Free Reply to Response to Motion - District Court of Connecticut - Connecticut

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 1 of 220

EXHIBIT A TRANSCRIPT OF ISRAEL POLANSKY VIDEO DEPOSITION

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 2 of 220

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT ------------------------------------------------------------DONALD WAINRIGHT, JANET WAINRIGHT, CASE NO. 3:01-CV-2158 (WWE) AND DEBORAH A. RUSSO-WILLIAMS, PLAINTIFFS, -AGAINSTOSM COMMUNICATIONS, INC., ISRAEL H. POLANSKY, ROBERT E. POLANSKY, AND ANNE POLANSKY, DEFENDANTS. --------------------------------------------------------------

TRANSCRIPT OF VIDEO DEPOSITION OF ISRAEL H. POLANSKY Date of Deposition: March 29, 2004 Time Started: 1:48 p.m. recording began, break at 2:40 pm, resumed at 2:46 pm Time Ended: 2:50 p.m. recording ended Held before Videographer/Notary Public: Kerry A. Bartolini

APPEARANCES: Present: Israel H. Polansky, Deponent/Defendant J. Michael Sulzbach, Esq. representing Israel Polansky Robert E. Arnold, Esq., representing Plaintiffs Robert E. Polansky, Defendant Donovan W. Riley, Esq., representing Plaintiffs Not present: Transcriptionist/Notary Public: Kari Payette Date of Video Transcript request: December 26, 2004 Date Transcription completed: January 3, 2005

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 3 of 220

ATTACHMENTS: RE-NOTICE OF DEPOSITION AND SCHEDULE A Attorney Robert E. Arnold (" Q.") questioning by direct examination the deponent/witness Israel H. Polansky ("A.") and being duly sworn responding as follows: Q. (By Attorney Arnold): We're here on a video deposition of Mr. Israel Polansky and a renotice of that deposition was handed to counsel today dated for March 26th, served on March 29th. We originally had scheduled this deposition for March 18th. Mr. Polansky, can you raise your right hand please? Witness Israel H. Polansky raised his right hand. Q. Do you swear the evidence you are about to give is the truth, the whole truth and nothing but the truth so help you God? A. (By Israel Polansky): I do. Q. Okay. Attorney Sulzbach: Incidentally, I don't think under the federal rules you can do this? Q. Videotape? Attorney Sulzbach: No, you can do the videotape, but you...it has to be before a...ahh...an appropriate officer and it can't be you. Q. This is a notary public right here. You want to take his oath, raise your right hand? Attorney Sulzbach: Can you raise your right hand? Mr. Polansky, Can you raise your right hand? Witness Israel H. Polansky raised his right hand. Notary Bartolini: Do you swear to tell the truth, the whole truth and nothing but the truth so help you God? A. (By Israel Polansky): I do.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 4 of 220

Q. (By Attorney Arnold): Mr. Polansky you received notice of this deposition from your attorney? A. (By Israel Polansky): Yes. I believe I did. Q. You did? A. Yes. Q. And that's why you're here today? A. Yes. Q. Were there any documents given to you by your attorney before you came here today? Attorney Sulzbach: Actually...wait a minute...object...hold it...no because its.. Q. I'll rephrase the question. Did you receive a notice of deposition...I'm going to caution you Mr. Polansky that there's not to be any speaking by you at this deposition in any way, shape or form. Do you understand that, or I'll have you removed? Robert Polansky: Yes. Q. Do you understand that? Robert Polansky: Yes. I understand that. Q. Okay. Your presence here is merely as a spectator, and not as a participant, in any way shape or form. Do you understand that? Robert Polansky: I understand. Q. Okay. Robert Polansky: I understand. Q. Now there is a videotape...on this... Robert Polansky: I understand. Q. And I'm going to ask that you not say another word because you have counsel that you are

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 5 of 220

represented by. Understood. Thank you Q. Mr. Polansky, Mr. Israel Polansky? A. (return to Israel Polansky): Yes. Q. Did you receive notice of this deposition? A. Yes Q. And did he give you the notice of deposition that was served on his office with an attached schedule which asks for information to be produced? A. Yes. Q. Do you have that schedule with you today? A. No I don't. Q. And when did you receive that, do you recall. A. Uhh...I don't exactly recall. Q. Do you recall reading a list of documents that you were asked to prepare? A. Yes. Q. Okay. So in response to " whether you had all documents between you and any other party relating to any matter asserted in the complaint and your cross complaint in this matter" you have no documents with you today? A. No I don't. Q. And you didn't bring any copies of checks front and back and check registers of any accounts used to pay any expenses payroll or costs of any kind of OSM Communications Inc. and any of its affiliates from 1996 to the present including any payments claimed as investments? A. No.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 6 of 220

Q. And you're not providing a list of all checking, savings, or any other account including investment accounts with the account numbers of which you were or are a signatory including the name and address of the banks or issuers of the accounts since 1996, you're not producing any information in response to that? A. No, I haven't uhh... Q. And you didn't bring any federal or state income tax returns from the years 1996 to the present with you? A. No. Q. And, did you acquire any interest in real property, or transferred any property, or sold any property from 1996 to the present? A. Umm... Attorney Sulzbach: I think you're asking him whether he has the documents or whether he did. Q. I am asking him whether he did? Attorney Sulzbach: Again...I am going to object...uhh...to anything after the times covered by the complaint because it's not relevant and it's not likely to lead to anything relevant unless you can show me otherwise or tell me otherwise Q. You can answer the question. Attorney Sulzbach: No, I am going to instruct him not to answer the question. Q. When did you buy the house that you currently living in? A. Ohh...about... Attorney Sulzbach: Well...hold it...foundation. Q. This is a deposition.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 7 of 220

Attorney Sulzbach: I understand, but you asked him when he bought the house he currently lives in...and you don't know that he bought it. Q. That's right. If you know when you bought the house you are currently living in. When did you buy it? A. Do I know when I bought it? Q. Yes, when did you buy it? What year A. About 45 years ago. Q. 45 years ago? A. Approximately. Q. Do you own any other homes? A. No. Q. Were you ever paid any money from OSM or OSM Communications Inc. or any of its affiliates? A. Did I ever receive any? Q. Yes. A. No. Q. You never received any money for salary? A. No. Q. Never any money for being on the board of directors? A. No. Q. And you did you serve on the board directors. A. Oh yes. Q. And when did you serve on the board?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 8 of 220

