Guo Wengui / Miles Guo — bankruptcy case · ORDER · ECF #2118

UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT BRIDGEPORT DIVISION In Re \* Case No. 22-50073 (JAM) \* HO WAN KWOK and GENEVER \* HOLDINGS CORPORATION, \* \* Debtor. \* LUC A. DESPINS, \* Adv. Proc. No. 23-05017 \* \* Bridgeport, Connecticut Plaintiff, \* August 14, 2023 \* v. \* \* TAURUS FUND, LLC, et al., \* \* Defendants. \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* TRANSCRIPT OF EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION BEFORE THE HONORABLE JULIE A. MANNING UNITED STATES BANKRUPTCY JUDGE APPEARANCES: For the Plaintiff: NICHOLAS A. BASSETT, ESQ. AVRAM E. LUFT, ESQ. Paul Hastings, LLP 200 Park Avenue New York, NY 10166 DOUGLAS S. SKALKA, ESQ. DENNIS M. CARNELLI, ESQ. Neubert Pepe & Monteith, P.C. 195 Church Street New Haven, CT 06510 Proceedings recorded by electronic sound recording, transcript produced by transcription service. Fiore Reporting and Transcription Service, Inc. 4 Research Drive, Suite 402 Shelton, Connecticut 06484 (203)929-9992

APPEARANCES: (Cont'd.) Chapter 11 Trustee: LUC A. DESPINS, ESQ.

Paul Hastings, LLP 200 Park Avenue New York, NY 10166 For the Defendants: MICHAEL T. CONWAY, ESQ. Lazare Potter Giacovas & Moyle, LLP 747 Third Avenue New York, NY 10017 Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 3 of 196

Despins v. Taurus Fund - August 14, 2023 3 (Proceedings commenced at 11:28 a.m.) THE COURTROOM DEPUTY: Case No. 23-5017, Luc Despins versus Taurus Fund, LLC, et al. THE COURT: Good morning. If we could have appearances for the record, please. MR. DESPINS: Good morning, Your Honor. Luc Despins, Chapter 11 Trustee. MR. BASSETT: Good morning, Your Honor. Nick Bassett, from Paul Hastings, on behalf of the Chapter 11 Trustee. THE COURT: Good morning. MR. LUFT: Good morning, Your Honor. Avi Luft, of Paul Hastings, on behalf of the Chapter 11 Trustee. THE COURT: Good morning. MR. SKALKA: Good morning, Your Honor. Douglas Skalka, of Neubert, Pepe and Monteith, also on behalf of the Chapter 11 Trustee. And with me is my partner, Dennis Carnelli, who filed an appearance this weekend. MR. CARNELLI: Good morning, Your Honor. THE COURT: Good morning. MR. CONWAY: Good morning, Your Honor. Michael Conway, Lazare Potter Giacovas & (indiscernible). I've just been retained by Taurus Fund, LLC, and Taurus Management, LLC. And I understand this was set as an uncontested hearing, but we are here.

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Despins v. Taurus Fund - August 14, 2023 4 THE COURT: I think it was set as an uncontested hearing, Counsel, just because no one had filed an appearance. But it's still an evidentiary hearing obviously. It's a preliminary injunction, so. Did you have an opportunity to file a notice of appearance this morning? MR. CONWAY: I did not, Your Honor. I realized when I tried that this morning that I haven't filed since they changed over to the ECF system in this court. And so I made a request that they link my two accounts and they hadn't done it by the time I had left the house. THE COURT: Okay. And are you admitted in the district court for the District of Connecticut? MR. CONWAY: I am. THE COURT: Okay. All right. MR. CONWAY: I've been practicing in this court since Judge Shipp was here. THE COURT: Okay. Thank you. THE COURTROOM DEPUTY: I'm sorry. THE COURT: Go right ahead. THE COURTROOM DEPUTY: I'm sorry. Your Honor, I just didn't get who attorney Skalka said was with him. MR. SKALKA: I'm sorry. THE COURTROOM DEPUTY: I'm sorry. MR. SKALKA: Attorney Carnelli, Dennis Carnelli.

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1 THE COURTROOM DEPUTY: Okay. Thank you. 2 MR. CONWAY: Your Honor, if I may? 3 I will say I reached out to counsel on Friday, 4 night when I realized I was going to be retained, and asked 5 that we reach out to you and try and push this out so I 6 could actually come to an understanding of what the case was 7 about. For obvious reasons, they were not interested in 8 doing that. And I will just say that I just now got the 9 exhibits, so. 10 THE COURT: Okay.

11 who retained you at Taurus Fund?

12 retain you? 13 MR. CONWAY:

14 vehicle of Taurus Fund S.A., and the director of Taurus Fund 15 S.A. retained me. 16 THE COURT: And who is that? 17 MR. CONWAY: It's a Mr. David Fallon. 18 THE COURT: Fallon? 19 MR. CONWAY: Yes. Spelled the way it sounds. 20 THE COURT: F-A-L-L-O-N? 21 MR. CONWAY: Yes. 22 THE COURT: Okay. Thank you. 23 All right.

24 were just some -- the clerk's office had wanted to make sure 25 that exhibits were in order.

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Despins v. Taurus Fund - August 14, 2023 6 flash drive has a different order of exhibits than the list of exhibits. Which is fine. We can work that out as the hearing progresses. But is there anything else, Trustee Despins, you wanted -- you want to let the Court know about before we proceed with the preliminary injunction hearing? MR. DESPINS: No, Your Honor. THE COURT: Okay. I also before -- in the last, I don't know what time it was actually, well, I guess I do, it was 9:55 a.m., received a letter which was docketed in this adversary proceeding by Attorney Henzy. Did you all see that? MR. DESPINS: We did, Your Honor. THE COURT: Okay. Okay. All right. So then please proceed. MR. BASSETT: Your Honor, may I use the podium? THE COURT: Yes, please. MR. BASSETT: Again, Your Honor, good morning. For the record, Nick Bassett from Paul Hastings on behalf of the Chapter 11 Trustee. What I'd like to do, Your Honor, is start by just kind of giving the Court an overview of how we would like to proceed with our evidence today. I anticipate that we will have one witness, the Chapter 11 Trustee, subject to, you know, the need to

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Despins v. Taurus Fund - August 14, 2023 7 potentially call other witnesses depending upon how the hearing proceeds, but I anticipate just the Chapter 11 Trustee. As the Court I think is aware, the Trustee submitted an affidavit in support of the motion for a TRO and preliminary injunction that is on the docket. I'm happy to do it when the Trustee takes the stand, but what we would propose to do is, rather than have him repeat what has already been submitted in a written form in his affidavit, have him adopt that as part of his direct testimony on the stand. And then I have some additional, supplemental, direct testimony that I would like to elicit from the Trustee. At that point obviously we would make him subject to or available for any cross-examination. After that, and I think during the Trustee's examination, we would deal with several of the exhibits in terms of presenting them to the Court and asking for their admission. After that, I anticipate there will be some additional exhibits left on the exhibit list that I don't think I need a witness on the witness stand to introduce. And then I would, as we have in the past, you know, publish those one by one or however the Court would like me to do it, explain the relevance, deal with any

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Luc Despins - Direct - Bassett 8 admissibility issues, et cetera. And then after that I anticipate we would be finished. And then my colleague, Mr. Luft, would be prepared to do a relatively brief closing. THE COURT: That's fine. Thank you. MR. BASSETT: Thank you, Your Honor. So with that, the Trustee would like to call the Trustee himself. (The trustee is sworn.) THE COURTROOM DEPUTY: State your name and address for the record, please. THE WITNESS: Luc Despins, business address 200 Park Avenue, New York, New York. THE COURTROOM DEPUTY: Thank you. LUC DESPINS, Trustee's Witness DIRECT EXAMINATION BY MR. BASSETT: Q Good morning, Mr. Despins. A Good morning. MR. BASSETT: Your Honor, may I approach the witness to hand him a binder that contains a copy of the affidavit that he filed in this case, which I believe is at ECF 5. THE COURT: Certainly. And counsel for Taurus Fund has all the documents

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Luc Despins - Direct - Bassett 9 as well? MR. BASSETT: Sure, Your Honor. MR. CONWAY: Thank you. BY MR. BASSETT: Q Mr. Despins, do you recognize this document as the affidavit you filed in this adversary proceeding and that you signed, dated July 11th, 2023? A Yes, I do. Q And if you go to the past page of that document, is that your electronic signature that prepares there? A It is. Q That appears there? I'm sorry. A It is. Q And, Mr. Despins, is everything that you said in this affidavit true and accurate to the best of your knowledge? A It is. Q Is there anything, sitting here today, that you would like to change in that affidavit? A No. MR. BASSETT: So, Your Honor, with that, and in the name of efficiency, I would ask that the affidavit be admitted as a portion of the Trustee's direct testimony for today's hearing. THE COURT: Counsel? MR. CONWAY: No objection.

Luc Despins - Direct - Bassett 10 THE COURT: Thank you. With no objection with regard to that offer of proof, so that we can proceed accordingly, Attorney Bassett. MR. BASSETT: Thank you very much, Your Honor. BY MR. BASSETT: Q So, Mr. Despins, I have a few different topics I'd like to cover with you today just to supplement a bit what you've already said in the affidavit that you filed. The first topic I'd like to cover is to ask you some questions about some of the exhibits that have been submitted to the Court. MR. BASSETT: And, Your Honor, may I approach the witness to hand him a copy of the exhibit binder, which opposing counsel also has? THE COURT: Yes, you may. MR. BASSETT: Thank you. And, Your Honor, as we go through exhibits, based on the way we have run hearings in the past, I assume that the easiest and most convenient thing for the Court to do is just to pull those up on the docket? THE COURT: Yes. MR. BASSETT: Okay. Excellent. THE COURT: Yes, please. Thank you. BY MR. BASSETT: Q So in a moment, Mr. Despins, I want to ask you some Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 10 of

1 questions about some of the exhibits on the list that are 2 labeled as video exhibits, but before I do that, I would 3 like you to please direct your attention to the exhibit on 4 the list at Exhibit No. 11, if you would, please.

I'm there. 6 MR. BASSETT:

7 have that pulled up from the docket as we go? 8 THE COURT:

9 International Real Estate Group listing? 10 MR. BASSETT: Yes, Your Honor. 11 THE COURT: Yes, we can pull that up. 12 MR. BASSETT: Thank you very much. 13 BY MR. BASSETT:

So, Mr. Despins, based on your professional experience 15 or personal experience or both, do you have an understanding 16 of what Christie's is?

It's a real estate broker.

18 estate broker.

Okay. And do you know where this particular image that 20 we're looking at was obtained?

From their website.

Okay. And this image has a picture of a home.

23 got a description below that says, among other things, 24 quote, "One of the world's magnificent and rare estates," 25 and goes on. It also has at the top a sold price of \$26

1 million. 2 The address that's listed here, Mr. Despins, 675 3 Ramapo Valley Road, are you familiar with that address?

Yes. That's the mansion's address.

That's the address of the mansion that's the subject of 6 the adversary proceeding before the Court?

That's correct.

Thank you. 9 MR. BASSETT:

10 offer this into evidence.

11 helpful to the Court, the purpose of introducing this 12 particular exhibit is just so we have a picture of the 13 mansion in the record. 14 THE COURT: That's fine. 15 Any objection, Counsel? 16 MR. CONWAY:

17 purpose, we have no objection. 18 THE COURT: Thank you. 19 Then Exhibit 11, is Plaintiff's Exhibit, is 20 admitted as a full exhibit. 21 MR. BASSETT: Thank you, Your Honor. 22 (Trustee's Exhibit 11 received in evidence) 23 BY MR. BASSETT:

So as I said, Mr. Despins, I'd next like to ask you 25 some questions about certain of the exhibits that have been

identified as video exhibits. Before I do that, I'd like you to briefly go back and look at your affidavit, which is in front of you, which

again was at ECF 5.

I'm there.

And in paragraph 4 of your affidavit, the second sentence begins with, and here you're talking about exhibits to the complaint, but you said I understand that certain of the exhibits referenced in the complaint, and you say specifically Exhibits 12, 13 and 16, which have been provided to the Court on the video flash drive, as defined in the complaint, are videos that were downloaded from the internet at the direction of Paul Hastings personnel and then supplemented with English translations provided by counsel. Do you see that?

Correct. In paragraph 4, yes.

So can you just maybe describe in a little bit more detail for the Court what you meant it was that you did in terms of directing Paul Hastings personnel to capture certain videos?

Sure. As Your Honor knows, in this case a lot of the evidence comes in through social media postings by the debtor or the debtor's affiliates or entities he controls, so that that's often I wouldn't say the best source, but

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1 probably the only source of evidence available in some 2 cases, and what I did is I directed the team to go and find 3 and look at internet postings regarding the mansion, 4 regarding the relationship between the debtor and the 5 mansion, or the debtor's satellite entities and the mansion, 6 and this is what is being referred to in here.

And did the team do this on their own or did they have 8 the assistance of technology personnel?

Yes. So they had -- there is a vendor that we use for 10 a discovery program. It's called UnitedLex.

11 provide the same service that the -- if Your Honor will 12 recall the GuidePost people who came to testify in December 13 regarding the preliminary injunction, you know, the 14 gentleman who testified about how he's able to capture an 15 image of a URL, of a website, and authenticate that, in 16 fact, that the posting that's presented to Your Honor is the 17 same as the -- as what's available on the internet or was 18 available on the internet, depending on the exhibit.

19 that's -- so the team used and relied on UnitedLex to 20 achieve that as well.

Now again, in paragraph 4, you're talking about certain 22 video exhibits that were submitted with the complaint.

23 you have the associates work with United -- Paul Hastings 24 personnel work with UnitedLex to perform this same process

Fiore Reporting and Transcription Service, Inc.

for any of the exhibits that are on the Trustee's Exhibit

Luc Despins - Direct - Bassett 15 List that's in front of you? A Correct. Same exact process. Q Okay. And if you look at Exhibits 21 through 27 on that list, I believe each of those exhibits, if you look at the title of it, starts with the words video exhibit? A That's correct. Q This process that you just described, was that followed at your direction for each of those exhibits? A Yes, it was. Q Now, in addition to -- in addition to having personnel at your direction capture the videos in the way that you discussed, these videos also have corresponding URL links that are available online, is that your understanding? A That's correct. They're indicated below in every exhibit number. Q In the exhibit list? A Correct. Q Have you personally visited those links and viewed the videos on those links? A Yes, I have. This morning. Q So you viewed each of the videos on Exhibits 21 through 27 this morning? A That's correct. Q You also mention in your affidavit that certain of the videos attached to the complaint were accompanied by Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 15 of

1 translations performed by counsel.

2 that?

We were fortunate in the sense that most of the videos 4 had an English translation provided by the party posting it 5 under the new State Federation of China or GETTR. 6 But in one case, if I remember correctly, in one 7 case, Exhibit 21, the video there was all in Mandarin.

8 therefore, I asked a Mandarin-speaking associate at the firm 9 to translate -- to listen to it first so that we would know 10 what was said, but then to -- after she downloaded verbally 11 the content of the video, I asked her to translate certain 12 segments of the video in English so that, you know, the 13 Court and the parties in interest know what is being said 14 there. 15 And by the way, that translation was not in the 16 documents that I clicked on this morning because that's 17 something that's homemade essentially.

Right. Right.

19 placed on top of the video, or how did that work?

Yeah. Exactly. Yeah.

So that when we watch, if you were to watch the videos 22 that were captured, it would have a translation over certain 23 parts of it?

Correct.

Okay. I'd like to direct your attention to Exhibit --

Luc Despins - Direct - Bassett 17 the Exhibit 21 slip sheet in your binder. MR. BASSETT: And if the Court could have that displayed on the screen, we'd much appreciate it as well. Oh, sorry. I was -- in the first instance, I was asking if we could just have the actual Exhibit 21 PDF slip sheet displayed on the screen. And then after that, we'll go to the actual video clip. THE COURT: Meaning the sheet that says Exhibit 21? MR. BASSETT: Yes, Your Honor. THE COURT: So the cover sheet of the PDF essentially? MR. BASSETT: On the docket. THE COURT: Yeah. MR. CONWAY: And, Your Honor, while that's happening, not having seen any of the videos, I don't want to interrupt the presentation, but I will say that when we get to the obvious point of trying to play the videos, I'm objecting for lack of foundation and hearsay. THE COURT: Okay. Thank you. MR. BASSETT: If you could -- THE COURT: All right. There's the cover sheet, Attorney Bassett, correct? That's what you were looking for? MR. BASSETT: Yes. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 17 of

Luc Despins - Direct - Bassett 18 THE COURT: Okay. MR. BASSETT: Yes, Your Honor. And if we could go to the second page, please. BY MR. BASSETT: Q So, Mr. Despins, is this the website that you were taken to when you clicked on the link to Exhibit 21? A That's correct. Q And that square box or the rectangular box with the picture, is that the video? A It is. Q Now, as the Court is well familiar with, we have talked quite a bit about the GETTR website and GETTR accounts at past hearings in this case. What do you, Mr. Despins, understand GETTR to be? A It's a social platform like, you know, it's called X now. What is it? Q The platform formerly known as Twitter? A Exactly. Formerly known as Twitter, exactly. It's a social platform like Twitter. Q Got it. And you have become familiar with GETTR based on your experience in this case? A Correct. Q What does -- can you remind the Court, because this is subject to past testimony and findings by the Court as well, but where it says on here beneath the box that you said Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 18 of

1 represents the video where it says NFSCTV and then there's a 2 red check next to it, what's your understanding of what that 3 signifies?

It means New Federal State of China TV.

That this is their like GETTR page?

Correct.

7 indicates that it's the source, yes. Verified source.

And what is your understanding of what the New Federal 9 State of China is?

It's an organization.

11 status like a company or something like that, but it's an 12 organization founded by, as the Court held, founded by the 13 debtor, controlled by the debtor. 14 MR. BASSETT: Okay.

15 this is a, as you can see from the image, a 36-minute and 16 30-second video.

17 courtroom the 36 minutes of watching the entire video. 18 What we have done is created 11 separate clips, 19 which upon viewing them, I'll ask the Trustee if they are 20 indeed accurate portions of what he viewed when he viewed 21 the video online. 22 But we will play those for the Court.

23 relevance of the video will be self-evident when we play it. 24 And then after that, I would intend to introduce this -- 25 these video clips into evidence along with this slip sheet.

Luc Despins - Direct - Bassett 20 I also am happy to respond to the arguments that counsel has indicated he plans to raise concerning admissibility. THE COURT: Counsel, go ahead and raise your arguments, please. Your objections. MR. CONWAY: So far, we have not heard anything laying a foundation of the video, how it's made, who made it. I believe the Trustee's indicated that the translation was created by somebody other than him, which is not surprising, but I don't know who that was. It sounds like it was somebody from his office, not a certified translator, so there's no foundation as to the accuracy of the translation. And obviously, whatever it is that's on this video is an out-of-court statement which would constitute hearsay. Again, I apologize, Your Honor, that I have not seen any of the videos, so otherwise I might have been able to stipulate to something, but I haven't seen them yet. MR. BASSETT: So, Your Honor, I'll respond to each of those points. I would start by I just want to make -- just clarify for the record -- so I completely understand and appreciate counsel's brand new to the case. It sounds like he was just retained. He did reach out to us on Friday as Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 20 of Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 21 of

1 he indicated asking if we would be open to a continuance. 2 You know, he didn't reach out to the Court after that. 3 There's been no objection filed by his clients. 4 They were, as the Trustee will testify and as our 5 certificate of service will show, properly served in 6 accordance with the Federal Rules of Bankruptcy Procedure. 7 so in our view their time to respond has lapsed. 8 Obviously I understand counsel is being heard here 9 today, but I just want to be clear that there was no effort 10 on the part of the Trustee to surprise anyone.

11 all of the videos, that we're going to be going through 12 today I believe were exhibits to the complaint, which again 13 we served, so I don't want there to be any confusion or lack 14 of clarity in the record regarding the notice that the 15 defendants have received of today's hearing. 16 As to the specific evidentiary items, first of 17 all, foundation. I think what counsel said is there's been 18 no indication who created the video. 19 Your Honor, the Trustee just testified, there was 20 no objection to the testimony, as to -- and, again, this is 21 based on findings the Court has already made -- and I 22 understand counsel was not around at this point in the case, 23 but during the preliminary injunction hearing in the PAX 24 litigation concerning the protests, there was extensive 25 testimony concerning GETTR, what GETTR is, how it works.

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Luc Despins - Direct - Bassett 22 The Trustee testified that he's familiar with it. He's visited the page. He knows what NFSCTV means. He knows that this is an account. I think based on the process that he described of how these videos were captured online and saved, coupled with the fact that the image that the Trustee said he personally visited, very clearly indicates that the owner of the account who posted the video is the NFSCTV organization. I think that is more than sufficient for purposes of today's preliminary injunction hearing to lay a foundation. Once the video is played, the contents will be self-evident as to their relevance. The second point I would make as to the translation, which we can get to when we see the video, is that the individual who did these translations at the Trustee's direction is actually in the courtroom today. If absolutely necessary, we could call her to the witness stand to testify to the accuracy of the translations on the videos and to answer any questions counsel may have. She is a native Mandarin speaker who was born in China and also speaks fluent English and is more than capable of performing these translations. So should that be necessary, which we don't think it would be, we could put her on the stand for that purpose. Lastly as to hearsay, I think first of all the Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 23 of

1 Court would need to see the videos to understand whether or 2 not the statements made on the videos are, in fact, hearsay 3 statements being made for the truth of the matter asserted. 4 Setting that aside, regardless, it is well 5 settled, I would say ironclad, law in the Second Circuit 6 that on a preliminary injunction the Court can consider 7 hearsay. This is the Mullins case from, I'll get the 8 citation reference, Mullins v. City of New York, 626 F.3d. 9 47, Second Circuit 2010.

10 hearings. 11 The Second Circuit concluded, given the summary 12 and nature of a preliminary injunction hearing, given that 13 it occurs at the outset of a litigation, the Court can 14 consider and can admit into evidence hearsay, period. 15 What the Court observed was that, at the 16 preliminary injunction stage, any hearsay that is admitted 17 into the record would go to the weight of the evidence, not 18 to its admissibility. 19 So I think for all those reasons, Your Honor, I do 20 think these videos are admissible.

21 it views them, will find them to be highly relevant.

