CONDENSED TRANSCRIPT

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

RICHARD H. PENSKE CIVIL ACTION
and PATRICIA L. PENSKE,

Plaintiffs,
vs.

LEWIS, RICE & FINGERSH,
L.c.,

Defendant. NO. O05-CV-4436

Oral deposition of RICHARD
HERMAN PENSKE, taken at the law
offices of KOHN, SWIFT & GRAF, P.C.,
One South Broad Street, Suite 2100,
Philadelphia, Pennsylvania, on
Friday, March 17, 2006, at
approximately 12:35 p.m., before
Rosemary Locklear, Registered
Professional Reporter, Certified
Shorthand Reporter (NJ), Certified
Realtime Reporter and Notary Public,

pursuant to notice.

SPX

James DeCrescenzo Reporting, LLC
215.564.3905 INNOVATING LITIGATION 215.751.0581
PHONE 1880 JFK Blvd., 6th Floor » Philadelphia, PA 19103 FAX
www.jdreporting.com



INTHE MATTER O

eee. Se Richard H. Penske, et al Lae



EXHIBIT J


EXHIBIT H


ORAL DEPOSITION OF RICHARD HERMAN PENSKE,

3/17/06

13 (Pages 46 to 49)
46 48

1 number of opinions on this 1 A. I don't believe. I believe

2 transaction, I wanted to ask them 2 she was not.

3 whether they thought it was a 3 Q. What individuals at Lewis

4 legitimate transaction. 4 Rice did you meet with on that day?

5 They were supposed to be 5 A. [met -- I clearly met with

6 experts in — in writing tax opinions 6 Gary Kornman. And normally in

7 and tax law, and I didn't want to do 7 meetings with Heritage, you've got to

8 a transaction or make a commitment to 8 remember, there were maybe —

9 doa transaction without meeting 9 MR. CRONER: He asked about
10 them, seeing the size of their law 10 Lewis Rice. He asked who you met
11 firm, were they of substance, would 11 with at Lewis Rice.

12 they — is this a transaction that I 12 THE WITNESS: Oh, I'm
13 should or shouldn't do. 13 sorry. Would you please repeat it.
14 I went into St. Louis and 14 MR. WEEDE: I'm sorry.
15 Heritage was fully aware of that, 15 BY MR. WEEDE:
16 that I wasn't going to make a 16 Q. At the November 27th, 2000,
17 commitment to do a transaction until 17 meeting that you had in St. Louis
18 [had met Lewis Rice and had a chance 18 with members of Lewis Rice, which
19 to interview Lewis Rice and ask them 19 members of Lewis Rice did you meet
20 about whether or not this was a 20 with on that date?
21° legitimate transaction. 21 A. Okay. The ~ Mike
22 Was this a transaction if 22 Mulligan, Bill Falk, Jaime Mendez,
23 they wrote an opinion it would — it 23 and Larry Weltman. And Tom Reed and
24 would hold up under scrutiny if it 24 myself.

47 49

1 was contested by the IRS. 1 Q. And at that meeting you

2 Because it was a complex 2 discussed the tax strategies that

3 tax transaction and that's the reason 3 Heritage had presented to you in

4 you — you — you went to firms of 4 these meetings in November with the

5 the size of Lewis Rice and the 5 members of Lewis Rice; is that

6 substance of Lewis Rice because they 6 correct?

7 had the wherewithal and — and were 7 A. It was probably more

8 represented as doing these type — 8 correct to say that I asked them if

9 type of things. 9 they were familiar with the details
10 So I wanted to know the 10 of the Heritage transaction and they
11 _ legitimacy of this transaction. 11 indicated they had.

12 Q Soyou wanted to see them 12 So I don't remember

13 in their offices. That's part of it. 13 _ spending much time whereby I asked
14 A. Yes, but I also wanted to 14 them to give me the details of the

15 ask them questions about the 15 transaction, because Heritage had

16 transaction. 16 done that.

17. Q. Ofcourse. 17 What I - so to answer your

18 Was Mrs. — you were at 18 question, more time was spent talking
19 that meeting on November 27th in St. 19 about the ability to write an opinion
20 Louis with members of Lewis Rice; 20 concerning the transaction as opposed
21 correct? 21 to all the details of the

22 ~~ A. And as was Tom Reed. 22 transaction.

23 Q. Tom Reed was there. 23 Because they — they —

24 Was Mrs. Penske there? 24 they seemed to be, you know, they ~

215.564.3905

srr

James DeCrescenzo Reporting, ic

InnovatingLitig:

jation FAX 248.751.0581

1880 JFK Bivd., 6" Floor, Philadelphia, PA 19103
www.JDReporting.com



Deposition of William J. Falk

Richard H. Penske, et al vs.

3/2/2006 Lewis, Rice & Fingersh, L.C.
Page 61 Page 63

o Q: Was he a lawyer; do you know? mo Q: And so you can't tell me, I take it,

cy A: Ido not know. whether, in fact, Mr. Penske had authorized

o Q: Do you have any idea why Mr. Czerwinski was 0) Mr. Mulligan to have Lewis, Rice undertake any work
tin Bethtehem on November 16th of 2000? 1 on his behalf; fair to say?

oy A: Thave no information about that, no. ro) A: That's correct. I cannot say. I cannot say

ta Q: Were you personally working on anything (a that Mr. Penske authorized Mr. Mulligan,

m_ telating to Richard Penske at this point in time? nm Q: In the middle — actually, they are sort of

ry A: I'd have to look at my time entries to tell (| numbered items on this FedEx Airbill. Item No. 2

13 you for certain. I said carlier that I began (says, "Your internal billing reference.”

tw) Working on Mr. Penske's matters several days before uo) Do you see that?

uy the meeting. I don't know whether we began as on A: I see that.

4) early — or whether I began, I should say, as early 12 Q: Is that essentially an internal Lewis, Rice

nx) as November 16th. oa client matter number?

Coy Q: Would you understand, from the fact that roy A: It has the structure of one, yes.

un Mr. Mulligan was sending Mr. Czerwinski a package on “5 Q: And if that is in fact the case, I take it

tq November 16th, that someone at Lewis, Rice was doing ua the first series of digits represents the client

un some sort of work for Richard Penske? 7 number; am I right?

chy A: Ido not —Ican't say that for sure. That 06 A: That's how we generally use them, yes.

tim would be reflected in the time entries, and I ut Q: And the second set of digits after the

‘n0) believe those have been provided. 0 decimal point represents the matter number; correct?
eu Q: Do you know whether, as of November 16th, co A: That's how we use them, yes.

2) 2000, Lewis, Rice had received authorization from Cy Q: Do you recognize that particular client

7 Mr. Penske to do any work on his behalf? 3) matter number?

ea A: I do not know. ba A: Ican't say Ido.

pa Q: Do you know whether, in fact, Lewis, Rice ry Q Do you recognize the client number?

Page 62 Page 64

0 was receiving whatever instructions it was receiving a A: Ido not.

with regard to Mr. Penske strictly from Heritage? a Q: Do you know whether in fact a client number
oy A: I think instructions is probably a strong ) had been opened for Mr. Penske at this point in

ta word. My understanding was that Mr. Penske had been. time?

1 referred as a potential client to Lewis, Rice, and oO A: donot.

t@ to the extent that Lewis, Rice was beginning work, 6 Q During the time that you have been working
TM it would have been in anticipation of forming an mor did work in connection with clients relating to

tm attorney-client relationship. 9 Heritage, did Lewis, Rice have a separate client

B Q: But to the extent that Lewis, Rice was doing number for Heritage?

tt) any work, as you described it, who had authorized 29) A: Yes, we did, because at one point the firm
an Lewis, Rice to do that work? un had done some work for Heritage.

oy A: The authorization, to the extent that there i) Q: And do you recognize whether this particular
us) Was any authorization given, would have been from tw number, 109210, is the Heritage client number?

ug Mr, Mulligan, cy A: I don't recognize it one way or another.

us Q: To do the work? rey Q So you can't tell me it's also ~ I take it,

tg A: (Nods head.) ug that it's not a Heritage client number; correct?

on Q: You have to say yes or no. on A: It is correct that I cannot tell you it is

29 ‘A: What was the question? Before I say yes, I us not the Heritage number.

us} want to know what the question was. ry Q: Okay.

po Record read.) bo A: Did I just say something? I'm not sure what
Bn THE WITNESS: That would be a yes. ey that meant,

my Q: (By Mr. Croner) And do you know whether cy MR. CRONER: This is Plaintiffs' No. 5, I

ey) Mr. Mulligan had had any direct contact of any kind x think, .

oq with Mr. Penske at that point? pq Plaintiffs’ Exhibit 5 was marked for

Bs A: Ido not know. ps identification.)

Gore Perry
Page 61 - Page 64

Gateway & Lipa
(314) 241-6750 621-4790 621-2571 621-8883

St. Louis, MO


LEWIS, RICE & FINGERSH, L.C.

November 21, 2002
Page 2

Pagoda was and is in the retail jewelry business. In his capacity as Chief Executive
Officer of Pagoda, Mr. Penske initiated a gold-consignment program the principal benefit of
which was to allow Pagoda to finance its gold merchandise at rates that were less than its
traditional bank borrowing rates. Although not a stock warrant investment per se, the gold-
consignment program functioned using similar techniques.

Mr. Penske was a reasonably sophisticated investor whose holdings included a variety of
ventures, some self-managed securities investment accounts, and some manager-advised
securities investment accounts. Industry groups covered included banking and finance, biotech,
health care, hardware and software, telecommunications, retail, and gaming. The portfolio
investments included companies operating domestically, as well as companies with
predominantly foreign operations, particularly in Europe and Asia. Portfolio investments took
both long and short positions, depending on economic conditions and where his advisors, fund
managers, and he saw opportunities for profit.

As a member of the board of directors of a banking institution, Mr. Penske was aware of
other institutions, both domestic and foreign, engaged in the banking business and the potential
attractiveness of investing in some of those institutions. Since the summer of 1996, Mr. Penske
had had an interest in European banks. Mr. Penske also had been attending the Basel
(Switzerland) Jewelry Shows for years on behalf of Pagoda and, as a consequence, had some
first-hand experience with and knowledge of Swiss banks. By mid-1997, Mr. Penske believed
that, due to anticipated European bank mergers in the third and fourth quarter of 1997 and more
general business considerations, there was a substantial potential for investment profit in
European banks, particularly Deutsche Bank and Union Bank of Switzerland (“UBS”). At that
time, UBS was the largest bank in Switzerland, and its stock was traded on the Swiss stock
exchange. Mr. Penske believed that such stocks were interesting both for their investment
potential and also (as a result of their holdings of Swiss and other currencies) as a means of
reducing the potential for loss in the value of his stock in Pagoda attributable to fluctuations in
foreign currencies resulting from Pagoda’s purchases abroad of gold used in its business. Mr.
Penske’s interest in UBS began substantially before he first learned about the potential
investment in Pinegrove Capital, Inc. (“Pinegrove”) or the use of Pinegrove or any other entity to
acquire a position in UBS. At the time he first became interested in investing in UBS, Mr.
Penske neither had nor received any information relating to potential tax benefits to be derived
from an investment in UBS.

In August 1997, a KPMG representative made a presentation and recommendation to
Mr. Penske with respect to a proposed investment strategy that involved an investment in one or
more European bank stocks. That representative subsequently introduced Mr. Penske to QA
Investments, LLC (“Quadra”), an investment advisor. Quadra was also enthusiastic about
European bank stocks at this time, viewing them as having a promising potential for growth,
with limited risk of decline in value. Quadra had designed the method—recommended by KPMG

Penske
006447


ORAL DEPOSITION OF RICHARD HERMAN PENSKE,

3/17/06

29 (Pages 110 to 113)

110 112
1 Q. So you signed more than one 1 A. I'm not certain. I mean,
2 Confidentiality Agreement? 2 there is documents somewhere that
3 A. [believe they would be 3 would confirm that. There would be a
4 classified as Confidentiality 4 record of the dating.
5 Agreements. 5 Q. But you don't know from
6 Q. How many Confidentiality 6 personal knowledge?
7 Agreements do you remember signing? 7 A. I can't recall.
8 A. [don't recall. 8 Q. That's all I have for that
9 Q._ Do you recall when you 9 one.
10 signed this one? IfI could direct 10 (Defendant's Exhibit 9 was
11 youto~ 11 marked for identification.)
12 A. Imean, it's dated. 12 BY MR. WEEDE:
13 Q 434. 13 Q. Mr. Penske, the court
14 A. 434, It's dated 10/25. 14 reporter has handed you Defendant's
15 Q. Was that at a meeting that 15 Exhibit 9, which is the Complaint in
16 you had with the Heritage group? 16 this action.
17 __ A. Idid have a meeting on 7 Have you seen this document
18 10/25 with the Heritage group. 18 before?
19 Q Do you recall signing that 19 A. I've seen the Complaint,
20 at this meeting? Sorry. Excuse me. 20 yes.
21 Do you recall signing this 21 Q. Could you tum with me,
22 Agreement at that meeting? 22 please, to Paragraph 51. The first
23 A. Idon't remember. 23 sentence there reads, LRF ~ and I'll
24 Q The other — 24 represent to you that LRF refers to
ql 113
1 A. Imean— 1 Lewis Rice — and Plaintiffs entered
2 Q Sony? 2 into an attomey-client relationship
3 A. Imean, there are three 3 in or about October 2000 during a
4 dates on this. There's 10/25, 4 meeting between Plaintiff Penske and
5 November 3, and 10/31. There's a 5 representatives of LRF.
6 number of dates on here. 6 Do you know what meeting
7 Q. But your signature and Tom 7 that paragraph is referring to?
8 Reed's signature are both on 10/25; 8 A. The first I met Lewis Rice
9 is that correct? 10/25/2000? 9 was the 27th of October.
10 ~—A. Right. But my signature 10  Q. OfNovember or October?
11 also appears at November 3 under 11 A. Excuse me. 27th of
12 Patrick Capital, so I'm not sure if 12 November.
13 we - if it was backdated or -I B Q. So is it your understanding
14. mean, I can't — 14 that this should read LRF and
15 Q. Okay. 15 Plaintiffs entered into an
16 A. I mean, you've got — 16 attorney-client relationship in or
17 because if I — as I say, there's my 17 about November of 2000 during a
18 signature twice with two different 18 meeting between Plaintiff Penske and
19 dates on it. 19 representatives of LRF?
20  Q. Now, the other 20 MR. CRONER: Objection to
21 Confidentiality Agreements you said 21° the form.
22 that you signed with Heritage, would 22 THE WITNESS: The word in
23 they have come after or before this 23 or about, I would —
24 Agreement? 24 MR. WEEDE: Did —