A. What's that? Q. What years? A. From it's inception when it was or...uhmm...organized, and I....I served as a director because a...a....according to the laws of Delaware we a...required two people to be directors so I served. Attorney Sulzbach: Mr. Polansky, uhmm., I know you're trying to be helpful... A. Of course... Attorney Sulzbach: ...but you've...you've actually done more than answer the question that was asked. And ...and...in the future, I'll... I'll call that to your attention when it starts to happen, I don't want you to think I am being impolite. A. Okay. Q. When you asked about ...ah...when you stated that...you said "we" it required two directors and we organized in Delaware or something who are you referring to when you say "we"? A. Robert. Q. That's your son? A. Yes. Q. And did you give Robert...any... or...withdrawn. Did you give any money towards the creation of the company that you were on the board of directors? A. Yes, I have... Q. Okay. What was the name of the company first organized A. Uh...OSM Q. And what...do you recall what year it was first organized A. Not really.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 9 of 220

Q. Do you recall approximately? A. Oh...uhmm...6...7...8 years ago I'm not sure Q. And when you lent OSM money what were the terms and provisions? Attorney Sulzbach: If any? A. I was investing in the company. Q. What does that mean investing? A. Well...oh...just about what it...I said...I invested the money, I advanced the money to the company, I purchased the stock in the company. Q. How much stock did you own? A. I beg your pardon? Q. How much stock did you buy? A. 93% Q. And who were the other shareholders in the company? A. Robert Polansky. Q. He owned the other 17 percent, I mean the other 7%? A. Robert Polansky. Q. And did you ever loan the company any money? A. As a matter of fact I think part of it was as a loan. Q. How much did you pay for the 93% ownership of the stock A. I don't really remember what the first payment was. Q. Do you remember any of the payments, how much they were? A. Well...yes I advanced money to the company from time to time? Q. And what would you advance money to the company for?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 10 of 220

A. Well I invested in the company and I assumed that they were going to use it for the functions necessary to maintain the corporation Q. Okay. And what are some of the functions that are necessary to run the corporation, as you understood them? A. Ah...I understood that they were to ahh...install signs and sell advertising on the signs and hopefully make a success of it Q. Would you consider payroll one of the functions necessary to run the company? A. I imagine any company must have payrolls. Q. Okay, but the question to you is "is payroll one of the functions that you understood that was necessary to run the company"? A. I didn't understand any of the functions of the company. Q. Well you just told me about two functions installing signs and selling advertising, correct? A. Yes. Q. Okay. What other functions were necessary to run the company, in using your own words? A. I suppose it depends on the company, they uh...they umm... Q. Okay...let's...let's...let's be specific to just OSM A. On OSM. Q. The money you lent to the company? A. Well I understood the company would be similar to ISA and would function in approximately the same manner. Q. Okay. Did ISA have employees? A. Oh yes. Q. Okay. So ISA paid their employees?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 11 of 220

A. I imagine so. Q. Okay. Have you read the complaint in this case; do you understand why you are being named as a party in the lawsuit today? A. Not really, I don't know why I am being named as a party. Q. Okay, have you ever read the complaint that was served on you? Did you ...Did you... A. Yes I read the complaint.... Q. Okay. And were you familiar with a Mr. Donald Wainright? Have you ever heard his name before? A. Certainly, it was in the complaint. Q. Prior to being served on the complaint have you ever heard the name Donald Wainright in reference to OSM? A. Yes. Q. And what was your understanding of who Donald Wainright was? A. An employee of the company. Q. Okay. And how about the name Deborah A. Russo or Deborah A. Russo-Williams? A. An employee of the company. Q. So you understood that both Donald Wainright and Deborah A. Russo-Williams were employees of OSM? A. Employees of OSM? Q. Yes. A. Yes Q. Okay. Attorney Sulzbach: When?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 12 of 220

A. Huh...? Attorney Sulzbach: I'm sorry ...yes....th...th...the question is...when... Q. Well... you'll have an opportunity to... and I'll certainly get there A. Were Donald Wainright and Deborah Russo-Williams were they employees of ISA at any point in time? A. Uhm...I think they were. Q. So you understand that in the complaint that there's a claim that as employees of OSM during some time period they weren't paid as their payroll or their salaries? Do you understand? A. I paid no attention to any of the...any of...the operations of the company. Q. But, the lawsuit that's pending in federal court against you, as you are a named defendant... A. Yes Q. It's...It's basically a lawsuit...Is it your understanding that it's basically a lawsuit by Donald Wainright and Deborah Russo-Williams for money that they weren't paid as employees of OSM? A. I've been told that that's probably so. Q. Okay. A. Or possibly so...I...I really don't know. Q. You testified that both Donald...Donald Wainright was an employee of OSM and you were aware of that, correct Attorney Sulzbach: That's not what he testified to...his testimony was that he understood that they were employees of OSM. Q. What time period...when did you first meet Donald Wainright or become aware of who

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 13 of 220

Donald Wainright was? A. Uhm.... several years ago. Q. When you first became aware of who Donald Wainright was, was he an employee of OSM? A. Uhm...Yes. Q. Did you have any ever discussions that you can recall with Donald Wainright? A. I never had any conversations with him as such. Q. You said that you invested in OSM, and you also loaned money to OSM, where did you take the money, from what bank, to loan to OSM? A. Uhm...I don't know if I can give an estimate...particularly...as I uh... Attorney Sulzbach: You can give them the name... A. The banks? Attorney Sulzbach: The name of the bank... A Bank? Attorney Sulzbach: From which you took funds to advance to OSM A. Umm... Citizens Bank. Q. In what state was Citizens Bank located in when you took the money out of it to loan money? A. In Massachusetts. Q. Was that the first time that you loaned money...was that the first bank that you used to withdraw funds to loan... Attorney Sulzbach: To who? Q. or to ... Q. If I could finish my question Attorney Sulzbach...