22 would ask to proceed on that basis, Your Honor. 23 THE COURT: Okay. Thank you. 24 Anything further, Counsel? 25 MR. CONWAY:

Luc Despins - Direct - Bassett 24 certainly don't believe that they intentionally tried to avoid giving me exhibits. It was a matter of timing. And I would also state that the -- the issue of hearsay, if you have a lack of foundation, a failure of foundation describing how these videos are made, that fundamentally changes the issue of whether hearsay can come in. It's one thing to say we know that this person made a statement and allow that in. It's another thing to say we have no idea whether this video is legitimate, has any accuracy at all, and now we're going to let it in. So there is a connection between allowing hearsay. I don't think it's admissible, period, as counsel stated. I think they have to lay a foundation for why the hearsay testimony has some sort of legitimate foundation. THE COURT: Thank you. Mr. Bassett, would you like to respond? MR. BASSETT: I would just say, Your Honor, that I think I addressed the foundation issue independent of any question of hearsay. And again, we have dealt with this extensively before in this case. And for purposes of developing the record today, I had the Trustee repeat some of the testimony that had already been given about what GETTR is, what it means when somebody posts something to a GETTR account, who NFSCTV is. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 24 of

Luc Despins - Direct - Bassett 25 I think for purposes of today's summary proceeding it is more than sufficient to lay a foundation for the video, to do so with the testimony that the Trustee has given. I think we can play the videos. To the extent counsel, you know, believes they may be doctored, he can make that argument and that could go to the weight, but I do not see any reason why the Court should not consider these videos, just as it has done in identical fashion in the past, including in particular at the PAX PI hearing that I mentioned previously. THE COURT: Okay. Anything further, Counsel? MR. CONWAY: No, Your Honor. THE COURT: Your objection is overruled. And I will note your objection for the record. MR. CONWAY: Thank you, Your Honor. THE COURT: Thank you. MR. BASSETT: With that, if I could please ask the Court, the courtroom deputy, to play clip one. And this would be -- Your Honor correctly noted that we did have some inconsistency between the filed exhibit numbers and the exhibits, the exhibit labels on the thumb drives that we provided, so Exhibit 21 on the thumb drive is actually labeled as Exhibit 9. And there are 11 short clips of Exhibit 9 that we would -- we would like to play. And I'll Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 25 of

Luc Despins - Direct - Bassett 26 start with clip one. (Exhibit 21, clip one, played) MR. BASSETT: All right. So that, that is the end of the first clip. BY MR. BASSETT: Q And before I move on to the next clip, I would just ask the Trustee was this, this clip that we just saw, was that part of the video that you said you viewed this morning when you went online by clicking the link in the exhibit? A It is. THE COURT: And I'd just note for the record that it appears that that video clip, number one, is -- was one minute and 51 seconds, Mr. Bassett, is that right? MR. BASSETT: That is correct, Your Honor. THE COURT: Okay. Thank you. MR. BASSETT: And if I could ask the courtroom deputy to please now play clip two. (Exhibit 21, clip two, played) MR. BASSETT: And for the record, Your Honor, that video, clip two, was 53 seconds. BY MR. BASSETT: Q Trustee Despins, other than the translation that we saw at the bottom of that video, during a portion of the video, was that clip also one -- was that also part of the larger 36-minute video that you saw this morning when you clicked Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 26 of

Luc Despins - Direct - Bassett 27 on the link? A Yes, it was. MR. BASSETT: If we could have the next clip played please, clip three. (Exhibit 21, clip three, played) MR. BASSETT: And we would go on to clip four. Your Honor, when I get finished with these clips, what I would ask is for, because I don't think this has been formally done yet, I would ask for Exhibit 21, the slip sheet, as well as these video clips, to be admitted into evidence. I just wanted to note that now because I was planning to do it at the end. But if the Court would like to do it after each clip, I could do that instead. THE COURT: I think you could do it at the end is fine. MR. BASSETT: Okay. Clip four, please. (Exhibit 21, clip four, played) MR. BASSETT: That fourth clip, Your Honor, was a minute and 27 seconds. One thing I would like to note for the record is all of these clips at the top, right-hand corner have a date stamp of April 12th, 2023. BY MR. BASSETT: Q Trustee Despins, is this clip also part of the video that you viewed online this morning? Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 27 of

Luc Despins - Direct - Bassett 28 A Yes, it is. Q Again, with the exception of the translations? A Correct. MR. BASSETT: Can we play clip five, please. (Exhibit 21, clip five, played) BY MR. BASSETT: Q Trustee Despins, is that also a clip, again aside from any translations, that you saw when you viewed the video online this morning? A Yes. MR. BASSETT: Could we play clip six, please. (Exhibit 21, clip six, played) BY MR. BASSETT: Q And again, same question, Trustee Despins, also part of the video that you viewed online? A Yes. Q Thank you. MR. BASSETT: Clip seven, please. (Exhibit 21, clip seven, played) BY MR. BASSETT: Q And, Trustee Despins, was that video also a part of the broader video that you viewed online this morning? A Yes. Because I recall seeing all the art work around the premises there. Q Thank you. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 28 of

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1 MR. BASSETT: Clip eight, please.

3 BY MR. BASSETT: 4 Q Trustee Despins, that clip eight we watched, was that 5 also part of the video you watched online this morning? 6 A Yes. 7 Q Again, aside from the translations? 8 A Correct. 9 MR. BASSETT: Clip nine, please.

11 BY MR. BASSETT: 12 Q Trustee Despins, clip number nine, which we just 13 watched, was that also part of the video that you watched 14 online at the link to the exhibit list? 15 A Yes. 16 Q Again, without the translations? 17 A Correct. 18 MR. BASSETT: Clip ten, please.

20 BY MR. BASSETT: 21 Q Trustee Despins, clip ten which we just watched, again 22 aside from the translation, the translations, was that also 23 part of the video that you watched online at the link this 24 morning? 25 A That's correct.

Luc Despins - Direct - Bassett 30 MR. BASSETT: And finally clip eleven, please. (Exhibit 21, clip eleven, played) MR. BASSETT: Your Honor, on this particular clip, there were two things I just wanted to highlight for the Court because they will tie into the relevance of certain exhibits that we see later, and I just wanted to make sure that was flagged for the record. The first is there was a reference in the translated portion of this video to antiques that were purchased for the home. I just wanted to flag that. Again, we'll come back to that later. And then I also wanted to note that there was a reference to a place in the home where Mr. Kwok himself had done live streams in the past. We'll also come back to that later. So I just wanted to flag that for the record. BY MR. BASSETT: Q Trustee Despins, this clip eleven, is this also part of the broader video that you viewed online? A Yes, it is. Q Again, minus the translations? A Correct. MR. BASSETT: So, Your Honor, those are all of the clips that we intend to introduce as part of Exhibit 21. As I had indicated previously, at this time, I would like to move for the admission of Exhibit 21, Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 30 of

1 including the cover sheet which shows the original location 2 of the video on GETTR, as well as each of these 11 clips. 3 THE COURT: Counsel? 4 MR. CONWAY: Yes.

5 objections. But before I do, I'm not familiar enough with 6 the exhibits. 7 Did counsel say that he had prepared written 8 transcripts that were attached someplace, because I haven't 9 seen them and it would make a difference if they were 10 something other than what we've seen on the screen. 11 MR. BASSETT: I did not say that, Your Honor.

12 do not have full translations of every video. 13 As I said, this entire video is 36 minutes long. 14 I'm happy to ask the Trustee to describe, you know, 15 generally what happens in the rest of the video.

16 what he'll tell you is that it is a 36-minute tour of this 17 house. 18 We did not think it was a good use of time or 19 resources or necessary to have the entire transcript of the 20 video translated. For among other reasons, is the fact that 21 we had understood that today's hearing was not going to be 22 contested given the fact that defendants who had notice did 23 not respond. 24 We do have our native Mandarin speaking colleague 25 in the courtroom if there are particular portions of the

Luc Despins - Direct - Bassett 32 clips that are played that counsel wants to have translated that weren't translated. We could do that exercise. I think that will prove for a lengthy hearing. But I don't think it's necessary to demonstrate that the portions of the video that we have played for the Court and translated are clearly relevant to the hearing before the Court today. MR. CONWAY: Counsel misunderstood me. I'm not accusing anybody of anything. I wanted to know if there were any translations being attached because all I saw was a portion of the conversation being translated. I thought maybe I missed something. Under the circumstances, I would ask that I be allowed to ask maybe three questions of the witness of voir dire on this exhibit. THE COURT: Of Mr. Despins? MR. CONWAY: Yes. THE COURT: Do you have an objection, Counsel? MR. BASSETT: I certainly don't have an objection to counsel cross-examining Trustee Despins. I don't know what relevance the questioning would have. I'm not suggesting that Trustee Despins has any personal knowledge of the content of these videos. His testimony was that he instructed Paul Hastings' personnel at his direction to take Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 32 of

1 and preserve these videos.

2 objection that was raised earlier with respect to that 3 testimony. 4 So I don't know what counsel has in mind, but 5 again, I obviously have no problem with the witness being 6 cross-examined. 7 THE COURT:

8 him right now. He wants to voir dire him.

9 difference, right? 10 So what are your questions?

11 ask Mr. Despins so I can understand what it is your point of 12 inquiry would be? 13 MR. CONWAY: Thank you, Your Honor. 14 I have three questions.

15 it always turns out to be more.

16 questions. 17 One, does he know where the gentleman got his 18 information that he's conveying in the video?

19 know where the lady got her information she's conveying in 20 the video? And three, why it is we didn't see a full 21 translation? 22 THE COURT:

23 counsel ask those three questions, Attorney Bassett. Okay? 24 MR. BASSETT: Sure. 25 THE COURT: So go ahead.

1 the podium for a moment and then you can ask Mr. Despins 2 those questions, those three questions. Okay? 3 MR. CONWAY: Thank you, Your Honor.

Sir, you've heard my three questions.

7 with the first one.

8 video got the information that he conveyed in the video?

From Mr. Kwok.

And that's based on?

Because he's been appointed by Mr. Kwok.

12 on the left has been appointed by Mr. Kwok as his 13 representative in charge of his satellite entities while 14 Kwok is in jail.

Okay. And the lady in this video, do you know where 16 she got her information relating to this house?

I know that she's a spokesperson for Mr. Kwok because 18 I've seen her on many other videos where she comments on the 19 case, this case, comments on the activities of the Trustee 20 and all that. So I know that she's -- that she's a de facto 21 representative of Kwok, but I don't know precisely whether 22 Kwok conveyed that information to her.

In other words, you didn't interview these folks about 24 this video?

No, I did not. No.

And the third question was about the translation.

2 saw certain pieces of the video translated, but not others, 3 why was that?

Well, because I guess Mr. Bassett described it.

5 know, to do a full-blown translation of these things would 6 cost a fortune. And so what I did ask our Mandarin speaker 7 to make sure that in one sentence they don't say yes, he 8 bought the house and in the next sentence he actually says 9 no, he did not buy the house.

10 sure that the extracts were representative of the discussion 11 and not some outlier. So that I asked. 12 But for her to do a full-blown translation of 36 13 minutes would cost thousands and thousands of dollars and 14 this estate has limited funds. 15 So as long as I can ensure -- I can be sure that 16 the video is representative of what they said, and it's not 17 like just sound bytes taken out of context, and that's the 18 representation she made to me, you know, for me, that's 19 sufficient. 20 Because otherwise if we -- in this case, if we 21 start translating everything that we get in Mandarin, this 22 case would last ten years.

23 documents, Mandarin emails, every day, so it would just be 24 impossible. That's why we take some shortcuts.

25 shortcut is let's make sure that what we're talking about is

Luc Despins - Direct - Bassett 36 relevant. There are many things in there that she told me are irrelevant. For example, they describe an office, office space and all that. You know, it's interesting, but not really relevant to our issue. So what she translated was relevant to our issue of ownership, and making sure, as well, negative assurances on our part that there was nothing Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 36 of

MR. CONWAY: I can speak my objection from my seat now?

in there that was contrary to those clips that we played.

THE COURT: Certainly. Thank you.

MR. CONWAY: Your Honor, I'm going to renew the objection on foundation grounds. It seems that these witnesses have not been interviewed. He's not aware of exactly how they came about their information.

But also, as we saw just now, multiple times, and I can tell you it was in clips three, four, five, six, seven, eight and ten, there was a translation of a question or statement by one side with no translation of the response.

And what we just heard from Mr. Despins is that he asked that only those things relevant to the position of the Trustee be translated. We have no idea whether there are things that were contrary to the position of the Trustee which were not translated.

1 So that's my foundation objection, Your Honor. 2 THE COURT: Thank you. 3 Attorney Bassett? 4 MR. BASSETT:

5 Honor. 6 First of all, as to the translation issue, counsel 7 was free to bring his own translator to this hearing had he 8 wanted to to address any issues that arose. 9 Secondly, as I already said, if absolutely 10 necessary, we have the person who performed these 11 translations in the courtroom. 12 The last thing I would say on -- and, by the way, 13 I think also the characterization of the Trustee's testimony 14 was not -- was not accurate insofar as counsel was 15 suggesting that we were deliberately trying to withhold 16 information that would have been counter to the position 17 that we're taking in this litigation.

18 said the opposite. 19 THE COURT:

20 said. I don't think he said that you were having 21 information that was counter.

22 least what I heard was, that his objection, one of his 23 objections is because certain words spoken were translated 24 and certain words that were spoken were not translated. 25 Is that right, Counsel?

1 MR. CONWAY: That's correct, Your Honor.

2 certainly did not mean to impugn the witness's character. 3 THE COURT: I didn't take it as that.

4 that was the point that was being made. 5 And, you know, I think you may need to call the 6 translator because there are -- there are parts of these 7 videos that I did see some -- one of the two people, whom 8 haven't been identified yet, speaking and then the person, 9 the other person, says something and that doesn't seem, at 10 least to me, to be translated. 11 MR. BASSETT: Sure. 12 THE COURT: So I just want to understand.

13 we're going to use only these 11 clips, then I think they 14 need to be translated. 15 MR. BASSETT:

16 who performed the translations in the courtroom.

17 more than qualified to tell us what else is being said on 18 these videos, so we can -- we can certainly do that. 19 Before going there, I would just respond again to 20 the foundation argument that was -- that was raised.

21 individuals are not themselves being presented as witness to 22 the Court. The rule for admissibility of a video is not the 23 person speaking has to be subject to cross-examination. 24 We already established, based on precedent in the 25 Second Circuit, that hearsay is admissible at a preliminary

1 injunction stage to the extent that information being 2 conveyed is being offered for the truth of the matter 3 asserted. 4 The other thing I would note and remind the Court 5 is that this court previously found at the preliminary 6 injunction hearing that the debtor controls the New Federal 7 State of China. 8 The testimony today has established in unrebutted 9 fashion that these videos were, in fact, posted on the GETTR 10 page of the New Federal State of China.

11 closely, you can see that the woman on the right is holding 12 a microphone bearing the New Federal State of China logo. 13 THE COURT:

15 MR. BASSETT:

16 to throughout the course of all these videos. 17 THE COURT:

18 -- the box essentially says that? 19 MR. BASSETT:

20 THE COURT: Is that what you're saying? 21 MR. BASSETT:

22 Honor.

23 THE COURT: Right above her hand? 24 MR. BASSETT: That's my understanding.

25 the Court can make its own observations in that regard.

1 you can't see it, you can't see it. 2 THE COURT:

3 as good as that video quality. That's all.

4 look at it from that screen I might be able to see it 5 better. 6 MR. BASSETT:

7 issue of foundation.

8 authenticity of these videos having been posted online. 9 Just to repeat one more time, there is essentially 10 precedent or law of the case, in this Chapter 11 case, we 11 have admitted these types of videos in exactly the same 12 fashion. 13 And again, we're now at a point where we have 14 findings by the Court that the New Federal State of China is 15 controlled by the debtor.

16 sufficient, again given a summary nature of this hearing the 17 fact that hearsay is admissible, to allow for these videos 18 to come into evidence. 19 With that, we can have our Chinese Mandarin 20 speaking colleague take the stand.

21 Luft, would handle that examination.

22 just trying to figure out the most efficient way to proceed. 23 THE COURT: Well, that's -- I am as well. 24 MR. BASSETT: Yeah. 25 THE COURT:

1 language that needs to be translated?

2 you said at the beginning. 3 MR. BASSETT:

4 about the other, the other video exhibits, so the Court will 5 see I believe three other videos and each of these other 6 videos that we show only has one clip.

7 videos, so it's not going to be nearly as many as we've had 8 here. 9 There will be three other videos that are 10 relatively short that are posted on the New Federal State of 11 China website as opposed to the GETTR page and those, when 12 posted, have at the bottom Chinese characters and an English 13 translation of everything that's on there.

14 that. Sorry. We didn't add that. That's already on those. 15 Then there are two other videos that were posted 16 by -- or they were posted to the debtor's, Mr. Kwok's, GETTR 17 page, and those are live streams of him speaking Mandarin to 18 his followers. We don't translate those at all.

19 Court sees them, we're just offering them for the fact that 20 he was posting from the house.

21 issue with those because we're not asking for the substance 22 of what he's saying to be admitted into evidence. 23 So I do think that the only -- unless counsel 24 would want to ask questions about the other videos that have 25 already translated, which I don't think is necessary because

Despins v. Taurus Fund - August 14, 2023 42 they're fully -- THE COURT: Well, I don't think the translation issue is necessary. MR. BASSETT: Right. So I do think that now would be the time. THE COURT: I do as well. My question in reviewing these is I just -- it seemed to me part of this, part of the statements that were being made were translated and not all and I just would like to understand that. MR. BASSETT: Understood, Your Honor. MR. CONWAY: Your Honor, if I may? THE COURT: Yes. MR. CONWAY: It's possible when we take a break counsel and I can try and work together to figure out a solution. And part of this, again, is that we didn't have a chance to do that before the hearing. And it's possible we can work something out. THE COURT: So are you saying you'd like to discuss it now before we bring on another -- the witness to testify about the translation? MR. CONWAY: We can do that, Your Honor. But I'm telling you that I don't want to interrupt the flow that counsel has in mind, if we want to postpone this issue until a convenient break time and try and come up with a solution. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 42 of

Despins v. Taurus Fund - August 14, 2023 43 And I'll also point out, Your Honor, when I first reached out to counsel, I indicated that, you know, the Taurus Fund, LLC would not object to an injunction prohibiting it from transferring the asset here. THE COURT: Well, apparently it's not just the asset though. It's the asset and its contents, and what's on the grounds and things of that nature, right? MR. CONWAY: And, Your Honor, and also we would agree not to encumber. The issue that was raised is that it's not a matter of just agreeing not to transfer any of the property, whether it be real or personal, the issue was that they wanted to lock out the owners of the property. That's the only reason we're here. I'm not sure whether this is going to go to that issue or not, but we don't need to waste time on the issue of whether or not this property should be restrained, because that's an issue -- I think it already is restrained. THE COURT: It is. MR. CONWAY: I mean, not just in this court. THE COURT: But that expires tomorrow I think. MR. CONWAY: But I mean, I think the federal court Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 43 of

has restrained it as well. I don't think there's any intent to try and move property real or personal is all I'm saying. THE COURT: But the problem is, and you could be

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1 right, okay, but the problem from what has been presented to 2 the Court through papers and complaints and exhibits is that 3 people are removing things from the -- from the house that 4 are not Mr. Kwok, or apparently the people you represent, 5 that there are other people that are in -- I don't know who 6 these people are, okay.

7 Neither one of these people are your client, 8 correct? 9 MR. CONWAY: I don't know who they are. 10 THE COURT: Okay.

11 allegations, which have not been disputed yet at this point, 12 that people are going in and out of this mansion and taking 13 antiques and other art work and that is valuable and that 14 the Trustee asserts is Mr. Kwok's.

15 then it's property of the bankruptcy estate and that's -- 16 that can't happen when there's this case pending.

17 the assertion. 18 So I hear what you're saying.

19 okay, we'll agree to be restrained, and we'll agree that 20 the, you know, we can be enjoined, but that's not the 21 problem. 22 The problem is why wouldn't your -- if your client 23 would agree to that, then why wouldn't your client agree to 24 have people that don't reside in the home not be allowed to 25 have access to the home and/or remove things from the home?

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1 MR. CONWAY:

2 this property and a personal residence is that this property 3 is used by a number of people for various reasons.

4 never meant to be -- even as these videos show, it was meant 5 to be some sort of a clubhouse for the G Clubs and a place 6 for meetings for the New Federal State of China. 7 The idea that we can't, under the Constitution of 8 the United States, tell people you can't go into your own

10 THE COURT: Well, who says it's their home? 11 Where's the evidence it's their home? 12 MR. CONWAY:

13 the only evidence is that it's the Taurus Fund's property.

15 THE COURT:

16 the Taurus Fund people. You've just said that, right?

17 asked you that question directly are either one of those 18 people your client and you said you don't know who those 19 people are. 20 MR. CONWAY: I don't know who those people are. 21 THE COURT: Okay. 22 MR. CONWAY:

23 THE COURT: So where's your client? 24 MR. CONWAY: -- this is not a two-bedroom house. 25 THE COURT: I understand that.

1 MR. CONWAY: This is like the White House. 2 THE COURT:

3 MR. CONWAY:

4 House. 5 THE COURT: I understand that.

6 where's your client? 7 MR. CONWAY: My client is a fund, Your Honor. 8 THE COURT: I understand that.

9 understand how it works.

10 to run that fund. 11 MR. CONWAY:

12 normally take to prepare for this hearing and put in an 13 opposition, we could have witnesses here.

14 circumstances, I didn't have that time. 15 THE COURT:

16 -- you say in the -- on the one hand you'll agree to be 17 restrained, but on the other hand you're not going to stop 18 people who are not your client from going in and out of the 19 property. And you don't have any evidence from your client 20 that says that other people can go in and out of that 21 property and remove things from that property. 22 Where is the -- there's nothing that I've seen 23 from your client, who are the defendants in this adversary 24 proceeding and who are restrained, from showing me that 25 they've allowed these people to be in here and/or remove --

Despins v. Taurus Fund - August 14, 2023 47 You say the client owns the property. Does the client own all the art? MR. CONWAY: The client owns -- well, I don't know what art is there. I know that I've seen a list -- THE COURT: I understand. MR. CONWAY: -- of all the property they've spent money on. I've seen -- I've seen a lot -- I mean, I don't know -- THE COURT: What does your client do? What is your client's business purpose? MR. CONWAY: You mean the fund? THE COURT: Yes. MR. CONWAY: The fund's investing in -- it depends on which sub-fund you're talking about. But this sub-fund was created for the purpose of investing approximately \$47 million that was recovered by G Clubs in an arbitration that it had with -- it's a public arbitration. I've got the award where they get this money. THE COURT: Okay. MR. CONWAY: They take the money. They put it in the fund. The fund then buys the house, uses the other money to pay for the property that's in the house. There's allegations of a piano that was moved out during the renovations. There's also an allegation in a footnote that says they know where that is, but they just Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 47 of

1 didn't go look to see where it was. 2 So you heard in the video the renovations were 3 going to be complete sometime after this video and that's 4 when people are going to start coming in and using it. 5 The purpose of the property was never so that the 6 debtor could live there as a personal residence.

7 idea now that, you know, everything in it is his, the house 8 is his, there's -- well, we'll let the Trustee put on his 9 proof. But I've seen evidence to the contrary. 10 And I can't -- you don't know me, Your Honor.

11 mean, I've worked with the Trustee for decades.

12 former partners together.

13 lying to you when I say the evidence shows that this house 14 belongs to the people whose money was used to buy it. 15 The request, the ask, is to prove a negative at 16 this stage without time to put together the exhibit list and 17 the witnesses. It's asking too much.

18 time, we'd be happy to try and do that for you, Your Honor. 19 THE COURT:

20 agreed to restraint, the continuation of the restraining 21 order, or preliminary injunction for that matter, it doesn't 22 address the issues that the Trustee has raised, which are 23 people going in and out of this home.

24 accurate, okay, they're going in and out of this home and 25 taking valuable property.

1 client wouldn't agree to that? 2 MR. CONWAY:

3 aware of anybody taking property so we'll let the Trustee 4 prove that allegation. 5 THE COURT: Okay. 6 MR. CONWAY:

7 more than happy to have an order saying nobody could do 8 that, because frankly why would our client want the property 9 taken out? It makes no sense. So, you know. 10 But I'm trying to -- I'm trying to streamline the 11 process, not make it more difficult.

12 offer, Your Honor. I'm trying to help. 13 MR. BASSETT: Your Honor, can I respond briefly? 14 THE COURT: Yes. 15 MR. BASSETT:

16 that conversation.

17 having an agreement or an order by the Court that the 18 property not be transferred or encumbered is not nearly 19 enough in the Trustee's view to protect this asset. 20 As the Court just noted in conversation with 21 counsel, Taurus Fund, LLC is not a natural person.

22 not heard the name of a single person who stands behind 23 Taurus Fund, LLC.

