Twin City Water Works filing involving FLDS Church

8/9/2019 Twin City Water Works filing involving FLDS Church

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in financial misconduct involving TCWW. However, LoManto did not do any analysis or offer

any opinions on these issues relating to Defendants. All of his analysis and opinions strictly

relate to TCWW. Therefore, his testimony is irrelevant, and should be excluded as more fully

described below.

ARGUMENT

I. STANDARD FOR DETERMINING THE ADMISSIBILITY OF NON-SCIENTIFICEXPERT WITNESS TESTIMONY.

District courts have the “responsibility of acting as the vigilant gatekeeper[ ] of expert

testimony to ensure that it is reliable.” United States v. Vera, 770 F.3d 1232, 1247 (9th Cir. 2014)

(further citation omitted). As such, this Court must ensure that expert testimony complies with

Rule 702 of the Federal Rules of Evidence, which states:

A witness who is qualified as an expert by knowledge, skill, experience, training,or education may testify in the form of an opinion or otherwise if:

(a) the expert's scientific, technical, or other specialized knowledge willhelp the trier of fact to understand the evidence or to determine a fact inissue;(b) the testimony is based on sufficient facts or data;(c) the testimony is the product of reliable principles and methods; and(d) the expert has reliably applied the principles and methods to the facts ofthe case.

Fed. R. Evid. 702 (2010). Thus, under this rule, expert testimony must be helpful to the trier of

fact and based on sufficient facts or data. It must also be “‘both relevant and reliable.’” Estate of

Barabin v. AstenJohnson, Inc., 740 F.3d 457, 463 (9th Cir. 2014) cert. denied , 13-1252, 2014 WL

1496421 (U.S. Oct. 6, 2014) (quoting United States v. Vallejo, 237 F.3d 1008, 1019 (9th

Cir.2001)). “Expert opinion testimony is relevant if the knowledge underlying it has a valid

connection to the pertinent inquiry. And it is reliable if the knowledge underlying it has a reliable

basis in the knowledge and experience of the relevant discipline.” Primiano v. Cook, 598 F.3d

558, 564-65 (9th Cir.2010) (quoting Daubert, 509 U.S. at 597) (citation and quotation marks

Case 3:12-cv-08123-HRH Document 575 Filed 02/05/15 Page 2 of 10


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omitted). The testimony must be the product of reliable principles and methods, and the expert

must reliably apply those principles and methods to the facts at issue. Fed. R. Evid. 702.

II. LOMANTO’S TESTIMONY IS NOT RELEVANT, RELIABLE OR HELPFUL TO

THE JURY.

Mr. LoManto’s testimony is neither relevant nor reliable in the present case. It is

irrelevant and unhelpful because it does not provide any opinions or analysis about any of the

Defendants in this case, but instead is entirely focused on a separate entity, TCWW. It is

unreliable because Mr. LoManto relies on inadequate facts and data as the basis for his opinions,

and because he uses poor methodology consisting of broad assumptions and a disregard of

contrary facts.

A. LoManto’s Testimony is Not Relevant.

Mr. LoManto’s testimony is not relevant in the present case because it consists of a

financial analysis of an independent non-party, TCWW, and provides no opinions or analysis

about any of the actual Defendants. This is made abundantly clear in Mr. LoManto’s deposition,

as the following examples demonstrate:

Q. Okay. You did a financial analysis of the records that you received from Twin CityWater Works; true?

A. That’s correct.Q. And you did not offer any opinion with respect to Hildale; correct?A. That’s correct.Q. You never offered any opinion with regard to Colorado City; true?A. That’s correct.Q. And you never offered any opinions with respect to Twin City Water Authority;

true?A. That’s correct.

Q. And you never offered any opinions and you have not been retained to offer anyopinions with respect to Twin City Power?

A. That’s correct.

Deposition of Mark LoManto (“LoManto Depo.”), November 14, 2014, 8:12-9:3, attached hereto

as Exhibit A.



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Q. The Department of Justice provided you no documents to do any type of analysisor formulate any opinions regarding any of the defendants in this case; true?

A. True. Isolated [TCWW].

LoManto Depo., 27:3-6. Additionally, LoManto did not show that TCWW is connected with the

Defendants in any way, as he admits in his deposition:

Q. [I]n no way did you ever connect any of the defendants with Twin City WaterWorks; true?

A. Correct. I was never given any financial information in regard to the cities.

LoManto Depo., 13:19-22.

Further, when Plaintiff contracted with LoManto to provide expert testimony in this case,

it explicitly requested that he opine on certain issues that would implicate Defendants. See, e.g.,

Statement of Work for Expert Witness, August 19, 2013 (“2013 Statement of Work”), ¶ 3,

attached hereto as Exhibit B.1 However, LoManto did not do any analysis or offer any opinions

on these issues relating to Defendants. If he had done so, his testimony might have been relevant

here. But since he did not form the requested opinions or any others that were tied in any way to

the Defendants, there can be no claim that his testimony is relevant.

Specifically, Plaintiff stated in its Statement of Work that it expected LoManto to do the

following:

1. Evaluate Defendants’ corporate and financial documents;2 2. Offer an opinion on the Defendants’ net worth and ability to pay a civil penalty;3 3. “[S]how that TCWW, with the Defendants’ knowledge and acquiescence, diverted

financial resources that could have been used to provide water to non-FLDS residentsin the Twin Cities”;4

4.

“[S]how the improper entanglement between the Cities and the FLDS Church”;5 5. “[S]how that the cities [sic] alleged justification for denying water connections to non-

FLDS members was, in fact, a pretext for discrimination.”

1 LoManto executed three versions of the Statement of Work on different dates, August 19, 2013, October 29, 2013,and August 17, 2014. Later versions changed some of the wording. The October 29, 2013 and August 17, 2014Statement of Work documents are attached hereto as Exhibit C and Exhibit D respectively.2 2013 Statement of Work, ¶ 3.3 Id.4 Id. at ¶ 2.5 Id.



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LoManto testified in his deposition that he did not fulfill any of these expectations:

1. Did not evaluate Defendants’ corporate and financial documents;6 2. Did not offer an opinion on the Defendants’ net worth and ability to pay a civil

penalty;7 3. Did not “show that TCWW, with the Defendants’ knowledge and acquiescence,

diverted financial resources that could have been used to provide water to non-FLDSresidents in the Twin Cities”;8

4. Did not “show the improper entanglement between the Cities and the FLDS Church”;9

5. Did not “show that the cities [sic] alleged justification for denying water connectionsto non-FLDS members was, in fact, a pretext for discrimination.”10

To summarize, Mr. LoManto only analyzed documents relating to TCWW and only gave

opinions relating to TCWW. He did not analyze any of Defendants’ financial documents, did not

offer any opinion or do any analysis about Defendants’ net worth or ability to pay a civil penalty

did not show that TCWW diverted money with any knowledge or acquiescence from Defendants,

did not show any improper entanglement between the Cities and the FLDS Church, and did not

show that the Cities’ alleged justification for denying water was a pretext for discrimination. Mr.

