Carlo DeMaria, Jr. vs. Everett Leader Herald, Sergio Cornelio, Joshua Resnek, Matthew Philbin and Andrew Philbin, Sr.
(Editor’s Note: This article was published in the Everett Advocate on Feb. 17, 2021)
Everett Leader Herald owner Matthew Philbin awaits another day of deposition after his recent deposition with attorneys for Mayor Carlo DeMaria on January 18, 2023, at the Boston law offices of Saul Ewing Arnstein & Lehr LLP was cut short.
Philbin, along with his Attorney, Kevin Polansky, answered questions posed by Atty. Jeffrey Robbins, the mayor’s lead attorney in the lawsuit which began back in 2022. In 2022, the court ruled that the lawsuit can be expanded back to 2017 following evidence presented by DeMaria’s attorneys of defamatory articles published about DeMaria dating back years.
Philbin’s testimony shed light on the newspaper’s dire finances when he admitted to needing to fund the newspaper out of pocket as the free weekly newspaper could not draw advertising revenue to even come close to paying the paper’s expenses. Philbin, in his sworn testimony, stated that he hoped that his corrupt publisher/reporter Joshua Resnek would liven up the newspaper’s content in order to draw potential advertisers.
Since purchasing the newspaper in 2017, Philbin stated, he hired Resnek to handle the finances for the company, Dorchester Publications LLC, (Everett Leader Herald), as well as write the content. He then claimed that he never kept track of the finances of the company – stating that he paid no attention to the newspaper’s finances from 2019 through 2021, stating that Resnek was in charge of that.
“My question is, you’ve paid no attention to the income, the revenue that’s come into Dorchester Publications in 2019, 2020, 2021? That’s your testimony?” asked the attorney.
“You have to be more specific,” replied Philbin.
“I can’t be,” stated Robbins.
Asked if he knew the definitions of “money” and “revenue”, Philbin admitted that he did, providing his definition.
When he was asked once again if he kept track of the revenue that was coming into Dorchester Publications in 2019, Philbin testified that he “looked at it” – just like he admitted to doing in 2020, 2021 and 2022. Philbin responded in kind to tracking the expenses and net income from 2019 through 2022 as well.
When asked about the newspaper hemorrhaging money since almost the entire time he’s owned it, Philbin admitted that the newspaper lost approximately $50,000-$75,000 per or even more.
His best estimate for 2019 and 2022, according to Philbin: It might have lost closer to $100,000.
“So, by my rough calculation, it has lost about somewhere between 4 and $500,000 between 2018 and the end of 2022; correct?” asked Robbins.
“Yeah, in around there,” replied Philbin.
Philbin admitted that he personally had to cover the loss of approximately half a million dollars out of his own pocket since 2018 in order to keep the newspaper running.
“So you knew that it was losing money every month, correct?” asked Robbins.
“Yes,” replied Philbin.
“And every month, in fact, you had to provide the funds to pay the expenses out of your own personal pocket, correct?”
“Yes,” replied Philbin.
Philbin, when asked if he knew the gross revenues and expenses for the newspaper from 2018 to 2021, stated that he didn’t remember.
When asked for an approximate percentage of the newspaper’s expenses he paid in 2018, Philbin stated he didn’t know but did admit, once again, that the expenses were paid for with his own personal funds. Philbin claimed that Resnek kept track of the expenses and revenue for the newspaper company, from which he would receive reports. He also stated, that the bookkeeper kept track through QuickBooks. Philbin then testified that his former employee, Elena Vega would keep track of the thousands of dollars he would use to help fund the newspaper, reporting to him directly.
Atty. Robbins asked Philbin if he was aware of any cash being used to fund the newspaper. Philbin stated that there could have been cash, along with checks “that would come in through the front door.”
Philbin again was asked if he was aware that Resnek was soliciting cash for the newspaper or that there was any plan to generate cash infusions, which he would deny, but then he admitted to receiving an email about how Resnek was going to raise money and increase advertising and cut costs.
Resnek provided Philbin a plan to obtain thousands of dollars to cover the printing and delivery of the newspapers leading up to the 2021 election. Resnek said that he had three persons, Mr. A, Mr. B and Mr. C, who would bank roll the newspaper at $5,000 apiece. In an email to a friend, Resnek said that he would meet a man in a Mercedes-Benz at a Main Street restaurant and pickup thousands of dollars in cash from someone who supported the mayor’s challenger, Fred Capone.
According to Philbin, as advertising revenue continually declined, especially during the Covid pandemic, he applied for and received for two Paycheck Protection Program (PPP) loans in 2020 and 2021, totaling approximately $20,000, which was forgiven by the government. Philbin stated that he used the money to meet the newspaper’s expenses.
“And I assume that when you told the government that you needed taxpayers’ money to help keep the newspaper afloat, you were telling the truth; right?” asked Robbins.
“Yes,” replied Philbin, who admitted to signing the application for the two PPP loans.
Atty. Robbins asked if the loan was used to pay the rent at the Church Street office; Philbin stated that he couldn’t recall and that it could have been for publishing the newspaper. Philbin, along with his brother, Andrew Philbin, Jr., are the owners of the Church Street building where the newspaper office is located, along with apartments, under the name Philbin Realty Group.
Philbin said he couldn’t recall the cost and number of copies that were printed each week as he left that up to Resnek, although he agreed that if the number of copies went up that the costs would go up and he would have to find the money to pay for the increase.
“And you were having trouble funding the printing and the delivery of newspapers at a static level in 2020 and 2021. Fair to say?” asked the attorney.
“I guess that’s fair to say,” he said.
Philbin would then cut back on staffing, from his VP of Operations, Elena Vega, who stated that the Leader Heraldwas not a real newspaper, to his executive secretary. Philbin would continue to pay his wife her $90K salary despite her not being present at the office, according to one of his former staff members.
The newspaper’s former photographer and graphic designer, James Mahoney, testified in his deposition that Philbin was in complete control over the newspaper’s content, editing and final edits. According to Mahoney, once Philbin approved the final draft, it was sent to the printers.
“Did Mr. Resnek ever suggest to you that Mr. Philbin’s approval of the newspaper was not necessary?” asked Atty. Robbins.
“Never to my recollection. I have fairly distinct memories of that time frame of Mr. Resnek always saying, hang on, you know, Mr. Philbin needs to see it,” said Mahoney.
Mahoney was shown complaint exhibits where Philbin denies any involvement “in the reviewing, editing or approving the alleged defamatory statements” in the newspaper’s publication. “It appears not to be a true statement,” stated Mahoney.
On numerous occasions during his testimony, Mahoney stated that Philbin was always involved in the matters of the newspaper’s production, from the editing and proofing of the articles to the final drafts of the complete edition before it went to press.
Philbin is expected to appear again for his next deposition in the near future.