24 co-members, as the evidence will show momentarily, is a man 25 by the name of Scott Barnett, who the evidence will show is

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Despins v. Taurus Fund - August 14, 2023 50 the driver and security guard for the debtor. There has been no indication from counsel during his remarks today that Mr. Barnett lives in this house. He's suggesting that this was simply set up as some sort of commercial base. There's going to be documents in the record showing that this is a residential building and it was designated for that use. It's not a commercial property as is apparent from the listing and everything else the Court has already seen. Counsel referred to the sub-fund, the Taurus Fund, that allegedly used G Club investments to buy this property. Your Honor, the Department of Justice, in its criminal indictment, has charged Mr. Kwok with a close to billion- dollar fraud, a big part of which was his use of G Club investments to fund his own personal expenditures including specifically the acquisition of this house. There's going to be other evidence in the record that shows that the one person who did live in this house, and has all of his treasured personal belongings in the house, is Mr. Kwok. We don't think there's any doubt about that. What we do have, and this is very important, is these videos. The dates on them are, well, it's April 12th, 2023, after the debtor is incarcerated. I don't think it's

Fiore Reporting and Transcription Service, Inc.

any coincidence that this became the, quote/unquote, "Base

1 for the NFSC after the debtor had no physical ability to use

3 Your Honor, the other -- what we're also going to 4 show in some of these videos is there's going to be a video 5 where these same two individuals or their colleagues are 6 standing outside the front door of the property and it's 7 going to look like a college dorm with how many people are 8 coming in and out, constantly.

9 the public. There is extremists. 10 It's not just that -- and there not need be 11 evidence that people are actually removing property from 12 this house, it's the fact that there's a real risk, an 13 eminent risk, that they would do so.

14 they do it? 15 Because these individuals who are members of this 16 movement clearly don't live in the house.

17 owners of the house. It's implausible. It's illogical. 18 Counsel wasn't suggesting otherwise.

19 no reason to treat a house and its belongings like an owner 20 would to preserve value. 21 And if they think these members of the New Federal 22 State of China, who the Court have found in the past were 23 directing the protests at the home of the Trustee and have 24 done things like file proofs of claim in this case in order 25 to delay and disrupt this Chapter 11 case, if they think

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1 they're going to lose this house to the Chapter 11 Trustee 2 as part of this litigation, then I think they'll have an 3 incentive that runs in the exact opposite direction, which 4 is to make sure it doesn't have value for the estate and for 5 creditors. 6 So not only potentially take extremely valuable

belongings such as antiques out of the home, and televisions and other things like a \$25,000 mattress, they may harm and destroy the property. And we'll have more testimony from the Trustee as to his basis for that fear.

But that's what this is all about. It is absolutely not sufficient that this property, which is being used in this manner and should be maintained for the benefit of creditors of this estate, simply be preserved and that it's not sold or encumbered. We need the broader relief that we're seeking in our preliminary injunction.

So that, that's my response. And we'll get into that more in closing argument later, but that doesn't work.

As to how we proceed, I'm happy to take a break on this particular issue given that I think now we have agreed that we're at a transition point where the Trustee would momentarily step down from the stand and we would have or in a manner in speaking colleague take the stand.

If there's a possible solution on that issue, I'm happy to talk about that now.

Despins v. Taurus Fund - August 14, 2023 53 But the broader solution suggested by counsel for this hearing just doesn't work for the reasons that I've suggested. THE COURT: All right. Then we're going to take a break and give the parties some time to talk. It is 12:44. We'll come back at 1:05. All right. So court is in recess until 1:05. And, Mr. Despins, obviously, as you know, you remain under oath. (Court recessed at 12:45 p.m.) (Proceedings resumed at 1:07 p.m.) THE COURT: Please be seated. All right. We took a short recess and the parties were going to discuss a few things I suppose, but certainly with regard to the issue of Exhibit 21. So, Attorney Bassett, do you have anything you would like to report to the Court? MR. BASSETT: Your Honor, so we did speak with counsel to Taurus Fund. We were not able to come up with a solution other than that we both agreed that we would just try to put Ms. Song, we would call Ms. Song to the witness stand and try to deal with any testimony that she needs to provide as expeditiously as possible. THE COURT: Okay. Go right ahead then. MR. BASSETT: And Mr. Luft is going to be handling Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 53 of

Luyi Song - Direct - Luft 54 the examination, Your Honor. THE COURT: Go ahead, Attorney Luft. MR. LUFT: Your Honor, may Ms. Song approach the bench? THE COURT: Yes, please. Go to the witness box, you mean? MR. LUFT: Yes. Thank you. I'm going to stand, and she'll go to the box. THE COURTROOM DEPUTY: Raise your right hand, please. (The witness is sworn.) THE COURTROOM DEPUTY: State your name and address for the record, please. THE WITNESS: My name is Lui Song, L-U-Y-I S-O-N- G. Address at 200 Park Avenue, New York. THE COURT: You know what, yeah, I think the microphone didn't pick you up. THE WITNESS: Oh, I need to speak into the mic? THE COURT: I'm sorry. THE WITNESS: Okay. Yeah. My name is Luyi Song, L-U-Y-I S-O-N-G. Address is at 200 Park Avenue, New York. THE COURTROOM DEPUTY: Thank you. THE COURT: You can be seated. Thank you. MR. LUFT: Thank you, Your Honor. For the record, Avi Luft of Paul Hastings on Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 54 of

Luyi Song - Direct - Luft 55 behalf of the Trustee. Your Honor, if I may, I'm going to do a little bit of background with Ms. Song and then get to the questions. THE COURT: Sure. LUYI SONG, TRUSTEE'S WITNESS, SWORN DIRECT EXAMINATION BY MR. LUFT: Q Ms. Song, where were you born? A I was born in China. Q Okay. And what is your native tongue? A Jinan, Shandong Province. Q And what language did you speak growing up? A Chinese. Q Can you tell the Court a little bit about your educational background? A Sure. I went to primary school in China. I went to middle school in China. Language of instruction for both schools was primarily Chinese or actually only Chinese. I went to high school in Singapore, where the language of instruction was English. I went to college in Germany, where the language of instruction is English. I graduated from the University of Minnesota Law School, where the language of instruction was English. And now I'm working at Paul Hastings. Q And in what language do you do your work at Paul

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Luyi Song - Direct - Luft 56 Hastings? A In English. Q And in which departments do you work? A I work full time for the Bankruptcy M&A Department. Q In what languages are you fluent? A I'm fluent in English. And Chinese is my native language. Q Thank you, Song. MR. LUFT: Your Honor, at this point, I'm going to turn to the work she did in this matter if that's okay with the Court? THE COURT: Yes. Go right ahead. BY MR. LUFT: Q Ms Song, there was a video that was played and a number of clips, were you here to see that? A Yes. Q I believe that was Trustee Exhibit 21, which on thumb drive has been marked ast Exhibit 9. A Yes, correct. Q Okay. Ms. Song, did you watch all of Exhibit 21? A Yes, I did. Q And you were asked to translate portions of it? A Yes, I did. Yes, I was. Q Let me ask you, for the whole, all of what is at Exhibit 21, marked as Exhibit 9, is there any portion of Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 56 of

1 that video that you did not translate that is inconsistent 2 with anything that you did translate?

No.

Okay. And why did you choose to translate the portions 5 that you did translate?

Because Mr. Kwok was referenced in those sections.

And in the entirety of the other video, was any other 8 individual or entity referenced as being the owner of the 9 mansion at any time in the remainder of the video?

No. 11 MR. LUFT:

12 really want to do is see how we could be helpful to the 13 Court. There are a number of clips.

14 issues about portions that were not translated.

15 available to translate those portions if that would be of 16 assistance to the Court.

17 pen and paper and that we pause it while we do it. 18 THE COURT:

19 he's looking for as well. 20 But my point was -- and I can definitely give you

22 MR. LUFT: I have one, Your Honor. 23 THE COURT: Okay. Thank you. 24 I just, when I was looking at the video, there 25 were certain points where one of the two individuals was

1 speaking and that those words were not translated.

2 just was curious as to why they were not translated? 3 THE WITNESS: Understood.

4 portion where Mr. Kwok's name was referenced.

5 ones that were not translated, they do not contain 6 substantive content. 7 THE COURT: Okay. And they don't contain Mr.

9 THE WITNESS: No. 10 THE COURT: -- so you didn't translate it? 11 THE WITNESS: That's correct. 12 THE COURT: Okay.

13 clips of the videos that you'd like to have Ms. Song 14 translate? 15 MR. CONWAY: Yes, Your Honor. 16 What Mr. Bassett and I discussed was the numbers 17 of the clips that had, you know, questions translated, but 18 not answers, and so on. 19 And what we discussed was that, as the witness 20 indicated, as long as it have -- there be a pause each time 21 a portion was -- a portion of the testimony was given so 22 that it could be translated, that's the way we talked about 23 handling this here. 24 THE COURT: All right.

25 proceed?

Luyi Song - Direct - Luft 59 MR. CONWAY: Playing the -- THE COURT: You had mentioned three -- you had a list it appeared to me of a few clips that you had questions about. MR. CONWAY: Correct. And I gave those numbers to Mr. Bassett, who I assumed passed them on. THE COURT: Okay. Okay. So you're going to pulls those up? We're going to pull those up and we're going through, okay. MR. LUFT: We will, Your Honor. THE COURT: So go ahead. What clip are we going to look at again first? MR. LUFT: My understanding the first clip Mr. Conway wants to see is clip number three from Exhibit 21. THE COURT: Okay. MR. LUFT: So if I could ask that to be brought up. THE COURT: Thank you. That will happen momentarily. (Exhibit 21, clip three, played) MR. LUFT: And again, I'll ask that the witness be allowed to just to ask that it be paused when she needs to make sure that the translation is accurate and she has sufficient time. THE COURT: Okay. So we shall start again? Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 59 of

Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 60 of

1 MR. LUFT: Please, Your Honor. 2 THE COURT: Okay. Go right ahead.

4 THE WITNESS: Please pause. 5 THE COURT: Please pause. Okay. 6 THE WITNESS:

7 13 acres. And the woman commented it's pretty big.

8 man said it's pretty big. 9 THE COURT: Okay.

11 THE WITNESS: Please pause. 12 THE COURT: Please pause. Yeah. 13 THE WITNESS:

14 (indiscernible) Brother and see the place. 15 THE COURT: Say that again.

16 the gentleman? 17 THE WITNESS:

18 follow (indiscernible) Brother, which I believe is the 19 gentleman here in the video and see the place. 20 THE COURT: Okay. Thank you.

22 THE WITNESS:

23 saying is so this building. 24 THE COURT: Okay. 25 MR. LUFT:

Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 61 of

1 that, we can move to the next clip. 2 THE COURT: Do you have any, Counsel? 3 MR. CONWAY: No, Your Honor. None. 4 THE COURT: Okay. Thank you. 5 Then let's move to the next clip. 6 MR. LUFT: Thank you. 7 The next one is clip four. Thank you.

9 THE WITNESS: Please pause. 10 The woman says it has historical and cultural 11 values.

13 THE WITNESS: Please pause. 14 She said this is the Palace of (indiscernible) the 15 United States.

17 MR. LUFT: Can I ask for a pause. 18 THE COURT: Pause, please. 19 MR. LUFT:

20 about reading the microphone.

21 to do at this point. 22 THE COURT: Yeah. I can see it.

23 minute ago as well. 24 MR. LUFT: Okay. 25 THE COURT: Thank you.

Luyi Song - Direct - Luft 62 (Exhibit 21, clip four, played) THE WITNESS: Please pause. He said inside the building we did a lot of renovations. (Exhibit 21, clip four, played) THE WITNESS: Please pause. He said in the past year, the year of 2022, this entire place has been renovated and was under renovation. (Exhibit 21, clip four, played) THE WITNESS: Please pause. He said now you can see some of the places are still not done yet. And we can see as we pass by that there are still places under construction. (Exhibit 21, clip four, played) THE WITNESS: Please pause. So the lady says last time in April the 8th about 500 fellow (indiscernible) from 20 global farms went to see this place for the first time. (Exhibit 21, clip four, played) THE WITNESS: Please pause. The last sentence she said before the translation was, so they, meaning the fellow (indiscernible), they were deeply touched. (Exhibit 21, clip four, played) THE WITNESS: Please pause. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 62 of

Luyi Song - Direct - Luft 63 So the man says this place is for the fellow (indiscernible) to meet up. The three C office was not big enough. THE COURT: The what office? THE WITNESS: So I believe the three C office they're referring to was the office at 3 Columbus Circle, New York. THE COURT: Thank you. MR. LUFT: Your Honor, again, I'll turn to Mr. Conway. THE COURT: Counsel, do you have any questions about that? MR. CONWAY: I don't. Thank you. THE COURT: Okay. Thank you. And what's the next clip? MR. LUFT: Clip five, Your Honor. THE COURT: Clip five. Okay. (Exhibit 21, clip five, played) THE WITNESS: Please pause. I believe they were talking about the organ pipe in the building and the man says last time a fellow (indiscernible), I believe the name is Qmey, was playing it and was able to produce a sound from the pipe. THE COURT: Could you spell that name Qmey, please. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 63 of

Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 64 of

Luyi Song - Direct - Luft 64 THE WITNESS: It's Q-M-E-Y. THE COURT: Thank you. (Exhibit 21, clip five, played) THE WITNESS: And please pause. The last sentence the man says was I believe he was -- he meant the pipe was different from a piano. So the organ pipe is different from a piano. (Exhibit 21, clip five, played) THE WITNESS: Please pause. He said -- the man says this place for the past few decades has been a seminary and it's a place of faith. (Exhibit 21, clip five, played) THE WITNESS: Okay. The last comment made by the man was that this place is of historical importance and is a historical relic. THE COURT: Anything further, Counsel? MR. CONWAY: Not on that, no. THE COURT: Okay. MR. LUFT: Your Honor, clip six is the next one we've been requested to play. THE COURT: Clip six. Okay. (Exhibit 21, clip six, played) THE WITNESS: Please pause. The party said before the translation starts was the farms, the vegetable farms.

Luyi Song - Direct - Luft 65 (Exhibit 21, clip six, played) THE WITNESS: The last part he says these have all been -- I believe he meant to say under renovation or construction. MR. CONWAY: Nothing from me. THE COURT: Nothing? Okay. MR. LUFT: Okay. Clip seven is the next one we've been requested to play. THE COURT: Clip seven. (Exhibit 21, clip seven, played) THE WITNESS: Please pause. The man says this place for the past few decades has been able to host two to 300 people, 100 to 200 people. I'm sorry. (Exhibit 21, clip seven, played) THE WITNESS: The last part he says, yes, 2000 to 3000 people in this place. MR. LUFT: Your Honor, Mr. Conway? THE COURT: Anything further? Any questions, Counsel? MR. CONWAY: No. I appreciate the translation. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 65 of

THE COURT: Is that all the clips now?

MR. LUFT: No, there's two more, Your Honor.

THE COURT: That's fine.

MR. LUFT: I apologize.

Luyi Song - Direct - Luft 66 THE COURT: That's fine. That's not a problem. MR. LUFT: Clip eight is the next one we've been asked to play. (Exhibit 21, clip eight, played) THE WITNESS: Please pause. He said the seminary, the old organ pipe, and there's a sauna room here. (Exhibit 21, clip eight, played) THE WITNESS: And the last word she said before the translations start are entertainment facilities. (Exhibit 21, clip eight, played) THE WITNESS: Please pause. He said including how to receive these people, how to manage the registration and sign up. Would you mind going back maybe two or three seconds? I didn't catch the last part. Thank you. (Exhibit 21, clip eight, played) THE WITNESS: Please pause. He said for G Club annual meeting for the premium members and also for smaller groups of people. (Exhibit 21, clip eight, played) THE WITNESS: Please pause. He said how are we going to receive them? There will be plans in the future. (Exhibit 21, clip eight, played) Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 66 of

1 THE WITNESS: Please pause. 2 He said this place is where the G Club members can 3 enjoy. And he also said the NFSC fellow fighters are also 4 welcome to come.

6 THE WITNESS:

7 (indiscernible) Brother, when I first joined the 8 whistleblower movement I never thought, and the clip ended. 9 THE COURT: Thank you. 10 MR. CONWAY: Thank you. 11 THE COURT: And then we have the last? 12 MR. LUFT: One more, Your Honor. 13 We've been asked to play clip ten. 14 THE COURTROOM DEPUTY: I'm sorry.

15 ten? 16 MR. LUFT: Yes. 17 THE COURTROOM DEPUTY: Okay. 18 (Exhibit 21, clip 10, played. 19 THE WITNESS: Please pause. 20 So what the lady was saying before the 21 translations start was a group of Chinese people with dark 22 hair and yellow skin came to this place.

24 THE WITNESS: Please pause. 25 The last sentence the man says is in between this

1 place has been a seminary for a few decades. 2 THE COURT:

3 MR. CONWAY: Thank you. That's it.

4 clips? 5 MR. LUFT:

6 we've been asked about. If you have any questions for Ms. 7 Song, she's available. 8 THE COURT: I don't have any further questions. 9 Thank you. That was helpful to me. 10 So Counsel, do you have any further questions? 11 MR. CONWAY:

12 answer. 13 THE COURT: Okay. Go right ahead. 14 MR. CONWAY: Thank you.

16 BY MR. CONWAY:

Good afternoon.

Good afternoon.

You mentioned that your native language is Chinese?

Correct.

Which dialect?

Mandarin Chinese.

And which dialect -- which dialect is being used in the 24 video?

Mandarin Chinese.

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Luyi Song - Cross - Conway 69 Q Thank you. THE COURT: Anything further, Attorney Luft? MR. LUFT: No, Your Honor. THE COURT: Okay. You can step down, Ms. Song. Thank you very much. THE WITNESS: Thank you, Your Honor. (Witness excused) THE COURT: All right. Mr. Bassett? MR. BASSETT: Yes, Your Honor. THE COURT: You're now moving for the admission in full of Exhibit 21? MR. BASSETT: Yes, Your Honor. THE COURT: Counsel, you stand on your objection? MR. CONWAY: Stand on the objection, Your Honor. THE COURT: Thank you. All right. I've considered the Exhibit 21 and the objection from counsel, and I understand the objection, and I understand the reasoning behind the objection, but I am going to overrule the objection and admit Exhibit 21 as a full exhibit. And your objection is noted for the record. MR. CONWAY: Thank you, Your Honor. THE COURT: Thank you. (Trustee's Exhibit 21, with video labeled Exhibit 9 on thumb drive, received in evidence)

Luc Despins - Direct - Bassett 70 MR. BASSETT: Your Honor, at this point, if it pleases the Court, we would continue the Trustee's testimony. THE COURT: Yes, please. Yes. Thank you. MR. BASSETT: May the Trustee approach and -- THE COURT: Yes. MR. BASSETT: Thank you. LUC DESPINS, Previously Sworn DIRECT EXAMINATION, Cont'd BY MR. BASSETT: Q So, Mr. Despins, we have now talked about Exhibit 21 on the Trustee's exhibit list. We have a few more videos which I think will go relatively quickly, at least more quickly than Exhibit 21 did, that I'd like to -- additional video exhibits that I would like to show you. MR. BASSETT: And if the courtroom deputy could please pull up from the Trustee's exhibit list on ECF the PDF exhibit page for Exhibit 24. Thank you very much. And then if you can scroll to the page, please. BY MR. BASSETT: Q So earlier, Mr. Despins, I asked you if you had clicked on the links for each of Exhibits 21 through 27. I believe that you said you did. Did you, for this Exhibit 24, did you visit that link this morning? A Yes, I did. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 70 of

And does what is shown here on this Exhibit 24, is that consistent with what you saw when you visited that website this morning?

It is.

And again, you see at the top it says the New Federal State of China, is it your understanding that this is a website associated with the New Federal State of China?

Yes, it is.

And then this black, again this black box that has the rectangle in the middle of the screen, with the April 9th, 2023 date on the left-hand side, is that to your understanding a video?

Yes, that's a video I watched.

You watched that video this morning?

Yes.

Okay. And you previously described a process by which Paul Hastings' personnel, working with a vendor, preserved and created slips of videos.

they created a clip of this video too?

That's correct. MR. BASSETT:

the Court what is marked on the thumb drive as I believe Exhibit 22, which corresponds to Trustee's Exhibit 24. (Exhibit 24, with video labeled Exhibit 22 on thumb

Luc Despins - Direct - Bassett 72 BY MR. BASSETT: Q Mr. Despins, is that the video that you saw when you visited the link for Exhibit 24 earlier this morning? A Yes, it is. Q And do you recognize the building or structure that appears in the background of this video? A Yeah. The Mahwah mansion, yes. MR. BASSETT: And this, Your Honor, was the full, this is not a clipped version, it's the full version of the video for the record. And that is not a translation that we provided. That's a translation, as I described to counsel, that was actually on the video posted online. With that, Your Honor, we would move for the admission of Trustee's Exhibit 24. THE COURT: Thank you. Counsel? MR. CONWAY: Thank you, Your Honor. Similar to the last video, the foundation has not been properly laid as to how this video was made, who the speakers are, what their -- what their reason for saying the things that they're saying on this video or the manner in which this video was created or even preserved here for us today. And based on that, even though again this is a preliminary injunction hearing, I believe that the hearsay Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 72 of

1 objection is also well taken. 2 THE COURT: Thank you. 3 Attorney Bassett? 4 MR. BASSETT:

5 that have already been made.

6 findings with respect to NFSC. 7 Your Honor will also recognize the G Translator's 8 logo in the upper, right-hand corner, which also was the 9 subject of prior testimony and evidence before this court. 10 I think we have laid the foundation for this 11 document by the Trustee having testified as to the process 12 by which it was preserved, the fact that it is located on 13 the NFSC website. 14 And as to the hearsay issue that counsel raised, I 15 would note that we are in large part introducing this 16 exhibit to show the level of activity that is occurring at 17 the Mahwah mansion, the people going in and out, which I 18 kind of alluded to earlier.

19 on a college campus. That's not hearsay.

20 be seen from the video itself. 21 And for all those reasons, Your Honor, we think 22 this video is admissible and we would ask for it to be 23 admitted into evidence. 24 THE COURT: Okay. Any response, Counsel? 25 MR. CONWAY:

1 references to other litigation where things had been proven 2 and I wasn't there and I don't think they relate to this 3 case. 4 I would agree though that this reminds me of my 5 college campus. 6 THE COURT:

7 the thumb drive are admitted in full over objection. 8 MR. BASSETT: Thank you, Your Honor. 9 (Trustee's Exhibit 24, with video labeled Exhibit 22 on

11 MR. BASSETT:

12 back to the exhibit list itself. 13 And if the courtroom deputy could please pull up 14 the cover page for Exhibit 25. Thank you. 15 You'll see there is a URL there like there has 16 been on the last exhibits.

17 the next page, please. 18 BY MR. BASSETT:

Trustee Despins, did you also visit the link this 20 morning associated with this video?

Yes, I did.

And did it take you to a webpage that looks like the 23 one that appears here on Trustee's Exhibit 25?

Correct.

