erin zhu's deposition in santa clara superior court case no. 1-02-cv-810705, zelyony v. zhu,...

1 SUPERIOR COURT OF THE STATE OF CALIFORNIA

2 COUNTY OF SANTA CLARA

3

4

5 ISAAK ZELYONY, an

6 individual,

7 Plaintiff,

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

vs.

ERIN YIER ZHU, an individual; PTYZ, a California partnership, LIVE SHARE, INC., a California corporation; and DOES 1-20, inclusive,

Defendants.

Case No. CV 810705

VOLUME I

DEPOSITION OF ERIN YIER ZHU

Los Angeles, California

Monday, November 10, 2003

24 Reported by: Annette Shaver

25 CSR No. 6169

ROVING REPORTERS (800) 955-7969

1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

ISAAK ZELYONY, an individual,

Plaintiff, vs.

ERIN YIER ZHU, an individual; PTYZ, a California partnership, LIVE SHARE, INC., a California corporation; and DOES 1-20, inclusive,

Defendants.

) ) ) )

) Case No. CV 810705 )

) VOLUME I ) )

) CONDENSED TRANSCRIPT ) ) ) ) )





25 CSR No. 6169


1

10

11

12

13

14

15

16

17

18

19

20

21

22

23

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

ISAAK ZELYONY, an individual,

Plaintiff, VS.

ERIN YIER ZHU, an individual; PTYZ, a California partnership, LIVE SHARE, INC., a California corporation; and DOES 1-20, ~nclusive,

Defendants.

1 1 1 1 ) Case No, CV 810705 1 1 VOLUME I 1 1 ) CONDENSED TRANSCRIPT 1 1 1 1 __________________________ 1





25 CSR No. 6169


1 Deposition of ERIN YIER ZHU, Volume I, 2 taken on behalf of Plaintiff, at 333 South Grand 3 Avenue, Suite 4270, Los Angeles, California, 4 beginning at 10: 17 a.m. on Monday, November 10, 5 2003, before Annette Shaver, Certified Shorthand 6 Reporter No. 6169. 7 8 9 APPEARANCES:

10 For Plaintiff:

11

12

13

14

15

16

Law Offices of John R. Walton BY: John R. Walton Attorney at Law Suite 4270 333 South Grand Avenue Los Angeles, California 90071-1546 (213) 620-9600

For Defendants:

Law Office of James M. Barrett 17 BY: James M. Barrett

Attorney at Law 18 789 Castro Street

Mountain View, California 94041 19 (650) 969-3687 20 21 Also present: Dr. Isaak Zelyony 22 23 24 25

1 of 63 sheets

1 2 3 4 5 6 7

8 9

10 11 12 13 14 15 16 17

18 19 20 21 22 23 24

1

25

1 2 3 4

1 0:17AM 5 6 7

8 9

10:17AM 10 11 12 13 14

10:18AM 15 16 17

18 19

10:18AM 20 21 22 23 24

10:18AM 25

2

Page 1 to 4 of 196

WITNESS

ERIN ZHU

INDEX

EXAMINATION

BY MR. WALTON

EXHIBITS

PLAINTIFF'S FOR ID.

1 Copy, Notice of Deposition of Erin

Yier Zhu dated September 17, 2003

PAGE

5

68

3

LOS ANGELES, CALIFORNIA, MONDAY, NOVEMBER 10, 2003

10:17 A.M.

-- 000 --

THE VIDEOGRAPHER: This is the videotaped

deposition of Erin Zhu taken by the plaintiff, Isaak

Zelyony, in the matter of Isaak Zelyony versus Erin

Zhu for Santa Clara Superior Court, case No. CV

810705 held in the law offices of John R. Walton

at 333 South Grand Avenue, Suite 4270, Los Angeles,

California on November 10,2003 at 10:17 a.m.

My name is Mark Petrigac, I am from Video

Deposition Representatives, we are located at

919 North Genesee, Suite No.2, West Los Angeles,

California. I am the videographer. The court

reporter is Annette Shaver with Roving

Reporters.

Will counsel and all others present please

introduce themselves.

MR. BARRETT: James Barrett, attorney for

defendant, Erin Zhu.

THE WITNESS: Erin Yier Zhu.

MR. WALTON: John Walton, attorney for

plaintiff, Isaak Zelyony, and with me is my client,

Dr. Zelyony.

4

11/20/2003 10:40:46 PM

1 ERIN YIER ZHU, 1 2 having been first duly sworn was examined and 2 3 testified as follows: 3

4 EXAMINATION 4 5 BY MR. WALTON: 10;20AM 5 6 Q. Would you state your full name for the 6

7 record. 7

8 A. Erin Yier Zhu spelled E-r-i-n, Y-i-e-r, 8 9 Z-h-u. 9

10;19AM 10 Q. Have you ever gone by any other names? 10;21AM 10 11 A. Just plainly Erin Zhu or Yier Zhu. 11 12 Q. Have you ever had your deposition taken 12 13 before? 13 14 A. No. 14

10;19AM 15 Q. Have you ever been a party to litigation 10;21AM 15 16 before, a plaintiff or defendant? 16 17 A. I am not sure. I don't think so. 17

18 MR. BARRETT: Are you talking about outside the 18 19 current litigation between the two separate ones? 19

10:19AM 20 MR. WALTON: Yes. 10;21AM 20

21 MR. BARRETT: Either outside of what we are 21 22 talking about today or the other lawsuit involving 22 23 WebEx. 23 24 THE WITNESS: I don't think so. 24

10:19AM 25 Q. BY MR. WALTON: Have you ever testified in 10;21AM 25 5

1 a court before? 1 2 A. No. 2 3 Q. The oath that the court reporter just gave 3

4 you is the same oath you would take if you were 4 10:20AM 5 testifying in a court of law, it has the same force 10:22AM 5

6 and effect. The surroundings are less formal than 6 7 in court, so if at any time you need to take a break 7

8 let us know, we will go off the record, you can get 8 9 something to drink, use the restroom, talk with your 9

10;20AM 10 attorney, whatever you need to do. 10:22AM 10 11 During the deposition I am going to ask you 11 12 questions and ask you to answer as accurately and as 12 13 completely as you can based on your recollection. 13 14 If you do not understand one of my questions, please 14

10:20AM 15 tell me, I will rephrase the question and try to 10:22AM 15 16 make it clear to you. 16 17 If you do answer the question, I am going to 17

18 assume your answer represents your best and most 18 19 accurate testimony as you sit here today, is that 19

10;20AM 20 fair? 10;23AM 20 21 A. Okay. 21 22 Q. Are you under any medications or do you 22 23 have any medical conditions that affect your ability 23 24 to remember? 24 25 A. No. 25

6 11/20/2003 10:40:46 PM Page 5 to 8 of 196

Q. Is there any reason you can think of why

you are not able to give your best and most accurate

testimony here today?

A. No.

Q. As you can see, the deposition is being

videotaped and it is also being transcribed by a

court reporter. At the end of the deposition there

will be a videotape of the proceedings here as well

as a transcript, this will be a booklet that will

have in writing all the questions that I ask, all

the answers that you give as well as any objections

made by your counsel.

You will have an opportunity to review that,

make any corrections that are necessary to make it

complete and accurate before signing under penalty

of perjury. However, I would caution you to the

extent that you testify one way under oath live and

then afterwards when you have had an opportunity to

discuss it with your attorney change your answer

substantively, it will reflect adversely on your

credibility at the time of trial. Fair enough?

A. Okay.

Q. During the course of the deposition I may

ask you for estimates. Your counsel will tell you

not to guess. There is a difference between

7

guessing and estimating. If I were to ask you what

is the length of this conference table, whether you

are a good judge of distance or a poor judge of the

distance, you could provide an estimate based upon

your personal knowledge and perception, correct?

A. Uh-huh.

Q. On the other hand, if I were to ask you the

length of the conference table in my last office

building I occupied you would be guessing, okay?

A. Okay.

Q. That's the difference. If you have a

basis, a personal knowledge, I am entitled to your

best recollection whether that is a perfect

recollection or an imperfect recollection, fair

enough?

A. Okay.

(Discussion held off the record.)

Q. BY MR. WALTON: Is English your first

language?

A. At this point, yes.

Q. The language you began with was Chinese?

A. Yes.

Q. But at this point you are perfectly

comfortable testifying in English?

A. Yes.

8 2 of 63 sheets

1 Q. Now do you recognize the gentleman seated 1 your charges were authorized?

2 to my right, Dr. Isaak Zelyony? 2 A. I believe so.

3 A. Yes. 3 Q. Was it one credit card or more than one?

4 Q. When did you first meet Dr. Zelyony? 4 A. One credit card.

10:23AM 5 A. 1991. 10:26AM 5 Q. Was that a Citibank card?

6 Q. And prior to today, when was the last time 6 A. Yes, it was.

7 that you saw Dr. Zelyony? 7 (Discussion held off the record.)

8 A. I don't remember exactly, but I would guess 8 Q. BY MR. WALTON: What else did you and Dr.

9 2000. 9 Zelyony talk about in connection with the credit

10:23AM 10 Q. Here we have the first basis for 10:26AM 10 card?

11 estimation. Can you estimate when in 2000 that was 11 A. I can't really remember.

12 that you last saw Dr. Zelyony, was it in the first 12 Q. Did you ever talk with Dr. Zelyony about

13 half or second half of 2000? 13 the amount outstanding on the credit card?

14 A. First half, I believe. 14 A. I may have once, I can't remember any exact

10:24AM 15 Q. What was the occasion in the first half of 10:27AM 15 incidences.

16 2000 that you met Dr. Zelyony? 16 Q. You don't recall any specific occasion on

17 A. I don't remember, but I would assume it was 17 which you talked to Dr. Zelyony about the amount

18 a social visit. 18 outstanding on the Citibank credit card?

19 Q. Do you recall where it was? 19 A. No, I have no specific recollection, I have

10:24AM 20 A. I have no recollection of the exact 10:26AM 20 no recollections of specific cases.

21 meeting. 21 Q. Now how did it come to be that you were

22 Q. Was it here in Los Angeles? 22 authorized to charge on a credit card on which Dr.

23 A. I would think so, yes. 23 Zelyony was the primary cardholder?

24 Q. After that last meeting in the first half 24 A. Dr. Zelyony, Michael Zelyony had gotten the

10:24AM 25 of 2000 did you ever have occasion to speak with Dr. 10:26AM 25 card for me.

g 11

1 Zelyony by telephone? 1 Q. And when did you first receive this card?

2 A. I may have once or twice. 2 A. I think it was April of 2000, I am not 100

3 Q. What was the purpose for those 3 percent sure, but it was around there.

4 communications? 4 Q. To your knowledge, did anyone else charge

10:25AM 5 A. About a credit card. 10:2BAM 5 purchases on that Citibank credit card other than

6 Q. What credit card? 6 yourself?

1 A. A Mastercard where he was the main account 7 A. I believe Michael did, at least a few

8 holder and I was given a secondary card. 8 times.

9 Q. And what did you discuss in those 9 Q. Did Michael also have a copy of that credit

10:25AM 10 conversations about the credit card? 10:29AM 10 card?

11 A. Probably something involving authorization 11 A. I don't know if he had a physical copy, I

12 on the account or the balance on the account, 12 knew he had the number.

13 something of those. 13 Q. What is the approximate dollar amount of

14 Q. Was there any issue about authorization on 14 the charges that may have been made by Michael

10:25AM 15 the account? 10:29AM 15 Zelyony?

16 A. I think there were times when I had gone 16 A. The only thing I recall was maybe 3, 4,000

17 abroad and it had triggered some fraud detection 17 in -- God, when was that? January of 2001, I think.

18 types of things on the credit card company. 18 Q. What were the nature of those purchases?

19 Q. They wanted to verify the purchases were 19 A. I believe he was paying some bills with

10:26AM 20 authorized? 10:29AM 20 that.

21 A. Correct, and for that I needed Dr. 21 Q. What kind of bills?

22 Zelyony's say so because he was the -- because I had 22 A. I would not know.

23 no authority on certain things on the account. 23 Q. Did you receive a copy of the monthly

24 Q. And to your knowledge, did Dr. Zelyony 24 credit card statements?

10:26AM 25 cooperate and confirm with the credit card that 10:30AM 25 A. I did not.

10 12 3 of 63 sh eets Page 9 to 12 of 196 11/20/200310:40:46 PM

1

2

3

4

5

6

7

8

9

10:30AM 10

11

12

13

14

10:30AM 15

16

17

18

19

10:31AM 20

21

22

23

24

10:31AM 25

1

2

3

4

10:31AM 5

6

7

8

9

10:31AM 10

11

12

13

14

15

16

17

18

19

10:32AM 20

21

22

23

24

10:32AM 25

Q. Never?

A. No.

Q. Did you ever receive any communications

from Citibank direct to you?

A. No.

Q. Was your name on the account as a joint

account holder?

A. I don't think I was a joint account holder,

I was just given like something parents do for their

children, it was a secondary card that I was

authorized to spend on, but I am not 100 percent

clear on the exact relationship on that card.

Q. Okay, but Dr. Zelyony is not your father,

correct?

A. Correct.

Q. He is Michael's father?

A. Correct.

Q. Was there any specific purpose upon which

you and not Michael was given this credit card?

MR. BARRElT: I object, I think it calls for

speculation on her part why she received the credit

card, unless you know specifically why you received

the credit card.

THE WITNESS: No.

Q. BY MR. WALTON: You have no idea?

13

A. Michael got this card for me, I had no

discussions with Isaak about why the card was given

tome.

Q. Did you ask Michael for a credit card?

A. No, I don't think I asked Michael for a

credit card.

Q. He just one day gave you a credit card that

had your name on it under his father's account, is

that correct?

A. Correct.

Q. And you asked no questions?

A. It was convenient.

Q. Did you have a credit card of your own at

that time other than Dr. Zelyony's?

A. No, I did not.

Q. Why not?

MR. BARRElT: Just a simple question, Erin.

THE WITNESS: I didn't.

MR. BARRElT: May I, Counsel? Had you ever

applied for a credit card?

THE WITNESS: Yes.

MR. BARRElT: Were you accepted or denied on the

credit card?

THE WITNESS: I was accepted a couple times and

denied a couple times.

14

1

2

3

4

10:33AM 5

6

7

8

9

10:33AM 10

11

12

13

14

10:33AM 15

16

17

18

19

10:33AM 20

21

22

23

24

1033AM 25

1

2

3

4

10:34AM 5

6

7

8

9

MR. BARRElT: So when opposing counsel asked you

why you didn't have a credit card at the time you

received that one, was that the same time frame that

you were accepted for other credit cards?

THE WITNESS: No, I think I was accepted

somewhat earlier.

Q. BY MR. WALTON: And in 2000 did you have a

personal bank account?

A. I did not.

Q. You did not?

A. Not at the time that I was given the credit

card I did not.

Q. Did you have a personal bank account in

2001?

A. Yes, I did.

Q. Did you have a personal bank account in

1999?

A. No, I did not.

Q. Prior to 1999 at any time did you have a

personal bank account?

A. Not since 1995.

Q. Why not?

A. Because Michael and I had a joint bank

account which had -- which was overdrawn.

Q. This is in 1995?

15

A. Yes, which was overdrawn and not correctly

closed out, and so it left a bad credit history in

the check systems, and so I was not allowed to open

a personal bank account until that had gone off the

record.

Q. Did you try to open a personal bank account

prior to 2001?

A. Yes, I did.

Q. At which bank?

1034AM 10 A. I believe Wells Fargo and Bank of America.

11 Q. What response did you receive?

12 A. I was declined because of the problem, the

13 previous bank account problem.

14 Q. Did you bounce checks in the previous

10:34AM 15 accounts?

16 A. No, I did not bounce checks, it was an

17 ATM check card, and I guess we overspent it not

18 realizing it because the charges authorized and then

19 didn't reflect onto the account until a couple days

10:34AM 20 later, and after a couple of those the account was

21 overdrawn, and we had no money at the time to fix

22 the situation and it got onto the credit reports.

23 Q. So the account was overdrawn?

24 A. Yes.

10:35AM 25 Q. And it was closed in that overdrawn

16 11/20/2003 10:40:46 PM Page 13 to 16 of 196 4 of 63 sheets

1

2

3

4

10:35AM 5

6

7 8

9

condition? 1

A. Yes. 2 Q. Overdrawn by how much? 3

A. I would think less than a thousand dollars. 4

Q. After the situation where the bank was 1038AM 5

overdrawn in 1995 did you ever repay that $1,000 6

debt? 7

A. No, because that bank which was I think 8

Glendale Federal had been bought by another bank and 9

A. 50 that I could have an easier time.

Q. Was there any particular reason why you

needed a credit card to have an easier time?

A. I was traveling fair amount in 2000.

Q. What was the credit limit on the Citibank

credit card when you first received it from Michael?

A. I think it was 7,000.

Q. When was the last time that you charged a

purchase on that card?

10:35AM 10 then bought yet again, and I don't know what 1038AM 10 A. I don't remember, but it was probably --

11

12

13

14

happened to it, I never. • • 11 well, it was in 2002, I don't have a precise date.

MR. BARRETT: Counsel, I have to correct 12 Q. In 2002 where were you residing?

something, she didn't say she was overdrawn 1,000, 13 A. Germany.

she said she was overdrawn less than a thousand 14 Q. And in 2002 did you have any business

10:38AM 15 dollars, so the assumption she owed 1,000 was 10:39AM 15 relationship with Isaak Zelyony?

inaccurate. 16 A. No.

Q. BY MR. WALTON: 50 it was less than a 17 Q. In 2002 did you have any business

thousand dollars you owed? 18 relationship with Michael Zelyony?

16

11

18

19 A. All I want to say, it was a small amount of 19 A. I am not sure how to understand "business

10:38AM 20 money.

21 Q. Less than $500?

22 A. Possible, but I would be guessing.

23 Q. How soon after 1995 did you first try to

24 open a personal bank account?

10:36AM 25 A. I don't remember.

17

1 Q. And during the period from 1995 to 2001, on

2 how many occasions did you apply for personal credit

3 cards?

4 A.

10:36AM 5 Q.

6 A.

Several.

And --

More than one, less than ten.

7 Q.

8 A.

9 Q.

And for several of those were you approved?

I was approved for two that I can recall.

But you did not accept those?

10:37AM 10 A. I did.

11 Q. When did you first accept those cards?

12 A. Those were actually -- sorry, correction,

13 you said only from 1995 to 20001

14 Q. To 2001.

10:37AM 15 A. I just wanted a clarification. No, I think

16 those approvals for credit cards were before '95,

17 so ••

18 Q. 50 no credit card approvals between 1995

19 and2001?

10:37AM 20 A. It was so long ago, I can't be sure if it

21 was before or after '95.

22 Q. When Michael Zelyony gave you the credit

23 card with your name on it under his father Isaak

24 Zelyony's account, did Michael say why he was giving

10:36AM 25 you the account?

18

10:39AM 20 relationship."

21 Q. Fair enough. What was the nature and

22 extent of your relationship with Michael Zelyony in

23 2002?

24 A. Hardly any contact.

1039AM 25 Q. In 2002 were you doing any business with

1 Michael Zelyony?

19

2 A. In my opinion, no, but he felt there were

3 unresolved matters, so if you take if I was

4 conducting business as opposed to there having

1 0:40AM 5 been unfinished business, I am not.

6 Q. When did you first meet Michael Zelyony?

7 A. 1991.

8 Q. And at that time was your relationship

9 business or personal?

10:40AM 10 A. Personal.

11 Q. How long did the personal relationship

12 continue?

13 A. Until 2002, I would say.

14 Q. Let me be a little more focused. You had a

10:40AM 15 romantic relationship with Michael, correct?

16 A. Yes.

17 Q. How long did the romantic relationship

18 last?

19 A. Until '97.

10:41AM 20 Q. 19977

21 A. Yes.

22 Q. And at that point you broke up as boyfriend

23 and girlfriend?

24 A. Yes.

10:41AM 25 Q. Did you ever get back together again?

20

5 of 63 sheets Page 17 to 20 of 196 11/20/2003 10:40:46 PM

1 A. No. 1 company.

2 Q. So after 1997 there was no further romantic 2 Q. Now at one point PTYX had employees,

3 relationship between you and Michael Zelyony? 3 correct?

4 A. Correct. 4 A. I am not 100 percent sure if they were

10:41AM 5 Q. After 1997 did you continue to be friends 10:44AM 5 employees of PTYX or of Live Share.

6 with Michael Zelyony? 6 Q. What were the names of the people who were

7 A. Yes. 7 employees either of PTYX or of Live Share?

8 Q. After 1997 did you have a business 8 A. Josh Gambin and Frank, I don't remember his

9 relationship with Michael Zelyony? 9 last name.

10 A. Yes. 10:45AM 10 Q. When were these people employees?

11 Q. What was the nature of that relationship? 11 A. 1999.

12 A. It was a partnership. 12 Q. And what kind of work did they perform?

13 Q. Did the partnership have a name? 13 A. Frank was employed very, very briefly as a

14 A. PTYX. 14 salesperson, and Josh was assistant in various

10:41AM 15 Q. Can you spell that? 10:45AM 15 things.

16 A. P-T-Y-X. 16 Q. Who is Brannon?

17 Q. What was the business of PTYX? 17 A. My ex-boyfriend.

18 A. Computer consulting. 18 Q. What is Brannon's last name?

19 Q. Anything else? 19 A. Wright.

10:42AM 20 A. Related things like web hosting. 10:45AM 20 Q. Did Brannon ever perform any work for PTYX?

21 Q. Any other business that was done through 21 A. No.

22 PTYX? 22 Q. He had no involvement with PTYX whatsoever?

23 A. No, I think it all falls under consulting. 23 A. No.

24 Q. When did you and Michael Zelyony first form 24 Q. Brannon was never a partner in PTYX?

10:42AM 25 PTYX? 25 A. No.

21 23

1 A. I don't actually remember. 1 Q. Did Brannon ever loan money to PTYX?

2 Q. Prior to PTYX, have you ever had a business 2 A. I don't think so.

3 relationship with Michael Zelyony? 3 Q. Did PTYX ever loan money to Brannon?

4 A. No, I did not. 4 A. Possibly.

10:42AM 5 Q. So PTYX was the first time you went into 10:46AM 5 Q. For what purpose?

6 business together? 6 A. I would not say that PTYX loaned money to

7 A. Yes. 7 Brannon because any loans were personal and would

8 Q. What were the terms of your agreement to 8 have been from me to him except that I had no

9 form this partnership with Michael Zelyony? 9 separate bank account of my own.

10:43AM 10 A. There were no written terms. 10:46AM 10 Q. During this period from 1995 to 2001, to

11 Q. But there were terms of agreement that you 11 your knowledge, did Michael Zelyony have a separate

12 agreed upon orally, correct? 12 bank account?

13 A. I guess so. 13 A. No.

14 Q. Was it a 50/50 partnership? 14 Q. Did Live Share have a bank account?

15 A. Yes. 15 A. Yes.

16 Q. Who contributed the capital to the 16 Q. Did PTYX have a bank account?

17 partnership? 17 A. Yes.

18 A. We both did. 18 Q. Who were the signatories on the PTYX bank

19 Q. Equally? 19 account?

10:43AM 20 A. Hard to say. 10:47AM 20 A. Michael and myself.

21 Q. Did PTYX ever have any other partners other 21 Q. Anyone else?

22 than you and Michael Zelyony? 22 A. No.

23 A. We never spelled out anything, I mean, 23 Q. Michael wrote checks on the PTYX bank

24 like I say, I don't even remember when it was 24 account?

10:44AM 25 established, we never spelled out anything about the 10:47AM 25 A. Yes.