215.564.3905

BPX

James DeCrescenzo Reporting, Lc

InnovatingLitigation

FAX 215.751.0581

1880 JFK Bivd., 6" Floor, Philadelphia, PA 19103
www.JDReporting.com



ORAL DEPOSITION OF RICHARD HERMAN PENSKE,

3/17/06

7 (Pages 22 to 25)

22 24
1 about the — the capital gains and I any specifics with regard to the tax
2 the impact of that transaction on 2 transaction which you would later go
3 capital gains and the impact of that 3 forward with in 2000; is that
4 transaction to estate planning. 4 correct?
5 They — they indicated that 5 A. That is correct.
6 they had an office of professional — 6 Q. Did you go on to signa
7 professionals in Dallas that 7 Confidentiality Agreement with
8 specialized in high-end estate 8 Heritage?
9 planning and tax transactions and 9 A. Yes, I did.
10 that they — they could save me 10 = Q. Doyou recall when you
11 significant dollars. 11 _ signed that agreement?
12 Q. Do you know if the — Mr. 12 A. [don't recall.
13 Van Borys and the other person from 13 Q. Well, let me ask you this:
14 Heritage traveled from Dallas to 14 Did you sign it before you had any
15 Pennsylvania for purposes of this 15 further meetings with people from
16 meeting? 16 Heritage?
17 A. Thaveno idea. 17 A. After that meeting, in
18  Q. Was there anyone from 18 order to get to the next step,
19 Lewis, Rice & Fingersh, L.C. — I'll 19 somewhere in there I signed a
20 just call them Lewis Rice throughout 20 confidential - Confidentiality
21 the remainder of this deposition. 21 Agreement and wrote a check to them
22 Was there anyone from Lewis Rice at 22 for either the 22,000 or 22,500.
23 that meeting? 23 Q. Do you recall when the next
24 A. No, there wasn't. 24 meeting was?
23 25
1 Q. Were you given any I A. I believe it was the first
2 materials at that meeting? 2 week in November.
3 A. Idon't recall. 3 Q. November 3rd sound correct
4 Q. Did any members of 4 toyou?
5 Heritage — strike that. 5 A. That sounds correct.
6 How did that meeting wind 6 Q. Now, you described the
7 ? 7 Agreement as a Confidentiality
8 A. Their pitch was, as I asked 8 Agreement.
9 questions, they weren't able to give 9 Who were the parties to
10 me more information unless I was 10 that Agreement?
11 willing to give them a — signa 11 A. [know that I~Isigned
12 Confidentiality Agreement and give 12 the Agreement. I'm not sure who else
13. them a-—a- like a fee, which was 13 signed it. Tom Reed might have been
14. either 22,000 or 22,500. 14 asked to sign it also, because he was
15° Q. Okay. 15 at that meeting with me. And who
16 A. Soit was — it was 16 signed it from Heritage, I have no
17 based — I had to do that in order to 17 ic
18 take -- to find out what their exact 18 Q. Soaccording to your
19 plan was. 19 recollection, Tom Reed, you, and
20 Q. Sothey only discussed 20 members of Heritage signed that
21 generalities with you at the October 21 Agreement.
22 25th, 2000, meeting? 22 Did Mrs. Penske, your wife,
23 A. That is correct. 23 sign that Agreement?
24 Q And they didn't give you 24 A. Idon'tremember. She was

215.564.3905

SPr

James DeCrescenzo Reporting, ic

InnovatingLitige

jation FAX 215.751.0581

1880 JFK Bivd., 6" Floor, Philadelphia, PA 19103
www.JDReporting.com



ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06
16 (Pages 58 to 61)

58
that they were familiar with the

60
A. Correct. Yes. 1 would

i 1
2 transaction. 2 agree -- yes, I would agree.
3 MR. WEEDE: Okay. 3 Q. So for them to know what
4 BY MR. WEEDE: 4 the tax transaction is, either you
5 Q. So going into the meeting 5 would have had to tell them what the
6 on November 27th, 2000, with the 6 tax transaction is or Heritage would
7 members of Lewis Rice, you assumed 7 have had to tell them what the tax
8 they would be familiar with the tax 8 transaction is.
9 transaction which you were seeking 9 Would you agree with that?
10 their advice on. 10. A. I—I~you're — you're
i MR. CRONER: Objection; 11 making an assumption and [ — I
12 asked and answered. 12 _ believe it's probably correct, but I
13 THE WITNESS: Again, I 13 can't — in other words, it's not for
14 can't say that. 14 me to acknowledge.
15 {~I clearly went to St. 15 AIL know is when I went
16 Louis because I wanted to meet the 16 in to St. Louis, we didn't spend a
17 members of the law firm and ask them 17 Jot of time talking about the details
18 about writing a legal opinion and 18 of the transaction and they seemed to
19 could they write an opinion and what 19 be up to date with the information.
20 was their assessment on whether it 20 So if you're — if you're
21 was a good transaction or a bad 21 saying assumptions, your assumption
22 transaction. 22 could be correct but I can't confirm.
23 Or — because I, at that 23 =Q. I'm just asking what you
24 point, had not made any decision 24 thought, assumed.
59 61
1 whatsoever as to whether I was going 1 A. Well, I mean, once I got
2 to do the transaction or not. 2 there —
3 And I went to St. Louis to 3 MR. CRONER: I'll object.
4 try to get clarification and comfort 4 I think he's answered that already,
5 _as to whether this firm should be — 5 that he didn't think about it.
6 be hired and whether the Heritage 6 MR. WEEDE: Allright. You
7 transaction should be done. 7 just didn't think about it.
8 BY MR. WEEDE: 8 THE WITNESS: Yeah.
9 Q. Tm not going to belabor 9 MR. WEEDE: Okay. All
10 the point much longer. I'm really 10 right.
11 just trying to figure out, if they're 11 BY MR. WEEDE:
12 going to opine on the tax 12 Q. Now, did you think that
13 transaction, which is your point for 13 Lewis Rice were Heritage's attorneys?
14 going to St. Louis and meeting with 14 A. I—maybe you should
15 them on November 27th; is that 15 clarify that.
16 correct? 16 Q Sure.
7 MR. CRONER: They being 17. A. What I will say is that
18 Lewis Rice. 18 Lewis ~ Heritage recommended Lewis
19 MR. WEEDE: Correct. 19 Rice. Whether there was —I—I
20 MR. CRONER: All right. 20 never thought at the time, was there
21 BY MR. WEEDE: 21 arelationship between the two.
22  Q. Presumably, they would have 22  Q Okay. So up until November
23 to know what the tax transaction was. 23 27th, you had no understanding
24 Would you agree with me on that? 24 whether or not there was a

SPr

James DeCrescenzo Reporting, tc
InnovatingLitigation
1880 JFK Bivd., 6" Floor, Philadelphia, PA19103
www.JDReporting.com

215.564.3905 FAX 215.751.0584


ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06

12 (Pages 42 to 45)
42 44
I only one I remember is Lewis Rice. i] Q. How long did you meet with
2 And the reason I say that, if there 2 members of Lewis Rice that afternoon
3 were multiple — I'm pretty 3 of November 27th, 2000?
4 investigatory and — 4 A. I'm not sure. Perhaps two,
5 Q. I'msorry. You're pretty 5 three hours.
6 invested to who? 6 Q. Were members of Heritage
7 MR. CRONER: Investigatory. 7 present with you at that meeting with
8 MR. WEEDE: Investigatory. 8 the Lewis Rice attorneys?
9 Sorry. 9 A. No.
10 THE WITNESS: In other 10 Q. So did any of the Heritage
11 words, if there would have been more IL members accompany you to St. Louis on
12 than one name, I would have 12 the Heritage jet?
13 remembered. So I only remember the 13. A. What - maybe you need to
14 one name, Lewis Rice. 14 rephrase it. The — the people
15 BY MR. WEEDE: 15 _ flying the airplane were — were
16 =Q. You didn't think about 16 employees of the Heritage.
17 _ using a Pennsylvania law firm? 17 Q Sure. Good point.
18 A. Idid not. 18 A. It was ~ it was a Heritage
19 Q. You didn't ask Heritage if 19 airplane.
20 there were any Pennsylvania law firms 20 =Q Allright. Did either of
21 that did this type of transaction or 21 the members — or any of the members
22 that offered opinions on this type of 22 of Heritage that you had the meeting
23 tax transaction? 23 with on October 25th, November 3rd,
24 A. Ididn't. 24 November 17th of 2000 that were
43 45
1 Q. What was the first contact 1 presenting you with the tax
2 you had with any members of Lewis 2 transaction and their strategies, did
3 Rice? 3 any of those individuals accompany
4 A. When we arrived in St. 4 you to St. Louis on November 27th,
5 Louis on the - on the 27th. 5 2000?
6 Q. So you didn't receive any 6 A. [believe that that is
7 phone calls from them. 7 correct, meaning that I don't believe
8 A. No, it was arranged by 8 any of the presenters of Heritage
9 Heritage. 9 made that trip with me. They
10 Q > Soon November 27th, first 10 weren't - they certainly were not in
11 you traveled to Dallas. 11 the meeting in — they were not in
12 A. Correct. 12 the meeting in St. Louis.
13. Q > You met with people from 13 And I don't believe any of
14 Heritage. 14 the presenters were on the plane that
15 A. Correct. 15 went from Dallas to St. Louis, just
16 Q And then you went to St. 16 the employees operating the aircraft
17 Louis to meet with members of Lewis 17 itself.
18 Rice. 18  Q Okay. Now, what was your
19 A. Correct. 19 reason for visiting Lewis Rice on
20  Q. Were members -— so about 20 November 27th?
21 what time — did you show up in St. 21 A. To ask them about the
22 Louis in the afternoon? 22 transaction, to ask them whether in
23 =A. Yeah. It must have been, 23 their legal opinion, because Heritage
24 say — yeah, afternoon. 24 had mentioned that they had done a

215.564.3905

Pr

James DeCrescenzo Reporting, ic

Innovatingt

Litigation

FAX 215.751.0581

1880 JFK Bivd., 6” Floor, Philadelphia, PA19103
www.JDReporting.com



ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06

30 (Pages 114 to 117)
114 116

i THE WITNESS: You know, we 1 sentence of Paragraph 64.

2 signed an engagement letter December 2 LRF, again, that's

3 1 and I met them November 27th. 3 referring to Lewis Rice, and

4 BY MR. WEEDE: 4 Plaintiffs entered into an

5 Q. Did you enter into an 5 attorney-client relationship and an

6 attorney-client relationship with 6 oral contract for the provision of

7 members of Lewis Rice on November 7 legal services in or about October

8 27th, 20007 8 2000 during a meeting between

9 MR. CRONER: Objection; 9 Plaintiff Penske and representatives
10 asked and answered. 10 of Lewis Rice — or LRF, referring to
al THE WITNESS: I mean, I'm 11 Lewis Rice.
12 not —I mean, December | is the 12 Is that an accurate
13 engagement letter and I think I've 13 statement?
14 answered that question. 14 A. Again, if you're using the
15 MR. WEEDE: Okay. 15 word in or about, I signed a ~ I
16 BY MR. WEEDE: 16 executed a document December 1. I
17 Q. So you're —- just to make 17 _ guess that's a legal definition, what
18 sure I have your testimony, you did 18 you mean by in or about. It's an
19 not enter into an attorney-client 19 approximate time period.
20 relationship on November 27th, 2000, 20  Q Okay. But what you signed
21 with members of Lewis Rice; is that 21 on December Ist, 2000, was not an
22 correct? 22 oral contract; is that correct?
23 MR. CRONER: Objection to 23 A. Yeah, it was a written
24 the extent you're asking him to call 24 engagement letter.