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 14 of 220

A. To OSM? Q. To loan money to either OSM or to Robert Polansky for running OSM? A. I never extended any loans to Robert Polansky, solely to OSM Q. So Citizens Bank in Massachusetts was one of the banks that you used to withdraw funds from to loan to OSM? Correct? A. Citizens Bank. Q. Okay. What year was that? A. Oh...19...19...ah...97...8...I'm not quite sure Q. And was that when you first invested in the stock ...was that the investment bank that you used...withdrawn...was that the bank that you used to purchase the 93% of the stock? A. Uhm...I don't recall...probably. Q. What other banks did you use or what other bank accounts did you use to withdraw money from to invest or loan...extend loans to OSM? Attorney Sulzbach: You can answer that. A. What was the question again? Q. What other banks did you use or bank accounts? A. Uhm...I'm not sure I used any other banks...as a matter of fact... Q. And the account that you used at citizens bank was that an account that you hold in your name solely or is there somebody else on that account A. Uhm...It started solely Q. So, your wife's name is not on it? A. Huh? Q. Your wife's name is not part of that account?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 15 of 220

A. I put my wife's name on it subsequently. Q. And from 1997 to 1998 from that time period to today, it's your testimony that you've made no loans to Robert Polansky? A. I never made loans to Robert Polansky. Q. Did you ever tell Mr. Polansky that you would lend him money whenever he needed it for OSM? A. I never lent him money...I never told him I would lend him the money. Q. Did you loan...but...but did you tell Robert that if OSM needed money you had money to loan him to help get the company started? A. No...I...I don't understand the question. Q. Okay I'll rephrase it. A. If you could please. Q. You made an investment in OSM... A. Yes Q. And Robert Polansky was running OSM, correct? A. Yes. Q. And if OSM needed money, because they were running short on money, would you have lent them more money or did you lend them more money? Attorney Sulzbach: Why don't we do one question at a time? Q. Did you lend them money? A. From time to time I would lend them money, the bank, not...not him but to the company Q. When was the last time you lent OSM money?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 16 of 220

A. Uhm...now I don't understand that question...is it supposed to be to 2000 or what... or does it go to yesterday... Q. To today? Attorney Sulzbach: When was the last time you lent OSM money A. I would think four months ago. Q. And how much did you lend? A. 3 or 4,000 dollars perhaps. Q. 3 to 4,000...? A. Not to him... Q. I understand... A. Not to him...but the company I sent 3 or 4,000 dollars. Q. And what was the reason you sent that money to OSM? A. Because I was...just...the reason I sent the 3,000... apparently he asked for money, he was running short, I sent the company money, he was running short, and I sent him only three because I was done with him, I didn't want to lend any more. Q. And what was the reason ... Attorney Sulzbach: (inaudible) A. (Inaudible) Q. What was the reason that...ahh...who contacted you to send the money? A. It had to be Robert Polansky. Q. Okay. And in the conversation you had with Robert Polansky... A. Yes... Q. ...he asked you to lend him some money...or lend the company some money.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 17 of 220

A. No. He said he needed more money and he was running out of money and I told him that was it. Q. And what did he tell you the reason that he needed more money for...was for? A. I guess he said he didn't...that the company didn't have any at that point. Q. And is the company still operating today? A. The company is still alive today. Q. And are you on the board of directors. A. I am still on the board of directors Q. Do you recall a time period where OSM was being advertised for sale? A. Uhm...I don't think it was ever advertised for sale. Q. Did you ever attend any board of directors meetings? A. We a...there was so little...we attended board meet...meetings over the telephone. We held them over the telephone Q. And who would participate in those board meetings? A. In the ahh...meetings? Q. In the meetings. A. Robert and I, we were the only two directors. Q. How often did those board meetings occur? A. Once a month...excuse me...once a year. Q. And who was the secretary for the board of directors? A. Robert was the secretary, I believe. Q. And were you ever asked to look at and approve minutes of the last board meeting or was there not that formality?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 18 of 220

A. Not really ...there was no real formality about it. Q. And you also...you said before...you started one sentence with you said "so little"...so was there...what type of formalities were there being on the board of directors, what were you asked to do? A. Simply to confirm the fact that Robert was still president, treasurer and secretary. Q. Did you ever discuss what OSM...the company...operated as, you testified earlier that installed...that the functions were that they installed signs and sold advertising, but did you...did you ever discuss during the board of directors meetings what the company was doing? A. The ah... Attorney Sulzbach: That's a yes or no question. A. (Inaudible) A. Repeat the question I didn't understand it. Q. Did you ever discuss during you annual board meetings, what the company was doing? A. Oh, yes. Q. And what were... A. Well...I've got to qualify that yes...because basically Attorney Sulzbach: No... Q. He can explain. Attorney Sulzbach: No...The question is yes or no... Q. Attorney Sulzbach...Attorney... Attorney Sulzbach: ...until you ask another question then his answer is yes or no... Q. Attorney Sulzbach...This is not a running dialogue... after I am done ...then you can counsel him.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 19 of 220

Attorney Sulzbach: ...he can't answer beyond yes or no. A. Yes. Q. And what were those discussions. A. The discussions consisted of a sentence, things are the same and will continue, we'll do the best and Robert said I'll do the best I can. Q. When was the last time you had an annual board meeting? A. Last year, I guess, I think it was last year. Q. So at some point for things to be the same, you would have had to have a discussion about what things were, correct? A. No we didn't discuss what things were, I simply left this up to Robert, he was running the company, and I let it go at that. Q. Okay, the company when you invested in it, what was your understanding of the money that you invested, what was going to happen to all that money? A. Used for the functions of the company. Q. And what were...the functions of the company that you said...were to install signs and sell advertising? A. Uhm...hopefully. Q. And. were you aware whether Robert was going to go out and hire employees to work for the company? A. Robert never asked me, and what he did, was what he did. Q. So at none of the board meetings were you asked to approve employment contracts? A. Approve what? Q. Employment contracts?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 20 of 220

A. No, I was not. Q. Were you asked to approve salaries for any of the officers of the company? A. No. Q. Were you asked to approve any advertising material promoting the company? A. No. Q. So when you...do you recall...now...now that we've spoken about it for a few minutes, do you recall the amount of money that you first invested in OSM? A. No. Not really at the moment. Ahh...What was the question again? Q. Do you recall the amount of money that you first invested in OSM? A. No, I don't. Q. Sir, if you need a break or if you need water just... A. I beg your pardon. Q. ...if you need a break or need to take some...a drink of water or use the restroom at any time..feel free. A. No...I'm... thank you I'll just sit here. Q. Did you ever sign any documents in reference to the money that you loaned OSM? A. No. Q. And when you invested and purchased the 93% of stock, did you ... A. Oh (inaudible)...uh Q. ...receive any stock certificates back? A. The stock certificates I believe are held in the lawyer's office but I didn't, Ididn't take them. Q. And what lawyer, do you recall what his name was? A. That was sometime...I don't recall.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 21 of 220