22 24 11/20/2003 10:40:46 PM Page 21 to 24 of 196 6 of 63 sh eets

1 Q. Did you also write checks on the PTYX 1 A. I don't think there was a check writing

2 bank account? 2 mechanism, or if there was, we did not use it.

3 A. Yes. 3 Q. How did you withdraw money from the money

4 Q. And were those for purposes relating to the 4 market account?

1 0:47AM 5 business of PTYX? 10:51AM 5 A. I would usually transfer it out of that

6 A. Generally, yes. 6 into the linked checking account.

7 Q. And when the checks that you wrote were not 7 Q. By telephone?

8 for business expenses of PTYX, how did you reflect 8 A. Usually, yes.

9 that on the check, if at all? 9 Q. Did your partnership with Michael and PTYX

1 0:47AM 10 A. There would be some comments on the checks 10:51AM 10 end at any time?

11 possibly. 11 A. I feel that it did, but there was no

12 Q. Did you write, for example, "Personal 12 concrete partnership dissolution.

13 Expense" on the memo line of the check? 13 Q. Now at some point you moved away from Los

14 A. Possible. I did not write -- most of the 14 Angeles, correct?

10:411AM 15 checks were not written by me. 15 A. Yes.

16 Q. I am just asking about the ones that you 16 Q. When was that?

17 know about. 17 A. December of 1999.

18 A. No, I don't think we wrote personal expense 18 Q. What was the purpose for your moving away

19 very often, if we did at all. 19 from Los Angeles?

10:411AM 20 Q. Did PTYX have more than one bank account? 10:52AM 20 A. I wanted change in my life.

21 A. Yes, in the year 2000 it did. 21 Q. Where did you move to?

22 Q. For what purpose? 22 A. San Francisco.

23 A. For the purpose of my needing to deposit 23 Q. After you moved to San Francisco, did you

24 some personal money into a bank account and not 24 continue to have a business relationship with

10:411AM 25 being able to open one of my own, and so we created 1052AM 25 Michael Zelyony and PTYX?

25 27

1 a separate I think money market account under PTYX's 1 A. I guess I did, although I tried not to.

2 name connected to an existing checking account. 2 Q. In what sense is it that you guess you did?

3 Q. And this was done in 2000? 3 A. We were not able to come to an agreement

4 A. Yes. 4 about the dissolution of PTYX, and he told me that

1 0:49AM 5 Q. And this was so that you could deposit 1 0:53AM 5 that meant it still existed.

6 personal funds? 6 Q. After December of 1999 when you moved to

7 A. Yes. 7 San Francisco did you perform any work on behalf of

8 Q. What funds did you deposit in that account? 8 PTYX?

9 A. Money that were sent by my parents. 9 A. Yes, I did.

10:49AM 10 Q. How much money? 10:53AM 10 Q. After you moved to San Francisco in

11 A. The deposit slips I believe are included 11 December of 1999 did you incur any expenses on

12 there, what I deposited was roughly 230,000, I don't 12 behalf of PTYX?

13 have the exact figure, but you can find that. 13 A. I guess so, yes.

14 Q. Who was an authorized signatory on the 14 Q. What were those expenses?

10:50AM 15 money market account? 10:53AM 15 A. There were some business-related travel,

16 A. Both Michael and myself, I believe. 16 there were some domain names we bought, there was --

17 Q. Who owned the bank account? 17 Q. "We" being you and Michael Zelyony?

18 A. I did. 18 A. Yes. There was a DSlline at my residence

19 Q. And you put Michael's name on the account 19 in San Francisco that was in the company name.

10:50AM 20 as well? 10:54AM 20 Q. How long did you have the DSL line at your

21 A. I think I just kept the same information 21 San Francisco residence in PTYX's name?

22 as for the PTYX checking account because it was 22 A. I think until 2001.

23 associated with that. 23 Q. And approximately when in 2001?

24 Q. Did Michael Zelyony ever write checks 24 A. March or April, I am not -- one of those.

10:50AM 25 against the money market account? 10:54AM 25 Q. What was the reason for your terminating

26 28 7 of 63 sh eets Page 25 to 28 of 196 11/20/2003 10:40 :46 PM

1

2 3 4

10:55AM 5 6 7

8 9

10:55AM 10 11

12 13 14

10:55AM 15 16 17

18 19

10:55AM 20 21 22 23 24

10:56AM 25

1 2 3 4

10:56AM 5 6 7

8 9

10:56AM 10 11 12 13 14

10:57AM 15 16 17

18

19

10:57AM 20 21 22 23 24

10:57AM 25

the DSL service in PTYX's name in March or April of

2001?

A. Q.

I moved out of the San Francisco apartment.

A. Q.

Where did you move to?

Berlin.

Germany?

A. Yes.

Q. After you moved to Berlin, Germany, did you

perform any work on behalf of PTYX?

A. I don't think so.

Q. Are you unsure?

MR. BARRETT: If you don't know the answer,

don't answer it. If you do know the answer, do the

best you can, but if you don't, don't answer

something you are not sure of to that level.

THE WITNESS: I don't know how to define "work."

I gave Michael business-related advice, but I would

not count it work.

Q. BY MR. WALTON: After you moved to Berlin

in -- was it March or April of 2001?

A. Uh-huh.

Q. -- did you incur any business-related

expenses on behalf of PTYX?

A. No.

Q. After March or April of 2001 did you

29

perform any work or services for income or pay?

A. Not until this year.

MR. BARRETT: Wait a minute, could you reask

that question? I think she misunderstood that

question. Thank you, very much.

Q. BY MR. WALTON: After you moved to Berlin

in March or April of 2001, did you perform any work

or services, and I will broaden it, first on behalf

of anyone for payor other remunerations?

MR. BARRETT: Did you get a job after March or

April that paid you money in 2001, is that your

question?

Q. BY MR. WALTON: Not just a job, temporary

consulting, hire, anything.

A. Yes.

Q. What kind of work did you do?

A. I am currently employed as -- what does my

business card say?

Q. I haven't seen it, I don't know.

A. Director of Strategic Marketing.

Q. For what organization?

A. A company called Codex Group.

Q. Who is Codex Group, what do they do?

A. They are primarily an outsourcing company.

Q. Computer-related?

30

1

2 3 4

1 0:57AM 5 6 7

8 9

10:56AM 10 11 12 13 14

10:56AM 15 16 17

18 19

10:56AM 20 21 22 23 24

10:59AM 25

1 2 3 4

1 0:59AM 5 6 7

8 9

10:59AM 10 11 12 13 14

11:00AM 15 16 17

18 19

11:00AM 20 21 22 23 24

11:00AM 25

11/20/2003 10:40:46 PM Page 29 to 32 of 196

A. Computer-related.

Q. How long have you worked for Codex Group?

A. Since June of this year.

Q. And prior to that, between March and April

of 2001 and June of this year did you do any work

for pay?

A. No, I don't believe so.

Q. Have you ever been an employee of Web Ex?

A. No.

Q. Have you ever received any payments from

WebEx whether for work or otherwise?

A. Yes, back before they were called WebEx.

Q. And at the time that you received those

payments what was the company called?

A. I think it was called "Active Touch," but I

am not sure, they changed their name several times.

Q. Were you ever an employee of Active Touch?

A. No.

Q. Did you ever perform any work for Active

Touch?

A. Yes.

Q. When was that?

A. It was either in '97 or '98.

Q. What was the nature of the work you

performed for Active Touch?

A. I did some consulting for them.

Q. In what area?

A. Market research, I would say.

31

Q. Who was your supervisor at Active Touch?

A. Didn't really have a supervisor.

Q. Approximately what period of time did you

spend working for Active Touch?

A. It was very brief, maybe a week.

Q. Were you paid for that work?

A. Yes.

Q. And was that work performed through or on

behalf of PTYX, the partnership?

A. No.

Q. What did you do with the money you received

for working for Active Touch?

A. 50 percent of the payment was in cash, I

believe it was $5,000, and I deposited into the PTYX

account as I deposit everything that was written out

to me personally, and the other 50 percent was in

shares which I received in 2000.

Q. Why was there such a delay between the time

you performed the work and the time when you

received the shares?

MR. BARRETT: Calls for speculation, unless you

know the answer specifically.

32

8 of 63 sheets

1 MR. WALTON: This is the third time you have 1 Q. What was the business of Live Share?

2 done this, that's coaching the witness. Speculation 2 A. Very hard to say. I would say internet

3 is not grounds for instructing the witness not to 3 speculation like many software companies were trying

4 answer. You can make your objection and she can 4 to do at the time.

11:01AM 5 answer. 11:03AM 5 Q. Live Share was organized as a corporation,

6 MR. BARRETT: Then I object, calis for 6 correct?

7 speculation. 7 A. Correct.

8 Q. BY MR. WALTON: You can answer. 8 Q. But you already had an existing partnership

9 A. I don't know. 9 set up with Michael Zelyony, correct?

11:01AM 10 Q. You have no idea? 10 A. Yes.

11 A. No. 11 Q. Who were the shareholders of Live Share?

12 Q. At the time you performed the work for 12 A. It was myself, Michael and a part of Live

13 Active Touch, was there any written agreement 13 Share was set aside.

14 providing you would be given shares in the company? 14 Q. What does that mean?

11:01AM 15 A. Yes. 11:03AM 15 A. It was intended for Web Ex, but WebEx never

16 Q. What was the nature of that agreement, was 16 took part in it.

17 it a letter agreement or a formal contract? 17 Q. Did Michael Zelyony ever do any work on

18 A. I believe it was a verbal agreement. 18 behalf of Active Touch or WebEx?

19 Q. Was it written down anywhere? 19 A. No.

11:01AM 20 A. I don't remember. 11:04AM 20 Q. Was Michael Zelyony ever offered any work

21 Q. What was the number of shares that you were 21 on behalf of Active Touch or Web Ex?

22 to receive in Active Touch for the work that you 22 A. No.

23 performed? 23 Q. During the time that you had your PTYX

24 A. 5,000. 24 partnership with Michael Zelyony, what other work

11:01AM 25 Q. And the work was done in 1997 and '98, is 11:04AM 25 did you do outside of the PTYX partnership?

33 35

1 that correct? 1 A. I did some web-elated consulting work.

2 A. It was one of those. 2 Q. And approximately how much money did you

3 Q. But not 1999? 3 earn for that work?

4 A. No. 4 A. I can't remember.

11:01AM 5 Q. It was 5,000 shares? 11:04AM 5 Q. And during the period from 1995 to 2001 did

6 A. Correct. 6 you ever earn any money for work that you did that

7 Q. And this is the company that later became 7 was not deposited into PTYX's bank account?

8 WebEx? 8 A. No, because I had nowhere else to put it.

9 MR. BARRETT: Asked and answered, objection. 9 Q. So the answer is no?

11:02AM 10 MR. WALTON: It is a trial objection, not for 10 A. No.

11 deposition. 11 Q. During that same period of time, to your

12 THE WITNESS: Correct. 12 knowledge, did Michael Zelyony perform any work for

13 Q. BY MR. WALTON: Did you ever have any 13 compensation without depositing that money in PTYX's

14 agreements with WebEx or Active Touch other than the 14 bank account?

11:02AM 15 ones you just mentioned that provided for payment of 11:05AM 15 A. I would not know.

16 5,000 shares of that company as compensation? 16 Q. You don't have any such knowledge?

17 A. Any other? 17 A. No.

18 Q. Correct. 18 Q. And in fact, that was one of the terms of

19 A. No. 19 your partnership agreement with Michael was that ali

11:02AM 20 Q. Did Live Share ever have an agreement with 11:05AM 20 the money would go through PTYX, correct?

21 WebEx under terms that would provide 5,000 shares of 21 A. No, absolutely not.

22 WebEx stock? 22 Q. You had a very clear agreement on that?

23 A. No. 23 A. No.

24 Q. Was that ever discussed at any time? 24 Q. You had a very clear agreement that not

11:02AM 25 A. No. 11:05AM 25 everything went through PTYX, is that correct?

34 36


1 A. We had no written or specified agreements 1 were in business together as PTYX, what type of

2 about the extent of PTYX. 2 expenses did you incur jointly on behalf of PTYX?

3 Q. Putting aside for the moment whether it was 3 A. Computer equipment.

4 written or oral, did you have any specific agreement 4 Q. What type of equipment?

11:0SAM 5 with Michael Zelyony as to what work was within PTYX 11:20AM 5 A. Servers, PCs, routers.

6 and what work was outside of PTYX? 6 Q. Would you speak up a little bit, please?

7 A. No. 7 A. Okay. You know, computer equipment.

8 Q. You never had any such specific agreement? 8 Q. Servers, pes, routers, monitors?

9 A. No. 9 A. Monitors.

11:0BAM 10 Q. In your own mind, how did you determine 11:21AM 10 Q. Software?

11 whether work that you did for money was part of PTYX 11 A. Not so much software.

12 or part of your own life personally? 12 Q. Did you acquire any specific equipment in

13 A. Depends on how I got that work and whether 13 connection with operating a web server?

14 I got it by my representing myself individually and 14 A. Yes, servers, routers, and internet

11:0BAM 15 whether any PTYX's resources or anything were used. 11:21AM 15 connection.

16 Q. Then in what way would you make up your 16 Q. What did you acquire in the way of internet

17 mind whether it was work that belonged to you 17 connection?

18 personally or to PTYX depending on how you got the 18 A. We started out with one T1 line.

19 work? 19 Q. A T1 line?

11:0BAM 20 A. If Michael or the name of PTYX or anything 11:21AM 20 A. Yes.

21 like that was involved, then it was PTYX's work. 21 Q. And thereafter did you acquire any

22 Q. So for example, if Michael had a hand in 22 additional internet connectivity?

23 generating the client, then you would consider that 23 A. There were two other T1 lines acquired

24 to be part of PTYX? 24 rather late in 1999, I believe.

11:07AM 25 A. Correct, or if I used the name of "PTYX," 11:21AM 25 Q. And what was the approximate monthly cost

37 39

1 even if Michael was not involved, then it was PTYX's 1 for the T1 lines?

2 work. 2 A. I am not sure, because Michael did all the

3 Q. But whether or not you used the name "PTYX" 3 negotiations and paid the bills.

4 was a matter of your own personal discretion, 4 Q. Did Michael ever present checks to you for

11:07AM 5 correct? 11:22AM 5 approval before he signed them?

6 A. Correct. 6 A. Sometimes only there are a few checks

7 Q. To your knowledge, did Michael Zelyony 7 written with both our names, both our signatures,

8 during this period of 1995 to 2001 solicit and 8 otherwise when he was writing them by himself he

9 obtain work for himself without using the PTYX's 9 generally did not ask for my approval.

11:07AM 10 name? 11:22AM 10 Q. When you wrote checks on PTYX's account,

11 A. I don't know. 11 did you ask for Michael's approval?

12 (A recess was taken from 11:05 12 A. Probably not.

13 a.m. to 11:19 a.m.) 13 Q. And when you signed checks jointly, what

14 (Record read.) 14 was the reason for the difference on those

11:19AM 15 Q. BY MR. WALTON: Before we broke we were 11:22AM 15 circumstances?

16 talking about work done on behalf of PTYX, and you 16 A. Probably because of the amount.

17 said you and Michael did not have any specific 17 Q. Did you have any specific agreement either

18 agreement as to how you distinguish between work 18 between you and Michael or with the bank that checks

19 done personally and work done through PTYX, correct? 19 over a certain amount had to have two signatures?

11:20AM 20 A. Correct. 20 A. No.

21 Q. Did you have any specific agreement with 21 Q. Was there any particular guideline that you

22 Michael as to what expenditures were to be 22 applied as to when a check would require two

23 considered expenses of PTYX's? 23 signatures?

24 A. No. 24 A. No.

11:20AM 25 Q. And during the time that you and Michael 11:23AM 25 Q. In your mind is there any specific reason

38 40

11/20/2003 10:40:46 PM Page 37 to 40 of 196 10 of 63 sheets

1 or distinguishing situation in which you and Michael 1 Q. At that time where were you living?

2 typically would sign a check jointly? 2 A. I was living in North Hollywood.

3 A. Can't really say. 3 Q. You had your own apartment?

4 Q. So when a check was signed by you and 4 A. I was living with my then boyfriend,

11:23AM 5 Michael jointly, according to your best and most 11:27AM 5 Brannon.

6 accurate recollection as you sit here right now, 6 Q. In his apartment?

7 there was no particular rhyme or reason to it? 7 A. A house that we jointly rented.

8 A. I guess we wanted to show that we both 8 Q. Where was Michael living?

9 approved, but. • • 9 A. He moved into Willow Glen, I believe,

11:24AM 10 Q. So if a check had two signatures on it, it 11:27AM 10 although I was not too clear on his personal matters

11 showed you both expressly approved the expenditure. 11 at that time.

12 A. Yes. 12 Q. And during this period in 1997 when you

13 Q. During the period 1995 to 2001, what was 13 were living in North Hollywood with Brannon, did

14 the business location of PTYX? 14 PTYX pay the rent on the house that you and Brannon

11:24AM 15 A. First of all, I am not entirely sure when 11:27AM 15 jointly rented?

16 PTYX as a partnership came into existence legally. 16 A. No.

17 Q. At some point did you register PTYX as a 17 Q. And during the period in 1997 when Michael

18 dba? 18 moved into the Willow Glen address, did PTYX pay the

19 A. Yes, and I don't remember which year that 19 rent on that place?

11:24AM 20 was. I suspect that it was when we were living on 11:27AM 20 A. I do not know.

21 Pacific View. 21 Q. After PTYX moved out of the room it rented

22 Q. You say "we," are you referring to you and 22 from L.A. Internet, what was its next business

23 Michael? 23 address?

24 A. Yes. 24 A. I believe the Willow Glen residence.

11:25AM 25 Q. And at that time were you still boyfriend 11:27AM 25 Q. Who owns the Willow Glen address?

41 43

1 and girlfriend? 1 A. I believe Michael's parents, but I have no

2 A. Yes, we were. 2 concrete information.

3 Q. And at that time you operated PTYX out of 3 Q. You never had any concrete information?

4 your residence at Pacific Line? 4 A. I don't know ifthey bought it for Michael

11:25AM 5 A. I believe so. 11:2BAM 5 or they bought it for themselves, so . .. 6 Q. And during the period PTYX operated out of 6 Q. Did you ever live at the Willow Glen

1 your Pacific Line address, did PTYX pay for the rent 7 address?

8 at that address? 8 A. Yes, I did.

9 A. I think so. 9 Q. During what time period?

11:25AM 10 Q. After Pacific Line -- 11:2BAM 10 A. From middle of '98 to end of '99.

11 A. Pacific View. 11 Q. And during that time period did you pay any

12 Q. I am sorry, Pacific View, did PTYX have any 12 rent?

13 other business address? 13 A. I believe PTYX or Live Share was paying

14 A. We rented a room in the offices of L.A. 14 rent.

11:25AM 15 Internet for less than a year. 11:2BAM 15 Q. Because that was a business expense of

16 Q. What year was that? 16 PTYX?

17 A. That must have been '97. 17 A. Yes, Michael lived in that house, I lived

18 Q. And during that time did PTYX have any 18 in that house also and we conducted business there.

19 other business address? 19 Q. So you treated the rent as a business

11:2BAM 20 A. The only business address it would have had 11:29AM 20 expense?

21 would be the Willow Glen address that Michael is 21 A. Yes.

22 still at. 22 Q. And during that time period of 1998 to 1999

23 Q. Let's go back for a moment to 1997 when you 23 Michael was living in that house and you were living

24 rented the room from -- is it L.A. Internet? 24 in that house and were you also living with your new

11:26AM 25 A. Yes. 11:29AM 25 boyfriend Brannon?

42 44


1 A. Yes. 1 Q. What kind of dogs?

2 Q. Maybe by that point still not so new, but 2 A. Akitas.

3 still Brannon. 3 Q. How large were they?

4 A. Yes. 4 A. Pardon?

11:29AM 5 Q. How many bedrooms are in that house? 11:31AM 5 Q. How large, how many pounds?

6 A. Three, I think. 6 A. Fairly large, I believe the male was

7 Q. Which one did you occupy? 7 slightly over 100 pounds, the female was maybe 70.

8 A. The master bedroom. 8 Q. You say both of those dogs were Michael's?

9 Q. I am not familiar with the house, can you 9 A. Yes.

11:31lAM 10 explain to me as you walk in the front door, where 11:32AM 10 Q. One of those dogs are not yours?

11 would the master bedroom be located? 11 A. No, they are with Michael today.

12 A. Upstairs and to the right. 12 Q. At that time was one of the dogs yours?

13 Q. If you go upstairs and to the right are 13 A. No, they were not allowed in my bedroom.

14 there any other bedrooms in that house? 14 Q. Never?

11:31lAM 15 A. Upstairs there's one -- no, then it must 15 A. No.

16 have been a four-bedroom house, it's been years, so 16 Q. You never had a dog in your bedroom, only

17 on the right there's one bedroom, on the left there 17 Brannon's two cats?

18 are two bedrooms. 18 A. No, certainly not, they would have killed

19 Q. What else distinguishes the master bedroom 19 the cats. I had a very strict policy.

11:31lAM 20 that you and Brannon occupied from the other 11:32AM 20 Q. Actually, that's not necessarily true, I

21 bedrooms of the house? 21 have a lOO-pound labrador and my cat beats him up.

22 A. It had an attached bathroom. 22 A. You haven't met the dogs I see.

23 Q. The other bedrooms did not? 23 Q. All depends on who is in the house first.

24 A. I don't think so. 24 Now during the time that you lived at the

11:31lAM 25 Q. Were there any other distinguishing 11:32AM 25 Willow Glen address and were doing business with

45 47

1 characteristics in the master bedroom? 1 Michael as PTYX, where was your work area?

2 A. It had a fireplace. 2 A. Downstairs.

3 Q. The other bedrooms did not? 3 Q. Where was Michael's work area?

4 A. No. 4 A. Also downsta irs.

11:31lAM 5 Q. So that is correct that they did not? 11:32AM 5 Q. In the same room?

6 A. Correct. 6 A. Downstairs was fairly open, there were no

7 Q. Sorry, I slipped a double negative in 7 walls except for one bedroom.

8 there, I needed to clean it up. Other than you and 8 Q. So it was one big open area --

9 Brannon, were there any other occupants of the 9 A. Generally, yes.

11:31AM 10 master bedroom during the time that you lived there? 11:33AM 10 Q. -- that you both occupied for doing your

11 A. Two cats of Brannon's. 11 work?

12 Q. Brannon had two cats? 12 A. Correct.

13 A. Yes. 13 Q. So is it fair to say that you saw Michael

14 Q. And they stayed with you in that bedroom? 14 every day?

11:31AM 15 A. Yes, they did. 11:33AM 15 A. Yes.

16 Q. They had the run of the house? 16 Q. You talked to him every day?

17 A. No, they were only allowed in the bedroom. 17 A. Yes.

18 Q. You never let them outside of the bedroom? 18 Q. You talked about work?

19 A. Correct. 19 A. I can't say every day, but generally, yes.

11:31AM 20 Q. You didn't let them outside? 11:33AM 20 Q. Where did you keep the PTYX's checkbook at

21 A. No. 21 the Willow Glen address?

22 Q. Any other animals? 22 A. Usually on Michael's desk.

23 A. Yes, Michael had two dogs. 23 Q. On top of it?

24 Q. What were the dogs' names? 24 A. I can't really say.

11:31AM 25 A. Cosmo and Kimiko 11:33AM 25 Q. Well, when you needed to write a check on

46 48 11/20/2003 10:40:46 PM Page 45 to 48 of 196 12 of 63 sheets

1 the PTYX account, where did you go to get checks? 1 A. We tried to have a mental idea of whether

2 A. I went to the checkbook which would usually 2 there was money in the account.

3 be on or around Michael's desk. 3 Q. On average, how much money would be on

4 Q. It wasn't locked away anywhere? 4 deposit at PTYX's bank account during this period of

5 A. No. 11:36AM 5 time?

6 Q. It was out accessible to you? 6 A. I would say running average of maybe

7 A. Yes. 7 between 5- and 10,000 a month.

8 Q. Did you have a check register system where 8 Q. Typically what was the lowest amount that

9 when you wrote a check it either created duplicates 9 the account would dip to?