Lomanto’s Report is therefore irrelevant, and must be excluded.

B. LoManto’s Opinion Testimony is Not Reliable, and Not Helpful to the Jury.

Mr. LoManto’s opinion testimony is unreliable because it is not based on sufficient facts

and data and it is not the product of reliable principles and methods.

First, LoManto has relied on limited facts and data to reach his conclusions. LoManto

states in his report that he did not obtain most of the underlying “source documents” that would

have allowed him to analyze and verify accounting records. Expert Report of Mark LoManto

(“LoManto Report”), August 25, 2014, pp. 2-3, attached hereto as Exhibit E. He characterizes

the source documents as “essential to the bookkeeping and accounting process,” and “a vital part

6 LaMonto Depo., 27:7-15.7 Id. at 26:6-25, 27:16-28:1.8 Id. at 18:24-20:1, 29:2-20.9 Id. at 25:20-26:5.10 Id. at 50:23-51:9.



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of the accounting control process.” Id. While LoManto appears to blame TCWW for failing to

provide him with the source documents, he acknowledged in his deposition that Plaintiff could

have subpoenaed all such documents. See, e.g., LoManto Depo., 69:11-71:5. And further, under

the terms of the Statement of Work, the Department of Justice specifically tasked LoManto with

the responsibility to “advise us” concerning which documents to request. 2013 Statement of

Work, ¶ 3; see also LoManto Depo., 69:11-71:5.

LoManto states in his Expert Report and deposition that while the source documents

would have allowed him to trace possible diverted funds with a high level of certainty, without

such documents he was forced to rely only on assumptions, limited data, and an unauthenticated

letter. Rather than reaching a high level of certainty as to his opinions, LoManto was often forced

to rely on mere “plausibility.” For example, as to funds allegedly diverted to what is referred to

in the letter as “mother’s cell phone,” LoManto writes in his Report that:

However, as noted above, TCWW failed to produce most of the underlying sourcedocuments including the monthly vendor invoices and vouchers related to payments to South Central Communications. An invoice from atelecommunications provider would typically provide a description of the services

and listing of the types and amounts of communication charges per phone numberor account. It may also designate user names associated with each phone numberor account. Without the availability of a monthly invoice from South CentralCommunications, I could not attempt to determine which monthly phone chargeswere related to mother’s cell phones and which were related to TCWW business purposes. Therefore, given that the many of [sic] the other expenses detailed inthe Allred communication could plausibly be tied to expenditures reflected inTCWW’s transactions, I concluded that it was reasonable to accept JosephAllred’s estimate . . . .

LoManto Report, p. 14. In LoManto’s deposition, he describes the level of certainty he is

reaching when using the term “plausibly”:

Q. Now, when you say plausibly, what degree of certainty are you usingthere?

A. Uh, possible? Yeah, I would say possible.Q. Possibly could have happened, possibly couldn’t have happened? Don’t

know either way; right?A. Yeah.



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Q. 50/50?A. Yeah.

LoManto Depo., 156:5-12. LoManto also states that his degree of certainty regarding his

conclusion that TCWW diverted money to vehicles was 50/50. Id. at 195:8-11.

Further, LoManto relies almost exclusively on an unsubstantiated letter allegedly written

in 2006 in determining that funds were diverted from TCWW. He testifies that the letter was the

“jumping off point” in his attempts to match up possibly diverted funds with the limited financial

records he had available. Id. at 161:25-162:4.

LoManto’s methodology is also inadequate, as demonstrated in his deposition testimony:

Q. Well, let’s talk about the methodology used to come to your conclusionregarding these utilities and payments to utilities.

A. Okay.Q. You start, correct, with the statement in the [Allred] letter, true?A. Correct.Q. You see that Mr. Allred allegedly stated that there was [sic] payments of

almost $4,000 for home utilities; correct?A. Correct.Q. Then you look through data that you receive from Twin City Water Works;

true?A. True.

Q. And you try to find or match up data that would be comparable to that;correct?

A. Correct.Q. And then you assume that you find some data, where it says there’s [sic]

payments to Power, for power; correct?A. Correct.Q. And those payments for power don’t specifically state a well, and you

make the assumption they must have been for the home; true?A. That’s correct.Q. Not just pumps.A. I understand.

Q. They could use power for other things besides pumps; correct?A. Correct.Q. But you jump to the assumption that because there are payments that don’t

specify for power, that don’t specify a pump number, that it had to be forhome utilities; true?

A. True.Q. And then you say it directly correlates with the letter, even though it’s at

least $273 more than what is stated in the letter; true?A. That’s true.



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Q. And then you take the assumption and you expound upon it for seven moreyears; correct?

A. Correct.Q. So you take data for one-third of the time -- time period that you were

asked to analyze; correct?A. Correct.

Q. And you take data that you gathered from that one-third period of time;true?

A. True.Q. And then you just assume that it must be the case for the other two-thirds

period of time that you were asked to analyze; true?A. Yes. . . .

***

Q. You multiply that amount over the entire period that you were asked toanalyze; correct?

A. That’s correct.Q. And that was the methodology used to get to that conclusion?A. For that section, yes.

The flaws in this methodology are legion, ranging from the groundless assumptions, to the

disregard of contrary facts. LoManto leaps from one conclusion to another with very little

data or reasoning to connect the two. The Court must exercise its role as gatekeeper and

reject such blatantly unreliable testimony.

Finally, Mr. LoManto’s testimony will not be helpful to the trier of fact. His

financial analysis about an entity that is not a party to this lawsuit is completely unhelpful

to the finder of fact and would likely cause confusion. Mr. LoManto’s testimony should

therefore be excluded.

CONCLUSION

For the reasons stated herein, this Court should exclude the testimony of Mark LoManto.



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SUBMITTED this 5t day of February, 2015.

DURHAM JONES & PINEGAR

By /s/ R. Blake HamiltonR. BLAKE HAMILTONASHLEY M. GREGSONAttorneys for Defendants City of Hildale, UtahTwin City Power and Twin City WaterAuthority, Inc.