And again, this is the New Federal State of China

Luc Despins - Direct - Bassett 75 website like the last video? A It is. Q And you instructed your team with the assistance of a vendor to preserve the video that appears on the screen? A We did. MR. BASSETT: With that, I would like to play this video which is at, again, it's Trustee's Exhibit 25, but on the thumb drive this one is labeled as Exhibit 23. (Exhibit 25, with video labeled Exhibit 23 on thumb drive, played) BY MR. BASSETT: Q Mr. Despins, was this video that we just saw the same video that you saw when you clicked on the link for Exhibit 25 this morning? A It is. Q There were some -- if you were following along, there were some mentions in the translated text to a Brother Seven. Based on your experience in this case or otherwise, do you have an understanding of who that's a reference to? A Yeah. That's an alias for Mr. Kwok. It's referred to in many documents. And the indictment actually refers to Brother Seven. MR. BASSETT: I would just note for the Court again the date of this video is April 9th, 2023. According to the image on the screen there, there's a New Federal Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 75 of

Luc Despins - Direct - Bassett 76 State of China logo in the bottom left. And then in the top right, again, we see G Translators. With that, the Trustee would move for the admission of the video that appears at Trustee's Exhibit 25. THE COURT: Counsel? MR. CONWAY: Your Honor, if I may, may I incorporate by reference my objection to Exhibit 24? THE COURT: Yes, you may. Thank you. MR. CONWAY: Okay. Same objection. THE COURT: Thank you. Exhibit 25, that's just the cover page, and Exhibit 23 on the thumb drive, which is the corresponding video, are admitted in full over objection. MR. BASSETT: Thank you, Your Honor. (Trustee's Exhibit 25, with video labeled Exhibit 23 on thumb drive, received in evidence) MR. BASSETT: At this point, if we could do the same exercise pulling up the PDF slip sheet for Trustee's Exhibit 26. Again, this exhibit slip sheet contains a URL there. And if you scroll down to the page. BY MR. BASSETT: Q Trustee Despins, was this another URL that you clicked on this morning? A Yes, it is. Q And again, it's to the New Federal State of China Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 76 of

Luc Despins - Direct - Bassett 77 website? A Correct. Q And there's a video on this page? A Yes, there is. Q Is this one of the videos that you asked your team to preserve according to the process we talked about this morning? A Yes, it is. MR. BASSETT: With that, I would like to play the video associated with Trustee's Exhibit 26, which was labeled as Exhibit 24 on the thumb drive. (Exhibit 26, with video labeled Exhibit 24 on thumb drive, played) BY MR. BASSETT: Q Trustee Despins, the clip that we just watched, was that the same video that you viewed this morning when you clicked on the link associated with Trustee Exhibit 26? A Yes, it was. MR. BASSETT: With that, Your Honor, we would similarly move for the admission of Trustee's Exhibit 26 and the associated video clip at Exhibit 24 of the thumb drive into evidence. THE COURT: Counsel? MR. CONWAY: Your Honor, may I incorporate by reference my objection to Exhibits 24 and 25? Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 77 of

Luc Despins - Direct - Bassett 78 THE COURT: Yes, you may. Thank you. MR. CONWAY: Same objection. THE COURT: Exhibit 26 with the corresponding video on Exhibit 24 are admitted in full over objection. MR. BASSETT: Thank you, Your Honor. (Trustee's Exhibit 26, with video labeled Exhibit 24 on thumb drive, received in evidence) MR. BASSETT: And we just have three more of these. If I could please ask the courtroom deputy at this time to pull up on the screen the exhibit slip sheet associated with Trustee Exhibit 27. Like the other exhibits, there's a URL on the first page of the exhibit, of Exhibit 27. If you scroll down to the second page, please. BY MR. BASSETT: Q Trustee Despins, is that URL on the first page another URL that you visited this morning? A Yes, absolutely. Q Did it take you to a webpage that looks like the one that appears here on Exhibit 27? A Yes. Q We talked about this earlier, but do you understand this to be the website GETTR? A Yes, I do. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 78 of

Again, we talked about this, but there's NFSCTV with a 2 red checkmark next to it, correct?

Correct.

And you asked your colleagues to preserve a clip of 5 this video in the same way that we discussed earlier, your 6 team?

Yes. 8 MR. BASSETT:

9 the courtroom deputy play if we can Exhibit 27, which is on 10 the thumb drive Exhibit 25. 11 And I would note for the Court at the bottom of 12 this it says NFSC third anniversary associated with the 13 caption of the video. 14 (Exhibit 27, with video labeled Exhibit 25 on thumb

16 BY MR. BASSETT:

Trustee Despins, was that clip that you just saw part 18 of the video that you watched when you clicked on the link 19 associated with Exhibit 25?

Yes, it is. 21 MR. BASSETT:

22 for the admission of Trustee's Exhibit 27. Sorry.

23 I referred to it as Exhibit 25.

24 thumb drive, but it's Trustee's Exhibit 27.

25 for the admission Trustee's Exhibit 27, as well as the clip

Luc Despins - Direct - Bassett 80 appearing on the thumb drive at Exhibit 25 that we just watched. THE COURT: Thank you. Counsel? MR. CONWAY: Your Honor, may I incorporate by reference my objection stated to Exhibit 24? THE COURT: You may. Thank you. MR. CONWAY: Objection is foundation. THE COURT: Exhibit 27 with the corresponding video on the thumb drive as Exhibit 25 are admitted in full over objection. (Trustee's Exhibit 27, with video labeled Exhibit 25 on thumb drive, received in evidence exhibit) MR. BASSETT: Thank you, Your Honor. At this point, there are just two more exhibits. The first one is Trustee's Exhibit 22. And again, if I could ask the courtroom deputy to please bring up the exhibit slip sheet associated with that exhibit. Again, Exhibit 22 has a URL link. If you scroll down to the second page. BY MR. BASSETT: Q Trustee Despins, is this the link that we just saw in the first page of Trustee's Exhibit 22? Is that another link that you have clicked on this morning? A Yes, it is. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 80 of

And did you ask your team to preserve the video 2 appearing at that link in accordance with the process you 3 described this morning?

Yes, I did.

And again, as we had discussed, this is a -- this link 6 is of a GETTR page, is that right?

That's correct.

And here, instead of NFSCTV, it says Miles Guo with a 9 checkmark next to it, do you see that?

Yes, I do.

What do you understand that signifies?

That it's -- it's his account, because with the red 13 check that means it's certified to be his account. 14 MR. BASSETT:

15 deputy to please play the video on the thumb drive 16 associated with Trustee's Exhibit 22, which Exhibit 20 on 17 the thumb drive. 18 And just for the record and the Court, this 19 exhibit and the next one are in the language being spoken is 20 Mandarin. We did not translate it because we're not 21 offering it for any substance of what's said.

22 offering it for the images that appear on the screen. 23 (Exhibit 22, with video labeled Exhibit 20 on thumb

25 BY MR. BASSETT:

Trustee Despins, is that the video that you saw when 2 you clicked on the link associated with Trustee Exhibit 22?

Yes, it is. 4 MR. BASSETT:

5 admitting this for the purpose of showing Mr. Kwok on the 6 post, which as the exhibit slip sheet indicated was a 7 January 11th, 2023 post.

8 that Mr. Kwok was filming the video as you can see from the 9 camera from the same location in the mansion that other 10 videos have been filmed that we have seen. 11 And with that, we would move for admission of 12 Exhibit 22 and the associated clip at Exhibit 20. 13 THE COURT: Counsel? 14 MR. CONWAY: Yes, Your Honor.

15 objection as raised to Exhibit 24.

16 that by reference? 17 THE COURT: Yes, you may. Thank you. 18 Plaintiff's Exhibit 22 with the corresponding 19 video at Exhibit 20 is admitted in full over objection. 20 MR. BASSETT: Thank you, Your Honor. 21 (Trustee's Exhibit 22, with video labeled Exhibit 20 on

23 MR. BASSETT:

25 And if I could please ask the courtroom deputy to

1 bring up the slip sheet for Exhibit 23. 2 Yet again, we see a link to a URL here.

3 scroll to the second page, please. 4 BY MR. BASSETT:

Trustee Despins, is this -- does this image on the 6 screen here, is that what you found when you clicked on the 7 link that we saw on the first page this morning?

Yes, it is.

And you asked your team to preserve a video that was 10 contained on this post?

Yes, I did. 12 MR. BASSETT:

13 associated with Exhibit 23, which is on the thumb drive as 14 Exhibit 21. 15 (Exhibit 23, with video labeled Exhibit 21 on thumb

17 MR. BASSETT: Could you please pause the video. 18 Your Honor, just to save us all a minute and 44 19 seconds, I was going to note that like the last video we are 20 simply introducing this for the purpose of showing that this 21 is a video with a date label of February 19th, 2023 with an 22 individual readily identified as Mr. Kwok on the screen 23 filming a video in what appears to be the same location in 24 the mansion.

25 offering it for the substance of what he's saying.

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1 So I'm happy to play the whole thing, but if it 2 would speed things up we would at this point, subject to any 3 objections or issues the Court may have, we would offer 4 Exhibit 22 into evidence, which, I'm sorry, Exhibit 23 into 5 evidence, which his on the thumb drive Exhibit 21. 6 THE COURT:

7 whole video? 8 MR. CONWAY:

9 Your Honor. 10 I would ask -- I would still object on foundation 11 grounds for the same reasons I objected to Exhibit 24 and 12 22, if I can incorporate those objections by reference? 13 THE COURT: Yes, you may. Thank you. 14 Plaintiff's Exhibit 23 with the corresponding 15 video on the thumb drive as Exhibit 21 is admitted in full 16 over objection. 17 MR. BASSETT: Thank you, Your Honor. 18 (Trustee's Exhibit 23, with video labeled Exhibit 21 on

20 MR. BASSETT:

21 the Trustee some questions about a few additional exhibits. 22 Thankfully these are not video exhibits, so I think these 23 will go more quickly. 24 BY MR. BASSETT:

But, Trustee Despins, if you could please turn in your

1 exhibit binder to what is marked as Trustee Exhibit 13. 2 MR. BASSETT:

3 courtroom deputy please pull that exhibit up on the screen, 4 that would be much appreciated.

5 first page. Thank you. Thank you.

6 other page. 7 BY MR. BASSETT:

Trustee Despins, do you recognize what appears here as 9 Trustee Exhibit 13?

Yes, I do.

What do you understand this to be?

It's the inside pocket of one of I believe 29 suits 13 that were found by the FBI when they did the search, 14 executed search warrant, at the Mahwah mansion on March 15 15th.

How did you get a copy of this picture?

The Department of Justice prosecution of Mr. Kwok is 18 led by an Assistant U.S. Attorney, Juliana Murray, who -- I 19 called her in early July to get pictures of what the FBI had 20 found at the mansion when they executed their search 21 warrant, and she provided numerous pictures, and we selected 22 I guess, you know, ten best of and that would be one of 23 them.

So Ms. Murray is the person you spoke to?

Correct.

And she communicated to you that this image was an 2 image taken by the FBI at the time they raided the mansion 3 on March 15th, 2023?

That's correct.

Did she tell you anything else about where they found 6 it, for example?

Yeah. It was found in a dressing room believed to be 8 the dressing room of Mr. Kwok in the mansion.

And I think you said, I think you may have mentioned 10 like 29 other, did she say this was like an example of one 11 suit?

Yeah. That's just a sample of one, yeah.

What did she say about the other ones?

That they all have that label. 15 MR. BASSETT:

16 for the admission of Trustee's Exhibit 13 into evidence. 17 THE COURT: Counsel? 18 MR. CONWAY: Foundation objection, Your Honor. 19 There's no foundation that this was actually something that 20 was found at a location, but I understand the testimony. 21 MR. BASSETT:

22 foundation through Mr. Despins' testimony of his 23 conversation with representatives of the U.S. Government 24 with direct knowledge of how these images were obtained 25 during the raid on March 15th.

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Luc Despins - Direct - Bassett 87 Again, I will stress that in this circuit hearsay testimony is admissible, hearsay evidence is admissible. And to the extent that counsel would take issue with that hearsay, it only goes to the weight of the evidence at this stage, not to its admissibility. THE COURT: Anything further, Counsel? MR. CONWAY: Only to reiterate that my objection is on foundation. This photograph was apparently culled out from photographs. We don't know that this was a photograph that was referred to by an FBI agent, what have you. So regardless of whether it's hearsay or not, my objection is to foundation. MR. BASSETT: And just to be clear, Your Honor, my position is that we have laid the foundation through Mr. Despins's testimony, which was about his conversations with the representatives of the Government. To the extent that Trustee Despins' testimony consists of hearsay, i.e., his conversations with representatives of the Government, that is admissible at this stage of this proceeding. THE COURT: Okay. Trustee's Exhibit 13 is admitted in full over objection. MR. BASSETT: Thank you, Your Honor. (Trustee's Exhibit 13 received in evidence) MR. BASSETT: If I could please ask the courtroom

Luc Despins - Direct - Bassett 88 deputy to pull up the next exhibit, Exhibit 14. And scroll to the second page, please. Thank you. BY MR. BASSETT: Q And, Trustee Despins, Trustee's Exhibit 14, which has images of documents, some of which are redacted, I think everyone in the court can see that there's a learner's permit from New York State that says Kwok Ho Wan on it, and other documents also containing his name. Trustee Despins, do you have an understanding of where this document came from? A It's the same. That's a picture provided to us by the Department of Justice reflecting pictures taken by the FBI on March 15th, except that we redacted personal information about Mr. Kwok from these documents. Q Okay. And when you say found during the raid, you mean of the Mahwah mansion? A Yes, the execution of the search warrant. MR. BASSETT: So without belaboring it, Your Honor, we would offer Trustee's Exhibit 14 into evidence. THE COURT: Counsel? MR. CONWAY: Without belaboring it, Your Honor, I'd like to make the same foundation objection as I made to Exhibit 13. THE COURT: Thank you. So noted. Trustee's Exhibit 14 is admitted in full over Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 88 of

Luc Despins - Direct - Bassett 89 objection. (Trustee's Exhibit 14 received in evidence) MR. BASSETT: And there are five more of these, Your Honor, Exhibits 15, 16, 17, 18 and 19. Just to expedite the course of the hearing today, I may ask if I could just publish each exhibit one by one and then ask the Trustee sort of to confirm that each of those additional exhibits was obtained in the same way. I think that may make things move a little bit more quickly than asking the same questions as to each exhibit if that's acceptable to the Court. THE COURT: Counsel, do you have an opposition to the suggestion that the Exhibits 15, 16, 17 and 18 be taken together essentially, and then we can see what the answers are to the questions? MR. CONWAY: I think that's a reasonable way to go about this. THE COURT: Thank you. MR. BASSETT: Thank you. THE COURT: Go ahead, Attorney Bassett. MR. BASSETT: Thank you very much, Your Honor. So if we could please pull up Exhibit 15 and scroll to the second page. I would just note for the record that you see Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 89 of

images that appear to contain, as the Court is aware, images

1 of the debtor and his family members. 2 If we could please go to Trustee's Exhibit 16. 3 On this exhibit I would note for the record, 4 although the font is fairly small, on the left-hand side of 5 the page, you see what says, I believe that's Italian if I'm 6 not mistaken at the top, and it says certificate of 7 authenticity in English underneath it. 8 And if you look at the English part of that page, 9 it says Ferrari certifies the authenticity of this Speed 10 Form. And then it goes on. 11 If you look at the letter on the right, it says 12 Dear Mr. Guo. And then there's a letter, which I won't read 13 in its entirety, but it begins with it is a great pleasure 14 for me to know that being one of our most affectionate 15 customers you have decided to purchase a Ferrari Speedform. 16 And then it goes on and it bears the signature of 17 somebody who has underneath their name senior vice president 18 for commercial and marketing. 19 And then there's, I would also note for the record 20 a piece of paper, at the bottom that's on the right-hand 21 side of the page, states among other things location found, 22 and it says Room E, and there's a reference to a buffet 23 cabinet, middle section. 24 With that, if the courtroom deputy could please 25 put up Trustee's Exhibit 17.

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1 As to this image, I would note for the Court that 2 there is a prescription medication bottle bearing the name 3 Ho Wan Kwok. Again, we've redacted sensitive, personal 4 information from the image.

5 piece of paper there which says, among other things, 6 location found, and it mentions a mirrored dresser near 7 window. 8 With that, if the courtroom deputy could please 9 bring up Trustee Exhibit 18. You wouldn't mind zooming in. 10 And I think what can be seen on the screen here is 11 yet another document bearing what appears to be, although 12 it's up to the Court's judgment, an image of the debtor and 13 has his name Kwok Ho Wan on it. 14 With that, the last image is Exhibit 19.

15 courtroom deputy could please pull that up. 16 This image I would note for the record, it says at 17 the top, Cedric DuPont Antiques.

18 were sold to Taurus Fund, LLC.

19 the upper, right-hand corner, you could see the date 20 2/11/2022, so February 11th, 2022. 21 And then if you scroll down, I would note that 22 February 11th, 2022 was, if I'm not mistaken, four days 23 before the Chapter 11 petition date in this case. 24 And if you look at this invoice, there are a 25 number of antique items listed.

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1 First we have wrought iron and marble center 2 table. Then we have what appear to be certain mirrors. 3 Then we have a magnificent pair of 19th century Italian 4 gilt-wood mirrors.

5 century, circa 1780, gilt-wood mirror from Tuscany.

6 you'll see below that one there's a checkmark and it says 7 boss's bedroom. The next one below that is a reference to a 8 French mid 19th century, another mirror.

9 under that one, it says -- there's the words Mei's 10 bedroom/bathroom.

11 that the debtor's daughter's name is Mei Guo.

12 is reference to a spectacular and elegant early 19th century 13 Italian mirror. 14 And all total, on this invoice, the apparent cost 15 of these items as invoiced is \$218,078 according to what 16 appears at the bottom of the invoice there on the right-hand 17 side. 18 THE WITNESS:

19 the top, right-hand corner it says ship to and that says 20 ship to the mansion in Mahwah. 21 MR. BASSETT: Thank you. 22 With that, Your Honor, that covers all of the 23 similar picture exhibits that's Trustee's Exhibits 15 24 through 19. 25 BY MR. BASSETT:

Trustee Despins, having looked at Exhibits 15 through 2 19, were these images ones that you obtained from the 3 Department of Justice in the manner that you described for 4 Trustee Exhibit 13 and 14?

That's correct. 6 MR. BASSETT:

7 BY MR. BASSETT:

And your understanding is that these are images that 9 the DOJ told you were taken of items found in the Mahwah 10 mansion on the day of the raid on March 15th, 2023?

That's correct. 12 MR. BASSETT:

13 move for the admission of Trustee Exhibits 15 through 19 14 into evidence. 15 THE COURT: Thank you. 16 Counsel? 17 MR. CONWAY:

18 grounds that was made to Exhibits 13 and 14.

19 incorporate that by reference? 20 THE COURT: Thank you. Your objection is noted. 21 Trustee's Exhibits 15, 16, 17, 18 and 19 are 22 admitted in full over objection. 23 MR. BASSETT: Thank you, Your Honor. 24 (Trustee's Exhibit 15 received in evidence) 25 (Trustee's Exhibit 16 received in evidence)

1 (Trustee's Exhibit 17 received in evidence) 2 (Trustee's Exhibit 18 received in evidence) 3 (Trustee's Exhibit 19 received in evidence) 4 MR. BASSETT:

5 of questions for the Trustee about certain other exhibits. 6 BY MR. BASSETT:

If you could please turn to Trustee Exhibit 4 that 8 appears in your binder. 9 MR. BASSETT:

10 Exhibit 4 brought up on the screen. 11 BY MR. BASSETT:

Trustee Despins, do you have an understanding of what 13 this exhibit is?

Yes. It's a screenshot of the Secretary of State of 15 Nevada's website of a particular element of that website. 16 Not the whole website, but what's relevant to Taurus Fund.

And do you have any understanding of how this was 18 obtained?

Yeah. I've asked the team to go and pull from the 20 website whatever information could be derived about these 21 Taurus entities.

And this screenshot is what they captured from the 23 Secretary of State website?

That's correct. 25 MR. BASSETT:

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1 exhibit for the primary purpose of showing that the entity 2 status as reported by the Secretary of State website for 3 Taurus Fund, LLC is in default as appears about midway down 4 the page. I don't think that's controversial.

5 purpose, we would offer Trustee Exhibit 4 into evidence. 6 THE COURT: Counsel? 7 MR. CONWAY: No objection. 8 THE COURT: Thank you. 9 Admitted 4, excuse me, Exhibit 4 is admitted in 10 full. 11 MR. BASSETT: Thank you, Your Honor. 12 (Trustee's Exhibit 4 received in evidence) 13 BY MR. BASSETT:

If I could next direct your attention, Trustee Despins, 15 to Trustee Exhibit 12.

16 this exhibit is?

Yeah. It's a screenshot from a LexisNexis search.

18 obviously the Court is familiar with LexisNexis, but we use 19 it all the time to do searches.

20 team to do a search on Mr. Kwok and it produce this result 21 showing him having an address at the Mahwah mansion.

And when was this search performed?

I want to say July. I forget the precise.

24 -- yeah, July 11th. 25 MR. BASSETT:

Luc Despins - Direct - Bassett 96 offer Trustee Exhibit 12 into evidence. THE COURT: Counsel? MR. CONWAY: Subject to my examination, obviously I have no objection. THE COURT: Thank you. Exhibit 12 is admitted in full. (Trustee Exhibit 12 received in evidence) MR. BASSETT: The last exhibit that I intend to show the Trustee, and again, I think I can go through the rest of our exhibits without requiring the Trustee in the witness stand, the next one is Trustee Exhibit 6. If I could please have that pulled up on the screen. THE WITNESS: Yes. BY MR. BASSETT: Q Take your time. And, Trustee Despins, when you're ready, I'm just going to ask you if you recognize this exhibit? A I do. Q And what is this? A It's a certificate of insurance or a declaration page of a policy issued by AIG to Golden Spring with respect to certain luxury cars. Q And how did you obtain or do you know where this policy was obtained from? Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 96 of

Yes, from Wolfson, our broker, or the broker for 2 Genever, what we call Genever U.S., because Mr. Linsey, who 3 is our counsel in Connecticut, was inquiring about the 4 insurance coverage for Genever U.S. 5 And the broker produced this and said basically 6 Genever U.S. is paying for insurance for these cars.

7 that's when he started asking, saying how can that be given 8 that the name of the insured is Golden Spring?

9 how we got -- that's what they sent us basically.

Thank you.

11 certain luxury automobiles. 12 MR. BASSETT:

13 second page of this, please. 14 I just want to direct the Court's attention to the 15 bottom of the page where it has description of drivers.

16 second driver there listed is Gerald Scott Barnett.

17 above that you'll see the automobiles covered according to 18 this policy are three different Mercedes, each worth in 19 excess of \$100,000 according to the decreed value stated 20 here. 21 With that, Your Honor, we would offer Trustee 22 Exhibit 6 into evidence. 23 THE COURT: Counsel? 24 MR. CONWAY: No objection. 25 THE COURT: Thank you.

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Luc Despins - Direct - Bassett 98 Exhibit 6 is admitted in full. MR. BASSETT: Thank you very much, Your Honor. (Trustee Exhibit 6 received in evidence) MR. BASSETT: I now have a couple or a few questions for the Trustee on a related topic. BY MR. BASSETT: Q Mr. Despins, at the beginning of the hearing today we took a look at the affidavit that you filed in this case. And my recollection is that in that affidavit you spent a fair amount of time explaining why you believe the estate will be harmed if there's not an injunction. I just wanted to ask you a few additional questions on that topic. And it's my understanding, Trustee Despins, that some of the relief that you're seeking, there was a dialog about this earlier, is not just to prevent the property from being sold or encumbered, but you are seeking relief that would require people occupying the property to vacate the property, that the mansion be secured, and that the Court authorize the assistance of the U.S. Marshal's Office. And my question for you is why do you believe that that type of relief is necessary? A Well, that's a multi-fold answer, but I would start with what we saw today, which is there's -- there are a number of art pieces, art work, in that -- in that house. So those are not bolted down. They're not -- they can leave

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1 at, you know, they can be, you know, they can disappear. 2 And the testimony, well the testimony, the colloquy between 3 the two people doing the visit was that the art work is more 4 -- is worth more than the house itself.

5 evidence, but I know that that art work is worth hundreds of 6 thousands of dollars, if not millions, because we see that 7 from the receipt of the mirrors used in Mei Guo's room and, 8 et cetera, et cetera.