Q. And you test...you said that you don't have any documents relating to any loans that you made to the company? Attorney Sulzbach: He didn't say that. Is the question does he have documents? Q. Do you want me to replay the videotape? Attorney Sulzbach. No...Uh... (inaudible) Q. I asked him if he signed any documents for any loans he clearly said "No." Attorney Sulzbach: That's what he signed. Q. That's what I'm asking. A.That I signed documents? Q. Yes. A. No. Q. Okay. Do you have any loan documents that were signed by OSM? A. The stock certificates, I believe, were signed by OSM. Q. Okay. So you have stock certificates. Do you have any loan, other loan documents, promissory notes, or anything of any nature, for money that you gave, that you lent to OSM? A.Yes there are some notes outstanding. Q. And who keeps track of the notes that are outstanding? A.They are at the lawyers office too. Q. Okay, so three or four weeks ago when you loaned them three thousand dollars, what type of loan document did you sign...or did...was signed on behalf of OSM? A. Uhh...I...it's sort of an open loan up there, I believe, I'm not quite sure I think...I don't recall signing documents that time. Q. Okay. Is it fair to say that you just wrote a check and sent it to OSM?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 22 of 220

A. No. I didn't write a check. Q. How was the money transferred? A. A wire. Q. And that was wired out of your Citizens account? A. Yes. Q. And is that the same citizens account that you lent the money in 1997 and '98? A. Yes. Q. Okay. And prior to that three thousand dollar loan, when was the last time before that that you lent OSM money? A. I don't remember the dates. Q. Was it within the last year? A. I'm so (inaudible) not necessarily the year 2000, right? Attorney Sulzbach. Any year. A. Ya...Yes, there were other occasions. Q. Okay. Can we go off the record for one moment please? Unless you want to continue to tell me. You can go off unless you're... Q. Mr. Polansky, do you have your bank account number at Citizens bank on you? Do you have a bankcard or any records with you that will give us the bank account number for Citizens bank? A. No I don't. Q. Okay. And when can you produce records associated with those amounts of monies wired or checks written to OSM from 1996 to the present? How long will it take you to produce those records?

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 23 of 220

A. Uhmmm. I am not sure, a week or two I suppose, more or less. Q. And do you have any objection as to providing checking account statements which reflect... Attorney Sulzbach. That...wait a minute. That...that's a decision you will make through counsel. Q. Do you...do you have checking account statements that you maintain at your house? A. What's...what's... Q. Do you have checking account statements...do you get statements every month from Citizens bank? A. Yes. Q. Okay. And in those statements will be reflected the amount of money that was lent to OSM? A. Yes. Q. And how far back do your statements go that you have at your house, do you recall? A. Well, since the inception of the account as far as that goes, but uh...I'm not sure. Q. Okay, and was that that before1996, did you open that account? A. I don't really recall that..uhh... Q. Well, you testi...it was open in 1997 and '98, correct? A. Well, I think so I'm not sure. Q. Well you said earlier that's the bank that you used to, to lend money or to buy stock in 1997 and'98... A.Yes, yea, yea. Q. So, the account was open at that point, correct? A. Uh, probably, I'd have to check that. I'd have to go back and look. Q. Okay. Was there another bank...

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 24 of 220

A. As a matter of fact, I don't know if I...I don't know if I kept the original statements anyhow, that goes a long ways back and I think about three years is about that...otherwise you get really cluttered up with it. Q. Do you have a record keeping system for the amount of money in total you lent to OSM? A. I have a very informal system. Q. Okay, when you say it's very informal, what is that, your memory? A. My memory and just copies of the statements which I'd have to start digging out. Q. Okay. As you sit here today, do you have any idea how much money is owed to you by OSM? A. Umm. Several hundred thousand. Q. Do you recall... and you don't...that's wrong ...do you recall signing a promissory note on March 7, 1994? A. I signed a promissory note? Q. Do you recall signing a promissory note with OSM Communications? A. No. Q. Okay. Do you recall lending OSM Communications $365,800 in 1997? A. I don't recall the amount. Q. Do you recall lending OSM Communications $221,225 during the time period from 1993 to 1996? A. I don't recall these amounts. Q. Does that seem like too much money to have lent OSM Communications? A. Uh...More or less in the ballpark. Q. Okay.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 25 of 220

A. I'm not sure. Q. So that's... those numbers I just read to you total $587,025. A. Well... Q. Okay. And I ask you if you sat here today if you rec...if you, if you had an idea how much money was owed and you said several hundred thousand. Do you recall giving that answer? A. Well, it turns out good. Q. Okay. So 587 thousand is... means the same to you as several hundred thousand? A. Not necessarily. Q. Okay. Umm...and you sent ...you testified you sent, the last money you sent to OSM was a wire. Correct? A. Yea. Q. Okay. Was your normal course of lending money to OSM by sending wires? A. Usually. Always. Usually. Q. And though the amount of those wires is reflected on your statements, correct?...checking account statements? A. Probably. Q. And you don't have another set of books or any other type of record keeping where you've written down and totaled up the amount of money you've lent? A. No. Q. Okay. When money was asked to be lent to OSM by Robert to you, was that done by telephone or by writing? A. Uhh...telephone. Q. Was it always done by telephone or was it always done by writing.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 26 of 220

A. Possibly. Q. Okay. What's the percentage of times that you loaned money that he just called you? What would you say the percentage was? A. The majority. Q. Ninety-five percent? A. I couldn't say exactly. Q. Okay. Could you give an estimate? A. It would be vague.. Q. And, what was the procedure? You would call your bank and then wire money? How would the wire work? A. Yea...They... I would call the bank or I'd go down there at times. Q. And was there a local branch that you would you use for Citizens bank in Massachusetts? A. Yes...yes. Q. What's the address of that branch? A. The what? Q. The address...the address... the physical address of the local branch? A. Um...it's just I don't know the exact number. It was at Newtown Center. Q. And is there a bank officer that you would speak with there. A. Uhh... Several of them. Q. Okay. What's one of the names of any of the officers that you dealt with at the bank? A. Uhh....one was Mark. Q. Do you know Mark's last name? A. No I don't.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 27 of 220

Q. Do you know any of the last names of any of the bank officers that you dealt with? A. I can't recall at the moment off hand. Q. That's fine. We asked you before about, that you lent the $3,000...When was the last time before that $3,000 that you lent OSM money? A. I don't recall exactly. Q. So between 1997 and '98, to three months ago, when you lent them $3,000, there were occasions where you lent OSM money? A. Yes. Q. Okay. And how often would you lend OSM money? A. Whenever the company ran short. Q. Was it once a year... A. Because there was no other money which we uhh....which Robert was trying to get. I beg your pardon... Q. Was it once a year, twice a year, how often would you estimate? A. Oh...frequently. Robert Polansky: Excuse me. We have to come back... Q. If you'd like to break, we... Robert Polansky: Would you mind taking a break? Q. Absolutely. OFF THE RECORD 2:40 P.M. ON THE RECORD 2:46 P.M. Attorney Sulzbach: Since we're going to make the production that we've agreed to produce and continue this deposition...um...things are getting urgent back in Massachusetts and my client is