115 117

1 for some sort of legal conclusion. 1 Q Soto the extent that this

2 THE WITNESS: Yeah. 2 paragraph says that Lewis Rice and

3 MR. CRONER: Whether he 3 Plaintiffs entered into an

4 entered into one, whether he could 4 attorney-client relationship and an

5 have asserted one. 5 oral contract for the provision of

6 ‘You can answer as best you 6 legal services in or about October

7 understood it. 7 2000, during a meeting between

8 BY MR. WEEDE: 8 Plaintiff Penske and representatives

9 Q. What was your 9 of LRF, that's not a true statement.
10 understanding? Let's put it this 10 Is that what you're telling
11 way: What was your understanding? 11 me?
12 Did you understand that you had 12 A. Yeah. I met with them
13 entered into an attomey-client 13 December I. I mean, excuse me,
14 relationship with members of Lewis 14 November 27th was the first meeting I
15 Rice on November 27th, 2000? 15__ had with them.
16 A. I~I-I-—TIbelieve 16 Q _ Did you enter into an oral
17 that the — it was entered into 17 contract for the provision of legal
18 December 1, but I don't ~ I don't 18 services on November 27th, 2000, with
19 believe it was entered into on the 19 members of Lewis Rice?
20 27th. 20 MR. CRONER: Objection;
21 Q Please tum to Paragraph 21. calls for a legal conclusion.
22 64, please. 22 You can answer to the best
23 A. AsIsay—okay. 64. 23 youcan.
24  Q Tread you the first 24 THE WITNESS: I -I—as

216.564.3905

Br

James DeCrescenzo Reporting, tc

InnovatingLitigation

FAX 215.751.0581

1880 JFK Blvd., 6" Floor, Philadelphia, PA 19103
www.JDReporting.com



Form 2848 (Rev. 12-97) Page 2

7 Notices and communications. Original notices and other written communications will be sent to you and a copy to the
first representative listed on {ine 2 unless you check one or more of the boxes below.
if you want the first representative fisted on line 2 to receive the original, and yourself a copy, of such notices or

a
communications, check thisbox . 2 2... ee ee ee ee eee ee
b If you also want the second representative listed to receive a copy of such notices and communications, check this
box ee ee
c¢_If you do not want any notices or communications sent to your representative(s), check thisbox  . . . . . . .»()

8  Retentian/revocation of prior power(s) of attorney. The filing of this power of attorney automatically revokes alt earlier
power(s) of attorney on file with the Internal Revenue Service for the same tax matters and years or periods covered by

this document. If you do not want to revoke a prior power of attorney, check here. . . 2... 2... . FO
YOU MUST ATTACH A COPY OF ANY POWER OF ATTORNEY YOU WANT TO REMAIN IN EFFECT.

9 Signature of taxpayer(s). If a tax matter concerns a joint etun, both husband and wife must sign if joint representation is
requested, otherwise, see the instructions, If signed by a corporate officer, partner, guardian, tax matters partner, executor,
receiver, administrator, or trustee on behalf of the taxpayer, | certify that | have the authority to execute this form on behalf
of the taxpayer.
> IF NOT SIGNED AND DATED, THIS POWER OF ATTORNEY WILL BE RETURNED.

Print Name.

Declaration of Representative

Under penalties of pegury, | declare that:
© | am not currently under suspension or disbarment from practice before the internal Revenue Service;
® | am aware of regulations contained in Treasury Department Circular No. 230 (31 CFR, Part 10), as amended, concerning
the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries, and others;
© | am authorized to represent the taxpayer(s) identified in Part | for the tax matter(s) specified there; and
@ | am one of the following:
a Attorney—a member in good standing of the bar of the highest court of the jurisdiction shown below.
b Certified Public Accountant—duly qualified to practice as a certified public accountant in the jurisdiction shown below.
¢ Enrolled Agent—enrolled as an agent under the requirements of Treasury Department Circular No. 230.
d= Officer—a bona fide officer of the taxpayer's organization.
e Full-Time Employee—a full-time employee of the taxpayer.
£ Family Member—a member of the taxpayer's immediate family (.e., spouse, parent, child, brother, or sister).
g Enrolled Actuary—enrolled as an actuary by the Joint Board for the Enrollment of Actuaries under 29 U.S.C. 1242 (the
authority to practice before the Service is limited by section 10.3(d)(1) of Treasury Department Circular No. 230).
fh Unenrolled Return Preparer—an unenrolled return preparer under section 10.7(c)(viil) of Treasury Department Circular
No. 230.
> IF THIS DECLARATION OF REPRESENTATIVE IS NOT SIGNED AND DATED, THE POWER OF ATTORNEY WILL
BE RETURNED.

Designation—insert | Jurisdiction (state) or Dat
above letter (a-h) Enrollment Card No. = Signature ate
WH +- OF

a MO

a Mo SL ff sas wh yfay

Penske
005434



Jacob IeeIoCII CIEE COMM. JOURNAL-

eke
se otooioioiccictooiooink DATE DEC-24-2001 sooo TIME @92.42 xEICIOICIOIOK

START=DEC-B4 09:38 ayLnec-as a9:42

“LEWIS RICE &@ FINGERSH
7314 444 788 = ex —

Jebepecboeriacedeooooooen
RK pIA IK
314 444. 788- eric

LEWIS, RICE & FINGERSH, L.C.

ATTORXEYS ATLAW
905, MAOAOWAY, ume 3000
AROS. MUGOURE 62102007
WLLL 1.88 ‘Ww LAR 00M . Ten gig aero"
DURECT BIg 444-713 WRALK@LEWISKICECOM ax qigan
TO: FAX NUMBER: ‘TELEPHONE NOMBER:
{ Joseqih D. McCarthy, IRS. 610-865-8201 610-865-6332, ext 103
Sheidon Kay 404-222-7633 404-614-8620
oc: Lawrence H, Weltman ERE/STL, 4
FROM: ‘William J. Falk
| DATE. Decanther 4, 2001
TIME: cae
TOTAL PAGES (WITH COVER): 3 4
| CLIRNT/MATSER NUMER; 110515.28994 |

COMMENT: Mr, McCarthy, I have attached x aew Form 2848 (Power of Attorney aad
Declaration of Representative) for Mr. and Mrs. Peaske. T will ond a hurd copy original to
you by mail As my partmer Luwrence Weltmam advined you yesterday, we now expect to
respond (o the remaining information document requests shorty.

PURASE CALL 314-444-7785 iy A PROBLEM OCOURS fh TRY. TRANSMIBSION OF THIN DOCUMENT,

"THES MESSAGE 6 INTENITED ONLY FON THE USE OF THE BHOIVIOUAL OR ENT TO WHICH (T & ADDRENSEN AND MAY
CONTAIN ihFORMATION THAT IS PRIVILRGED, CONPIDENTIAL ANH EXEMPT FROM DYECLOSUKK TINOER APPLICABLE LAW,
Tr THE ROADER OF THIS MESSAGE 1S NOT THU INTENDED RECHIENT OR THR SMPLOTES OR AGENT REAPORSIBLE POR
DELIVERING: (05 MBSSACT TO TH INTENDED RECENT, YOU ARS HEXEDY NOTIFED THAT ANY DISSEMINATION,
DISTRIBUTION, OR CUFT) OF TIS COMMUNICATION G STRICTLY PROMINIED. IF YOU HAVE KECFIVED THE
COMMUNICATION IN ERROR, FLEASR NOTIFY US DAMGOIATELV HY \ELEFHONE (COLLECT), ANT) RETURN THB ORIGINAL
{ MESSAGE TO US ArC14R ABOVE ADDRESS VIA IVR U.$, POSTALSERVICE. THANE YOU,

Penske
005569

|S7T.LOVER, MIASOUY » KAMBASCITY, MUSOINE ¢ $6. LOULCOUITY « WASRIOGTON, MISSOURI « BELLEVILLE, MLUNGE « LEAWOOD, KANSAS


ORAL DEPOSITION OF RICHARD HERMAN PENSKE,

3/17/06

25 (Pages 94 to 97)

94 96

| Power of Attomey. 1 2001.

2 Q. Okay. 2 THE WITNESS: Okay.

3 A. But I don’t — don't know 3 BY MR. WEEDE:

4 when. I believe it was signed 4 Q. Mr. Penske, do you

5 somewhere in order for them to 5 recognize this calendar month? Let

6 represent me in the audit. 6 me strike that.

7 Q. Okay. So it could have 7 Do you recognize this

8 been signed in St. Louis; is that 8 document?

9 correct? 9 A. It's — it's the daily
10 A. I—Idon't know. 10 planner of Tom Reed.
ll Q You don't know? You have W Q. Directing your attention to
12 norecollection? 12 the 7th, 8th, and 9th, those all say
13° A. No. 13. St. Louis on them.
14 Q. Did you travel again to St. 14 A. Correct.
15 Louis in October of 2001? 15 Q._ Does that refresh your
16 A. Idon'trecall. You might 16 recollection whether or not you were
17 have a record of it. I just don't 17 in St. Louis in October 7th, 8th, and -
18 recall. I made — I know I made a 18 9th along with Mr. Reed?
19 trip in August and I might have made 19 A. This is his record and if
20 another trip that fall. 20 he was in St. Louis on these dates, I
21+ Q Letmeask you this: Do 21 was in St. Louis on these dates.
22 you recall making another trip to St. 22 >  Q Okay. Do you recall on
23 Louis after that August 2001 trip, 23 those dates you'd be meeting with
24 you just don't recall the date, or 24 Lewis Rice?

95 97

1 you're not sure if you made a trip at 1 A. [-I- there was —I

2 all? 2 think we did go another time in the

3 A. I think I made another 3 fall.

4 trip, but I'm not certain. My 4 Q. Okay.

5 recollection is I believe I did make 5 A. And so those dates, yeah,

6 another trip. I don't have a 6 that's probably correct.

7 recollection of the date. It's - 7 Q. Okay. And again, do you

8 Im sure there's a record of it. 8 recall the purpose of that visit?

9 Q. Ill see ifI can find 9 A. This was for the 1997 IRS
10. that. 10 audit. I'm certain that's what it
ll A. Tim going to excuse myself 11 was for. And this is '01, isn't it?
12 for one minute. 12 October of 01?
13 MR. CRONER: Do you need a 13 Q. That's correct.
14 break? 14 Did anyone not affiliated
15 Qecess, 2:07-2:11 p.m.) 15 with — let me step back.
16 MR. WEEDE: Back on. 16 Did Mr. Reed also assist
17 MR. CRONER: Sure. 17 you with your 1997 federal income tax
18 (Defendant's Exhibit 7 was 18 audit?
19 marked for identification.) 19 A. Didhe assist me?
20 THE WITNESS: This is what? 20 MR. CRONER: Objection;
21 October? 21 vague.
22 MR. WEEDE: Yes. Sorry. 22 You can answer.
23 It's cut off in the upper right-hand 23 THE WITNESS: Did he assist
24 comer. I believe it's October of 24 me in doing the '97 audit? I mean,

215.564.3905

ar

James DeCrescenzo Reporting, ic

InnovatingLitigation

FAX 215.751.0584

1880 JFK Bivd., 6" Floor, Philadelphia, PA 19103
www.JDReporting.com



ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06

22 (Pages 82 to 85)
82 84
1 to clarify was that the numbers on 1 had basically completed the estate
2 the right side were written at a 2 planning transaction for you?
3 different time than the handwriting 3 A. I paid the bill, so it - I
4 on the left side. 4 would — I would literally say that
5 A. That's correct. 5 that -- it was basically completed.
6 Q. Does RHP Investments or 6 Now, does that mean it's entirely
7 does RHP INV, period, refer to RHP 7 completed? It was an ongoing
8 Investments, L.P.? 8 process, but the ~ I would say
9 AL Yes. 9 basically —
10 Q. Sowas this bill charged to 10 Q. As of that time, it was
11 that entity? 11 basically completed.
12 A. Was this bill — 1 -I— 12. A. That's fair.
13 1—I paid this bill from my RHP 13° Q. Thanks.
14 Investments account. 14 A. Was it completely finished?
15. Q > Doyou know if RHP 15 I can't 100 percent.
16 Investments, L.P., is a Missouri 16 Q. You don't know 100 percent
17 limited partnership? 17 if it was completely finished, but
18 A. Itis. 18 the terms of the letter say it was
19 Q. Do you know where its 19 basically —
20 principal place of business is? 20 A. ‘It was essentially — the
21 A. I'mnot sure technically. 21 main part of it was done.
22 Tm really not. 22 Q Thanks.
23° = Q. Well, let me ask you this: 23 (Defendant's Exhibit 6 was
24 Do you know what the Partnership 24 marked for identification.)
83 85
1 Agreement says its principal place of 1 BY MR. WEEDE:
2 business is? 2 Q. Mr. Penske, before you --
3 A. I'm not certain. 3 Tm going to be focusing on Pages 645
4 — Q Would it surprise you that 4 to 676. You'll find that it's the
5 _ its principal place of business, 5 Agreement of Limited Partnership of
6 according to the Partnership 6 RHP Investment, L.P., dated as of
7 Agreement, was St. Louis, Missouri? 7 December 4th, 2000.
8 A. It wouldn't surprise me. 8 ~~ A. Okay.
9 Q. Does that sound accurate to 9 Q. So if you wouldn't mind
10 you? 10 tuming to Page Plaintiffs 00645.
11 A. Idon't know. I'd have to 11 Its in the lower right-hand corner.
12 look at the document. 12. MR. CRONER: The problem
13° Q Allright. Let me ask you 13 _ is, it got chopped a little in the
14 this: Before I move on to that, do 14 copying.
15 you still have Defendant's-5 in front 15 MR. WEEDE: Oh, I'm sorry.
16 of you? I'm sorry to make you put 16 MR. CRONER: No. No. No.
17 that back in front of you. 17 That's fine. We can find it. Which
18 A. Okay. 18 pages do you want?
19 Q. The first sentence there of 19 MR. WEEDE: Just start at
20 that letter says, Since we have 20 00645.
21 basically completed the estate 21 BY MR. WEEDE:
22 planning transaction. 22  Q Do you recognize this
23 Was it true that as of 23 document, Mr. Penske?
24 August 31st, 2001, that Lewis Rice 24 A. I~I-—TIhave seen a RHP

218.564.3905

sr

James DeCrescenzo Reporting, Lc

InnovatingLitigation

FAX 215.751.0581

1880 JFK Bivd., 6" Floor, Philadelphia, PA19103
www.JDReporting.com



LEWIS, RICE & FINGERSH, L.C.