11:34AM 10 or there was a check stub? 11:36AM 10 A. Very, very low.

11 A. There was a check stub, yes. 11 Q. But you still would just kind of keep a

12 Q. Did you have a custom and practice as to 12 mental impression of when it got very, very low and

13 how you filled out the checks and the check stubs? 13 you better not write any more checks?

14 A. We tried to. 14 A. We could call up and get an automated

11:34AM 15 Q. So you would write on the check stub the 11:36AM 15 account of the balance.

16 date, the payee and what the check was for? 16 Q. Sure, but then that wouldn't tell you

17 A. Yes. 17 whether the checks you had already written and

18 Q. Did you ever go through the check register 18 delivered to somebody hadn't been cleared, right?

19 and review the checks that had been written by 19 A. We didn't keep good track of that.

11:34AM 20 Michael to see what the money was going for? 11:37AM 20 Q. Did you ever reconcile your bank account?

21 A. No. 21 A. No.

22 Q. You never did? 22 Q. Did you have an accountant?

23 A. No. 23 A. Not really. We had a tax accountant who

24 Q. Did you ever look at the cancelled checks 24 did taxes, but not a regular bookkeeping sort of

11:34AM 25 when they came back from the bank? 11:37AM 25 way.

49 51

1 A. No. 1 Q. Who is your tax accountant?

2 Q. Did PTYX ever have general ledgers or other 2 A. Michael has the information on that.

3 accounting books? 3 Q. Do you remember who your tax accountant

4 A. No. 4 was?

11:34AM 5 Q. Nothing at all? 11:37AM 5 A. I believe I have a statement from her in

6 A. Nothing. 6 one of those, but she had a Russian name, and I was

7 Q. Just checking account, money came in? 7 not dealing with her more than once a year, if that.

8 A. Yes. 8 Q. Did Michael deal with her more frequently,

9 Q. You spent it, money went out? 9 to your knowledge?

11:35AM 10 A. Yes. 11:37AM 10 A. I think so.

11 Q. Did you ever look at the bank statements? 11 Q. This woman, was she a CPA, as far as you

12 A. No. 12 know?

13 Q. You didn't have any interest in how much 13 A. I believe so.

14 money the business was making and spending? 14 Q. Did this woman prepare tax returns on

11:35AM 15 A. It was a very confused time. 11:3BAM 15 behalf of PTYX?

16 Q. So did you have an interest in how much 16 A. Yes.

17 money the business was making and spending? 17 Q. And those were K1 returns?

18 A. Yes, but not so much an interest in the 18 A. I don't know.

19 check book. 19 Q. Did you ever sign tax returns prepared by

11:35AM 20 Q. When you went to the checkbook to write a 11:3BAM 20 this woman?

21 check, did you keep a running balance of how much 21 A. I believe so.

22 money was in there? 22 Q. Did she also prepare your personal tax

23 A. No. 23 returns for you?

24 Q. So you didn't know if you were going to 24 A. I remember she filed some tax deferrals or

11:35AM 25 overdraw the account like it happened in 1995? 11:3BAM 25 extensions, I don't know what they are called

50 52


1 exactly, and I am not 100 percent sure if she 1 Q. Did you make any distinction between the

2 actually prepared tax statements, I think she did. 2 business lines and the personal lines?

3 Q. But you would have known because you would 3 A. I don't think so.

4 have had to sign them before sending them in, right? 4 Q. Did P1YX also pay for food to stock the

11:3BAM 5 A. Yes, but Michael arranged for all that, all 11:41AM 5 refrigerator?

6 I had to do was go in and sign what I was told to 6 A. No, that was considered personal.

7 sign. 7 Q. So you bought your own food?

8 Q. So it was Michael's responsibility to have 8 A. Yes.

9 your personal income tax prepared? 9 Q. Did you have your own refrigerator at that

10 A. Yes. 11:41AM 10 house?

11 Q. How would Michael have the information to 11 A. No.

12 prepare your personal income tax for you? 12 Q. Just one refrigerator?

13 A. All my income went into the PTYX account 13 A. Correct.

14 and he had full access to that and records for that. 14 Q. Where did you buy your food?

11:39AM 15 Q. What instructions was the tax accountant 11:41AM 15 A. Local grocery stores.

16 given as far as charging business expenses to P1YX? 16 Q. Anyone in particular?

17 A. I do not know. 17 A. The nearest one was called Chalet Gourmet,

18 Q. Did you ever review the tax returns of P1YX 18 I think it is now part of Bristol Farms.

19 for yourself personally to see what expenses had 19 Q. Any other place you shopped for food?

11:39AM 20 been charged to the business as opposed to the two 11:41AM 20 A. I went to Chinese supermarkets in Monterey

21 of you personally? 21 Park frequently.

22 A. No. 22 Q. Did you have a car?

23 Q. Did you ever discuss with Michael what 23 A. Yes.

24 kinds of expenses were or were not appropriate for 24 Q. Did P1YX pay for your car?

11:39AM 25 payment out of the P1YX bank account? 25 A. No.

53 55

1 A. No. 1 Q. Did it pay for any of your automobile

2 Q. Did you ever discuss with Michael whether 2 expenses?

3 one or the other of you had been spending too much 3 A. No.

4 money on personal expenses or taking too much money 4 Q. Not for gas?

11:39AM 5 out in cash? 11:42AM 5 A. I am not sure how that was accounted for.

6 A. Possibly. 6 Q. What about for car insurance?

7 Q. Did you ever try to keep track of who was 7 A. No.

8 getting paid more or less whether in cash or in 8 Q. That was paid by you separately?

9 other forms of compensation? 9 A. Yes.

11:40AM 10 A. Well, there were checks written out to both 11:42AM 10 Q. How did you pay that separately?

11 of us as salary which was very, very little, those 11 A. Actually, my parents paid for the car and

12 were equal. 12 for the car insurance.

13 Q. How much was the salary? 13 Q. They also paid for insurance?

14 A. I think it was 2,500 a month, and there 14 A. Yes.

11:40AM 15 were other checks written out were written out 11:42AM 15 Q. Your parents gave you the car as a gift?

16 individually. 16 A. It was a leased car, and yes.

17 Q. So for example, du ring the period of 1998 17 Q. So you didn't owe them any money on the

18 to '99 for both you and Michael P1YX paid for the 18 car?

19 rent on the Willow Glen house where you operated the 19 A. Correct.

11:40AM 20 business and where you both lived, right? 11:42AM 20 Q. Did Michael have a car?

21 A. Uh-huh. 21 A. Technically, yes.

22 Q. So you didn't have any rent expense? 22 Q. What car did Michael have?

23 A. Correct. 23 A. He had a 1974 Maserati Bora.

24 Q. P1YX paid the phone bill? 24 Q. Did P1YX pay for that car?

11:40AM 25 A. Yes. 11:42AM 25 A. I don't know.


1 Q. Did PTYX pay for any of the automobile 1 Kimiko with me.

2 expenses associated with the operation of that car? 2 Q. Any particular reason?

3 A. I don't know how to answer if PTYX paid for 3 A. Michael said having two dogs was hard on

4 that, because checks went out in PTYX's name, but I 4 him when he wanted to travel or whatever.

11:43AM 5 don't know if they were counted as PTYX's expenses. 11:45AM 5 Q. So he could take one dog with him, but not

6 Q. During the time that you were in the PTYX 6 two?

7 partnership with Michael, did you ever have the 7 A. Right, and I had a backyard at the time

8 impression that Michael was spending more money out 8 so ••

9 of the PTYX account on personal items than you were, 9 Q. Did you have any particular relationship or

11:43AM 10 for example? 11:45AM 10 bond with Kimiko as opposed to Cosmo?

11 A. I think so, yes. 11 A. Well, we acquired the pets when Michael

12 Q. What was the basis for that impression on 12 and I were still together romantically, so I lived

13 your part? 13 with them for several years; one forms attachments.

14 A. He bought a lot more things. 14 Q. Did you have an attachment for Kimiko over

11:43AM 15 Q. What kind of things? 11:46AM 15 Cosmo?

16 A. For awhile he was into expensive camera 16 A. No.

17 equipment, he bought several Nikons, each of which 17 Q. During that period when you acquired the

18 were over a thousand dollars just for the body, and 18 dogs until the time that you moved to San Francisco,

19 then you have to have lenses and other things to go 19 did you ever have both of the dogs or one of the

11:44AM 20 with that. 11:46AM 20 dogs sleep in the bedroom with you?

21 He also had an interest in weapons and 21 A. Not at Willow Glen certainly. When Michael

22 bought very expensive knives at gun shows and other 22 and I -- from what time period? Sorry.

23 related things. 23 Q. From the time you acquired the dogs with

24 Q. And -- 24 Michael -- did you get them as puppies?

11:44AM 25 A. He had a motorcycle. 11:46AM 25 A. Yes, we did.

57 59

1 Q. Did you have a motorcycle? 1 Q. -- until the time you moved to San

2 A. No, I did not. 2 Francisco.

3 Q. Did you ride a motorcycle? 3 A. Yes, certainly when I was still

4 A. No. 4 romantically involved with Michael we had the dogs

11:44AM 5 Q. Did Michael ever use the cameras in 11:46AM 5 sometimes sleep with us.

6 connection with any work on behalf of PTYX? 6 Q. But after you broke up with Michael, then

7 A. No. 7 you didn't have the dogs with you in the bedroom?

8 Q. Purely a personal hobby? 8 A. No, never.

9 A. Correct. 9 Q. Did you ever have any discussions with

11:44AM 10 Q. And the knives and all that was a personal 11:47AM 10 Michael about whether he was spending too much money

11 hobby of his? 11 out of the PTYX account?

12 A. Yes. 12 A. I think you already asked that.

13 Q. And we were talking about the dogs before, 13 Q. I asked if you had an impression about

14 were those just considered personal pets or was that 14 that.

11:44AM 15 a business expense? 1147AM 15 A. Yes, I did have discussion.

16 A. Personal pets. 16 Q. What did you talk about?

17 Q. And that was all Michael's responsibility 17 A. Whether he really needed all these things.

18 to pay for? 18 Q. And what was his answer?

19 A. Yes. 19 A. Basically that they made his life

11:45AM 20 Q. So you never had any responsibility in 11:46AM 20 tolerable.

21 connection with anything related to the dogs? 21 Q. Did you talk about anything else during

22 A. I did take the female dog to live with me 22 those discussions?

23 for one year. 23 A. How we hoped to make some money so that we

24 Q. That's Kimiko? 24 can easily afford these things.

11:45AM 25 A. Yes, when I lived in North Hollywood I had 11:4BAM 25 Q. Did you tell him that there was anything

58 60


1 that you wanted to buy? 1 Q. When you bought clothes you would pay in

2 A. Not really. 2 cash?

3 Q. Anything at all? 3 A. Yes.

4 A. I suppose I might have said that I would 4 Q. Where did you get your health insurance

11:4BAM 5 like my own house some day, the usual, so I didn't 11:52AM 5 during this time?

6 have to live in such a strange arrangement. 6 A. Michael had bought us health insurance from

7 Q. Did you ever talk with Michael about 7 I think Blue Cross during part of that time,

8 calculating how much he was spending on personal 8 certainly not all of the time.

9 expenses versus how much you were spending? 9 Q. That was done through PTYX?

11:49AM 10 A. No, not really. 11:52AM 10 A. I believe so.

11 Q. Did you ever use PTYX's bank account to 11 Q. Did Michael also make cash withdrawals at

12 write checks yourself for personal expenses? 12 the same time that you did?

13 A. Very occasionally. 13 A. I think so, yes.

14 Q. What kinds of personal expenses did you 14 Q. Did you ever limit your cash withdrawals

11:49AM 15 write PTYX's checks for? 11:52AM 15 because you didn't have enough money in the bank?

16 A. I think I bought an arm chair late in 1999, 16 A. Yes.

17 I am trying to remember specific things, very late 17 Q. So there were times when you couldn't pay

18 in 1999, I think November even. That was actually 18 yourself $2,500 a month?

19 left at the Willow Glen house when I left in '99, so 19 A. Yes.

11:50AM 20 I actually owned it for a month, but I believe that 11:52AM 20 Q. What did you do at those times?

21 was a personal thing that was paid for with a PTYX 21 A. Tried to do without, occasionally I even

22 check. 22 borrowed from my boyfriend Brannon.

23 Q. Any other personal expenses of yours that 23 Q. So you borrowed money personally from

24 were not part of PTYX that you can recall paying for 24 Brannon?

11:50AM 25 out of the PTYX bank account? 1153AM 25 A. Yes.

61 63

1 A. I don't recall buying anything of a big 1 Q. Did you borrow money from anybody else from

2 enough sum that it would not be covered under what 2 the period 1995 to 2001?

3 I considered my salary or what we agreed was my 3 A. Yes, I did, I think it was within that time

4 salary. 4 frame, but it would have been very early on that

11:51AM 5 Q. That's $2,500 a month? 11:53AM 5 time when I borrowed some money from Michael's

6 A. Yes. 6 cousin, I don't know the exact family relationship,

7 Q. Did you typically withdraw that in a single 7 Alex.

a check or how was it done? 8 Q. Did you borrow money from anybody else?

9 A. We had checks made out to cash for some of 9 A. I borrowed money from my parents.

11:51AM 10 that. 11:54AM 10 Q. How much money?

11 Q. Did you write Michael's checks and he wrote 11 A. I can't really say.

12 yours or how did you do it? 12 Q. More than $10,000?

13 A. I don't recall, I don't think that we had a 13 A. Over the six years or so?

14 systematic way of doing that. 14 Q. Correct.

11:51AM 15 Q. Did you draw out the same amount on average 11:54AM 15 A. Probably.

16 each month? 16 Q. Less than 25,000?

17 A. We tried. 17 A. There were some monies that I think ended

18 Q. You paid it out in cash? 18 up exceeding 25,000 that were lent to me by my

19 A. Yes, and I think most of the time Michael 19 parents, I believe they were written out to my name

11:51AM 20 wrote the checks. 11:54AM 20 that I put into the PTYX account as usual, and they

21 Q. What did you do with the cash? 21 have been more or less written off.

22 A. Spent it on food and personal expenses. 22 Q. Are we talking about loans or other monies

23 Q. So when you went to the grocery store would 23 that you received from your parents? Right now I am

24 you pay it in cash? 24 asking specifically about loans, money that you were

11:52AM 25 A. Uh-huh. 11:55AM 25 obligated to repay.

62 64


1 A. They were meant to be loans, but when I was 1 A. No.

2 unable to repay them .•. 2 Q. During this period of time did PTYX itself

3 Q. How much did you borrow during the period 3 borrow money from anybody, again 1995 to 2001?

4 1995 to 2001 from your parents with at least the 4 A. Not to my knowledge.

11:55AM 5 original expectation that you would repay the money? 11:5BAM 5 Q. Not to your knowledge, is that correct?

6 A. I would say maybe 50,000, but that's an 6 A. Uh-huh.

7 extremely undocumented guess. 7 Q. Would you have been aware of it if PTYX had

8 Q. You never kept any record of how much you 8 borrowed money from anybody else during that time

9 borrowed from your parents? 9 period?

11:56AM 10 A. No. 11:5BAM 10 A. I think so.

11 Q. Did you ever pay any of it back? 11 Q. When the tax accountant prepared your

12 A. No. 12 taxes, did she also prepare financial statements for

13 Q. Did they ever ask you to pay it back? 13 either PTYX or Live Share?

14 A. Not yet. 14 A. I don't know.

11:56AM 15 Q. Did you ever have any agreement that you 11:5BAM 15 Q. You never saw any financial statements?

16 would pay them interest? 16 A. No.

17 A. No. 17 Q. So other than having a rough mental notion

18 Q. Did you ever have any discussions with your 18 of how much money was in the bank account at anyone

19 parents as to when you would pay them back? 19 time, you didn't have any concrete idea of what

11:56AM 20 A. When I had it. 11:59AM 20 money PTYX was earning or spending from month to

21 Q. As soon as you were able? 21 month?

22 A. As soon as I was comfortably able. 22 A. No.

23 Q. And how was the money that you borrowed 23 Q. Is that correct?

24 from your parents given to you, was it in cash? 24 A. Correct.

11:5BAM 25 Checks? 11:59AM 25 MR. WALTON: Should we break for lunch here?

65 67

1 A. Checks. 1 MR. BARRETT: Sure, fine.

2 Q. Made out to you personally? 2 (A recess was taken for lunch at

3 A. Yes. 3 11:59 a.m. and resumed at 1:39 p.m.)

4 Q. And how did you handle the check, did you 4 (End of videotape No.1, beginning

11:56AM 5 deposit it into a PTYX account or take it to the 5 of videotape No.2)

6 bank in cash? 6 MR. WALTON: Will the court reporter please mark

7 A. Deposit it into the PTYX account or the 7 this as first exhibit in order.

S Live Share account. 8 Q. And Miss Zhu, I hand you a document called

9 Q. Were these checks written generally for 9 "Notice of Deposition of Erin Yier Zhu." Have you

11:56AM 10 even amounts or odd amounts? 01:41PM 10 seen this document before?

11 A. I don't understand. 11 (The document referred to was

12 Q. For example, $10,000 even or $8,973.25? 12 marked Plaintiff's Exhibit 1 for

13 A. Even amounts. 13 identification. )

14 Q. Even amounts. Were there ever times you 14 THE WITNESS: (Witness examines document.) Yes,

11:57AM 15 asked for a loan from your parents that they 01:41PM 15 I think so.

16 refused? 16 Q. BY MR. WALTON: When did you first see it?

17 A. Yes. 17 A. Sometime in October.

18 Q. On how many occasions? 18 Q. And where were you when you saw it for the

19 A. I can't say, I don't know. 19 first time?

11:57AM 20 Q. Was there any limitation imposed by your 01:41PM 20 A. Do you want an address or. . . 21 parents on the amount of money they would loan you? 21 Q. Were you in the United States?

22 A. Every loan was discretionary. 22 A. No, I don't think so, I think it was faxed

23 Q. Did they ever ask you to first repay some 23 over to me.

24 of what you had borrowed before before you took 24 Q. You were overseas?

11:57AM 25 another loan from them? 25 A. Yes.

66 68 17 of 63 sheets Page 65 to 68 of 196 11/20/2003 10:40:46 PM

1 Q. Were you overseas on September 30, 2003? 1 Q. Before we get to Dr. Zelyony, how recent

2 A. Yes, I was. 2 are the E-mails that you have access to in Berlin?

3 Q. When did you return? 3 A. Within 2003.

4 A. October 11. 4 Q. Are there any E-mails within 2003 that

01:42PM 5 Q. And you have been in California since 01:45PM 5 refer or relate to Michael Zelyony?

6 October 11? 6 A. Except -- no, except with regards to

7 A. Yes. 7 communications with my lawyer.

8 Q. So it was sometime before October 11 that 8 Q. So you do communicate with your attorney by

9 you saw this document by fax? 9 E-mail?

01:42PM 10 A. I think so. 01:45PM 10 A. Sometimes, yes.

11 Q. Would you turn to page 2, please. 11 Q. And that's relating to Dr. Zelyony?

12 A. Yes. 12 A. Yes.

13 Q. Now category No.1, "All documents relating 13 Q. Are there any E-mails between you and

14 to any communications between you and Dr. Zelyony." 14 Michael that would show up for the E-mails that you

01:43PM 15 I guess we will make a copy of this, and for the 01:45PM 15 have access to in Berlin?

16 record, this is a binder that says "Responses to 16 A. No.

17 Request for Production of Documents" with what 17 Q. What about E-mails prior to 2000, do you

18 appear to be responses on the inside cover, and tabs 18 keep those stored on any kind of fixed or electronic

19 numbered 2, 5, 6, 7, 19, 25, 28, 29 and 34. 19 media?

01:43PM 20 MR. WALTON: Counsel, can we stipulate these tab 01:46PM 20 A. Prior to 2000?

21 numbers correspond to the documents in the named 21 Q. Prior to 2003.

22 categories? 22 A. No, I had a Notebook accident beginning of

23 MR. BARRETT: Yes. 23 this year and I had not backed up the hard disk.

24 Q. BY MR. WALTON: And Miss Zhu, these are 24 Q. You are a computer consultant?

01:43PM 25 documents produced by you for the first time at your 01:46PM 25 A. I have had several laptops die.

69 71

1 deposition here today? 1 Q. And you didn't back up?

2 A. Correct. 2 A. I failed to back up.

3 Q. And you had the assistance of counsel in 3 Q. Did you have a backup system that you

4 preparing this binder? 4 usually followed?

5 A. Yes. 01:46PM 5 A. Not really, I was not good at backing up.

S Q. What did you personally do to find 6 Q. You didn't have any regular routine that

7 documents that were within the scope of the 7 you followed?

8 inspection demand? 8 A. No.

9 A. I looked for things in my personal 9 Q. No plug-in external hard drive with a

01:44PM 10 possession. 01:46PM 10 backup program?

11 Q. Where did you look? 11 A. No.

12 A. At my home. 12 Q. Had you ever backed up the data on your

13 Q. Which home is that? 13 Notebook?

14 A. Both here and in Berlin. 14 A. I think I burned a couple backup CDs of

01:44PM 15 Q. You have documents relating to PTYX and Dr. 01:47PM 15 things at points, but E-mail is very difficult to do

16 Zelyony both here in California and in Berlin? 16 for that sort of thing.

17 A. You asked me where I looked, yes. 17 Q. So you never backed up your E-mails?

18 Q. Did you find any documents in Berlin? 18 A. Not really, no.

19 A. Not really, no. 19 Q. What was the scope of the data loss that

01:44PM 20 Q. Did you find any documents at all in 01:47PM 20 you suffered on your Notebook with respect to

21 Berlin? 21 E-mails specifically?

22 A. The only thing I would have had access to 22 A. Well, I had two laptops die on me in the

23 in Berlin would be recent E-mails. 23 last three years, and the most recent one the entire

24 Q. How recent? 24 hard disk and the motherboard was wiped up out.

01:44PM 25 A. Are you specifically talking about ••• 01:47PM 25 Q. And the motherboard?


1 A. Yes. 1 spreadsheets or projections for PTYX?

2 Q. Wiped out? 2 A. I did, yes.

3 A. Yes, a glass of water onto the keyboard I 3 Q. With respect to what specifically?

4 was working. 4 A. With respect to potential business ventures

01:47PM 5 Q. And when did that occur? 01:50PM 5 that PTYX could be involved in, could develop.

6 A. Beginning of this year, I think it was 6 Q. Is Trespass a business that PTYX got

7 January or February. 7 involved in?

8 Q. So after this litigation had began? 8 A. Trespass was a website that PTYX was

9 A. Yes. 9 running for a relatively short period of time.

01:48PM 10 Q. And how many years' worth of E-mail would 01:50PM 10 Q. What was Trespass?

11 you say you had on that Notebook? 11 A. It was in my E-mail service.

12 A. That one I think had maybe a year and a 12 Q. What did Trespass do specifically?

13 half. 13 A. It offered to pay people money for allowing

14 Q. And what about E-mails going back earlier 14 advertising to be attached to their E-mails,

01:48PM 15 than a year and a half, did you have those stored 01:51PM 15 outgoing E-mails.

16 anywhere? 16 Q. Was that business venture profitable?

