PPP Loan Testimony

Q. Let me turn to something you haven’t been asked much about, and that’s TFM Advisors, Inc., a company you have joined in this lawsuit. TFM Advisors, Inc. is nothing more than an estate plan for your estate; correct?
MAHATHIRATH. Correct.
Q. And the concept was to create a separate company so that you could convert some of your income into a defined benefit plan; correct?
MAHATHIRATH. Yes.
Q. And that’s why you wanted to assign some of your bonus income from TriPacific to TFM; correct?
MAHATHIRATH. Yes.
Q. And you and your wife are the only two employees of TFM; correct?
MAHATHIRATH. Yes.
Q. At least while you were employed by TriPacific, TFM incurred no business; correct?
MAHATHIRATH. No. No. That’s right. Correct.
Q. It was set up simply, as you said, to receive
bonus payments from TriPacific; correct?
MAHATHIRATH. Correct.
Q. It had no clients, no other contracts; right?
MAHATHIRATH. Correct.
Q. And you listed the address of TRM as being located at your home address; is that right?
MAHATHIRATH. I’m sorry. You said, “TRM.”
Q. I’m sorry. TFM. My apologies.
MAHATHIRATH. As my home address, correct.
Q. So it didn’t have any additional expenses like rent or utilities or mortgage interest beyond what you’re already paying for your own home; correct?
MAHATHIRATH. It did not have a building, correct.
Q. And the filing you made with the secretary of state lists the purpose of TFM as a real estate advisory company; is that correct?
MR. ENGLAND: Objection. Relevance to all of this, Your Honor.
HON. CHAPMAN: Wait a minute. I’ll give some leeway. If it turns out not to be relevant, we can strike it. I’ll give you some leeway Mr. Livingston. Go ahead.
THE WITNESS: My accountant filed my corporation papers. So if he put that in there, then — but it was really nothing more than a pass-through. There’s nothing about, you know, starting my own company to compete with TriPacific or anything like that.
BY MR. LIVINGSTON:
Q. Now, according to public records, you had an $83,705 PPP loan approved on May 1, 2020 for payroll for TFM Advisors, Inc.; is that correct?
MAHATHIRATH. I believe so.
Q. And that loan had to be used for payrol expenses and operating expenses; correct?
MAHATHIRATH. My accountant filed that PPP loan. So whatever he did, I just went with it. I’m not familiar with the specifics of the PPP components.
Q. This payroll request you made in May of 2020 was made when you were a full time employee of TriPacific; correct?
MR. ENGLAND: Same objection, Your Honor.
HON. CHAPMAN: No. Overruled. It clearly goes to credibility and honesty. Overruled. Go ahead.
THE WITNESS: What’s the time frame again? I’m sorry.
BY MR. LIVINGSTON:
Q. The approval was May 1, 2020.
MAHATHIRATH. I guess. Again, my CPA did it. I didn’t — I didn’t do it.
Q. Well, you signed the application for the loan; correct?
MAHATHIRATH. I did.
Q. Okay. And, again, this payroll request that you made in May of 2020 was made when you were a full time employee of TriPacific making almost $1 million a year; correct?
MAHATHIRATH. Correct.
Q. That loan was approved four months before you left TriPacific; correct?
MAHATHIRATH. I don’t — yeah.
Q. And you are aware, I assume, that PPP provisions require that the minimum number of employees that a company must have to receive a PPP loan was at least four; correct?
MR. ENGLAND: Objection. Assumes facts. Argumentative.
HON. CHAPMAN: No, he can ask. If you can answer, answer. If you can’t, you can’t.
THE WITNESS: I was unaware.
BY MR. LIVINGSTON:
Q. Now, you later applied for a second PPP loan, this one larger, for $108,275 while you were living in your new home in Shady Canyon; correct?
MAHATHIRATH. Correct.
Q. And that home recently sold for $11-1/2 million; correct?
MAHATHIRATH. Correct.
Q. And that second loan was also for payroll for TFM; correct?
MAHATHIRATH. That was payroll, and when my accountant filed, he took into consideration something about my defined benefits. So again, it’s whatever my accountant did. I just did whatever he said.
Q. And again, you signed the loan application for that second $108,000 loan; correct?
MAHATHIRATH. I did.
Q. In fact, you later applied for and received forgiveness for both of those loans; correct?
MAHATHIRATH. Yes.
Q. So you collected a total of about $193,000 in PPP loans for TFM; Correct?
MAHATHIRATH. I guess, yes.
Q. A company that had no business, no contracts, and only you and your wife as employees; correct?
MAHATHIRATH. Again, my accountant prepared it. I don’t know what variables he put in there, but I’m testifying that it was my wife and I, and we had the defined benefits. We had the costs associated. But again, this is my accountant that did it.
Q. You’re not willing to admit that this was really just loan fraud?
MR. ENGLAND: Of course not. Objection. Argumentative.
HON. CHAPMAN: No, the objection is overruled.
THE WITNESS: No, I’m not aware. The answer is no.