1 also cites testimony of Mr. Thomashaw that he received the documentation for the
multi-million dollar Adila loan shortly before his deposition in October of 2011 and he had
never seen the document before it was sent to him by some mysterious person named Jos from
1
Collectively, the terms Gulf Group, Inc. or Gulf Group refer to a group of companies that are
controlled by one of the largest investors in tax certificates in Florida.
2
As will be shown in Who are Hatchett and Adila? (Document No. 3 of this Series), Adila, Hatchett,
and Gulf Group are all represented by the same attorney, Ozzie Schindler of Greenberg Traurig, LLC.
2
Ecuador. Tab 1 at Page 208, Lines 12-17. Mr. Thomashaw purports to have no knowledge of
Adila except that Torbay is somehow connected to Adila. Tab 1 at Page 208, Lines 18-19.
Astonishingly, in subsequent communications to the plaintiffs attorneys and to the
Court, Realauctions attorneys have represented that no one from Realauction or its attorneys
have communicated with principals from Adila or Hatchett (i.e., entities that purportedly have a
majority interest in Realauction) except through their attorneys!
3

The proffer also notes that Realauction and Gulf Group used the same accountant. Tab 1
at Page 209, Lines 7-17. Realauctions accountant testified that he had never met, spoken to, or
communicated with Mr. McClendon, except in connection with a subpoena that was served in
the patent infringement lawsuit. Tab 1 at Page 209, Lines 9-14.
Tabs 2-3 include portions of Mr. McClendons trial testimony. During the trial, Mr.
McClendon confirmed that he has only a 15% interest in Realauction. Tab 2 at Page 209, Lines
16-18.
Later, Mr. McClendon was questioned about receiving over $2.6 million in funds from
Gulf Group, including the initial $100,000 that was used to start Realauction in 2004. Tab 3 at
Page 41, line 25 to Page 46, line 25. Even after Mr. McClendon was presented with
Realauctions own financial records documenting large fund transfers between Realauction and
Gulf Group (Tab 7), he continued to deny under oath that the Company had ever received any
funding from Gulf Group or its principal, Jonathan Politano.
Mr. McClendons testimony was contradicted by deposition testimony from
Realauctions CFO, Marc Thomashaw. Presented with the same document, Mr. Thomashaw
described it as a loan that was made by an investor from Gulf Group. Tab 4 at Segment #13
(Page 38:10 to 39:10).
The 2004 Tax Certificate Sale Guidelines and Procedures, which were published by The
Florida Tax Collectors Association in cooperation with the Florida Department of Revenue,
states: Tax collectors shall not allow bidders to control or attempt to conduct the sale or interfere
with its conduct. Tab 5 at Paragraph No. 13.
Tab 6 includes a list of Realauctions tax certificate, foreclosure, and tax deed clients.
Tab 8 includes Realauctions Balance Sheet as of December 31, 2012, which shows the
current balance of loans from Adila to Realauction exceeds $2.8 million and Realauctions
Profit & Loss Statement for December 31, 2012, which shows current interest payable from
Realauction to Adila of $500,000. Tab 8 (Trial Exhibit P-194).