17 A. No, because I had another laptop, a 17 A. Very briefly, yes.

18 different laptop before then, and anyway when I left 18 Q. How briefly?

19 Los Angeles in December of 1999 I had left my 19 A. Two or three months.

01:48PM 20 personal computer and everything stored thereon at 01:51PM 20 Q. How much profit?

21 the house in Willow Glen. 21 A. I don't recall at this point, I think maybe

22 Q. So anything prior to 1999 was on your 22 at the most profitable months maybe lS, $20,000 a

23 computer at Willow Glen? 23 month.

24 A. Yes. 24 Q. Did you continue operating Trespass after

01:48PM 25 Q. What kind of computer was that? 01:51PM 25 it had no longer become profitable?

73 75

1 A. It was a PC, I think it was a Compaq, but I 1 A. No, I did not.

2 am not sure. 2 Q. What happened to Trespass?

3 Q. Not a Notebook? 3 A. Basically we were not prepared for the

4 A. No. 4 actual usage and demands on the website. What I had

01:49PM 5 Q. Kind of a standard sort of PC tower like 01:51PM 5 built and started running was a prototype, not

6 you'd get at Frye's? 6 designed to really support a large number of users,

7 A. Yes. 7 and actual usage and popularity brought the whole

8 Q. By the way, did PTYX buy any of its 8 system down.

9 computer equipment at Frye's? 9 Q. Your website crashed?

01:49PM 10 A. Yes, it did. 01:52PM 10 A. Basically, yes, it overwhelmed the server,

11 Q. Would that Compaq computer also have 11 the whole software, everything.

12 E-mails between you and Michael? 12 Q. Were any claims for money ever made against

13 A. Yes, it would. 13 PTYX as a result of the Trespass business?

14 Q. Going back how far? 14 A. I think individuals attempted to, but as

01:49PM 15 A. I had that computer for maybe a year before 01:52PM 15 Trespass, as the venture of Trespass was no longer

16 that, so at least for that year. 16 successful, well, I don't know if there were any

17 Q. What about E-mails and other data going 17 real claims.

18 back to 1998 or before? 18 Q. What other businesses did PTYX get involved

19 A. I would not have kept records, I was not in 19 in?

01:49PM 20 the habit of saving E-mails. 01:53PM 20 A. Web hosting and some programming services.

21 Q. Did you save any other kind of electronic 21 Q. During the time that you were in

22 data or files relating to PTYX? 22 partnership with Michael, did you ever write any

23 A. I probably had some documents relating to 23 books?

24 PTYX such as proposals on that computer as well. 24 A. I looked into it, I did not actua lIy write

01:50PM 25 Q. Did you ever prepare any financial 01:53PM 25 any.

74 76 19 of 63 sheets Page 73 to 76 of 196 11/20/200310:40:46 PM

1 Q. Did Michael write any books? 1 2 A. I don't think so. 2 Q. How much did you charge on that card?

3 Q. Did you ever accept any contracts to write 3 A. I can't -- I don't know, I would have to

4 books? 4 look at the records and add it up.

01:53PM 5 A. Yes, I did. 01:56PM 5 Q. You have no idea?

6 Q. And was that in your mind part of your work 6 A. No.

7 on behalf of PTYX or for you individually? 7 Q. More than $10,OOO?

8 A. It was for me individually, it involved no 8 A. Over time certainly.

9 contact with Michael whatsoever, and the contract 9 Q. More than $20,OOO?

01:53PM 10 was in my name. 01:56PM 10 A. Yes.

11 Q. And that was how you requested it from the 11 Q. More than 30?

12 publisher, right? 12 A. Maybe, I can't say.

13 A. Yes, uh-huh. 13 Q. You didn't keep any records of what

14 Q. Did PTYX ever purchase books for use in 14 purchases you made on Dr. Zelyony's credit card?

01:54PM 15 connection with its business? 01:56PM 15 A. No, I made an effort to payoff a

16 A. Purchase books? 16 reasonable amount every month.

17 Q. Yes. 17 Q. How much was a reasonable amount?

18 A. Probably. 18 A. More than the minimum payment.

19 Q. What kinds of books? 19 Q. But if you weren't receiving the

01:54PM 20 A. Technical manuals and business books, I 01:57PM 20 statements, how did you know what the minimum was?

21 suppose. 21 A. I can call and get the automated account

22 Q. Anything else? 22 information, that was also how I made my payments.

23 A. I can't think of any at the moment. 23 Q. So when you made your payments of more than

24 Q. So is it correct that you do not have 24 the minimum, was it some round number like $400 a

01:54PM 25 current access to any E-mails between you and 01:57PM 25 month, $500 a month?

77 79

1 Michael or anyone else about Michael or about Dr. 1 A. Ohl there were months when I was regularly

2 Zelyony that go back earlier than this year? 2 paying several thousand a month.

3 A. Correct. 3 Q. But did you ever pay the card off

4 Q. Do you keep paper files on the business 4 completely?

01:54PM 5 dealings that you had with Michael Zelyony and PTYX? 01:57PM 5 A. No, I did not pay it off completely.

6 A. I do not. 6 Q. You were not --

7 Q. Do you have any files regarding Live Share? 7 A. Actually, I may have done that once or

8 A. I do not. 8 twice, actually.

9 Q. I think you said previously you never had 9 Q. But then you used it again?

01:55PM 10 any communications directly with Citibank about the 10 A. Yes.

11 credit card, right? 11 Q. During this period of time when you paid

12 A. I did make telephone payments, so I guess 12 off several thousand dollars a month you were living

13 that counts as direct communication. 13 in San Francisco?

14 Q. But you never requested them to increase 14 A. During 2000 I was living in San Francisco.

01:55PM 15 the credit limit? 01:58PM 15 Q. I am asking you is that when you paid

16 A. I believe I asked Dr. Zelyony to do that. 16 thousands of dollars a month on the credit card?

17 Q. But you didn't do that? 17 A. I did that both in San Francisco and when I

18 A. I don't think so. 18 was living in Berlin.

19 Q. The credit card statements didn't come to 19 Q. When you went to Berlin, that was when you

01:55PM 20 your address? 01:58PM 20 got married, right?

21 A. No. 21 A. That was before I got married.

22 Q. You said you thought Michael had charged 22 Q. And after you moved to Berlin you continued

23 about $3,000 of charges on that same card, is that 23 using the credit card?

24 right? 24 A. Yes.

01:56PM 25 A. That would be my guess given the ..• 01:58PM 25 Q. And during that period of time you were


1 living in Berlin, this is after March April 2001, is 1 credit card charges on Dr. Zelyony's credit card?

2 that right? 2 A. No, he did not, I was sending money to his

3 A. I more or less moved to Berlin end of year 3 Germany account.

4 2000. 4 Q. I am confused, were you working during that

01:56PM 5 Q. After you moved to Berlin you continued 02:00PM 5 time period?

6 using the credit card? 6 A. No, I was not.

7 A. Yes. 7 Q. So where was the money coming from that you

8 Q. And did you payoff the balance completely 8 were sending to your husband's Germany account?

9 at that time? 9 A. I had money giving given to me by my

01:56PM 10 A. I don't think so. 02:01PM 10 parents in 2000.

11 Q. Why not? 11 Q. So you sent that to your musician husband's

12 A. It was a running account, I pay some, I use 12 account in Germany, but didn't use that to payoff

13 some. 13 Dr. Zelyony's card, right?

14 Q. Did you have the money to pay it off 14 A. When I ran out of money completely I

01:59PM 15 completely? 02:01PM 15 stopped paying.

16 A. Let me think. Yes, there was. Yes, I did. 16 Q. But you kept using the credit card?

17 Q. Were you ever late in making the payment on 17 A. No, I did not, I did not use the credit

18 the credit card? 18 card after I stopped making payments on it.

19 A. I don't think so, but I can't be 100 19 Q. At the time you stopped making the payments

01:59PM 20 percent sure. 02:01PM 20 on it, how much was left on the credit card balance?

21 Q. Is there ever a time when you stopped 21 A. I think roughly $10,000.

22 making payments altogether? 22 Q. Did you write to Dr. Zelyony to tell him

23 A. Yes, there was. 23 you could no longer make the minimum payments and

24 Q. When was that? 24 that he should do something?

01:59PM 25 A. December of 2001. 02:01PM 25 A. I was in communication with Michael, I

81 83

1 Q. Why did you stop paying off the credit card 1 believe, about the fact that I was completely broke.

2 charges that you had put on Dr. Zelyony's card? 2 Q. So the answer is no, you never contacted

3 A. I ran out of money. 3 Dr. Zelyony?

4 Q. In December of 2001 you ran out of money? 4 A. I don't think so, not directly.

02:00PM 5 A. Yes. 02:01PM 5 Q. Did Dr. Zelyony ever attempt to contact you

6 Q. You didn't have any job at that time? 6 about the unpaid balance on the credit card?

7 A. No. 7 A. Yes.

8 Q. No source of income? 8 Q. Did you respond to him?

9 A. No. 9 A. Yes, I did.

02:00PM 10 Q. Were you married at that time? 02:02PM 10 Q. How did you respond?

11 A. Yes. 11 A. I don't recall exactly how I responded, I

12 Q. What does your husband do? 12 believe I received an E-mail from Dr. Zelyony.

13 A. He is a musician. 13 Q. And did you respond by E-mail?

14 Q. What kind of musician? 14 A. I would suspect so, but I don't remember.

02:00PM 15 A. Rock, pop music. 02:02PM 15 Q. Did you ever receive any phone calls from

16 Q. Does he have his own band? 16 Dr. Zelyony about the unpaid balance on the credit

17 A. Yes, he does. 17 card?

18 Q. In Germany? 18 A. I don't remember, it was a very hectic

19 A. Yes. 19 point in my life.

02:00PM 20 Q. In fact, he is a rock star in Germany, 02:02PM 20 Q. But it was also less than two years ago,

21 right? 21 right?

22 A. I wouldn't say that. 22 A. Correct.

23 Q. But his fans would, right? 23 Q. What is the highest level of education that

24 A. No, his fans absolutely would not. No. 24 you have?

02:00PM 25 Q. Your husband had nothing to payoff in 02:02PM 25 A. Some college.


1

2

3

4

5

6

7

8

9

02:03PM 10

11 12 13 14

02:03PM 15 16 17

18

19 02:03PM 20

21

22 23 24

02:03PM 25

1

2

3

4

02:04PM 5

6

7

8

9

02:04PM 10

11

12

13

14

02:05PM 15

16

17

18 19

02:06PM 20 21 22 23

24

02:06PM 25

Q. And yet you have contracts with publishers

to write technical books, correct?

A. Correct.

Q. Have you ever had your IQ measured?

A. No.

Q. Would you say you have a better than

average memory?

A. No, I would not, my memory is very poor,

actually.

Q. How old are you now?

A. 29.

Q. And it's difficult for you to recall with

clarity things that happened 18 months ago, is that

right?

A. When I was traveling around the world and

not keeping track of what I was doing, telephone or

communication-wise, yes.

Q. So that period of time is not clear to you?

A. No.

Q. What about the period of time when you

were living in San Francisco, are the events and

conversations that you had at that time still clear

in your mind?

A. The general subjects, yes; specific dates

and incidences, depends on the significance.

85

Q. What about during the period of 1995 to

1999 when you were living in Los Angeles, are those

events still clear in your mind?

A. Again, really depends on the nature ofthe

events. I remember when Michael and I separated,

but smaller things ...

MR. WALTON: Excuse me, can we go off the record

for just a minute? I have an issue apparently I

need to attend to.

(A recess was taken from 2:04 p.m.

to 2:05 p.m.)

Q. BY MR. WALTON: Miss Zhu, you said you ran

out of money, referring to money that was given to

you by your parents, correct?

A. Referring to all money in my possession.

Q. Let's back up then. After you moved to San

Francisco, how much money did you earn through PTYX?

A. Nothing.

Q. After you moved to San Francisco how much

money did you earn from outside work?

A. When I was living in San Francisco?

Q. Correct.

A. Nothing.

Q. So that carries us up to end of 2000 or

March of 2001?

86

1

2

3

4

02:06PM 5

6

7

8

9

02:07PM 10

11

12 13 14

02:07PM 15 16 17

18 19

02:07PM 20 21

22 23 24

02:07PM 25

1

2

3

4

02:08PM 5

6

7

8

9

02:08PM 10

11

12 13 14

02:09PM 15 16 17

18 19

02:09PM 20 21 22 23 24

02:09PM 25

11/20/200310:40:46 PM Page 85 to 88 of 196

A. Correct.

Q. No earned income, correct?

A. No earned income.

Q. What money did you live on other than Dr.

Zelyony's credit card?

A. Monies given to me by my parents.

Q. How much money did your parents give you?

A. A settlement of $300,000 minus legal fees

and some other amounts that were taken off.

Q. What other amounts other than legal fees

were taken out?

A. Some money was paid back to -- well, some

money was given to live Share, some money was paid

back to Michael for monies that he had borrowed on

my behalf during the first three months of 2000.

Q. Monies borrowed from whom on your behalf?

A. I do not know.

Q. You have no idea?

A. No.

Q. Michael went out and borrowed money for

you?

A. Yes, I said I needed money to live on, he

said he was helping me during that time period, he

borrowed money for me.

Q. And what other monies were taken out of the

87

$300,000 you received from your parents?

A. I don't remember. I believe there's an

account by David Affeld listing what monies were

taken out and what checks were given to me, and then

those checks were deposited into the bank -- into

the PTYX's money market account at Bank of America.

Q. Looking at your Notebook here, where would

I find that account in?

MR. BARREn: Under "Affeld."

MR. WALTON: Under "6"?

MR. BARREn: Behind there there is an indicator

of a letter from Affeld.

Q. BY MR. WALTON: The one dated April 6,

20007

A. That was for the first disbursement.

Q. A Cashier's Check payable in the amount of

$119,731?

A. Correct, and a bit later in the same folder

you will find a deposit slip to Bank of America for

the exact same amount. And there was another

payment of I think $127,000 that was again in the

form of a Cashier's Check from David Affeld. I

don't have the letter that accompanied that, but

that was also deposit to the same account.

Q. According to this letter there is like a

88

22 of 63 sheets

1 first payment of $150,OOO? 1 costs?

2 A. Uh-huh. 2 A. Yes.

3 Q. And out of that, 20,000 went to Live Share? 3 Q. So $20,000 to Live Share?

4 A. Uh-huh. 4 A. Uh-huh.

02:09PM 5 Q. $10,268.71 went to Mr. Affeld's law firm? 02:12PM 5 Q. And then legal fees?

6 A. Uh-huh. 6 A. Uh-huh.

7 Q. And the balance of $119,731.21 went to you? 7 Q. What was the $20,000 to Live Share for?

8 A. Yes. 8 A. I don't really know, but I am pretty sure

9 Q. And you got that by Cashier's Check payable 9 it was for returning -- as I said, returning some

02:10PM 10 to you? 02:12PM 10 monies that Michael had borrowed on my behalf.

11 A. Yes. 11 Q. From Live Share?

12 Q. What did you do with that money? 12 A. I think he borrowed it from other people,

13 A. I opened a money market account in the name 13 and that's the money he borrowed went into the Live

14 of PTYX at Bank of America and I deposited there. 14 Share account, so it got repaid back out of the Live

02:10PM 15 Q. Was there another $150,000 check after 02:12PM 15 Share account.

16 this? 16 Q. And then there was another 140 odd thousand

17 A. It was, I believe, 127,000, it was $150,000 17 dollars that came to you when?

18 with some deductions, I don't know what these 18 A. I believe very beginning of June of 2000.

19 deductions were exactly. 19 Q. 2000?

02:10PM 20 Q. Who would know the answer to that? 02:13PM 20 A. Uh-huh.

21 A. David Affeld would. 21 Q. So in the space of two months you received

22 Q. So we would have to ask David. 22 net 250,000, thereabouts?

23 A. Yes. I am sure he enclosed a letter at 23 A. Correct.

24 that time, I don't have that in my possession. 24 Q. What did you do with that money?

02:10PM 25 Q. We can get that from David? 02:13PM 25 A. Some of it I used for personal purposes.

89 91

1 A. Correct. 1 Q. How much?

2 Q. Were those, to the best of your 2 A. I don't know, I have not done an

3 recollection, was the deduction from the second 3 accounting, and a great deal of it went towards

4 payment also related to legal fees or was it 4 business expenses of PTYX and Live Share.

02:11PM 5 something else? 02:13PM 5 Q. Before we get to that, I mean did you have

6 A. Part of it went to legal fees because there 6 to take deductions of personal income tax against

7 was a contingency component. 7 that amount?

8 Q. How much was the contingency? 8 A. No, it was, I believe -- I believe my

9 A. Two and a half percent, and some other 9 parents paid the taxes on that.

02:11PM 10 deductions that I trusted Affeld's judgment on. 02:13PM 10 Q. They paid the taxes?

11 Q. And in what sense did you rely on Affeld's 11 A. I believe so.

12 judgment for deductions? 12 Q. Did you file a tax return showing the

13 A. Whatever he thought was reasonable. I 13 treatment of these monies one way or the other?

14 don't -- 14 A. I believe they were -- actually, I don't

02:11PM 15 Q. Are you saying Mr. Affeld made the decision 02:14PM 15 know, actually.

16 to disburse $20,000 to Live Share? 16 Q. Do you remember when was the last time you

17 A. No, he had my approval, I am sure I 17 filed a tax return?

18 approved what he said at the time. 18 A. 1999.

19 Q. According to this letter it says you 19 Q. You haven't filed one since 1999?

02:11PM 20 instructed him? 20 A. No.

21 A. Yes. 21 Q. Why not?

22 Q. Did you instruct him to pay $20,000 to Live 22 A. Because I did not think that I had any

23 Share? 23 earned income.

24 A. I guess I did, yes. 24 Q. So it is your understanding if you didn't

02:12PM 25 Q. And then the balance is for legal fees and 02:14PM 25 have any earned income you didn't have to file a tax

90 92


1 return? 1 your case?

2 A. That's what I was told. 2 A. I don't think so.

3 Q. So is it fair to say since 1999 when you 3 Q. You don't think you ever talked about that

4 were working at PTYX, PTYX also didn't have any 4 with Michael?

02:14PM 5 earned income? 02:17PM 5 A. Not regarding his father.

6 A. PTYX had its taxes done by a professiona I. 6 Q. Do you know whether David Affeld ever

7 Q. PTYX is a partnership, and that income and 7 talked to Dr. Zelyony about your case?

8 the expenses would be attributed as a passthrough to 8 A. I would hope not.

9 you, right, as a partner? 9 Q. Do you know whether David Affeld ever

02:15PM 10 A. I don't know, I have that handled by a 02:17PM 10 talked to Michael about your case?

11 certified professional. 11 A. Certa in Iy did.

12 Q. Did you keep copies of the tax returns? 12 Q. What was the purpose for that?

13 A. No, I did not. 13 A. Michael was very much involved in that

14 Q. You reside predominantly in Germany or 14 case.

02:15PM 15 California? 02:18PM 15 Q. In what way?

16 A. At what time period? 16 A. He was the one that had the idea to start

17 Q. This point. 17 with.

18 A. Half and half. 18 Q. What idea did Michael have?

19 Q. Was that also true last year? 19 A. That my parents owed me financially.

02:15PM 20 A. No, last year I was predominantly in 02:18PM 20 Q. Why did Michael believe that your parents

21 Germany. 21 owed you financially?

22 Q. Did you ever talk to Dr. Zelyony about your 22 A. Because Michael has known me since I was 17

23 settlement monies that were received in April and 23 years old, since I left my parents' house, and he

24 June of 20007 24 always had this idea.

02:16PM 25 A. No, I did not. 02:18PM 25 Q. The idea of getting a recovery for you from

93 95

1 Q. Never? 1 your parents?

2 A. No. 2 A. Yes, that my parents owed me something.

3 Q. Did you ever talk to Dr. Zelyony about the 3 Q. Was Michael trying to get any money for

4 claims that gave rise to the settlement claims? 4 himself?

02:16PM 5 A. No. 02:18PM 5 A. He says not.

6 Q. Never? 6 Q. Did he receive any money out of the

1 A. Never. 7 settlement money you received?

8 Q. During that time period, say, December 1999 8 A. Only in terms of monies that I transferred

9 to June of 2000, did you ever meet with Dr. Zelyony 9 into the PTYX and Live Share accounts to which he

02:16PM 10 in person? 02:19PM 10 had full authority to use.

11 A. Probably. 11 Q. And how did he exercise that authority,

12 Q. Do you recall the occasion? 12 putting the money in the PTYX and Live Share

13 A. No, but I would imagine it was a social 13 accounts?

14 occasion involving Michael. 14 A. He could write checks on whatever was in

02:16PM 15 Q. Did you ever ask Dr. Zelyony to assist your 02:19PM 15 the PTYX and Live Share checking accounts.

16 attorney, David Affeld, in evaluating your claims? 16 Q. And what checks did he write upon those

17 A. I did not. 17 accounts that drew upon the settlement monies that

18 Q. Did anyone else ask Dr. Zelyony on your 18 you deposited there?

19 behalf to perform that service? 19 A. I don't know the exact checks, but whatever

02:17PM 20 A. Michael may have. 02:19PM 20 checks he did write in 2000 after April I would

21 Q. Did you talk to Michael about whether he 21 think that -- I mean money was spent, I knew that,

22 had done that? 22 on the PTYX account, and Michael was writing checks

23 A. Can you repeat that? 23 on them.

24 Q. Sure. Did you ever talk to Michael about 24 Q. Do you think it was more than likely it was

02:17PM 25 whether he had ever asked his dad to help out in 02:19PM 25 your money that was being spent because PTYX did not

94 96


1 have any other money? 1 A. If you look at the deposits, it was under

2 A. I know that Michael used PTYX checks for 2 $250,000, I think it was under 240,000.

3 his personal things as well because he had no 3 Q. We will call it 240, 240,000 goes into the

4 personal checking account. 4 PTYX account?

02:20PM 5 Q. That's not my question, do you think that 02:22PM 5 A. Uh-huh.

6 after you deposited this money into PTYX's bank 6 Q. How much of that was spent by checks

7 account that some portion of it necessarily was 7 written by Michael?

8 spent by Michael's writing checks because PTYX 8 A. I don't know, but I am sure we could get

9 didn't have any other money coming in? 9 Bank of America to produce the balances and other

02:20PM 10 A. Sure. 02:22PM 10 cancelled checks.

11 Q. So in this period, spring of 2000, is it 11 Q. Here's one of those times I am going to

12 correct that PTYX did not have any steady source of 12 need you to try to give me an estimate.

13 income? 13 A. I have no idea.

14 A. Not from my side, I don't know if Michael 14 Q. Don't know whether it was more than half or

02:20PM 15 brought any money in. 02:23PM 15 less than half?

16 Q. You have no idea? 16 A. I would suspect it was more, but I really

17 A. No, we were living quite far from each 17 have no idea, I kept no records during that time.

18 other at that point. 18 Q. Had you ever had $250,000 at one time in

19 Q. But PTYX continued to have business 19 your life before?

02:20PM 20 expenses at that time, right? 02:23PM 20 A. No, I did not.

21 A. Yes, it did. 21 Q. Have you ever had $50,000 in your life at

22 Q. And how were those being paid for? 22 one time before?

23 A. It was being paid by the money that I had 23 A. No, I did not.

24 transferred into the PTYX account. 24 Q. $25,000?

02:21PM 25 Q. And how much of the money you transferred 02:23PM 25 A. Yes.

97 99

1 into the PTYX account from your settlement was used 1 Q. So the most money you had ever had at one

2 to pay PTYX's expenses? 2 time in your life before was something between 25-

3 A. I don't know as I don't have PTYX's 3 and $50,000?

4 accounts, Michael has all that information. 4 A. Yes.

