Preview
FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013
NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020
EXHIBIT G
FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013
NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF SUFFOLK
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- X
ALBERT PEREZ, ind
ividua
l
ly and der
iva
tive
ly :
on behal
f f TOTA
o L COMPUTER SOFTWARE , LLC, : Index No
.: 063193
/2013
:
P
lain
ti
ff
, :
-aga
inst
- :
:
VINCENT TEDESCO , TOTAL COMPUTER :
SYSTEMS , LTD. d
/b/a TOTAL COMPUTER :
GROUP , TOTAL COMPUTER GROUP , LLC
, :
TOTAL COMPUTERS , LTD. And JOHN DOE :
CORPORAT ION , :
:
De
fendants and :
:
TOTAL COMPUTER SOFTWARE , LLC, :
:
Nomina
l-De
fendant
. :
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- X
TOTAL COMPUTER SOFTWARE , LLC, :
: Index No
.:
Th
ird-Pa
rty P
lain
ti
ff
, :
:
-aga
inst
- :
:
ALBERT PEREZ, :
:
Thi
rd-Pa
rty De
fendant
. :
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- X
DEFENDANTS VINCENT TEDESCO ,
TOTAL COMPUTER SYSTEMS , LTD. d
/b/a TOTAL COMPUTER GROUP ,
TOTAL COMPUTER GROUP , LLC, TOTAL COMPUTERS , LTD.
AND TOTAL COMPUTER SOFTWARE , LLC
'S
PROPOSED FINDINGS OF FACT AND CONCLUS IONS OF LAW
V
incent Tedesco ("Tedesco
")
, To
tal Compute
r Sys
tems, LTD. d
/b/a To
tal Compute
r
Group
, To
tal Compute
r Group
, LLC, and Tota
l Compute
rs, LTD. and Tota
l Compute
r So
ftware
,
Par
t
ies"
LLC (co
llec
t
ively the "Tota
l Par
t
ies"
), by and through the
ir a
ttorneys
, Far
rel
l Fr
i
tz, P
.C.,
respec
tfu
l
ly submi
t the fol
lowing Proposed F
indings o
f Fac t and Conc
lus
ions o
f Law:
FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013
NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020
F
indings o
f Fact
Ques
tion
: Where d
id the $8 mi
ll
ion go?
happened
"
1
. The purpose o
f the hea ring was to dete
rmine "what w
ith the $8 m i
l
lion
"Proceeds
" ("Sof
tware"
in proceeds (
the "Proceeds
") from the sa
le o
f To
tal Compute
r So
ftware LLC's ("So
ftware
")
Sa
le"
compute
r prog
ram ca
lled To
tal En
forcement ("TE
") to T
iburon (
the "TE Sa
le"
) (Col
loquy be
tween
counse
l and the Cour
t, 4
/27/17
, 3
:23-4
:12)
.
Answer
:
to
/from"
2
. The Proceeds
: i) pa
id So
ftware
's in
tercompany "due accoun
t owed to
("Group
"
To
tal Compute
r Sys
tems, L
td. d
/b/a To
tal Compute
r Group ("Group
")
; i
i) sat
is
fied loans to
So
ftware
; i
ii
) sa
tis
fied So
ftware
's accoun
ts payab
le ob
liga
tions
; and iv
) pa
id for So
ftware
's
ongo
ing expenses
, inc
luding pro
fess
iona
l fees incur
red, and to be incur
red, as a resu
lt o
f Plain
ti
ff
's
su
it aga
inst So
ftware (Ross
, 4
/27/17
, 25
:9-18)
.
A
. D
ist
ribu
tion o
f Sale Funds
Par
t
ies' ("Ross"
3
. The To
tal f
irs
t w
itness was Andrew Ross ("Ross
")
, a Cert
i
fied Pub
lic
Accoun
tant ("CPA"
) and a pa
rtne
r in Get
try Marcus CPA, P
.C.'s bus
iness va
luat
ion and l
it
igat
ion
serv
ices group (Ross
, 4
/27/17
, 11
:3-9)
.
4
. In addi
tion to being a CPA, Ross is a Cert
i
fied Fraud Examine
r and a Cert
if
ied
Va
luat
ion Ana
lyst (Ross
, 4
/27/17
, 12
:23-25
; 13
:10-12)
.
5
. Ross was re
tained to inves
tiga
te the speci
f
ies as to how the Proceeds were
d
ist
ribu
ted (Ross
, 4
/27/17
, 11
:23-24
, 16
:16-17)
.
FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013
NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020
i
. Ross
's Inves
tiga
t
ion In
to the Verac
ity o
f Sof
tware
's Genera
l Ledge
r
6
. Ross tes
ti
fied he reviewed So
ftware
's books and reco
rds, inc
luding the Grea
t P
lains
sys
tem,l
accoun
ting the genera
l ledge
r, tax returns
, prom
issory no
tes, bank s
tatements
, cance
lled
checks
, f
inancia
l s
tatements prepa
red by So
ftware
's ou
tside accoun
tant
, Monahan & Company, as
we
ll as the Asset and Purchase Sa
le Ag
reement for the TE Sale (Ross
, 4
/27/17
, 17
:9-19)
.
