Deposition of Richard Peterson



FEDERATION, an Illinois non-profit            )
corporation,                                                  )
                            Plaintiff,                             )
                                                                     )            No. CV 99-11962
vs.                                                                 )
JANE DOE PETERSON, husband and wife; )
ASSOCIATION, an unicorporated               )
Association,                                                   )
                            Defendants                         )


		January 6, 2000
		9:04 a.m.
		Phoenix, Arizona

					330 East Thomas Road, Suite One
					Phoenix, Arizona 85012
					Phone: (602) 266-6535
					Fax: (602) 266-9661

was taken an January 6, 2000, commencing at 9:04 a.m. at the law offices of DeConcini McDonald Yetwin Lacy, P.C., 2025 North 3rd Street, Suite 230, Phoenix, Arizona, before S. Lena Duvall, a Notary Public in and for the County of Maricopa, State of Arizona.

The Plaintiff was represented by its attorneys, DeConcini McDonald Yetwin Lacy, P.C., by Mr. Jeffrey R. Simmons.

The Defendants were represented by their attorneys, Meyer, Hendricks, & Bivens, P.A., by Mr. Michael R. Ross.

Mr. Bob Smith was also present.

a witness herein, having been first duly sworn by the Notary Public to speak the truth and nothing but the truth, was examined and testified as follows:



Q Please state your full name.
A. Richard Anthony Peterson.
Q. Where do you presently reside?
A. 8511 East Cactus Road, Scottsdale, Arizona.
Q. And where was your residence prior to that address?
A. East Bell Road, Number 1047, Scottsdale.
Q. Have you had any other addresses in Arizona?
A. Yes.
Q. Okay. What are those other addresses?
A. 5408 East Kings Avenue in Scottsdale. We're. getting-back in time.
Q. How far back in time?
A. Six or seven years.
Q. Is that how long you have been in Arizona?
A. No. I have been , in the ten years in Arizona, I have had two other addresses. 2978 North Benson Lane I think the address was. I think the other was on Redmon. I believe it was 2114 East Redmon in Tempe.
Q. Have you lived ten years continuously in Arizona?
A. Pretty close now.
Q. Pretty close to ten.
A. I came in 1990, but I think I came in the fall.
Q. Since the fall of 1990, you've lived in Arizona?
A. That's correct.
Q. Before moving to Arizona, where was your residence?
A. Texas. Austin, Texas.
Q. How long did you live in Austin, Texas?
A. Ten years.
Q. Did you live in Texas ten continuous years?
A. No. I went to school in New York for a year and a half.
Q. During what time period?
A. '80. I moved to Texas in '80. Then in I believe it was the -- this is a long time ago, this is almost twenty years ago. Either the fall of '80 or fall of '81, I moved to New York, to New Jersey actually, and attended NYU.
Q. Have you lived in California during the last twenty years at any time?
A. No. I moved from California to Texas in 1980.
Q. Okay. Where did you live in California prior to moving to Texas?
A. Ridgecrest, California.
Q. How long did you live in California?
A. Since 1952.
Q. The year you were born?
A. Yes.
Q. Have you been known by any other names other than Richard Anthony Peterson?
A. Have I been known by any other name other than Richard Anthony Peterson? The only other name was about 25 years ago my name was changed to Lawrence, which in my grandfather's name, and we changed it back. We thought it was not worth it.
Q. Was it Lawrence Peterson?
A. No. I'm sorry. Richard Lawrence.
Q. Oh, Richard Lawrence. And what period of time were you known as Richard Lawrence.
A. 1975 maybe.
Q. And for how long were you known as Richard Lawrence?
A. Three months maybe.
Q. Three months. And the reason you changed your name was to honor your grandfather?
A. Frankly, I never really cared for the name Peterson just as a name. And I was getting out of college then, was just getting married, and my wife didn't like the Peterson name so we were looking for something else we could agree on.
In those days, my wife's family name was Hafele, H-a-f-e-l-e, and that didn't seem like a name to start a family. We were looking around for a family name. We chose Lawrence. We finally decided the headaches were too much to overcome.
Q. You said you were married. What year were you first married?
A. 1974.
Q. And you were married to whom?
A. Barbara Marilyn Hafele, H-a-f-e-l-e.
Q. And how long were you married to Barbara?
A. Until 1966. I think that's correct. It might have been '65.
Q - Did you have any children with Barbara?
A. Yes. Three.
Q. In light of your court claim, I know that you're currently married. Have there been any marriages between Barbara and your current marriage?
A. Yes.
Q. Who was that to?
A. I was married to -- what the heck was her name?
Q. Theresa Wagner?
A. Well, Theresa Wagner was my third wife. There was one before that. It was like a six-month marriage. That's why I came to Arizona in the first place was that young lady and -- Shelly, her name was Shelly.
Q. That was approximately six months?
A. Shelly Foster. Yes. Well, let's see. It would have been from either October or November of 1990 to approximately May of '91.
Q. And then you were married to Theresa Wagner as well?
A. Yes.
Q. About how long did that marriage last?
A. About two years.
Q. With either Theresa or Shelly, did you have any children?
A. No
Q. Now you're currently married. Is that correct?
A. Yes, that's correct.
Q. And her name is?
A. Deepika, D-e-e-p-i-k-a.
Q. And when were you married to -- is it Deepika?
A. Deepika, sounds like Jessica only it's Deepika, On April 11 of 1998.
Q. April 11, 1998?
A. That's correct.
Q. And you've recently had a child, Is that correct?
A. That's correct.
Q. Boy or girl?
A. Boy. His name is Michail, M-i-c-h-a-i-1.
Q. And when was he born?
A. On June 18, 1999. Where did you attend high school?
A. Trona High School, Trona, California
A. And what year did you graduate?
A. 1970.
Q. Have you attended college?
A. Yes.
Q. Where?
A. Chapman College in Orange, California
Q. Did you get any degree from Chapman?
A. Yes, bachelor of arts in government.
Q. And what year did you graduate from a Chapman?
A. In February of 1974.
Q. You mentioned NYU. Is that where you attended graduate school?
A. That's one of the places I attended graduate school.
Q. After Chapman, what was the first college that you attended after that for any graduate study?
A. After that it was for insurance studies which were industry sponsored at the American College in Bryn Mawr, Pennsylvania.
Q. How long did you attend there?
A. They weren't exactly correspondence courses, but they were the degree-issuing institution so that-probably started in 1975 or '6 and I went on until I got a master's degree in 1980, I believe. First I got the CLU degree, and then MSFS.
Q. CL --
A. Chartered life underwriter
Q. That's in the insurance industry.
A. Yes, I also attended the College of Financial Planning, which is located in Denver, Colorado, in 1979 and '80. Now again that was the degree-granting institution. I wasn't in Denver, Colorado.