02:21PM 5 Q. You didn't care? 02:23PM 5 Q. And now you got this windfall of $250,000,

6 A. I cared, but I cared more about Michael 6 you deposit it into a joint account, and you don't

7 being able to continue. 7 know how much your business partner spent out of

8 Q. Did you ever look to see how much was left 8 that?

9 when you withdrew the money? 9 A. No.

02:21PM 10 A. Yes, once in awhile, yes, I would call the 02:23PM 10 Q. You don't know whether it was $25,000 or

11 bank at the automated number and get a figure. 11 $125,000?

12 Q. And did it ever drop to a point that it 12 A. No, I do not. He wasn't just my business

13 concerned you? 13 partner, he was my best friend.

14 A. Yes. 14 Q. But he is not any longer?

02:21PM 15 Q. At what point was that? 02:24PM 15 A. Not any longer since he chose to go through

16 A. I think it had dropped to a figure that 16 litigation.

17 concerned me near the end of 2000. 17 Q. That was not something you agreed with?

18 Q. And what amount of money was that? 18 A. I don't like being sued, I don't think

19 A. I can't say right now, but I would suspect 19 anybody likes being sued.

02:22PM 20 it went under $10,000. 02:24PM 20 Q. Did you ever suggest to Michael that he

21 Q. So we got 260, $270,000 deposited into the 21 should resolve PTYX's debts by suing you or suing

22 accounts? 22 your parents?

23 A. Less than that. 23 A. I don't recall.

24 Q. Well, counting the $20,000 that went to 24 Q. Is it possible that you said such things

02:22PM 25 Live Share? 02:24PM 25 and you don't remember right now?


1 A. Sue me, no, I certainly did not say "Sue 1 A. Once before I moved there.

2 me." 2 Q. Any other extensive trips?

3 Q. But you might have told him to go sue your 3 A. I went to New York several times.

4 parents? 4 Q. Did you establish a bank account for

02:25PM 5 A. Perhaps jokingly. 02:27PM 5 yourself in San Francisco?

6 Q. You might have said that to Michael 6 A. Late in 2000 I did.

7 jokingly? 7 Q. Which bank?

8 A. Yes, out of frustration. 8 A. Bank of America.

9 Q. Immediately after you, yourself, had 9 Q. Is that currently where you bank?

02:25PM 10 threatened to sue your own parents and gotten a 02:27PM 10 A. Yes.

11 settlement as a result you would make such a joke? 11 Q. And how much did you open the Bank of

12 A. Yes. 12 America account with?

13 Q. How much of the $240,000 that you deposited 13 A. I don't remember.

14 into the PTYX account did you personally spend? 14 Q. Do you recall whether it was more or less

02:25PM 15 A. I don't know. 02:27PM 15 than $25,000?

16 Q. No idea? 16 A. Less, I would think, but I don't recall.

17 A. No idea. 17 Q. And during this period from April, I am

18 Q. It just slipped right through your fingers? 18 sorry, during this period from June 2000 to, say,

19 A. Yes. 19 June of 2002 --

02:25PM 20 Q. You don't know whether you spent more than 02:27PM 20 A. Yes.

21 $50,000? 21 Q. -- other than the $300,000 we talked about

22 A. I don't know. 22 in the settlement, did you receive any other money

23 Q. Don't know if you spent more than $100,000? 23 or transfers of assets from your parents?

24 A. I don't know. 24 A. From my parents? No.

02:25PM 25 Q. And during the period from April of 2000 to 02:28PM 25 Q. From anyone?

101 103

1 April of 2001 you were living in San Francisco, 1 A. There were the 5,000 shares from Active

2 correct? 2 Touch that was given to me for consulting work back

3 A. April of 2000 until December of 2000 I 3 in '97, '98.

4 lived in San Francisco. 4 Q. So three years later after you did the

02:26PM 5 Q. And then you moved to Germany? 02:28PM 5 work, all of a sudden you got the 5,000 shares?

6 A. Yes. 6 A. Yes, because I think the shares were

7 Q. And during that time period you weren't 7 finally worth something on the open market.

S working? 8 Q. Did you sell those shares?

9 A. Correct. 9 A. Gradually, yes.

02:26PM 10 Q. Did you pay rent? 02:28PM 10 Q. So you sold all those shares?

11 A. Yes, I did. 11 A. Yes.

12 Q. How much did you pay a month in rent? 12 Q. And other than the 5,000 shares in WebEx,

13 A. 1,395, I believe. 13 did you receive any other monies, stock, anything of

14 Q. $1,395? 14 value from anybody else?

15 A. Yes. 02:28PM 15 A. Up to June of 2002?

16 Q. And you had a car? 16 Q. Correct.

17 A. Which was paid for by my parents. 17 A. No.

18 Q. And how much would you say you spent in 18 Q. So you lived entirely on what was left from

19 other living expenses per month? 19 the settlement and not from Dr. Zelyony's credit

02:26PM 20 A. I really can't tell you. 02:29PM 20 card?

21 Q. Did you travel a lot during that time 21 A. Dr. Zelyony's credit card I stopped using,

22 period? 22 last time I used it was December of 2001.

23 A. I did some traveling, yes. 23 Q. But during that time period were you still

24 Q. How many times did you go to Germany during 24 using it?

02:26PM 25 that year? 25 A. Yes.


1 Q. During that time did you receive money from 1 Q. By whom?

2 your husband in Germany? 2 A. WebEx.

3 A. He paid for some joint expenses. 3 Q. WebEx was a company founded by, among

4 Q. But no regular living stipend or anything 4 others, your father, right?

02:29PM 5 like that? 5 A. Yes.

6 A. No, no. 6 Q. Your father's name is Min?

7 Q. And during the period from June of 2002 to 7 A. Yes.

8 the present, have you received money, stock or 8 Q. When your brother told you a trust had been

9 anything else of value from some other person? 9 created in your favor, when did he first tell you

02:29PM 10 A. My parents, yes. 02:32PM 10 that?

11 Q. When did you receive that? 11 A. That it had been created?

12 A. I started borrowing some money from them in 12 Q. Correct.

13 second half of 2002 and somewhat earlier this year. 13 A. I think it was maybe April of this year.

14 Q. So last year and earlier this year? 14 Q. And that was when he first told you that a

15 A. Yes. 02:32PM 15 trust had, in fact, been created?

16 Q. And these again are borrowed monies that 16 A. Correct, for both him and me.

17 originally at least you expected there is an 17 Q. Are you joint beneficiaries under the

18 expectation that you will have to repay, is that 18 trust?

19 right? 19 A. I have been told so.

20 A. Yes. 02:32PM 20 Q. Have you ever seen the trust instrument?

21 Q. Have you repaid any of those borrowed 21 A. I have not.

22 monies? 22 Q. Do you know what the terms of the trust

23 A. Not yet. 23 are?

24 Q. Why not? 24 A. I do not.

02:30PM 25 A. I haven't had money with which to repay. 02:32PM 25 Q. Have you received any payment out of the

105 107

1 Q. Is that the only money or stock or thing of 1 trust?

2 value that you received from your parents in the 2 A. I have not.

3 last year? 3 Q. Just your brother's word that there is a

4 A. No, I also received 10,000 shares of Web Ex 4 trust?

02:30PM 5 stock. 02:32PM 5 A. Correct.

6 Q. What is the current price stock of WebEx? 6 Q. Prior to April of this year had your

7 A. Slightly over $20, I believe. 7 brother ever told you that your parents were

8 Q. So you still have that stock in your own 8 creating a trust of which you were going to be a

9 name? 9 beneficia ry?

02:30PM 10 A. Yes, I just found it the other day. 02:33PM 10 A. He had told me that my parents were

11 Q. And other than the 10,000 shares of WebEx 11 thinking about doing such a thing.

12 stock, any other transfers from your parents to you? 12 Q. When was the first time he told you that?

13 A. No. 13 A. I can't remember.

14 Q. Are you the beneficiary of a trust in your 14 Q. Was it before or after April of 2000?

02:31PM 15 favor? 02:33PM 15 A. After, I believe.

16 A. I have been told so. 16 Q. Did you ever discuss with your parents the

17 Q. Who told you so? 17 creation of a trust in your favor?

18 A- My brother. 18 A. No.

19 Q. What is your brother's name? 19 Q. Was there ever any discussion with your

02:31PM 20 A. Lei. 02:33PM 20 parents or anyone else about a trust being created

21 Q. How old is your brother? 21 in your favor as part of your settlement?

22 A. I think he is turning 33 this month, but I 22 A. No.

23 think it is still a couple days to go. 23 Q. Never happened?

24 Q. Is your brother employed? 24 A. No.

02:31PM 25 A. Yes, he is. 02:34PM 25 Q. Did you yourself consider the creation of


1 a trust to be connected with your settlement with 1 happen, so it is not •••

2 your parents? 2 Q. Not something you worried about?

3 A. I do not because it is an equal, and I 3 A. No.

4 believe a single trust instrument for both my 4 Q. You didn't ask your brother what was going

02:34PM 5 brother and myself, that's what my brother told me. 02:37PM 5 on, or if he could hurry up the process?

6 Q. My question to you is a little different, 6 A. I asked him about it, he didn't have

7 did you permanently ever believe that the creation 7 details until April of this year when he told me

8 of a trust in your favor was linked to the 8 that something had been done.

9 settlement of your claims against your paints? 9 Q. So you didn't see the creation of a trust

02:34PM 10 A. I do not. 02:37PM 10 by your parents in your favor and your brother's

11 Q. You never believed that? 11 favor potentially as being an event that had any

12 A. No. 12 relevance in your day-to-day life?

13 Q. You never told anyone that you believed 13 A. No.

14 that? 14 Q. That's correct, you didn't see it that way?

02:34PM 15 A. At the end of the titlement process there 02:37PM 15 A. That is correct.

16 was some talk of stock being given to me that 16 Q. And it was during this period of time that

17 however, never happened. 17 you didn't have any other income from earned

18 Q. You had a contingency agreement with 18 sources, correct?

19 Mr. Affeld of two and a half percent? 19 A. Correct.

02:35PM 20 A. Yes. 02:37PM 20 Q. You didn't have enough money to pay back

21 Q. That's not a typo, correct, it was 2.5 21 the 10,000 plus a thousand dollars you charged on

22 percent, that's all? 22 Dr. Zelyony's credit card, right?

23 A. It was 50 percent of his leave fees in cash 23 A. Correct.

24 and the rest as 2.5 percent contingency. 24 Q. And were you still trying to send some

02:35PM 25 Q. So Mr. Affeld got 2.5 percent of $305,000? 02:38PM 25 money over to your husband's bank account in

109 111

1 A. Yes, he did. 1 Germany, credit right?

2 Q. Was Mr. Affeld to receive any other percent 2 A. That was finished when I ran out of money,

3 of any monies or stock paid to you as a result of 3 too.

4 settlement from your parents? 4 Q. So you were broke your husband was broke?

02:35PM 5 A. Result of settlement, yes. 02:38PM 5 A. Yes.

6 Q. Can you speak up a little bit? 6 Q. And it didn't matter to you that your

7 A. Yes /STPH-FPLT hear back there. 7 parents were supposed to be creating a trust with

8 Q. Did you ever receive any additional money 8 more than $100 million in it?

9 or stock from your parents? 9 A. I don't know where you get $100 million.

02:35PM 10 A. I did not. 02:38PM 10 Q. Have you ever seen the account statement?

11 Q. And you never told Mr. Affeld or anybody 11 A. No, I have not.

12 else that you considered the trust in your favor to 12 Q. Well, the deposit it is at Goldman Sachs,

13 be part of the settlement of your claims against 13 right?

14 your parents? 14 A. I have no idea.

02:36PM 15 A. My parents or -- God, I was not talking to 02:38PM 15 Q. You never heard anyone mention Goldman

16 my parents. 16 Sachs?

17 Q. Do you know why the trust in your favor and 17 A. I went with Michael to Goldman Sachs once

18 your brother's favor wasn't created toward to go 18 to open an account, I have no knowledge of anything

19 what your brother said from April of 2000 until 19 actually happening with that account.

02:36PM 20 April of 2003 this year? 02:38PM 20 Q. So you have never seen an account statement

21 A. No, I don't. 21 for a stock account originally in the name of your

22 Q. Did you ever wonder? 22 parents?

23 A. I suppose, but. 23 A. No.

24 Q. Was it important to you? 24 Q. As a master account and you listed as a

02:36PM 25 A. It was going to be a gift if it would ever 02:39PM 25 beneficiary of trust under?


1 A. Not at all. 1 Q. But they didn't offer you help in the form

2 Q. No idea? 2 of money and so you found it necessary to use Dr.

3 A. No. 3 Zelyony's credit card, correct?

4 Q. Did you have any idea how much your parents 4 A. I did not have Dr. Zelyony's credit card at

02;39PM 5 intended to vest in that trust account? 02;41PM 5 that time.

6 A. I don't know. 6 Q. But after your parents did not give you

7 Q. But you knew your parents were at that time 7 help in the form of money in December 1999 you found

8 in the year 2000 enormously wealthy, correct? 8 it expedient to receive and use doctor seminar's

9 A. That was the hope. 9 credit card?

02;39PM 10 Q. That was the reality by 2000, right? 02;41PM 10 A. I had my settlement money by the time I got

11 A. They didn't go public until I think late 11 Dr. Zelyony's credit card, so I other absolutely

12 July, so in April that was certainly very much up in 12 expected to be able to pay on that card.

13 the air. 13 Q. Just like you promised Dr. Zelyony that as

14 Q. Very much up in the air, and yet your 14 soon as you got the money from your settlement would

02;39PM 15 parents had $300,000 in cash to give to you? 02;42PM 15 you pay that card off, right?

16 A. Yes they did. 16 A. I got the first payment of the settlement

17 Q. And WebEx went public, and who were the 17 in the same month I believe as the credit card to

18 largest shareholders of WebEx at the time it went 18 begin with, I promised that I would do my best to

19 public? 19 make prompt payments on that credit card.

02;40PM 20 A. I do not know. 02;42PM 20 Q. But Miss Zhu, you had $250,000 worth of

21 Q. It was your father, wasn't it? 21 best efforts to make payments on a charge card and

22 A. I don't think so, but I don't believe, I 22 you couldn't make that happen?

23 don't know. 23 A. And I did so for as long as I could.

24 Q. And you know how many shares your father 24 Q. Until you spent the rest of the money on

02;40PM 25 owned, right? 02;42PM 25 something else?

113 115

1 A. No, I did not. 1 A. I don't know how to answer that.

2 Q. Had no interest in that either? 2 Q. During that period from April of 2000 to

3 A. I was not in communications with my parents 3 say December of 2001 how much money did you give to

4 and I did not intend to ever be in my -- in 4 your husband in Germany?

02;40PM 5 communication with my parents again at that point. 02;43PM 5 A. During what time period?

6 Q. This is April 2000? 6 Q. April 2000 to December 2001.

1 A. Correct. 7 A. I gave my husband $10,000.

8 Q. And prior to April 2000, when was the last 8 Q. And that's all?

9 time you were in regular communication with your 9 A. Correct.

02;40PM 10 parents? 02;43PM 10 Q. Did he ever pay that money back to you or

11 A. December of 1999. 11 that was just a gift that?

12 Q. What was the purpose of that communication? 12 A. Was a gift.

13 A. I wanted to leave L.A. and I wanted their 13 Q. Are you testifying that the only money you

14 help. 14 received in settlement, the only money or stock or

02;40PM 15 Q. What kind of help were you looking for? 02;43PM 15 anything of value you received in settlement of the

16 A. Emotional and financial. 16 claims against your parents was the two payments

17 Q. You asked them for money? 17 totalling $300,000?

18 A. No, I asked them for support. 18 A. Correct.

19 Q. But you asked them for money, correct? 19 Q. Do you consider that to be a fair amount

02;40PM 20 A. I don't ask my parents for money, I asked 02;43PM 20 for the claims that you had?

21 them for help. 21 A. I don't really think there is a thing as a

22 Q. And did they offer you help in the form of 22 fair amount.

23 money? 23 Q. Did you always hold the view that there was

24 A. No, they offered me help in the form of 24 no such thing as a fair amount of compensation for

02;41PM 25 other forms of support, helping me change my life. 02;44PM 25 your claims?

114 116

29 of 63 sheets Page 113 to 116 of 196 11/20/2003 10:40 :46 PM

1 A. It's my parents. 1 eventually went public?

2 Q. No, but it is also you, correct? How much 2 A. Yes.

3 money did you initially demand from your parents to 3 Q. So you watched the success of other

4 settle your claims? 4 companies?

02:44PM 5 A. Actually, I did not make the demand. 5 A. Yes.

6 Q. Your attorney did it for you? 6 Q. And you also paid attention to the success

7 A. Michael did. 7 of your father's own company?

8 Q. Michael did? 8 A. I was, yes.

9 A. Michael named a figure, I agreed to it. 9 Q. And you were aware of that at the time you

02:44PM 10 Q. What figure was that? 03:13PM 10 entered into the negotiations for settlement of your

11 A. 10 percent of my father's assets. 11 claims, correct?

12 Q. How much was that? 12 A. No because I did not know about WebEx going

13 A. I don't know. 13 IPO at the time.

14 Q. You had some basis for estimating at the 14 Q. And you had no idea whether your father's

02:44PM 15 time, correct? 03:14PM 15 net worth was likely to be $1 million or $100

16 A. No, I have no idea what my parents' assets 16 million?

17 were like. 17 A. I did not.

18 Q. But you had information on what your 18 Q. No idea whatsoever?

19 father's relative holdings were in WebEx which was 19 A. No.

02:45PM 20 poised to go public? 03:14PM 20 Q. So when Michael made the initial demand

21 A. No, I don't think so. 21 about your approval for 10 percent, you didn't know

22 Q. What were your father's WebEx holdings 22 whether that amounted to $100,000 or $10 million?

23 worth after the IPO? 23 A. I did not.

24 MR. BARRETT: Excuse me, Counsel, I think we 24 Q. Did it matter to you?

02:45PM 25 need to take a break right now. 03:14PM 25 A. No.

117 119

1 THE WITNESS: I don't know. 1 Q. You didn't care about money?

2 (A recess was taken from 2:45 p.m. 2 A. I did not care about how much my father was

3 to 3: 12 p.m.) 3 worth at the time, no.

4 (Record read.) 4 Q. But you cared about how much you personally

03:12PM 5 Q. BY MR. WALTON: Before we broke we were 03:14PM 5 recovered for, correct?

6 talking about your father's WebEx holdings and the 6 A. Somewhat.

7 relative value after the IPO, and is it correct that 7 Q. You negotiated with your attorney for a

8 you have no idea how much they are worth? 8 blended rate that continued a continuing if I see of

9 A. I don't know. 9 two and a half percent, right?

03:12PM 10 Q. Did you know they were worth more than $100 03:15PM 10 A. I did not negotiate Michael did the

11 million? 11 negotiation.

12 A. I don't know. 12 Q. Did Michael tell you why he thought that

13 Q. Do you know whether they were worth more 13 was appropriate for a contingent fee of two and a

14 than $500 million? 14 half percent?

03:13PM 15 A. I don't know. 03:15PM 15 A. I don't know, I was not present at the

16 Q. As part of your career in computer 16 negotiation.

17 consulting you did follow the financial success of 17 Q. Did you sign an agreement to that effect?

18 internet based companies that went public, right? 18 A. I did.

19 A. Yes, but they crashed in April of 2000. 19 Q. And at the time did you talk with Michael

03:13PM 20 Q. But your father's company went public after 03:15PM 20 about whether this arrangement made sense or not for

21 that, right? 21 you?

22 A. Yes. 22 A. He advised me that it was a good thing, I

23 Q. And in fact, that is one of the things you 23 never dealt with lawyers before.

24 and Michael had hoped to have accomplished was to 24 Q. Did you think Mr. Affeld overcharged you

03:13PM 25 start an internet company of your own that 03:15PM 25 in any way for the services he provided you in

118 120


1 connection with your claims? 1 A. I don't remember, but I believe it would

2 A. I don't think so. 2 have been the $300,000 cash settlement.

3 Q. When you first contacted Mr. Affeld about 3 Q. It went from 10 percent of the net worth

4 pursuing claims against your parents, how much time 4 based on your father's holdings in a company that

03:15PM 5 was left on the statute of limitations? 03:16PM 5 was about to go public to $300,OOO?

6 A. I do not know. 6 A. I did not know about the going public at

7 Q. No idea? 7 the time.

8 A. No idea. 8 Q. It went public in July, right?

9 Q. Was there more or less than a year? 9 A. Correct.

03:16PM 10 A. I do not know. 03:16PM 10 Q. Do you know how far in advance companies

11 Q. Was there more or less than six months? 11 going public are required to file SEC disclosure

12 A. I don't know. 12 statements?

13 Q. No idea? 13 A. I do not.

14 A. No. 14 Q. Do you know how far in advance they

03:16PM 15 Q. No idea whether there was any time 03:16PM 15 announce publicly their intention to go public?

16 emergency at all? 16 A. I do not.

17 A. No. 17 Q. You have no experience in that?

18 Q. You never talked about that with David 18 A. No, I have never had a company go public or

19 Affeld? 19 worked in a company that went public.

03:16PM 20 A. Not as far as I remember. 03:19PM 20 Q. You never acquired any knowledge of that

21 Q. You never talked about that with Michael? 21 from your reading?

22 A. I don't think so. 22 A. No.

23 Q. Among the documents you produced here today 23 Q. Did you ever engage in any face-to-face

24 there appears to be a draft complaint that doesn't 24 negotiations with your father of the settlement of

03:16PM 25 bear a file stamp, this is a complaint by you at 03:19PM 25 your claim?

121 123

1 plaintiff against your father, correct? 1 A. No.

2 A. Correct. 2 Q. It was done entirely through attorneys?

3 Q. To your knowledge, was this complaint ever 3 A. Correct.

4 filed in court? 4 Q. You were represented by David Affeld?

03:17PM 5 A. I don't think so. 5 A. Yes.

6 Q. Did Mr. Affeld present a settlement demand 6 Q. Who represented your father?

7 for your claims after the demand relayed by Michael? 7 A. My counsel, James Barrett here.

S A. Can you rephrase that? 8 Q. Mr. Barrett who is now representing you?

9 Q. Sure. It was a bad question. You say 9 A. Yes.

03:17PM 10 Michael initially made the first settlement demand 03:19PM 10 Q. And to your knowledge, did Mr. Affeld meet

11 of 10 percent of your father's net worth, correct? 11 with Mr. Barrett to discuss settlement of the

12 A. Correct. 12 claims?

13 Q. What response did Michael receive? 13 A. That's what I was told.

14 A. Michael did not make the demand, Michael 14 Q. And as a result of these discussions was

03:17PM 15 suggested the amount as the figure that Affeld 03:19PM 15 any agreement reached?

16 should demand. 16 A. Yes, a settlement agreement for $300,000 in

17 Q. You agreed with that? 17 two payments.

18 A. I agreed with that. 18 Q. Did Mr. Affeld recommend that you accept

19 Q. And did Mr. Affeld with your approval make 19 that amount or demand a higher amount?

03:17PM 20 such a settlement demand? 03:19PM 20 A. I don't recall.

21 A. As far as I know. 21 Q. Did you agree to the $300,OOO?

22 Q. What response was received? 22 A. Yes, I did.

23 A. I think it was a no, but •. 23 Q. Did you think that was a fair and

24 Q. And what was the next offer conveyed either 24 appropriate valuation of your claims against your

03:18PM 25 by Mr. Affeld or by your father's side? 03:20PM 25 father?


