Galper v. JP Morgan Chase Bank N.A.
OPINION re: 19 FIRST MOTION to Dismiss the Amended Complaint, or, in the alternative, to Strike Certain Allegations, filed by JP Morgan Chase Bank N.A. Given the reasoning above, Defendant's motion to dismiss is granted, and motion to strike is denied as moot. The AC is dismissed with leave granted to replead within 20 days. It is so ordered. (Signed by Judge Robert W. Sweet on 3/14/2014) (ja) (Main Document 36 replaced on 3/18/2014) (ja).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
13 Civ. 3449
-againstJPMORGAN CHASE, N.A.,
----- ---- --- ------------- ---------x
A P PEA RAN C E S:
fth Avenue, Fl. 7
New York, NY 10017
Eric M. Creizman, Esq.
LEVI LUBARSKY & FEIGENBAUM LLP
1185 Avenue of the Americas, 17th Floor
New York, NY 10036
By: Alan H. Scheiner, Esq.
Andrea Likwornik Weiss, Esq.
Defendant JPMorgan Chase Bank, N.A.
("Chase U or the
"Defendant U) has moved pursuant to Federal Rules of Civil
Procedure 9(b} and 12(b} (6) to dismiss the Amended Complaint
("AC U) of Yelena Galper ("Galperu or the"
the alternative, to strike certa
aintiffU), or, in
allegations pursuant to Fed.
R. Civ. P. 12(f). Based upon the conclusions set forth below,
the motion to dismiss is granted, and the AC is dismissed with
leave granted to replead within 20 days.
Galper filed her complaint on May 22, 2013. Chase
moved to dismiss the initial complaint on June 28, 2013. Galper
filed her AC on July 9, 2013. The instant motion to dismiss the
AC was heard and marked fully submitted on November 6, 2013.
Because this is a motion to dismiss under Fed. R. Civ.
P. 12(b) (6), the
llowing facts, which this Court assumes to be
true, are drawn from the AC.
551 U.S. 308, 322, 127 S. Ct. 2499, 168 L. Ed.
2d 179 (2007)
("[F]aced with a Rule 12(b) (6) motion to di
10(b) action, courts must, as with any motion to dismiss
ilure to plead a claim on which relief can be granted, accept
the complaint as true.").
all factual allegations
The AC alleges three causes of action: i
in violation of N.Y. Gen. Bus. Law Section 380 s, aiding and
and conversion. The AC contains
ng the activities of three Chase employees
from 2008-2011 in connection with a money laundering scheme,
members of which have been prosecuted and convicted on
charges in t
Eastern District of New York. AC
1, 17. The
members of the money laundering scheme concealed the proceeds of
a Medicare fraud perpetrated by owners and control
rs of three
health care clinics: Bay Medical Care, SZS Medical Care, and SVS
Wellcare Medical (the "Clinics
16. Members of the money
undering scheme provided a service to the owners and
controllers of the Clinics by creating phony corporations to
which the Clinic owners and controllers could write checks, thus
concealing the illicit proceeds of their fraud.
money laundering conspirators would then withdraw ca
cashier's checks from the
k accounts they opened for the
phony corporations and return the cash to the Clinic owners
after taking a fee for themselves. Id. In September 2009, three
accounts in the name of phony corporations were opened at Chase
that falsely identified Galper as signatory and president of the
18. These accounts were opened by members of
the money laundering scheme with the assistance of a Chase
branch manager and business account manager, who allegedly
opened the accounts without Galper's permission or knowledge.
rd. The members of the money laundering scheme and the Chase
employees also used a dormant personal checking account of
Galper's to make personal, lavish expenditures for the members
of the money laundering scheme. rd.
18, 19. The branch
manager and a teller permitted a member of the money laundering
scheme to make large cashier's check withdrawals using Galper's
y and forged bank records to fals
made the withdrawals. Id.
y reflect that Galper
22. The AC further details the
The money laundering conspirators provided the Chase
employees with money and other things of value in exchange for
their unlawful se
4. Additionally, by ostensibly
bringing in business and bank fees through the opening and
operation of the fraudulent business accounts, the Chase
employees improved their stature and compensation at Chase. rd.
Oftentimes the money-laundering accounts opened in Galper's name
would become overdrawn, or checks written to those accounts
would bounce. Id.
6. When the money laundering conspiracy was
discovered, the Government closed the fraudulent accounts. Id.
Since Galper was the sole signatory on the accounts, the
Government investigated her, and despite her denial of
involvement, Galper was indicted. Id. The bounced checks, closed
accounts, and government investigation triggered reports to
ChexSystems and Early Warning Systems, companies which collect
data on account holders and he
institutions identify risky
As a result of the adverse reports, Galper's checking
account at HSBC was closed, as was the account she opened in
response to the first account's closing. Id.
2010, Chase also clo
10. In February
a bank account of Galper's 12-year old
son, for which she was the custodian. Id. In addition, the
unlawful activity captured the attention of law enforcement, who
interviewed and investigated Galper, resulting in an ultimately
1 federal criminal prosecution. Id.
27. After a
seven week trial, a jury acquitted Galper of all charges. Id.
Galper seeks $10 million in compensatory and punitive
damages from Chase. AC
r actual damages
11. She claims that
include financial and emotional damages, id.
s and costs associated with defending the federal
criminal prosecution against her,
The Applicable Standards
On a motion to dismiss pursuant to Rule 12 (b) (6),
in the complaint
all inferences are drawn in favor of the pleader. Mills v.
.,12 F.3d 1170,1174
is not whether a plaintiff will ultimately prevail but whether
the claimant is entitled to offer evidence to support the claims
. . '" Villager
236, 94 S. Ct. 1683, 40 L. Ed. 2 d 90
( 1974 ) ) .
12 (b) (6),
accepted as true,
'state a claim to relief that is plausible
on its face.'" Ashcroft v.
1937, 1949, 173 L.
. 2d 868
(quoting Bell Atl. Co
factual allegations of a complaint as true,
it is "'not bound to
U.S. at 555).
a plaintiff must:
or speculat i ve allegat ions,
unsupported by specific
facts, are legally insufficient. Id. at 176.
The First, Second And Third Causes of Action Are Dismissed
(internal quotation marks and citation omitted).
state where and when
identify the speaker,
To satisfy this requirement,
The first cause of action is based on state law that
concerns the furnishing of information to credit
agencies. Such claims are preempted by the federal Fair Credit
Reporting Act ("FCRA"). See 15 U.S.C. § 1681t(b) (1) (F)
requirement or prohibition may be impos
under the laws of any
with respect to any subject matter regulat
section 1681s 2."); 15 U.S.C. § 1681s-2(a) (1) (A)
person shall not furnish any information relating to a consumer
to any consumer reporting agency if the person knows or has
reasonable cause to believe the information is inaccurate.");
665 F.3d 45, 47-48
(statutory and common law claims grounded upon bank's
lse reporting to credit reporting agencies are preempted); see
also Islam v. Option One Mortgage Corp., 432 F. Supp. 2d 181,
(D. Mass. 2006)
(holding that federal FCRA preempts
claims under Massachusetts fair credit reporting statute and for
common law negligence) .
The AC alleges that false reports were made to two
purported "consumer reporting agencies," ChexSystems and Early
Warning Systems, AC
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?