3
These representations will be substantiated in Who Owns Realauction? (Document No. 2 of this
Series).

Tab 1
1
IN THE UNITED STATES DISTRICT COURT
OF WESTERN PENNSYLVANIA
GRANT STREET GROUP, INC.,
a Pennsylvania corporation,
Plaintiff,
vs.
REALAUCTION.COM, LLC.,
a Florida limited liability
company,
Defendant.
CIVIL DIVISION
No. 09-1407
_____________________________
Transcript of JURY TRIAL held JUNE 7, 2013
United States District Court, Pittsburgh, Pennsylvania
BEFORE: HONORABLE MARK R. HORNAK, DISTRICT JUDGE
APPEARANCES:
For the Plaintiff:
For the Defendant:
Court Reporters:
Patrick J. McElhinny, Esq.
Christopher M. Verdini, Esq.
Thomas E. Birsic, Esq.
K&L Gates, LLP.
210 Sixth Avenue
Pittsburgh, PA 15222
David S. Brafman, Esq.
Jacqueline M. Arango, Esq.
Akerman Senterfitt
222 Lakeview Avenue
Suite 400
West Palm Beach, FL 33401
Karen M. Earley, RDR-CRR
Julie Kienzle, RMR-CRR
6260 U.S. Courthouse
700 Grant Street
412-201-2660
Proceedings reported by mechanical stenography.
Transcript produced by computer-aided transcription.
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THE COURT: Okay.
Mr. McElhinny, who is going to make the offers of
proof?
Do you want to do Gulf Group first and prosecution
history?
MR. McELHINNY: Mr. Birsic.
THE COURT: Mr. Birsic.
MR. BIRSIC: Your Honor, as Your Honor knows, the
Court and the parties have been dealing with a variety of
evidentiary issues during the trial, which I will refer to as,
for lack of a better shorthand term, the Gulf Group evidence
issues, and those would be matters that have been precluded as
a result of Judge Ambrose's order dated September 25, 2012 --
THE COURT: 484 order.
MR. BIRSIC: -- related to Gulf Group and Jonathan
Politano.
I just want, for purposes of the record, because as
Your Honor knows, as the case is preceded, we tried to toe the
line there and not have to stop at every occasion when this
subject came up.
I thought for purposes of the record, this might be
an opportunity to briefly summarize some of the testimony and
the documents that we would have sought to admit had that
order not been in place.
I think the best way to organize that is for us to
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start and try to proceed by witness.
We would have called and elicited testimony and
documents from Mr. Thomashaw, who was the CFO of RealAuction
and a 30(b)(6) deponent.
We would have entered evidence and testimony from
Mr. Thomashaw's depositions in this case under oath on June
28
th
, 2011 and October 18, 2011.
We would have sought to admit Trial Exhibits P-51,
P-387, P-116, P-86, P-359, P-56, P-87, P-88, P-90, P-427,
P-89, P-153, P-429, and P-424.
For purposes of brevity, I won't go into what each
of those exhibits are because they are a lot of financial
statements that were discussed during that deposition.
I would say as a purpose of just brief summary of
what we believe the facts that would be established through
that testimony and the documents are as follows:
That P-154, which is a document that would reflect
QuickBooks printed out by Mr. Thomashaw from the books and
records of RealAuction dated October 17, 2011, based on his
testimony would show that under the designation of the heading
in the QuickBooks, RA Partners, that those entries for loans
and financial transactions really related to Gulf Group, Inc.
and Mr. Jonathan Politano, and that they would show several
millions of dollars of transactions involving investments and
loans and payments by and to Mr. Politano going back as early
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as October 18, 2004, including on October 18, 2004, the
initial $100,000 capital contribution that was shown on the
books and records of RealAuction.
That ledger will show that from October 18, 2004,
through and including the time period of September 2011,
millions of dollars of transactions, including a deposit on
July 19, 2007 of $925,000 alone and many, many deposits
throughout that entire time period.
The facts and testimony from Mr. Thomashaw will
also show that although these were described initially on the
books, these cash infusions by Gulf Group as investments,
later Mr. Thomashaw attempted to characterize them as loans.
We went through each of the P&L statements that the
company RealAuction produced from 2004 until 2011 with
Mr. Thomashaw, and we showed there was not one indication on
any P&L of any interest payment being made on any alleged loan
by Gulf Group or Mr. Politano.
The implication in our proffer on that would be
that those were investments and not loans.
The evidence would also show, specifically Trial
Exhibit 50, they will reflect that the Gulf Group investments
were re-characterized and rolled into a loan on the books of
RealAuction called Adila.
We will show through Trial Exhibit 96, an operating
agreement that was dated as of January 1, 2011, which showed
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that the owners of RealAuction are Lloyd McClendon, Thomashaw
and some entity called Hatchet Development, LTD, which is a
British virgin Island company.
We would show through Mr. Thomashaw's testimony,
that Mr. Thomashaw has no information allegedly about Hatchet
except that it is represented by a lawyer from Ecuador named
Enrique Torbay, who he has not met and never spoken to.
We would show through Trial Exhibit 86 that
Mr. Torbay is listed as a managing member of RealAuction on
the -- as of the 2010 limited liability filing with the State
of Florida as of January 5, 2010.
We would then show the loan from Adila for several
million dollars also has been documented and the documentation
showed up and Mr. Thomashaw identified it, although he said he
received it shortly before his deposition in October of 2011
and he had never seen the document before it was sent to him
by some mysterious person named Jos from Ecuador.
Mr. Thomashaw has no knowledge of Adila except that
Torbay is somehow connected to Adila.
We would also show through Mr. Thomashaw that cash
outflows from RealAuction to Gulf Group of large sums starting
in or about the time periods after our lawsuit was filed in
this case.
With respect to additional evidence, we would have
called Mr. Ronald Rubin through his deposition testimony as
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taken in this case. Mr. Rubin is a partner in the accounting
firm of Binstock.
We would have sought to admit through his testimony
Trial Exhibits P-146, P-446, P-65, P-55, P-456, P-67, P-147,
P-69, P-148, P-50, P-371, P-81, P-79, P-80, P-378, P-372,
P-394, P-448, P-150, P-396, P-393, P-417, P-56, P-116, P-66.
The testimony -- our summary of the testimony that
we believe we would have entered through Mr. Rubin's
deposition was that since the inception of RealAuction, he has
served as the outside accounting firm for RealAuction,
although he has never met, spoken, or communicated with Lloyd
McClendon except in connection with a subpoena that our law
firm served on him in this litigation for documents and
records related to RealAuction.
We would show that Mr. Rubin has served as the
outside accountant to Joseph Politano and Gulf Group companies
for more than 15 years.
We will show through Mr. Rubin's testimony and
documentary evidence that he took direction and instructions
from Joseph Politano regarding the characterization and
treatment of entries on the balance sheets, profit and loss
statements, and other books and records of RealAuction over
the years, including specifically moving amounts from accounts
of capital accounts under the names of Polo Holding and Gulf
Group on the books and records for RealAuction into a loan
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under the name of Adila.
Mr. Politano also personally directed Mr. Rubin as
to how to account for amounts of accrued interest on the Adila
loan.
We would then have also elicited the following
additional testimony from Mr. Harrington during the course of
the proceeding:
That prior to the first online tax certificate
auctions in Florida conducted by Grant Street in 2004,
Mr. Harrington met with Gulf Group and Jonathan Politano to
demonstrate the proposed software at the request of Florida
tax collector to preview and explain the new upcoming auction
format for the tax certificate sales.
During that meeting, Gulf Group asked
Mr. Harrington to modify the software system in several
respects, including a modification that would have allowed
multiple bidders when there were multiple bidders all
represented by the same entity, in this case, Gulf Group, when
the only bids submitted on a particular tax certificate, no
matter what the bid level, were all based coming from an
affiliated entity that by default, that certificate would be
sold at the highest interest rate, 18 percent, rather than the
actual interest rate's bid.
Mr. Harrington refused to allow that modification
in the system.
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We would also show Gulf Group sued Grant Street and
the tax collectors for two of the four counties in attempting
to stop the automatic tax computer-mediated tax auctions from
going forward in 2004.
We would show after the 2004 auction, Gulf Group
endorsed RealAuction and RealAuction issued a no lawsuit
guarantee from institutional investor bidders such as Gulf
Group as part of its marketing and sales efforts.
We will also have entered into evidence that during
the conversation between Lloyd McClendon and Myles Harrington
on March 15, 2004, that Mr. McClendon specifically told him he
had worked extensively with Gulf Group.
We would have also introduced through
Mr. Harrington P-146, which was the document -- that didn't
have anything to do with Gulf Group. That has already been
discussed. We won't make that part of this proffer.
We would also offer testimony on this subject from
Mr. Yorty, the following additional testimony would have been
elicited from Mr. Yorty:
That in 2002, in the County of Miami-Dade where
Mr. Yorty was eventually the tax collector, there was a
scandal involving bribery and bid rigging in connection with
tax certificate sales and there were approximately 20 members
of the tax collector staff, who were indicted and implicated
in accepting gifts and other inappropriate amounts and
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accommodations from certain institutional bidders and that
Mr. Politano was implicated in that.
THE COURT: Was he indicted?
MR. BIRSIC: We would have shown Mr. Politano -- a
Civil Action was brought by the State of Florida against
Mr. Politano and Gulf Group alleging violations of the Unfair
Trade Practices Act in connection with the improper gifts to
tax collectors associated with that.
THE COURT: What would have been the outcome of the
suit?
MR. BIRSIC: That was settled.
THE COURT: I take it he was not indicted for
criminal charges?
MR. BIRSIC: He was not indicted, no.
We would have brought out from Mr. Yorty that Lloyd
McClendon did extensive work with Gulf Group.
THE COURT: Whoa. Whoa. Did extensive work with
them in that he worked for them, interacted with them?
MR. BIRSIC: He worked for them extensively in
connection with providing real estate and other information on
the delinquent tax properties so that the bidders such as Gulf
Group would have that information in a form of their business
in terms of bidding on the various properties.
We would have called Eric Benson through deposition
testimony. Mr. Benson is the member and a founder of the Tek
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Group, which is the group that Mr. McClendon went to develop
the auction platform used to compete with Grant Street, and we
would have brought out through that testimony that before
Mr. Benson set up the Tek Group, Mr. Benson worked for many
years with one of Mr. Politano's companies.
That's a fair summary of the evidence that we would
have adduced under this issue.
We would have offered relevance on three broad
areas. First, willfulness. We believe that this is -- these
facts are important to establish what RealAuction's frame of
mind was at the time that they learned of our patent and their
behavior in terms of entering this business, copying our
auction site without concern of our patent or intellectual
property rights.
This ground for relevance has been briefed heavily,
Your Honor, so I am not sure I'm going to say much more on
this, and it also goes to motive to harm Grant Street Group,
particularly because our theory would be that Mr. Politano
sponsored Mr. McClendon in this business as a way of
maintaining control.
One other point through Mr. Harrington's testimony.
We would have brought out that RealAuction's platform allows
the modification, that Mr. Politano requested of
Mr. Harrington and Grant Street refused to accommodate.
We also believe it was relevant to damages
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concerning the explanation for the pricing strategies or lack
of strategies that RealAuction has had.
Finally, we think, as we previously noted, that
counsel for RealAuction and in this proceeding particularly
through opening statements has used Judge Ambrose's order not
only as a shield but as a sword to wrongfully mischaracterize
Mr. McClendon, Mr. McClendon's motivations for getting into
the business, so we think that was an additional ground for us
to be able to enter this evidence.
THE COURT: A couple questions.
I understand substantively, putting aside relevancy
or the application of the rules of evidence, I understand
substantively how willfulness is a substantive issue in the
case and, therefore, is a matter of consequence as to which
relevant evidence should be admitted.
Tell me under the infringement theory or the damage
theory the Court has allowed in the case how the motive of
either RealAuction or Gulf Group or Mr. Politano or anybody
else, how motive is -- is substantively a matter of
consequence in the action?
MR. BIRSIC: Well, I'm not exactly sure what the
Court is asking. Let me take a crack at it.
I think you saw through cross-examination of our
damages expert Mr. Hofmann, there was much discussion about
the fact that the tax collectors would have wanted the lower
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pricing and that RealAuction has been able to sustain lower
pricing in they have gotten along fine at the lower pricing
levels, when, in fact --
THE COURT: Which is an eight million dollar
question as I understand Mr. Verdini's handiwork at the end.
MR. McELHINNY: I think it's 12.
THE COURT: 12, if it's the higher lost profits.
It's a question of eight to twelve million dollars when I
understood Mr. Verdini's artistic endeavors at the end of the
redirect.
MR. BIRSIC: Our theory is simply that this is a
competitor who is sponsored and really set up by the largest
institutional bidder on these tax certificates and has not
disclosed its interest in this company any point along the
way.
So what you have --
THE COURT: Other than in response to your
subpoenas and deposition questions, they're not publicly
talking about it.
MR. BIRSIC: No. It's not revealed in RFPs that
RealAuction files, for good reason, because as we pointed out
in our prior motion papers, we believe there are directives
from the State Treasury Department in Florida that make
conflicts of interest like this inappropriate.
THE COURT: As a matter of substantive patent law,
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not getting into whether there is sufficient record evidence
to do it, but as a matter of substantive patent law, could an
entity standing in the shoes of Gulf Group or Mr. Politano
been named as a defendant in this action?
MR. BIRSIC: I -- at the time the action was filed,
we had no knowledge of the specifics here, a general -- really
this was in many respects surprising to us, but I don't
believe so because their fingerprints, except as I describe
are, no where -- they don't even acknowledge --
THE COURT: The reason I ask is I grew up, as
counsel may have figured out, not as a patent lawyer, but as a
labor lawyer.
One of the things we learn about is the Joint
Employer Doctrine and that is on the face of things Susie
works for the Ajax Company, but when you dig into it, you find
out the paycheck says Ajax, W2 and employment contract says
Ajax Company, but you learn that the Acme Company is running
the show.
In employment law Ajax isn't left off the hook but
Acme enjoins the matter. I did not know whether under the
substantive law of patent infringement claim does a similar
doctrine exist.
MR. BIRSIC: I'm going to ask Mr. McElhinny if he
has anything to add on that. I do not know the answer.
THE COURT: That makes two of us.
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MR. McELHINNY: I would have to think about it a
little bit more. I think there would be some theories for
inducing infringement, theories about joint infringement,
which might particularly, interestingly in this case on the
'099. We would have to look into it a little bit. This is
not information we uncovered as erected until after the close
of discovery.
MR. BIRSIC: The only other issue we have that
closes the book on our proffer for the Gulf Group, Your Honor,
as you also know during the course of Mr. Harrington'S
testimony, we had the issue of over whether we would be
permitted through Mr. Harrington to develop a fact that Grant
Street Group made an information disclosure.
THE COURT: Let's put a hold on that. Let's take
care of the first proffer first. There are a number of things
we need to accomplish with that.
MR. BIRSIC: That's it.
THE COURT: One question relative to that, when I
was watching I believe Mr. Hofmann's testimony, listening to
it, I can't recall whether this was -- I'm confident it was a
slide Mr. Verdini put up but I'm not certain of that.
I'm almost certain it came up during cross of
Mr. Hofmann or redirect, and there were on the entire screen,
left side and right side, there were excerpts of the
deposition transcript of Mr. Thomashaw, which the Court
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thought could be fairly read as saying we have no idea how we
set our prices or why we set them the way we do. We don't
look at it. We don't think about it.
Is that in evidence?
MR. BIRSIC: No, Your Honor, not yet. That's part
of the Thomashaw deposition that we decided to hold for either
rebuttal or depending upon how the evidence goes, when
RealAuction puts their case in.
THE COURT: Mr. Brafman, this is not to exhaust
your opportunity to speak on this. I have a question at the
moment.
Do you anticipate that Ms. Rinke is going to
testify because you call her to the stand?
MR. BRAFMAN: At this point we do expect that, Your
Honor.
THE COURT: Do you expect that to occur in the
first phase of your case rather than the last end of rebuttal?
When you get going on Monday before you are done, Ms. Rinke is
going to testify?
MR. BRAFMAN: Yes, but not on Monday.
THE COURT: Sometime between Monday and Wednesday?
MR. BRAFMAN: Yes.
THE COURT: Is she coming live or by deposition?
MR. BRAFMAN: Live.
THE COURT: Okay.
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Back to Mr. Birsic. First, as to matters that
occurred during opening statement, Court has already ruled, I
have ruled that I have not ruled any of the things that you
mentioned or other things may not be completely fair game for
impeachment depending on the testimony from Mr. McClendon or
other witnesses called by RealAuction and under the Federal
Rules styles things that are impeachment also are coming in
substantively. We'll see that one way or the other.
I understand the argument on willfulness. I think
if I went back and read Weinstein and all the other folks that
write the evidence treatises that will tell me while I'm to be
attentive to the development of the record, unless we have a
pro se party, I'm not responsible for the development of the
record. I'm to be attentive to it.
So, I'm looking at Rule 103 of the Federal Rules of
Evidence, particularly Federal Rule of Evidence 103(a)(2)
which says: A party may claim error in a ruling to admit or
exclude evidence only if the error affects a substantial right
of the party and (2), if the ruling excludes evidence, a party
informs the Court of its substance by an offer of proof,
unless the substance was apparent from the context.
So, obviously there has been a motion in limine
which Judge Ambrose ruled on at 484.
I have, subject to the rulings I made relative to
fair game on cross-examination and impeachment, have generally
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affirmed that ruling or accepted it as the applicable law of
the case, as has obviously Grant Street because that is why
you are making the proffer.
Here is the question if you know at this point,
Mr. Birsic. Have each of the documentary exhibits that you
identified, have each of them been individually ruled upon as
to admissibility?
MR. BIRSIC: I haven't checked, Your Honor, but I
think --
THE COURT: That makes two of us.
MR. BIRSIC: I will check. I think the answer is
probably yes, because I think each one of these, as I
indicated, is right on this issue and I'm sure they objected
based on the motion in limine.
THE COURT: Here is what I think we need to do. I
take that answer, Mr. Birsic, as, at minimum, colorably
fulfilling your obligation to make a record subject to you
examining it in the context of my obligation to facilitate
making of a record.
I think what we need to make sure is in the record
is that each of the exhibits you just proffered is if it
hasn't been offered before and there's been a ruling in a
written order from Judge Ambrose as to any of the other ones
out of the presence of the jury, you need to move their
admission and then Mr. Brafman or Ms. Arango has to state
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whether there is an objection.
I think in order on those documents, in order to
confirm the state of the record and to comply with Federal
Rule of Evidence 103, and so that I don't end up in Chief
Judge Rader's doghouse, I think we need to do that if this
goes to Washington.
In terms of your prose explanation of the
anticipated testimony from each of the witnesses who you have
identified by name, you have identified on the record whether
you would anticipate calling them as a live witness in court
or whether you would rely on a deposition that has been taken.
Consistent with the Federal Rules of Evidence, I do
find that you have informed the Court of the substance of the
testimony and evidence that would be offered by those
witnesses as witnesses and you have in the Court's judgment
fulfilled your obligation to preserve a claim or error.
I know I don't get the final word on those things,
but I would have no basis on the record now to ask you to do
more.
Mr. Brafman, putting aside for a moment the
documentary exhibits, which Mr. Birsic on Monday outside of
the presence of the jury will either confirm have each been
ruled on because they were proffered and there was an
objection and Judge Ambrose ruled on them, or if that has not
occurred, he will out of the presence of the jury offer the
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ones he elects to offer and at that time, you'll have an
opportunity to object or not object to their admission.
Based on the prose statements would you object, and
we'll take them one at a time?
To the extent Grant Street, as plaintiff, proffered
testimonial evidence from Mr. Thomashaw from his June 28, 2011
and October 18, 2011 depositions, which in sum and substance
would be direct testimony as outlined by Mr. Birsic, what
would be the position of RealAuction as to its admissibility?
MR. BRAFMAN: We would object, Your Honor.
THE COURT: Basis of your objection?
MR. BRAFMAN: Basis of the objection are the
grounds that we opposed or filed our motion in limine on Rules
402 and 403, and we oppose on the basis that motion has
already been granted.
THE COURT: Would by the RealAuction's position
that the sum and substance of Mr. Thomashaw's anticipated
testimony as explained by Mr. Birsic was in all respects
subsumed in the matters before the Court and the ruling on the
motion in limine?
MR. BRAFMAN: I believe so, Your Honor.
THE COURT: Okay. I will affirm that ruling on the
testimony subject to us seeing what happens on the exhibits.
As to Mr. Ronald Rubin, were his testimony to be
proffered by deposition and the proffer -- and the testimony
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through deposition excerpts was in sum and substance that
which was outlined by Mr. Birsic in his proffer, what would be
the position of RealAuction?
MR. BRAFMAN: We would object on the same basis.
THE COURT: And the same objections as stated to
Mr. Thomashaw?
MR. BRAFMAN: Yes.
THE COURT: Is it RealAuction's position that the
sum and substance of Mr. Rubin's testimony as outlined by
Mr. Birsic was subsumed in the matters that were before the
Court in its disposition of the motion in limine on this
topic?
MR. BRAFMAN: Yes.
THE COURT: Okay. The Court will affirm that
ruling and would have sustained the objection for the same
reasons set forth in the motion in limine.
As to the testimony of Mr. Harrington, not the
testimony that has occurred but the proffered testimony as
outlined by Mr. Birsic a few moments ago, if Mr. Harrington
testified live in court and the sum and substance of his
testimony was as proffered and outlined by Mr. Birsic, what
would be the position of RealAuction, Mr. Brafman?
MR. BRAFMAN: We would object on the same basis as
in our prior motion in limine.
THE COURT: Is it RealAuction's position that the
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sum and substance of Mr. Harrington's proffered testimony was
subsumed in its entirety within the motion in limine and the
ruling on that motion?
MR. BRAFMAN: Yes, Your Honor.
THE COURT: Court would affirm that ruling and
would sustain the objection for the same grounds as set forth
in the motion in limine.
Subject in each case to the examination of the
rulings on the exhibits to the extent there are any that have
not been ruled on.
As to Mr. Yorty, Mr. Brafman, while he was
testifying live in court, if he testified in sum and substance
as proffered by Mr. Birsic a few moments ago, what would the
position of RealAuction have been?
in our prior motion in limine.
THE COURT: Is it the position of RealAuction that
the sum and substance of Mr. Yorty's testimony as set forth by
Mr. Birsic in his offer a few moments ago was subsumed in its
entirety within the matters before the Court and ruled upon in
the motion in limine?
THE COURT: Court would affirm that ruling and
would have excluded Mr. Yorty's testimony on that point for
the reasons set forth by Judge Ambrose.
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Finally, had deposition excerpts from the
deposition of Mr. Eric Benson, who has been identified as the
founder of the Tek Group been in sum and substance as outlined
by Mr. Birsic a few minutes ago, what would have been
RealAuction's position on the admissibility of that testimony?
our prior motion in limine.
THE COURT: Mr. Brafman, is it RealAuction's
position that the sum and substance of that testimony from
Mr. Benson had been the subject of and was subsumed in its
entirety in the motion in limine and the order granting that
by Judge Ambrose?
THE COURT: Court will affirm that ruling and would
uphold the objection to that testimony at this point as to the
case of each of these subject to a proffer that would be made
and specifically as to rebut or impeachment or on
cross-examination and in that case specific proffered
testimony or exhibits will be considered by the Court on its
own merits in the context of rebuttal or in the context of
impeachment or cross-examination.
Mr. Birsic, in terms of completing the record under
Federal Rule of Evidence 103(a)(2) on this point, we haven't
gotten to the prosecution history and subject to an
examination of the exhibits, is there anything else you think
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the Court needs to put on the record at the moment?
MR. BIRSIC: No, Your Honor.
THE COURT: You had a proffer on another issue?
MR. BIRSIC: We do, Your Honor.
As you know during the live testimony of
Mr. Harrington, we sought to admit or adduce facts that Grant
Street made an information disclosure submission during the
proceedings that were the second reexamination of the '063
patent by the PTO and that that submission was then in the
form of Exhibit 204.
The examiner Mr. Escalantay (phonetic) indicated,
took the submission and indicated at the bottom as part of the
public record of the second reexamination that he had
considered, those are his words, not mine, all materials --
except those that he lined through, and then he lined through
on our information submission all of the references and the
materials that we submitted that he did not consider.
That is part of the public record of the second
reexamination and we sought through Mr. Harrington simply to
say we made a submission of all these materials in connection
with that second reexamination proceeding and here's what was
part of the public record.
Now, I know we have argued this and I don't mean to
rehash it because I think Your Honor has it under advisement
and we do have another crack at this as Your Honor continues