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2810

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SLC_2061850

CERTIFICATE OF SERVICE

I hereby certify that on the 5th day of February, 2015, I electronically transmittedthe foregoing document to the Clerk’s Office using the CM/ECF system for filing andtransmittal of Notice of Electronic filing to the following CM/ECF registrants:

R. Tamar HaglerEric W. TreeneLori K. WagnerSean R. KeveneyJessica C. CrockettAnika GzifaMatthew J. DonnellyUnited States Department of JusticeCivil Rights Division950 Pennsylvania Avenue, NW

Washington, D.C. 20530Attorneys for Plaintiff United State of America

Jeffrey C. MaturaAsha SebastianGraif Barrett & Matura, P.C.1850 North Central Avenue, Suite 500Phoenix, Arizona 85004Attorneys for Defendant Town of Colorado City, Arizona

/s/ Melani ThatcherAssistant



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© Az Litigation Support, LLC (480)481-0649

www.CourtReportersAz.com

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

United States of America, )

)

Plaintiff, )

)

vs. ) No. CV-12-8123-PCT-HRH

)

Town of Colorado City, )

Arizona; City of Hildale, )

Utah; Twin City Power; and )

Twin City Water Authority, )

Inc., )

)

Defendants. ) )

THE DEPOSITION OF MARK LOMANTO

(Videotaped)

Washington, D.C.

November 14, 2014

9:05 a.m.

(ORIGINAL)

PREPARED FOR: REPORTED BY:

Az Litigation Support, LLC

Marty Herder, CCR

DISTRICT COURT Certified Court Reporter

CCR No. 50162

2



I N D E X

Examination By: Page:

Mr. Hamilton 5

Mr. Donnelly 216

E X H I B I T S

No. 1 U.S. Department of Justice Statement of

Work For Expert Witness 9

No. 2 Report of Expert Mark Lomanto 14

No. 3 U.S. Department of Justice Contractor Costs

Proposal 30

No. 4 U.S. Department of Justice Statement of Work

For Expert Witness 31

No. 5 U.S. Department of Justice Financial Analysis

of Twin City Water Works' Fee Estimate for Expert

Witness Report and Testimony 34

No. 6 U.S. Department of Justice Statement of Work

For Expert Witness dated 8/17/14 44

No. 7 U.S. Department of Justice Contractors Costs

Proposal dated 8/17/14 71

No. 8 E-mail chain 73

No. 9 Invoices from Mark Lomanto 84

No. 10 Articles of Incorporation for Twin City Water

Works 119

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3



THE DEPOSITION OF MARK LOMANTO,

Taken at 9:05 a.m., on November 14, 2014, at the Offices of

THE DEPARTMENT OF JUSTICE, 1800 G Street, NW, Suite 7002,

Washington, D. C. 20503, before Marty Herder, Certified

Court Reporter, pursuant to the Rules of Civil Procedure.

COUNSEL APPEARING:

For the Plaintiff:

UNITED STATES DEPARTMENT OF JUSTICE

CIVIL RIGHTS DIVISION

BY: Matthew J. Donnelly, Esq.

950 Pennsylvania Avenue, NW

Washington, D.C. 20530

For the Defendants City of Hildale, Utah, Twin City Power

and Twin City Water Authority, Inc.:

DURHAM JONES & PINEGAR

BY: R. Blake Hamilton, Esq.

111 East Broadway

Salt Lake City, Utah, 84111

For the Defendant Town of Colorado City, Arizona:

GRAIF BARRETT & MATURA, P.C.

BY: Jeffrey C. Matura, Esq.

1850 North Central Avenue, Suite 500

Phoenix, Arizona 85004

Also present: Rick Sanborn, videographer

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4



Washington, D. C.

November 14, 2014

9:05 a.m.

P R O C E E D I N G S

THE VIDEOGRAPHER: This is the start of file one

in the video deposition of Mark LoManto in the matter of the

United States of America versus the Town of Colorado City,

Arizona, et al., filed in the United States District Court

for the District of Arizona, case number CV-12-8123.

Today's date is November 14th, 2014. The time on

the video monitor is 9:05 a.m.

This deposition is being held at the Department of

Justice, 1800 G Street Northwest, Washington, D.C.

The court reporter is Marty Herder on behalf of

Arizona Litigation Support L.L.C. The video camera operator

is Rick Sanborn on behalf of Rick Sanborn Legal Video.

Will counsel please introduce themselves and state

who they represent, beginning with the party who noticed the

deposition.

MR. HAMILTON: Blake Hamilton on behalf of

Hildale, Twin City Water Authority, Twin City Power.

MR. MATURA: Jeff Matura on behalf of Town of

Colorado City.

MR. DONNELLY: Matt Donnelly on behalf of the

United States.

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Case 3:12-cv-08123-HRH Document 575-1 Filed 02/05/15 Page 1 of 12


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THE VIDEOGRAPHER: Thank you.

Would you please raise your right hand.

MARK LOMANTO,

called as a witness herein, having been first duly sworn,

was examined and testified as follows:

BY MR. HAMILTON:

Q. Good morning, Mr. Lomanto. Is it Lomanto?

A. It is Lomanto.

Q. I want to make sure I pronounce that correctly.

Sir, have you ever had your deposition taken

before?

A. Yes.

Q. And how many times have you had your deposition

taken?

A. Uh, I would say approximately four or five times.

Q. And when was the last time you had your deposition

taken?

A. Uh, I believe maybe five or six years ago.

Q. Since it's been a few years, let me give you a

couple rules that will make this go a little smoother.

First of all, again, my name is Mr. Hamilton. I

just met -- well, actually, I believe I met you in the

summer when you were at the deposition --

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6



A. Correct.

Q. -- 30(b)(6) deposition of Twin City Water Works.

The most important thing that I'm going to tell

you, the most important rule that will help this go

smoothly, is that I'm not here to trick you. I'm here to

ask you questions.

If you can just provide me an answer to my

question it will make this process go much smoother.

If you don't understand my question, please let me

know and I'll rephrase it. But if you start to answer my

question I'll expect you to answer the question I'm asking,

not something that you want to talk about, but the question

I'm asking. Okay?

A. Understand.

Q. And we have a court reporter here who's taking

down everything that's said, so it's imperative for a couple

of things. First of all, he can't take down non verbal

acts, so if you are answering my question, you need to do so

verbally. He can't take down the shake of a head or an

huh-uh or uh-huh doesn't show up very good on the

transcript, so if you can provide a yes, no, or another

appropriate verbal response.

Does that make sense?

A. Yes, it does.

Q. The other thing is he can't take down more than

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one person talking at a time, so it's important that we do

not talk over one another. And I will give you the courtesy

of finishing your answer before I start my next question, if

you'll pay me that same respect.

Does that make sense?

A. Yes, it does.

Q. You understand that you were just administered an

oath here today?

A. Yes.

Q. And you understand that that's the same oath and

you're under the same obligations to tell the truth that you

would be if you were to testify in a court of law?

A. Yes.

Q. Is there anything or any reason why you cannot

tell the truth today?

A. None.

Q. Are you on any substances that would impair your

testimony in any way?

A. No.

Q. Do you have any type of medical conditions that

would in any way impair your testimony?

A. No.

Q. Sir, do you understand that you've been retained

by the Department of Justice as a witness?

A. I do.

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8



Q. And you've been retained specifically to offer

expert opinions; correct?