Q. And what certificate or diploma or degree did you get from the College of Financial Planning?
A. Certified financial planner.
Q. Any other post-college study?
A. Yes. From the American Financial College in 1981 I was granted a charter financial consultant, that designation.
Q. How many hours of study at the American i6 College was required to get a CLU degree?
A. How many college credits?
Q. Right.
A. I believe thirty.
Q. How about for your certified financial planner degree, how many hours or credits?
A. Basically also thirty. I'm not sure they were distinguished that way, but it was basically thirty credits.
Q. What about the credit requirement for a certified or chartered financial consultant?
A Frankly, 1 don't remember. It was brand-new program. I think for the MSFS there were thirty-nine hours required.
Q. And where did you receive an MSFS?
A. That was from the American College.
Q. What does that stand for?
A. Master of science in financial services.
Q. And you received that in tax?
A. Yes, that was primarily tax.
Q. What year did you receive that degree?
A. Again, we're going way, way back, but I think it was 1980.
Q. Any other graduate studies?
A. Yes. University of Texas.
Q. When did you attend the University of Texas?
A. After I came back from New York to Austin. See, that would have been maybe 1982. MR. ROSS: Off the record.
(Brief pause in the proceedings.)
BY MR. SIMMONS: You went to the university -- the University of Texas in 1982. How long did you spend time there?
A. I was there one year, I believe.
Q. Did you receive any degree from that one year?
A. No. No. I already had my master's degree basically. I went to NYU and also the University of Texas. NYU was primarily for tax, and Texas was primarily for real estate.
Q. You had mentioned NYU earlier and I think we were trying to get chronologically your master's. When does NYU fit into this?
A. '81-'82, 1 think. That was after you received the MSFS from American College?
A. I believe that's correct. It's a little jumbled. It wasn't like I was going after one thing and then another thing. I was just looking for another knowledge.
Q. How long did you attend classes at NYU?
A. It was just one school year.
Q. One school year. Were you a full-time student for one year?
A. No, I was also running a business.
Q. Okay. And we'll get to your job history in a moment. You were a night -- was it night school?
A. No.
Q. Part time?
A. Just basically part time
Q. How many hours per semester?
A. I think about nine. Probably three classes.
Q. And you said those classes were concentrated in the tax area?
A. Yes. There was some computer science, but not much.
Q. There were computers back then?
A. Yes, there were.
Q. They don't look like they do now.
A. They look the same, just didn't do as much.
Q. When you were at the University of Texas, were you a full-time student there?
A. No. I was also running a business.
Q. Part-time classes?
A. Yes.
Q. Any other graduate studies after the University of Texas?
A. Well, I had a substantial amount of the securities training through NASD.
Q. Through where?
A. National Association of Securities Dealers. I'm not sure that that's academic. It is academic, but I'm not sure. There is no degree attached.
Q. When did you take clauses from NASD?
A. You don't necessarily take classes. NASD otters various levels of certificates. Series 7 is for a securities broker. If you securities, you need a Series 1.
Q. Did you get any certificates from NASD?
A. I'm doing this totally from memory. I passed Series 1; Series 6; series 7; Series 22, which I believe was the state securities; and I think 24 was registered securities principal. I could be off, but that's what it was.
Q. If you pass any of these series, do you have to register or become licensed with any governmental agency?
A. Well, NASD is not a government agency. It's an association.
Q. That's why I'm asking. If you have any certificates, do you have to be licensed?
A. The SEC interacts with NASD, but I'm not sure you are licensed with the SEC. I'm not sure what the interaction is. In any case,-I filled out a lot of .papers for the SEC and NASD.
Q. But you're not sure if you're licensed with the Securities and Exchange Commission?
A. I don't think you're licensed. The New York Stock Exchange and American Stock Exchange, they're self-regulatory. SEC is just kind of the overall umbrella.
A. To your knowledge, are you licensed with any governmental agency for any securities work?
A. At the current time?
Q. Yes.
A. No.
Q. Have you ever been?
A. Yes.
Q. Do you recall which period of time?
A. I think probably about 1975. That was the first time I took the test.
Q. The test with whom?
Q. And you believe, based on that test, you were licensed with some governmental agency or just NASD?
A. Well, again, I'm not sure of the interaction so I don't know quite how to answer the question.
Q. I just need you to answer based on your understanding.
A. I passed the test. Whatever the normal procedure is for somebody who passes the test, that's what I did.
Q. And that test was taken in 1975 approximately?
A. Approximately.
Q. Any other tests with NASD after 1975?
A. I just listed them.
Q. But what years?
A. Oh, I have no way of remembering.
Q. So the first test would have been 1975. And would that have been for the Series 1?
A. Yes.
Q. Okay. And would you have taken them in the order where they fall chronologically?
A. No. No. They don't work that way. The 22 is a state test. I'm not sure when that came. Q. Have you ever been licensed in the State of Arizona for any securities work?
A. No.