Tab 2
1
Plaintiff,
vs.
company,
Defendant.
CIVIL DIVISION
No. 09-1407
_____________________________
APPEARANCES:
For the Plaintiff:
For the Defendant:
Court Reporters:
K&L Gates, LLP.
210 Sixth Avenue
Akerman Senterfitt
222 Lakeview Avenue
Suite 400
700 Grant Street
412-201-2660
2
I N D E X
DIRECT CROSS REDIRECT RECROSS
PLAINTIFF'S WITNESS:
Kenneth Farmer (Video) 49
Lloyd McClendon 64 157 213 221
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official auction clock maintain sync.
Do you see that?
A. Yes.
Q. Was this a discussion of some problem that Lee County was
experiencing with their official auction clock?
A. I think they noted that the official auction clock was not
keeping current time.
Q. And then you said: RealAuction could not duplicate the
issue. Please send us an example of when and where the
problem occurs, right?
A. That's true.
Q. So, here's at least one instance where a county had a
problem and you had a discussion with an auction clock, right?
A. I stand corrected. There is one instance of somebody
saying the auction clock is -- mentioning the auction clock.
Q. I just want to confirm so that we all understand that you
currently have a 15 percent ownership in RealAuction, correct?
A. Yes, sir, that's correct.
Q. It's also correct, is it not, that on two occasions, you
have authorized the filing of reexamination requests of the
'063 patent, correct?
MS. ARANGO: Objection, Your Honor. I hate to say
this but can we request a sidebar.
THE COURT: We'll go to sidebar.
(Sidebar discussion held as follows:)