7
. Ross began h
is invest
iga
tion by reconc
i
ling So
ftware
's 2003 through 2014 genera
l
ledge
rs w
ith So
ftware
's 2003 through 2014 tax f
il
ings (Ross
, 4
/27/17
, 19
:14-20
, 20
:22-20
:11;
Exh
ibi
t A
, Tabs 1 and 2; Exh
ibi
t C)
.
8
. Ross tes
ti
fied tha
t this reconc
i
lia
t
ion was an impor
tant s
tep because i
t would pu
t
the lie to P
la
int
if
f's a
llega
tions tha
t So
ftware
's genera
l ledge
r was no
t con
temporaneously
prepa
red and
, there
fore
, cou
ld no
t be re
lied upon (Ross
, 4
/27/17
, 19
:4-20
:1; Exh
ibi
t A
, Tab 1
;
Exh
ibi
t C)
.
9
. Ross
's reconc
i
lia
tion demonst
rated tha
t the genera
l ledge
rs were
con
temporaneously prepa
red w
ith the tax fil
ings and
, thus
, could be rel
ied upon (
id.
).
10
. Nex
t Ross inves
tiga
ted the ove
ral
l f
inancia
l h
isto
ry o
f So
ftware from incep
tion
through the TE Sa
le and dete
rmined tha
t So
ftwa
re had losses o
f $5
,800
,000.00 (
in this con
tex
t,
losses means expenses in excess o
f revenues
) (Ross
, 4
/27/17
, 20
:2-16
; Exh
ibi
t A
, Tab ; Exh
1 ibi
t
C)
.
11
. Th
is de
termina
tion was impor
tant because a company's losses
, i
f any, mus
t be
f
inanced from somewhere
, and Ross de
termined spec
if
ica
lly tha
t Sof
tware
's losses we
re pr
imar
ily
f
inanced by G
roup (Ross
, 4
/27/17
, 20
:17-21)
.
1Joseph Di
recto
r ofF
Cassano ("Cassano"
), G
roup's inance, exp
lained that So
ftwa
re used an accoun
ting sys
tem called
Pla
ins
,"
"Grea
t wh
ich was updated in2007 (Cassano, 4
/27/17
, 130
:16-131
:6)
. Cassano prov
ided s
imi
lar serv
ices to
bo
th G roup and Sof
tware, though he was no t aSoftwa
re employee (Cassano
, 4/27
/17, 129
:18-130
:8)
.
FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013
NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020
i
i. So
ftware
's Deb
ts and Ob
liga
tions a
t the T
ime f the TE
o Sa
le
a
. When TE Was So
ld So
Preview
FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013 NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020 EXHIBIT G FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013 NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK -- -- -- --- -- --- -- -- --- -- --- -- -- --- -- --- -- -- --- -- --- -- -- --- -- --- -- -- - X ALBERT PEREZ, ind ividua l ly and der iva tive ly : on behal f f TOTA o L COMPUTER SOFTWARE , LLC, : Index No .: 063193 /2013 : P lain ti ff , : -aga inst - : : VINCENT TEDESCO , TOTAL COMPUTER : SYSTEMS , LTD. d /b/a TOTAL COMPUTER : GROUP , TOTAL COMPUTER GROUP , LLC , : TOTAL COMPUTERS , LTD. And JOHN DOE : CORPORAT ION , : : De fendants and : : TOTAL COMPUTER SOFTWARE , LLC, : : Nomina l-De fendant . : -- -- -- --- -- --- -- -- --- -- --- -- -- --- -- --- -- -- --- -- --- -- -- --- -- --- -- -- - X TOTAL COMPUTER SOFTWARE , LLC, : : Index No .: Th ird-Pa rty P lain ti ff , : : -aga inst - : : ALBERT PEREZ, : : Thi rd-Pa rty De fendant . : -- -- -- --- -- --- -- -- --- -- --- -- -- --- -- --- -- -- --- -- --- -- -- --- -- --- -- -- - X DEFENDANTS VINCENT TEDESCO , TOTAL COMPUTER SYSTEMS , LTD. d /b/a TOTAL COMPUTER GROUP , TOTAL COMPUTER GROUP , LLC, TOTAL COMPUTERS , LTD. AND TOTAL COMPUTER SOFTWARE , LLC 'S PROPOSED FINDINGS OF FACT AND CONCLUS IONS OF LAW V incent Tedesco ("Tedesco ") , To tal Compute r Sys tems, LTD. d /b/a To tal Compute r Group , To tal Compute r Group , LLC, and Tota l Compute rs, LTD. and Tota l Compute r So ftware , Par t ies" LLC (co llec t ively the "Tota l Par t ies" ), by and through the ir a ttorneys , Far rel l Fr i tz, P .C., respec tfu l ly submi t the fol lowing Proposed F indings o f Fac t and Conc lus ions o f Law: FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013 NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020 F indings o f Fact Ques tion : Where d id the $8 mi ll ion go? happened " 1 . The purpose o f the hea ring was to dete rmine "what w ith the $8 m i l lion "Proceeds " ("Sof tware" in proceeds ( the "Proceeds ") from the sa le o f To tal Compute r So ftware LLC's ("So ftware ") Sa le" compute r prog ram ca lled To tal En forcement ("TE ") to T iburon ( the "TE Sa le" ) (Col loquy be tween counse l and the Cour t, 4 /27/17 , 3 :23-4 :12) . Answer : to /from" 2 . The Proceeds : i) pa id So ftware 's in tercompany "due accoun t owed to ("Group " To tal Compute r Sys tems, L td. d /b/a To tal Compute r Group ("Group ") ; i i) sat is fied loans to So ftware ; i ii ) sa tis fied So ftware 's accoun ts payab le ob liga tions ; and iv ) pa id for So ftware 's ongo ing expenses , inc luding pro fess iona l fees incur red, and to be incur red, as a resu lt o f Plain ti ff 's su it aga inst So ftware (Ross , 4 /27/17 , 25 :9-18) . A . D ist ribu tion o f Sale Funds Par t ies' ("Ross" 3 . The To tal f irs t w itness was Andrew Ross ("Ross ") , a Cert i fied Pub lic Accoun tant ("CPA" ) and a pa rtne r in Get try Marcus CPA, P .C.'s bus iness va luat ion and l it igat ion serv ices group (Ross , 4 /27/17 , 11 :3-9) . 4 . In addi tion to being a CPA, Ross is a Cert i fied Fraud Examine r and a Cert if ied Va luat ion Ana lyst (Ross , 4 /27/17 , 12 :23-25 ; 13 :10-12) . 5 . Ross was re tained to inves tiga te the speci f ies as to how the Proceeds were d ist ribu ted (Ross , 4 /27/17 , 11 :23-24 , 16 :16-17) . FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013 NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020 i . Ross 's Inves tiga t ion In to the Verac ity o f Sof tware 's Genera l Ledge r 6 . Ross tes ti fied he reviewed So ftware 's books and reco rds, inc luding the Grea t P lains sys tem,l accoun ting the genera l ledge r, tax returns , prom issory no tes, bank s tatements , cance lled checks , f inancia l s tatements prepa red by So ftware 's ou tside accoun tant , Monahan & Company, as we ll as the Asset and Purchase Sa le Ag reement for the TE Sale (Ross , 4 /27/17 , 17 :9-19) . 7 . Ross began h is invest iga tion by reconc i ling So ftware 's 2003 through 2014 genera l ledge rs w ith So ftware 's 2003 through 2014 tax f il ings (Ross , 4 /27/17 , 19 :14-20 , 20 :22-20 :11; Exh ibi t A , Tabs 1 and 2; Exh ibi t C) . 8 . Ross tes ti fied tha t this reconc i lia t ion was an impor tant s tep because i t would pu t the lie to P la int if f's a llega tions tha t So ftware 's genera l ledge r was no t con temporaneously prepa red and , there fore , cou ld no t be re lied upon (Ross , 4 /27/17 , 19 :4-20 :1; Exh ibi t A , Tab 1 ; Exh ibi t C) . 9 . Ross 's reconc i lia tion demonst rated tha t the genera l ledge rs were con temporaneously prepa red w ith the tax fil ings and , thus , could be rel ied upon ( id. ). 10 . Nex t Ross inves tiga ted the ove ral l f inancia l h isto ry o f So ftware from incep tion through the TE Sa le and dete rmined tha t So ftwa re had losses o f $5 ,800 ,000.00 ( in this con tex t, losses means expenses in excess o f revenues ) (Ross , 4 /27/17 , 20 :2-16 ; Exh ibi t A , Tab ; Exh 1 ibi t C) . 11 . Th is de termina tion was impor tant because a company's losses , i f any, mus t be f inanced from somewhere , and Ross de termined spec if ica lly tha t Sof tware 's losses we re pr imar ily f inanced by G roup (Ross , 4 /27/17 , 20 :17-21) . 1Joseph Di recto r ofF Cassano ("Cassano" ), G roup's inance, exp lained that So ftwa re used an accoun ting sys tem called Pla ins ," "Grea t wh ich was updated in2007 (Cassano, 4 /27/17 , 130 :16-131 :6) . Cassano prov ided s imi lar serv ices to bo th G roup and Sof tware, though he was no t aSoftwa re employee (Cassano , 4/27 /17, 129 :18-130 :8) . FILED: SUFFOLK COUNTY CLERK 02/12/2020 07:52 PM INDEX NO. 063193/2013 NYSCEF DOC. NO. 372 RECEIVED NYSCEF: 02/12/2020 i i. So ftware 's Deb ts and Ob liga tions a t the T ime f the TE o Sa le a . When TE Was So ld So