Q. In any other state?
A. Yes. California and Texas.
Q. Do you recall when you were licensed in. California?
A. '75. I'm assuming '75 to '80 left California in '80.
Q And what would have been that license for?
A. Series 1.
Q. Okay. Did California require a license independent of any certificate with NASD, if you know?
A. I don't know. I don't remember.
Q. Did Texas require a license independent of any certificate with NASD?
A. Frankly, I don't remember. I took the 22 Series exam. I think that was required,-but I don't recall if it was required by NASD or the State of Texas.
Q. Okay. After your tests and certificates with NASD, did you take any other graduate studies?
A. I don't think so.
Q. Let's talk about your job history now.
A. Okay.
Q. What is your current position?
A. I teach chess.
Q. Full time?
A. Yes.
Q. Where do you teach chess.?
A. I teach chess to the students of fifteen different schools.
Q. Here in the Phoenix metropolitan area?
A. In Scottsdale and Paradise Valley.
Q. And you get compensated for that?
A. Yes, I do.
Q. Through the schools?
A. Through the schools? No. The parents generally pay me directly.
Q. So private lessons?
A. Well, not one at a time. Through group lessons. They're class lessons.
Q. But the students are charged a fee to take your class?
A. Typically I get a room and give the classes.
Q. And how long has that been your full-time job?
A. For the last six years.
Q. Do you have any side job?
A. Sides jobs? You mean organizing chess tournaments?
Q. Well, we'll get into that.
A. If that's a side job that related to teaching children chess. Everything that I do relates to teaching children chess.
Q. It's also my understanding that you build trophies.
A. My wife does.
Q. So its not a job that falls under your current positions?
A. No.
Q. I'm looking for what you do.
A. Sure. I teach chess.
Q. Okay. I guess that was, I was under the impression that you also built trophies as a side job to generate revenue.
A. My family does.
Q. Do you assist with that?
A. When it's necessary.
Q. But it's primarily your wife's job?
A. Primarily.
Q. And that's?
A. Deepika
Q. Deepika.
Were you in the trophy building business or your family prior to marrying Deepika?
A. Yes.
Q. Who built the trophies then?
A. Well, I built some of them. This was back when I was married to Theresa. Theresa is still in the trophy building business.
Q. And you said that a lot of the things you do fall under teaching chess. Because it appears to be more than just teaching students at the various schools, can you tell me all the things that you do under what you describe as teaching chess to children?
A. Once or twice a month we run chess tournaments at the local area schools. We've been running a free program for kids called Chess & Pizza every Tuesday night for the past six years. Between the fifteen schools and Chess & Pizza and the tournaments on the weekend, that pretty much takes up my time.
Q. And based on going back six years, you started doing this full time in approximately 1994?
A. That sounds correct.
Q. And prior to teaching chess full time, what was your prior job?
A. I owned a mortgage company.
Q. What was the name of that company?
A. New Desert Mortgage.
Q. Were you the sole owner of that
A. Yes, I was.
Q. -- business?
A. Yea, I was.
Q. And how long did you own New Desert Mortgage?
A. About a year and a half maybe. maybe two-and-a-half years. I'm not real sure. Somewhere in that vicinity.
Q. What did you do as owner of New Desert mortgage?
A. Sold mortgages.
Q. Were you the sole employee as well?
A. I had other people who came in to help occasionally, but yes, I was the focal point.
Q. Did you ultimately sell that business?
A. No.
Q. How was that business resolved?
A. I just closed it.
Q. For what reason?
A. I decided I wanted to teach chess. Doing exactly the same repetitive thing day after day wasn't as much fun as teaching chess, and I had been teaching chess to kids for many years prior to that.
Q. Prior to owning New Desert Mortgage, what was your job?
A. I worked as a loan officer for Allstate Mortgage.
Q. Was that a full-time job?
A. Yes.
Q. And what-period of time was that?
A. Early '90s.
Q. Here in the Phoenix area?
A. Yes
Q. And prior to that job, what was your position?
A. Prior to that job, I was a consultant in the health care industry.
Q. And that was in Arizona?
A. No. That was in Texas.
Q. What was your responsibilities as a consultant to the health care industry?
A. Primarily the financial areas, arranging financing for various activities.
Q. You would go to them to explain what their financing options would be for various ventures?
A. Or could be expansions, could be real estate, could be equipment.
Q. Was that a full-time job?
A. Was it a full-time job? Yes.
Q. Were you doing any other work besides --
A. No.
Q. -- consulting to the health care industry during that period of time?
A. No.
Q. What period of time was that?
A. Let's see. '86 to '90 roughly.
Q. And between -- I'm going back to 1980. Between 1980 and 1986 what did you do?
A. I had a company called Peterson Diversified Interests.
Q. What was the nature of that business?
A. Security brokerage dealers called Peterson Securities and we had a chain of cardiac rehabilitation a centers where we were partners with doctors in various locations.
Q. You had both of those going on at the same time, those two businesses?
A. Yes.
Q. Were you the registered or certified broker?
A. I was the registered principal. Registered principal?
A. That's what it's called.
Q. Who were you registered with?
Q. And then you were also a part owner with doctors in this chain, what you said was cardiac rehabilitation centers?