1 2 3 4

03:20PM 5 6

7

8 9

03:20PM 10 11 12 13 14

03:20PM 15 16 17

18 19

03:21PM 20 21 22 23 24

03:21PM 25

1

2 3 4

03:21PM 5 6 7

8 9

03:22PM 10 11

12 13 14

03:22PM 15

16 17

18

19 03:23PM 20

21 22 23 24

03:28PM 25

A. I wanted the whole thing to be over with at

that pOint.

Q. How long was it from the time you first

made this claim to the time that the settlement was

achieved?

A. Two or three months.

Q. Without any litigation in court, right?

A. Correct.

Q. But by that point you had decided you

wanted the whole thing over?

A. Yes.

Q. But you hadn't had any meetings with your

father about it, it was all done by lawyers?

A. Correct.

Q. And aside from your deSire to have the

whole thing over, as you put it, did you think the

$300,000 was a reasonable valuation of the claims

you had against your father?

A. I don't know how to answer that.

Q. Well, the claims against your father were

for childhood sexual molestation, right?

A. Yes.

Q. By force?

A. Pardon?

Q. By force?

A. The claims were, yes.

Q. On repeated occasions?

A. Yes.

Q. And were those allegations true?

MR. BARRETT: Objection, relevance.

THE WITNESS: No answer.

Q. BY MR. WALTON: Counsel has objected for

the record, but you can answer.

A. I am not answering.

Q. Mr. Barrett, would you like to take a

moment to advise your client of the procedure

following a witness's refusal to answer witnesses at

deposition?

(Witness and counsel confer.)

MR. BARRETT: Go ahead, Counsel.

Q. BY MR. WALTON: Once again, were those

allegations true?

THE WITNESS: Can we have a very brief break?

MR. WALTON: Sure.

(Witness and counsel leave deposition

room at 3:23 p.m. and then return

at 3:27 p.m.)

MR. BARRETT: Counsel, I just want you to know

that go ahead, reask your question. I think there's

some terminology that you can clear up just by

126

1 2 3 4

03:28PM 5 6 7

8 9

03:28PM 10 11 12 13 14

03:28PM 15 16 17

18 19

03:28PM 20 21 22 23 24

03:29PM 25

1

2 3 4

03:29PM 5 6 7

8 9

03:31PM 10 11 12 13 14

03:32PM 15 16 17

18 19

03:32PM 20 21 22 23 24

03:32PM 25

11/20/2003 10:40:46 PM Page 125 to 128 of 196

asking proper questions, she is more than willing to

answer she was having a problem with the

terminology.

MR. WALTON: Okay.

MR. BARRETT: We worked through that.

Q. BY MR. WALTON: Can you tell me what part

of the terminology was giving you pause?

A. The word "molestation."

Q. My intention is not to embarrass you or

humiliate you by asking unnecessary questions about

details, but what term would you use to characterize

it?

Q. And are the allegations of childhood sexual

abuse that you made against your father true?

MR. BARRETT: Wait a minute.

THE WITNESS: That's what I am saying, is

everything in there true? That's--

MR. BARRETT: Can we go off the record for a

second? I apologize.

(Discussion held off the record.)

Q. BY MR. WALTON: Miss Zhu, referring now to

the draft complaint that we referred you to before,

this is at tab 6 in your book, the Complaint

prepared by David Affeld on behalf of you, when we

use the term "childhood sexual abuse" as used in

this Complaint, you had indicated off the record

that the Complaint is inaccurate in some respects,

correct?

A. Yes.

Q. So the allegation that your father had

actual sexual intercourse with you is not correct?

A. Yes.

Q. There was sexual contact, but not actual

intercourse?

A. Correct.

Q. Did you participate with Mr. Affeld in the

preparation of the allegations in this Complaint?

128

32 of 63 sheets

1 A. Yes. 1 Q. And the only two valuations that you are

2 Q. Did you review it before it was transmitted 2 aware of is 10 percent of your father's net worth or

3 to your father for settlement purposes? 3 $300,000, one or the other?

4 A. I don't remember. 4 A. That I am aware of.

03:32PM 5 Q. Did you ever tell Mr. Affeld anything in 03:35PM 5 Q. Did you tell David Affeld that your father

6 this Complaint was inaccurate? 6 had had sexual intercourse with you?

7 A. I guess I didn't. 7 A. I don't remember what specific words I

8 Q. Aside from this Complaint, did you ever 8 used.

9 tell anybody else that your father had actually had 9 Q. Is says your father was also physically

03:32PM 10 sexual intercourse with you? 03:36PM 10 violent with you when you failed to achieve perfect

11 A. Michael Zelyony. 11 grades in school. Is that allegation correct?

12 Q. You told Michael that? 12 A. n is.

13 A. Yes. 13 Q. Did he strike you?

14 Q. But when you told Michael that it wasn't 14 A. Yes.

03:33PM 15 true? 03:37PM 15 Q. Turning to paragraph 31 where it says "Min

16 A. Wait, when I told Michael? 16 Zhu proceeded to then rape plaintiff." You didn't

17 Q. Did you tell Michael that your father had 17 say that to Mr. Affeld?

18 had sexual intercourse with you? 18 A. I don't think I said that.

19 A. Yes, I told him that. 19 Q. Did you say words to that effect?

03:33PM 20 Q. But that wasn't true? 03:37PM 20 A. I don't remember, it was a very painful

21 A. That was not true. 21 several hours when I was just dumping out memories.

22 Q. Did you intentionally lie about your father 22 Q. And you were with Mr. Affeld while you were

23 having sexual intercourse? 23 dumping out memories?

24 A. When I was 17, yes. 24 A. Yes.

03:33PM 25 Q. At any time after that did you lie about 03:37PM 25 Q. Was he taking notes?

129 131

1 your father having sexual intercourse with you? 1 A. I think so, he or someone else.

2 A. I don't think I said things about 2 Q. After that session where you were dumping

3 intercourse as opposed to abuse. 3 out the memories, did he ever review with you the

4 Q. In paragraph 30 of this Complaint it says 4 substance of the allegations and confirm point by

03:34PM 5 that your father choked you? 03:37PM 5 point whether they were correct?

6 A. Yes. 6 A. There was no point by point confirmation,

7 Q. Restrained you with a blanket, is that 7 he probably sent that to me at some point.

8 true? 8 Q. Did you read it?

9 A. That is true. 9 A. Actually, I don't know if he sent that to

03:34PM 10 Q. On how many occasions did this sexual abuse 03:37PM 10 me because -- I don't know if he actually sent that

11 occur? 11 specific Complaint to me.

12 A. More than once, less than 20. 12 Q. And in the course of the settlement

13 Q. But never involved penetration in any way? 13 discussions, do you know whether your father

14 A. No. 14 acknowledged or denied the sexual abuse that

03:34PM 15 Q. Did you ever talk with David Affeld about 03:38PM 15 occurred?

16 his opinions about what a reasonable valuation of 16 A. I don't know, I was not present.

17 such a claim might be? 17 Q. Now during this time period were you still

18 A. Not an exact dollar amounts, I don't think. 18 in business with Michael Zelyony at PTYX, correct?

19 Q. In rough dollar amounts? 19 A. Yes.

03:35PM 20 A. Not in real dollar amounts. 03:38PM 20 Q. Had you had any discussions with Michael

21 Q. In what sense did you discuss with 21 about dissolving the partnership?

22 Mr. Affeld what an appropriate valuation of such a 22 A. Yes, that's how this came about.

23 claim might be? 23 Q. In what way is the dissolution of PTYX how

24 A. I think that's where the percentage came 24 the claim against your father came about?

03:35PM 25 in. 03:38PM 25 A. I tried to leave l.A. December of 1999, in


1 January of 2000 I came back here to discuss the 1 A. I didn't have an exact figure in mind, but

2 dissolution of the PTYX partnership with Michael 2 I was going to take care of -- I was going to take

3 with the mediation by David Affeld in this building. 3 care of paying for the remaining contract time on

4 Q. When you say this building not obviously on 4 the Tl lines and some power and business telephone

03:39PM 5 this floor? 03:42PM 5 costs up until then and so forth.

6 A. Not this floor, I don't think. I don't 6 Q. Let's pause right there for a moment. How

7 remember exactly where Affeld's office is. 7 much was owed on the remaining portion of the T1

8 Q. And at that time was Mr. Affeld 8 contract as of that time?

9 representing you in connection with these claims? 9 A. I am not 100 -- I was not and I still am

03:39PM 10 A. No, he was not, he was, however, acting -- 03:43PM 10 not quite sure because Michael negotiated for them

11 he was a lawyer to both Michael and me individually 11 and signed for them in his name.

12 and sometimes together. 12 Q. In your discussions with Michael did he

13 Q. Was he a personal friend of one or the 13 tell you how much was still owed?

14 other or both of you? 14 A. He probably gave me he probably told me how

03:39PM 15 A. A personal friend of Michael's, yes. 0343PM 15 long the contracts were for, but I don't remember

16 Q. Not you? 16 exactly when they started, but I was willing to take

17 A. Not really. 17 care of them for whatever remaining period.

18 Q. I am sorry? 18 Q. However, of that might be in money?

19 A. Not really, not a close friend. 19 A. Pardon?

03:40PM 20 Q. But you asked for his assistance in 03:43PM 20 Q. Whatever amount of money that might end up

21 revolving the issue of dissolution between you and 21 being?

22 Michael? 22 A. Yes, that's what I was prepared to do.

23 A. Yes. 23 Q. And how much a month did the T1 lines cost?

24 Q. And in what way, if any, was Mr. Affeld of 24 A. I am not sure, but I think in the $3,000

03:40PM 25 assistance in resolving that dispute or that issue? 03:44PM 25 range.

133 135

1 A. He conducted one-on-one discussions with 1 Q. What other business expenses did you

2 each of us, tried to work out what we thought about 2 believe that you were willing to accept

:3 the matter. 3 responsibility for in order to dissolve the

4 Q. Now at that point were your discussions 4 partnership?

03:40PM 5 with Michael about dissolution amicable or had they 03:44PM 5 A. I think there was one or two servers that

6 become a source of dispute between the two of you? 6 had not been paid off.

7 A. A bit of both. 7 Q. How much was that?

8 Q. When you went to Mr. Affeld and asked for 8 A. A few thousand dollars.

9 his help in revolving the situation to the best of 9 Q. What else?

03:41PM 10 your recollection what was your position on the 03:44PM 10 A. And outstanding bills for electricity and

11 issue of dissolution? 11 phone bills, that sort of thing.

12 A. I wanted to leave and I was willing to 12 Q. Anything else?

13 accept a certain amount of responsibility because of 13 A. And certain obligations to, you know, so

14 that. 14 some web hosting.

03:41PM 15 Q. And how much was that certain amount of 03:44PM 15 Q. Anything else?

16 responsibility that you were going to accept? 16 A. Those are the main things I can think of.

17 A. I had in mind certain obligations that PTYX 17 Q. Was any money owed to employees?

18 had incurred as a partnership. 18 A. No.

19 Q. Which obligations were those? 19 Q. So what is the approximate dollar amount of

03:41PM 20 A. Some websites that we were still hosting 03:45PM 20 partnership obligations that you were prepared to

21 and the three Tl lines and some other small business 21 assume as part of your dissolution from Michael?

22 expenses or smaller business expenses. 22 A. I have to calculate that. I would say up

23 Q. And what was the total amount of 23 to maybe80,OOO.

24 obligations that you had in mind taking 24 Q. At the time you sought Mr. Affeld's

03:42PM 25 responsibility for? 03:46PM 25 assistance what was Michael's position on the terms


1 of dissolution? 1 was mediating this, I did not see knows monies as

2 A. Well, we had agreed sort of verbally on 2 being part of company liabilities at all.

3 dissolution with my agreeing to take these 3 Q. But you knew they existed?

4 responsibilities, and basically valuing the company 4 A. I knew that Michael's father gave him

03:46PM 5 then at nothing, that both of us walk away and I 03:50PM 5 money, yes.

6 take the responsibilities I just outlined. 6 Q. And you knew that Michael's father gave

7 Q. You agreed with Michael on that? 7 money to PTYX?

8 A. Well, that was the problem, I did not, 8 A. I knew that Michael's father had written

9 David Affeld was not as thorough as you and did not 9 some checks to PTYX, yes.

03:47PM 10 outline these things, I just said company 03:50PM 10 Q. Approximately how much did Mike had

11 liabilities with a certain understanding in my mind, 11 Michael's father written in collection do PTYX?

12 and Michael agreed to that verbally, we had not 12 A. I do not know exactly.

13 drafted anything, and then as soon as we shook hands 13 Q. Was it more than $25,000?

14 on that we found out that we had different things in 14 A. I believe so.

03:47PM 15 mind. 03:50PM 15 Q. More than $50,000?

16 Q. What did Michael tell you that he had in 16 A. I believe so.

17 mind? 17 Q. More than $100,000?

18 A. He was under the impression that monies 18 A. Possibly.

19 given to him in the name of the -- given to him in 19 Q. More than $150,000?

03:47PM 20 the name of the company from his father were to be 03:50PM 20 A. I don't think so.

21 also considered company liabilities. 21 Q. Somewhere between 100- and $150,000?

22 Q. And how did you feel about that? 22 A. To the best of my knowledge.

23 A. I felt that I was not 100 percent 23 Q. What about the Live Share, did Dr. Zelyony

24 responsible for those. 24 write checks payable to Live Share, to your

03:48PM 25 Q. Did you feel any percentage of 03:50PM 25 knowledge?

137 139

1 responsibility? 1 A. I don't know.

2 A. I felt a certain percentage of 2 Q. You were also a signatory on the Live Share

3 responsibility and then we spent the subsequent 3 bank account, right?

4 year trying to figure out how we felt about that. 4 A. Yes, I was, but I hardly used that account

03:48PM 5 Q. What percentage did you feel responsible 03:50PM 5 at a II. Michael was really in charge of all the

6 for? 6 bank accounts and all our financial statements.

7 A. Well, I had, in were two things that I 7 Q. Did you ever sign any checks on the Live

8 wanted, there were two issues that we tried to 8 Share bank account?

9 clarify, I remember talked directly with Michael in 9 A. I suppose I did.

03:48PM 10 that time period, one was what accounted for -- what 03:51PM 10 Q. For what purpose?

11 of the monies that his father gave him were company 11 A. Business expenses.

12 went to the company as opposed to going to Michael 12 Q. Any other purpose?

13 personally, and then of the company amounts what 13 A. I don't think so, but I can't be 100

14 percentage I was personally responsible for as part 14 percent sure.

03:49PM 15 of the partnership, we tried to clarify these two 03:51PM 15 Q. Did you ever receive a salary from Live

16 issues. 16 Share?

17 Q. So under your view certain expenses 17 A. I believe that in 1999 I did not receive a

18 identified as the T1 lines and phone and unpaid 18 salary from PTYX but received it from Live Share and

19 servers, those you would pay 100 percent of? 19 same for Michael, that's my recollection.

03:49PM 20 A. Yes, because I was the one that wanted to 03:51PM 20 Q. I am sorry, the same for Michael?

21 end the partnership. 21 A. The same for Michael, that's my

22 Q. And with respect to other partnership 22 recollection.

23 obligations you proposed some division between 23 Q. And unlike PTYX, Live Share is not a

24 yourself and Michael as far as paying them back? 24 partnership but a corporation, correct?

03:49PM 25 A. I did not see them initially when Affeld 25 A. Yes.

138 140

35 of 63 sheets Page 137 to 140 of 196 11/20/2003 10:40 :46 PM

1 Q. And what was your title in the corporation? 1 in '97.

2 A. I don't actually remember. 2 Q. So that was two years after you formed

3 Q. Were you president or vice-president? 3 PTYX?

4 A. Something along those lines. 4 A. I don't know when PTYX was formed.

03:52PM 5 Q. Director? 03:55PM 5 Q. But Michael convinced you to stay in

6 A. I don't remember, we never went around 6 business even though you had broken up with him?

7 saying Erin whatever of whatever. 7 A. Yes.

8 Q. Did you have a particular title in PTYX? 8 Q. So you never at any time had any

9 A. I think both of us went by "Principal." 9 understanding of whether the monies advanced to PTYX

03:52PM 10 Q. And did you represent yourself as being an 03:55PM 10 by check from Dr. Zelyony were considered loans or

11 owner of PTYX? 11 not?

12 A. Part owner, yes. 12 A. No, my understanding insofar as there was

13 Q. Did you ever represent either PTYX or Live 13 an understanding because I never dealt with Dr.

14 Share as qualifying as a WMBE? 14 Zelyony directly on these money matters, was that

03:52PM 15 A. Don't know what you mean. 03:56PM 15 they were personal loans or gifts or whatever to

16 Q. Women of Minority Owned Business. 16 Michael, his son, that Michael then invested into

17 A. I never thoug ht of it. 17 our business.

18 Q. Say you were aware that Dr. Zelyony had 18 Q. Was it your understanding that PTYX had no

19 written checks payable to PTYX and Live Share 19 obligation to repay any of the monies provided in

03:53PM 20 correct? 03:56PM 20 this way by Dr. Zelyony?

21 A. Yes. 21 A. n was my impression that the business if

22 Q. What was your understanding of the purpose 22 it succeeded would have course give returns back to

23 for those checks, were they loans? 23 Dr. Zelyony, and I felt a personal responsibility as

24 A. Michael had gotten these -- Michael had 24 a friend of the Zelyony family that the money did

03:53PM 25 periodically gotten money to help keep our business 03:57PM 25 not go completely to vein.

141 143

1 well, businesses going. 1 Q. What exactly does that mean that the money

2 Q. Just like you got money from your parents 2 does not go completely to vein?

3 for the same purpose, right? 3 MR. BARRETT: Excuse me, I am sorry.

4 A. At some points, yes. 4 THE WITNESS: Sorry.

03:53PM 5 Q. Just not as much? 03:57PM 5 MR. BARRETT: Take your time.

6 A. I did not get as much, correct. 6 THE WITNESS: This is difficult. I did not feel

7 Q. So when Michael got money from his father 7 that it was a business -- I did not feel it was a

8 to help keep your business going, was it your 8 business liability of PTYX's, the monies the checks

9 understanding that that money from Dr. Zelyony was a 9 written by Dr. Zelyony to PTYX, however, on an

03:54PM 10 ? 0357PM 10 individual level and that's why I spent all that

11 A. I don't know because Michael just presented 11 time discussing it with Michael in 2000 and some of

12 it as he had managed to save the business yet again 12 2001 was that I felt personally that Dr. Zelyony

13 by bringing home some more money to be put into the 13 should see some of that back.

14 PTYX account. 14 Q. BY MR. WALTON: And it was your personal

03:54PM 15 Q. And did that strike you as a good thing? 03:58PM 15 feeling?

16 A. Insofar as it made the business possible, 16 A. Yes.

17 yes. 17 Q. And what did Michael say about that feeling

18 Q. Did you thank Michael? 18 of yours?

19 A. No. 19 A. Michael agreed with that and so a number of

03:54PM 20 Q. Why not? 03:58PM 20 checks were written out of my settlement money to

21 A. Because I wanted out of that business for 21 Dr. Zelyony to repay a portion of what he had, of

22 years and he insisted on keeping it going, and so I 22 what had come in.

23 did my best, but I was -- well. 23 Q. And so that was a gesture of appreciation

24 Q. When did you first want out of PTYX? 24 on your part?

03:54PM 25 A. I wanted out back when I broke up with him 03:58PM 25 A. An appreciation obligation, it was a


1 personal sentiment. 1 inquiries concerning sales of PTYX's assets?

2 Q. A sentiment but not a partnership 2 A. I had asked Michael to because they were I

3 obligation? 3 had left the house and all the physical assets were

4 A. Correct. 4 in his house, I had asked Michael to look into it, I

03:58PM 5 Q. And the monies that you said out of your 04:01PM 5 don't know if he actually did.

6 settlement proceeds to Dr. Zelyony, was that the 6 Q. Did you ever talk with Michael further

7 first time any money had been repaid to Dr. Zelyony 7 about possibly selling some of the assets of PTYX7

8 for what he had advanced to PTYX? 8 A. I don't think we discussed that in detail.

9 A. I don't know, the months that monies that 9 Q. Did you discuss it generally?

03:58PM 10 went between Michael and his father were not under 04:02PM 10 A. Probably.

11 my supervisor vision in any way. 11 Q. Was it your view that the assets of PTYX

12 Q. You had absolutely no involvement in that? 12 should be sold as part of the dissolution?

13 A. No, they discussed that as a primarily 13 A. I had no real opinion on the matter, if

14 family matter. 14 Michael wanted to take possession of them and do

03:59PM 15 Q. And you never went to look at the bank 04:02PM 15 something to improve his life, that was okay with

16 statements or the check register or any other 16 me.

17 records to see what was happening with the money in 17 Q. So you didn't perceive any of the equipment

18 and out of the business? 18 assets of PTYX as having any appreciable value?

19 A. That was Michael's side of things, I was 19 A. Not a lot of value.

03:59PM 20 the engineering technical person, he was the one 04:02PM 20 Q. Give me an estimate in terms of digits,

21 handling bUSiness and money. 21 more than 10,0007

22 Q. So the answer is that you never did go and 22 A. I would say 10,000, yes 10- to 15,000,

23 look? 23 let's say.

24 A. No, I did not. 24 Q. If Michael wanted to take 10- or $15,000

03:59PM 25 Q. During the course of your discussions with 04:03PM 25 worth of partnership assets for himself as part of

145 147

1 Michael about dissolving the partnership, did you 1 the dissolution that was okay with you?

2 ever take an inventory of what assets the business 2 A. Yes, I had left all my personal possessions

3 had? 3 except for my completing clothing in that house, I

4 A. Me? 4 was not about to quibble about material things.

04:00PM 5 Q. You, Michael, both of you together. 04:03PM 5 Q. Going back to your discussions with

6 A. I did not, I don't know if Michael did. 6 Mr. Affeld, how long did was this on one occasion or

7 Q. Did you ever discuss what the business was 7 more than one occasion that you used Mr. Affeld to

8 worth? 8 try to reach agreement with Michael about

9 A. We discussed our opinions of what the 9 dissolution?

04:00PM 10 business was worth. 04:03PM 10 A. More than one occasion.

11 Q. You thought it was worth zero? 11 Q. More than three?

12 A. I thought it was worth roughly zero. 12 A. Hard to say, but if so, not much more,

13 Q. What did Michael think it was worth? 13 because it was not working out.

14 A. Michael had optimistic thoughts about what 14 Q. And did either or both of you retain

04:00PM 15 it could be. 04:04PM 15 Mr. Affeld to act as an attorney in this role or as

16 Q. What did you perceive to be the assets of 16 professional mediator?

17 PTYX at the time that you discussed dissolution with 17 A. No, because we didn't want him to be

18 Michael in 19997 18 partial.

19 A. Some hardware of which were at the Willow 19 Q. Did he charge you for this time?

04:00PM 20 Glen house, some paying hosting accounts and some 04:04PM 20 A. I don't think so.

21 potential customers and business relationships. 21 Q. He just did it as a friend?

22 Q. Did you have any idea or estimation in your 22 A. That's what I remember.

23 mind as to how much all of that might be sold for? 23 Q. Now as a result of Mr. Affeld's

24 A. Very little. 24 intermediation, did you reach agreement with Michael

04:01PM 25 Q. Did you or Michael make any attempts tore 04:04PM 25 about dissolving PTYX?


1 A. No, I did not. 1 taking care of the partnership liabilities, did you

2 Q. Did you ever reach a point where you 2 and Michael ever discuss using the proceeds from

3 thought you had reached an agreement with Michael 3 your settlement for that purpose?

4 about dissolution of P1YX? 4 A. Yes.

04:04PM 5 A. Yes, I thought so, and then five minutes 04:07PM 5 Q. How many times?