November 21, 2002
Page 4

12, 2001, December 7, 2001, February 22, 2002, and March 7, 2002. Responses to the most
recently received information document requests are being prepared at this time.

Mr. and Mrs. Penske have cooperated fully with the Internal Revenue Service in this
examination. They were not eligible to participate in the Disclosure Initiative under IRS
Announcement 2002-2 (the “Announcement”) because the transactions were already under
examination when the Disclosure Initiative commenced upon the issuance of the Announcement
on December 24, 2001. By that time, however, all or substantially all of the documents and
information related to the transactions in controversy had been submitted to the IRS, so a
disclosure under the Announcement would not have provided additional information to the IRS
and was not authorized under the Announcement.

In summary, we submit that:

. Mr. Penske participated in the transactions at issue for bona fide investment
purposes, with a realistic expectation that he could make a substantial profit, and
with the belief that KPMG personnel would not have recommended the strategy if
it did not meet the highest standards of legal, tax, and accounting propriety. Prior
to receiving this recommendation, he had worked for 14 years with KPMG
personnel in connection with both business and personal matters, and had come to
believe deeply that they were difficult to satisfy but principled. As a result, he felt
confident that the structure of the transaction was solid and correct.

. As an investor, a bank board member, and a regular business visitor to
Switzerland, he was interested in the stock of UBS before hearing anything about
the transactions in controversy. As he perceived the proposal, the transactions at
issue appeared to combine an investment in UBS that he deemed to have
substantial potential for profit with certain tax benefits. His extensive experience
with KPMG—in which they insisted on conformity with the highest standards in
legal, tax, and accounting matters—not only gave him confidence with the
structure of the plan, as noted above, but reinforced his interest in UBS (or
Deutsche Bank). In addition, KPMG introduced Mr. Penske to Quadra personnel
who shared his enthusiasm for UBS and who executed the transactions. Thus,
from an investment perspective, Mr. Penske approached the transaction confident
in its potential for nontax investment profits.

. Finally, the tax consequences of the transactions were supported by opinions not
only of KPMG, but of a nationally recognized and respected law firm, Brown &
Wood (now Sidley Austin Brown & Wood). He has cooperated fully with the
examination and provided all of the information that would have been required
under the Announcement even though he did not qualify for participation in the
Disclosure Initiative.

Penske
006449


LEWIS, RICE & FINGERSH, L.C.

November 21, 2002
Page 3

and ultimately utilized by Mr. Penske—of making leveraged investments in European bank
stocks. Mr. Penske understood that, by purchasing the warrant issued by Pinegrove at that time
of potentially-substantial growth, he was able to take a large, fully-leveraged position in UBS
that was not otherwise available to him in the United States.

KPMG also provided information to Mr. Penske regarding potential income tax benefits
and detriments of investing in the stock of UBS or Deutsche Bank and the warrant of Pinegrove,
and how an investment in UBS would affect his overall asset allocation and tax planning.

Mr. Penske decided to pursue the plan recommended by KPMG and Quadra for
investment in UBS directly and through Pinegrove. He commenced the plan in the fall of 1997
and disposed of the last of his holdings in UBS in 1999. Quadra executed the transactions, and
provided advice with respect to the investment positions. Mr. Penske received tax opinions with
Tespect to the consequences of the transactions from the national accounting firm KPMG (his
regular tax advisors) and from the New York City law firm of Brown & Wood (now Sidley
Austin Brown & Wood). The KPMG opinion is dated August 12, 1998, and the Brown & Wood
opinion is dated August 28, 1998. Mr. and Mrs. Penske filed their 1997 Form 1040 on or about
October 10, 1998.

Mr. Penske’s tax retums included the following items related to the transactions under
Teview:

year description sale price adjusted basis gain (loss)
1997 [UBS Options 232,258) 3,312,829} (3,080,571.
1997 [UBS Stock 1,238,420} 15,305,981) (14,067,561
1997 [Pinegrove Warrant q 1,260,00 (1,260,000)
Call Options (appears to

1997 |be a duplicate entry) 232,258) 218,202} 14,056
1998 |100 shares USBAG 31,19] 369,511) (338,320)
1999 |50 United Bk SW W/D/R. 13,822} 184,755} (170,934

Mr. Penske did not attempt to conceal or disguise the transactions or the items related to the
transactions on his tax returns, listing these items in the usual manner, along with well over 100
other Schedule D items on each of his returns for 1997, 1998, and 1999.

Examination of the 1997 Form 1040 commenced in July 2001. Later, the examination
expanded to include the 1998, 1999, and 2000 tax returns. Hundreds of pages of documents,
together with narrative responses to questions, were submitted on September 13, 2001, October

Penske
006448


EXHIBIT I


EXHIBIT G


ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06

14 (Pages 50 to 53)
50 52

1 well prepared and that this was 1 Rice had been given information from

2 something that they had a great 2 Heritage already about the tax

3 amount of knowledge about and seemed 3 transaction?

4 to be very well prepared. 4 A. It's hard for me to say

5 Even though this was my 5 that. You have to remember, they

6 first meeting, meaning that I — 6 recommended Lewis Rice. They set up

7 since Heritage set up the meeting, 7 the meeting with Lewis Rice.

8 my — my belief is that, you know, 8 So I — with that, I mean,

9 Heritage pretty much brought them up 9 I didn't think much about it. I went
10 to speed as to the transaction and 10 to St. Louis and they — you know, we
11 they were familiar with this 11 had this meeting and I didn't get
12 transaction. 12 into the details of the transaction.
B So when I showed up, they 13 So there — there was some
14 were — they were pretty 14 type of — their — more than likely,
15 knowledgeable and well prepared for 15 there was some type of correspondence
16 that meeting. 16 and dialogue between Heritage and
17 Q So you knew that Heritage 17 Lewis Rice. _
18 was giving them information about the 18  Q. Did you assume that going
19 tax transaction prior to you meeting 19 into the November 27th, 2000, meeting
20 with them? 20 with Lewis Rice, that there would be
21 MR. CRONER: Objection. No 21 some communication between Heritage
22 foundation. He didn't say that. 22 and—-
23 THE WITNESS: Yeah. The 23 A. Ireally didn't think much
24 answer is I - I have no basis for 24 about it. I mean, it was more ofa

51 53

1 that other than they were very well 1 process of me going to Dallas, then

2 prepared when I was at that meeting. 2 going up to St. Louis. Because you

3 BY MR. WEEDE: 3 have to remember, I — I had not made

4 Q. I guess let me step back 4 adecision to do the Heritage

5 and make sure I understand your 5 transaction when we went to St.

6 testimony. 6 Louis.

7 When you left Dallas to go 7 I was going to St. Louis

8 to St. Louis to meet with people from 8 to ~ with Tom with the idea of —

9 Lewis Rice, were you prepared to 9 of—of meeting Lewis Rice, talking
10 explain the Heritage tax transaction 10 to them about the legalistic issues

11 to the members of Lewis Rice at that 11 around the transaction, about whether
12 meeting? 12  ornot they ~ they — they — they
13. A. Idon't recall that — that 13 could write an opinion and what the
14 I was prepared to give them the ~ 14 opinion, you know, was about.

15 all the details of that transaction. 15 And whether this was a
16 I-I—-I was under the 16 good — was ~ was a tax transaction
17 understanding that Lewis Rice was — 17 that — that I could do and they

18 was aware and knew of the Heritage 18 had — and they could give me comfort
19 tax transaction. So when I — when I 19 that I wasn't doing anything that
20 went there, we didn't discuss much as 20 wasn't legitimate.
21 related to the details of the tax 21 Q. Okay. I guess where I'm
22 transaction itself. 22 trying to go with this is just that
23 Q > Was that because you 23 if they're going to opine about
24 understood that the people at Lewis 24 whether or not this is a quote,

218.564.3905

BIPr

James DeCrescenzo Reporting, Uc

InnovatingLitic

FAX 216.751.0581

1880 JFK Bivd., 6” Floor, Philadelphia, PA 19103
www.JDReporting.com



EXHIBIT F


tom 2848 Power of Attorney {owe wo, 1545-0150

(Rev. December 1997) and Declaration of Representative For IRS Use only

Department ofthe Tressuxy Received by:

bhtema Revenue Serice > See the separate instructions. Name

Power of Attorney (Please type or print.) Tecehone
1__Taxpayer information (Taxpayer(s) must sign and date this form on page 2, line 9.) Dae ied

Taxpayer name(s) and address Social security number(s) | Employer identification

Richard Penske and Patricia L. Penske 192 yi number

1851 Saucon Valley Road . . : i

Bethlehem, PA 18015 208 : 38 : 7973

Daytime telephone number | Plan number (if applicable)

hereby appoint(s) the following representative(s) as attorney(s)-in-fact:

2__Representative(s) (Representative(s} must sign and date this form on page 2, Part IL)

Name and address CAF No. ...8000-16554R.
William J. Falk, Esq. Telephone No. {ake
500 WN. Broadway, Suite 2000 Fax No. ........A344
St. Louis, MO 63102-21h7 Check if new: Address_C}
Name and address CAF No. .... 801
Lawrence H. Weltman, Esq. Telephone No.
500 N. Broadway, Suite 2000 Fax No.
St. Louis, MO 63102-21h7 Check if new: Address C1)
Name and address CAF No. ......

Telephone No.

Fax No. .....

Check if new: Address (1) Telephone No. []

to represent the taxpayer(s) before the Internal Revenue Service for the following tax matters:

3_Tax matters
Type of Tax (Income, Employment, Excise, etc) Tax Form Number (1040, 941, 720, etc) Year(s) or Period(s)

Income Tax 1040 99T, 1998, 1999

4 Specific use not recorded on Centralized Authorization File (CAF). If the power of attorney is for a specific use not recorded
on CAF, check this box. (See instruction for Line 4—Specific uses not recorded on CAF). . . . . . . . +O

5 Acts authorized. The representatives are autharized to receive and inspect confidential tax information and to perform any
and ail acts that | (we) can perform with respect to the tax matters described on line 3, for example, the authority to sign any
agreements, consents, or other documents. The authority does not include the pawer to receive refund checks ‘eee ti line 6
below}, the power to substitute another representative unless specifically added below, or the power to sign certain returns

(See instruction for Line 5—Acts authorized).

List any specific additions or deletions to the acts otherwise authorized in this power of attorney: .

Note: /n general, an unenrolted preparer of tax returns cannot sign any document for a taxpayer. See Revenue Procedure 81-38,
printed as Pub. 470, for more information.
Note: The tax matters partner of a partnership is not permitted to authorize representatives to perform certain acts. See the

instructions for more infarmation.
6 Receipt of refund checks. If you want to authorize a representative named on line 2 to receive, BUT NOT TO ENDORSE

OR CASH, refund checks, initial here __m_ and list the name of that representative below.

Name of representative to receive refund check(s) >
For Paperwork Reduction and Privacy Act Notice, see the separate instructions. Cat No. 11980) Form 2848 (Rev. 12-97)

Penske
005571


LEWIS, RICE & FINGERSH, L.C.

WILLIAM J. FALK
DIRECT (314) 444-7749

Mr. Joseph D. McCarthy
Internal Revenue Agent
Internal Revenue Service
3 Bethlehem Plaza

Bethlehem, Pennsylvania 18018

ATTORNEYS AT LAW

500 N. BROADWAY, SUITE 2000
‘ST. LOUIS, MISSOURI 63102-2147

‘WWW.LRF.COM TEL G14) 444-7600
WFALK@LEWISRICE.COM FAX G14) 612-7749
December 4, 2001

Re: _ Richard and Patricia L. Penske
SSN 192-34-9695 (RP), Tax Periods 1997, 1998, 1999, Form 1040
Form 2848 (Power of Attorney and Declaration of Representative)

Dear Mr. McCarthy:

I have enclosed a new Form 2848 (Power of Attorney and Declaration of Representative),
revoking and replacing the prior form. This is a duplicate of the form faxed to you on
December 4, 2001. As I mentioned in my fax, we now expect to respond to the remaining
information document requests shortly.

Enclosure

Very truly yours,
Lewis, RICE & FINGERSH, L.C.