Tab 3
1
Plaintiff,
vs.
company,
Defendant.
CIVIL DIVISION
No. 09-1407
_____________________________
APPEARANCES:
For the Plaintiff:
For the Defendant:
Court Reporters:
K&L Gates, LLP.
210 Sixth Avenue
Akerman Senterfitt
222 Lakeview Avenue
Suite 400
700 Grant Street
412-201-2660
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LLOYD McCLENDON, a witness having been previously sworn,
testified as follows:
THE COURT: You remain under oath, Mr. McClendon.
Make yourself comfortable.
Mr. Birsic, I believe there was just some final
wrap-up that you had.
MR. BIRSIC: A few question, Your Honor.
RECROSS-EXAMINATION (Cont.)
BY MR. BIRSIC:
Q. Mr. McClendon, at the end of the day yesterday, we were
talking about the no-lawsuit guarantee that RealAuction issued
to tax collectors as early as October of 2004 as part of its
selling effort and to refocus the questioning, I want you to
take a look at Exhibit 199 that was admitted at the end of the
day yesterday.
Do you have a copy in front of you?
A. I have no copies in front of me.
Q. I'll give you a copy.
Put it up on the screen.
To orient ourselves, this is a copy of the memo or
an e-mail that Ms. Mia Ahmed sent on October 14 to
representatives of the Broward County Tax Collector's Office,
correct?
A. Yes, sir.
Q. Let's go down to the bottom. Let's see who Ms. Ahmed was,
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see her signature line.
Ms. Ahmed was the director of sales and marketing
with RealAuction at the time.
Correct?
A. Ms. Ahmed was a part-time telemarketer but using the title
director of sales and marketing, correct.
Q. You were aware she was using the title director of sales
and marketing, right?
A. Yes, absolutely.
Q. Let's go up to the third line, third paragraph where it
says: Here are some basic points about RealAuction.
So, she says: Here are some basic points about
RealAuction which set us aside from our competitors.
The last one she mentions is this no-lawsuit
guarantee.
Correct?
A. Yes, sir.
Q. She says: RealAuction is the only company that has
endorsements from some of the largest tax buyers in the
country that will back us with a no-lawsuit guarantee.
That is what she was telling tax collectors,
correct?
A. Yes, sir.
Q. And the large tax buyers being referred to here are Gulf
Group and Bank Atlantic, correct?
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A. Yes, I believe those were two of them, yes, that's
correct.
Q. And isn't it true that as early as of October of 2004, at
or about the time this no-lawsuit guarantee is being made by
Ms. Ahmed of RealAuction, Gulf Group or its owner, Jonathan
Politano, provided funding to RealAuction in the amount of
100,000, correct?
A. No, I don't recall -- no, I don't think that's correct.
Q. So you deny that RealAuction received funding from Gulf
Group, from Mr. Politano to help it start up the business?
A. I deny receiving $100,000 from Gulf Group, yes.
Q. How about my next question. You deny that RealAuction
received funding from Gulf Group or Mr. Politano to help start
up the business?
A. I don't believe we have ever received any funds from Gulf
Group.
Q. And so -- but do you deny that Gulf Group --
A. I --
THE COURT: One at a time.
Mr. Birsic, ask your question --
BY MR. BIRSIC:
Q. Did you have something further? I thought you were
finished.
A. Continue. I'm sorry.
Q. So your denial on that subject is complete, correct?
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A. I don't believe we have ever received -- I don't
believe we received funds in 2004 from Gulf Group, no.
Q. Well, my question was, okay, but it's true that you
received from Gulf Group or Mr. Politano hundreds of thousands
of dollars in funding to RealAuction at various times
throughout 2006 and into 2011, correct?
A. I know we received short-term funding during some of the
multiple lawsuits so, yes, I know we have.
Q. And that totaled hundreds of thousands of dollars,
correct?
A. I don't know the total.
Q. Now, isn't it true --
MR. BIRSIC: Your Honor, I seek to cross the
witness on Exhibit 154.
THE COURT: Why don't you begin by asking him if he
can identify it, Mr. Birsic.
MR. BIRSIC: I will, Your Honor.
MS. ARANGO: Your Honor, may I have a copy, please.
THE COURT: I think that's a good idea.
MR. BIRSIC: I have another copy.
BY MR. BIRSIC:
Q. Mr. McClendon, can you take a minute and take a look at
Exhibit 154.
A. Yes, sir.
Q. Do you recognize these as the financial records of
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RealAuction.com from the account QuickReport as of from
January 1, 2006 through January -- October 17, 2011?
A. I couldn't say. I have never seen them before, no.
Q. So you don't recognize these as your own financial
records?
A. I have never seen these before. It appears to be
QuickBooks reports from our company, but I have never seen
them before, no.
Q. Do you recognize Mr. Thomashaw -- who is Mr. Tom
Thomashaw, he's your CFO, right?
A. He's the CFO, correct.
Q. Do you recognize his handwriting in the upper left-hand
corner on the first page?
A. No, sir.
Q. Can you go to the second to the last page.
Do you recognize that as Mr. Thomashaw's
handwriting?
A. No, sir.
Q. So, it's your position that you don't recognize these
documents and you can't authenticate them as your own
financial record; is that correct?
A. I'm saying I have never seen the report before and I don't
recognize his handwriting. I'm not disputing that they're not
ours, I'm saying I have never seen them before.
Q. But whether or not you've seen them before, do you agree
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that these are the financial records of RealAuction as
maintained in the ordinary course of business?
A. Yes, I would probably agree, yes.
MR. BIRSIC: Seek to admit, Your Honor.
THE COURT: Ms. Arango?
MS. ARANGO: Your Honor, I would object.
Relevance. There's no contradiction of testimony, so I don't
believe that there's any basis under 613 or any other rule of
evidence to allow their admission.
THE COURT: Ms. Kienzle, can you read back the last
question and answer.
(Whereupon, the previous question and answer were read.)
THE COURT: Overruled. Admitted.
MR. BIRSIC: Could you please publish the first
page of 154, please.
Go to the top.
BY MR. BIRSIC:
Q. Are you familiar with your QuickBook accounting system
that you use at RealAuction?
A. I understand we use QuickBooks. I don't -- I'm not a user
of the system, no.
Q. But you do see that at the top here this says
RealAuction.com QuickBook Report.
Correct?
A. Yes, sir.
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Q. Can you go to the second to the last page.
You're at the second to the last page,
Mr. McClendon?
A. Yes, sir.
Q. This identifies, does it not, long-term liabilities:
Stockholder loans under something called RA Partners.
Do you see that?
A. Yes, sir.
Q. Can you zoom back and go up to the handwriting at the top.
Do you see where it says Gulf, 16 percent?
A. Yes, sir.
Q. Do you know if that is Mr. Thomashaw, your CFO's
handwriting?
A. No, I don't know.
Q. You don't recognize that?
A. No.
Q. Go down further to the first line entry.
Do you see that entry for October 18, 2004 for
$100,000?
A. Yes, sir.
Q. You deny that this is an amount that was provided to you
by Gulf Group or Mr. Politano, correct?
A. Yes, sir.
Q. Can you go down and scroll down.
Do you see the rest of these amounts?
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Let's go down and look at the 2006 amounts.
So the amounts in 2006, do you deny that these
amounts were provided to you by Gulf Group?
A. Yes, sir.
Q. Go down to the 2007 amounts.
Do you see these amounts?
A. Yes, sir.
Q. On the dates that are indicated?
A. Yes, sir.
Q. Do you deny that these amounts were provided to you by
Gulf Group or Mr. Politano?
A. Yes, sir.
Q. Go down to the next group for 2008 through 2011.
So this is showing some amounts, loan from 2008
through 2011.
Do you deny these amounts were provided to you by
Gulf Group or Mr. Politano?
A. Yes.
Q. There's a middle column that says Decreases. It seems
that there's some repayments here. One repayment of the loan
on July 19, 2007, $925,000.
Do you see that?
A. Yes.
Q. Do you deny that's a repayment to Gulf Group and/or
Mr. Politano?
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A. I don't know the specifics about the -- I don't know the
specifics about the repayment, no.
Q. So you just don't know one way or the other?
A. No, I really don't.
Q. Would that be inconsistent with what your testimony is
concerning the level of funding that you received from Gulf
Group or Mr. Politano?
A. I'm sorry, can you say that again.
Q. I said, is this a payment to somebody in this amount,
$925,000 in 2007, is that inconsistent with your understanding
of amounts that you received from Mr. Politano or Gulf Group?
MS. ARANGO: Objection. Vague.
THE COURT: I think it's argumentative.
You can rephrase, Mr. Birsic.
Sustained, Ms. Arango.
BY MR. BIRSIC:
Q. Can we go to the next page.
Continuing on here now, these are all payments in
2011 and it says: Gulf Group Holding and AC.
I believe that's correct, right?
A. Yes.
Q. Now, do you accept that those are payments to Gulf Group?
A. It says: Payments to Gulf Group. I don't believe we have
ever written a check to Gulf Group. I don't know what this
is. I don't.
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Q. So you deny any knowledge of these financial statements,
correct?
A. Yes, I don't have personal knowledge about it, no.
Q. Last question.
So, isn't it true that at the time that Ms. Ahmed
was making her statements about the no-lawsuit guarantee, you
knew you had the endorsement for that no-lawsuit guarantee
from Gulf Group in your pocket, right?
A. No. I knew that we weren't performing the objectionable
items that all the investors were interested in, which were
the three items that I mentioned yesterday, so, it was
impossible that we would be sued for the same reason.
Q. Well, Gulf Group was the company that sued Grant Street
and several of the tax collectors to stop the 2004 auctions,
correct?
MS. ARANGO: Objection. Relevance. We're getting
outside the scope.
THE COURT: Overruled.
THE WITNESS: They did file a lawsuit asking for
certain relief, that's correct.
MR. BIRSIC: No further questions, Your Honor.
THE COURT: Thank you, Mr. Birsic.
Mr. McClendon, you may step down. Thank you very
much.
Mr. Brafman.

Tab 4
Marc Thoma shaw October 18, 2011 Deposition Designations Played June 13, 2013
#1 (Page 5:08 to 5:171
08 Q Good morning, Mr. Thomashaw?
09 A Good morning.
10 Q My name is Tom Birsic.
11 I'm one of the lawyers representing Grant
12 Street Group in this litigation, and I'm going to be
13 asking you questions today concerning the case.
14 First, could you state, for the record,
15 your full name and your current employer?
16 A Marc David Thomashaw. ReaiAuction.Com,
17 LLC.
Segment #2 (Page 6:11 to 6:13)
11 Q Could you state your current position and
12 title with ReaiAuction.Com, LLC?
13 A I'm the Chief Financial Officer.
Segment #3 (Page 7:23 to 9:05)
23 Q Now, throughout the course of the
24 questioning today I will be referring to
25 ReaiAuction.Com, LLC either as ReaiAuction.Com, LLC or
00008:01 ReaiAuction for a shorthand; is that understood and
02 acceptable?
03 A Yes.
04 Q If at any time you believe that I'm
OS referring to an entity other than ReaiAuction.Com,
06 LLC, the defendant in this case, will you so indicate
07 on the record so that we can be clear about your

..;
"" TRIAL EXHIBIT
f
.:

08responses?
09AYes.
10QThankyou.
11Now,isitcorrectthatyoupreviouslygave
12depositiontestimony,underoath,inthiscase,on
13June28,2011?
14AIbelievethatwasthedate,yes.
15QOkay.Andatthattimeyourealizedthat
16youwereunderoathandunderpenaltyofperjury,
17correct?
18AYes,that'scorrect.
19QAndyourecognizethatyou'reunderoath
20todayforallofyourresponses,correct?
21ACorrect.
22QYouindicatedthatyourcurrenttitleand
23positionwithRealAuctionisChiefFinancialOfficer,
24correct?
25AThat'swhatmytitleis,yes.
00009:01QHowlonghaveyoubeenassociatedwith
02RealAuction?
03AIwouldsaysince2007,althoughIdidsome
04parttimeworkpriortothatwiththecompany,forthe
05company.
Segment#4(Page9:18to11:03)
18QMr.Thomashaw,whendidyoustartdoingany
19realworkofanynaturewithRealAuction?
20AIbelieveitwasin2006.That'stothe
21bestofmymemoryatthispoint.That's,youknow,
22overfiveyearsago,so
23QWhenin2006,thefirsthalfof2006?
24AIdon'tremembertheexacttimeframe.
25Itwassometimeinthatarea.Itcould
00010:01havebeeninthemiddle.
02Asbestcase,narrowingitdown,asfaras
03datesgo.
04QSoyourbestrecollection,atthistime,is
05thatyoufirststartedtoworkwithRealAuction,in
06anycapacity,inthemidnineteen,ormid2006,
07correct?
08ACorrect.
09QOkay.Andwhatexactlywereyoudoingfor
10thematthattime?
11AIwouldjusthelpoutwithsomeQuickbooks
12work,openingdata,youknow.
13Iwasworkingatthetimeforanother
14company,andthiswasjusthelpingout.
15QWhenyousayhelpingout,enteringdatain
16Quickbooks,wouldthatbeenteringfinancialdataand
17informationinthebooksandrecordsofRealAuction,
18atthetime?
19AItwould.Itwouldbeenteringjournal
20entriesor,youknow,postingexpensechecks,things
21ofthatsort.
22QOkay.AndwhenyousayQuickbooks,isit
23correctthatQuickbooksisaformofaccounting
24softwarethatyouutilize,byRealAuction?
25AThat'scorrect.
00011:01QOkay.Isthattypicallyhowyouasthe
02ChiefFinancialOfficeradministerthefinancial
03affairsofRealAuction,throughQuickbooks?
07AThat'swherethefinancialdataisreported
08andrecordedforthecompany.
09QFairenough.Soit'scorrectthatthe
10financialdataforRealAuctionisrecordedandstored
11inaQuickbookssoftwarepackage?
12AThatwouldbecorrect.
13QAndhasthatalwaysbeenthecasesince
14yourfirstinvolvementwithRealAuction,beginningin
15mid2006?
16AIcouldtellyouthatsinceIhadany
17involvementdirectlywithRealAuctionandthe
18financials,theonlysetofbooksorsoftwarethatwas
19usedwasQuickbooks.
20QWhendidyouassumeyourdutiesand
21responsibilitiesasChiefFinancialOfficerfor
22RealAuction?
23AIwouldsaythatthatwassometimein2008,
24rightinthebeginning,asfarasbeingofficially
25titled.
22QIn2007,woulditbefairtosaythatyou
23wereperformingthesametasksthatyouperformasthe
24ChiefFinancialOfficercurrently?
25AIwouldsaytheyweresimilar.Idon't
00013:01rememberifthey'reexactlythesame.
02AtthispointIdoalot.There'smore
03peopleintheoffice,sothere'smoreresponsibility.
04QFairenough.In2007,wasthereanyother
05employeeatRealAuctionwhodealtwiththefinancial
06affairsofthecompany,intermsofkeepingtrackof
07expensesandrecordingfinancialdata?
08AIdon'tbelieveso.
09QWereyouthepersonatRealAuction,during
102007,whowasresponsibleforrecordingfinancial
11data?
12AThatwouldbeintoQuickbooks,that
13wouldbecorrect.
22QOkay.Now,astheCFOofRealAuction,are
23youultimatelyresponsibleforallthefinancial
24affairsofRealAuction?
02AI'mresponsibleforallthebookingofall
03thedata.
04QAreyoualsoisthereanyoneelse
05involvedforthebookingoffinancialdata?
06ANo.
07QDoyouexclusivelyexecuteanybookingof
08entriesoffinancialdataforRealAuctionastheChief
09FinancialOfficer?
12AThat'scorrect.
13QOkay.Andhasthatalwaysbeenthecase
14sinceyoustartedworkingwithRealAuction?
15AIwouldsayyes.
11QMr.Thomashaw,I'mshowingyouwhatwe've
12markedforidentificationasRealAuctionExhibit
13number1,whichconstitutesacopyofPlaintiffGrant
14StreetGroup,Inc.'sAmendedNoticeofContinuationof
15Rule30(b)(6)depositiondirectedtoRealAuction.Com,
16LLC.
17Haveyouhadachancetotakealookat
18Exhibit1?
19AThisisthefirsttimeI'mseeingthis.
20QTakeamomentandtakealookatit.
21Ihavesomequestionsforyouregarding
22pagetwo,butyou'recertainlywelcometoreviewthe
23entireexhibit?
24AOkay.
25QHaveyouhadachancetolookitover,
00030:01generally?
02AI'velookedatpagetwo.Ididn'ttakeit
03homeandmemorizeit.Ijustscannedoverit.
04QHaveyouseenthisnotice?
05AThisisthefirsttimeI'veseenthis
06specificnotice.
07QOkay.Doyouknowthatyouhavebeen
08designatedasthecorporatedesigneeofRealAuction,
09forpurposesofrespondingtocertainareasofinquiry
10setforthinthenotice?
11AYes,butthere'ssomeareasherethatI
12believearesupposedtobecoveredbyouraccounting
13firm.
14QAndthatwouldbeBinstock?
15AThat'scorrect.
16QSothereareonlycertainareasofinquiry
17thatyouaredesignatedasthecorporatedesigneefor
18RealAuction,correct?
19AIcouldgiveyouasmuchinformationon
20theseareasasI'mawareof,buttheremightbemore
21detailsthatIdon'thave.
22QOkay.Isitcorrectthatyouarethe
23corporatedesigneeforRealAuctionforpurposesof
24respondingtoitemBonpagetwo,entitledAreaof
25Inquiry17?
00031:01AYes.
02QAreyoualsothecorporatedesigneeforthe
03purposesofrespondingtoquestionsconcerning
04paragraphConpagetwo?
05AYes.
06QAndthatwouldbeAreaofInquiry19?
07AThatwouldbe.
08QAndareyoualsothecorporatedesigneefor
09purposesofrespondingtocertainaspectsof
10subparagraphA,particularlydetailsrelatingtothe
11accountingtreatmentofinterestpayments,accruals,
12andthedetailsofallloansmadetoRealAuction,
13includingloansmadebyprincipalsandrelatives
14thereof?
15MR.BRAFMAN:I'mgoingtoclarifyand
16respondtothatquestion,Mr.Birsic.
17Mr.Thomashawisnotthe30(b)(6)
18witnessontheaccountingtreatmentof
19interestandaccruals,butheiswith
20respecttotheloans.
21QSoyouarethecorporatedesigneeforthat
22aspectofsubparagraphAthatrelatestothedetails
23ofallloansmadetoRealAuction,correct?
24AThat'scorrect.
22QMr.Thomashaw,I'mgoingtoshowyouwhat
23we'vemarkedforidentificationasRealAuction
24depositionExhibitnumbertwo,whichisamultiple
25pagedocumentcomprisedofexhibitsthatwereprovided
00035:01tousbyyourcounselbeforethedeposition.
02I'daskifyoucanreviewthisexhibitand
03identifyitforus?
04AI'mfamiliarwiththis.
05QAndthisisacopyofthematerialsthat
06youprintedfromtheRealAuctionQuickbooks,tomake
07availableforthedepositiontoday?
08AIbelieveyouhaveacopy.Thisisthe
09actualprintout.
10QSowhatisExhibit2istheactualprintout
11thatyoumadefromtheQuickbooksofRealAuction,
12correct?
13AThat'scorrect.
14QAndtherearecertainhandwritingonthis
15exhibit,forexample,intheupperrighthandcorner
16onthefirstpage,there'sahandwrittennotationthat
17appearstoread,sixteenpercentAdilainterest;do
18youseethat?
19AAdila.
20QAdila?
21AUhhuh.
22QOkay.Iapologizeforthepronunciation.
23I'mphonicallychallenged.
24IfImispronounceanythingduringthe
25courseofthisdeposition,it'sunintentional,andI
00036:01meannooffense;doyouunderstandthat?
02AIunderstand.
03QOkay.Soisthatyourhandwritinginthe
04upperlefthandcorner?
05AUhhuh.
06QAndthereissomehandwrittennotationon
07therightaroundthenumbers,itlookslikesome
08additionbeingperformed,correct?
09AUhhuh,that'scorrect.
10QIsthatyourhandwritingaswell?
11AYes.
12QOkay.Andatthebottomofpageone
13there'ssomehandwriting,confidentialdashattorneys
14eyesonly.
15Isthatyourhandwriting,oristhatyour
16counsel?
17AThat'snotmine.Idon'tknowwhoseitis,
18butit'snotmine.
19QOkay.Solet'sgothrough,onpagetwo.
20There'snohandwriting,exceptthe
21confidentialattorneyseyesonlydesignationatthe
22bottom,correct?
23AUhhuh.
24QExcept,let'sjustsee.
25Onpagetwothere'snohandwritingexcept
00037:01that.
02Pagethree,Idon'tseeanyhandwriting,
03withtheexceptionoftheconfidentialdesignation.
04Onpagefourofthisexhibit,atthetop
05there'ssomehandwritingintheupperlefthand
06corner;doyouseethat?
07AYeah,Iwrotethat.
08QWhatdoesitsay?
09AItsaysMarc,twelvepercent.
10QAndwhatdoesthetwelvepercentreferto?
11ATheinterestrate.
12QOkay.Thenextpage,somehandwritingat
13thetop.Isthatyours?
14AYes.ItsaysLloyd,twelvepercent.
15QLloyd,twelvepercent?
16 A Correct.
17 Q Next page, what is that; I don't know, is
18 there any handwritng on the top of that?
19 A No.
20 Q Pardon?
21 A The answer is no.

Segment #13 (Page 38:10 to 39:10)
10 Q Next page, there's some handwritng at the
11 top that says, Gulf, and there's some other writng.
12 Did you --
13 A Sixteen percent.
14 Q Is that your handwritng?
15 A Yes.
16 Q So you wrote Gulf on this, sixteen percent?
17 A Right.
18 Q Correct; and what does this page reect,
19 as you understand it?
20 A A loan that was made by an investor from
21 Gulf Group.
22 Q Okay.
23 A And they got a certain interest rate on
24 their investment, for loaning money.
25 Q Okay. So you went into the Quickbooks and
00039:01 researched informaton concerning loans from Gulf
02 Group, correct?
03 A I researched all loans that were made,
04 because there's no way I could remember when all these
05 loans were made over the years, and this way it was
06 just printed out for your knowledge, and this way it
07 would be easier for you.
08 Q Okay. So then the last page, does that
09 also reect Gulf Group loan informaton?
10 A It looks like a contnuaton, yes.

Tab 5
TAX CERTIFICATE SALE GUIDELINES l ~ D PROCEDURES
2004 TAX CERTIFICATE SALES
PREAMBLE
The Florida Tax Collectors Association, through its Select Committee on Tax
Certificate Sales, in conjunction with the Department of Revenue has developed the
following guidelines and procedures regarding tax certificate sales. These guidelines
have been developed to (l) answer many of the questions that have been raised in past
years regarding the proper method for conducting a sale, (2) establish statewide
uniformity for tax certificate sales, and (3) address some of the problems that many
counties face in conducting orderly sales. You are strongly encouraged to follow these
guidelines as closely as possible when conducting your 2004 ta:x certificate sale.
We hope these guidelines help everyone to better understand tax certificate sales
and will result in more uniform, competitive and successful sales in 2004.
TA-X CERTIFICATE SALE GUIDELINES
1. Definitions: For purposes of defining the terms used in these guidelines, a "bidder"
means a person who actually appears at the tax certificate sale to bid on tax certificates .