A. Correct.

Q. And these expert opinions are with respect to Twin

City Water Works; true?

A. That's correct.

Q. And you specifically did a financial analysis of

Twin City Water Works; correct?

A. I would phrase it a little differently. We did an

analysis utilizing Twin City Water Works' financials as that

-- as were provided to us.

Q. Okay.

You did a financial analysis of the records that

you received from Twin City Water Works; true?

A. That's correct.

Q. And you did not offer any opinion with respect to

Hildale; correct?

A. That's correct.

Q. You never offered any opinion with regard to

Colorado City; true?

A. That's correct.

Q. And you never offered any opinions with respect to

Twin City Water Authority; true?

A. That's correct.

Q. And you never offered any opinions and you have

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not been retained to offer any opinions with respect to Twin

City Power?

A. That's correct.

Q. And so you have been retained specifically to

offer opinions regarding Twin City Water Works and Twin City

Water Works financials only; true?

A. That's correct.

Q. And you understand that Twin City Water Works is

not a listed defendant in this case; correct?

A. Correct.

Q. And you would agree with me, sir, that you've been

paid approximately $130,000 so far in this case; true?

A. Uh, I know it's over a $100,000.

Q. Would you agree with me that it's over $125,000?

A. I recall it's over 100.

Q. Okay.

So you recall that it's over a $100,000; correct?

A. Correct.

Q. And you've been retained and paid over $100,000

and you've not offered one opinion about any defendants in

this case; true?

A. I was only asked to, uh, review Twin City Water

Works.

Q. Okay.

I'm going to hand you what we'll mark as Exhibit

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No. 1.

(Deposition Exhibit No. 1 was marked for

identification by the reporter.)

BY MR. HAMILTON:

Q. Sir, Exhibit No. 1 is what I understand to be the

first contract that you entered into with the Department of

Justice.

If you look at the very top of the page it says

U.S. Department of Justice, Civil Rights Division, Statement

of Work For Expert Witness.

Do you see that?

A. I do.

Q. If you look at the very back, there is a signed

page, with signatures from a Jessica Crockett and, I

believe, yourself.

Do you see that?

A. I do.

Q. Do you see that your signature was on August 19th,

2013?

A. Yes.

Q. If you go back to the beginning of the contract,

you would agree with me that you had this contract and you

executed this contract before you conducted any type of

financial analysis for the Department of Justice?

A. That would be correct.

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Q. And you had this contract before you formulated

any opinions?

A. That's correct.

Q. And you had this contract before you came to any

conclusions?

A. That's correct.

Q. And you had this contract and you executed this

contract before you authored your report; true?

A. That's correct.

Q. If you go down to the background section of the

contract, it states halfway down, in a sentence that starts,

in connection.

Do you see where I'm reading?

A. I do.

Q. It says: In connection with investigating its

claims, the United States uncovered evidence that Twin City

Water Works, the nonprofit water company with which Colorado

City and Hildale, collectively, Twin Cities, have a

contractual relationship to purchase culinary water, and at

least some of whose members were also government officials

likely engaged in financial misconduct.

Did I read that correctly?

A. I believe you did.

Q. All right. I'd like to discuss really quickly

portions of that sentence.

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First of all, when it says uncovered evidence at

the beginning, and then continues on saying that Twin City

Water Works likely engaged in financial misconduct, you were

given that prior to you performing any type of analysis;

correct?

A. I was given this document, yes.

Q. Right. You were given this contract with that

language before you did any type of financial analysis;

true?

A. That's true.

Q. And so in essence, the Department of Justice was

telling you that they had uncovered that Twin City Water

Works likely engaged in financial misconduct; true?

MR. DONNELLY: Form.

THE WITNESS: Uh, in the document, yes.

BY MR. HAMILTON:

Q. And you understand this was prepared by the United

States Department of Justice; true?

A. Yes.

Q. I mean, this was the contract that they sent to

you to have executed; correct?

A. Correct.

Q. You didn't create this document and send it to the

Department of Justice?

A. No.

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Q. Okay.

And so you started with that knowledge or that

assumption that Twin City Water Works likely engaged in

financial misconduct; true?

A. Correct.

Q. You see there in that sentence where it talks

about that there were some members, at least some members of

Twin City Water Works were also government officials; right?

A. Yes.

Q. The Department of Justice told you that Twin City

Water Works officials were government officials before you

started your analysis; true?

A. It's in the document, yes.

Q. And you had that understanding going in before you

did any type of analysis or formulated any type of opinions;

correct?

A. Yes, I had this document.

Q. Okay.

Yet, even though you had that piece of knowledge,

in no way did you ever connect any of the defendants with

Twin City Water Works; true?

A. Correct. I was never given any financial

information in regard to the cities.

Q. Okay.

You were also told in this that the Twin City

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Water Works had a contractual relationship to purchase

culinary water -- or contractual relationship with Hildale

and Colorado City in which Hildale and Colorado City would

purchase water, culinary water from Twin City Water Works;

correct?

A. Correct.

Q. And you were told this, again, by the Department

of Justice; correct? Before you started your analysis?

A. Yes. It was in the document.

Q. And you did nothing independently to correlate

that or connect those dots; true?

A. Let me understand. Meaning the -- confirm the

contract with the cities and the --

Q. Yes.

A. -- and Twin City Water Works?

Q. Correct.

A. No, I did not attempt to validate anything within

the contract, what was stated in the contract.

Q. You actually never saw the contract; correct?

A. Not until we began work.

Q. It's true that you don't list contract as one of

your relevant documents in your report; true?

A. I don't think that is true, sir. I thought that

would have been in the -- in the range of Bates stamps.

Q. Sir, we're going to mark a new exhibit. It's your

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report. We'll mark it as Exhibit No. 2.

A. Okay.



BY MR. HAMILTON:

Q. Sir, I've handed you what has been marked as

Exhibit No. 2, which is a copy of your report.

I'll apologize for the front page. I made a

little notation on the copy before I made the copy, so

you'll have a little black mark, but I think you can still

read your contract, or read your report; true?

A. True.

Q. If you flip back to Appendix I, page one,?

A. I think it's missing from here. I only see

Appendix 2.

Q. Sir, it's the one, two, three, fourth to the last

page.

A. Yeah, where the appendixes start, and the very

next page is Appendix 2.

Q. Sir, do you have a copy of your report with you?

A. I do.

Q. Okay.

Can you hand me Exhibit No. 2 back, please, sir,

the one that was marked?

A. This?

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Q. No, the one that was actually marked.

MR. HAMILTON: We're going to need to go off the

record just briefly.

A. Sure.

THE VIDEOGRAPHER: This concludes file one in the

deposition of Mark Lomanto. Off the record at 9:19.

(Brief recess taken.)

THE VIDEOGRAPHER: This begins file two in the

deposition of Mark Lomanto. On the record at 9:31.