By
William J. Falk

Penske
005570

‘ST. LOUIS, MISSOURI + KANSAS CITY, MISSOURI * ST. LOUIS COUNTY * WASHINGTON, MISSOURI + BELLEVILLE, ILLINOIS » LEAWOOD, KANSAS


EXHIBIT L


ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06
24 (Pages 90 to 93)

90
audit of your 1997, 1998, and 1999

92
Lewis Rice in St. Louis on August

| 1
2 tax retums? 2 2001 with regard to your 1997
3 A. Yes, they did. 3 audit ~ the audit of your 1997
4 Q. Okay. How did that come 4 federal income tax returns?
5 about? 5 A. To talk about the audit and
6 A. I~ [received notice from 6 the — you know, the — the IDRs that
7 the IRS in the summer of '01 that I 7 the IRS was requesting.
8 was — my 1997 tax return was going 8 Q. Did you ask Lewis Rice to
9 to be audited. 9 come to you in Pennsylvania?
10 Q. Okay. And then what 10 A. No, didn't. But I
11 happened? 11 might add that with their fees being
12 A. Lat that point made a 12 what — what — what they are, it
13 decision to ask Lewis Rice if they 13 made a lot more sense for me to go to
14 would —- if this is — if they — if 14 St. Louis.
15 they would represent me in my tax 15 Q._Is that pretty much your
16 audit. 16 philosophy generally with regard to
17 Q._How did you ask Lewis Rice 17 your dealings with Lewis Rice?
18 to represent you in connection with 18 A. Pretty much in total. The
19 your tax audit? 19 people here will tell you that I
20 A. Picked up the phone and 20 normally come to Philadelphia for
21° gave thema call. 21 meetings. I understand the — the —
22 Q = Who did you call? 22 the bills keep cranking.
23 =A. I'mnot certain. The 23 Q. Sure.
24 two — the two people that I had the 24 A. And Ihave sold my
91 93
1 most contact was Falk and Weltman. 1 business, so it was just more — more
2 So more than likely it was one of 2 convenient.
3 those two, but it could have been 3 Q. And—
4 Mulligan. 4 A. And it made sense.
5 Q. Okay. Now, did you ever 5 Q. It made sense. It was your
6 travel to St. Louis to visit Lewis 6 practice to go to St. Louis to visit
7 Rice in connection with the audit of 7 Lewis Rice.
8 your 1997 federal income tax returns? 8 A. Yes. Yes.
9 A. Yes. 9 Q_ What was generally
10 =Q When was that? 10 discussed in that August 2001
ll A. I believe it was August of 11 meeting? You said the IDRs.
12 ‘01. Might have been September, but 12 A. Yeah. I think we —
13 [believe it was August of ‘01. 13 whatever the document —
14. Q August 14th, 2001, sound 14 documentation that the IRS had
15 right? 15 presented to us to start the audit
16 A. T'mnot certain. 16 was what was -- what we were — what
17 Q_ Did anyone accompany you on 17 we discussed.
18 that trip to St. Louis? 18  Q. Did you sign any documents
19 A. TomReed. 19 while you were in St. Louis at the
20 Q Mrs. Penske go with you? 20 August 2001 meeting?
21 A. I-I don't know. 21 A. I don't remember signing
22  Q Why did you go to visit St. 22 any — any documents.
23 Louis — excuse me. Strike that. 23° Q. Did you visit —
24 Why did you go to visit 24 A. Atsome point I signed a

Sr

James DeCrescenzo Reporting, Lic

215.564.3905

InnovatingLitigation FAX 215.751.0581

1880 JFK Bivd., 6" Floor, Philadelphia, PA 19103

www.JDReporting.com



ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06

23 (Pages 86 to 89)
86 88
1 Investments agreement. Whether I've 1 MR. CRONER: Objection.
2 seen this specific -- I mean, I'm — 2  ButI —to the extent that that —
3 I~ probably, yes. I can't -1 3 you're suggesting by that that means
4 don't know every page of the — of 4 he signed it that date, I don't think
5 the document, but I know I ~ I did 5 those dates have any correlation at
6 form RHP Investments. 6 all.
7 Q. Ifyou wouldn't mind ~ 7 MR. WEEDE: Okay.
8 A. And this looks like a legal 8 THE WITNESS: And I would
9 document and probably ~ 9 say I - the partnership I guess is
10 Q. Let me see if! can help 10 dated the 4th, because this is a copy
11 you outa little bit. Can you tum 11 of the document.
12 to Page 22, going by the numbers in 12 BY MR. WEEDE:
13 the middle of the document. 13 Q. But you don't know when you
14 MR. WEEDE: That's 14 signed it.
15 essentially — George, that's Page 15 A. That's correct.
16 Plaintiffs 00668. 16  Q. And you don't know where
17 MR. CRONER: Got it. 17 you were when you signed it.
18 BY MR. WEEDE: 18 A. Correct.
19 Q._Is that your signature 19  Q. Could you tum to Page 6 of
20 there, Mr. Penske? 20 the Agreement, please. That's to the
21 A. Yes. 21 extent mine is chopped off, too, so
22  Q. Could you tur to the next 22 Im-
23 page, please. Is that your signature 23 +A. You're talking about the
24 there? 24 big Number 67
87 89
1 A. Yes. 1 Q. On the bottom, yeah, in the
2 Q. Do you recall where you -2 middle right here.
3 were when you signed this Agreement? 3 A. Okay. Okay. Number 6.
4 A. When was this signed? 4 Okay.
5 MR. CRONER: Well, 5 Q. Do you see Clause 2.4 there
6 that's — that's the problem. 6 where it says, Principal place of
7 THE WITNESS: Pardon me? 7 business of the partnership?
8 MR. CRONER: I'll object to 8 A. Correct.
9 the form because — if you can answer 9 Q. Isit listed as St. Louis,
10 it. Ifyou remember when and where 10 Missouri?
11 you were when you signed, you can. ll A. In this document 'm
12 answer the question. 12 looking at, that's correct.
13 THE WITNESS: I don't see 13° Q Allright. Tm done with
14 anything on here that indicates the 14 that.
15 date. 15 Now, Mr. Penske, outside of
16 BY MR. WEEDE: 16 the tax transaction and the estate
17 Q If you'd go to the 17 planning, did Lewis Rice represent
18 Plaintiffs 00645, I'm sorry to keep 18 you in any other capacities?
19 flipping you back and forth here. I 19 A. There were a number of
20 wish I had a better copy. 20 times on a lot of different general
21 Does that read dated as of 21 tax questions that we -- we called ~
22 December 4th, 2000? 22 we talked to Lewis Rice.
23 =A. That's correct. 23> Q Okay. Did Lewis Rice
24 Q.> Okay. 24 represent you in connection with the

215.564.3905

DPX

James DeCrescenzo Reporting, ic

InnovatingLitigation

FAX 215.751.0581

1880 JFK Bivd., 6" Floor, Philadelphia, PA 19103
www.JDReporting.com



LEWIS, RICE & FINGERSH, L.C.

November 21, 2002
Page 5

We respectfully submit that, based upon all of the relevant facts and circumstances, Mr.
and Mrs. Penske should not be subjected to penalty with respect to their participation in the
transactions at issue.

Very truly yours,
Lewis, RICE & FINGERSH, L.C.

By
William J. Falk

Penske
006450


ORAL DEPOSITION OF RICHARD HERMAN PENSKE,

3/17/06

11 (Pages 38 to 41)

38 40
1 myself, and subsequently the Heritage 1 that a legal opinion was appropriate
2 corporate jet retuned Tom Reed and 2 and business prudent to do a — the
3 myself from St. Louis back to 3 transaction they were talking about,
4° Bethlehem. 4 that it would — made — you needed
5 Q. Okay. What I'm trying to 5 ait made sense to have a legal
6 understand is, if you recall whether 6 opinion.
7 or not it was your idea to go to 7 Q Do you recall why it made
8 Dallas on November 27th or not. 8 sense to have a legal opinion?
9 A. I don't recall. 9 A. Because it was a
10 Q. Was it your idea to go to 10 complicated tax transaction.
11 St. Louis on November 27th? II MR. CRONER: Go ahead.
12 A. T wanted — it was my idea 12. BY MR. WEEDE:
13 to meet Lewis Rice. 13 Q. So someone at Heritage
14. Q.> Okay. 14 mentioned the name of Lewis Rice.
15 A. Not necessarily the 27th, 15 Did they mention where they were
16 but it was — it was my desire to 16 located?
17 meet Lewis Rice. 17 A. What ~ what I recall is I
18 Q. It was your desire to go to 18 asked for a recommendation. They
19 St. Louis to meet with Lewis Rice. 19 recommended Lewis Rice and somewhere
20 =A. Correct. 20 in the conversation, whether I asked
21 Q. When was the first time you 21 specifically or they told me, that
22 heard the name of the law firm Lewis 22 they were a St. Louis law firm.
23 Rice? 23 Q. Was Lewis Rice the only law
24 A. In one of my meetings with 24 firm that Heritage recommended to
39 41
1 Heritage. 1 you?
2 Q. Can we narrow that down or 2 A. That's correct, that they
3 do you know if it was — 3 were the only law firm that was
4 A. I don't know if it was 4 mentioned.
5 the — the 3rd or the 17th. I'm not 5 Q. You didn't ask for names of
6 certain. 6 any other law firms?
7 Q. But it wasn't the one in 7 A. I think with the — the
8 October. 8 question came up as to, are you aware
9 A. Notto my knowledge. I 9 of law firms that do legal opinions
10 would say that that's correct. 10 for these type of transactions and
li Q. Who told you about Lewis 11 they said that they were aware of a
12 Rice? 12 number of them or were aware of a
13. A. Heritage. 13 firm or firms that could do it.
14 Q._Do you recall which member 4 And I said you have a
15 of Heritage, whether or not it was 15 recommend -- it went on the order,
16 Mr. Van Borys or whether or not it 16 well, is there a recommendation or a
17 was Mr. Komman? 17 name you could give me.
18 A. It came up ina meeting. 18 And the name that they gave
19 Who mentioned the name, I'm not 19 me was Lewis Rice. That's the only
20° certain. 20 name that was given me or that I
21 Q. What did they say with 21 recall giving me.
22 regard to Lewis Rice? 2 Q. So there could have been
23. A. We were talking about the 23 others.
24 transaction and the subject came up 24 A. I don't believe so. The

215.664.3905

BIPr

James DeCrescenzo Reporting, ic

InnovatingLitigatic

tion FAX 215.751.0581

1880 JFK Bivd., 6" Floor, Philadelphia, PA 19103
www.JDReporting.com



Eg
i

Richard H. Penske, et al vs.

Deposition of Michael D. Muli an

Lewis, Rice & Fingersh, L.C. 006
Page 25 Page 27

ty attracted its clients? ty name. Do you see that?

a A: No. o A: Yes, sir.

o Q Did anyone ever explain to you how Heritage » Q: And it's dated November 16th, 2000; correct?
(Went about procuring clients? t Top, left hand.

1 A: No, ry A: Yes,

‘o Q: Did you ever ask? a Q And the recipient is indicated to be a

” A: No, that [can ~ I don't remember that 1 m_ Mr. Brian Czerwinski?

i ever asked. i Czerwinski, yes.

a Q Ltake it Mr. Penske, for exemple, was not o : Who is Mr. Brian Czerwinski; do you know?
tn) an existing client of Lewis, Rice's at the time that om A: Brian Czerwinski was an employee of The

on Mr. Kornman or Mr. Canada first contacted you about an Heritage Organization.

oy him? 1 Q And according to the Airbill, at least you

oy ‘A: He was not. wy) were sending him a package by first overnight

4 Q: Now, after you first had this call from ug delivery, Federal Express, on November 16th, and he
ua Kornman or Canada about Mr. Penske, what did you do ua was located in Bethlehem, Pennsylvenia.

tq within the firm? ua Do you see that?

TM A: What I did was to organize ~ organize on A: Yes, sir.

un people who would attend the meeting. un Q Do you remember doing that, Mr. Mulligan?
ta Q This was the meeting with Mr. Penske? um A: No.

ba A: Yes, sir. oy Q Do you have any idea what was in a package
an Q Do you remember when that meeting took ‘8 that you would have been sending Mr. Czerwinski at

ray place? this time?

1 Az Not the precise date, no. oy, ‘A: I don't have any firm knowledge, no.

4 Q I'll represent to you that Mr. Falk 24 Q Do you know — well, let me back up for a

29) testified yesterday, and there are some exhibits e9 minute. Other than knowing that Mr. Czerwinski was

Page 26 Page 28

that T certainly can show you that indicate, that tm an employee for Heritage, did you ever have any

&% the meeting took place on November 27th of 2000. 8) direct contact with him?

a Would you have a recollection that it was o A: Oh, frequently.

f9 any different than that? ” Q Frequently? Okay. So you spoke with him?

o A: No, sir. 0 A: Yes, sir.

a Q: And I take it that your contact by @ “Q: Do you have any knowledge as to why he might
TM Mr. Kornman or Mr. Canada took place at some point TM have been in Bethlehem, Pennsylvania on or about
prior to that? 5 November 16th?

a A: The telephone communication, yes, sir. a A: Ihave no knowledge as to why he was there.