6 later I didn't think so. 6 A. I don't know, but that was the motivation

7 Q. Five minutes later literally? 7 initially to try to get money.

8 A. Yes, literally. 8 Q. And did you agree upon any specific amount

9 Q. The same day? 9 of your settlement that would be used to repay

10 A. Yes. 04:08PM 10 partnership obligations?

11 Q. As part of the partnership dissolution 11 A. No.

12 agreement did you ever offer to repay to Michael's a 12 Q. Did you, in fact, use some portion of your

13 parents the monies that they had loaned to P1YX? 13 settlement to repay partnership obligations?

14 A. All the monies? 14 A. Yes.

04:05PM 15 Q. Any part of them. 04:08PM 15 Q. And what obligations do you recall those

16 A. I offered to pay some. 16 being?

17 Q. And was an agreement reached on that pOint? 17 A. I paid for as best as I could the Tl lines,

18 A. No. 18 the company part of utility bills and some travel

19 Q. What portion did you offer to pay? 19 related expenses, various things.

04:05PM 20 A. I said different things at different times, 04:08PM 20 Q. During this time you had moved to San

21 less than 100, probably more than 50. 21 Francisco, but P1YX was still at the Willow Glen

22 Q. Between 50 and 100,000? 22 address, correct?

23 A. No, no percent. 23 A. Correct.

24 Q. And what amount did you think that was in 24 Q. And Michael still lived there as well?

04:06PM 25 terms of dollars? 04:09PM 25 A. As far as I knew, yes.

149 151

1 A. I asked Michael for a full accounting of 1 Q. But before you lived at Willow Glen, did

2 what he considered those monies were and I said I 2 you have any understanding as to whether P1YX was

3 would then make an offer based on that accounting, I 3 supposed to pay rent on the Willow Glen address?

4 never saw it. 4 A. It was offered to me as Michael saying I

04:06PM 5 Q. And how did you convey that message to 04:09PM 5 have this big house, why don't we all try to make

6 Michael, orally or in writing? 6 use of this, that's why my boyfriend and I and so

7 A. In person and orally. 7 forth got there in the first place.

8 Q. Did you ever make that offer in writing? 8 Q. So you moved into Michael's house with your

9 A. No. 9 new boyfriend?

04:06PM 10 Q. Did you ever communicate in writing to 04:09PM 10 A. Not so new, I had been living with that

11 anyone in any wayan offer to pay for the business 11 boyfriend in a separate house for a year before

12 liabilities of P1YX? 12 that.

13 A. I don't think so. 13 Q. Okay, but Michael was okay with your moving

14 Q. You and Michael didn't exchange E-mails on 14 in and living with another man in the same house?

04:07PM 15 that subject? 15 A. Yes.

16 A. I think mostly we met in person. 16 Q. Did you ever have any fights about that?

17 Q. How long did these discussions about 17 A. Not with Michael, no, I had fights with my

18 dissolution continue between you and Michael? 18 boyfriend and he had fights with his girlfriend.

19 A. A year and a half. 19 Q. Perhaps understandable, but fortunately for

04:07PM 20 Q. At some point during that process then the 04:10PM 20 all of us not relevant. You and Michael never

21 claim that you made against your father and the 21 fought about that?

22 expected settlement became known, correct? 22 A. Did not fight about Brannon's presence in

23 A. Yes. 23 the house, correct.

24 Q. And during the course of your discussions 24 Q. Or Michael bringing other women in the

04:07PM 25 with Michael about dissolving the partnership and 04:10PM 25 house?


1 A. No, we did not fight about that. 1 Q. And these checks are out of sequence

2 Q. You were still good friends? 2 apparently. You have one to David Affeld for -- can

3 A. I thought the arrangement was maybe not a 3 you read that number?

4 good idea, I thought so even before I moved in for 4 A. I can try.

04:10PM 5 obvious reasons, but we never fought about that 04:30PM 5 Q. Is that your handwriting?

6 issue. 6 A. No, that is Michael's handwriting.

7 Q. Let's take a break here and go off the 7 Q. How much is that?

8 record. You need to change the tape. 8 A. Looks like 4,000 to me, but I can't be

9 (A recess was taken at 4:11 p.m. 9 sure.

04:11PM 10 to 4:27 p.m.) 04:30PM 10 Q. That was paid to Mr. Affeld in connection

11 Q. BY MR. WALTON: Miss Zhu, I am going to ask 11 with your claim or some other legal work Mr. Affeld

12 you to look back at the deposition notice. 12 did?

13 Directing your attention to category No.3, "All 13 A. Some other legal work, I believe, he was

14 documents relating to PTYX, is it correct in this 14 our lawyer prior to.

04:28PM 15 white wind binder here are all documents you have 04:30PM 15 Q. For PTYX?

16 been able to find after a reasonable and thorough 16 A. He was our lawyer.

17 search in your possession custody and control 17 Q. What kinds of matters did Mr. Affeld

18 relating to PTYX? 18 represent you on?

19 A. Yes. 19 A. Things that we wanted legal, professional

04:28PM 20 Q. Is that also correct for No.4 all 04:30PM 20 legal opinions on.

21 documents relating to Live Share? 21 Q. Like transactions or litigation or. ..

22 A. Yes. 22 A. Transactions, I think.

23 Q. With respect to the credit cards you don't 23 Q. What kinds of transactions?

24 have any other charge slips or any information from 24 A. I believe we used his help when Live Share

04:28PM 25 Citibank? 04:31PM 25 was incorporated, he didn't handle it himself, but

153 155

1 A. What I have I included in there. 1 he referred us to somebody.

2 Q. That would be No.5. 2 Q. You left to go to San Francisco December

3 A. There were some checks that I had used to 3 '99, right?

4 pay over the phone with. 4 A. Yes.

04:29PM 5 Q. This is out of the PTYX account? 04:31PM 5 Q. And you got checks here that you wrote. Is

6 A. Yes. 6 that you?

7 Q. This is after you received the settlement 7 A. Yes, that is me.

8 money? 8 Q. That is your handwriting?

9 A. Yes. 9 A. Yes.

04:29PM 10 Q. And these are the check registers? 04:31PM 10 Q. That one, too? (Indicating.)

11 A. Yes. 11 A. Yes, that is me.

12 Q. And how did you come to have these 12 Q. So when you left to move to San Francisco

13 particular checks in your possession? 13 you took with you a supply of PTYX's checks?

14 A. They were in a box of random papers that I 14 A. Yes. Actually, Michael came up to see me

04:29PM 15 had that I had boxed up when I was moving out of San 04:31PM 15 and brought some sheets of checks.

16 Francisco in April of 2001. 16 Q. Did you ask him to do that?

17 Q. Were these originals of the checks or 17 A. I don't know if I asked him to do that.

18 photocopies that you came across? 18 Q. We've got here, these are all documents you

19 A. These were originals. 19 are just producing back to us, these are the ones

04:29PM 20 Q. So if I look at the next page, you also had 04:32PM 20 you are producing here with I see Bates. You didn't

21 the stubs? 21 have copies of these yourself?

22 A. I had a few checks and a few stubs, yes. 22 A. No, I did not.

23 Q. But you didn't have an entire check 23 Q. So when we produced these to you, that was

24 register or book? 24 the first time you saw them?

04:29PM 25 A. No, I did not. 25 A. Yes.

154 156 39 of 63 sheets Page 153 to 156 of 196 11/20/2003 10:40 :46 PM

1

2

3

4

04:32PM 5

6

7

8

9

04:32PM 10

11

12 13 14

04:33PM 15 16 17

18 19

04:33PM 20 21 22 23 24

04:34PM 25

1

2

3

4

04:34PM 5

6

1

8

9

04:34PM 10

11 12 13 14

04:35PM 15 16

17

18

19

04:35PM 20 21 22 23 24

04:35PM 25

Q. Did you go through and review these checks?

A. I think so, I have seen them.

Q. You see where like this one here, check

1740 payable to Citibank, it references the Citibank

card number, it says "Erin Zhu."

A. Uh-huh.

Q. That is a payment that Dr. Zelyony made on

the card for charges you made?

A. Yes.

Q. Looking on the next page we have a Citibank

statement, January 29, 2001 closing date, now at

this point the credit line is $10,500, and you got

AT&T Wireless Services, is that your cell phone?

A. I don't think so, but I don't think AT&T

was mine.

Q. You got a Los Angeles Water and Power

charge, $767.37. What is that?

A. That was charged by Michael to pay the

power bill at the Willow Glen residence.

Q. For PTYX?

A. Yes.

Q. And all these charges here from Germany,

those are yours, just personal charges?

A. Yes.

Q. Not business. Bistro Elan in Palo Alto,

157

that's you?

A. Yes.

Q. And Chez Panis in Berkeley, that's you?

A. Depending on when, it may have been myself

with Michael.

Q. We got March 28 of 2001.

A. That was me.

Q. That was a restaurant?

A. Yes.

Q. You spent $275?

A. Correct.

Q. Did you eat with somebody, I assume?

A. Yes.

Q. More than one other person?

A. One other person.

Q. Is that your husband?

A. Yes.

Q. Reverse Creative Labs, Inc., $880. What

was that?

A. I believe that was a reversal of a charge.

Q. No, that's actually a charge. You don't

know what that was?

A. I don't know why that went back onto the

account, they had charged me for something that they

didn't deliver. I had asked actually Dr. Zelyony's

158

1

2

3

4

04:36PM 5

6

1

8

9

04:36PM 10

11 12 13 14

04:36PM 15 16 11 18 19

04:37PM 20 21 22 23 24

04:37PM 25

1

2

3

4

04:37PM 5

6

1

8

9

04:37PM 10

11 12 13 14

04:38PM 15 16 11

18 19

04:38PM 20 21 22 23 24

04:38PM 25

11/20/2003 10:40:46 PM Page 157 to 160 of 196

help in disputing that, and that sounds like it got

put back onto the account somehow if it was not a

credit.

Q. You have a bunch of charges here, Mega

Books, Borders, Barnes & Noble, Tower, Borders, all

those are your personal charges?

A. Probably, yes.

Q. Did you buy a lot of books?

A. I did.

Q. Me, too. The Slanted Door, Inc., what is

that?

A. Restaurant.

Q. $165. And you have Buzz, Internet Pounds

Sterling, what's that?

A. Don't know.

Q. Public Storage. You had things in storage

up in San Francisco?

A. Yes.

Q. We have Grovesnor House in London. Is that

a hotel?

A. What time?

Q. May of 2001.

A. Probably a restaurant in a hotel.

Q. Restaurant, okay. We have a restaurant

that was $405 and we have a restaurant in Berlin

159

$275, that was you?

A. Yes.

Q. You and your husband. You have a Pacific

Bell payment $1,227. Was that typical of your phone

bills?

A. No, there were no phone bills in my name

except for wireless cellular, I mean, so that would

have been for PTYX expense, business expense.

Q. So that was for a PTYX line at your

residence in San Francisco?

A. No, I think that was for PTYX line at

Willow Glen. The one in San Francisco was $40 a

month, I don't see how it could have been.

Q. We have Misa Travel, Singapore, $560?

A. That was mine.

Q. Tickets?

A. Yes.

Q. Personal travel?

A. Yes.

Q. And United Germany, 870 and 870; Jody

Apparel, that was clothes for you?

A. Yes.

Q. We have a charge at the Four Seasons in

Bali, that was you?

A. Uh-huh.

160

40 of 63 sheets

1 2 3 4

04:39PM 5 6 7

8

9

04:39PM 10 11 12 13 14

04:39PM 15 16 17

18 19

04:40PM 20 21 22 23 24

04:40PM 25

1

2 3 4

04:41PM 5 6 7

8

9

04:41PM 10 11

12

13 14

04:41PM 15 16 17

18 19

04:42PM 20

21 22 23 24

04:42PM 25

Q. You were there on vacation?

A. Uh-huh.

Q. Yes?

A. Yes.

Q. Another hotel charge in Bali. Again we

have an AT&T charge from south San Francisco,

California, $746. That's not you, you don't think?

A. I don't think so.

Q. Hertz Rent-a-Car, San Francisco, $353. Is

that you?

A. Probably there may have been some travel

expenses in business, for business purposes.

Q. Computers & Music in San Francisco, $860,

personal or business?

A. Business, I believe, but I don't know the

exact transaction.

Q. That was October 2001.

A. Probably personal, but I can't be sure. I

never had these accounts.

Q. We have December 2001 late fee past due.

Were you in Portugal in December of 2001?

A. Yes, I was.

Q. Charged $300 there. We have a late fee in

November of 2001. Before that we had a credit

protector fee of $29.50. Did you cancel a credit

161

protection?

A. I did not, and if you look at it a couple

pages down you will see the credit protection fee

was continuing all the way through, January credit

protection fee.

Q. There it is. What is that?

A. That was -- if you read this you will see

the account was then closed because of this account

protection fee, it was to protect the credit files

of the account holder.

Q. But that was cancelled because payments

were past due?

A. No, the credit card was closed because this

protection service was in place. As soon as the

account became -- I stopped paying in December, and

as soon as this -- the lateness puts the account

holder's credit files at risk, they cancelled the

card, period, in February.

Q. That was because the payments hadn't been

made?

A. Correct.

Q. But you never communicated directly to Dr.

Zelyony that you had stopped making payments on the

card?

A. As I said, there was probably an E-mail

162

1 2 3 4

04:42PM 5 6 7

8 9

04:43PM 10 11 12 13 14

04:43PM 15 16 17

18 19

04:43PM 20 21 22 23 24

04:43PM 25

1 2 3 4

04:43PM 5 6 7

8 9

04:43PM 10 11 12 13 14

04:44PM 15 16 17

18 19

04:44PM 20 21 22 23 24

04:44PM 25

41 of 63 sheets Page 161 to 164 of 196

communication, but I don't have the records.

Q. Let's go back to the deposition notice. We

have all documents in your possession, custody and

control now relating to your claims of sexual abuse

by your father?

A. Yes.

Q. And all documents relating to payments,

gifts, trusts, assignments or any other transfers of

property to you from either of your parents?

A. That are in my possession, yes.

Q. And you never received a copy of any trust

instrument?

A. No, I never did.

Q. Did your brother receive a copy of the

trust instrument?

A. I do not know.

Q. Did he tell you he had seen it?

A. I don't think I said anything of that sort,

he just said it was done.

Q. He didn't say what was the source of his

information?

A. No.

Q. Did he tell you any of the other terms of

the trust?

A. No, he did not.

163

Q. Did he tell you how much money it was

expected to pay you on a yearly or monthly basis?

A. No, he did not.

Q. Did he tell you any restrictions on your

access to the money in the trust?

A. He did not.

Q. You didn't ask?

A. No.

Q. You didn't care?

A. He said it was nothing that was relevant

now.

Q. But you need money now, right?

A. He said that the trust was for something

for our future.

Q. But my question is you are in need of money

now, right?

A. I could use money now, sure.

Q. You are spending more than you earn?

A. Sometimes.

Q. But you didn't ask him whether or how you

could access the money in the trust?

A. As far as I know, the trust is for a future

date.

Q. And who is it that has a copy the original

or a copy of the trust instrument itself?

164

11/20/200310:40:46 PM

1 A. My parents, I would assume. 1 any of it.

2 Q. Anyone else that you know of? 2 Q. Likewise with respect to 20, 21 and 22, you

3 A. No. 3 don't have any documents relating to dissolution or

4 Q. Paragraph No.9, "All documents relating to 4 sale of PTYX?

04:44PM 5 any source of income to you from 1996 to 2000." You 04:46PM 5 A. I do not.

6 don't have anything? 6 Q. Did you ever talk about selling any

7 A. I do not. 7 intangible assets of PTYX, by that I mean good will?

8 Q. "Documents relating to transfers of any 8 A. Selling? No, I don't think so.

9 WebEx stock." You don't have anything? 9 Q. Did PTYX have any electronic data from its

04:45PM 10 A. I do not. 04:47PM 10 web hosting services that could be commercially

11 Q. You have the 5,000 shares and you sold all 11 valuable to anyone?

12 of them? 12 A. I don't think so.

13 A. Correct, and I got them, it was 2001 when I 13 Q. What about from Trespass, advertising

14 got the stock certificate. 14 information?

04:45PM 15 Q. This is from 1997 to the present time. 04:47PM 15 A. Advertising was run by a third party

16 A. I don't have any documents at this pOint. 16 plug-in.

17 Q. You don't have any documents reflecting 17 Q. So you don't have any files that were ever

18 when you sold the stock or how much? 18 used by anybody?

19 A. No. I suppose I could petition the 19 A. No.

04:45PM 20 brokerage. 04:47PM 20 Q. And no documents relating to any

21 Q. What brokerage do you use? 21 partnership agreement you had with Michael?

22 A. Charles Schwab. 22 A. I do not have.

23 Q. But you didn't keep copies of any of that? 23 Q. Whether written or oral?

24 A. No, I was out of the country for a long 24 A. No.

04:45PM 25 time, and I had no residence here and no place to 04:47PM 25 Q. You have never been an employee of WebEx,

165 167

1 put anything except a little bit of storage. 1 have you?

2 Q. We have all documents in your possession, 2 A. No, I have not.

3 custody and control relating to Live Share, Michael 3 Q. Never done any work for WebEx except for

4 Zelyony and Dr. Zelyony? 4 that short thing you did as Active Touch?

04:45PM 5 A. Yes. 04:47PM 5 A. Correct.

I) Q. You don't have any bank statements on any 6 Q. And other than what you've shown us with

7 bank account that you're signatory on other than 7 the credit card slips, you don't have any

8 PTYX account from 1996 to 2002? 8 documentary evidence or credit that you got from Dr.

9 A. I do, I would have to get them. I was not 9 Zelyony?

04:46PM 10 able to get them from Bank of America in time. 04:48PM 10 A. Correct.

11 Q. Your individual account? 11 Q. And No. 27, and you are saying the only

12 A. Yes. 12 payment you ever received for your claim against

13 MR. BARRETT: But for counsel's record, she is 13 your father was $300,000 in two payments, correct?

14 more than willing to produce those documents from 14 A. Yes.

04:46PM 15 the bank. 04:48PM 15 Q. Did you ever talk with your brother about

16 Q. BY MR. WALTON: And documents relating to 16 the amount that you had settled for with your

17 any transactions proposed to PTYX? 17 father?

18 A. I don't have any. 18 A. No.

19 Q. Nothing concerning any proposed deal 19 Q. Did you ever discuss with your brother the

04:46PM 20 between PTYX or Live Share and WebEx? 04:48PM 20 fact that you were making a claim against your

21 A. No. 21 father?

22 Q. And you don't have any financial records of 22 A. No.

23 PTYX? 23 Q. Never?

24 A. No, Michael kept all that, or rather, they 24 A. No.

04:46PM 25 were all at Willow Glen, and I left without taking 04:48PM 25 Q. To your knowledge, is your brother aware


1 you made that claim? 1 his home phone number at the time, yes.

2 A. I suspect so. 2 Q. And you knew his home address?

3 Q. He has never mentioned it to you? 3 A. I think so, or I could have asked Michael

4 A. No. 4 for it.

04:48PM 5 Q. What did your brother say to you, if 04:51PM 5 Q. Now going to No. 34, all documents that

6 anything, was the purpose for a trust being created 6 refer or relate to, or support, your allegations in

7 or proposed to be created in 2000? 7 paragraph 2 of Crossclaim that, quote, Zelyony,

8 A. In 2000? 8 meaning Dr. Zelyony, received a share of the profits

9 Q. Right. You talked with your brother in the 9 of the business of PTYX and is presumed to be a

04:49PM 10 spring of 2000 or summer after the claim against 0451PM 10 partner in the business.

11 your father about there being a trust created in 11 To your knowledge, was Dr. Zelyony a partner

12 your favor, right? 12 in PTYX?

13 A. I don't recall. 13 A. Well, he had made investments into it or

14 Q. Did you ever talk with your parents about 14 what felt like investments; I don't know if that

04:49PM 15 their creating a trust in your favor? 04:51PM 15 made him a partner, but it made him something.

16 A. No. 16 Q. Let's back up, because now I am confused.

17 Q. Never at all? 17 I thought you told us before that Michael came up

18 A. No. 18 with money but you didn't know any of the details

19 Q. Within the last year, approximately how 19 about where it came from or what it was for?

04:49PM 20 often have you spoken to your parents by phone? 04:52PM 20 A. Correct.

21 A. Within the last year? 21 Q. This was the same money?

22 Q. Yes. 22 A. Correct.

23 A. Fairly frequently in the last five months 23 Q. Yes. Did Dr. Zelyony participate in any

24 or so. 24 way in the business of PTYX?

04:49PM 25 Q. Once a week? Twice a week? 04:52PM 25 A. Obviously I knew when, or there were times

169 171

1 A. Once or twice a week. 1 when I knew that the money did come from Dr.

2 Q. And before that how often? 2 Zelyony.

3 A. Just within the last year? 3 Q. Did you think that that made him a partner?

4 Q. Yes. 4 A. I thought it made him have some sort of

04:50PM 5 A. Before that, maybe once a month. 04:52PM 5 interest in the business.

6 Q. What about in the year 2001? 6 Q. Did you think that made Dr. Zelyony

7 A. Not at all. 7 partially liable for the business debts of PTYX if

8 Q. Not at all, zero? 8 he was an investor or a partner?

9 A. Zero. 9 A. I don't think so.

04:50PM 10 Q. Not even to your mother? 04:52PM 10 Q. What about your parents, they also put

11 A. Huh-uh. 11 money into PTYX, right? Were they partners?

12 Q. Did they call you? 12 A. They did not put money into PTYX, I put

13 A. No, they did not have my phone number. 13 money into PTYX.

14 Q. Did Dr. Zelyony have your phone number in 14 Q. You borrowed money from your parents to put

04:50PM 15 2001? 04:53PM 15 into PTYX?

16 A. He could have if Michael gave it to him. 16 A. Correct, the money was all paid to me

17 Q. So Michael had your phone number? 17 personally and I put the money into PTYX.

18 A. Yes. 18 Q. So that meant that it was a loan?

19 Q. Did you receive any phone calls from Dr. 19 A. That it was a personal thing between my

04:50PM 20 Zelyony that you recall? 04:53PM 20 parents and myself.

21 A. I don't recall. 21 Q. As far as you knew, with respect to the

22 Q. You didn't call Dr. Zelyony though? 22 money Dr. Zelyony paid directly to PTYX, you didn't

23 A. I don't think so. 23 know if that was an investment or loan or what?

24 Q. But you had his phone number? 24 A. I was not sure, no.

04:50PM 25 A. I had his home phone number from -- I had 04:53PM 25 Q. And you never had any clue as to which it

170 172 43 of 63 sheets Page 169 to 172 of 196 11/20/200310:40:46 PM

1 was? 1 A. Yes, he did.

2 A. All that money was handled through 2 Q. Frequently?

3 Michael, and Michael did not clarify to me what 3 A. In 2000, I believe so, but I was not

4 representation he made to his father about the exact 4 keeping track of his whereabouts.

04:53PM 5 status of the money. 04:56PM 5 Q. What about in 1999?

6 Q. Well, did Michael also use credit cards 6 A. I knew that he had done so, I don't

7 belonging to his father for business expenses of 7 remember, he traveled for different reasons.

8 PTYX? 8 Q. Approximately how often did you and/or

9 A. Did he? 9 Michael entertain business clients at meals?

04:54PM 10 Q. Yes. 04:57PM 10 A. Hardly ever.

11 A. Okay, if you tell me so. 11 Q. Rare occurrence?

12 Q. I am asking you. To your knowledge, did 12 A. Rare occurrence.

13 he ever use a credit card to pay for a business 13 Q. Less than once a month?

14 expense of PTYX? 14 A. I would say so.