A "registrant" is a person, whether a natural person, corporation, partnership, trust,
pension plan, etc., who registers at the sale, whether in person or through an agent. A
single bidder may represent many registrants (clients) through an agency relationship.
2. Agents: A bidder is entitled to appear at the sale as an agent for any one or more
persons. The tax collector should obtain from the agent the Tax I.D. number or social
security number of each of the age.nt's clients. A separate deposit should be required for
each of the agent's clients.
3. Deposits: Tax Collectors should require a reasonable deposit from each person
registered at the sale, whether the registrant appears at the sale or is represented by an
agent. It is recommended that the deposit be an amount sufficient to pay for costs
associated with the re-advertising and reselling of the tax certificate(s). If a successful
bidder does not timely pay for the certificate(s) on which he was awarded the bid, his
deposit should be forfeited and the bid canceled. Upon the cancellation of a bid, the tax
collector shall resell the certificate(s) the following day or within 10 days of the
cancellation ofthe bid.
4. Identification of Registrants: The tax collector can use any reasonable type of
identification system for identifying all of the registrants at a sale. This system can
utilize numbered cards, identification numbers or any other reasonable identification
method. Placards attached to a stick or any extension should not be used when they
interfere with other bidders' line of sight to the auctioneer.
5. Assistance bv Local Law Enforcement: It is recommended that you request your
local sheriffs department provide a deputy sheriff to attend the sale in uniform, at least at
the start of the sale and especially if you anticipate the possibility of having disruptive
bidders at the sale. Local sheriff's departments are encouraged to provide uniformed
officers to attend the sales.
6. Beginning the Sale: The sale should begin on the date and at the location advertised
and at approximately the time advertised. Once begun, every effort should be made to
conduct the sale daily without any extended closures (except for weekends). The tax
collector should not begin the sale on June 1, sell only one or a few certificates, and then
close the sale for more than one day. The tax collector should use discretion in
determining how late each day the sale will be conducted; that time can vary but should
be announced at the beginning of each day.
7. Order of Sale: Tax Certificates shall be sold in the order in which they appear on the
tax roll. Certificates shall not be sold out of order even if a bidder request that it be done.
8. Sell Individually: Tax Certificates shall be sold one by one and not in blocks. That
is, a certificate representing one parcel of property as it appears on the tax roll shall be
separately auctioned. Groups or blocks of certificates shall not be auctioned together
even if there is no objection from the bidders. For those certificates that are low-priced,
for example, $150.00 (the tax collector has the discretion to set this dollar amount at
$100.00 or $50. 00) or less, the tax collector will inquire if there will be any competitive
bidding on any of these certificates. If the answer is no, the ta,'\ collector will strike off
the group of certificates to the county. If the answer is yes, the bidders may bid on an
individual parcel within the range and that parcel will be auctioned off individually. No
bid is to be accepted on a block of certificates. As long as the tax collector offers the
low-priced parcels in numerical order and accepts bids on those parcels in that order, and
sells certificates individually on the parcels in that order, i ~ is not considered a sale of tax
certificates in blocks.
9. Homestead Property and Propertv in Litigation: Tax Sale Certificates which must
be struck off to the county pursuant to Subsection 197.432(4), (homestead of less than
$100. 00) or tax roll items that are currently in tax assessment litigation prohibiting the
sale of a certificate, shall be left in sequence as they appear on the tax roll but do not have
to be described by the tax collector. When the tax collector comes to one of these
certificates or items, he may either skip the parcel, say "struck off the county at 18%" or
"no sale, in litigation" but the numerical order of the certificates or items must be kept in
sequence.
10. Identifving Certificates: The tax collector should describe each parcel by use of
some reasonable identification such as the sequence number published in the paper, the
tax roll LD. number or other identifying number. Tax collectors are not required to read
the legal description of the property covered by a tax sale certificate.
11. Bids: Each certificate shall be awarded to the person who will pay the taxes
interest, costs, charges and will demand the lowest rate of interest not in excess of the
maximum rate allowed by law. The tax collector may accept bids in even increments and
in fractional interest rates of one-quarter of 1 percent only. If there is no buyer, the
shall be issued to the county at the maximum rate ofinterest allowed by Jaw.
12. Rotational Bidding: Rotational bidding is a violation of the law. Rotational
bidding means any system, procedure or behavior, established or encouraged or allowed
to be established or encouraged, whereby two or more bidders at the sale, or any bidder
together will the tax collector, prevent or attempt to prevent free, open and competitive
bidding on each and every tax sale certificate. For example, ordered, sequences,
cooperative behavior by any two or more bidders, or by any bidder and the tax collector,
whereby certificates are allocated among the bidders at rates higher than what could
otherwise be obtained through free, open and competitive bidding could be classified as
rotational bidding. If a tax collector observes any type of rotational bidding, the tax
collector should take whatever measures are necessary to prevent the occurrence or
continuance of rotational bidding. These measures may include removing the bidder who
attempts to disrupt a sale. Comments such as "It's my tum", "This one's mine", "Let
providing disclosure to persons who are successful bidders; and who after two years
apply for a ta"X deed, and who at the courthouse public auction obtain multiple tax deeds,
for the purpose of resale to multiple purchasers. A seller oflots in property subdivided or
prcposed to be subdivided into 50 lots or more is required to be registered with the
Department of Business and Profession;! Regulation, Division of Florida Land Sales,
Condominiums, and Mobile Homes. Also, if a certificateholder purchases 5 certificates
in sub.:Evision that ccn:c::;:3 25 cr nore lots, and eventually obtained 5 tax deeds, he
would be subject to the provisions of section 498.022, Florida Statutes, regarding
standards for transacting land sales. Therefore, it is recommended that, when purchasing
certificates on lots or parcels in a subdivision, the Department ofBusiness and
Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile
Ho:nes be contacted at (850) 488-1631 to ascertain youuesponsibility with regard to
subsequent sales transactions of lots in that_ subdivision.

Tab 6
Realauctions Tax Certificate, Foreclosure and Tax Deed Auction Clients
TAX CERTIFICATE CLIENTS
Florida (County Tax Collector)
1. Columbia County https://columbiafl.realtaxlien.com
2. Dixie County https://dixiefl.realtaxlien.com
3. Duval County https://duvalfl.realtaxlien.com
4. Escambia County https://escambiafl.realtaxlien.com
5. Flagler County https://flaglerfl.realtaxlien.com
6. Gadsden County https://gadsdenfl.realtaxlien.com/
7. Gilchrist County https://gilchristfl.realtaxlien.com
8. Hendry County https://hendryfl.realtaxlien.com
9. Hernando County https://hernandofl.realtaxlien.com
10. Lee County https://www.leetaxsale.com
11. Levy County https://levyfl.realtaxlien.com
12. Manatee County https://manateefl.realtaxlien.com
13. Orange County https://orangefl.realtaxlien.com
14. Palm Beach County https://palmbeachfl.realtaxlien.com
15. Polk County https://polkfl.realtaxlien.com
16. Putnam County https://putnamfl.realtaxlien.com
17. Santa Rosa County https://santarosafl.realtaxlien.com
18. Sarasota County https://sarasotafl.realtaxlien.com
19. Seminole County https://www.seminoletaxsale.com
20. Suwannee County https://suwannee.realtaxlien.com
21. Taylor County https://taylorfl.realtaxlien.com
22. Walton County https://waltonfl.realtaxlien.com
Arizona (County Treasurer)
1. Coconino County https://www.coconinotaxsale.com
2. Pinal County https://www.pinaltaxsale.com
3. Yavapai County https://www.yavapaitaxsale.com
Colorado (County Treasurer)
1. Adams County https://www.adamstaxsale.com
2. Arapahoe County https://www.arapahoetaxsale.com
3. Archuleta County https://www.archuletataxsale.com
4. Denver City & County https://www.denvertaxsale.com
5. Douglas County https://www.douglascotaxsale.com
6. Grand County https://www.grandtaxsale.com
7. Mesa County https://www.mesataxsale.com
8. Morgan County https://www.morgantaxsale.com
9. Park County https://www.parktaxsale.com
10. Weld County https://www.weldtaxsale.com
Illinois (County Treasurer)
1. Cook County https://www.cooktaxsale.com
Maryland (County Tax Collector)
1. Charles County https://charlescountymd.realtaxlien.com
2. Harford County https://harfordcountymd.realtaxlien.com
Nebraska (County Treasurer)
1. Douglas County https://www.douglastaxsale.com
3
New Jersey (County Tax Collector)
1. Borough of Red Bank https://www.redbanktaxsale.com
2. City of Linden https://www.lindentaxsale.com
3. City of Trenton https://www.trentontaxsale.com
4. Evesham Township https://www.eveshamtaxsale.com
5. Neptune Township https://www.neptunetaxsale.com
6. Township of Toms River https://www.tomsrivertaxsale.com
FORECLOSURE AND TAX DEED AUCTION CLIENTS
Florida (County Clerk of Courts)
1. Bay County Foreclosure Sales
visit http://www.bay.realforeclose.com/
2. Brevard County Tax Deed Sales
visit http://www.brevard.realforeclose.com
3. Broward County Foreclosures Sales
visit http://www.broward.realforeclose.com
4. Charlotte County Foreclosures and Tax Deed Sales

visit http://www.charlotte.realforeclose.com/
5. Citrus County Foreclosure Sales and Tax Deed Sales
visit http://www.citrus.realforeclose.com
visit http://www.citrus.realtaxdeed.com
6. Duval County Foreclosures Sales and Tax Deed Sales

visit http://www.duval.realforeclose.com
visit http://www.duval.realtaxdeed.com
7. Escambia County Foreclosures Sales
visit http://www.escambia.realforeclose.com
8. Hendry County Foreclosures and Tax Deed Sales (Coming Soon)
visit http://www.hendry.realforeclose.com (web site not functional)
9. Hillsborough County Foreclosures Sales
visit http://www.hillsborough.realforeclose.com
4
10. Indian River County Foreclosures Sales
visit http://www.indian-river.realforeclose.com
11. Lake County Tax Deed Sales
visit http://www.lake.realtaxdeed.com
12. Lee County Foreclosures Sales and Tax Deed sales

visit https://www.lee.realforeclose.com
visit https://www.lee.realtaxdeed.com
13. Manatee County Foreclosures and Tax Deed Sales

visit http://www.manatee.realforeclose.com/
14. Martin County Foreclosure Sales
visit http://www.martin.realforeclose.com
15. Marion County - Foreclosure Sales
visit http://www.marion.realforeclose.com
16. Miami-Dade County Foreclosures Sales and Tax Deed Sales (May 2013)
visit http://www.miamidade.realforeclose.com
17. Okaloosa County Foreclosures Sales
visit http://www.okaloosa.realforeclose.com
18. Orange County Foreclosures Sales and Tax Deed Sales (Coming Soon)
visit http://www.myOrangeClerk.realforeclose.com
visit http://www.Orange.realtaxdeed.com
19. Osceola County - Tax Deed Sales
visit http://www.osceola.realtaxdeed.com
20. Pasco County Foreclosures Sales
visit http://www.pasco.realforeclose.com
21. Pinellas County Foreclosures Sales and Tax Deed Sales

visit http://www.pinellas.realforeclose.com
visit http://www.pinellas.realtaxdeed.com
22. Polk County Foreclosures Sales and Tax Deed Sales

visit http://www.polk.realforeclose.com
visit http://www.polk.realtaxdeed.com
5
23. Sarasota County Foreclosures Sales
visit http://www.sarasota.realforeclose.com
24. Volusia County Foreclosure Sales (May 2013) and Tax Deed Sales (June 2013)
visit http://www.volusia.realforeclose.com
visit http://www.volusia.realtaxdeed.com
25. Walton County Foreclosures and Tax Deed Sales
visit http://www.walton.realforeclose.com