10 Q And do you know whether Lewis, Rice did any 0) Q You don't remember him telling you that or *
tu) work in connection with Mr. Penske prior to the ty anything like that?

ta) first meeting with Mr. Penske? ry A: No, sir.

wo A: Idon't remember that we did, personally. ry Q You'll see there is a — there is an

ua Q Td like to show him Exhibit No. 4. 9 internal billing reference, item No. 2, sort of

ts Exhibit No. 4 was marked yesterday, a4 right in the middle of the left-hand side of the

ua Mr. Mulligan, and I'll ask you, have you seen this ug Airbill?

ty document before? fo) A: Yes.

fr) A: No, sic. ry Q The number is 109210.230777

9 Q Do you know what it is? Do you recognize oa A: Yes,

toy what it is? en Q From what I understand now from Mr. Falk

on As It appears to be a receipt ~ a Federal ty yesterday, that apparently appears to be a client

ea Express receipt, f21 matter number used by Lewis, Rice; is that correct?

ea Q It's an Airbill; correct? co) A: Yes, sir.

pa A: Yes. co) Q Do you know what that client matter number

oy Q And the sender's name is listed as your ns is?

Gore Perry Gateway & Lipa St. Louis, MO
(314) 241-6750 621-4790 621-2571 621-8883 Page 25 - Page 28


EXHIBIT K


ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06
17 (Pages 62 to 65)

62

64

1 relationship between — there was an 1 A. Correct.
2 attorney-client relationship between 2 Whether it was, you know,
3 Heritage and Lewis Rice. 3 the next day or the day after, but
4 A. I wouldn't know that. 4 within a day or two, we started to
5 Q. Okay. Didn't think about 5 put in place, evidently, the
6 it? 6 documents and what was necessary,
7 A. Ididn't think about it. 7 because on December | is when the —
8  Q. Did you know if Lewis Rice 8 the engagement letter was signed.
9 had signed any Agreements with 9 And — and — and that was December 1
10 Heritage as of that date, that 10 that it was signed.
11 meeting? WH Q. I guess what I'm asking you
12. A. I did not know that. 12. is, had you decided from your end
13° Q. After you left the meeting 13 that you wanted to go forward with
14 with the members of Lewis Rice on 14 the tax transaction after you met
15 November 27th, were they your 15 with Lewis Rice in St. Louis on
16 lawyers? 16 November 27th, 2000?
17 MR. CRONER: Objection; 17 A. Inmy own mind, the answer
18 vague. 18 is yes.
19 Answer it, if you can. 19 Q Sol take it you liked what
20 THE WITNESS: | —I think 20 you saw when you met with members of
21. we left the table feeling 21 Lewis Rice.
22 comfortable, but I don't think I made 22 ~~. Yeah. It was clearly a
23 the decision at that moment. 23 favorable meeting or we wouldn't have
24 T think it was subsequent, 24 gone forward.
63 65
1 aday or two or afterward, that we — 1 Q. But at that moment you did
2 we finally — I think the engagement 2 not let them know that you wanted
3 letter was signed December 1. So I 3 them to be your attorneys.
4 would say officially you're talking 4 MR. CRONER: At which
5 December 1. 5 moment?
6 BY MR. WEEDE: 6 MR. WEEDE: Good point.
7 Q. Okay. So-- 7 +BY MR. WEEDE:
8 A. In other words, I didn't 8 Q At that meeting on November
9 sign an engagement letter or indicate 9 27th, 2000, when you met with members
10 to them that they were being hired. 10 of Lewis Rice, you did not let them
ll I might have given the — 11 know that you wanted them to be your
12 from a comfort standpoint, did I — 12. attorneys.
13 did I —1 felt good about the 13 A. That's my recollection,
14 meeting, but I hadn't — we hadn't 14 that I did not confirm at that
15 confirmed a relationship on the 27th. 15 meeting that I wanted them to be my
16 Q So there was no oral 16 attorneys.
17 agreement between you and members of 17 Q Didyou say maybe? How did
18 Lewis Rice that occurred at that 18 you leave it with them?
19 November 27th, 2000, meeting. 19 A. I think I just said, it was
20 =A. That is correct. 20 agood meeting. I feel comfortable
21 Q After leaving that meeting 21 after meeting with you and we'll get
22 on November 27th, had you determined 22 back to you.
23 that you were going to go forward 23 Q = When do you remember
24 with the tax transaction? 24 receiving a letter from Lewis Rice

BPr

James DeCrescenzo Reporting, tc

215.564.3905

InnovatingLitigation

FAX 215.751.0581

1880 JFK Bivd., 6” Floor, Philadelphia, PA 19103

www.JDReporting.com



LEWIS, RICE & FINGERSH, L.C.

ATTORNEYS AT LAW

500 N. BROADWAY, SUITE 2000
‘ST. LOUIS, MISSOURI 63102-2147
WILLIAM J. FALK WWW.LRF.COM TEL (314) 444-7600
DIRECT (314) 444-7749 WFALK@LEWISRICE.COM FAX (314) 612-7749

November 21, 2002

Mr. Joseph D, McCarthy BY FAX
Internal Revenue Service
3 Bethlehem Plaza

Bethlehem, Pennsylvania 18018

Re: Richard H. Penske and Patricia L. Penske
Announcement 2002-97 penalty considerations

Dear Mr. McCarthy:

During our conversation on November 1, 2002, I requested a computation of what the tax
consequences would be if Mr. and Mrs. Penske were to accept the settlement proposal under
Announcement 2002-97. In addition, we discussed some of the facts and circumstances that lead
us to the conclusion that Mr. and Mrs. Penske should not be subject to penalty in connection with
the deficiencies, if any, that may result from this examination. You requested that we make a
written submission on that subject, and later you supplied a set of nonexclusive criteria you have
been instructed to consider in making your penalty determinations. Although much if not all of
this information has been submitted earlier in responses to various information document
requests, I will attempt in this letter to present the facts relevant to your determination.

In 1983, Mr. Penske, as President of Piercing Pagoda, Inc. (“Pagoda”), began to work
with KPMG LLP (“KPMG”) as the outside auditor of Pagoda. The audit review by KPMG was
comprehensive, questioning every aspect of Pagoda’s assets, liabilities, and activities, and
Pagoda’s accounting for them. In each instance, KPMG insisted that Pagoda adhere to the
highest ethical and reporting standards for accounting and tax matters. Mr. Penske became the
Chief Executive Officer of Pagoda in 1986.

The auditing process became even more strict and demanding as Pagoda prepared for and
made its initial public offering in 1994. In 1996, KPMG began to provide estate planning,
investment advisor selection, and asset allocation advice to Mr. Penske personally. As a result of
14 years of financial accounting audits of Pagoda by KPMG, Mr. Penske believed that any
structure that could pass KPMG’s due diligence process must, at a minimum, satisfy all relevant
legal, tax, and accounting guidelines. Mr. Penske had absolute confidence in the judgment of
KPMG on these matters and therefore felt comfortable considering just the investment or
business aspects of anything KPMG might suggest. Despite Mr. Penske’s background,
independence, and confidence in general business matters, he felt that it was right and necessary
that the advice of KPMG on matters of tax and accounting be given substantial weight in his
decision-making process.

ST. LOUIS, MISSOURI + KANSAS CITY, MISSOURI ¢ ST. LOUIS COUNTY » WASHINGTON, MISSOURI + BELLEVILLE, ILLINOIS + LEAWOOD, KANSAS
983405 /110515.28994

Penske
006446


SUPPLEMENTAL DECLARATION OF WILLIAM J. FALK

1. My name is William J. Falk. I am over the age of 18 years and am fully competent to
make this declaration.
2. Tam a member of Lewis, Rice & Fingersh, L.C. (“Lewis, Rice”), defendant in this action,

and am authorized to make this declaration on its behalf. I have personal knowledge of the facts
contained in {| 3 of this declaration, which are all true and correct. The facts set forth in q4 of
this declaration are true and correct approximations, based upon information compiled from
documents and information provided by accounting staff and other knowledgeable persons at
Lewis, Rice & Fingersh, L.C.

3. Lewis, Rice currently has 163 attorneys who are members, of counsel, or associates.

4, In the agreed upon discovery period between January 1, 2000 and August 18, 2005,
matters with a connection to Pennsylvania were not significant compared to Lewis, Rice’s
overall client base. As of February 1, 2003, when Lewis, Rice converted to its current time and
billing software, the firm had approximately 3,996 active clients for which there were
approximately 7,876 open matters. By August 2005, Lewis, Rice had approximately 6,331
active clients for which attorneys handled approximately 9,934 open matters.

5. Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true
and correct.

Executed on this \2*~ day of April 2006.

Lewis, RICE & FI SH, L.C.
. a

WILLIAM F, FALK
Its: Member



LEWIS, RICE & FINGERSH, L.C.

ATTORNEYS AT LAW

500 N. BROADWAY, SUITE 2000
ST. LOUIS, MISSOURI 63102-2147

WILLIAM J. FALK WWW.LRE.COM TEL (314) 444-7600
DIRECT (314) 444-7749 WFALK@LEWISRICE.COM FAX (314) 612-7749
TO: FAX NUMBER: ‘FELEPHONE;NUMBER:
Joseph D. McCarthy, IRS 610-865-8201 610-865-6332, ext 103
Sheldon Kay 404-222-7633 404-614-8620
cc: _ Lawrence H. Weltman LRE/STL :
FROM: William J. Falk
DATE December 4, 2001
TIME:
TOTAL PAGES (WITH COVER): 3
CLIENT/MATTER NUMBER: 110515.28994

COMMENT: Mr. McCarthy, I have attached a new Form 2848 (Power of Attorney and
Declaration of Representative) for Mr. and Mrs. Penske. I will send a hard copy original to
you by mail. As my partner Lawrence Weltman advised you yesterday, we now expect to
respond to the remaining information document requests shortly.

PLEASE CALL 314-444-7785 IF A PROBLEM OCCURS IN THE TRANSMISSION OF THIS DOCUMENT.

THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED AND MAY
CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW.
IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR
DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION,
DISTRIBUTION, OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS
COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY TELEPHONE (COLLECT), AND RETURN THE ORIGINAL.
MESSAGE TO US AT THE ABOVE ADDRESS VIA THE U.S. POSTAL SERVICE. THANK YOU.

Penske
005431

ST. LOUIS, MISSOURI ¢ KANSAS CITY, MISSOURI ST. LOUIS COUNTY + WASHINGTON, MISSOURI + BELLEVILLE, ILLINOIS « LEAWOOD, KANSAS


rom 2848, Power of Attorney |_oms no. 1545-0150
(Rev. December 1997) and Declaration of Representative peaeate
bona Revewe Saves 7 > See the separate instructions. Name
Power of Attorney (Please type or print.) i in

ul

1__Taxpayer information (Taxpayers) must sign and date this form on page 2. line 9.) Date i i
Taxpayer name(s) and address Social security number(s) | Employer identification
Richard Penske and Patricia L. Penske 192 fqumber

1851 Saucon Valley Road . . i

Bethlehem, PA 18015 208 _: 38 : 7973 i

Daytime telephone number | Plan number (if applicable)

hereby appoint(s) the following representatives) as attorney(s)-in-fact:

2 __Representative(s) (Representative(s) must sign and date this form on page 2, Part Il.)

Name and address CAF No. ....8000= LOaRER

William J. Falk, Esq. Telephone No. (314.

500 N. Broadway, Suite 2000 Fax No. .... -
St. Louis, MO 63102-2147 Check if new: Address_(] Telephone No. (]
Name and address CAF No. _. C

Lawrence H. Weltman, Telephone No.

500 N. Broadway, Suite 000 Fax No. .

St. Louis, MO 63102-2147 Check if new: Addre:
Name and address CAF No. ...
Telephone No. ..
Fax No. ....
Check if new: Address

to represent the taxpayer(s) before the Internal Revenue Service for the following tax matters:

3__Tax matters
Type of Tax (income, Employment, Excise, etc.) Tax Form Number (1040, 941, 720, etc.) Year(s) or Period(s)

Income Tax 1040 1997, 1998, 1999

4 Specific use not recorded on Centralized Authorization File (CAF). if the power of attorney is for a specific use not recorded
on CAF, check this box. (See instruction for Line 4—Specific uses not recorded On CAF). . . . . . . . . PO
§ Acts authorized. The representatives are authorized to receive and inspect confidential tax information and ta perform any
and all acts that | (we) can perform with respect to the tax matters described on fine 3, for example, the authority to sign an}
agreements, consents, or other documents. The authority does not include the power to receive refund checks (see line
. below), the power to substitute another representative unless specifically added below, or the power to sign certain returns
(See instruction for Line 5—Acts authorized).
List any specific additions or deletions to the acts otherwise authorized in this power of attorney: .............

Note: In general, an unenrolled preparer of tax returns cannot sign any document for a taxpayer. See Revenue Procedure 81-38,
printed as Pub. 470, for more information.
Note: The tax matters partner of a partnership is not permitted to authorize representatives to perform certain acts. See the

instructions for more information.
6 Receipt of refund checks. If you want to authorize a representative named on line 2 to receive, BUT NOT TO ENDORSE.

OR CASH, refund checks, initial here ___________ and fist the name of that representative below.

Name of representative to receive refund check(s) >
For Paperwork Reduction and Privacy Act Notice, see the separate instructions.