04:54PM 15 A. I know we wrote company checks for all the 04:57PM 15 Q. How often did Michael eat out at a

16 computer purchases and so forth, I don't know if he 16 restaurant alone, if you know?

17 used credit cards to pay for business expenses. 17 A. Do you mean alone just as in without me or

18 Q. You never observed him to? 18 him individual?

19 A. I have observed him use credit cards to pay 19 Q. Just Michael individually, one person.

04:54PM 20 for things. 04:57PM 20 A. I don't think he liked to do that very

21 Q. And were any of the things that you 21 often, I mean he did, but he preferred to go with a

22 observed him make a purchase with a credit card 22 girlfriend or something.

23 directly related to the business of PTYX? 23 Q. How often did you dine out at a restaurant

24 A. Possibly, yes. 24 with Michael?

04:54PM 25 Q. What kinds of things? 04:57PM 25 A. When I was living at Willow Glen? Fairly

I 173 175

1 A. Books maybe, I don't know. 1 regularly.

2 Q. Anything else? 2 Q. Is that one of the sources of friction with

3 A. I don't know. 3 your boyfriend and his girlfriend?

4 Q. Did Michael ever pay for meals for the two 4 A. Possible.

04:55PM 5 of you or your employees using a credit card? 04:58PM 5 Q. Now look at category 35, it asks for "All

6 A. Yes, Michael has paid for meals for two of 6 documents that refer or relate to, or support,

7 us with a credit card. 7 your allegations that Zelyony consented to another

8 Q. And for employees? 8 representing him as a partner in PTYX, and also

9 A. If so, not very often. 9 represented himself as a partner in PTYX."

04:55PM 1 0 Q. Did Michael ever pay for business travel 04:58PM 10 What does that refer to?

11 expenses using a credit card, to your knowledge? 11 A. I am not sure.

12 A. I don't know. 12 Q. Did anybody, to your knowledge, ever

13 Q. Did Michael ever buy travel tickets to 13 represent that Dr. Zelyony was a partner in PTYX?

14 arrange for accommodations for business travel for 14 A. Well, when we were talking about the

04:55PM 15 you using a credit card? 04:59PM 15 dissolution of the business, Michael did make

16 A. For me or for both of us? 16 representations that basically there was a

17 Q. For you including him if he was along. 17 certain -- that Dr. Zelyony was entitled to a return

18 A. Possible, I don't know. 18 on investment.

19 Q. Did you ever take any business travel on 19 Q. That was the words that Michael used was a

04:56PM 20 behalf of PTYX without Michael being along? 04:59PM 20 return on investment, not repayment of loans?

21 A. I don't recall, I don't think so, but if 21 A. He used both, he wanted to consider it a

22 so, very, very infrequent. 22 repayment of loans, but he wanted to calculate it

23 Q. And did Michael, to your knowledge, ever 23 according to what he considered normal investment

24 undertake any business travel on behalf of PTYX 24 into a dot com company.

04:56PM 25 without your being along? 04:59PM 25 Q. So not applying any interest rate but a dot


1 com type of return? 1 for this to be done.

2 A. Correct. 2 Q. Did you ever have any direct communications

3 Q. What rate of return was that? 3 with Dr. Zelyony about how much was owed or claimed

4 A. 100 percent or more. 4 to be owed?

05:00PM 5 Q. Did Michael ever give you any figure or 05:03PM 5 A. I did not.

6 estimate of how much in dollars total he thought his 6 Q. Never?

7 father was entitled to receive back from PTYX? 7 A. No.

8 A. It varied from -- well, there were some -- 8 Q. It was all through Michael?

9 there were a couple of big rough numbers thrown at 9 A. Yes, it was.

05:00PM 10 me a couple of times, I don't know how serious they 05:03PM 10 Q. But the fact that you were unable to reach

11 were because they were just rough figures. 11 a final resolution with Michael for the dissolution

12 Q. How big and how rough? 12 of your partnership with Michael you believe is Dr.

13 A. 600,000 and a million. 13 Zelyony's fault?

14 Q. Those were figures from Michael? 14 A. Well, I had it from Michael that this

05:00PM 15 A. Yes. 05:04PM 15 money was meant for Dr. Zelyony, that it was not a

16 Q. Did Michael tell you what was the basis for 16 loan -- it was not a debt or an investment or

17 those numbers? 17 anything that I needed to give back to Michael,

18 A. He said that his father had put in -- I 18 so ••.

19 don't quite remember, but I think something between 19 Q. To Michael or to Dr. Zelyony?

05:01PM 20 4- and 500,000, and therefore, depending on how one 05:04PM 20 A. That was not meant for Michael, that I

21 wanted to calculate that was how he came up with his 21 would be paying it to Michael on Dr. Zelyony's

22 figures. 22 behalf if we had agreed on a payment thing.

23 Q. So the base amount advanced was 4- or 23 Q. And was that term or condition

24 $500,OOO? 24 objectionable to you?

05:01PM 25 A. That was what Michael claimed, and I tried 05:05PM 25 A. The part about Michael acting as an

177 179

1 to get him to substantiate that and I was not -- I 1 intermed iary?

2 did not receive anything. 2 Q. Or Michael receiving the payment on his

3 Q. I hope we will do better for you. 3 father's behalf, did you object to that?

4 MR. BARRETT: We are all hoping. 4 A. No, I did not object to that because all

05:01PM 5 MR. WALTON: That's why I am here. 05:05PM 5 previous financial things, discussions of every type

6 Q. In category No. 36 you asked for "All 6 related to Dr. Zelyony went through Michael.

7 documents that refer or relate to, or support, your 7 Q. So the problem was not the proposal that

8 allegations in paragraph 4 that, 'In engaging in the 8 you pay Michael instead of his father directly but

9 above referenced activity, Zelyony has damaged 9 instead what?

05:02PM 10 Defendant. " 05:05PM 10 A. It led me to assume that it was Dr.

11 How did Dr. Zelyony damage you by advancing 11 Zelyony's interest that was holding up this whole

12 money to the business in which you were a partner? 12 thing.

13 A. Again, indirectly through Michael, by 13 Q. So you assumed that because of --

14 asking for these really enormous amounts of sums as 14 A. Because Michael said so.

05:02PM 15 company liability that I was meant to be personally 05:05PM 15 Q. Because of Dr. Zelyony's loans to PTYX,

16 responsible for, it made it impossible for me to 16 Michael was unwilling to reach an agreement with

17 move on to actually get to the dissolution of the 17 you?

18 business that I wanted, and it ended up with me 18 A. Correct"

19 spending far more money on maintaining this 19 Q. And that's the damage that you suffered

05:03PM 20 partnership that I did not want to maintain, I 05:06PM 20 from Dr. Zelyony, correct?

21 wanted to be done with by January of 2000, I came 21 A. Can you repeat that?

22 here for mediation to settle the business of how we 22 Q. Sure. The damage that you suffered as a

23 were going to have closure on that, and Michael's 23 result of Dr. Zelyony advancing money to PTYX is

24 claims on behalf of Dr. Zelyony that these very 24 that you were not able to reach an agreement with

05:03PM 25 large sums were my responsibility made it impossible 05:06PM 25 Michael for final dissolution of your partnership?


1 2 3 4

05:06PM 5 6 7 8 9

05:07PM 10 11 12 13 14

05:07PM 15 16 17

18 19

05:08PM 20 21 22 23 24

05:08PM 25

1

2 3 4

05:08PM 5 6 7 8 9

05:08PM 10 11 12 13 14

05:08PM 15 16 17

18

19

05:09PM 20 21 22 23 24

05:09PM 25

A. I would agree to that.

Q. Any other damage that you can think of?

A. Well, everything else sort of were

consequences of this inability to reach a

dissolution.

Q. Next page, No. 37, what documents are there

that exist that refer or relate to the allegations

that, quote, "The misrepresentations included

statements and actions which led Erin to reasonably

believe that from November of 1998 to July 2001,

Zelyony had accepted approximately $100,000 in

capital from Erin and/or PTYX as full payment of all

debts, loans and/or advancements that Zelyony had

made to Erin and/or PTYX."

I will let you chew on that and digest it

for a second, it is legalese.

A. Well, actually -- I am not quite sure

actually how to approach this.

Q. You are probably not alone. Let me see if

I can tease apart the relevant concepts here. No.

1, "Misrepresentations." Did Dr. Zelyony ever make

any misrepresentations to you?

A. Not directly.

Q. Right, because you never talked with him

about PTYX, correct?

181

A. Correct.

Q. So he couldn't have lied to you about

anything related to PTYX, right?

A. All communications were handled by Michael.

Q. Did Michael ever convey anything to you on

behalf of his father that you felt was materially

false?

A. That all was -- that all this money had to

be paid back like that, yes.

Q. You never expected to have to pay back any

of it?

A. I expected to pay back if we were

successful.

Q. But not otherwise?

A. Otherwise to the best of ability, I

suppose, but it was not -- I mean the whole idea was

that we were going to, you know .••

Q. Get rich?

A. Yes.

MR. BARRETT: That's a good idea.

Q. BY MR. WALTON: Well aware of the concept.

I buy a lottery ticket every other week.

MR. BARRETT: I do if it is over 20.

MR. WALTON: Less than that it is just a cruel

joke, not enough to retire.

182

1 2 3 4

05:09PM 5 6 7 8 9

05:09PM 10 11 12 13 14

05:10PM 15 16 17 18 19

05:10PM 20 21 22 23 24

05:10PM 25

1 2 3 4

05:11PM 5 6 7 8 9

05:11PM 10 11 12 13 14 15 16 17

18 19

05:11PM 20 21 22 23 24

05:12PM 25

11/20/2003 10:40:46 PM Page 181 to 184 of 196

Q. So did Dr. Zelyony himself ever say

anything that you considered to be false to you

ever?

A. No.

Q. Michael you said didn't tell you anything

about the money when it came in?

A. Correct.

Q. But afterwards when it was time to figure

out how to sort out the partnership and the

liabilities he told you that this had to be repaid

to his father?

A. And not just repaid, but repaid with

significant returns.

Q. So at that point though what he was saying

wasn't necessarily a fact but his opinion or view of

what should be done, correct?

A. His opinion of. . .

Q. What should be done.

A. It was his opinion of what his father was

entitled to, I suppose.

Q. Did Michael ever tell you that he had such

a specific agreement between himself and his father

that his father would receive some specified rate of

return as an investor?

A. I think he was telling me that he had given

183

his father certain impressions based on how dot com

bUSinesses were doing in the late '90s, he had made

certain representations to his father, that's what

he told me.

Q. That the money would soon be flowing like

wine and all of it would be able to be repaid?

A. That was the hope.

Q. In other words, you would both be rich

enough that you WOUldn't have to worry about the

menial task of counting?

A. Correct.

Q. That didn't happen?

A. No, it did not.

Q. So then you did have to do some counting?

A. Yes.

Q. And you felt that Michael was not being

reasonable as to how much money should go back to

Dr. Zelyony?

A. Correct.

Q. And do you think that Michael was trying to

defraud you?

A. After a while, yes, because there were

expenses that PTYX had that were ongoing that could

have been terminated, and there were things I felt

he was doing that was just prolonging and speeding

184

46 of 63 sheets

1 up the payment of my money. 1 nothing.

2 Q. Would the T1 lines be in that category? 2 Q. Do you believe that that inability on your

3 A. Yes, I believe he had the option of 3 part to get a job is in any way the fault of Dr.

4 negotiating for an early termination of the contract 4 Zelyony?

05:12PM 5 and he refused. 05:15PM 5 A. I don't think that it is a direct fault of

6 Q. You wanted him to do that and he refused? 6 Dr. Zelyony, I am just saying all these things stem

7 A. Yes. 7 from this big huge obstacle in the way of Michael

8 Q. And how did that end up working out in the 8 and I getting to a closure about our partnership.

9 end, did Michael pay the contract all the way 9 Q. Are you saying but for the fact that Dr.

05:12PM 10 through to the end? 05:15PM 10 Zelyony continued to supply money to Michael for

11 A. I paid the contract for as long as I could, 11 PTYX the business would have failed much sooner and

12 and after that I don't know what happened. 12 you could have gotten out of it?

13 Q. You have no idea? 13 A. No, I am saying if it had been, if the

14 A. No. 14 money that came in from Dr. Zelyony had been in

05:12PM 15 Q. Do you know if Michael ever got sued by any 05:16PM 15 the form that I thought it was instead of being a

16 of the creditors of PTYX? 16 subject of subsequent repayment in the way that

17 A. I don't know. 17 Michael has represented it, then we would have had a

18 Q. No idea? 18 somewhat amicable dissolution of the partnership and

19 A. No. 19 been able to continue with professional life, et

05:12PM 20 Q. Don't know, don't care? 05:16PM 20 cetera.

21 A. Don't know, and I had no place to get that 21 Q. So your understanding was Dr. Zelyony

22 information. 22 provided money for PTYX, and if you both got rich

23 Q. Do you know whether Michael ever had 23 would you repay it, but if you decided to call it

24 judgments entered against him for business 24 quits you wouldn't have to pay it, that's what you

05:13PM 25 liabilities of PTYX's? 05:16PM 25 thought the terms were?

185 187

1 A. I do not know. 1 A. It wasn't just that I called it quits, it

2 Q. Do you know whether Michael had a judgment 2 is that the whole thing was not working as a

3 entered to him for liabilities associated with the 3 business.

4 T1 lines? 4 Q. But you thought in those circumstances --

05:13PM 5 A. I don't know. 05:17PM 5 A. If the business failed, then we all sort of

6 Q. Never had any information on that at all? 6 suffer.

7 A. No, I did not. 7 Q. So if the business fails, then Dr. Zelyony

8 Q. Did Michael ever say anything to you on 8 suffers along with you?

9 behalf of Dr. Zelyony that was false but you 9 A. But as I did have the settlement money in

05:13PM 10 believed at the time to be true? 05:17PM 10 the year 2000, I did make the best effort I could to

11 A. That is awfully vague. 11 return money to Dr. Zelyony.

12 Q. Working with what I got in front of me 12 Q. How much?

13 here. Were you ever actually harmed, other than by 13 A. I believe the copies of checks amount to

14 being unable to reach an agreement with Michael, by 14 almost 80,000.

05:14PM 15 anything said concerning Dr. Zelyony's advancing of 05:17PM 15 Q. Those are the copies of the checks that we

16 monies that you later considered to be false? 16 provided to you from this lawsuit, right?

17 A. Well, it has made my -- I mean it -- this 17 A. Uh-huh, because I had no access to

18 whole inability to resolve things has had huge 18 paperwork other than that.

19 effects on my life. 19 Q. Separate and apart from those checks, you

05:14PM 20 Q. Personal headache? 05:17PM 20 don't have any records or document that reflects how

21 A. Not just personal headache, but because I 21 much was paid to Dr. Zelyony using money from your

22 was in this business partnership with Michael for 22 settlement?

23 quite a few years, I now have difficulty getting 23 A. I do not.

24 employment because I have no way of accounting for 24 Q. Going to category 37 again, that caused you

05:15PM 25 what happened, I have no job references, I have 05:18PM 25 to reasonably believe that from November '98 to July

186 188


1 2000 Zelyony had accepted approximately $100/000 in 1 A. At different times.

2 capital from Erin and/or PTYX as full payments of 2 Q. But you gave in?

3 all debts/ loans and advancements. 3 A. Yes.

4 Did Dr. Zelyony ever say anything to you 4 Q. You may not have agreed/ but that was your

05:16PM 5 directly to say "I've got $100/000 back/ thanks/ 05:21PM 5 choice?

6 that's enough/ we are even"? 6 A. Yes.

7 A. No. 7 Q. And that was not due to anything Dr.

8 Q. Did Michael ever say anything to that 8 Zelyony did?

9 effect to you? 9 A. No.

10 A. No. 05:21PM 10 Q. Last category/ No. 46/ did Dr. Zelyony ever

11 Q. Did Dr. Zelyony ever say anything through 11 do anything to you that you thought was intended to

12 Michael to indicate that any debts/ loans or 12 willfully or maliciously or fraudulently hurt you?

13 advancements have been fully repaid? 13 A. I don't know.

14 A. No. 14 Q. Let me make it simpler. Has Dr. Zelyony

05:16PM 15 Q. So this is just wrong? 05:22PM 15 ever done anything to hurt you in any way?

16 A. I would strike out the word "full." 16 A. Yes, but we don't need to go into that.

17 Q. Fair enough. Now going down to No. 39 17 Q. What did he do?

18 then. I got to let you go/ don't I, or you will be 18 A. They are not business-related, and I don't

19 here for tomorrow's deposition. No. 39 here/ do you 19 think that it is necessary.

05:19PM 20 think Dr. Zelyony siphoned off any assets from the 05:22PM 20 Q. Anything relating to PTYX or Live Share

21 partnership? 21 that Dr. Zelyony ever did to you to hurt you in any

22 A. I don't know how to answer that. 22 way?

23 Q. Do you know what siphoning off is/ like 23 A. Not directly, no.

24 diverting? 24 Q. And not indirectly either/ right?

05:19PM 25 A. Yes. 05:22PM 25 A. I don't know how much that came out of

189 191

1 Q. Embezzling/ misappropriating? 1 Michael was directly from Michael versus from Dr.

2 A. I don't know how to answer this. 2 Zelyony when monies relating to Dr. Zelyony were in

3 Q. In your personal belief/ do you think he 3 question.

4 did that? Let me ask it a different way. Do you 4 Q. And by that you are referring to Michael

05:20PM 5 think Dr. Zelyony wrongfully took any money from 05:23PM 5 taking the position that to reach an agreement on

6 PTYX? 6 dissolution of the partnership he was demanding an

7 A. No, I don't think so. 7 amount of return or interest payable to his father?

8 Q. Do you think Dr. Zelyony wrongfully took 8 A. Yes, he was demanding that, yes, and he was

9 any money from Live Share? 9 demanding also that I perform work as a possible way

05:20PM 10 A. I don't think so. 05:23PM 10 of paying for that and so forth, but .••

11 Q. Did Dr. Zelyony ever receive any money 11 Q. Do you have any reason to believe that that

12 from PTYX or Live Share that was not authorized by 12 proposal came from Dr. Zelyony and not from Michael?

13 Michael or by you? 13 A. No, I don't know.

14 A. I don't think so. 14 Q. So you don't have any reason to believe

05:20PM 15 Q. Did Dr. Zelyony ever receive any money 05:23PM 15 that/ correct?

16 from PTYX or Live Share that was not authorized by 16 A. I don't know how much of the insistence

17 you? 17 that money should be returned to Dr. Zelyony was

18 A. Proba bly not. 18 Michael's idea versus Dr. Zelyony's idea.

19 Q. And you never objected to any monies that 19 Q. And you don't know that the proposal that

05:20PM 20 were paid to Dr. Zelyony from PTYX or Live Share/ 05:23PM 20 you continued to perform work for the partnership to

21 correct? 21 payoff debts/ whether that was Michael's idea or

22 A. I may have objected, but it was overridden. 22 Dr. Zelyony's?

23 Q. Who did you object to? 23 A. I do not.

24 A. Michael. 24 Q. You don't know?

05:21PM 25 Q. When did you object? 25 A. No.


1 2 3 4

05:24PM 5 6 7

8

9

05:25PM 10 11 12 13 14

05:25PM 15

16

17

18

19

05:25PM 20 21 22 23 24

05:25PM 25

1

2 3

4 05:26PM 5

6

7

8

9

05:26PM 10

11

12

13

14

05:26PM 15 16 17

18

19

20 21

22

23

24 25

Q. Why don't we adjourn it for today. We need

to put a stipulation on the record.

MR. WALTON: We need to set a date for continued

deposition. Do you have anything handy?

MR. BARREn: I don't know.

(A discussion was held off

the record.)

MR. WALTON: Can we agree we will attempt to

agree on a reasonably mutually convenient date?

THE WITNESS: Second week in December.

MR. BARREn: After your return, yes, I do

agree.

MR. WALTON: If we can't, otherwise on, say, 15

days' notice.

MR. BARREn: Yes.

MR. WALTON: And otherwise are we ready to

stipulate to the handling of the transcript?

MR. BARREn: Correct.

MR. WALTON: Do you want it sent to you?

MR. BARREn: It can be sent to me.

MR. WALTON: Let's stipUlate that the court

reporter shall direct the original of the transcript

to Mr. Barrett, counsel for the deponent, that the

deponent will have 30 days after the dispatch from

the court reporter to review the transcript, make

193

any changes necessary, sign it under penalty of

perjury, and within that time period Mr. Barrett

agrees to confirm to me the fact of the penalty of

perjury and as well as notify me of any changes made

by his client.

Mr. Barrett will retain custody of the

original. If for any reason the original is lost,

stolen or otherwise unavailable, a Certified Copy

may be used as an original for all purposes upon

reasonable notice for use at trial or any other use

at trial.

MR. BARREn: So stipulated.

MR. WALTON: And we are adjourned.

(End of videotape No.3 of the

deposition of Erin Zhu.)

(At the hour of 5: 26 p.m. the

deposition was adjourned to be

continued sine die.)

-- 000 --

194

1 I, ERIN YIER ZHU, do hereby declare under

2 penalty of perjury that I have read the foregoing

3 transcript; that I have made any corrections as

4 appear noted, in ink, initialed by me; that my

5 testimony as contained herein, as corrected, is true

6 and correct.

1 8 EXECUTED this ___ day of ______ , 9 20 __ , at ________ , ________ _

10

11

12

13

14 15 16 17 18 19 20 21 22 23 24 25

1

(City) (State)

ERIN YIER ZHU

2 I, the undersigned, a Certified Shorthand

3 Reporter of the State of California, do hereby

4 certify:

5 That the foregoing proceedings were taken

6 before me at the time and place herein set forth;

7 that any witnesses in the foregoing proceedings,

8 prior to testifying, were placed under oath; that a

195

9 verbatim record of the proceedings was made by me

10 using machine shorthand which was thereafter

11 transcribed under my direction; further, that the

12 foregoing is an accurate transcription thereof.

13 I further certify that I am neither

14 financially interested in the action nor a relative

15 or employee of any attorney of any of the parties.

16 IN WITNESS WHEREOF, I have this date

17 subscribed my name.

18 19 20 21

22

23

24 25

Dated:

ANN EnE SHAVER

CSR No. 6169

196

49 of 63 sheets Page 193 to 196 of 196 11/20/200310:40:46 PM

1

2 I, the undersigned, a Certified Shorthand

3 Reporter of the State of California, do hereby

4 certify:

5 That the foregoing proceedings were taken

6 before me at the time and place herein set forth;

7 that any witnesses in the foregoing proceedings,

8 prior to testifying, were placed under oath; that a

9 verbatim record of the proceedings was made by me

10 using machine shorthand which was thereafter

11 transcribed under my direction; further, that the

12 foregoing is an accurate transcription thereof.

13 I further certify that I am neither

14 financially interested in the action nor a relative

15 or employee of any attorney of any of the parties.

16 IN WITNESS WHEREOF, I have this date

17 subscribed my name.

18

19 Dated: !1 / .

//i/ JV ' I .. J.c)() 3 -------~-u---------~-~-------------------20

21 ,11 z-"1t" Ji{" k //ill //J £ £ : j(J /\i / Vt" VD fr // z. .. Vl41fZilc

------~JL----------------------------22 ANNETTE SHAVER

CSR No. 6169 23

24

25

196


erin zhu's deposition in santa clara superior court case no. 1-02-cv-810705, zelyony v. zhu,...

Documents

depositionof erinyierzhu

walton at333southgrand

southgrandavenue losangeles

attorneyfor plaintiff

takenonbehalf of plaintiff

barrett attorney atlaw

californiacorporation

erin yier zhu spelleder