Michigan (Treasurers Office)

1. Wayne County Foreclosure Sales
No website

Tab 7

Tab 8
12:15 PM
04/09/13
Accrual Basis
ASSETS
Current Assets
Realauction.com, LLC
Balance Sheet
As of December 31 , 2012
Checking/Savings
BOA Regular Checking
BOA Regular Savings
US Bank Regular Checking
Total Checking/Savings
Total Current Assets
Fixed Assets
Accumulated Depreciation
Computer Equipment
Furniture & Equipment
Leasehold Improvements
Office & Computer Equipment
Office Furniture
Phone System Equipment
Total Fixed Assets
Other Assets
Accumulated Amortization
Website Construction-Asset
Total Other Assets
TOTAL ASSETS
LIABILITIES & EQUITY
Liabilities
Long Term Liabilities
Accrued Interest
Dec 31, 12
152,293.25
202,334.30
8 ,1 92.62
362,820.17
362,820.1 7
-41 2, 966.00
290, 118.16
33,525.67
43,977.14
48,266.61
17,319.75
28,184.55
48 ,425.88
-2,078,470.00
2,129,516.91
51 ,046.91
462,292.96
150,043.48
Loans -Adila Enterprises, SA. 2,625,000.00
Total Long Term Liabilities
Total Long Term Liabilities
Total Liabilities
Equity
Capital Stock
Capital Stock-Adila Enterprises
Capital Stock-LLC partners
Capital Stock-Lloyd
Total Capital Stock
Retained Earnings
Net Income
Total Equity
TOTAL LIABILITIES & EQUITY
PLAINTIFF'S
TR. EXHIBIT
NO. 194
2,625,000.00
2,775,043.48
2,775,043.48
210,000.00
1,000.00
90,012.50
301,012.50
-2,562,982. 15
-50,780.87
-2, 312,750.52
462,292.96
CONFIDENTIAL ATTORNEY EYES ONLY
Page 1
RA_0017300
Jan - Dec 12
Ordinary Income/Expense
Income
Reimbursed Expenses 0.00
Sales
Sales - RA
Sales-Foreclosures & Tax Deeds 3,992,496.00
Sales-Tax Lien Certificates
Sales-Tax Lien Certificates Az 52,405.00
Sales-Tax Lien Certificates Co 97,757.00
Sales-Tax Lien Certificates Fla 1,853,374.16
Sales-Tax Lien Certificates Ill 115,563.00
Sales-Tax Lien Certificates Md 2,974.00
Sales-Tax Lien Certificates Ne 45,000.00
Sales-Tax Lien Certificates NJ 2,000.00
Sales-Tax Lien Certs Cty Held 158,108.97
Total Sales-Tax Lien Certificates 2,327,182.13
Total Sales - RA 6,319,678.13
Total Sales 6,319,678.13
Sales-Services-Income
Sales-Services-DTR 64,175.00
Services-Other 636.50
Total Sales-Services-Income 64,811.50
Total Income 6,384,489.63
Expense
Advertising and Marketing
BusinessWire 1,100.00
Trade Show supplies 5,546.26
Trade Shows 49,912.05
Web Design and Branding 11,460.00
Total Advertising and Marketing 68,018.31
Amortization Expense 129,775.00
Automobile Expense
Auto Non Deductible 4,853.89
Automobile Expense
Automobile Expense-cMedia LLC 10,530.85
Automobile Expense-Daphne 103.50
Automobile Expense-David 545.40
Automobile Expense-Doug 917.19
Automobile Expense-John 426.50
Automobile Expense-Lloyd 12,745.59
Automobile Expense-Marc 12,571.43
Automobile Expense-Maria S 574.01
Automobile Expense-Omar 245.25
Total Automobile Expense 38,659.72
Total Automobile Expense 43,513.61
Bank Service Charges
Bank Service Charges-ACH 22,215.42
Bank Service Charges-Other 1,630.58
Total Bank Service Charges 23,846.00
Computer Center
Cloud Infrastructure Amazon 36,608.77
Comp Equip NAP Offsite Storage 38,428.44
Total Computer Center 75,037.21
12:14 PM Realauction.com, LLC
04/09/13
Profit & Loss
Accrual Basis January through December 2012
Page 1
RA_0017301
Jan - Dec 12
Contractor Labor
Alice Anne Pareti 2,900.00
Allen Bien'aime 1,440.00
Cinthya Garcia 495.00
Danielle Rose Buenacasa 4,540.00
David Krane 3,865.00
Deborah Thomashaw 500.00
Frank Marcelin 3,000.00
Janet Sanabria 240.00
Jason Solorzano 3,220.00
Javier Sotolongo 500.00
Leslie Baca 3,780.00
Lourdes McClendon 500.00
Marc Taylor 85.00
Regina Sara 2,870.00
Renee Williams 550.00
Robert Scott 200.00
Stacey-Ann Lormica 200.00
William Serrano 580.00
Yanjett Viscariello 1,105.00
Total Contractor Labor 30,570.00
Contributions
Campaign Contributions 18,487.05
Charity 1,200.00
Total Contributions 19,687.05
Depreciation Expense 44,912.00
Domain Names
Domain Name Fees 5,256.00
Total Domain Names 5,256.00
Dues and Subscriptions
Colorado Dept 10.00
Dues and Subscriptions-Other 10,619.60
Florida Dept 302.50
Glance Networks 958.80
Maryland Dept 405.00
Netflix 305.56
Total Dues and Subscriptions 12,601.46
Education Classes 253.00
Equipment
Computer Equipment 3,295.00
Computer Expense 5,478.20
Total Equipment 8,773.20
Guaranteed Payments
Guaranteed Payments - Lloyd 313,192.60
Guaranteed Payments - Marc 246,878.10
Total Guaranteed Payments 560,070.70
Insurance
Crime Insurance 0.00
Dental Insurance -649.84
Disability Insurance 12,069.80
Health Dental Life Vision 118,113.58
Health Insurance 32,508.55
Life Insurance Key man 2,010.00
Professional Liability Ins 22,151.68
Rx Insurance 222.00
Vision Insurance -97.50
Workers Compensation 9,524.07
Total Insurance 195,852.34
04/09/13
Profit & Loss
Page 2
RA_0017302
Jan - Dec 12
Interest & Financing
Finance Charges 1,076.55
Loan Interest-Adila Enter SA 499,610.44
Total Interest & Financing 500,686.99
Licenses and Permits 9,016.83
Lobby Expense 40,000.00
Office Expense -223.65
Office Supplies
Office Supplies
Office Supplies-cMedia LLC 568.39
Office Supplies-Daphne 8.26
Office Supplies-Doug 780.69
Office Supplies-John 67.22
Office Supplies-Judy 248.03
Office Supplies-Lloyd 2,576.01
Office Supplies-Marc 6,327.99
Office Supplies-Maria S 28.34
Office Supplies-Robert 1,418.93
Office Supplies-Whit 6,727.36
Software 8,683.44
Total Office Supplies 27,434.66
Total Office Supplies 27,434.66
Parking & Tolls
Parking & Tolls
Parking & Tolls-cMedia LLC 1,469.86
Parking & Tolls-Daphne 19.72
Parking & Tolls-David 200.00
Parking & Tolls-Doug 489.01
Parking & Tolls-Lloyd 260.66
Parking & Tolls-Marc 598.25
Parking & Tolls-Maria S 207.04
Parking & Tolls-Omar 26.45
Total Parking & Tolls 3,270.99
Total Parking & Tolls 3,270.99
Payroll Expenses
BONUS 226,409.02
COMMISSION 0.00
SALARY 1,540,744.00
Wage Garnish Alvita Garcia 4,500.00
Wage Garnish Douglas McClendon 5,175.00
Wage Garnish Robert Cruz 14,064.12
Payroll Expenses - Other 2,433.28
Total Payroll Expenses 1,793,325.42
Perm Labor Certification 0.00
Postage and Delivery
Postage and Delivery
Postage and Delivery-Fedex 1,046.65
Postage and Delivery-Other 1,395.49
Total Postage and Delivery 2,442.14
Total Postage and Delivery 2,442.14
Printing and Reproduction
Printing and Reproduction 13,898.88
Total Printing and Reproduction 13,898.88
Professional Development
Professional Development-Guru 4,392.04
Total Professional Development 4,392.04
04/09/13
Profit & Loss
Page 3
RA_0017303
CONFIDENTIAL ATTORNEY EYES ONLY
Jan - Dec 12
Professional Fees
Accounting 5,350.00
Consulting Fees
Cons Fees-Black Isle, LLC 20,000.00
Cons Fees-cMedia, LLC 119,223.67
Cons Fees-Court Reporting 2,104.80
Cons Fees-Cruz Consulting LLC 165.00
Cons Fees-David C Parkes 4,000.00
Cons Fees-Davis & Hosfield 1,425.00
Cons Fees-FRI Inc. 30,500.00
Cons Fees-Hill Ward Henderson 18,970.50
Cons Fees-Sandholm Enterprises 7,312.50
Cons Fees-Savannah Cons RA 83,140.00
Cons Fees-Tekgroup 8,218.70
Total Consulting Fees 295,060.17
Legal Fees
Legal Fees RA 1,943,056.16
Total Legal Fees 1,943,056.16
Lloyd McClendon-dtr 63,315.00
Total Professional Fees 2,306,781.33
Public Data Files 4,290.00
Reconciliation Discrepancies 0.00
Recording Fees
Recording Fees-other 106.25
Total Recording Fees 106.25
Recruiting 1,837.90
Rent
Rent-Plantation office 167,721.38
Total Rent 167,721.38
Repairs
Building Repairs 243.66
Computer Repairs 330.00
Exterminating Exp 561.41
Janitorial Exp 10,750.00
Total Repairs 11,885.07
Taxes
Payroll-Fica,W/H,Med 137,003.26
Payroll-Futa/Suta 14,371.69
Property Tangible Taxes 2,241.60
Unemployment Tax 0.00
Total Taxes 153,616.55
Telephone
Telephone
Telephone-cMedia internet 881.50
Telephone-cMedia LLC cell 1,608.49
Telephone-Comcast internet 2,519.55
Telephone-Computer network card 1,489.58
Telephone-David cell 200.00
Telephone-Doug cell 2,932.54
Telephone-Doug internet 325.00
Telephone-Greg cell 780.00
Telephone-Ken cell 960.00
Telephone-Lloyd cell 3,357.56
Telephone-Lloyd internet 17.94
Telephone-Marc cell 3,066.27
Telephone-Marc internet 12.51
Telephone-Maria S cell 900.00
Telephone-Office line 4,148.59
Telephone-Robert C cell 1,410.94
04/09/13
Profit & Loss
Page 4
RA_0017304
Jan - Dec 12
Telephone-Whit cell 1,061.84
Telephone-Whit efax 288.75
Telephone XO Services 31,229.75
Total Telephone 57,190.81
Total Telephone 57,190.81
Travel & Ent
Entertainment
Entertainment
Entertainment-cMedia LLC 2,124.39
Entertainment-Doug 1,583.43
Entertainment-John 106.00
Entertainment-Lloyd 513.58
Entertainment-Marc 8,178.22
Entertainment-Maria S. 14.87
Entertainment-Robert 300.06
Total Entertainment 12,820.55
Total Entertainment 12,820.55
Fuel
Fuel
Fuel-cMedia LLC 5,421.15
Fuel-Daphne 90.09
Fuel-David 95.59
Fuel-Doug 88.39
Fuel-Jan 101.50
Fuel-John 80.54
Fuel-Lloyd 1,445.14
Fuel-Marc 743.23
Fuel-Maria S 455.55
Fuel-Omar 44.04
Fuel-Robert 37.55
Fuel-Steven 28.44
Total Fuel 8,631.21
Total Fuel 8,631.21
Meals
Meals
Meals-cMedia LLC 3,730.40
Meals-Daphne 190.00
Meals-David 173.97
Meals-Doug 1,312.82
Meals-John 98.02
Meals-Ken 11.24
Meals-Lloyd 5,884.15
Meals-Marc 2,348.88
Meals-Maria S 729.63
Meals-Robert C 1,517.76
Meals-Savanah Cons 597.08
Meals-Steven 78.69
Meals-Whit 1,140.43
Total Meals 17,813.07
Total Meals 17,813.07
04/09/13
Profit & Loss
Page 5
RA_0017305
Jan - Dec 12
Travel
Travel
Travel-Alain-hotel 4,370.88
Travel-Alice Pareti-hotel 231.18
Travel-cMedia LLC-air 5,188.14
Travel-cMedia LLC-hotel 17,954.21
Travel-cMedia LLC-taxi 469.51
Travel-Daphne-hotel 553.64
Travel-David-air 1,486.00
Travel-David-hotel 904.77
Travel-Doug-hotel 1,781.26
Travel-Jan-hotel 143.19
Travel-Lloyd-air 3,959.59
Travel-Lloyd-hotel 11,107.53
Travel-Lloyd-taxi 111.90
Travel-Marc-air 1,093.89
Travel-Marc-hotel 3,448.73
Travel-Maria S-air 623.80
Travel-Maria S-hotel 312.51
Travel-Robert-hotel 17.98
Travel-Savanah Cons-hotel 6,321.25
Travel-Whit-air 824.20
Travel-Whit-hotel 1,943.35
Travel-Whit-taxi 147.06
Total Travel 62,994.57
Total Travel 62,994.57
Total Travel & Ent 102,259.40
Utilities
Utilities
Alarm System 2,616.72
Gas and Electric 16,453.33
Total Utilities 19,070.05
Total Utilities 19,070.05
Total Expense 6,437,168.92
Net Ordinary Income -52,679.29
Other Income/Expense
Other Income
Interest Income 1,898.42
Miscellaneous Income 0.00
Total Other Income 1,898.42
Net Other Income 1,898.42
Net Income -50,780.87
04/09/13
Profit & Loss
Page 6
RA_0017306
Mar 31, 13
ASSETS
Current Assets
Checking/Savings
BOA Fiduciary Checking 100.00
BOA Regular Checking 102,604.41
BOA Regular Savings 102,405.45
USBank Regular Checking 8,192.62
Total Checking/Savings 213,302.48
Total Current Assets 213,302.48
Fixed Assets
Accumulated Depreciation -412,966.00
Computer Equipment 293,004.55
Furniture & Equipment 33,525.67
Leasehold Improvements 43,977.14
Office & Computer Equipment 48,388.76
Office Furniture 17,319.75
Phone System Equipment 28,184.55
Total Fixed Assets 51,434.42
Other Assets
Accumulated Amortization -2,078,470.00
Website Construction-Asset 2,129,516.91
Total Other Assets 51,046.91
TOTAL ASSETS 315,783.81
LIABILITIES & EQUITY
Liabilities
Accrued Interest 150,043.48
Loans -Adila Enterprises, SA. 2,625,000.00
Total Long Term Liabilities 2,625,000.00
Total Long Term Liabilities 2,775,043.48
Total Liabilities 2,775,043.48
Equity
Capital Stock
Capital Stock-Adila Enterprises 210,000.00
Capital Stock-LLC partners 1,000.00
Capital Stock-Lloyd 90,012.50
Total Capital Stock 301,012.50
Retained Earnings -2,613,763.02
Net Income -146,509.15
Total Equity -2,459,259.67
TOTAL LIABILITIES & EQUITY 315,783.81
04/09/13
Balance Sheet
Accrual Basis As of March 31, 2013
Page 1
RA_0017307
Appendix I
EXHIBITS CITED IN GRANT STREETS PROFFER AND ENTERED INTO
THE TRIAL RECORD IN THE CASE
(ALL OF THESE DOCUMENTS HAVE BECOME PART OF THE OFFICIAL
TRIAL RECORD AND ARE AVAILABLE FOR PUBLIC INSPECTION)
P-51
P-56
P-66
P-154
P-199
EXHIBITS CITED IN GRANT STREET GROUPS PROFFER BUT