BY MR. HAMILTON:

Q. Sir, I apologize. Before we went on our little

break I handed you what we marked as Exhibit 2, and we have

now removed that and replaced it with another document that

we'll mark as Exhibit No. 2, which is a complete copy of

your report. The previous report that I handed you,

unfortunately, only the front pages of a front and back have

been copied, so I apologize for that, but now you should

have a copy of your complete report; correct?

A. Correct.

Q. We've marked that as Exhibit No. 2.

I'd like you to actually go back to exhibit --

what we marked as Exhibit No. 1, and we were talking about

the fact that the Department of Justice had asked you to

assume that there had been or that there was a contractual

relationship between Twin City Water Works and Hildale and

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Colorado City; correct?

A. Correct.

Q. And you testified that you did nothing

independently to analyze that, and make that determination

if that contractual relationship was there; true?

A. That's correct.

Q. Okay.

If you go back to Exhibit No. 1, and look at the

next sentence in Exhibit No. 1, it says: That evidence is

relevant to the United States' claim under the FHA pled in

the United States complaint.

Do you see that?

A. I do.

Q. And you were told this by the Department of

Justice; correct?

A. That's correct.

Q. You never came to any independent conclusion

regarding this in your report; true?

A. Uh, that one sentence?

Q. Correct.

A. Yeah, I just want to be sure what you're asking

me.

Q. Well, maybe it was a poorly worded question.

A. Yeah.

Q. And again, if you don't understand my question,

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please just ask me to clarify.

A. Right.

Q. All I'm asking, sir, is simply did you come to any

conclusions regarding whether this information regarding

Twin City Water Works was relevant to the Department of

Justice claims?

A. I did not attempt to verify or confirm or analyze

the contractual relationship between the cities, if that's

what you're asking, and Twin City Water Works.

Q. Sir, again I apologize. It must have been a poor

question, because my question is actually, did you come to

any type of conclusions about the relevance of the analysis

you were doing regarding Twin City Water Works financials

and the complaint that the Department of Justice filed?

MR. DONNELLY: Form.

THE WITNESS: I -- I guess no. I analyzed the

financial analysis and -- and the evidence given me in

regard to the Twin City Water Works.

Q. Right.

So you did no independent analysis to make any

determination regarding whether that would be relevant to

this case; correct?

A. I did not.

Q. The next sentence in this document says that the

United States case would be strengthened by being able to

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show that Twin City Water Works, with the defendants'

knowledge and acquiescence, diverted financial resources

that could have been used to provide water to non FLDS

residents in the twin cities.

Did I read that correct?

A. I believe you did.

Q. And, again, you were told this by the Department

of Justice prior to conducting any type of financial

analysis?

A. That's correct.


Justice before formulating any opinions?

A. That's correct.


Justice before you came to any conclusions?

A. That's correct.


Justice before you authored your report; true?

A. That's correct.

Q. And, specifically, I want to focus in on that

portion of the sent -- of the sentence that says, with the

defendants' knowledge and acquiescence.

You, even though you were told this, you would

agree with me that nowhere in your report do you come to any

type of conclusion like that?

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A. That's correct.

Q. So even though you were told that this would

strengthen the Department of Justice case, it's not in your

report anywhere; correct?

MR. DONNELLY: Form.

THE WITNESS: Yeah, whether it would or not, it

didn't bear on our analysis nor our conclusions.

BY MR. HAMILTON:

Q. Sure.

And what I'm trying to get at, sir, is you were

told that this would strengthen their -- their case if you

could demonstrate that the defendants had knowledge and

acquiesced to Twin City Water Works' actions, but nowhere in

your report did you come to a conclusion or did you make the

statement that the defendants had knowledge and acquiesced

to Twin City Water Works' actions; correct?

A. Correct. That was not in our scope of work nor

did we attempt to make any such analysis.

Q. So it's logical to assume that the inverse is

correct?

A. Can you explain what. . .

Q. Sure. It would be logical, since you were told by

the Department of Justice this would strengthen their case,

and you were never able to come to that conclusion, it would

be logical that the defendants did not know about Twin City

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Justice's case?

A. It was never part of our scope.

Q. So you didn't understand that to be part of your

scope, even though it's in the contract that you signed with

them?

A. It's in the background of the contract, not in the

scope.

Q. And you didn't understand that that was part of

what you were being asked to do?

MR. DONNELLY: Form.

THE WITNESS: I don't believe it was in our scope,

sir.

BY MR. HAMILTON:

Q. And you were not provided any documentation by the

Department of Justice to perform that analysis?

A. In regard to the defendants' acquiescence and

knowledge?

Q. Yes.

A. Correct.

Q. Going on to the next sentence it says: This

evidence would also show the improper entanglement between

the cities and the FLDS church.

You never offered any opinions in your report

about any type of entanglement between the cities and the

FLDS church; true?

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A. That's correct.

Q. And you performed no analysis with respect to

that?

A. Between the cities and the FLDS church, that's

correct.

Q. Going on in the background section it says: The

United States' case would also be strengthened by testimony

as to the defendants ability to pay civil penalties.

You never offer any opinions in your report

regarding that, do you?

A. That was part of our scope, but we never received

any information that would allow us to make that

calculation.

Q. So even though that was in the scope of work that

the Department of Justice specifically gave you, they never

provided you any documents to perform that work?

A. There was none provided.

Q. And so is it your testimony, sir, that the

Department of Justice only provided you documents to perform

a financial analysis regarding Twin City Water Works and

whether they diverted funds?

A. Correct.

Q. And, again, it's your understanding that Twin City

Water Works is not a defendant in this case?

A. That is my understanding.

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Q. And so you were provided no documents to do any

type of -- strike that.

The Department of Justice provided you no

documents to do any type of analysis or formulate any

opinions regarding any of the defendants in this case; true?

A. True. Isolated CCWW.

Q. Going to the scope of work it says: We expect

Mr. Lomanto to evaluate Twin City Water Works' financial

transactions as well as the defendants' corporate and

financial documents.

Again, sir, I believe you already testified to

this, but, again, the Department of Justice didn't provide

you any of the defendants' corporate and financial documents

to do any type of analysis; true?

A. That's correct.

Q. We expect him to offer an opinion on whether Twin

City Water Works improperly diverted funds, and offer an

opinion on defendants' net worth and ability to pay a civil

penalty.

And, again, you never did that analysis regarding

the defendants' net worth; true?

A. That's correct.

Q. You never did any work and came to any type of

opinion whether the defendants could actually pay a civil

penalty; true?

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A. That's correct.

Q. And when you were doing your analysis, at any

point in time did the Department of Justice inform you that

two of the defendants have been dissolved?

A. No.

Q. So you weren't even aware that Twin City Power has

been dissolved?

A. I was not.

Q. You never were made aware by the Department of

Justice that Twin City Water Works or Twin City Water

Authority has been dissolved?