A. That's correct.
Q. Is either one of these businesses in business today?
A. No.
Q. And why is that?
A. Because it was fifteen years ago. I don't know how to answer that question.
Q. Have you ever filed for bankruptcy protection?
A. Yes, I did.
Q. And what year was that?
A. In 1986 or 1987. I'm not real sure which one it was.
Q. And, as part of the bankruptcy filing, were there debts with Peterson Diversified Interests and these cardiac rehabilitation centers?.
A. Cardiac Fitness Centers of America.
Q. Cardiac Fitness Centers of America was the reason you had to file bankruptcy?
A. All of the banks in Texas closed down, nine of the ten major banks in Texas closed down.
Q. And were your debts ultimately discharged?
A. Yea, they were.
Q. Okay. And what year was that?
A. A year filing -- following the filing.
Q. Okay. And do you recall the amount of the debt that was discharged?
A. No, I don't. It was a large number.
Q. Was it close to 2.3 million dollars?
A. That sounds about right.
Q. You mentioned Peterson Diversified Interests as a company. Was there also a Peterson Financial Management Group?
A. That was me. That was not a corporation. That was a DBA.
Q. And did you own a hundred percent-of the Cardiac Fitness Centers of America stock?
A. Well, when you said did I own it, I don't remember if I was married at the time or not. Texas is a community property state, so in order to answer your question, my family owned it.
Q. Okay.
A. If I was not married then, then I owned it.
Q. You had mentioned a partnership with doctors in this chain. What was their interest if you owned a hundred percent of the stock?
A. The corporation Cardiac Fitness Center of America was in partnership with the doctors.
Q. They had a separate, they had a joint venture
A. Yes.
Q. -- with your corporation?
A. Yes.
Q. What wall the name of their entity.
A. I don't remember.
Q. Have you ever been convicted of a felony?
A. No, I have not.
Q. Have you ever been involved in any prior litigation?
A. Yes.
Q. And let's go back in time. When was the first lawsuit that you were involved in?
A. The first lawsuit I was involved in was about 1977.
Q. And what was the nature of that lawsuit?
A. I made the error of allowing somebody to is move in my house before they bought it and then they didn't make payments and it took me a year to get them out.
Q. Where was that lawsuit filed?
A. That lawsuit was in California
Q. After that, what was the next lawsuit?
A. The next lawsuit, basically, I'm trying to think. About 1985 or '6.
Q. And what was the nature of that lawsuit?
A. one of the gentlemen who bought equipment to lease to the San Antonio fitness center sued because his payments weren't being made.
Q And did the bankruptcy stay prevent that lawsuit from going forward?
A. No, it did not.
Q. How was it ultimately resolved?
A. 'Ultimately the doctors were found guilty and I was exonerated.
Q. So there was a judgment in your favor?
A. There was no monetary judgment in my favor. There was no judgment against me. In fact, the plaintiff's attorney at the end got up and said Richard Peterson did everything he said he was going to do, But in the end the doctors took all the money and didn't make the payments.
Q. Where was that filed; in San Antonio?
A. I believe -it was filed in Austin, although Austin and San Antonio, there were judges who sit in both places so I'm not sure where it was filed. I think it was filed in Austin. His attorney was from Austin.
Q. And you were a defendant in that action?
A. Yes. Well, Cardiac Fitness Centers of America was a defendant. I might have been individually, but I'm not sure.
Q. Was there any judgment against Cardiac Fitness Centers of America in that case?
A. I have no clue.
Q. Okay.
A. You know, I rather think there was because clearly there were lease payments that were due to the gentlemen who owned the equipment so there may well have been.
Q. After that lawsuit, was there any other lawsuits that you have been involved in?
A. Well, there was somebody else who sued me and -- an attorney, but that was wiped out in the bankruptcy.
Q. Okay. Any others?
A. Yes.
A. In Arizona there was a lawsuit by a homeowners' group. Bob loves this. Bob's a homeowners' guy. Where they had claimed that I had been served, when, in fact, I wasn't even in the state.
Q. And how was that ultimately resolved?
A. It was ultimately resolved in my favor. In other words, they obtained a judgment based on the fact they had served me, when, in fact, I had not been served.
Q. So you were able to set aside the judgment?
A. I was able to set-aside the judgment.
Q. Any other lawsuits?
A. No.
Q. Okay, I want to ask you about the Arizona Scholastic Chess Association. Let me ask you this. What kind of entity is that?
A. It is a sole proprietorship. That's how it's filed from the business standpoint.
Q. Filed with the secretary of state?
A. I don't know. I didn't file for the business license. My ex-wife Therese did. So I don't really know, but that's probably correct. It's a DBA, whatever it is, but it should also be said it's a region of the state organization for scholastic chess-.
Q. An affiliate or do you use the term?
A. It's affiliated with the U.S. Chess Federation, yes.
Q. I just want to clarify. You said region.
A. Arizona is set up in various scholastic regions, so Scottsdale and Paradise Valley is set up as a region.
Q. So is there no other competing scholastic association competing within that region?
A. No.
Q. So, as a sole proprietorship, any revenue that's generated by the Arizona Scholastic Chess Association is your revenue; is that --

