Faughn et al v. JPMorgan Chase Bank, NA

Filing 1

COMPLAINT against All Defendants filed by Rick D. Holtsclaw on behalf of All Plaintiffs. Filing fee $400, receipt number 0866-3874608. Service due by 7/14/2014. (Attachments: # 1 Exhibit A - Oct. 8, 2008 Report, # 2 Exhibit B - Hunter Declaration, # 3 Exhibit C - Stein Declaration, # 4 Civil Cover Sheet )(Holtsclaw, Rick) Modified on 3/14/2014 to correct receipt number (Jones, Robin). Modified on 3/14/2014 to restrict complaint and exhibits to case participants pending ruling on emergency motion (Jones, Robin).

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Stein
Declaration

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DECLARATION OF CASEY STEIN
I, Casey Stein, do hereby dei:clare under penalty of

perjury, in accordance with 28 U.S.c.

§ 1746. that the ftìllowing is true and correct, and that I am competent to testify to the matters
stated herein:
1. I am over 2 i years of age and employed by JPMorgan Chase/Wa,'iington Mutual

("WAMU"). i am a Compliance Manager and I supervise WAMU employees who review
customer account transactions which might involve ilegal activities.
2. In mid-February 2009, during the normal course of

operations, an investigator

within my department noticed unusual deposit items and wÎre activity in W AMU account

ending
in #648 during January 2009. The aCcount is a Business Corporations/Joint Ventures Analysis

Checking Account in the name ofUT ofS,LLC and was opened on 07/08/2004 ("'the tIT ofS,
LLC Accom:if'). Willam J. Wise ("Wise") and Kristi M. Hoege! ("Hoegel") have joint signature

authority fur the account
3. The unusual actIvity on the UT ofS,LLC Account involved

rapid movement of

funds and international wire transfers to countries with an increased risk for potential money
laundering. further, a

large portion of

the funds that were deposited into the UT ofS, LtC

Account were being redistributed to Wise, Hoegel, and their apparent relatives, including
payment to credit cards, and a minimal amount was distdbuttxi to companies În a related line of
business.
4. As a service to its custorncrs, the W AMU branch offices offer "remote deposits

devices," which allow the customer to deposit checks into the account from the customer's
business location. 'rhe devices scan the checks and the funds are electronically deposited into

the customer's account.

App. 100

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5. The Iff ufS,LLC Account activity rel1ects many "remote items deposits.' and
customer deposits in significant amounts, followed by large outgoing domestic and international
wires to various individuals, including Wise, Hoegel, apparent famHy members, and entities and

businesses controlled by Wise andíor the Hoegels. The remote items deposited in the liT of S,
LLC Account consist of transit checks from various individuals. 'rhc memo Hnes on the checks
typically include reIèrences to "CD" and interest rates ranging from 6.75% to 10%.

6. A W AMU employee working at my direction performed an investigation into the
account activity and reported his findings to me in the nornial course of

business. Among other

things, the employee repoftt-'d that from a tally üf checks deposited into the U1' of S, LLC

Account fÌom 07/18/2005 to 03/06/2009, the total amount of possible investor funds was in
excess of $43,000,000. This amount does not include wire transfers and other possible types of

deposits.
7. At my direction" on February 27,2009, the SmaH Business Manager at the bank's
Napa Valley branch conducted a physical inspection of

the 0'1' ofS, LLC office at 3432 Valle

Verde Drive, Napa, California. The branch m~\Iager's inspection" which was reported to me in

the nonnal course of business. noted that the offce has no signage, and the remote deposit
machine wa.: present at the location. While inspecting the premises, the branch manager
overheard the U1' of S, LLC office receptionist ask a caller if he/she wanted to rollover a

matured CD to a new one.
8. On February 27, 2009, at approximately 4:08 p.m. CST, I placed a can to BoegeJ.
Other W AMU employees working at my direction

listened to the calL. Boegel stated, among

other things, that: (I) Wise is her boss; (2) Wise owns United Trust of Switzerland, a/k/a U1' of
S, which owns Milennium Bank; (3) she did not knO\v why the memo section of

the checks

App.101

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deposited into the 0'1' of S, TJ...C Account referred to CDs and interest rates; (4) her business did

not oftèr CDs; (5) she was not licensed to oHer CDs; (6) checks being deposited into the UT of

S, LtC account arrive in Napa by mail; (7) Jackie lìoegel is her mother, Ryan Hocgcl is her
brother, and

Daryl Hoegel is Jackie's husband.

9. On March 9,2009, W AMlJ froze the UI' of S, LLC Account on a temporary

basis. The account currently holds approximately $34,500. The funds wìJ be released and the
account wil be closed \vithin the next several days.

Executed

March 23, 2009

#"~/
.,- ~~"::'" ""~: ,CASEY STEIN

App.l02