9 expensive art work. 10 So to say that the house won't be sold and that's 11 protection. or people will not dispose of any of those 12 assets is, you know, that's a nice statement of intent, but 13 practically that's not enforceable.

14 I mean by that. 15 The company Taurus, LLC, Taurus Fund, LLC, that's 16 a company that was created the day this property was 17 acquired. It doesn't have any other assets as far as we 18 know except for the piano, we'll come back to the piano 19 later, but it doesn't have any other assets other than the 20 Mahwah mansion. 21 Our theory of the case is that the Trustee, 22 because Mr. Kwok as the owner, or the Trustee, owns that 23 property. 24 So to have that entity give us some sort of 25 commitment or agreement not to do bad things is -- I don't

Luc Despins - Direct - Bassett 100 want to be rude about this, but it's worthless because that's me giving a representation to myself. Meaning that if they don't do that, if bad things happen, the claim is against that entity whose sole asset is the Mahwah mansion. So it's kind of circular. If there are some individuals that are -- that have money, real money, that are willing to sign a guarantee, personal guarantee, to guarantee the protection of the property, I'm all ears. But to have the company that owns it in theory, when we clearly believe that they don't own it and believe that there's strong evidence that they don't own it, is, you know, doesn't solve the problem. So there are very expensive assets in there that can be removed. The property itself could be damaged. And you have, what we've established here, is there's transient, the people -- it's like a college dorm. People are walking in. And they may have the best of intentions, I don't know that. But I know one thing is that once they know that we're coming after the property, and now they do know, they hadn't known that before, but now they do know that we're coming after the mansion, and if they think that they're going to lose that battle, then it's a different ball game completely, because it's not the same incentive to protect Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 100 of

1 their, what they call their sanctuary, because they're very 2 likely to lose the sanctuary. 3 And those people are not accountable.

4 know who they are.

5 what governs that. 6 And the fact that Taurus itself, the alleged 7 owner, is fighting to give -- to continue to give access to 8 all these people tells you everything you need to know. 9 Meaning why would -- if the company is owned by 10 Warren Buffett, he wouldn't care about who's in the 11 property, he would want to protect the property. 12 But Taurus wants these people to go in there 13 because Taurus is Kwok.

14 -- that's the whole premise of this. 15 So there's a real risk here.

16 assets being secreted. 17 So you might say the mansion is not going to move 18 itself. Fine. Could be damaged.

19 examples. 20 We know recently, and based on what happened in 21 the criminal case involving Yvette Wang, and a release on 22 bail, that the Government submitted evidence that Ms. Wang 23 was giving instructions from jail on how to empty P.O. boxes 24 for G Club containing millions of dollars in checks or 25 currency. So that's one item.

1 not hesitate to do things like that. 2 Then we know that the, you know, that Ms. Wang 3 transferred the title to Ace Decade to a Swiss resident 4 because that makes it very hard for us to go and grab that 5 asset. Well, not grab the asset, but to serve that person 6 in Switzerland, because all sorts of rules involving 7 international service of process in Switzerland. 8 We know that the debtor's daughter has, you know, 9 sold an airplane during the case that clearly as a 29-year 10 old she doesn't own a Bombardier Jet that's worth, you know, 11 probably \$15 million.

12 million. And when we asked her who holds the funds, the 13 only answer is a guy. 14 So there's a pattern here that -- and there are 15 many other examples throughout the case of assets being 16 secreted away. 17 And you might say, well, that's Mei Guo, that's 18 not them. 19 The point is that at this point it's clear that 20 they're acting as a team.

21 for the estate to maintain this state of play where people 22 that are not owners, as far as I know, they're not paying 23 rent, they don't have a lease, to have access to this 24 property.

25 And I'm sure there's other examples of funds being

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1 secreted I'm forgetting, but the point is that there's a 2 pattern, there's a huge risk, this is a real asset, there's 3 personal property there that's worth millions of dollars,

4 and with people, again, that are not the owners, that are 5 not lessors, that are not paying rent, it's really a bad 6 place to be from the point of the estate.

And we've seen videos earlier today that showed that 8 there were representatives of the New Federal State of China 9 who were at -- at the house.

10 with members of the New Federal State of China throughout 11 this case previously?

Extensive experience.

13 issue, but we know that they're acting at the debtor's 14 behest because, you know, they came to picket at my house, 15 at my daughters' houses, and also there's a whole process. 16 For example, the filing of these claims, these, 17 what I refer to as the bogus claims, for hundreds of 18 millions of dollars that was done to impede the trustee 19 process and make sure it would cost a fortune to deal with 20 that. Of course, that's done at the behest of Mr. Kwok. 21 And the people who are filing these claims are 22 associated with the New Federation of China and so, 23 therefore, there is a, you know, it's not speculation, they 24 are directly involved in these activities to impede the 25 trustee process.

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So what you just described, those observations and 2 experiences that you've had with members of the NFSC in this 3 case, based on that, what does that lead you to believe 4 about what may happen if they think you are going to prevail 5 in this adversary proceeding and obtain ownership and 6 control over the Mahwah mansion?

I hesitate to speculate on that. I just don't.

8 it's clear that really bad things could happen, and that 9 it's -- the estate could be in a world of hurt if it turns 10 out that we own this property and bad things happen to it or 11 to its contents. 12 And that's why, you know, I know that, for 13 example, the use of U.S. Marshals may be perceived as heavy 14 handed by some, but the point is that we need to stop this 15 complete free access that's going on there because -- forget 16 whether there are bad intentions, there's no control.

17 have no idea who took what or didn't take. 18 So I'm not saying that, in fact, other than the 19 piano, which apparently disappeared or is missing, I'm not 20 saying that they actually stole things.

21 there's just no control.

22 are there. There are some exhibits that we haven't gone 23 through, but we show people at these events where there's 24 hundreds of people in the room.

25 happen.

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Trustee Despins, we talked earlier about some 2 communications that you've had with the Department of 3 Justice, and I believe also there was a reference in the 4 motion for preliminary injunction that you filed to the fact 5 that you had been coordinating with the Department of 6 Justice on reaching a potential settlement or agreement 7 related to the Mahwah mansion, do you have an update on that 8 for the Court?

A Yes. As Your Honor pointed out, there was a filing at 9:55 this morning of a motion to approve a settlement. And we're not seeking approval of that today. And as we pointed out in the motion seeking a TRO and a preliminary injunction, in a footnote somewhere we said that we're having discussions regarding the Mahwah mansion because the Mahwah mansion is on the list of assets that the DOJ is seeking a forfeiture of. They cannot, however, obtain forfeiture today because there's no criminal conviction.

And it was necessary to have a dialog with them about this asset because I didn't want to be in a position where we're doing all this legwork to get the Mahwah mansion, and at the end they say thank you very much, we'll take it from you. And then the estate is out, you know, a lot of money prosecuting this, or obtaining security, and doing all this work to obtain the house. So basically I told them that.

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1 And they realized that that was an issue.

2 they said, well, we cannot have an agreement with the 3 Trustee now regarding the final disposition of the Mahwah 4 proceeds if there's ever a sale, but we can make sure that, 5 one, all the expenses that the Trustee incurs, and it's not 6 only Paul Hastings, it's all expenses, security guard, 7 insurance, sales broker, again, that's if the Court 8 eventually grants the motion to sell the property, but all 9 these expenses would be coming off the top of the Mahwah 10 property. So it's certainly worth north of 20 million.

11 so the estate would be no worse off. 12 But on top of that, the DOJ agreed we'd negotiate 13 a provision saying that on top of the actual expenses coming 14 off the top, there will be a million dollar deemed expense. 15 So it's not a -- so it's a deemed expense.

16 actual expenses that would come to the estate for the 17 benefit of victims of the debtor, victims to be defined 18 later in this case. 19 So, therefore, the estate is not only not going to 20 be exposed for fees and expenses, but also would -- is 21 guaranteed a million on top of that. 22 But more importantly, that's not a limit. 23 There is a -- there's a discussion to be had with 24 the DOJ, Your Honor, regarding this property, but other 25 assets. For example, the \$630 million that's sitting in

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1 accounts that are frozen. 2 As you know from, I forget the name of the case 3 that you handled where there was a partner at Zeisler that 4 was appointed as the receiver, and I think he was the 5 Chapter 11 Trustee as well, or, again, mixing the stories a 6 little bit, but the point is that in the past, in cases 7 involving fraud, meaning if there's a conviction, the 8 Chapter 11 Trustee was authorized by the DOJ to handle the 9 distribution of assets to the debtor's creditors pursuant to 10 a process to be approved by the bankruptcy court. 11 So we're far away from that, but the point to be 12 made is that this is a blueprint potentially or a beachhead 13 in that direction and, therefore, I wouldn't look at this 14 as, oh, we're doing this for a million. No.

15 attempt to work with them because we believe that the most 16 efficient way of handling all of this is through a 17 bankruptcy court process where these assets are distributed

to the holders of allowed claims. That's again to be determined who holds an allowed claim and who doesn't. But that's something that would add a lot of value to the estate because you're dealing with a much larger pot.

So the settlement motion, which is not before the Court, I wanted the Court to be aware of it and to be aware that we filed it so that you know that that's happening in the background. It does not deal with the main event at the

1 end of the case.

2 property. 3 And again, to be clear, there's an agreement with 4 the DOJ that they will not interfere with what we're doing 5 here with respect to the property.

6 saying, wait a minute, this is an asset in the criminal case 7 and we're going to oppose that. So they are not doing that. 8 They've agreed that all expenses will come off the 9 top from the sales proceeds if there's a sale.

10 also agreed to a million dollars on top of that that would 11 be distributed to victims of the debtor in this case 12 pursuant to an order of this court eventually. 13 Sorry for the long, but it's important for the 14 Court to know that this is going on in the background.

Thank you. 16 MR. BASSETT:

17 exhibit that I meant to show the Trustee earlier.

18 to that, I think I don't have any other questions at this 19 time. 20 But if I could please have the courtroom deputy 21 pull up what's marked as Trustee Exhibit 5. 22 BY MR. BASSETT:

So I'll just note for the record that this document 24 appears to be an email chain between you and some attorneys 25 at Zeisler & Zeisler, as well as a representative of the

Luc Despins - Direct - Bassett 109 Sherry-Netherland, and somebody from the Struck Law Firm, is that right, Trustee Despins A That's correct. Q It's June 20th, 2023? A Correct. Q And then can you just very, very briefly, what's the -- A Yeah. Q -- what's the context for this email? A So the context is that the debtor had personal effects at the Sherry-Netherland. They wanted -- the family wanted to recover it. And we had no problems with that so we boxed them 21 boxes, or 20, 21, yeah, 21 boxes. And so here Mr. Romney was telling me who would come and pick up these boxes. And it's Mr. Barnett, who's the manager of Taurus, one of the Taurus entities here, who was the driver and bodyguard. He identifies him as security personnel of Mr. Kwok. MR. BASSETT: Yeah. For the record it says Scott Barnett, who worked security for Mr. Kwok at the Sherry, will be picking up the boxes. Your Honor, we would offer Trustee Exhibit 5 into evidence. MR. CONWAY: No objection. THE COURT: Thank you. Exhibit 5 is admitted in full. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 109 of

Luc Despins - Cross - Conway 110 (Trustee Exhibit 5 received in evidence) MR. BASSETT: So, Your Honor, at this point, there may be, I have to go through my list, five or so additional exhibits that we would offer as part of our case in chief, but I don't think I need the witness for that. I think those documents are all self-authenticating. So at this juncture, I've finished with my examination and would offer the witness for any cross- examination. THE COURT: Cross-examination, Counsel? MR. CONWAY: Thank you, Your Honor. CROSS-EXAMINATION BY MR. CONWAY: Q Good afternoon. A Good afternoon. Q Let me start from your most previous testimony and work my way back because it's easier for everybody. You mentioned that you had this deal with the DOJ that's in the works where they're going to let you go after this house even though it's a part of their claims in a criminal matter. What did you mean by their claims? A I was using shorthand. It's not part of their claim. There's a criminal prosecution of the debtor and of Ms. Wang and then Mr. Je. As part of that, the DOJ has identified several assets as being subject to forfeiture. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 110 of

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1 And forfeiture cannot occur until there's a conviction, so 2 that's what I meant by part of their claim.

3 current claim they're prosecuting, but they've identified 4 the Mahwah mansion as one of these assets that's subject, 5 that would be subject, according to them, to forfeiture.

And this is something that you've had a conversation 7 with these folks at the FBI about?

No. The U.S. Attorney, U.S. Assistant Attorney.

Okay.

Yes.

And did they tell you why the house was part of their 12 investigation and a potential forfeiture claim?

Because they think that there's proceeds of fraud 14 involved in there.

What does that mean proceeds of fraud?

Proceeds of Kwok's -- you have to read the indictment, 17 but of the fraud that's alleged there, money laundering, 18 securities fraud, proceeds of that alleged crime, you know, 19 that's their allegation, was used to purchase the property 20 and to repair the property and improved it, improve it.

Okay. So if I understand you correctly, and tell me if 22 I get it wrong, the DOJ believes that the Mahwah mansion, as 23 you call it, was purchased and improved with proceeds of 24 some sort of a crime where individuals were tricked into 25 giving their money for this purpose?

I don't know the details.

2 indictment. But, you know, I think it speaks for itself in 3 terms of what they're alleging.

Okay. Well, let's -- let me back you up.

5 was going to start from the end, and I'm going to go right 6 back to the beginning. 7 You did mention the New Federal State of China and 8 you were asked what was it, what did it do, and you said it 9 was an organization of Mr. Kwok's. 10 Let me ask you again what's your understanding of 11 what that entity is?

You used the word entity, I'm not sure -- I'm not sure 13 it's a -- I don't think it's a corporation.

14 an organization of some kind that he started and, you know, 15 made various statements about giving it millions of dollars, 16 et cetera. 17 What it does officially is to combat the Chinese 18 Communist Party. That's their headline.

19 practically may be different than that, meaning that it's 20 used to serve his causes, for example, impede the Chapter 11 21 process or harass people that are part of the Chapter 11 22 process.

The people we saw in some of these videos, and I can't 24 imagine you know the content of each video by exhibit 25 number, but let me just refer you back to a couple of them

Luc Despins - Cross - Conway 113 that were very similar. I believe it was Exhibits 25 and 26 you saw some people standing behind a table with roses or flowers in their hand, do you recall those videos? A Yes. Q Were those members of the New Federal State of China? A I think they were self-professed members of it, yeah. Q That's what it sounded like. A Yes. Q And they called themselves fellow fighters? A Correct. Q What's a fellow fighter? A You would have to ask them. I assume that it's in the context of fighting the Chinese Communist Party, but I don't know precisely. It's not the label we put on them. They describe themselves as fighters. Q Okay. And that's -- that was sort of a theme in these videos is that the self-proclaimed fellow fighters were grateful to be able to show up at that Mahwah mansion as sort of a base for their operations, is that what you got from those videos? A Well, that's what they want other people giving money to believe, that's correct. Q Okay. When was the last time anybody gave money? A There's money being given as we speak. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 113 of

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How do you know?

Because it's on the internet.

3 informants, not criminal informants, but people who have 4 been defrauded saying, look, they're raising money here, 5 they're raising money there, for Yvette Wang's defense for 6 example. Or for paying for counsel involved in these cases 7 representing satellite entities.

Okay. And are you aware of any of that sort of money 9 that's been raised by the fellow fighters that was used to 10 purchase the Mahwah mansion?

I don't know that.

What about the articles of property in the Mahwah 13 mansion such as the articles that were listed on that piece 14 of paper we saw moments ago?

You're asking me whether the fellow fighters bought 16 this or paid for it?

To your knowledge?

Well, I would have strong doubts about that.

19 these folks have very limited means, so that's why we see 20 these, through these bank accounts, these hundreds, 21 thousands of donations for \$5,000, \$2,000, and all that. 22 These people are not fortunate.

23 funding. They can't buy mirrors for \$250,000.

Right. Right.

25 that the house was purchased by Taurus Fund, LLC, correct?

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1 A Well, the title, the alleged title owner, yes.

2 formal title owner is Taurus Fund, LLC. 3 Q There's no dispute in your mind to that fact, is there? 4 A No.

5 technically the titleholder is the Taurus Fund, LLC. 6 Q Okay. And I don't want to keep referring to it without 7 an exhibit. Give me just a moment here.

8 have to because I don't remember which exhibit was the 9 exhibit with the sort of an invoice for all those pieces of 10 art. You recall that exhibit, correct? 11 A Yes. Yes. 12 Q And you pointed out in your testimony that that was an 13 invoice that called for delivery to the mansion, correct? 14 A Correct. 15 Q And the purchaser of those goods was Taurus Fund, LLC, 16 correct? 17 A That's what the invoice said. 18 Q Okay. Let's just get back to the heart of things. 19 You've been working this case for a little while now, right? 20 A A bit, yes. 21 Q Done a lot of investigation? 22 A Yes. 23 Q Spent a lot of attorney time on this? 24 A Yes. 25 Q And your attorneys have investigated a lot of bank

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1 records relating to this case, right?

We have.

Okay. Where did the debtor get the money to buy the 4 Mahwah mansion?

First, the debtor had funds before what the DOJ is 6 alleging occurred here, meaning the debtor was a billionaire 7 based on his investments or transactions in China, so I have 8 no doubt that he had the funds to pay for that.

You have no doubt, but you have no evidence, correct? 10 MR. BASSETT: Objection. 11 THE WITNESS: Okay. 12 MR. BASSETT: That misstates his testimony. 13 THE WITNESS:

14 the indictment sets forth exactly what happened here, 15 meaning that there's a -- that his lieutenant, you know, 16 William Je, was involved in raising funds for people to 17 invest in these G Coins or Himalaya Coins, and that's part 18 of the way he got the money. 19 But also, I know for a fact that he had billions 20 of dollars at one point, based on a lot of evidence that we 21 have accumulated to date. 22 BY MR. CONWAY:

Have you done any tracing analysis that shows that the 24 funds used to buy this house come from an account owned by 25 the debtor?

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The debtor never owns an account, any account, that's 2 not the way it works.

3 the wife, or William Je, otherwise the debtor could not be a 4 debtor. So that's the way he operates.

5 an account with his name on it.

6 but in 2015.

7 accounts. So that doesn't stop him from owning all these 8 assets. That's the whole point about equitable ownership is 9 that he lives there, he enjoys it, he owns it practically, 10 but he'll never have title to anything.

11 scheme.

Okay. Well, let's focus on this Mahwah mansion, the 13 subject of this case, because when we talk about the scheme, 14 it gets really confusing.

15 part of the scheme. 16 I want you to focus on the mansion now.

17 heard you testify just moments ago that the Department of 18 Justice thinks that the funds that were used to purchase 19 that mansion came from victims of the debtor?

For some of the funds.

21 correct.

Where are the rest of the funds coming from?

Well, I think from the debtor himself.

Okay.

And as I said, you'll never find a wire transfer from

1 Kwok to anyone, because that doesn't exist, but it doesn't 2 mean that it's not his money. 3 Because when you have a driver like -- let's talk 4 about the driver being the managing member of this entity. 5 How can anyone rationalize that other than it's Kwok's 6 asset? Who would let somebody's driver be in charge of a 7 \$26 million mansion?

8 the person who the person drives is the owner. 9 By the way, that's not the only factor, but that's 10 a pretty compelling one.

Okay. Well, you know, let's look at that.

12 have you seen any evidence or some sort of video like you've 13 seen today on the internet that suggests that the -- Mr. 14 Kwok or the New Federal State of China is concerned about 15 interference from the People's Republic of China and their 16 agents? 17 MR. BASSETT: Objection to relevance.

18 it's beyond the scope of the direct.

19 has to do with any of the questions that I asked. 20 THE COURT:

21 direct, so I'm going to sustain that objection. 22 MR. CONWAY:

23 that the only rational -- there's no rational reason to have 24 Mr. Barnett associated with this property. 25 THE COURT:

1 do with interference from China, that was your question. 2 That has -- we haven't established anything about Mr. 3 Barnett, and certainly not that he's somehow connected to 4 China. 5 So you can ask a different question, but I'm 6 sustaining the objection to that question. 7 BY MR. CONWAY:

Is Mr. Barnett listed in these documents you've 9 produced here today as security for Mr. Kwok?

So are you asking me whether he's a bodyguard for Mr. 11 Kwok?

I'm asking you whether the documents you've asked the 13 judge to look at today show that the reason for him being 14 involved here is that he's security for Mr. Kwok?

I'm not sure I understand your question.

16 bodyguard or he was a bodyguard, although he doesn't need a 17 bodyguard now because he's in jail, so, but he was the 18 security guard.

19 complaining about him being a bodyguard.

20 out that there's no credibility whatsoever to having a 21 bodyguard being the manager of a \$26 million mansion.

Well, isn't it true that there was a concern about 23 listening devices being placed within the Mahwah mansion?

I know nothing about that.

Have you investigated it at all?

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That's not my jurisdiction. Listening devices?

So you don't know -- you don't know why Mr. Barnett 3 would be involved with Mahwah mansion, but you haven't 4 investigated the possibility as to why he would be involved 5 with the Mahwah mansion. Is that true?

I will tell you that I'll bet big dollars that he has 7 no involvement with that mansion on a daily basis.

Okay. And he's not -- I think -- I don't know if you 9 meant to testify to this, but you didn't testify that Mr. 10 Barnett was an owner of the Mahwah mansion?

No. He's a managing member of -- actually, he's now a 12 trustee because these companies are in default under Nevada 13 law. What happens then is that the managing members become 14 the trustee for the -- for it's assets and so he's one of 15 the two trustees.

The Taurus Management, LLC is the manager of the Taurus 17 Fund, LLC, isn't that correct?

I forget which one it is, but one of these entities is 19 in default. And by that stated fact, under Nevada law, 20 Barnett becomes one of the co-trustees to that, to the 21 assets of the company that's in default.

22 look at the exhibit to figure out which.

Okay. It's not necessary to look.

24 course of this case we'll figure out what Mr. Barnett does. 25 But he's not listed anywhere as being a managing member or

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1 an owner of Taurus Management, LLC, is he?

He's listed -- I mean, we have -- I'm sure the 3 documents we filed are accurate on this.

4 precisely. But he is the managing member of one of the 5 Taurus entities for sure because we didn't make that up.

6 mean, that's in the Nevada filing -- filings.

7 at these. I'm sure it will be there.

8 involved as a -- as a managing member or now a trustee. 9 That's what we've alleged.

What was the default that occurred in Nevada?

Failure to file some documents or, you know, to update 12 documents or something like that.

Isn't it true it's just a failure to file a couple 14 hundred dollar filing fee?

That, I'm not sure that's the case.

16 was a failure to file annual reports or something along 17 those lines.

Okay. It doesn't say that on the document you provided 19 the judge though, does it? You want to take another look?

That document does not probably -- doesn't say that, 21 but I'm sure in our papers we actually describe exactly what 22 happened and why it's been -- why it's in default mode.

Okay. So you've indicated that you don't know whether 24 or not any of the debtor's money was used to buy this house, 25 the Mahwah mansion, correct?

No, that's not what I said.

2 be able to show a wire or transfer from any bank account of 3 the debtor because the debtor owns nothing.

4 whole scheme.

And the same is true with the possessions within the 6 house, you have no evidence to show that the debtor 7 purchased any of those articles, do you?

Well, when the invoice says this is going into Mei's 9 room, this is going in the boss's room, that's often how 10 they refer to him, as the boss, you know that it's for them. 11 It's not for some unnamed New Federation of China people. 12 It's for -- this is their house.

Who wrote those notes?

That's on the invoice.

15 write the notes. The FBI didn't write the notes.

16 must have been -- this was taken from the Mahwah mansion.

Do you know who wrote the notes?

No. I don't know who wrote the notes.

Now, you've -- you've testified that you've had these 20 conversations with the FBI.