A. It was not in my scope, and I was not informed.

To the best of my recollection.

Q. Sir, we've gone over the fact that you've not

offered any opinions about Twin City Water Authority, Twin

City Power, Hildale or Colorado City.

What I'd like to ask you now, sir, is, it's true

that you have never connected Twin City Water Works' actions

to Twin City Water Authority?

A. Beyond the fact that they were selling water,

that's correct.

Q. You never connected Twin City Water Works' actions

to Twin City Power?

A. Can you define when you say actions?

Q. Sure.

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Let's start that over.

You have never been able to establish or --

establish that there's any connection between Twin City

Water Works and them financially diverting money with Twin

City Water Authority?

A. That's correct.

Q. You've never been able to connect Twin City Water

Works' actions of diverting funds to Twin City Power?

A. That's correct.

Q. You've never been able to connect Twin City Water

Works' actions of diverting funds to Hildale?

A. Yeah. The proper phrase would be we never

attempted to make that analysis.

Q. Okay.

And so if you never attempted, you never did that;

correct?

A. That's correct.

Q. And you never connected Twin City Water Works'

actions of diverting funds to Colorado City?

A. We never attempted.

Q. If you look to paragraph 12 of Exhibit No. 1,

which is on page Bates label DOJ SDT-129.

Do you see that?

A. The period of performance?

Q. Yes, the paragraph's called period of performance,

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and it says that: The period of performance for this

contract will be from August 1st, 2013 through

September 20th, 2013.

Is that correct?

A. That's correct.

Q. And so it states that this contract will be for

two months; true?

A. Of this contract, that's true.

Q. But if you actually look at the signature page,

which we did at the very beginning, you didn't sign this

contract or enter into this contract until August 19th;

correct?

A. That's correct.

Q. So really, the period of this contract was 42

days; true?

A. Apparently, yes.

Q. I'm going to hand you what we'll mark as Exhibit

No. 3.



BY MR. HAMILTON:

Q. Exhibit No. 3 states that it's the United States

Department of Justice, Civil Rights Division, Contractor

Cost Proposal, or Costs Proposal.

Do you see that?

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A. Yes.

Q. And it states there that you are going to offer

the rate of $350 an hour to perform work for the Department

of Justice; right?

A. Correct.

Q. And then it gives the estimate of $14,000.

Do you see that?

A. Yes.

Q. And that $14,000 was to be paid for 42 period of

-- 42 day period of time; true?

A. I believe so.

Q. And, again, this was signed by you; correct?

A. Correct.

Q. On August 19, 2013?

A. Correct.

Q. And this proposal would be valid through

September 30th, 2013?

A. Correct.

Q. So you anticipated performing $14,000 worth of

work for the Department of Justice on this case in that 42

day period of time; true?

A. Uh, I think that was laid out and that was the

funding as far as really the extent of how much work I -- I

really can't answer that.

Q. Okay.

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I'm going to hand you what we'll mark as Exhibit

No. 4.



BY MR. HAMILTON:

Q. Sir, Exhibit No. 4, again, is a U.S. Department of

Justice, Civil Rights Division, Statement of Work for Expert

Witness.

Do you see that?

A. I do.

Q. I understand this to be a second contract that you

entered into with the Department of Justice. And if you

turn to the last page, there's a signature of Jessica

Crockett and your sig --is that your signature, sir?

A. That is.

Q. And it's dated 10/29/13?

A. Correct.

Q. And so, sir, you entered into that one, that first

contract that we've marked as Exhibit No. 1, and we looked

at Exhibit No. 3, which was your estimate of what you would

be paid, and so for that first contract you understood that

there was a budget to pay you $14,000 for that 42 days worth

of work; true?

A. That -- the signatures are true, but when you say

it was my estimate, there was amounts being put on to start

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Q. If you'll look at Exhibit No. 1 and Exhibit No. 3,

would you agree with me, sir, that after looking at those,

that that sentence ended there in those contracts?

A. I see the same last sentence, is that what you're

asking me?

Q. Sure. In Exhibit No. 1 and Exhibit No. 3, the

second to last sentence in the background section says:

This evidence would also show the improper entanglement

between the cities and the FLDS church; right?

A. Right.

Q. And it ends there; true?

A. Oh, I see, yes, uh-hmm.

Q. But if you look in contract number three that you

signed with the Department of Justice, that sentence

continues; correct?

A. Oh, okay, yes.

Q. And it continues by stating: And show that the

cities alleged justification to denying water connections to

non FLDS members was, in fact, a pretext for discrimination.

Do you see that?

A. I do.

Q. Do you have any knowledge of why that was added to

this third contract that you entered into with the

Department of Justice?

A. I do not.

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Q. And, again, you had this contract before you

authored your report; true?

A. True.

Q. And so you have this contract before you had

finalized your opinions in this case; correct?

A. Correct.

Q. And so you are aware that the Department of

Justice believed that the evidence that you -- or the

analysis that you were performing would somehow show that

the City's alleged justification for denying water

connections to non-FLDS members was, in fact, a pretext for

discrimination; true?

MR. DONNELLY: Form.

THE WITNESS: That is a statement in this

document, but, again, that was not part of our scope.

BY MR. HAMILTON:

Q. All right.

So again, you offer no opinion regarding that

opinion; is that true?

MR. DONNELLY: Form.

THE WITNESS: That's true.

BY MR. HAMILTON:

Q. You never came to any conclusion in your analysis

that the analysis of Twin City Water Works in any way showed

that the City's alleged justification for denying water

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connections to non FLDS members was, in fact, a pretext for

discrimination; did you, sir?

A. That's not part of our analysis.

Q. So the answer to my question is that you did not

come to that conclusion; true?

A. We didn't attempt, nor would we.

Q. So the answer is that you didn't come to that

conclusion; correct?

A. That's correct.

Q. Going on, it says: The United States' case would

also be strengthened by testimony as to defendants' ability

to pay civil penalties.

Do you see that?

A. I do.

Q. So this contract, if you look back to the contract

of -- that's Exhibit No. 1 and Exhibit No. 3, has changed

slightly; has it not?

A. The last sentence?

Q. Yes.

A. I don't know if there's a word or a difference.

Can you point to it specifically?

Q. So there is no change; correct?

A. To the last sentence?

Q. Yes.

A. It doesn't appear to be.

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Q. So even as of August 2014, they were telling you

-- the Department of Justice was telling you that their case

would be strengthened if you were able to opine into the

defendants' ability to pay a civil penalty; correct?

MR. DONNELLY: Form.

THE WITNESS: It says that in the background.

I don't believe we were ever asked to -- oh, let

me take that back.

Yes, they continued to say that, yes.

BY MR. HAMILTON:

Q. And even though they continued to tell you that it

would strengthen their case, you still never did an analysis

of defendants' ability to pay a civil penalty?