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 28 of 220

very tired having been really ready to start this thing uh...in mid day and uh...so I think what we ought to do is adjourn this to the next period we'll make our production and, and uh... will get it down...and I'm hoping that we can do it here rather than Boston. Q.The location is... is whatever's suitable for Mr. Polansky. A. Well... Q. I have no objection to...to being in Boston or here. A. My wife uh...is not well...is a...and a... Attorney Sulzbach: But...but we'll work that out ...so let's... Q. We'll work that out...we'll work that out through the attorneys. Attorney Sulzbach: Yes. So, we'll agree on our production and we'll make that. A. And I barely got away today, it's just that I had (inaudible)... Q. Ca...can we, can we obviate the need for court intervention , and, and it's whatever statements he has the last three years...or, or, or... Attorney Sulzbach: Well, any statement that relates to OSM. Q. To any monies lent from Citizens Bank to OSM. Attorney Sulzbach: to OSM. Q. Correct. And any wires. Attorney Sulzbach: Yes, yes. Q. Okay. Fair enough. And we'll try to do that uh...within the next few weeks, whenever it's arranged through counsel. Attorney Sulzbach: Yea, exactly, yea. Q. Okay. This concludes uh... this portion of deposition to be continued to a date that's agreed upon by both attorneys.

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 29 of 220

Attorney Sulzbach: And to that end, I think we're going to need a continuance on our summary judgment period once again. Q. Um...Yea, well, we can speak about that off the record...I mean that's...I'm not sure even what the date was for the summary judgment. Attorney Sulzbach: What it was before? Uh...the beginning of April. Q. Beginning of April...Maybe we should uh...agree... Attorney Sulzbach: Push back to the end of April? Q. Uh...well...if, if... Attorney Sulzbach: I mean, I'll do it as fast as I can. Q. If you're going to provide me with the statements... Attorney Sulzbach: Yep. Q. Um...and he's made record, statements on the record uh, so, if you're going to limit to OSM I want to make sure there's no payments to Robert or Anne Polansky either of the ...uh...defense. Attorney Sulzbach: Those I really...I, I, I will go to the judge on those because he... Q. Okay. So go to the judge on that we'll just have a conversation and we'll ask him the necessity of those records and... Attorney Sulzbach: If you tell me how they're relevant. I mean he's, he's, he's Robert's father and Anne's father-in-law. Q. They're defendants, they're all defendants in a federal lawsuit. Attorney Sulzbach: Correct, but the lawsuit has a subject matter and tell me how this relates to that subject matter or is likely to lead to anything that's relevant. Q. Piercing the corporate veil because there's no formality...uh...I'm, I'm not even going to

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 30 of 220

recite that. I'll talk about this, uh, off the record and with counsel and if it needs to go to, uh, motion work, I'd be more than happy to do that, so... Attorney Sulzbach: Okay. Q. So...uh, so we're going to continue this to a date to be set within the next two weeks plus or minus a few days, uh, what can be arranged through counsel. And that concludes this portion of the deposition. OFF THE RECORD TIME: 2:50 P.M. END OF RECORDING

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 31 of 220

CERTIFICATE STATE OF CONNECTICUT COUNTY OF MIDDLESEX } }

I, Kari Payette, a notary public in and for the Sate of Connecticut, do hereby certify that the foregoing record is a correct and verbatim computer aided transcription of the proceeding here and before set forth. I further certify that I am neither counsel for, nor related to, or employed by, any of the parties in the action in which this proceeding is taken; and further certify that I am not related to, nor an employee of, any attorney or representative employed by the parties thereto, nor am I financially interested in this action. In witness whereof, I have hereunto set my hand and affixed a notarial seal this date January 3, 2005. /s/ Kari Payette Notary Public My commission expires:

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 32 of 220

EXHIBIT B TRANSCRIPT OF ROBERT POLANSKY DEPOSITION

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 33 of 220

1

1 2 3 4 5 6 7 8 9

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

* * * * * * * * * * * * * * * * DONALD WAINRIGHT, ET AL * Plaintiffs * * VS. * * O.S.M. COMMUNICATIONS, INC., * ET AL, * Defendants * * * * * * * * * * * * * * * * *

Civil Action No. 3:01CV2158 (WWE) December 14, 2004

10 11 DEPOSITION OF ROBERT E. POLANSKY 12 13 Appearances: 14 FOR THE PLAINTIFFS: 15 16 17 18 19 20 21 22 23 24 J. MICHAEL SULZBACH, ESQ. 385 Orange Street New Haven, Connecticut 06511 LAW OFFICES OF ROBERT E. ARNOLD, LLC 295 Bassett Street New Britain, Connecticut 06051 By: ROBERT E. ARNOLD, ESQ. LAW OFFICES OF KAREN HALEY & ASSOCIATES, LLC 419 Whalley Avenue, Suite 105 New Haven, Connecticut 06510 By: KAREN E. HALEY, ESQ. FOR THE DEFENDANTS, ISRAEL POLANSKY and ANNE POLANSKY:

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 34 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 35 of 220

2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Appearances Continued: FOR THE DEFENDANT, ROBERT E. POLANSKY: ROBERT E. POLANSKY, PRO SE 3 East 69th Street New York, NY 10021

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 36 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 37 of 220

3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

. . .

Deposition of ROBERT

E. POLANSKY, taken on behalf of the Plaintiffs in the above-entitled cause, before Lisa Graziano, a Licensed Shorthand Reporter and a Notary Public in and for the State of Connecticut, County of Hartford, held on December 14, 2004, at 11:20 a.m., at the Law Offices of J. Michael Sulzbach, 385 Orange Street, New Haven,, Connecticut, at which time the parties were represented as hereinbefore set forth. . .

STIPULATIONS

All objections, except as to form, are reserved until the time of trial. Formalities as to notice and proof of the authority of the Notary Public are waived. The reading and signing of the deposition are not waived.

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 38 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 39 of 220

4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 BY MR. ARNOLD: Q A Q A as exhibits.

ROBERT E. POLANSKY Having been called as a witness, was first duly sworn and testified on his oath as follows:

MR. ARNOLD:

Let's pre-mark these

(Whereupon, the documents were received and marked as Plaintiff's Exhibits A through Y for identification.)

DIRECT EXAMINATION

Good morning, Mr. Polansky. Good morning. Where do you actually reside? I reside at 3 East 69th Street in New York

City, Apartment 2-A. Q A Q Zip code? 10021. You filed an appearance in federal court in

this case with a Weston, Connecticut address? A Yes.