Cat. No. 11980) Form 2848 (Rev. 12-97)

Penske
005433


soeicetieioeinado: —CONM. JOURNAL -enninenpnanecnmenac DATE NOU-21-2002 -btooior TIME 13156 2biinetork

START=NOU-21 13:53

1K

LEWIS RICE & FINGERSH

STORIE IOI CAI AIIAAOHIIANIC ~314 444 7666 — oI (314 44d 7666— rorteretotoe
LEWIS, RICE & FINGERSH, L.C.
ATTORNEYS AT LAW
‘S10. BROADWAY, SUITE 2000
‘ST. LOUIS, MISSOURI 102-2147
‘WILLIAM J. FALK WWW.LRF.COM TEL (914) 444-7600
DIRECT (914) 444-7749 WFALK@LEWISRICE.COM FAX G14) 612-749
TO: FAXNUMBER: _| TELEPHONE NUMBER:
Joseph D. McCarthy, IRS 610-865-8201 610-865-6332, ext 103
cc: __ Lawrence H. Weltman LRF/STL
FROM: William J. Falk
DATE ‘November 21, 2002
TOTAL PAGES (WITH COVER): 6
‘CLIENT/MATTER NUMBER: 110515.28994

COMMENT: Please see the attached letter.

‘PLEASE CALL 314-444-7785 IF A FROBLEM OCCURS IN THE TRANSMISSION OF THIS DOCUMENT.

‘THIS MESSAGE 1S INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED AND MAY
(CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW.
[If THE READER OF THIS MESSAGE 1S NOT THE INTENDED RECIPIENT OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR

COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY TELEPHONE (COLLECT), AND RETURN THE ORIGINAL

MESSAQE TOUS AT THE ABOVE ADDRESS VIA THE U.S. POSTAL SERVICE. THANK YOU.

$F LOUIS, MISSOURI © KANSAS CITY, MISSOURI ¢ ST. LOUIS COUNTY + WASHINGTON, MISSOURI ¢ BELLEVILLE, ILLINOIS « LEAWOOD, KANSAS

Penske
006445

‘
Wie


Sle Sa Seana ne ean ee eo
se
rr a

| a =
: | | = iis=--
cae =. ——“—TM————C—=C=éss=s=i‘“
oe |
- ===
. i. oS  —rr—N————CT
: : =
: . ..... | | . | .._—CC —
——rrr—r——C—C—"N(REECC ei LC
ee

Cc
— ~~

are OE :
—r—r—~—~—=t—‘(TMOOCOCCstCCs«sC;YsCsCszas”zsrdiéiCiwsW
a ,,rrrr—<“i—~—s—r—~s—srs—S~*si—aisOOCOC*sC—sCsCN
@. . . |
a i =§_§__=§
: es ie. =. a
‘ a rc ris  ~=——r—“_Ss—éC—MC—TM'r—'_ifmisésé|
ee — i - ri
eee a . .._§=—|§§§|§_. .
: rr—”r”————.—CXFCT—'Y”,.———C—Or—NT—.L.C'—0.hUrts—CCr—COi‘iCOriCOCOCOCCNCNCCCC oe
: ——r—~—«——C—“i_rCtisrs—s=Si“SiCOrsiCzsKYsCsisK;srzONSCréwsaersziNriéic”CrCCSOC oe
—— rrr— rs ——ssEeee Cae ee ae
a r—D . | 2
~  s« @©=©6—hmCUTMCTMC~—CSECO
rr CC —~—i—“CiCOC*isCCSCiC:C :
a rrrt—~—sCSC . .###§8=: i§£§ =.
— =. —=—SEese ¢&¢ Eg
=. i ###=-. SF |
—  —( lS i—i<C ri Cri—“‘COéOCOrisrR:”—r——OSOSiCsisCs
—  & = ss is: -
5 —r—Sr—‘“OOONOOOiiOisSC;dtssCeCti‘(‘OCBC
— r—“—rC R$§Cs«CsSsSsttszisaCazaiszas ‘(OOC‘ (LC
oe 5. —rrt—“—OeOs—sTr—sSF—‘s<s—sasiesFFfmhmfmeFmeseseFeF = 2s
— : Cr Srrr—“i—“—CC Ss: S.C S
oe Se r—~—CiCS COS
o 5 — 2 8 eC
Seeks ee 2. ss i. -:. 5S  § |
eS ee ec 00}= @=6feS EC ss
: Sf  ###- i. = Ff
3 tee CE Crtwtw~OC~w”TMSs*”sC=< ‘CCE i
: Pe — rr—“—Cr—OC—i—is—S~—i‘C‘“O(“(“<‘CONC¥;RCSBRSSDLULUCUCGE CLC
EM ——,rrr—~—~—En = rt—“‘iOC—CisSs~SsS—S~s—*s=i‘“aCSsSS eo Re
a  . o = s°. | =
— a 5 : SS
: ss os  &
fe - — & |
a = - =
Se Be 2
. —r—“‘“‘_O—C—SC—‘<C:SsStstTMt Ss = «§&
— a #8 —=- Cr F- 8
ao =. —  . a =.
_. =. —rr—CidsCNiCNia‘O ‘CLC ee ee
: : F&F. == re
ee ee  . =
.  - ss |.
2 rrr =
ae i _—_s —
= ee ieéééé@é@.€@ é i. 4@4.£.@i@@=€£=7h]HM?MSFSES—sS—TMF—s—fhmhmT
= =—=—r—~—‘“‘.r—C—C—.—U—=—~—s—h—eesh
- —rrrr———“_.C—i“CRCrdzsOWsCON  .
 ———“_eOONONrCOCOdsCrsC< WsSsSsziOR CC —
a CCC  — i =.
. ee... .. . 4. =
ee rr—“‘“‘OCOCOCOCOCOCSs=sC*s*sCi*sC Sst ,—r—“—i—OC—C—C—C—sCTM=CSC—itCECSCN
rer —<=Rrrrr a s—CSi<—rsitrSi“C;i;SCi;C;éCOC oo
S a > i = ii..
_  ...§=_=s§ ~~
.r—“‘“‘“‘iCOsOsOsOOOOOOOCOCOiOOCOiwiOisisiésiétésS 8 |
ee
_ cee gee coe o
ee ee «
\ : “3



ORAL DEPOSITION OF RICHARD HERMAN PENSKE,

3/17/06

15 (Pages 54 to 57)

54 56
1 unquote, tax transaction you can do, 1 meeting, you did or did not have any
2 presumably, someone had to explain 2 assumptions? Or were you told by
3 the tax transaction to them. 3 anyone from Heritage that ~
4 MR. CRONER: Objection. 4 Well, let me ask you this:
5 Objection to form. 5 Ifyou explained the details of the
6 THE WITNESS: As I say, 6 tax transaction to members of Lewis
7 there was not — I don't remember 7 Rice, was it your understanding that
8 giving them any real details of that 8 you would be violating your
9 tax transaction. When I went to that 9 Confidentiality Agreement with
10 meeting, they seemed to know pretty 10 Heritage?
11 well my situation as relates to i A. 1-1 don't think —
12 the — the details of that 12 MR. CRONER: Objection.
13 transaction. 13 THE WITNESS: I don't think
14 MR. WEEDE: Right. 14 Lever thought about it.
15 BY MR. WEEDE: 15 MR. CRONER: Calis for a
16 Q. AndsoI guess what 'm 16 legal conclusion to some extent.
17 _ saying is, you were not prepared to 17 Til let you answer the
18 explain the tax transaction to them 18 question.
19 at that meeting; is that correct? 19 BY MR. WEEDE:
20 =A. Well, I can't say I wasn't 20 Q I'm purely asking about
21 prepared to discuss details because, 21 what your understanding is.
22 obviously, I had some information 22 A. [never thought about it.
23 about the transaction. 23 So I — in other words, I didn't go
24 Because I'd had a number of 24 in there with an understanding that
55 57
1 meetings with Heritage and we had 1. there was a — if — that I—I
2 signed a Confidentiality Agreement 2 didn't go in there with an
3 and they had presented, you know, the 3 understanding that [ couldn't say
4 tax plan. So I can't say I wasn't 4 anything about the transaction
5 5 because of a Confidentiality
6 But Heritage didn't say to 6 Agreement.
7 me, when you go to St. Louis, be 7 QQ Soit was your
8 prepared to present, you know, our 8 understanding at the time, as far as
9 tax strategy. I — if they would 9 your obligations under the
10 have asked me more detailed 10 Confidentiality Agreement, that you
11 questions, I would have responded as 11 could share the particulars of the
12 I best knew it at that meeting. 12 tax transaction with Lewis Rice at
13 But the main content of 13 that meeting.
14 that meeting was questions about 14 MR. CRONER: Objection.
15 could they do the opinion, had they 15 I think he said he didn't
16 done, you know, other opinions, did 16 think about it.
17 they have, you know, what — tell me 17 THE WITNESS: Yeah. I
18 a little bit about your law firm. 18 never thought about it. Because
19 You know, tell me, you 19 Heritage referred me to Lewis Rice so
20 know, the reason I should have 20 1—TI thought if they referred me,
21 comfort in you writing the opinion 21 they were familiar with the
22 and writing an opinion on this tax 22 transaction.
23 transaction. 23 And when I — when I got to
24 Q. So then going into that 24 St. Louis in the meeting, it seemed

215.564.3905

Br

James DeCrescenzo Reporting, tc

InnovatingLitigation

FAX 215.751.0581

1880 JFK Blvd., 6" Floor, Philadelphia, PA 19103
www.JDReporting.com



.
aadoojoonnoIoe —ODMM. JOURNAL
deooopioioooercion DATE NOU-21-2882 souk TIME 14:87 sbtobiomiook
: I

MODE = MEMORY TRANSMISSION

“LEWIS RICE & FINGERSH = —

Jp RIOKKOODIODIOKODDIR SOOKE 314 4447665 — — btoboK '
- 314 444 '7666~ roKIcloWIOIOIK |
. '
LEWIS, RICE & FINGERSH, L.C. :
f
ATTORNEVE AT LAW
“SON. BROADWAY, SUITE 2000
st, LOUIS, 8SOUR ournd’
WILLIAMS. FALC wewLRy. . PEON HE TEOY
wera FaKounsinr

DIRECT (68) MTT

fro: | Fax NUMMER: TE EPHONE NUMBER:
Joseph D. MeCarthy, IRS. 610-865-8201 G10-B65 6532, ext 103
ce: tawroace H. Wellman LRESTL
1 L .
FROM: ‘William J. Falk ‘

November 21, 2002

DATE
"TOTAL PAGES (WITH COVER): ___| 6
110515.28994

CLIENT/MATTER NUMBER:

—

[GOMMENT: Please see the attached letter.

he
ip

To
Punase caus at4-444-7765 1 A PROB Rw OCCURS THE TRANSMISSION OF TES DCT: |
Tuas MPSSAGE 5 BNTENDED ONTY SR TS OSE OF Tis DAV ALOR ENTETY To WK TT ADDRESSED NOON ET
is RTE yn, reas ANS MPT MOM SLOSS
JW tHe, READER OF THIS MESSAGE 1% NOT [UR AGENT RESTDONSIBLE FOR
(DELIVERING THE MESSAGE 10 THE INTENDED

(TION IN ERWOR, PLEASE NOTIFY US MCAETAATELY BY TELEPHONE (CAWLECT), AND RBTURN THE ORDORNAL
VIA THE US. POSTAL SERVICE. THANE YOU. _

sr-vovte, MISGOnHL » RANBAS CITY, MISSONRE » ST. LOULE CORNY » WASHINETUR sussount + BELLEVILLE, ILLINOIB + LEAWOOD, KANSAS
Penske

006444


ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06
27 (Pages 102 to 105)

102 104
1 Q. So Heritage did not 1 act on Lewis Rice's behalf?
2 represent to you that they were in 2 A. No.
3 any way affiliated. 3 Q._ Did Lewis Rice ever inform
4 A. Right. They did not 4 you that it had the power to act on
5 represent that they were affiliated. 5 Heritage's behalf?,
6  Q. Did Lewis Rice represent to 6 A. No.
7 you that it was affiliated with - 7 Q. Did Lewis Rice ever take
8 did any members of Lewis Rice in any 8 any action which led you to believe
9 way represent that they were related 9 that Heritage could act on Lewis
10 with Heritage to you when they met 10 Rice's behalf?
11 with you on November 27th, 2000? I A. No.
12 A. They did not. 12. Q Was Heritage ever a party
13 Q_ Since that time did anyone 13 to any agreement between you and
14 at Lewis Rice represent to you that 14 Lewis Rice?
15 Heritage was in any way affiliated 15 A. [don't believe so.
16 with Lewis Rice? 16 Q. Soyouhave no
17 A. They did not. 17 recollection?
18 Q. Did Lewis Rice ever tell 18 A. Thave no recollection.
19 you that Heritage had the power to 19 (Defendant's Exhibit 8 was
20 act on its behalf? 20 marked for identification.)
21 ~~ A. That Lewis Rice had the 21 BY MR. WEEDE:
22 authority to act on the behalf of 22 Q Mr. Penske, if you could
23 Heritage? Is that the question? 23 take a minute to leaf through this
24 QQ. Wecan start with that. 24 document, familiarize yourself with
103 105
1 That's fine. I'm going to ask you 1 it.
2 both questions. I'm going to ask you 2 MR. CRONER: To what level
3 whether or not Lewis Rice — 3 of familiarity?
4 MR. CRONER: I want to know 4 MR. WEEDE: Generally. I
5 which one he's responding to. 5 will give him more time to...
6 MR. WEEDE: That's fair. 6 THE WITNESS: Okay.
7 That's fair. 7 BY MR. WEEDE:
8 BY MR. WEEDE: 8 Q. Do you recognize this
9 Q. Did Lewis Rice ever inform 9 document?
10 you that Heritage had the power to 10 MR. CRONER: Now, there's
11 act on behalf of Lewis Rice? 11 actually two documents, so which one
12. A. No. Isaid that right; 12 are you asking about?
13 right? 13 MR. WEEDE: Sorry. Let
14 MR. CRONER: You answered 14 me—I'msorry. So this — George,
15 the question. 15 when you say two documents...?
16 THE WITNESS: Yeah. Yeah. 16 MR. CRONER: Well, there's
17 Yeah. Yeah. No. I'm just — okay. 17 a fax cover page that has a
18 BY MR. WEEDE: 18 completely different date than the
19 Q. Did Heritage ever inform 19 underlying document. So when you ask
20 you that Lewis Rice had the power to 20 that, I don't know whether you're
21 act on Heritage's behalf? 21 asking him about the cover page or
22 A. No. 22 the-
23 Q. Did Heritage ever inform 23 MR. WEEDE: I should
24 you that Heritage had the power to 24 probably ask you this. I was

215.564.3905

i
1880 JFK Blvd., 6" Fi

Sr

James DeCrescenzo Reporting, tc

innovatingLitigation
loor, Philadelphia, PA 19103

FAX 215.751.0581

www.JDReporting.com



Deposition of William J. Falk

Richard H. Penske, et al ys.