NOT ENTERED INTO THE TRIAL RECORD IN THE CASE
P-50
P-55
P-65
P-67
P-69
P-79
P-80
P-81
P-86
P-87
P-88
P-89
P-90
P-96
P-116
P-146
P-147
P-148
P-150
P-153
P-359
P-371
P-372
P-378
P-387
P-393
P-394
P-396
P-417
P-424
P-427
P-429
P-446
P-448
P-456
Appendix II
1
CONTACT INFORMATION FOR
REALAUCTION, GULF GROUP, ADILA, AND HATCHETT

REALAUCTION

Realauction.com, LLC
861 SW 78th Ave.
Suite 102
Plantation, FL 33324

Telephone: (954) 734-7400
Fax: (954) 424-7601
Email: info@realauction.com
www.realauction.com

GULF GROUP
Gulf Group Holdings, LLC
18305 Biscayne Blvd.
Suite 400
Aventura, FL 33160

Telephone: (305) 913-3333

ADILA AND HATCHETT
Adila Enterprises, S.A.
P.O. Box 146
Road Town, Tortola, British Virgin Islands.

Hatchett Developments Ltd.
P.O. Box 146
Road Town, Tortola, British Virgin Islands.

It is unclear whether either company has a telephone number or any other contact information.
However, the address for both companies is also used by Trident Trust Company (BVI) Limited,
P.O. Box 146, Road Town, Tortola, British Virgin Islands. Telephone: 1-284-494-2434.

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REALAUCTION BANKRUPTCY

AND OWNERSHIP SERIES

TAX CERTIFICATE CLIENTS

Florida (County Tax Collector)

1. Columbia County https://columbiafl.realtaxlien.com

2. Dixie County https://dixiefl.realtaxlien.com

3. Duval County https://duvalfl.realtaxlien.com

4. Escambia County https://escambiafl.realtaxlien.com

5. Flagler County https://flaglerfl.realtaxlien.com

6. Gadsden County https://gadsdenfl.realtaxlien.com/

7. Gilchrist County https://gilchristfl.realtaxlien.com

8. Hendry County https://hendryfl.realtaxlien.com

9. Hernando County https://hernandofl.realtaxlien.com

10. Lee County https://www.leetaxsale.com

11. Levy County https://levyfl.realtaxlien.com

12. Manatee County https://manateefl.realtaxlien.com

13. Orange County https://orangefl.realtaxlien.com

14. Palm Beach County https://palmbeachfl.realtaxlien.com

15. Polk County https://polkfl.realtaxlien.com

16. Putnam County https://putnamfl.realtaxlien.com

17. Santa Rosa County https://santarosafl.realtaxlien.com

18. Sarasota County https://sarasotafl.realtaxlien.com

19. Seminole County https://www.seminoletaxsale.com

20. Suwannee County https://suwannee.realtaxlien.com

21. Taylor County https://taylorfl.realtaxlien.com

22. Walton County https://waltonfl.realtaxlien.com

Realauctions Tax Certificate, Foreclosure and Tax Deed Auction Clients

Arizona (County Treasurer)

1. Coconino County https://www.coconinotaxsale.com

2. Pinal County https://www.pinaltaxsale.com

3. Yavapai County https://www.yavapaitaxsale.com

Colorado (County Treasurer)

1. Adams County https://www.adamstaxsale.com

2. Arapahoe County https://www.arapahoetaxsale.com

3. Archuleta County https://www.archuletataxsale.com

4. Denver City & County https://www.denvertaxsale.com

5. Douglas County https://www.douglascotaxsale.com

6. Grand County https://www.grandtaxsale.com

7. Mesa County https://www.mesataxsale.com

8. Morgan County https://www.morgantaxsale.com

9. Park County https://www.parktaxsale.com

10. Weld County https://www.weldtaxsale.com

Illinois (County Treasurer)

1. Cook County https://www.cooktaxsale.com

Maryland (County Tax Collector)

1. Charles County https://charlescountymd.realtaxlien.com

2. Harford County https://harfordcountymd.realtaxlien.com

Nebraska (County Treasurer)

1. Douglas County https://www.douglastaxsale.com

New Jersey (County Tax Collector)

1. Borough of Red Bank https://www.redbanktaxsale.com

2. City of Linden https://www.lindentaxsale.com

3. City of Trenton https://www.trentontaxsale.com

4. Evesham Township https://www.eveshamtaxsale.com

5. Neptune Township https://www.neptunetaxsale.com

6. Township of Toms River https://www.tomsrivertaxsale.com

FORECLOSURE AND TAX DEED AUCTION CLIENTS

Florida (County Clerk of Courts)

1. Bay County Foreclosure Sales

2. Brevard County Tax Deed Sales

3. Broward County Foreclosures Sales

4. Charlotte County Foreclosures and Tax Deed Sales

6. Duval County Foreclosures Sales and Tax Deed Sales