MR. DONNELLY: Form.

THE WITNESS: Correct.

BY MR. HAMILTON:

Q. And you would agree with me that this contract was

entered into after you had already provided them with the

estimate of what you anticipated doing?

A. Correct.

Q. And what it would cost?

A. Correct.

Q. And in your estimate you never included making

this type of determination; true?

A. True.

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Department of Justice; correct?

A. That's true.

Q. Did you do anything else besides attending the

deposition of the Twin City Water Works representative when

you went to St. George?

A. I think I assisted in formulating some questions.

Q. And you could have assisted in formulating

questions prior to the deposition without leaving your

office; true?

A. That's true.

Q. If you look at that sentence it says that you have

consulted with the United States on the subpoena requests

and assisted in deposing a representative of the Twin City

Water Works.

Do you see that?

A. I do.

Q. Throughout your report that's been marked as

Exhibit No. 2, you continually blame Twin City Water Works

for not producing source documents to you; correct?

A. I state that documents were not provided.

Q. Right.

You specifically blame Twin City Water Works for

not producing source documents; true?

A. Yeah, they were not produced.

Q. But, again, sir, you, according to the scope of

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work, were working with the Department of Justice; correct?

A. Yes.

Q. Specifically working with them and consulting them

on what subpoenas they should send; true?

A. This was in regard to the specific deposition at

St. George?

Q. Sir, no. If you look at the language it says: He

has consulted with the United States on subpoena requests

and assisted in deposing a representative of Twin City Water

Works.

Do you see it says "and"?

A. Right.

Q. So the first portion of that sentence says that

you consulted with the United States on subpoena requests.

Do you see that?

A. Yes.

Q. So it's true you were working with the Department

of Justice about what subpoenas they should send; true?

A. Some of the financial information, that's true,

yes.

Q. Yes. So you could have asked the Department of

Justice at any point in time to subpoena third party vendors

to get the source documents you needed; true?

A. Uh, that's true.

Q. And you didn't?

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A. Uh, we did not.

Q. You never consulted, you never told the Department

of Justice to subpoena third party vendors to get the source

documents you needed to perform your analysis; correct?

A. I believe that's true.

Q. If you go on here, it says: Expert disclosures

are currently due on August 25th, 2014. Mr. Lomanto has

performed a substantial amount of work and his expert report

is near completion.

At that point in time you had burned through over

$100,000 of Department of Justice money; true?

MR. DONNELLY: Form.

THE WITNESS: True.

BY MR. HAMILTON:

Q. Of taxpayer money; true?

A. Correct.

Q. And this was, as you explained it, an agreement

being entered into to get more funding; correct?

A. Correct.

Q. I'm going to hand you what we'll mark as Exhibit

No. 7.



BY MR. HAMILTON:

Q. So again, at that point you had already burned

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through $100,000 and you enter into this additional

agreement. We won't call it a contract. Additional

agreement with the Department of Justice. And, again, you

sign one of these United States Department of Justice, Civil

Rights Division, Contractor Costs Proposal.

Do you see that?

A. I do.

Q. And it's dated August 17, 2014. And is that your

signature, sir?

A. Yes.

Q. And this time it is for an anticipated amount of

$21,500; correct?

A. Correct.

Q. And at that point in time, you had already burned

through over $100,000; correct?

MR. DONNELLY: Form.

THE WITNESS: Correct.

BY MR. HAMILTON:

Q. You enter into a new agreement with the Department

of Justice, and understand that you received an additional

funding of $21,500.

Do you see that?

A. I do.

Q. And, again, you offer no opinions regarding any of

the defendants Twin City Power, Twin City Water Authority,

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range is different than the 210 to $674 range; right?

A. Agreed, yes.

Q. And you would agree with me that the 60 to $469

range is different than a 200 to $300 range; right?

A. Correct.

Q. But yet you make the statement that there's a

direct correlation; true?

A. True.

Q. And then you continue on in the report by stating:

However, as noted above, Twin City Water Works failed to

produce most of the underlying source documents including

the monthly vendor invoices and vouchers related to payments

to South Central Communications.

An invoice from a telecommunications provider

would typically provide a description of the services and a

list of the types and amounts of communication charges per

phone number or account.

Do you see that?

A. I do.

Q. It may also designate user names associated with

each phone number or account.

Do you see that?

A. I do.

Q. Be pretty important to get those documents from

South Central Communication; right?

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A. Or Twin Cities.

Q. One of the two; right?

A. Yeah.

Q. True again that you were -- part of the scope of

your work was to help direct the government, the Department

of Justice in that subpoenaing the appropriate documents;

right?

A. Correct.

Q. And you never had the Department of Justice

subpoena South Central Communication's supporting documents

that you needed; correct?

A. That was all in the subpoena to Twin City Water

Works.

Q. But you didn't have --

MR. HAMILTON: Move to strike as nonresponsive.

BY MR. HAMILTON:

Q. You did not ask the Department of Justice to

subpoena those documents from South Central Communications;

true?

MR. DONNELLY: Form.

THE WITNESS: I did not, no.

BY MR. HAMILTON:

Q. And you have no knowledge of the Department of

Justice subpoenaing these -- those documents from South

Central Communications; true?

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A. True.

Q. And that would obviously have helped out your

analysis; correct?

A. It would have certainly brought more definition to

it, yes.

Q. Well, you just listed right there in that three or

four sentences all the information you could have received

if you would have had those documents; true?

A. True.

Q. You continue on by saying: Without the

availability of a monthly invoice from South Central

Communications I could not attempt to determine which

monthly phone charges were related to mother's cell phones

and which were related to Twin City Water Works' business

purposes; correct?

A. Correct.

Q. So without -- you were not able to accomplish what

you wanted to accomplish; true?

A. With the source documents.

Q. Right. Without having subpoenaed South Central

and receiving those documents, you weren't able to

accomplish what you needed to accomplish or wanted to

accomplish; true?

A. Well, meaning, yeah, carry out procedures we were

hoping to carry out, yes.

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Q. Right.

So instead, what you do is, you state: Therefore,

given that many of the other expenses detailed in the Allred

communication could plausibly be tied.

Now, when you say plausibly, what degree of

certainty are you using there?

A. Uh, possible? Yeah, I would say possible.

Q. Possibly could have happened, possibly couldn't

have happened? Don't know either way; right?

A. Yeah.

Q. 50/50?

A. Yeah.

Q. So with 50/50 certainty you make the jump or the

assumption and accept Joseph Allred's estimate from a period

of time in 2006 that there were phone charges of 200 and

$300 a month being paid for mother's cell phones; true?

A. True.

Q. And from that you then average it to 250; right?

A. Correct.

Q. You didn't take the 146 or the 136.49, which was

the one average that you had; correct?

A. Correct.

Q. You took the average of $250; right?

A. Correct.

Q. And then you extrapolated that over the entire 119

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Q. And so you're saying that that's the same as $500

a month?