3/2/2006 Lewis, Rice & Fingersh, L.C.
Page 149 Page 151
ty the scope of the relationship between Penske and ty these estate planning services that are described in
Lewis, Rice? 0) Exhibit 25 from the initial services that were
» A: I didn't check on whether an engagement by provided pursuant to whatever that earlier
ta letter existed for each of those, no, I didn't. ta engagement letter was.
[oy Q: And the first one I think that you o Q: December Ist, 20007
ta described, which related to the furnishing of the 6 A: December 1, right. I know that there was a
m__ original opinion, is that Plaintiffs' No. 16, the TM Separate matter number assigned, for example, to
9 December Ist, 2000 letter? ‘9 distinguish the services on the income tax audit.
” A: It's the first of the engagement letters i Q: Okay. But can you tell me whether there was
tno) relating to what we'd call the Heritage transaction (9) @ Separate engagement letter executed for the
tn or the one with the — the one that’s at issue here uy matters related to the audit?
ty is the December 1, 2000, Exhibit 16. i) A: And that goes back to my earlier answer. I
oo MR. CRONER: Mark this as 25, Nancy. 3 don't know.
ug Plaintiffs’ Exhibit 25 was marked for 14 MR. CRONER: Make that 26.
us) identification.) 09 Plaintiffs Exhibit 26 was marked for
te @ _ @y Mr. Cronez) I'm going to show you, 9 identification.)
wy Mr. Falk, what the reporter has marked as wm Q: (By Mr. Croner) Let me show you what I have
119 Plaintiffs’ Deposition Exhibit No. 25, a letter, two tg marked as Deposition Exhibit No. 26, Mr. Falk, a
ua pages, bearing Bates Nos. Penske 000874 and 875, tun single-page document purporting to be on the
(0) purporting to be on the letterhead of Lewis, Rice & 0) letterhead of Lewis, Rice & Fingersh, single Bates
en Fingersh, dated February 22nd, 2001. en "No. 21756, Penske number. What is this, Mr. Falk?
cay T'll ask you, have you ever seen this a A: It appears to be a bill.
pi document before? By Q: Prepared by Lewis, Rice, I take it?
ea A: Yes, Ihave. ea A: Yes. .
es Q: And when did you last see this document? roy Q: Sent to Mr. Penske in Pennsylvania?
Page 150 Page 152
Ww A: Yesterday. ry A: Yes.
ci Q: It appears, up in the top left-hand corner, a Q: Now, it says, "Our Matter Number.” Do you
») Mr. Malligan's name, so I take it you didn't prepare ey see that?
19 this; is that fair to say? 4 A: It's addressed to Mr. Penske in
o A: That's correct. 1 Pennsylvania.. I don't know if it was sent or hand
6 Q: And what is your understanding of what this (9 delivered or exactly what.
m is? m Q Do you have any reason to believe it didn't
w A: This is an engagement fetter for estate tend up in Pennsylvania?
planning services that were to be provided by Lewis, wo ‘A: Idon't know whether Mr. Penske was here,
tw) Rice for Mr. Penske and his family. a9 for example.
on Q: And is this a different set of services than on Q Do you have — well, tet me ask you: Other
12) was contemplated by the original retention letter on than November 27th of 2000, was Mr. Penske ever at
ts) executed in December of 2000? 1 Lewis, Rice's offices again?
19 A: Yes. 14 A: Tell me again, what was the date you
0 Q: And when Lewis, Rice has different pieces of un referred to?
09 work that it's working on for o particular client, ue Q Other than the initial meeting that we've
un do those separate pieces of work get assigned un talked about that occurred on November 27th of 2000,
us different matter numbers? us did Mr. Penske ever come to Lewis, Rice's office in
29 A: Sometimes. a9 St. Louis again?
ay Q Do you know whether separate matter numbers co) A: Yes.
te) were assigned for the work done for Mr. Penske? en Q: And when was that?
m= A: It's my understanding that there were not ca A: Iknow that he was here in 2001, once,
os or — let's be clear about it. ps perhaps twice, in connection with the income tax
By It’s my understanding that there were not eq examination. I do not know whether he visited our
bs separate matter numbers assigned to distinguish 25 offices in connection with any of the estate

Gore Perry Gateway & Lipa
(314) 241-6750 -621-4790 621-2571 621-8883

Page 149 - Page 152

St. Louis, MO


ORAL DEPOSITION OF RICHARD HERMAN PENSKE, 3/17/06
21 (Pages 78 to 81)

RBRBRBSSIATEGHISocmriudMsHavne

78

A. I-1I-I believe so,
yes.

Q. But at that time they were
not — strike that.

Do you recall the specific
events that led up to the ~ your
receipt of this letter on February
22nd - let me step back.

Did you receive this letter
on or around February 22nd of 2001?

A. It's dated the 22nd and
there was a meeting in Dallas at the
Heritage office on February 22nd.
And I know that somewhere in this
estate planning process in one of the
meetings in Dallas, Mike Mulligan
from Lewis Rice was at the meeting.

This is dated and
corresponds to the date that I had a
meeting with Heritage in Dallas. And
Irecall a meeting with Heritage in
Dallas that Mike Mulligan was present
and we discussed the PASTrust.

My recollection was it was

80

A. I-I'm - it's ~ it's
certainly in my possession, so I
don't know if I remember opening up
the envelope but -- but, you know, I
did — I did see this letter and 1
did okay it for payment.

Q. And you stated that that
was your handwriting in the lower
left-hand comer which reads, Charge
to RHP Invest, or I-N-V, period?
1) A. Yes.
12. Q. _Isitalso your
13 handwriting, the numbers on the right
14 side, nine and ten?
15 A. Yes.
16  Q. Could you tell me what
17 those two numbers mean?
18 A. Iwas — from the - we —
19 we got a copy of Lewis Rice billings
20 and I was going through the Lewis
21 Rice billings and our billings and I
22 was just numbering them to see
23 that -- that things matched up.
24  Q. At what time were you doing

SvwmiudsH sun

RBRBRRSRAARESB OS oma d4yaune

79
at this meeting on this date in the
Heritage office in Dallas that this
letter more than likely was — was
signed and executed.

Q Byyou?

A. Yeah, there's my signature
on it.

Q. Was Mrs. Penske at this
meeting?

A. [believe so.

Q. I'm done with that one.

(Defendant's Exhibit 5 was
marked for identification.)
BY MR. WEEDE:

Q. Mr. Penske, have you hada
chance to familiarize yourself with
what's been marked as Defendant's-5?

A. Yes.

Q. Do you recall receiving
this letter?

A. That is my writing, Charge
to RHP Investments.

Q. Do you recall receiving
this letter, Mr. Penske?

81

this? About what — what year? Was
it around August 31st, 2001, that you
were making those notations?

A. No. It's within the last,
say, six months.

Q. Okay. So the numbers on
the right were created by you within
the last six months —

A. Yes.

Q. —inreference to the
billing by Lewis Rice to you?

A. Correct.

Q. Do you know when the
handwriting on the left-hand comer,
left side, which says Charge to RHP
L-N-V, period, was made?

A. Imean, I-I- at the —
at the time I paid the bills my —
when I — when I write Charge RHP
Investments, it's normally at the
time I'm paying the bill. So I would
assume that at the time I paid this
bill, that's how I noted it.

24 Q Okay. What I just wanted

Sowragqauaune

BBXSSRIAAESSS

BPr

James DeCrescenzo Reporting, ic

215.564.3905

InnovatingLitigation
1880 JFK Bivd., 6" Floor, Philadelphia, PA 19103
www.JDReporting.com

FAX 216.751.0581


Form 2848 (Rev. 12-97) Page 2

7 Notices and communications. Original notices and other written communications will be sent to you and a copy to the
first representative listed on line 2 untess you check one or more of the boxes below.
a If you want the first representative listed on line 2 to receive the original, and yourself a copy, of such notices or
communications, check thisbox . 2... 2 6 1. ee
b If you also want the second representative listed to receive a copy of suct

¢_f you do not want any notices or communications sent to your representative(s), check thisbox . . ... . . .-O
8 Retention/revocation of prior power(s) of attorney. The filing of this power of attorney automatically revokes all earlier
pawer(s) of attorney on file with the Internal Revenue Service for the same tax matters and years or periods covered by

this document. If you do not want to revake a prior power of attorney, checkhere. . . 2. 2. 2 1. e .. -O
YOU MUST ATTACH A COPY OF ANY POWER OF ATTORNEY YOU WANT TO REMAIN IN EFFECT.

. >a

‘h notices and communications, check this

9 Signature of taxpayer(s). If a tax matter concerns a joint return, both husband and wife must sign if joint representation is
requested, otherwise, see the instructions. if signed by a corporate officer, partner, guardian, tax matters partner, executor,
receiver, administrator, or trustee on behalf of the taxpayer, | certify that | have the authority to execute this form on behalf
of the taxpayer.
> IF NOT SIGNED AND DATED, THIS POWER OF ATTORNEY WILL BE RETURNED.

Print Name
Declaration of Representative

Under penalties of perjury, | declare that:
© |. am not currently under suspension or disbarment from practice before the Internal Revenue Service;

| am aware of regulations contained in Treasury Department Circular No. 230 (31 CFR, Part 10}, as amended, concerning
the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries, and others;
© (am authorized to represent the taxpayer{s) identified in Part | for the tax matter(s) specified there; and
@ | am one of the following:
Attorney—a member in good standing of the bar of the highest court of the jurisdiction shown below.
Certified Public Accountant—duly qualified to practice as a certified public accountant in the jurisdiction shown below.
Enrolled Agent—enrolled as an agent under the requirements of Treasury Department Circular No. 230.
Officer—a bona fide officer of the taxpayer's organization.
Full-Time Employee—a full-time employee of the taxpayer.
Family Member—a member of the taxpayer's immediate family (.e., spouse, parent, child, brother, or sister).
Enrolled Actuary—enrolled as an actuary by the Jaint Board for the Enrollment of Actuaries under 29 U.S.C. 1242 (the
authority to practice before the Service is limited by section 10.3(d)(1) of Treasury Department Circular No. 230).
bh Unenrolied Return Preparer—an unenrolled return preparer under section 10.7(c)(viil) of Treasury Department Circular
No, 230.
> IF THIS DECLARATION OF REPRESENTATIVE IS NOT SIGNED AND DATED, THE POWER OF ATTORNEY WILL
BE RETURNED.

Designation—Insert | Jurisdiction (state) or - oa
above letter (a-h) _| Enrollment Card No. . < Signature late
Iw 4-1

a MO

a w |S 7 fetLeteo— vigfas

Penske
005572

Quoante



LEWIS, RICE & FINGERSH, L.C.

ATTORNEYS AT LAW

500 N. BROADWAY, SUITE 2000
‘ST. LOUIS, MISSOURI 63102-2147

WILLIAM J. FALK ‘WWW.LRE.COM ‘TEL (314) 444-7600
DIRECT (314) 444-7749 WFALK@LEWISRICE.COM FAX G14) 612-7749
December 4, 2001

Mr. Joseph D. McCarthy
Internal Revenue Agent
Internal Revenue Service

3 Bethlehem Plaza

Bethlehem, Pennsylvania 18018

Re: Richard and Patricia L. Penske
SSN 192-34-9695 (RP), Tax Periods 1997, 1998, 1999, Form 1040
Form 2848 (Power of Attorney and Declaration of Representative)

Dear Mr. McCarthy:

Thave enclosed a new Form 2848 (Power of Attorney and Declaration of Representative),
revoking and replacing the prior form. This is a duplicate of the form faxed to you on
December 4, 2001. As I mentioned in my fax, we now expect to respond to the remaining
information document requests shortly.

Very truly yours,

‘

Lewis, RICE & FINGERSH, L.C.

By
William J. Falk

Enclosure

Penske
005432

ST. LOUIS, MISSOURI + KANSAS CITY, MISSOURI « ST. LOUIS COUNTY + WASHINGTON, MISSOURI + BELLEVILLE, ILLINOIS ¢ LEAWOOD, KANSAS