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 40 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 41 of 220

5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Q address? A

Who lives at that Weston, Connecticut

Robert Ruben is cousin Robert.

He

consented to take delivery of my Connecticut documents. Q Have you, in fact, received any mail that's

delivered to that address? A No. The fact is, Robert right now is

having a triple bypass in New York City, so anything you sent in the last week would not have gotten to me yet. Q Have you changed your address with the

court to 3 East 69th Street? A Q A No. Okay. Not as 9 Aspertuck Lane, Weston,

Connecticut. Q Is it your intention to change your address

with the court so you can receive important notices from the court? A It depends. I will talk to Robert in the He has a His wife

next day or two.

I see no reason.

complete staff that's there of people.

lives up there with him, and I don't know why I

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 42 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 43 of 220

6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

wouldn't be getting everything on a timely basis. MS. HALEY: getting returned. THE WITNESS: MS. HALEY: Does it? Because it keeps

Yeah. Maybe I'll have to

THE WITNESS:

put, "In care of Robert Ruben" on it because we were just using the address, which is what he said to do. And he had said that he had --

BY MR. ARNOLD: Q Who do you reside with in the 3 East 69th

Street address? A Q correct? A Q I do. You have made a representation to the court Have My wife of thirty-two years, Anne Polansky. You currently represent yourself, is that

that you were going to be hiring an attorney. you, in fact, endeavored to hire an attorney? A Q A I'm in negotiations with an attorney. What is that attorney's name? Mike Tagliatela. Let me give you the

precise spelling. Q

It's Mike Tagliatela.

Where is he located?

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 44 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 45 of 220

7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

A Q

In this building here. Does he work with Attorney Michael

Sulzbach? A No. He's an independent. There are two I'm not

partners in the firm, I understand.

familiar with the details of the firm. Q A Who's the other partner in the firm? It's Mike Tagliatela and Mark Tagliatela. MS. HALEY: Did you say Mark? It is an with an R,

THE WITNESS: yes. It's Mark Tagliatela.

BY MR. ARNOLD: Q A Q So it's Mike and Mark, correct? Yes, Mark and Mike. And do you anticipate them filing an

appearance in your case? A We're talking about it. In the near term

we will have a decision on it. Q A Q Have you given them any retainer funds? No. You're a defendant in the action which You're aware of that,

brings you here today. obviously? A Yes.

I'm aware, yes.

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 46 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 47 of 220

8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Q

Okay.

And you know who Donald Wainright

and Deborah Russo-Williams are, correct? A Q Yes. I'm going to start with Donald Wainright When did you

and discuss his case against you. first meet Donald Wainright? A Q Approximately 1989.

What were the circumstances surrounding

your meeting him? A He was hired by one of my people to work in

the software development area. Q A Q And that was for what company? In-Store Advertising. I'm going to show you what's been marked

Plaintiff's Exhibit C and ask that you take a look at that, please. MR. SULZBACH: of these new documents? MR. ARNOLD: New documents? Yeah. In other Do you have copies

MR. SULZBACH:

words, this is not one I've seen, not one that's been produced before. Polansky produced it. THE WITNESS: Mr. Wainright should I don't believe that Mr.

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 48 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 49 of 220

9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

have produced it at his deposition. MR. ARNOLD: Prior to -I just want to get a

MR. SULZBACH: copy. MR. ARNOLD: you can have copies made.

Prior to us leaving,

This is your office.

With your allowance, you can have copies of all of these exhibits which will be attached to the transcript. But it's your office. As long as your

copying machine is available, you're certainly welcome to have that. THE WITNESS: MR. SULZBACH: question? BY MR. ARNOLD: Q You're familiar with this employment Answer it, right? What's the

agreement for Donald Wainright? A Yes. It appears to be a Xerox copy of the

employment agreement, yes. Q Okay. Do you have a signed original

somewhere in your files? A Q Probably. I don't know.

Well, in looking over that agreement, do

you think that this has been altered from the

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 50 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 51 of 220

10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

original or -A It's hard for me to say. It looks right,

but -- it looks right.

I don't have the original in

front of me, but it appears to be the document. Q And that's your signature that appears at

the end of the document, correct? A Q Appears to be my signature, yes. Well, either it's an exact replica of your

signature or not. MR. SULZBACH: Wait a minute! If

he doesn't know or if he does know, it's up to him. He's the only one that can know the answer. MR. ARNOLD: representing him. MR. SULZBACH: I represent a party I'm sorry, you're not

and I have rights to have the questions asked and answered properly. MR. ARNOLD: style? According to your

I'll ask the questions the way I want to ask

the questions without any interference or direction from you, Attorney Sulzbach, and we'll get through this a lot quicker. So, every time that I make a

comment, you are going to object to my questions, this is going to take all day.

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 52 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 53 of 220

11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 proceed, please?

MR. SULZBACH: THE WITNESS:

Fine. Mr. Arnold, can we

I will depend on Mr. Sulzbach and

I will listen to him, but I expect it to go on smoothly. It appears to be an accurate copy of the

employment agreement with my signature, yes. BY MR. ARNOLD: Q And the date next to your signature is

October 4, 1996? A Q Yes. Okay. So, you met Donald Wainright in 1989

and the employment agreement is dated 1996 with OSM? A Q Yes. When Donald Wainright was hired in 1989,

what company did he work for? A Q In-Store Advertising. And what was your capacity at In-Store

Advertising in 1989? A Q Founder and CEO. Who else was on the Board of Directors of

In-Store Advertising? A Merrill-Lynch Capital Markets, Steve

McCormick; Jeff Walker, head of Capital Ventures, now head of Chase Ventures; Kurt Johnson, the son of

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 54 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 55 of 220

12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Sam Johnson of S.E. Johnson family; Kouzi (phonetic spelling) Wadia, W-A-D-I-A, of Technology Funding; and Bruce Maggin of ABC Cap Cities, M-A-G-G-I-N. Q A Q A Q A Was Israel -I'm sorry, and Israel Polansky, yes. As well as yourself, correct? Yes. And who are the major shareholders? Major shareholders were the Venture

Capitalists. Q And what was the percentage of ownership

that you had in terms of share? A Q A Q Four percent. How about Israel Polansky? Four percent. And what was Israel's role on the Board of

Directors? A He was a member of the board. He was on no

committee. Q point? A Q No. At some point, In-Store Advertising -- and Was he an officer of the company at any

if I may for the duration of this deposition refer

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 56 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 57 of 220

13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

to it as ISA. A Q correct? A Q At some point, yes. Okay. And what were the circumstances that It's ISA. ISA, okay. Ceased to exist, is that

led to ISA ceasing to exist? A 1994. In-Store Advertising ceased to exist in You have to be a little more precise with What do you mean "ceased to exist"?

your question. Q

Well, was there any type of Security and

Exchange Commission investigation into ISA? A Q A to '93. Q Okay. And what was the reason for the Yes, there was. Okay. When did that occur?

