This exhibit provides the testimony of the Senior Investigator on behalf of the California Department of Insurance, Minerva Lopez. She discovered no violations by National Medical Funding prior to 2001, and that she found that there were a number of investors who had been paid. She identified and documented at least 58 investors who invested in National Medical Funding and were paid and had documents to prove that. She also found an additional approx. 20 to 25 investors who also invested and said that they had been repaid but did not have supporting documents.

Deposition Minerva Lopez Investigator for California Department of Insurance
April 28, 2004
Ken Sobel, ESQ

Q. Have you ever been told that there was any violations by National Medical Funding of state law prior to January 1 1999?
A. The period we selected did not include '99 as far as violations.

Q. If you didn't investigate prior to January 1, '99, that would lead me to conclude that you don't know whether there was any violation by National Medical Funding prior to January of '99. Is that right?
A.That's fair to say.

Q. Do you recognize that document (Exhibit 17 -State of California Department of Ins. Viatical Settlements Brokers License -see Due Dilligence Section of this website)
A. Yes.

Q. Did you understand when you commenced your investigation that National Medical Funding, which of course was the dba, was a licensed viatical broker, sales broker?
A. Yes. When I started investigating, I knew we had issued a license that had been surrendered sometime. I don't have the exact date right now. I don't want to give you a wrong date. But is was not active.

Q. The information that I have suggests that it was surrendered sometime after January 1 of 2001. Does that refresh your recollection?
A. I believe that's correct.

Q. Did you understand that it was a document that was in full force and effect until it was surrendered sometime after January 1 of 2001?
A. Yes, I had checked on that.

Q. And it was in place for July 1996 until the time it was surrendered?
A. Correct.

Q. Did you note when you investigated whether there was any indication of any discipline in connection with that license? Do you follow what I mean by "discipline"?
A. I understand what you're saying. Any disciplinary action by our department?

Q. Any disciplinary by your department during this time period, between July '96 when it was issued, to January 2001 or after, when it was surrendered.
A. No, I'm not aware.

Q. Do you know whether any notation was made at any time during the time that this license was valid, I mean before it was surrendered?
A. No, I'm not aware. When there is a complaint, they generate what they call a prior and pending, something that will warrant time spent on an investigation or at least on allegation. And to the best of my recollection there were none. The only thing I know is that when somebody applies for a license, they investigate; they do the background check. And that is not in my department so I cannot tell you about that.

Q. But as the investigator, lead investigator, if you will, from the Department of Insurance, at the time that you began your investigation you did not note that there were any complaints against National Medical Funding, is that right?
A. After the license was issued and whoever reviewed the file, no, not aware.

Q. Did you ever determine the amount that investors had been repaid from National Medical Funding and/or Trust Management Services?
A. No

Q. Was that something someone else did?
A. I'm not sure if anybody was interested in determining that.

Q. So nobody at any time ever said, gee, we ought to find out who invested in NMF and got paid, or words to that effect; is that right?
A. By saying "we", in my investigation in conjunction with the district attorney's office that's something that was brought up, and we determined it would take more time and effort to come to arrive at that number..

Q. So as you sit here today, you don't know how many investors invested in NMF through Bob Shearburn or Innovative Financial Services and were repaid, is that right?
A. No, I don't know.

Q. And some decision was made early on by another investigative agency not to pursue that; is that right?
A. Well, I think it was in conjunction with our division here.

Q. Did you speak with every investor?
A. Yes.

Q. Did you ask each and every one of them if they had invested before and had been paid?
A. Yes.

Q. Okay. Did you attempt to list all of those who told you that they had invested and had been paid on that spreadsheet?
A. I did attempt, but the majority did not have the contracts anymore. Only the ones that had them still and sent them to me, I listed them.

Q. Okay. Those then who had a contract for prior investment that had been paid, those are the ones that on your Exhibit 15 you would have reported as paid out, or words to that effect, correct?
A. Correct.

Q. But those who may have said to you in conference, well, we were paid on this investment but we don't have the contracts, those you didn't list as paid out?
A. Right.

Q. Okay. But you know that there were a number of investors who said they had been paid but didn't keep the paperwork and weren't then recorded as paid out, correct.?
A. Right.

Q. Do you have any estimate of the number of investors?
A. I want to say yes, that it's more than 20 victims.

Q. Less than 100?
A. Most definitely less than a hundred. The victims that I listed and obtained purchase agreements for the case are only 58.

Q. Would it be less than 50?
A. Oh, definitely less than 50. I want to say it's about 20, 25 of those people I spoke with.

Q. Wonderful. Is that your best estimate?
A. Yes.