21 FBI. We've all seen these.

22 evidence. And I assume that some of this property was 23 determined by the FBI to belong to Mr. Kwok, is that true?

Well, his prescription pills.

That's a yes or no question.

Yeah. I would think so. Yeah. His driver's license. 2 All the stuff that has his name on it.

3 pictures, yeah.

I'm not really focused on pieces of paper here.

Okay.

I'm really just saying they found things, property at 7 the location that they think belong to the debtor, correct?

Well, it's more than that that show that this was his 9 house. Like the 29 suits with his name embroidered in them.

Okay. Let's focus on those.

11 answer a yes or no question.

I'm sorry. Okay.

But we'll focus on the suits if that makes you happy. 14 What happened to those suits after the FBI found those 15 suits?

I have no idea.

Did they inventory them?

Well, I know they counted them.

19 when there's a FBI raid as to what the -- once they're 20 inventoried the property and take these pictures, I don't 21 know what they do. So, no.

22 whether they took them or left them there.

What about the rest of the property that we've seen 24 pictures of that relates to the debtor, did they take them 25 or leave it there?

I think that they took cars that were there.

2 than that, I'm not sure.

Did they tell you that they thought that the property, 4 not the pieces of paper, but the valuable property that they 5 found on the premises was likewise property purchased with 6 inappropriate funds?

They haven't said that.

8 indictment, so you would have to read what they are saying 9 in there, but we haven't had a discussion about actual items 10 other than the mansion itself.

Okay. Would your answer be the same if I asked you 12 about the suits, there's no way of knowing whether Mr. 13 Kwok's own money was used to purchase those suits?

It's impossible. He has no money.

15 suits are worth probably five, \$10,000 each.

16 point is that you'll never find a bill that -- well, you'll 17 find his name all over the place, but he never pays for 18 anything directly.

Now, how often did Mr. Kwok sleep at the Mahwah 20 mansion?

We think that based on the video, we just showed you a 22 sample, but based on the live streaming that we see with 23 these golden columns, he slept there and at the Sherry 24 Netherland quite a bit, meaning not -- it was not like once 25 every month or something like that.

And for the record, what's the Sherry-Netherland?

That's an apartment in New York City that the debtor 3 had the right use.

And did you determine how often he was there?

Not precisely.

6 the sense that we know the background now.

7 the Sherry-Netherland background.

8 background. And he was in both places a lot.

9 say in the Mahwah mansion, you know, there are tons of 10 videos of him broadcasting from the room with the golden 11 pillars if you will.

Okay. You don't know for a fact that he spent the 13 night at the location every time he made a video, do you?

Well, based on the stuff that he left behind, I would 15 say yes.

Why?

Because a guy my age doesn't live -- leave his 18 prescription drugs in a place where you don't sleep. 19 Meaning you don't like go to various places and leave 20 prescription drugs there. That's your home.

21 house.

So you know -- we know that he was there at least one 23 night because he left prescription drugs there?

No. But it's just not only that, the family pictures,

That leads you to believe that he spent the night there 2 on a regular basis?

Many times.

4 hotel? I mean, if that's the concept that he's there for 5 once a month, you don't leave family pictures there.

6 in essence of using that place a lot.

Okay. Now, did -- what we saw in the videos, the -- 8 let's see, I believe it was when we got the translation of 9 the clips, we heard that in clip eight of Exhibit 21 there 10 was a reference to the fact that G Club owned the house and 11 was allowing the fellow fighters to use it.

I don't think I heard G Club owning the house.

13 mentioned G Club, meaning that people from G Club can come 14 and visit the house, but I didn't hear anyone saying G Club 15 owned the house.

Okay.

Maybe you heard that. I didn't hear that.

Did you investigate whether G Clubs has any ownership 19 interest in the house?

G Club is Kwok.

21 change my views for one bit.

Yeah. That's a pretty general statement G Club is 23 Kwok. You know.

24 instance, a reputable third-party company audited every 25 dollar that came into G Clubs and determined that Mr. Kwok

1 was not one that put money into G Clubs?

As I said, he never puts money -- you'll never be able 3 to show that he put the money directly.

4 this thing works. 5 But I'd like to see -- I'd like to see what you're 6 talking about. I'd like to understand what they knew when 7 they issued those financial reports if such reports exist.

Okay. But generally speaking, the only way we're going 9 to figure out whether Mr. Kwok had an ownership interest 10 here is if there was some sort of a audit of where the money 11 came from, correct?

Well, we just hired a forensic accounting firm that's 13 going to do a tracing analysis of all these accounts, so 14 eventually we'll have more information on that.

15 end of the day, I don't think it's going to change the 16 fundamental premise which is all these satellite companies, 17 Golden Spring, G Club, et cetera, it's all governed by Kwok, 18 controlled by him, and used for his purposes.

Well, governing a business doesn't necessarily mean 20 that it's his business, does it?

It depends what the -- what the business is used for 22 and who gets the profit, who gets to dip in it.

23 to dip in it and buy a jet, well, that would be a form of 24 ownership even though you don't own it.

25 that company sends \$2.5 million in England to buy a jet, and

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1 who's using the jet, like the New Federal State of China, 2 no. It's him or his son, et cetera.

3 form of ownership. That's what we have here.

That's what you have here.

5 it, therefore, it's his?

No. It's not only he uses it.

7 it. He enjoys -- he controls it.

8 benefits of it or most of the benefits of it, meaning the 9 members of the New Federation of China are not getting 10 airplanes. They're not getting a yacht.

11 getting the apartment, the Sherry-Netherland.

12 that. So that's -- and the lifestyle is millions of dollars 13 a year. That money gets taken out.

14 ownership, not legal ownership, but he's able to dip into 15 those companies and use those funds to buy a house, or to 16 buy cars, to buy, you know, \$5,000 cigars.

17 ownership.

Equitable ownership.

I didn't know they had \$5,000 cigars.

I didn't know either, but that's what he says that 22 they're worth.

So again, let's focus on the asset here --

Yes.

-- because I don't know anything about all those other

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1 assets you're referring to.

2 mansion. Twenty-one bedrooms, correct?

I think that's correct, but I don't -- I don't know if 4 it's 21 or 22.

Call it approximately.

Lots of bedrooms.

Okay.

You know.

If anybody else spends a night there, are they the 10 owner?

No. No.

But he is because he spent the night there?

If that were the only factor, I would say, no, that's 14 wrong. But the -- he controls the asset. 15 I don't know if you noticed, but the New 16 Federation of China didn't have access to that house until 17 he went to jail.

18 building empty or tell his followers I bought this for you. 19 This is all for you. 20 So the point is that before that, there was not 21 like -- there were not hundreds of people traipsing in and 22 out. I guarantee you that. He has bodyguards.

23 not allow all these hundreds of people to go in and out of 24 the building. So it's not only that he slept there, it was 25 his house before he went to jail.

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Well, I think we've seen in your exhibits that the 2 house cost \$28 million, correct?

That's correct.

And there's been about \$17 million worth of 5 renovations, correct?

It's something like that.

7 precisely the amount of the improvements.

Okay. In the video that we saw at the outset today, 9 Exhibit 21, they make repeated reference to the fact that it 10 still wasn't ready.

11 correct?

Mm-hmm. That's so they can explain to people why they 13 cannot all come.

Well, when it was -- the refurbishment were completed, 15 that's when people started coming, correct?

They'll never be completely refurbished, because that 17 way -- remember that he explained that there will be a plan. 18 We will tell you when you can come.

19 you can come. And that's the way these things work.

Well, you say that, send more money and then you can 21 come, but the fact of the matter is that the money that was 22 collected from these defrauded folks that the DOJ's 23 supposedly protecting, that was collected years ago, wasn't 24 it?

Define years ago.

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Within the last two years?

Well, that's not years ago.

Two years?

Yes. Which portion are we talking about, the G Club, 5 the Himalaya Coins, or other schemes?

Only focusing on this house, the money used for this 7 house?

Yes.

That money was collected obviously before the house was 10 purchased, correct?

Well, yeah. But again, there's an assumption that the 12 full amount was collected from these people.

13 already controlled through other sources.

Okay. And frankly, you're the Trustee here, so let me 15 just come right out and ask you, it's really the judge's 16 call, but let me ask you, if you saw a piece of paper that 17 showed you where the money came from and all came from one 18 source, would that satisfy you, or is there nothing that 19 could satisfy you that the money didn't come from the 20 debtor?

That's a fair question.

22 naive in the sense that there are a lot of people who can 23 act as fronts to pay and make it look legit.

24 mean that you stop there.

25 they get the money? It depends.

1 history of that company. 2 I know a company was created the day of the 3 closing. Okay. So that company didn't have a past.

4 we'd like to understand where did the money come from? 5 And that company that provided the money or the 6 people, I'd like to understand how they got money?

7 you can't really -- you always have to scratch below the 8 next level. 9 I understand you're going to say, well, when do 10 you stop? That's a good question. 11 But I think we know enough here to know that these 12 transfers are going fast and furious every day for thousands 13 and thousands of dollars with bank accounts being opened, 14 closed, all the time. All the time.

15 much more now about the transfer to pay law firms, how they 16 pay them. How some companies that sold property that they 17 shouldn't have sold.

18 in this case and all that. We just know a lot more now. 19 So you have to -- I have to apologize for my 20 degree of skepticism, but I would want to understand the 21 full picture before telling you it's okay.

Fair enough. And I think that's what we're here for. 23 We're trying to show the judge the full picture before 24 anybody takes anybody's property away.

Well, we're not -- this is not about taking the

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1 property. This is about protecting the property right now. 2 Any owner should be happy with what we're trying to do, 3 which is to protect the property. Nobody goes there.

4 are security guards there. The property is safe.

5 should be a goal that anyone shares.

Right. The testimony you gave just a moment ago sort 7 of -- there was some sort of an inference that because the 8 Nevada corporation was formed the day of the real estate 9 transfer, that there was something nefarious.

10 mean to say there was something nefarious about that, did 11 you?

No. What I mean by that is there's no history in there 13 and it's hard to believe it has other assets.

14 to the point I made about having that entity give me an 15 assurance that they won't do anything wrong doesn't get me 16 where I need to be to protect the estate.

You've been doing this a long time.

18 are crated for the purposes of purchasing real estate --

Sure.

-- all the time?

Sure. I'm not -- there's no point about -- the point 22 there is that there's no track record of an entity with 23 other assets that could -- you know, if there's -- as I 24 said, if somebody wants to stand behind what happens to the 25 property from now until there's a ruling in this case, I'm

1 all ears. But a real party with real money, not a company 2 that we think we own.

And before I get off those videos, again, without 4 trying to make you remember which video goes with which 5 exhibit number, there were -- there were approximately four, 6 it appeared to me anyway, four videos relating to events 7 that took place at the Mahwah mansion, not including the 8 live streams of Mr. Kwok, just the events.

9 that your understanding, because you produced this?

Yeah. Yes.

Okay. And do you recall what those events were for?

Yeah. They're fundraisers essentially without calling 13 it a fundraiser.

14 anniversary of the New Federation of China.

15 Bannon there. They bring Santos.

16 and ask people to send more money because Brother Guo was in 17 jail. We need to help him.

Okay. So that's not an everyday occurrence.

19 were actual events where those videos were taken?

Yes. But there's an implication that other days 21 there's nobody in the property, that's not right.

I wouldn't suggest that.

23 forgive me, I'm so new to the case, I have to keep looking, 24 the New Federal State of China, they've only had, from what 25 we can see here, four events, you know, formal events, that Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 135 of

1 you're aware of and got videos relating to all?

No. I know they live stream from there all the time. 3 At least once a week on Saturdays, so that means that people 4 go in. The people that we saw, the, quote/unquote, 5 "Journalists," the ten journalists that are there.

6 video people and all that.

7 activities. 8 And remember, in these things, they are inviting 9 the followers to come and visit, so that there's just no 10 control over what -- who goes in there.

Yeah. And I promised you I'd get to the live stream 12 separately, but the event videos, those were -- those were 13 only four events, large events, that you're aware of during 14 the past year, correct?

Well, first of all, these are all taken post March 16 15th, so that's -- that's a very short track record of four 17 events since March 15th. Big events? Yes. 18 But I know that there's live streaming that goes 19 on all the time.

20 bunch of people.

21 going in there. 22 So I would hesitate to say four events only.

23 don't think I can say that.

But you can't say there was more?

Well, I know Santos was there.

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1 at least once or twice a week from there.

2 a bunch of people.

Okay. And the live streaming that took place after Mr. 4 Kwok was incarcerated, who does that live streaming?

You know, it's the federation people and GETTR, 6 probably GETTR, or people affiliated with them, or some HCHK 7 people, or ex-HCHK people.

8 company like HBO who does this.

9 group that does this.

But you know that these events are happening because 11 you see them on GETTR?

Yeah. We see them.

13 those and she sees them and gives us reports periodically 14 about what is being said there and who's there, et cetera, 15 et cetera.

Okay. And about how many of those events have occurred 17 on the premises since the incarceration of Mr. Kwok?

I think at least two a week, plus the other events. 19 And again, as I said, I don't know and I don't 20 think that the mansion is closed.

21 and get in maybe.

22 shouldn't say every time, often when they have a live 23 stream, there's a new guest, somebody who just stopped by 24 from Kansas or from Florida.

25 there all the time.

Are you aware of the purpose of G Clubs?

The legitimate purpose of G Club?

3 sell clothes.

To sell clothes?

Well, to sell fashion, you know, G Fashion, G Club. 6 There's also the -- the aspect of G Club which is to give 7 access to people to events or things like that.

Or to show their 9,000 members what it's like to be in 9 a free, democratic society and have possessions?

No. There's a cynical answer to that, but I'm not 11 going to go there.

12 purpose of G Club, I don't know if that's really the purpose 13 of G Club.

Okay. So I just want to focus you back really to where 15 we started, you and I, this afternoon.

16 FBI going to the mansion and finding some property there. 17 And we talked about the vehicles.

18 were taken by the FBI?

Yes.

Okay. And do you know where they are now?

No.

Okay. I'm really more focused on, again, what is your 23 understanding from your conversations with the U.S. 24 Attorney's Office about who the debtor's victims are with 25 respect to the Mahwah mansion?

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1 MR. BASSETT: Objection.

2 previously, and the witness already answered these questions 3 and testified to this topic. 4 THE COURT:

5 overrule the objection. 6 THE WITNESS: So can you repeat the question? 7 BY MR. CONWAY:

Yes.

-- what is your understanding after you've had your 11 conversations with the U.S. Attorney's Office about who the 12 victims are with respect to the Mahwah mansion?

Well, there's -- you're conflating two things here. 14 The Mahwah mansion is a target of a forfeiture, a future 15 forfeiture proceeding.

16 have victims with respect to the Mahwah mansion to get 17 there, meaning that there may be victims of crimes.

18 the proceeds are used to buy part of the Mahwah mansion, 19 then they can seek forfeiture.

20 of the Mahwah mansion, I'm not sure I can testify to that.

Can you testify to anything about what -- who may be a 22 victim of the debtor where the monies that were obtained 23 from these victims ended up being used to purchase the 24 Mahwah mansion?

As I said, that's the Government's theory for

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Luc Despins - Cross - Conway 139 forfeiture. I don't need to prove that. I just need to prove that it's equitably owned by Kwok. Q I've asked you something specific. Are you aware of there being any victims who somebody, whether it's the Government or you, alleges gave their money, and that money was obtained for some sort of fraud, and then used to purchase the Mahwah mansion? A Well, there -- MR. BASSETT: I'm just going to lodge a relevance objection, Your Honor. I mean, this is not -- this is not a criminal case. We're not trying to prove victims. We're trying to prove ownership of the home. THE COURT: Your response, Counsel? MR. CONWAY: We're having -- we can't have it both ways, Your Honor. Either there's some sort of a victim here and Mr. Kwok somehow got their money and purchased the mansion, or somebody else purchased the mansion and Mr. Kwok doesn't own it. So I'm asking -- I'm giving the Trustee an opportunity to come out and say, yeah, I think that the monies that belong to somebody else were used, but they were swindled from them by Mr. Kwok. And if so, who were they? THE COURT: Well, there's an objection pending, so you just asked a second question. MR. CONWAY: Well, I --

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Luc Despins - Cross - Conway 140 THE COURT: But there's an objection pending to the first question, which is you said who are the victims, right? Isn't that your question? Who are the victims? MR. CONWAY: There's a lot more prefatory language, but it was something along those lines, yes. THE COURT: Okay. And, Mr. Bassett, your objection is that it -- you're talking -- that the question is irrelevant because it goes to the criminal proceeding? MR. BASSETT: My objection is that it is not an issue in this adversary proceeding who the, quote/unquote, "Victims" -- THE COURT: I think Mr. Despins already answered that, that was the last answer he gave. So I guess I'm not sure what your question is, Counsel, insofar as in addition to what Mr. -- Mr. Despins, I think I just heard him say that I don't need to prove what the Government needs to prove. I just need to prove that it's an asset of this estate somehow. I think that's what he said. And so I'll let you ask the question one more time, but I'm not sure if I understand what your question is. I think I understand it, but I'm not sure I do. So why don't you try it one more time. MR. CONWAY: I'll rephrase the question, Your Honor.

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1 BY MR. CONWAY:

And the theory here, and I apologize, this question is 3 prefatory and rehashes what we've been over, but it seems 4 necessary at this point.

5 belongs to the debtor or the debtor's estate, correct?

Correct.

But you don't have any evidence as to where the debtor 8 got the money to purchase this house, do you?

No. We have evidence from the indictment.

10 as I told you, the debtor had billions of dollars before 11 these very schemes were started.

12 the debtor, the debtor's, you know, funded this directly or 13 indirectly. 14 But as I told you, you can never prove that 15 there's a bank account that has his name on it that made the 16 transfer. So if you're asking me that, I cannot prove that. 17 But I am sure that it's -- he controls the funds that went 18 in there and that he owns them because he has access to them 19 and he's using them. 20 So I -- that's, I think that's -- I'm repeating 21 myself, but that's really the point.

Okay. And so if, in fact, in this case, if you're 23 shown evidence of where the funds came from, and it's not 24 from a debtor controlled account, does that mean that it has 25 to come from a victim?

Luc Despins - Redirect - Bassett 142 MR. BASSETT: Objection. I don't even understand the question or its relevance. THE COURT: I understand. I think -- I think Mr. Despins can answer that question actually. I'm going to overrule your objection. THE WITNESS: So the question is if it doesn't come from a debtor controlled account, controlled defined loosely because he never actually has documented control -- BY MR. CONWAY: Q I'll take your word for that. A -- at least that's our view of the world at this point, does that mean it comes from a victim? Probably. Probably. MR. CONWAY: Okay. I think I'm done for the moment, Your Honor. THE COURT: You're done with this witness until -- MR. CONWAY: This witness. THE COURT: We're going to redirect, Counsel? MR. CONWAY: I assume there will be, so. THE COURT: Right. Okay. That's fine. Thank you. Mr. Bassett? MR. BASSETT: Thank you, Your Honor. Again, Your Honor, Nick Bassett from Paul Hastings on behalf of the Trustee. Just a few questions on redirect. I hope to be fairly brief. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 142 of

2 BY MR. BASSETT: 3 Q Trustee Despins, you were asked some questions during 4 cross-examination about what you had or had not learned in 5 your investigation about sources of funding of the home, et 6 cetera. When were you appointed as Trustee in this case? 7 A In July of last year. 8 Q And you've been conducting an investigation since then. 9 But when did you first become aware of the Mahwah mansion? 10 A On March 15th I'm embarrassed to say. 11 Q How did you become aware of it on March 15th? 12 A Because we saw the indictment.

13 before then. 14 Q So at this point in the case, have you finished your 15 investigation into the Mahwah mansion, including how it was 16 acquired and all the other facts that may be relevant to 17 this adversary proceeding? 18 A No. It's ongoing. 19 Q Do you intend to seek discovery as part of this 20 adversary proceeding? 21 A Absolutely. 22 Q Now, is it your understanding that the FBI has 23 conducted an investigation of the debtor and his affairs 24 including the Mahwah mansion? 25 A Yes, they have.

1 Q And when did they file the indictment? 2 A It became public on March 15th, but I -- they may have 3 filed it before.

4 that time. 5 Q And you mentioned during your cross-examination that 6 you understand that in the indictment the Department of 7 Justice has alleged that the Mahwah mansion was purchased 8 with proceeds of fraudulent conduct by the debtor? 9 A Correct. 10 Q That occurred after the FBI completed their 11 investigation? 12 A That's correct. 13 Q Do you have all of the documents and information from 14 the FBI and the DOJ that that they obtained in their 15 investigation? 16 A No. The debtor has been resisting providing us that, 17 so we're trying to get that. 18 Q Have you gotten any discovery at all of documents that, 19 aside from these pictures that we saw today, that relate to 20 the Government's investigation that they conducted prior to 21 the indictment? 22 A No. 23 Q You were asked some questions about the managers or 24 members of Taurus Fund, LLC, do you recall that? 25 A Yes.

I'd like you take a look at Trustee Exhibit 3 if you 2 could. 3 MR. BASSETT:

4 pulled up on the screen. If you could scroll down. 5 BY MR. BASSETT:

And, Trustee Despins, do you recognize this as a 7 document obtained from the State of Nevada Office of the 8 Secretary of State as the document appears to indicate?

Yes, I do.

And if you go to, it would be the fourth page of this 11 document, so four pages down, sorry, next page, on this 12 page, it says formation limited liability company and then 13 there's a checkmark next to articles of organization, do you 14 see that?

Yes.

Then the name being registered in Nevada, the Taurus 17 Fund, LLC, do you see that?

Yes.

Taurus Fund, LLC, that's the defendant and the nominal 20 owner of the Mahwah mansion, correct?

That's correct.

Now, if you go down further, sorry, sorry, just the 23 bottom of that last page, where it says number six, it says 24 name and address of each manager or managing member, do you 25 see that?

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Yes.

Then there are two names listed in the box to the 3 right, can you list those off for the Court?

Yeah. Taurus Management, LLC and Scott Barnett.

And Scott Barnett's the individual that you were 6 questioned about during cross-examination, right?

Correct.

All right. If you go to the next page of the document, 9 please, this page of the limited liability company formation 10 form has a spot in box 12 for the name and signature of 11 manager or member, do you see that?

Yeah.

And whose -- whose signature and name appear there?

Scott Barnett again. 15 MR. BASSETT:

16 offer Trustee's Exhibit 3.

17 is self-authenticating so I was going to do it separately, 18 but because it came up during cross-examination, I would 19 offer it at this time into evidence. 20 THE COURT: Counsel? 21 MR. CONWAY: No objection. 22 THE COURT: Okay. Thank you. 23 Exhibit 3 is admitted in full. 24 MR. BASSETT: Thank you, Your Honor. 25 (Trustee's Exhibit 3 received in evidence)

1 BY MR. BASSETT: 2 Q And do you have copy of the pleadings binder there in 3 front of you, Mr. Despins?

5 A Power papers? 6 Q Power papers. There you go. 7 A Yes. 8 Q And there should be an index in the front that has a 9 reference to the complaint, do you see that? 10 A Yes. 11 Q Could you turn to that document for me? 12 A Yes. 13 Q Before I direct you to a particular paragraph in the 14 document, do you recall you were asked some questions during 15 cross-examination about exactly what had happened that, as 16 you testified, led to the managers of Taurus Fund, LLC 17 becoming trustees? 18 A Yes. 19 Q If you could turn to paragraph 31 of the complaint, 20 this is on page 10. 21 A Yes. 22 Q And it says there, under Nevada revised statute 23 annotated section 86.2632, Taurus Fund's annual list of 24 information was due on December 31st, 2022.