A. Yes.

Q. Pretty close?

A. Yes.

Q. Close enough?

A. Yes.

Q. So because it's close enough, then you just say,

okay, what he said in that letter must be true, or what was

said in that letter must be true?

A. Yes, was consistent with what was said in the

letter.

Q. Well, you don't use the word consistent. Again,

you say directly correlates; right?


Q. So $466 directly correlates with $500?

A. Yes.

Q. When you say that the payment history or the

pattern was important to you, you have no idea whether prior

to that Twin City Water Works made any type of payments;

right?

MR. DONNELLY: Form.

THE WITNESS: Say that again, that last part.

BY MR. HAMILTON:

Q. Well, again you're taking all this from the

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letter; right?

A. Yes.

Q. That's where you're jumping off point is; true?

A. Yeah.

Q. And Mr. Allred's statement in the letter was: I

have continued to pay some home expenses from Twin City

Water Works' account, such as a car insurance. One policy

contains about half home half company vehicles, about $500

per month; right?

A. Yes.

Q. And you try to find a policy that averages close

to 500; right?

A. Well, we broke it down into payments by insurance

providers.

Q. You break it down into insurance providers.

You find that the State Farm one is the one that's

closest to $500; true?

A. I believe that's correct.

Q. And you would agree with me that the State Farm

one was the policy that ran the longest period of time;

true?


Q. So again, these other auto or these other

insurance companies' auto owner's insurance, Dixie Levitt

Agency, GEICO Insurance, SCF of Arizona, their policies

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didn't run the entire period of 2004 to 2014; true?

A. I'd have to go back and look, but I believe many

of their policies or payments to those insurance providers

were somewhat limited.

Q. So you took the one that went for the entire

period of time; right?

A. I don't know if it went the entire period of time.

Q. You took the policy that expir -- policy that ran

for the greatest length period of time that you were

analyzing; true?

A. Certainly that would have been in existence at the

time of the letter.

Q. And, again, you picked the one that ran the

greatest amount of time that you analyzed; true?

A. I believe it was the greatest amount of time.

Q. And because that one had a dollar amount that was

within $50 of what was stated in the letter, you determined

that that had to be the policy; right?

A. Likely, yes.

Q. And so then you just take and extrapolate that

over 119 months; true?

A. True.

Q. And, again, you were present during the 30(b)(6)

deposition of TCWW; true?

A. Correct.

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Q. You were sitting there when Mr. Barlow, Sylmar

Barlow was deposed; correct?

A. Yes.

Q. Again, you could have had that question asked if

Twin City Water Works was continuing to pay --

MR. DONNELLY: Form.

BY MR. HAMILTON:

Q. -- that amount; true?

A. I believe there was a series of questions asked to

Mr. Barlow if there were improper diversion of funds

continuing, and he certainly said no to that question.

Q. Well, you specifically could have asked that, and

as I understand it, that -- that you could specifically ask

whether State Farm -- whether Twin City Water Works was

still insured by State Farm; true?

A. We could have asked that question, yes.

Q. And you could have asked how much on the average

Twin City Water Works was paying State Farm; right?

A. Uh, that's true.

Q. And you could have found out if that amount was

that same average of 466.81; right?

A. I believe we obtained that information through

June of 2014.

Q. And so you're stating that you take the letter

that was written back in April 2006, where there -- or

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A. That's not true.

I identified what I believed were many vehicles

that were likely consistent with what Mr. Allred was saying.

Q. Again, the three vans, the Corsica and the Lumina?

A. Yeah. Yes.

Q. So because of the make of those vehicles, you

believe that that shows some consistency with what was

stated in this alleged 2006 letter?

A. Yes.

Q. Is that the only correlation you saw?

A. I don't know offhand. I would have to go back and

read over some documents.

Q. You agree it's the only correlation you identified

in your report?


Q. If Mr. --

A. Just to finish. Just to go back to my report, I

talked about all the payments for a significant number of

registered vehicles over the time period.

Q. Okay.

Sir, if the letter of April 2006, or that was

allegedly written in April of 2006, would have simply said

that there have been no payments from Twin City Water Works'

accounts for any personal vehicles, you would agree with me

that the data that you analyzed would have supported that

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conclusion as well; true?

A. Uh, there would have been nothing to analyze.

Q. You could have gone and looked at the data that

you had and come to the same conclusion that this supports

what was stated in the letter; true?

A. If that was asked of us, yes.

If the reverse were true, meaning he was making

statements about business use, we would have got -- done or

performed the same procedures.

Q. Right.

And you could have come to a conclusion that all

the money from Twin City Water Works' account was being

simply used for business vehicles; true?

MR. DONNELLY: Form.

THE WITNESS: If that was the statement he was

making, and if there was, again, certain patterns that

supported that, yes.

BY MR. HAMILTON:

Q. Like, for example, you could have said those vans

seem to indicate that they were being used for some type of

maintenance?

A. That could be.

Q. So with a 50/50 degree of certainty, you come to

the conclusion that this total amount paid from Twin City

Water Works for vehicles over this 119 months, which was a

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total of 831,992.74, which included depreciation, that half

of that had to have been used for vehicles that were only

being used for personal use, and thus that money was being

diverted; true?

MR. DONNELLY: Form; foundation.

THE WITNESS: That was our estimate.

BY MR. HAMILTON:

Q. You just made that estimate and again with 50/50

degree of certainty; true?

MR. DONNELLY: Form.

THE WITNESS: That's correct.

BY MR. HAMILTON:

Q. And so you came to a conclusion, a conclusion of

50/50 percent probability, that $415,996.37 had been

diverted from Twin City Water Works; true?

MR. DONNELLY: Foundation.

THE WITNESS: That's true.

BY MR. HAMILTON:

Q. What's the foundation?

MR. DONNELLY: I don't think he's testified 50/50

on this.

BY MR. HAMILTON:

Q. We'll go to the next section which calls -- is

called funds diverted to RJ home improvements and other non

business related supplies.

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Do you see that?

A. I do.

Q. You take a look, you started your analysis here,

by looking again at the language of the letter.

Specifically, if you look at the bottom of page 17 you were

looking at the language that said: There were a lot of

other purchases before that were made by the company,

especially home improvements on the old RJ home. Right?

A. Correct.

Q. And so from that statement you then go look at the

general ledger for Twin City Water Works; true?

A. True.

Q. You find an account number 540; correct?

A. Correct.

Q. Which is called Operating Supplies. That's the

account name; true?

A. Yes.

Q. And there's data for that Operating Supplies

account number 540 for the time period between 2004 and

2013; right?

A. Correct.

Q. So you look at all the data in that column; true?

A. True.

Q. And you specifically identify some entries in that

account number, or made under that account number, that you

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Twin City Water Works filing involving FLDS Church

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