[pages 33 and 34 missing]

Q. Were there boards left over from the National Elementary Chess Championship?
A. No.
Q. Anything else that your nonprofit corporation has done besides what you've told me?
A. Anything else? Anything else? Well, we haven't even established a checking account so there is really nothing.
Q. So, since its incorporation in 1996, you've had no checking account?
A. There's never been a checking account, period.
Q. And has the board ever met in those four years?
A. Basically we are just in the formation stage. We are trying to decide what we want to do with this thing.
Q. Has the board met to decide what to do?
A. No. A lot of. it depends on what happens here.
Q. Do these board members that you listed here know they are board members?
A. Every one has been asked.
Q. You're still in formation so I'm just asking what's been done. Have you gotten your 501(C)(3) authority from the Internal Revenue Service.
A. That filing has been done.
Q. But no approval yet?
A. It simply takes time.
Q. If, if you've received donations already, where has those donations been placed if there is no bank account?
A. We have not received any cash deposits. It's just those boards. I received six hundred boards and I donated them.
Q. Where did you get the six hundred boards?
A. Actually, they were-pieces of scrap material. We -make boards occasionally. When I say scrap material, it doesn't mean they were defective.
The rolls come in fifty-six, the vinyl rolls come in fifty-six inches and a board is twenty inches so there is an extra sixteen inches.- The schools in Dallas play on desktops so the boards can be sixteen inches. The boards work perfectly-for them. So the U.S. Trust gave us those boards and gave them six hundred sets to match the boards.
Q. When did the USCF Trust do that?
A. Same time. It was last year.
Q. There was another corporation that showed up too and that was one that was incorporated in October

[End of page 36 of this deposition]

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