19 -- to the best of my recollection, 1992

investigation? A Alleged improprieties with the public

offering. Q And was that in reference to the

advertising for sale of ISA? A sorry -No. What do you mean "advertising"? I'm

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 58 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 59 of 220

14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Q A Q

Was the company trying to be sold? No. So, what was the underlying background of

that investigation? A I'm confused as to where you're going. Why

don't you be a little more precise? Q I want you to be specific about what the

charges were against ISA. A Charges were that some of the numbers in

the public offering weren't precise. Q A Q A Q A Q Who prepared the public offering? The CFO and his group. Who was the CFO? John Capps. Capps? C-A-P-P-S. As the founder and CEO, where were the

funds obtained to invest in ISA? A Q A Q At what stage? At the initial stage. Israel Polansky. In exchange for the four percent of stock

ownership, he invested a certain amount of money? A Yes.

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 60 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 61 of 220

15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Q

In exchange for your four percent stock

ownership, did you put money or was that in the working? A Q for ISA? A Q No. Did you ever consent to the entry of a It was a combination of both. Did you work on the public offering at all

permanent injunction prohibiting you, Robert Polansky, from any further violations of the anti-fraud and record keeping provisions of the Securities Act of 1933? A Q A Q There is no such -- say that again. In September of '96, did you consent -No, I did not consent. Okay. Was an entry made of a permanent

injunction against you in 1996 by the SCC? A Q No. There was no action taken against you at

all by the SCC in 1996? A signed. There was a consent order which was It's not an injunction. It carries no

prohibitions in any way, shape or form. Q And what was the consent order? Tell me

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 62 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 63 of 220

16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

what the specifics of it were, if you can recall. A It says that, "We don't know if you did

anything wrong, but if you did, don't do it again." It is what is called a no proof, no substance, no reality to allegation kind of document. Q And shortly thereafter -- withdrawn. ISA filed for bankruptcy at some point? A You're saying the date was 1996 on that? I

think I would research that date a little. Q A Q A Was it 1993? I don't know the date. Okay. No. Did ISA file for bankruptcy?

Well, it was a -- no, it didn't file

for bankruptcy. Q At some point they were taken over,

acquired by another group called Electronic Marketing and Retail Communications, is that correct? A Q A company. Q And then eventually that business was taken Yes. And who owned that company? The board, the same board owned that

over by Valassis Communications, Inc.?

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 64 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 65 of 220

17

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

A Q

Yes. And what was your relationship with

Valassis? A Q A Q A None. Was it sold to Valassis? Yes. And then at some point OSM bought Valassis? Yes. MR. SULZBACH: THE WITNESS: Bought Valassis? No, no. Thank you. Thank

We bought what remained of ISA from Valassis. you. I didn't buy Valassis.

BY MR. ARNOLD: Q And in 1996, who comprised OSM, principals? MR. SULZBACH: directors? MR. ARNOLD: directors. THE WITNESS: Israel Polansky. BY MR. ARNOLD: Q And as a condition of the acquisition of Robert Polansky and Yes, officers and You mean officers or

Valassis In-Store Marketing, who required you to obtain a $250,000 line of credit?

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 66 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 67 of 220

18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

A Q A

Valassis. And how was that line of credit obtained? It was obtained from Ameristar and included

in the purchase and sale agreement. Q A Q A And who was Ameristar? It was a financial organization. Who owned Ameristar? Joe Messina and another man. I don't

recollect his name. Q Where were they located at the time that

business operations -A They were located in the same building that

I was in in the Newsweek Building on Madison Avenue. Q And do you have any records or memoranda or

notes or any files that reference Ameristar and the $250,000 line of credit? A Q A No. Are there any -The proposal is in the purchase and sale

agreement, which I gave you. MR. ARNOLD: record for a second? (Off-the-record discussion.) MR. ARNOLD: Back on the record. Can we go off the

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 68 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 69 of 220

19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

You can mark that. (Whereupon, the document was received and marked as Plaintiff's Exhibit Z for identification.) BY MR. ARNOLD: Q You've handed me what's been marked as Can you show me in this

Plaintiff's Exhibit Z.

exhibit where there's a reference to the line of credit? A Q (Witness so doing.) Did you ever draw any funds from Ameristar

to operate OSM? A Q No. In relation to the funding to operate OSM

at that time, who was funding all of the operations? A so. Q I'm going to show you what's been marked as Israel Polansky invested the funds to do

Exhibit T and ask if you recognize that? A Where did you obtain this, if you don't

mind my asking? Q A Do you recognize that document? I won't answer until you tell me where you

obtained this document.

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 70 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 71 of 220

20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Q A

Is that your signature on the document? It's a highly confidential document which How did you obtain this document?

is not public. Q

Mr. Polansky, is that your signature at the

bottom of that page? A Q A Q It appears to be, but this is a Xerox copy. Let me explain how a deposition works. Let me explain to you -I will get the federal judge on the line

right now. A Q A Q You may do that. Your threats --

It's not a threat. I asked you a question. You do not have a right to ask any

questions. A You don't have a right to use confidential

documents which are not privy to you and you should not have this. Q Is that your signature at the bottom of

that document? A Q not? A It appears to be. It's a Xerox copy. It Where did you get that? Are you going to answer the question or

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 72 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 73 of 220

21

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

appears to be. Q

Where did you get that?

I'm going to show you what's been marked Is that your signature that appears on

Exhibit U.

the document? A Once again, this is from a minute book,

which was not made public, and how did Mr. Wainright or you get ahold of this? Q Do you have these documents in your

possession? A are. Q Not now, I don't. I don't know where they

I don't have these documents in my possession. Is that your representation of your

father's signature on that Exhibit U? A Q Yes. I'd like to show you what's been marked as

Exhibit R. A Wait a second, please. This one was

produced in the minute book, yeah. MR. SULZBACH: THE WITNESS: page. You did have it. But not the first

The first page was -- I'm sorry, next

question, sir? BY MR. ARNOLD: Q Are you ready, Mr. Polansky?

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 74 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 75 of 220

22

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

A Q

I'm ready. I'm going to show you what's been marked as That's the Board of Directors and

Exhibit R.

organizational chart for OSM? A Q Yes. And it shows that Israel Polansky is

involved in the operations? A This was a document for investor pitch to This was a proforma document and it was

GE Capital.

taken from that proforma as a possibility for the future. Q May I ask where you obtained this, too? Mr. Polansky, you're not allowed to ask any It will go a lot easier -I think I produced that, too.

questions. A Q

Okay, go.

I'd like to show you what's been marked as

Exhibit S. A This is the first page of three pages that This was part of

I have submitted to you as well.

the same meeting for GE Capital, where they were asking if they provided money who would potentially be the organizational structure. I have produced

that document as well, except mine is a three pager, not just the front page. Q So, in the first paragraph, where it

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 76 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 77 of 220

23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

mentions some language in reference to Israel Polansky, can you read the second paragraph and the third paragraph to me, please? A "Recognizing the potential of the company,

he moved rapidly to purchase Valassis In-Store Advertising from Valassis in April, 1996." Q A And the last paragraph is? "A knowledgeable and senior statesman, he Yes,

brings a wealth of experience to the company." he was a director of OSM. Q So, he actually participated with the

operation -A No, he never participated with the

operation. Q A Q Let me finish my question. Of Valassis? No. What?

Don't put words in my mouth.

Did he actively participate in the

operations of Valassis In-Store Advertising? A No. In no way, shape or form. MR. SULZBACH: question. BY MR. ARNOLD: Q So, he served as president of the Atlantic Answer the

Paper Box Company?

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 78 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 79 of 220

24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

A Q

Yes. And it says he put up the original $500,000

to start In-Store Advertising, ISA? A Q Yes. And he served as a member of the Board of

Directors from 1986 to 1991, correct? A Q Yes. Okay. Did he invest other money other than

the original $500,000? A No. "Committed to restaging of the venture

which did close to $20,000,000 under his leadership, he has aggressively put together a mixture of the old team and new to drive the business." Q So, back to Exhibits T and U, I'm showing

you Exhibit T. A Q Yes. What is your understanding of what that

exhibit means? A It's just the record of the investment

dollars that Mr. Polansky put into the company. Q Mr. Polansky pointed several times to

something on the document, correct, Mr. Polansky? A Yes. The 12/31/97, in terms of an overlap

that I provided to you.

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 80 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 81 of 220

25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Q

Okay.

And since 12/31/97, he's given other

money to OSM as well? A Q Yes. All right. And what records do you have

that show the amount of money that he's invested since 1997? MR. SULZBACH: If it's something

you produced, you should go to the documents that you gave them. THE WITNESS: you. BY MR. ARNOLD: Q you. A Q A I produced it for you. Here's the pile of documents. You're on your own. You can find your own You have a stack of papers in front of I produced that for

18 19 20 21 22 23 24

this time.

Should I find it for him? MR. SULZBACH: Off the record.

(Off-the-record discussion.) MR. SULZBACH: What's the question? THE WITNESS: how much money was put in. Each year it details Back on the record.

It was probably -- see,

POST REPORTING SERVICE

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 82 of 220

HAMDEN, CT

(800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 83 of 220

26

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

this was -- I think this was done, yeah. '97.

See that's

At the end of each minute meeting, you know, So, the structure is such.

it's the topic, yeah. You have that one.

That's what you just showed me.

I'll produce everything. BY MR. ARNOLD: Q When's the last time that you had a Board

of Directors meeting for OSM? A Q 2000. I think in 2000.

Did you ever sign your father's name to any

of the shareholder meeting records? A Q No. I'm going to show you the June 10, 2000

waiver of notice of the meeting of shareholders of OSM Communications, and at the bottom of that page there's two signatures, one for Robert Polansky, one for Israel Polansky? A Q line? A Q I don't need to, no. Was he present in June 2000 to sign that Right. Did you sign your father's name on that

document? A Of course. Well, I don't know if he was

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 84 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 85 of 220

27

1 2 3 4 5 6 7

present the exact day.

When the notes were

produced, he was asked to put his signature on it. I don't know if it was produced the exact same day. Israel Polansky was the investor and I did once in a while see him. Q Do you recall the testimony of Israel

Polansky that the Board of Directors meetings all

8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

occurred by the phone? A Q I don't recall that at all. Did any Board of Directors meetings occur

over the phone? A I don't think so. I think he actually came

into the city and we had a meeting right at the company offices, which was once a year. I mean, I can

after -- I think they were all at the office.

go through that myself, but I think they were all at corporate offices. Q Would you like to look at the minute book,

Mr. Polansky? A Is that what they say? Okay, yeah.

Office, yeah. Q So, it's your testimony that he came into

New York in June of 2000 for a meeting? A Yes.

POST REPORTING SERVICE

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 86 of 220

HAMDEN, CT

(800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 87 of 220

28

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Q

And it's also your testimony that none of

the annual shareholder meetings occurred over the phone? A No. Not to my recollection. I can't --

it's really what's stated there.

We're talking five

to ten years ago, to the best of my recollection at this time. Q Okay. Let's focus back on Mr. Wainright.

I'd like to show you what's been marked as a group, Plaintiff's Exhibit B, which is a copy of checks and bank statements, and ask you to look through that and see if you recognize any of those checks? A wrote. These seem to be copies of checks that I And these bank statements, these were sent I don't know how I would have But let

to Donald Wainright. ever seen them. me see.

I don't recollect those. Let me just check

This was 1997.

something.

I'm sorry, bear with me.

See, in 1997 In that year, Yes,

these were several returned checks.

Mr. Wainright got $106,000 that did clear.

this didn't, but in 1998, here's a check that didn't clear. MR. SULZBACH: Wait! I think the

only question was whether you could identify the

POST REPORTING SERVICE HAMDEN, CT (800) 262-4102

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 88 of 220

Case 3:01-cv-02158-WWE

Document 150-2

Filed 12/12/2005

Page 89 of 220

29

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

checks and the bank statements. THE WITNESS: copies. written. These are Xerox

They appear to be checks that I've But they appear to be copies of checks

that I had written, but I don't have the originals. MR. SULZBACH: THE WITNESS: MR. SULZBACH: these since he can't identify? MR. ARNOLD: of checks. Well, there's copies Can I see those? Yes, sir. Why don't you split

There's photocopies of the checks

attached to each page. THE WITNESS: received, correct? MR. ARNOLD: That's correct. But he said he That Mr. Wainright

MR. SULZBACH: doesn't know. MR. ARNOLD: page. No, that's fine. MR. SULZBACH:

You're flipping each

So far the only

21 22 23 24

checks that I found are at the beginning and at the very end. THE WITNESS: There were seven

checks in total over the course of the four years,

Case 3:01-cv-02158-WW