25 failed to timely file, Taurus Fund is deemed in default

Luc Despins - Redirect - Bassett 148 under Nevada law. Do you see that. A Yes. Q Is that your understanding as to how the entity became to be in default -- A Yes. Q -- and thus managers were converted into trustees? A Yeah. That's my recollection. Yeah. Yes. Q Trustee Despins, you were also asked some questions about G Club and its potential relationship between funds raised through G Club and the Mahwah mansion, and I think counsel had asked you whether you thought that those were all in the past couple of years, but do you have an understanding sitting here today whether or not G Club remains an active vehicle? A No. I think it's defunct. Q Have you heard of G Club premier members? A Vaguely, yes. Q Do you have any idea what those -- what those members -- what that's about? A Yeah. They paid more and they were promised something, but I'm not sure they got it. Q And you mentioned G Club was, you said, defunct. We've had discovery in this case where you sought documents from G Club, do you recall that. A Yes. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 148 of

And recently, have you had a dispute about trying to 2 get documents from G Club?

Sure. And as the Court is aware, this is a hot issue 4 in the HCHK adversary proceeding where we wanted these 5 documents through HCHK and G Club was attempting to resist 6 that.

And do you recall -- do you recall as part of that 8 discovery that went on, one of the issues being that there 9 was a change in leadership of G Club?

Yes.

11 something like that. Yeah.

Because the prior managers left?

Had all resigned. Yeah.

And when -- do you know when that happened?

15 before or after the debtor's indictment?

After the indictment. 17 MR. BASSETT: No further questions, Your Honor. 18 THE COURT: Thank you. 19 Any recross, Counsel? 20 MR. CONWAY: Not based on that, Your Honor. 21 THE COURT: Okay. Thank you. 22 All right. You can step down, Mr. Despins.

23 you.

25 THE COURT: Mr. Bassett?

Despins v. Taurus Fund - August 14, 2023 150 MR. BASSETT: Yes, Your Honor. So, Your Honor, as promised, at this time, there are just a few additional exhibits that we have not yet introduced into the record that I don't think I need the Trustee for. I'll just try to make sure I have a comprehensive list of which ones I've already got, of which ones already came into the record. So, Your Honor, on the Trustee's Exhibit List, and we can pull these up and look at them if we need to, we don't have to, I think to the extent that they prove relevant to the arguments that we're going to be making at closing, my colleague, Mr. Luft, will address that, but the first exhibit on the exhibit list that we would like to have put in the record, really by way of sort of housekeeping and just good order, is the Trustee's Certificate of Service for serving the temporary restraining order on the defendants. That appears at Trustee Exhibit 1. I'm not going to, you know, direct the Court to any particular parts of it. It's already filed on the ECF docket, but, again, we'd like that to be part of the record and, therefore, would ask that that certificate of service at Trustee Exhibit 1 be admitted into evidence. THE COURT: Counsel? MR. CONWAY: No objection. THE COURT: Okay. Thank you. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 150 of

Despins v. Taurus Fund - August 14, 2023 151 MR. BASSETT: Thank you, Your Honor. Trustee's Exhibit 1 is admitted in full. (Trustee's Exhibit 1 received in evidence) MR. BASSETT: The next exhibit is Trustee Exhibit 2, which we had not yet addressed. If I could have that exhibit pulled up on the screen, please. This document at Trustee Exhibit 2, Your Honor, I believe also is -- it's self-evident what it is and it's a self-authenticating document. This is a copy of the file containing the deed that was pulled from the Bergen County Office and it has the seal listed there. If you scroll down to, well, on that first page, I apologize, I just wanted to point out a couple of things here. If you scroll back up. I'm sorry. It has the recorded date of December 29th, 2021. As the Court knows, that approximately two months prior to the bankruptcy filing in this case. Secondary name, which is the name of the purchaser, you'll see is Taurus Fund, LLC. And then at the bottom of this first page, it has the consideration paid which was \$26 million. If you go to page 12 of the PDF please, there's one other thing I wanted to flag for the Court. MR. CONWAY: Your Honor, I would just say that given the fact that it's not in evidence, he's sort of Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 151 of

1 testifying, but I won't object to it going into evidence, so 2 then he could then read the document. 3 THE COURT: Okay.

4 full. Thank you. 5 MR. BASSETT: Thank you. 6 (Trustee's Exhibit 2 received in evidence) 7 MR. BASSETT:

8 identify for the Court was at page, is this page 12, yes, 9 property classification, which is in the middle of the page, 10 the mark, the checkmark there is Class 2 Residential. 11 The next exhibit, Your Honor, that is not yet into 12 evidence is Trustee Exhibit 9.

13 simply the articles of organization of Taurus Management, 14 LLC, which is one of the two managers of Taurus Fund, LLC. 15 The other one being Scott Barnett.

16 would offer this document into evidence. 17 THE COURT: What is this document? 18 MR. BASSETT:

19 the Secretary of State from the State of New Mexico. 20 THE COURT: Okay. 21 MR. BASSETT:

22 it was Exhibit 2, no, Exhibit 3, which was the articles of 23 organization of Taurus Fund, LLC, Taurus Fund, LLC being the 24 nominal owner of the property, Taurus Fund, LLC, according 25 to its articles of organization, has two managers.

1 being Scott Barnett.

2 LLC. 3 This, in turn, is the document pulled from the New 4 Mexico Secretary of State website concerning Taurus 5 Management, LLC. We wanted that document also to be part of 6 the record. And, therefore, we would offer it into evidence 7 as Trustee Exhibit 9. 8 MR. CONWAY:

9 characterization, which wasn't true.

10 admission of the document. 11 THE COURT:

12 this document. I just didn't see it.

13 I was looking away when -- oh, it's just the cover sheet. 14 Okay. I thought there was a different title or something. 15 All right. 16 So then the first page of the document is this, 17 right here with the seal at the top? 18 MR. BASSETT: That's correct, Your Honor. 19 THE COURT: Okay. Okay.

20 full. 21 (Trustee's Exhibit 9 received in evidence) 22 MR. BASSETT: I think just a couple more exhibits. 23 Trustee Exhibit 11 is the next one.

24 sorry. I'm sorry. That's incorrect. Trustee Exhibit 10. 25 This is another, Your Honor, just public record

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1 document. I believe it's self-authenticating.

2 from the United States Department of the Interior National 3 Park Service, National Register of Historic Places.

4 contains information recorded with the National Register 5 about the property, including its historical nature.

6 don't think there's a dispute about that. 7 And this is a document that we also believe should 8 be admitted into evidence and I would ask that it be 9 admitted as Trustee Exhibit 10 at this time. 10 THE COURT:

11 the admission of Trustee Exhibit 10? 12 MR. CONWAY: I don't, Your Honor. 13 THE COURT: Okay. Thank you. 14 MR. BASSETT:

15 this particular exhibit is on page 7 of the PDF. 16 If you scroll down further. Sorry.

17 bit. 18 The second paragraph on page 7, it says pursuant 19 to an agreement between the Township of Mahwah and 20 Darlington Associates, the owners, the mansion is to have 21 its exterior restored by the owners and to be used as a 22 single-family residence.

23 the Court. 24 THE COURT: Okay. Thank you. 25 MR. BASSETT:

1 exhibit list that I'd like to have pulled up on the screen 2 if possible is Trustee Exhibit 20. 3 Trustee Exhibit 20, Your Honor, frankly is a 4 document that I think the Court could just take judicial 5 notice of. It is a decision from Your Honor in this case. 6 This is the corrected memorandum of decision granting in 7 part the motion for preliminary injunction in the PAX 8 litigation concerning the protests. 9 I'm happy -- I think it's been clear based on 10 comments made today, you know, why much of what the Court 11 found in issuing this decision is relevant.

12 important that it become part of the record. 13 And again, this summary staged at the proceeding, 14 to the extent counsel would argue that it's hearsay because 15 he was not involved, hearsay does come in at this stage of 16 the proceeding. So we would ask that Exhibit 20 be admitted 17 into evidence as well. 18 MR. CONWAY:

19 relevant, so I'm going to object on relevance grounds.

20 assume that you can take judicial notice of it though. 21 MR. BASSETT:

22 fine with the Court taking judicial notice of it, but I just 23 would be happy to point out, among other things, paragraphs 24 2 and 4 of the decision the Court found that NFSC is 25 associated, affiliated, and/or connected to the debtor.

Despins v. Taurus Fund - August 14, 2023 156 In paragraph 6, the Court found that the NFSC is involved in the protests that were at issue in that litigation. In paragraph 7, the Court found that the debtor is the leader of the NFSC. NFSC serves the purposes of the debtor, it serves as business vehicles for the debtor, and their members are personally loyal to the debtor. Those are just a couple of the findings of this order that are highly relevant. THE COURT: Okay. Exhibit 20 is admitted in full. (Trustee's Exhibit 20 received in evidence) MR. BASSETT: Just two more, two more exhibits, Your Honor. First is Exhibit 28 to the Trustee's Exhibit List. This is another document of which the Court will be familiar. This is the decision and order of Justice Ostrager of the New York Court in the PAX litigation from February 9, 2022. I think again the Court could take judicial notice of this decision. What I would note in terms of its relevance and why we are offering it, we are simply asking the Court to take notice of Justice Ostrager's findings in this decision, with which the Court is very familiar, and which are mentioned in the complaint in this adversary proceeding, that the debtor has used legal entities to engage in what Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 156 of

1 Justice Ostrager called a, quote/unquote, "Shell game" 2 designed to keep his assets from creditors. 3 Again, that's the purpose for which we are asking 4 this to be introduced.

5 for this document to come in at this stage of this 6 litigation given that we're here on a preliminary 7 injunction. 8 MR. CONWAY:

9 it's relevant at all to these proceedings.

10 if this one is subject to being taken on judicial notice, 11 but Your Honor can tell me. 12 MR. BASSETT:

13 add, you know, the relevance is for the limited purpose that 14 I mentioned.

15 decision to come into evidence, just the finding that 16 Justice Ostrager made concerning the way the debtor 17 operates, which was the subject to extensive testimony by 18 the Trustee. 19 So I think -- and by the way, that testimony was 20 elicited on cross-examination so I think it is -- it's 21 certainly relevant. 22 THE COURT:

23 full. 24 MR. BASSETT: Thank you, Your Honor. 25 (Trustee's Exhibit 28 received in evidence)

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1 MR. BASSETT:

2 exhibit list that we're seeking to have admitted into 3 evidence is Exhibit 29.

4 indictment that has been filed against Mr. Kwok and William 5 Je that has been the subject of much testimony here today. 6 We obviously understand that the statements in 7 here at this point, given that it is an indictment, are only 8 allegations. But we do think the fact of the indictment's 9 allegations, the facts cited in the indictment, and the 10 conclusions that the Department of Justice has drawn is 11 relevant, highly relevant. 12 And I think given that the allegations are 13 unproven, the court obviously would just place whatever 14 weight it deems on this document at this time. 15 I can go through and point out particular 16 paragraphs to the extent helpful, but as the testimony has 17 already shown today, there's numerous statements in here 18 about the debtor having purchased the Mahwah mansion using 19 proceeds of fraudulent conduct.

20 that we're asking for Trustee Exhibit 29 to be admitted into 21 evidence. 22 THE COURT: Counsel? 23 MR. CONWAY:

24 foundation. Counsel's indicated that he's not suggesting 25 that any of the allegations are true.

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1 why the allegations are in here.

2 relevance is here because we've got a sealed indictment that 3 has a whole host of allegations that have been unproven and 4 we don't know where this information comes from. 5 So I'm objecting on foundation, Your Honor. 6 THE COURT: Thank you. 7 MR. BASSETT:

8 indictment has been unsealed.

9 THE COURT: Counsel may not know that. 10 But it is unsealed at this point.

11 unsealed since March of this year. 12 But also, just to answer your objection why I'm 13 going to overrule your objection, in addition to the fact 14 that this document, there was a lot of testimony about this 15 document already today, and it's mentioned in, if not 16 numerous occasions in the complaint, and also the debtor's 17 counsel filed a letter in this adversary proceeding today at 18 9:55 this morning talking about that they somehow -- I'm not 19 exactly sure what the debtor's intending to do except that 20 in this letter, that's now ECF 25 in this adversary 21 proceeding that was filed at 9:55 this morning, a letter 22 from Attorney Henzy, talking about the mansion and 23 understanding that there was a hearing on a preliminary 24 injunction today. 25 And the letter says in paragraph 3, I write to

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1 report to Your Honor that the debtor, through his criminal 2 counsel, intends to present a motion to the United States 3 District Court. In so doing, the debtor intends to seek an 4 order providing continued -- providing continued access to 5 the property and to prevent any changes to it or its 6 contents pending resolution of or further orders in the 7 criminal case. 8 So I think it is relevant.

9 for a foundation in that it's a public document.

10 himself has called it into question in this adversary 11 proceeding by filing this letter.

12 to the indictment.

13 regarding the indictment today. 14 So I'm overruling your objection. 15 And Trustee's Exhibit 29 is admitted in full. 16 (Trustee's Exhibit 29 received in evidence) 17 MR. BASSETT: Thank you, Your Honor. 18 That is all I had by way of exhibits.

And with the Court's indulgence, I'll just check with my colleagues to make sure we don't have anything else. THE COURT: Go right ahead,

MR. BASSETT: Your Honor, that concludes the presentation of the Trustee's evidence. Thank you very much.

THE COURT: Okay. Thank you.

1 Attorney Conway, would you like to present any 2 evidence? 3 MR. CONWAY:

4 have not been around long enough to have been able to 5 organize that as I mentioned earlier today. 6 I guess I should suggest that I think Your Honor 7 said that the TRO expires tomorrow, is that what you said? 8 THE COURT: It does.

9 the docket two, I don't remember, 2:06 or seven p.m. on 10 August 1st. So under Rule 65, it expires, right? 11 Doesn't it expire tomorrow?

12 day? I don't know. I have to look at the rules again, but. 13 MR. CONWAY:

14 day, I understand it's expiring soon. 15 THE COURT: Yes. 16 MR. CONWAY:

17 reason why when I asked Mr. Bassett about an extension of 18 time he probably was reluctant.

19 like me. But I didn't know it at the time. 20 So obviously, Your Honor, given the facts we've 21 heard, we know that there are a lot of questions marks. 22 More than anything, there are questions marks here.

23 would absolutely love to put on a case where we can answer 24 some of these allegations, you know, before Your Honor makes 25 a decision on a preliminary injunction.

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1 And perhaps we can stipulate to an extension of 2 the TRO in order to provide me time to do the necessary to 3 accumulate the evidence I need, actually review the papers, 4 which I have to admit I only had a chance to scan.

5 got most of them this morning.

6 that time. 7 And to the extent that we can resolve the concern 8 about the expiration of the TRO by simply stipulating to 9 extending it, that would perhaps make it easier for this 10 court to make a decision based on full evidence. 11 THE COURT:

12 short recess if you'd like and you can talk about it, but I 13 don't know what the position is going to be obviously. 14 I'll take -- I'll give you some time to talk about 15 whether you'll extend, you'll agree to an extension under 16 Rule 65(b)(2). 17 Go ahead. Go ahead. 18 MR. BASSETT:

19 THE COURT:

20 think, Mr. Bassett, before you say it, there's no need for a 21 recess because you're not going to agree? 22 MR. BASSETT: That's correct, Your Honor. 23 I think we had some discussion about this earlier 24 today. We are here today seeking not merely a continuation 25 of the TRO that's in existence, but the further relief that

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1 we have been discussing and that we're asking for in our 2 papers, which is to ensure that all the individuals that 3 we've seen coming in and out of the house, all of that 4 activity, that the house be secured, that we have the 5 assistance of the U.S. Marshal if necessary, everything that 6 Trustee Despins talked about. 7 And we're not willing, the Trustee is not willing, 8 to continue for any longer period of time simply by having 9 the existing TRO in place. 10 The other thing that I want to point out and 11 emphasize is that the Court is correct that we have set this 12 hearing for a preliminary injunction in accordance with the 13 rules. 14 And we have also served a TRO on the defendants to 15 this litigation in accordance with this court's order.

16 certificate of service at Trustee Exhibit 1, which I did not 17 cover in detail, makes clear that the Trustee served all of 18 the defendants, specifically in accordance with Federal of 19 Bankruptcy Procedure 4(b), by mailing documents to 20 registered agents. 21 Other exhibits in the record make clear that the 22 registered agents of Taurus Fund and Taurus Management are 23 the registered agents to whom we served these papers, so 24 there is no issue. 25 I understand counsel may not have been contacted

1 and been retained until recently, but his clients were 2 served. That's what matters.

3 THE COURT:

4 Bassett. It was UPS overnight delivery too.

6 MR. BASSETT: That's correct. 7 THE COURT:

8 first class mail and UPS overnight delivery on its 9 registered agent G International which I think we just saw

11 MR. BASSETT: That's correct. 12 THE COURT:

13 think Trustee's 9, or Trustee's 3, either one of those were 14 the Secretary of State documents.

15 one. 16 MR. BASSETT: That's correct.

17 -- I think 9 was the Secretary of State document for Taurus 18 Management. And that had listed in, within that document, 19 the registered agent we served for purposes of serving 20 Taurus Management. 21 The document at Trustee Exhibit 3 is the Taurus 22 Fund, LLC articles of organization.

23 agent that we served listed as the registered agent for that 24 entity. 25 We also attempted to -- we also I believe sent by

1 overnight mail service to Mr. Barnett himself.

2 belt and suspenders, although not necessary, tried to serve 3 him personally. And we tried to do that twice. 4 And then we filed another certificate of service 5 this morning reaffirming the second attempt whereby the 6 process server has indicated that he received confirmation 7 from a neighbor of Mr. Barnett that he, in fact, lives 8 there, but he was not able to catch him at home.

9 regardless, service under Rule 4(b) is sufficient if process 10 has been mailed. 11 So I don't think there's any question about the 12 defendants having had notice, timely notice, of the hearing 13 today and, therefore, I don't think there's any basis at all 14 for a continuance simply because those defendants decided to 15 take their time in retaining counsel. 16 So for all those reasons, and including most 17 importantly the fact that we are simply not willing to 18 adjourn this hearing based on a continuation of the current 19 TRO, we would, you know, continue to ask for the relief that 20 we're seeking, which is a broader relief than currently in 21 place without a continuance. 22 THE COURT: I understand. 23 Counsel, any response? 24 MR. CONWAY:

25 characterization that they had notice is improper.

1 that they got served under the code by mail to a post office 2 box is not the same as giving them notice. 3 And I can tell you that if it weren't for counsel 4 in another of your matters here having seen this on the 5 docket and making folks aware, I wouldn't have been 6 contacted on Friday. 7 So, you know, that said, I don't think it's -- 8 THE COURT:

9 service though. 10 MR. CONWAY: I'm not overly concerned about that. 11 I just want to make sure the record's clear that, you know, 12 those of us who practice bankruptcy law who take advantage 13 of the mail service option, should -- 14 THE COURT:

15 overnight mail UPS as well.

17 Is that his name, I'm sorry, Barnett? 18 MR. BASSETT: Yes, Your Honor. 19 MR. CONWAY: Right. 20 THE COURT:

21 wasn't there. 22 MR. CONWAY: Yeah.

23 THE COURT: I don't think you're correct.

24 think that statement that service notice is not proper. 25 It's a temporary restraining order.

Despins v. Taurus Fund - August 14, 2023 167 the rules prescribe how service should be made and service was made on your clients in the way that they directed service be made with the Secretary of State's Office of the state in which they were incorporated. So I don't think you can say that really. I mean, you can say it. I'm not going to disagree with other things that you say, but I am going to disagree with that because I don't think that's a valid statement. MR. CONWAY: I didn't argue about service. THE COURT: Tell me how under Rule 4 and under Rule 65 they didn't make service? MR. CONWAY: I didn't say that, Your Honor. And I apologize if I was unclear. I said the exact opposite. That while service was made, you can't say that the parties got notice simply because there were multiple mailings to post office boxes. The only individual here that they claim they served, they didn't actually make service on. THE COURT: I don't -- I don't agree with your argument, Counsel. MR. CONWAY: I didn't mean to use the word service. I mean to say -- well, they didn't actually put it in hand. They didn't -- THE COURT: There's no requirement that it be served in hand. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 167 of

1 MR. CONWAY: And I'm not saying there is.

2 arguing service. 3 THE COURT:

4 let's move on. Because then nothing that you're saying is 5 persuasive to me right now with regard to service.

6 exactly what they were supposed to do with regard to 7 service. 8 MR. CONWAY: And my comment is limited. 9 THE COURT:

10 decided to not open up the package isn't their problem. 11 It's your clients' problems.

12 package, and you're telling me there's somehow a notice, 13 there's now a standard for actual notice of the service in 14 the manner in which they made service that your client has 15 designated for service, show me a case that says that, 16 because I think you're going to lose on that one. 17 MR. CONWAY: Yeah.

18 Honor. 19 I would only restate the fact that it's one thing 20 to say service was made.

21 actually had notice. 22 THE COURT:

23 notice. 24 MR. CONWAY: It shouldn't say it. 25 THE COURT: Your client made the choice.

Despins v. Taurus Fund - August 14, 2023 169 either didn't open up the package or they threw the package away or whatever. Whatever they did. You can't -- you can't escape the requirements of service of a temporary restraining order by saying I didn't open up the pleading so I didn't know what it said. There's no case law that supports that, Counsel. There's just none. MR. CONWAY: And nobody here has made that argument, Your Honor. THE COURT: Well, you are making that argument because you just said they don't have notice. MR. CONWAY: No. I said that while service was good, it was improper for counsel to speculate that they had notice. MR. BASSETT: Your Honor? THE COURT: I don't think that's what you said. But I think let's move on. MR. CONWAY: That's what I intend. THE COURT: Let's move on. It's irrelevant. Service was properly made and I have no problem with the way service was made. And the fact that, you know, your -- Mr. Barnett and/or your clients, whatever they chose to do, they chose to do, nobody can control what they chose to do. Service was properly made. So they're not going to agree to an extension of Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 169 of

Despins v. Taurus Fund - August 14, 2023 170 the TRO, Counsel. So then is there anything else you want to tell the Court? Because then I have to make this ruling by 2:06 p.m. tomorrow in order for the -- before the restraining order expires. MR. CONWAY: Are you inviting me to argue right now or did you want -- THE COURT: I'm inviting you to argue. You're here. So go ahead. MR. CONWAY: Okay. MR. LUFT: Your Honor? THE COURT: I'm going to listen to argument, Counsel. MR. LUFT: I'm saying I just ask that we ask to respond with our argument after? THE COURT: Yeah. Sure. I'm going to give you just -- I'm going to give you an opportunity to respond. But he's here and I'm going to listen to him. I'm not -- I'll give whatever weight -- I'm giving whatever all of you say -- I have -- I'll give it whatever weight it's worth when I go back and review it. Right? That's what I do. That's supposedly what I'm here for. So that's what I'm going to do. Okay? So go ahead, Counsel. Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 170 of

Despins v. Taurus Fund - August 14, 2023 171 CLOSING ARGUMENT FOR DEFENDANT MR. CONWAY: Thank you, Your Honor. And, you know, my argument's going to be very brief because I have very little understanding of the case at this point. I can tell you that I've listened to the evidence here and the evidence is that we think that this may have been a house purchased with funds that may have been controlled by the debtor and, therefore, you should restrain the property and lock out the owners of the property, titled owners of the property, based on this testimony. That's a mandatory injunction which requires a little bit higher burden of proof. You know, what we're talking about here is a, you know, an allegation that may be that there's some property there that's at risk of being taken and that's why they feel that they should lock out the owners of the property. Well, we would stipulate that they can go in and get that property and move it. Because if that's the only concern, fine. THE COURT: You'll stipulate that they can go into the mansion and take out all the property? MR. CONWAY: The property that they believe is the debtor's. THE COURT: Well, they believe all of it's the Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 171 of

1 debtor's. So you're going to let them to in and take it? 2 MR. CONWAY:

3 THE COURT: That's fine. 4 MR. CONWAY:

5 show Your Honor all the evidence that shows which property 6 belongs to the Taurus Fund, and that property belongs to the 7 Taurus Fund. 8 If there's no evidence that it belongs to the 9 debtor, they can't take it.

10 evidence that anything here other -- there's speculation 11 that because they don't know how Mr. Kwok does his business 12 that this must be ill-gotten gains, that this must be like 13 other assets that has been discussed in front of Your Honor, 14 somehow improperly controlled by Mr. Kwok.

15 evidence of that though. And we need evidence here. 16 We need to have something to show that there is an 17 immediate need, there's some actual concern about changing 18 the status quo. 19 Your Honor, a preliminary injunction is to 20 maintain the status quo.

21 to change the status quo, which right now is that the Taurus 22 Fund can use the property.

23 maintain the status quo and have an injunction that says you 24 can't do anything with the asset, pending the outcome of 25 this litigation, that's well within the bounds of Rule 65.

1 But that's not what they're asking. 2 There asking that Your Honor change the status 3 quo, lock out the owners, mandatory injunction, and they 4 want you to do this based on evidence that consists of what? 5 Well, he did it before so we think that he did it 6 here. That's not -- that's not sufficient, Your Honor.

7 is a high burden to have a mandatory injunction that changes 8 the status quo. We haven't seen it here. 9 THE COURT: Okay. Thank you, Counsel. 10 Any response? 11 MR. LUFT: Yes, Your Honor. May I approach? 12 THE COURT: Sure. 13 CLOSING ARGUMENT FOR THE PLAINTIFF TRUSTEE 14 MR. LUFT: Good afternoon, Your Honor.

15 of Paul Hastings on behalf of the Chapter 11 Trustee. 16 THE COURT: Good afternoon. 17 MR. LUFT:

18 want to note, because it's come up a number of times, 19 Attorney Conway keeps representing that if he could just 20 show his evidence, he's seen all the evidence, and at the 21 same time has repeatedly told us today that he has 22 absolutely no time to see evidence or build a case. 23 That's the speculation we're talking about today, 24 Your Honor. If he had evidence, he had every opportunity to 25 show up today and present it.

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1 Now, the fact is he's also said he hasn't seen our 2 evidence and it's not there.

3 walk through, there's extensive evidence that supports this 4 and reason to grant this preliminary injunction. 5 As our claims state, the debtor is the equitable 6 owner of the Mahwah mansion.

equitably owned by him and we believe it to be the alter ego.

How are we going to show this? The evidence is going to show that the mansion, its contents, and the Taurus Fund are all estate assets and these assets have to be preserved for the creditors before they can be dissipated, damaged, liquidated, or moved to another unnamed shell company.

So we are asking the Court to have the assets freezed. We are asking for access to the mansion to be restricted to only those who need to be there, meaning law enforcement, the Trustee, and who he designates as needing to be there. And, Your Honor, we also are going to need for the assistance of the U.S. Marshals to the extent that it is necessary. Because the fact is right now the debtor has called on hundreds of people to descend on the mansion. This is a recipe for disaster.

Now, we've talked about the relief we seek. We ask to enjoin the defendants, which is the Taurus Fund, LLC,

1 Mr. Barnett, and Taurus Management, LLC, who are now the 2 trustee's of the Taurus Fund, for interfering with 3 encumbering and disposing of the assets of the Taurus Funds. 4 We've also asked in the order that this be made 5 applicable to high-ranking members of the NFSC as set out. 6 I'm not going to detail each one. 7 We're asking for the restriction of the access to 8 be limited and in such a way that keys can be changed, 9 passcodes, whatever else, to help secure the assets. 10 As the Trustee has said, anyone who cares about 11 the assets should support this.

12 assets, we believe for the creditors.

13 wrong, presumably any other owner would want this. 14 Now, the law is clear.

15 need to show a likelihood of success on the merits of one of 16 our three claims.

17 to all three. 18 Now, while there's been suggestions that we must 19 meet some type of criminal standard of beyond a reasonable 20 doubt, that is not the standard.

21 likelihood of success greater than 50 percent how likely it 22 is. 23 Now, the equitable ownership found where property 24 is acquired, sorry, equitable ownership is found where the 25 property is paid for with debtor funds, where the debtor

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1 represents that he has an interest in the property, or the 2 property is used to obtain credit. 3 The Bankruptcy Court in the District of New Jersey 4 has also found equitable ownership where they have found a 5 pattern and practice of a debtor's fraudulent behavior, 6 specifically where a debtor funds purchases and maintains 7 the fact of control but places the asset in another person's 8 name. 9 Now, with regard to Nevada equitable ownership 10 law, which is where the Taurus Fund is registered, where a 11 debtor has active or substantial control of a fund, or the 12 debtor is using or receiving the benefits of the fund's 13 assets, that establishes equitable ownership under Nevada 14 law. 15 Now, the evidence in this case supports all of 16 that. The funds used to purchase and renovate, all evidence 17 suggests they come from the debtor. 18 I want to address the idea that before it was 19 asked the Trustee on cross, well, didn't the video say that 20 G Club owns the property? There was no such statement. 21 In fact, I asked Ms. Song directly was there any 22 testimony -- was there any statements on those videos, 23 excuse me, in which anyone other than Mr. Kwok was indicated 24 as being the owner of the property?

25 nothing in Mandarin suggested that.

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1 And if the Court had its own review it, they're 2 not going to be able to find it. It's just not there. 3 Now, in terms of where these funds come from? 4 Part of the investigation, we can look certainly 5 where the FBI and the Department of Justice believes they 6 come from is that the money came from G Club, routed through 7 bank accounts to purchase the mansion.

8 indicated that that is part of Mr. Kwok and Mr. Je's 9 fraudulent scheme to fund the purchase. 10 There have been allegations of, well, must the 11 money all come from a victim? 12 Of course, Your Honor, in this case, we know that 13 the defendant has money from many places.

14 China, billions of dollars.

15 where we've had testimony where he has billions of dollars. 16 As well as the money, the billion dollars that the 17 Government has raised. 18 So the idea that it's a strawman to suggest that 19 if you can't show that from the victims, then it must not be 20 the debtor's money. 21 Now, let's talk about the residence itself and the 22 question of -- the statement earlier from Mr. Conway that 23 this was not -- no one is saying that this a personal 24 residence. 25 Of course all the evidence suggests that this is

Despins v. Taurus Fund - August 14, 2023 178 the debtor's personal residence. If you look at Exhibit 19, it talks about the boss's bedroom and Mei's bedroom. People have bedrooms where they live, Your Honor. If you look at Exhibits 14 and 18, we can see the debtor's personal identifications with his picture on it. His New York learners permit. His Hong Kong permanent identity card. Exhibit 17, his own prescriptions. Exhibit 13, suits with his name stitched in them, which we now know is 29 suits. No one brings 29 suits for a one-night, overnight stay, Your Honor. And of course Exhibit 15, the family's pictures. That's Mr. Kwok with his family. That's the type of thing I have in my home and I believe it's the exact type of thing that Mr. Kwok has in his home. We've seen the debtor broadcasting. He is using the asset. It's exactly -- where else have we seen that? In the Sherry-Netherland, the other apartment that he lives in. And we see that at Exhibits 22 and 23. What else do we see that we've seen before? The entity is managed and in the name of someone close to Mr. Kwok. Here it is his bodyguard/chauffeur, Mr. Barnett. He manages the Taurus Fund. And now that it's in default, he's a trustee of the Taurus Fund. Why is it significant that we have it transferred to a trustee? I'll Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 178 of

1 say it in two-fold, Your Honor. 2 First of all, the fact that the Taurus Fund is 3 defunct means under Nevada law it can no longer do business. 4 So the suggestion that they're the people who want to use 5 the asset or that they are still operating just legally is 6 not true. 7 Now, now that it's transferred into default and 8 leaves the trustees in control, it is of particular 9 important to secure these assets, because I believe under 10 Nevada law, those trustees now have the right to distribute 11 the assets of the trustee, sorry, of the Taurus Fund.

12 obviously we have to secure them before something like that 13 can happen. 14 Now, also with regard to the debtor's use of the 15 house, I want to make note of the letter from Mr. Henzy 16 today in which he talks about the debtor needs to have 17 continued ability to access the home. 18 Well, why would Mr. Kwok have to have access to 19 the home if it wasn't someplace where he was living in the 20 first place? I mean, any suggestion that Mr. Kwok wasn't 21 deeply intertwined with this property went out the window 22 when Mr. Henzy wrote a letter today saying he needed special 23 relief so that the debtor can continue that access just like 24 -- and the access he wants is just like the Sherry 25 Netherland. The property where he has admitted that he was

1 living. 2 Now, we know that Mr. Barnett, through Exhibit 5, 3 the same lawyers from Zeisler & Zeisler have described to 4 (indiscernible) security for Mr. Kwok. 5 Exhibit 6 showed that he was a listed driver for 6 Mr. Kwok's cars. 7 And Exhibits 7 and 8 show that he received 8 payments from Greenwich Land, the entity that owns Mr. 9 Kwok's Connecticut residence, which is in the name of 10 Greenwich Land and Lexington Property, which is one of the 11 entities that we are having the HCHK litigation about. 12 These are all entities which the Trustee is 13 diligently and quickly moving through various adversary 14 proceeding Your Honor is well aware of that all have one 15 common factor, they're all owned by Mr. Kwok.

16 we're showing. 17 And quite honestly, the notion that Mr. Barnett 18 spends his days driving around Mr. Kwok and picking up his 19 boxes from places, and completely unrelated to that also 20 happens to have another job managing a \$30 million mansion 21 that is allegedly not tied to Mr. Kwok, is just simply not 22 plausible. He is just another person close to Mr. Kwok who 23 Mr. Kwok puts on the title and then proceeds to use the 24 asset. And that's his practice.

25 over.

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1 And case law talks about a pattern and practice. 2 Mr. Kwok uses shell companies that he does not put his name 3 on while retaining control of the assets.

4 seen this? 5 Well, we've seen it with the Lady May where he

6 used his daughter.

7 properties where Greenwich Land, which is in the name of his 8 wife; Golden Spring's in the name of his son; HCHK and Ace 9 Decade, which are of course in the names of Ms. Wang; Mr. 10 Barnett is just another in this line. 11 And of course the property itself matches the 12 pattern of what the debtor buys. It is opulent.

13 expensive. And it's filled with showy items intended to 14 show his wealth despite telling this court that he has none. 15 Now, even after his arrest, he has continued to 16 use this property for his benefit.

17 courts look to when looking at equitable ownership, is he 18 getting a benefit? He did it before.

19 arrested for the first time, he said, well, now my 20 followers, the NFSC, you come in, you can use it, he is 21 gaining a benefit from that. He's getting publicity.

22 appears he is using it through these sales of G Club premium 23 memberships to try to get more people to continue to fund 24 money to him. This is something to his benefit. 25 We've seen the videos, Exhibits 21 and 26, where

1 his followers openly describe how it is the debtor who 2 picked out the property, purchased the property, went 3 through the property, made all the choices, that's not the 4 words of the Trustee. Those are his followers.

5 is being put out there. 6 Now, the Taurus Fund, also it should be noted when 7 we're looking at the issue of alter ego, Your Honor, clearly 8 is not following corporate formalities. It's in default. 9 Why did it go into default?

10 who its managers were, to provide any signatures.

11 surprisingly, what don't they want people to know?

12 behind it. 13 But they're not following corporate formalities. 14 And if they not willing to do even that minimal thing, the 15 suggestion that they can be entrusted with this extremely 16 valuable asset I think really begs incredulity. 17 At this point, Your Honor, I want to turn to the 18 likelihood that the estate can suffer irreparable harm if we 19 don't get this relief. 20 Quite simply, this is a recipe for significant and 21 unrecoverable losses if this PI is not in place.

22 unique and valuable asset.

23 Historic Record. Damage to this property -- while damage to 24 any property is significant, one on the historical record

raises significant issues of whether there is any way to

1 compensate that loss or whether it can be fixed. 2 More importantly, we see it is filled with 3 valuable assets, from the art work, from the claims that 4 there is allegedly antiques in there worth more than the 5 whole house. Your Honor, I have never been in the house.

6 don't think anyone from our side has.

7 much they are. 8 What I do know is there's a quarter million 9 dollars in mirrors and a table in there.

10 room, bedroom house.

11 of tables for that house.

12 how much money is in these assets. 13 What's our second factor for a disaster here?

14 have unnamed and unnamed individuals who have been vested 15 with the control of the dissipated assets.

16 human person, who anyone knows about tied to this is Mr. 17 Barnett, who I'll note, Your Honor, seems to be the one 18 person that Mr. Conway doesn't represent. 19 Instead, it is a fund, which is now defunct, which 20 has two managers, who are now trustees, one of whom is Mr. 21 Barnett who seemingly hasn't spoken to Mr. Conway about 22 this, and the other one is Taurus Management, who again no 23 one knows who's behind it. 24 The idea that someone could be held accountable or 25 someone can be responsible in that instance is just not

Despins v. Taurus Fund - August 14, 2023 184 plausible. Now, what's our third thing? We have hundreds of unknown and likely judgment-proof individuals to be honest coming and going through the property. They have -- they're not owners. They don't have a vested interest in maintaining the property. And as the Trustee has testified, quite frankly we have a great concern that once they realize that -- fully that the Trustee is coming for this property, their interest may turn the opposite way, which is to primarily focus on making sure the Trustee does not get anything valuable out of it. The chance of loss of assets is very real, whether it's by accident, intentional, an unattended property is ripe for loss. You've heard no testimony from the other side that Mr. Barnett is there every day making sure things are okay or that there is anyone from this alleged owners, that anyone from Taurus Fund, is on the site protecting this, checking who's coming, looking at IDs. It seems to be a free-for-all and there's no indication that any of the people who are alleged owners are there. There's a reason construction projects are -- in unattended and abandoned buildings are guarded, because things can happen. And this is far more valuable than Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 184 of

Despins v. Taurus Fund - August 14, 2023 185 something like that. Now, if there is a loss, the chance of recovery quite honestly is minimal. There is no reason to believe that Mr. Barnett, a driver and security guard, has money to reimburse the estate. No one knows who Taurus Management is. And quite frankly, as the Trustee testified, it is our belief that Mr. Kwok is the equitable owner of the Taurus Fund. So going after them for any damage that is done by the people who are there doesn't help us in any way. And as I said, because it is now in default, and the fact that it is now under the care of trustees, my understanding of Nevada law is that it can have the type of distribution of assets and property proceedings one would typically see with a limited liability company that's going out of business, meaning they can just distribute them. They have to be secured. Now, I want to talk for a second about where -- there's been questions about, well, where do we think this comes from? Why do we have any reason to suspect them? Well, because we've seen it over and over, Your Honor. There has been a pattern of dissipation of assets connected to Mr. Kwok. The Ferncliff home that Greenwich Land had was sold after the filing of the bankruptcy despite the fact that they had been served with papers by PAX telling them do Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 185 of

1 not sell any property. 2 As the Trustee testified, Mei Guo, this summer, 3 while the case has been going on, sold a jet.

4 asked where it is simply said I gave it to a guy.

5 know where it is. 6 G Club and HCHK employees have moved G Club assets 7 to the UAE according to the Department of Justice.

8 the Trustee testified, Ms. Wang has emptied G Club mailboxes 9 of millions of dollars by having people at her direction do 10 that. 11 The idea that assets can be dissipated is not 12 speculation or mere worry, it is a very real concern. 13 Before I turn to the balance of the equities, Your 14 Honor, I do want to respond to a couple of comments made 15 that seemed to suggest that G Club is really in charge here 16 and we can feel secure. 17 All the dates on the videos you saw, all the 18 evidence that shows anyone from the NFSC on this property, 19 is all after the debtor's indictment. 20 Prior to him being indicted, there's no indication 21 that he wanted any of those people in his home.

22 home. It's where he lived.

23 them as guests.

24 different use of the property. 25 Now, what else happened after the debtor was

Despins v. Taurus Fund - August 14, 2023 187 incarcerated? As we heard, G Clubs executives all resigned. Your Honor knows this. We've been here a lot about G Club. And the reason they claimed that they couldn't produce discovery to us in this case is because their CEO, their general counsel, and all their senior management left. So counsel's suggestion that it must be G Club who's inviting all these people to come use the property at the exact same time period that G Club's lawyers are coming into this court saying there's no one from G Club with the ability to make even the simplest decision of complying with the subpoena is just incompatible. They can't have it both ways. G Club has come to this court and said that there was no senior leadership there who could do anything. Counsel can't suggest that those people were there and they're the ones who are managing the property and inviting them in. At this point, Your Honor, I want to turn to the balance of the equities. This is a valuable property that could provide -- help provide a real return for creditors. It is not someone's current home. We are not kicking someone out of where they reside full time. Your Honor, we have a very clear example of how Case 22-50073 Doc 2118 Filed 08/24/23 Entered 08/24/23 12:21:15 Page 187 of

1 that can differ. 2 Ms. Ngok, Mr. Kwok's wife, continues to reside in 3 the home that she has on Taconic Road despite the fact that 4 we have a proceeding going on against Greenwich Land.

5 have no concern that Ms. Ngok will destroy the home or steal 6 things from the home in which she's currently living. 7 This is not that.

8 there. No one knows where they are.

9 to seek recourse from them.

10 defendants in freezing the assets and excluding the NFSC and 11 them. 12 First of all, there's no indication that Mr. 13 Barnett lives in this home.

14 corporate forum, doesn't need a home.

15 forum. 16 Now, the NFSC members have no right to be in this 17 house. They are there because Mr. Kwok on his own decided 18 to tell them they could go in.

19 the right to do that.

20 now an asset of the estate.

21 Despins to decide how to use that house.

22 told them. You've seen no indication that G Club made an 23 announcement or some other -- or Mr. Barnett said please 24 come do this. 25 The only person who told all these people to come

1 there is Mr. Kwok.

2 with the fact that he doesn't control the assets that were 3 in his estate, but he doesn't anymore, and it wasn't for him 4 to do it. 5 And again, Your Honor, I will note that there is 6 no indication that he had any interest in having anyone in 7 his house prior to his being incarcerated.

8 whole point of it. You know. 9 We didn't realize, know about the Mahwah mansion 10 until we were sitting in front of you at that PI hearing the 11 day the indictment came down despite our investigation. 12 You could be sure that if Mr. Kwok was out there 13 broadcasting that he had this house or that he was inviting 14 all his members to be there, we would have known about it a 15 long time ago. 16 Rather, it was his secret. That's where he lived. 17 It's where he kept his personal affects.

18 it despite the fact that he was in a bankruptcy. 19 It is only now that he is caught and cannot use it 20 that he has decided the next ploy in trying to keep that 21 asset from his creditors is to rename it and say, oh, it is 22 a headquarters. It's not.

23 indicate that it can only be used for a residential purpose. 24 No one ever intended for this to be a headquarters.

25 intended to be what it says it is, a home, his home.

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1 Finally, Your Honor, with regard to the factors, 2 whether this is in the public interest, I think that's 3 clear. Providing that creditors be able to get a recovery 4 and that the assets that are available not be dissipated 5 clearly is in the public interest.

6 concern that something can happen to it.

7 sure that doesn't happen. 8 Your Honor, before I finish, I just would like to 9 touch on the one difference between -- we had a TRO that 10 gave a great amount of the protection we needed.

11 that everything in the TRO be extended. 12 But I do want to also touch on some of the relief 13 that maybe wasn't appropriate at the time given the status 14 of a TRO, but for the PI, I think is.

15 a direction to the Marshal Service to aid in the enforcement 16 of the preliminary injunction to the extent we need it. 17 We would love to work with counsel and get his 18 client's agreement to exclude these people and to agree that 19 they should -- that we don't have to use Marshals.

20 wants to do that if we don't have to, Your Honor. 21 But if this is going to be a problem, it is just 22 not a good situation to ask the Trustee's attorneys or 23 agents to try to do this themselves. We don't want fights. 24 We don't want conflicts.

25 peaceably. And we believe the presence of the U.S. Marshals

1 is the best way for that to happen. 2 That's why we similarly wish to have the keys 3 changed, the pads.

4 who has access to it. 5 We ask that this proposed order be made applicable 6 to the high-ranking members of the NFSC, Pamela Si, who's 7 also known as Nicole, (indiscernible) Je, (indiscernible) 8 Brother. These are the people we see on the video. 9 In the case of Nicole, it's someone Your Honor has 10 already made findings about in the PI that has been entered 11 into this record. 12 We believe these are persons who are -- act in 13 concert and participation with the debtor. 14 We believe rule 65 provides for this. 15 In sum, Your Honor, what we are asking for today 16 is not meant to be punitive.

17 assets. And we can't think of any reason why anyone who 18 cares about these assets would not want that to happen. 19 If Your Honor has any questions, I'm happy to 20 answer it. 21 THE COURT: I do not have any questions.

22 you. 23 MR. LUFT: Thank you, Your Honor. 24 THE COURT: Anything further, Attorney Conway? 25 MR. CONWAY:

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1 in the event that you determine that it's appropriate to 2 enter the requested injunction that there should be a bond 3 posted by the Trustee in the amount of the value of the 4 property, which I believe we heard testimony was \$26 5 million, plus the additional assets, which I believe we 6 heard testimony were about \$17 million. 7 THE COURT:

8 right now, Attorney Conway. 9 MR. CONWAY: I would agree with that, Your Honor. 10 THE COURT: Okay. Number one. 11 Number two, the Trustee has requested that he not 12 be required to post a bond because he doesn't have money in 13 the estate to post a bond.

14 of that, but I'm just letting you know that that's the 15 request that's been made. 16 I understand your request.

17 that's the request that's been made. 18 And at this point, I had -- I did not require the 19 posting of the bond in connection with the temporary 20 restraining order. 21 So in any event, anything further from anyone 22 else?

24 THE COURT: Okay.

25 submitted. I'll have to obviously look at the evidence and

1 rule accordingly. 2 Some form of a ruling will issue before 2 p.m. 3 tomorrow or right around 2 p.m. tomorrow, although we have 4 court in the morning too.

5 what is appropriate under the rules and the law and upon a 6 review of the evidence. 7 So that is the only matter on today's calendar. 8 There's no other business that the Court needs to address 9 today, so court is adjourned. Thank you, all. 10 ALL COUNSEL: Thank you.

Fiore Reporting and Transcription Service, Inc.

3 transcriber and certified electronic reporter and 4 transcriber, certify that the foregoing is a correct 5 transcript from the official electronic sound recording of 6 the proceedings in the above-entitled matter.

Filed 08/24/23 196 Entered 08/24/23 12:21:15 Page 195 of

Despins v. Taurus Fund - August 14, 2023 195

5 PLAINTIFF TRUSTEE:

10 PLAINTIFF TRUSTEE EXHIBITS: ID REC'D 11 1 Trustee Certificate of Service 151 151

Nevada Sec. of State Website Screenshot 94 95 15 5 Email Chain Regarding Kwok Boxes 110 16 6 AIG Insurance Declaration Page 98 17 9 New Mexico Taurus Management, LLC Filing 153 154 18 10 National Register of Historic Places 155 19 11 Christie's Real Estate Group Listing 11 12

22 14 Kwok Personal ID Information 88 89

Despins v. Taurus Fund - August 14, 2023 196

3 19 Cedric DuPont Antiques Invoice 91 94 4 20 Judge Manning PAX Decision 155 157

12 28 Judge Ostrager PAX Decision 157 158 13 29 Department of Justice Kwok Indictment 158 161

15 CLOSING ARGUMENTS: