mark faughn, terrie faughn, marvin l. glass, carolyn s. glass, thomas mcintyre, deborah mcintyre and...

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI

___________________________________ ) MARK FAUGHN, TERRIE FAUGHN, ) MARVIN L. GLASS, CAROLYN S. ) GLASS, THOMAS MCINTYRE, ) DEBORAH MCINTYRE and ROGER ) Case No. 4:14-cv-00245 SPARKS, )

) Plaintiffs, ) ) v. ) ) JPMORGAN CHASE BANK, N.A., ) ) Defendant )

COMPLAINT

COME NOW Plaintiffs, and for their cause of action against defendant JPMorgan Chase

Bank, N.A. (JPMorgan), state as follows:

PARTIES

1. Plaintiffs Mark and Terri Faughn are citizens of Butler County, and reside at 71

County Road 454, Poplar Bluff, Missouri.

2. Plaintiffs Marvin L. and Carolyn S. Glass are citizens of Butler County, and

reside at 60 Hawkeye Lane, Harviell, Missouri.

3. Plaintiffs Thomas and Deborah McIntyre are citizens of Dent County and reside

at 19816 E. Highway 32, Salem, Missouri.

4. Plaintiff Roger Sparks is a citizen of Jackson County and resides at 524 N.E. Oaks

Ridge Drive, Lees Summit, Missouri.

Case 4:14-cv-00245 Document 1 Filed 03/13/14 Page 1 of 9

2

5. Defendant JPMorgan is a subsidiary of JPMorgan Chase & Co., a Delaware

corporation, with its principle place of business at 270 Park Avenue, New York, NY. JPMorgan

may be served through its registered agent, CT Corporation System, at 111 Eighth Avenue, 13th

Floor, New York, New York 10017.

JURISDICTION AND VENUE

6. This Court has personal jurisdiction over defendant by reason of defendants

contacts within this judicial district.

7. This Court has subject matter jurisdiction of this action pursuant to 28 U.S.C.

1332(a)(1) based on total diversity with an amount in excess of $75,000.00 in controversy.

8. Venue is proper pursuant to 28 U.S.C. 1391(a)(2) because the Plaintiffs are all

residents of the State of Missouri and forwarded all issued payments to Millennium from the

State of Missouri.

9. Divisional venue in Kansas City, Missouri is proper because defendants are non-

residents and Plaintiff Roger Sparks is a resident of counties of the Western Division.

ALLEGATIONS COMMON TO ALL COUNTS

10. William Wise (Wise) orchestrated a Ponzi scheme which involved using the

internet to advertise the sale of Certificates of Deposit (CDs) with unusually high rates of

interest. Investors money was then laundered and moved to offshore accounts controlled by

Wise.

11. The CDs were fake and were worthless.

12. Plaintiffs collectively paid a total $1,878,500.00 for the CDs Wise and the

Hoegels purported to sell.

13. William Wise (Wise) orchestrated the scheme.


3

14. Jacqueline Hoegel and her daughter, Kristi Hoegel, (collectively, the Hoegels)

assisted Wise with the scheme.

15. In 1999, Wise established Millennium Bank (Millennium) in St. Vincent and

Grenadines in the Caribbean.

16. Millennium purported to be a subsidiary of a Swiss bank known as the United

Trust of Switzerland (UT of S).

17. Wise and the Hoegels opened accounts at Washington Mutual Bank (WAMU)

in Las Vegas, Nevada for several Las Vegas limited liability companies, including UT of S,

LLC, United T of S, LLC and Sterling I.S., LLC (collectively, Millennium Accounts). All used

the same business address in Napa, California.

18. Investors, including Plaintiffs, mailed checks to Napa, California, where the

Hoegels operated an office, or wired funds directly to bank accounts in the United States that

were designated by Wise and the Hoegels.

19. The Hoegels took the investors checks to two WAMU retail bank locations on a

frequent basis, depositing hundreds of checks in the Millennium Accounts.

20. Employees at WAMU, including a branch manager, Tamara Miller (Miller),

and a commercial banking officer, Bianca Greeves (Greeves), actively assisted the Hoegels

with the bulk deposits.

21. Miller, Greeves and other WAMU employees helped Wise and the Hoegels to

wire funds from the Millennium accounts out to bank accounts which were in off-shore banking

locations and were controlled by Wise.


4

22. WAMU was one of several banks Wise used for money laundering. The other

banks, however, terminated banking services after becoming suspicious of Wise and his

activities.

23. WAMU ignored the suspicious activities of Wise and the Hoegels.

24. Miller and Greeves offered the Hoegels the ability to make deposits remotely and

to remotely wire funds off-shore.

25. Given remote access, the Hoegels began moving investor monies in and out of the

Millennium Accounts from their own office.

26. The rapid movement of money in and out of the Millennium Accounts activated

an alert of WAMUs internal monitoring system.

27. The alert resulted in multiple investigative audits of the Millennium accounts and

an investigation of Wise and the Hoegels.

28. JPMorgan acquired WAMUs assets, including the Millennium accounts, from

the Federal Deposit Insurance Company on September 25, 2008, following WAMUs failure.

29. The audits of the WAMU accounts generated investigative reports for specific

review periods, one of which ran from May 31, 2008 to October 8, 2008, bridging the date of

JPMorgans acquisition of WAMU.

30. The report for the May 31, 2008 to October 8, 2008 review period was prepared

on or after October 8, 2008, so the entity that prepared the investigative report was JPMorgan,

which had already acquired WAMU.

31. The October 8, 2008 report (Exhibit A to this Complaint) included a detailed

narrative, summarizing the suspicious activities related to Wise, the Hoegels and the Millennium

Accounts.


5

32. The October 8, 2008 report demonstrates that by October 8, 2008, JPMorgan had

specific and actual knowledge of the fraudulent activities of Wise and the Hoegels.

33. The October 8, 2008 report reveals that the bank, after its acquisition by

JPMorgan, had elected not to report these illegal activities to law enforcement authorities.

34. JPMorgans Anti-Money Laundering Operations Unit, located in San Antonio,

Texas, conducted an investigative audit for the period from October 8, 2008 to February 20,

2009, and created an investigative file, summarizing the suspicious activities for that period.

35. On March 25, 2009, the Securities and Exchange Commission (SEC) filed an

enforcement action in U.S. District Court for the District of Northern Texas, SEC v. Millennium

Bank, et al, N.D.Tex, Wichita Falls Division, Case No. 7:09-cv-00050-O (SEC Action),

seeking injunctive and other relief to shut down the Millennium fraud. See Exhibit B, Hunter

Declaration, filed in support of the SECs motion.

36. In response to a request from the SEC, a compliance manager for JPMorgans

Anti-Money Laundering Operations Unit, Casey Stein (Stein), signed a sworn declaration

dated March 23, 2009, which summarized the results of his units investigation of the

Millennium Accounts (Stein Declaration, Exhibit C). The Stein Declaration was also filed in

support of the SECs motion for a restraining order against Millennium.

37. The Stein Declaration demonstrates that no later than February of 2009, Stein, and

therefore JPMorgan, knew that Wise and the Hoegels were laundering money.

38. Stein and JPMorgan had specific knowledge of the Millennium fraud as far back

as September 25, 2008, the date of JPMorgans acquisition of WAMU.

39. During the six-month period from JPMorgans acquisition of WAMU and the

filing of the SEC action, JPMorgan took no action to shut down the Millennium Accounts.


6


filing of the SEC action, JPMorgan continued to provide uninterrupted banking services to Wise.

41. JPMorgan was legally required to notify a law enforcement agency of the illegal

activity that was discovered during the audit and investigation of the Millennium accounts.


filing of the SEC action, JPMorgan did not notify law enforcement of the illegal activities

discovered during the audit and investigation of the Millennium accounts.

43. During this six month period, over $16 million passed in and out of the bank, and

ended up in overseas accounts beyond the reach of U.S. law enforcement authorities.

44. JPMorgan, by its acts and omissions, knowingly aided and abetted the

Millennium fraud, causing investors, including Plaintiffs, to lose their investment monies.

45. The loss of Plaintiffs investment monies was a reasonably foreseeable result of

JPMorgans failure to notify law enforcement of the Millennium scheme.

COUNT ONE AIDING AND ABETTING COMMON LAW FRAUD

Come now Plaintiffs, and for their cause of action against Defendant under Count One of

this Complaint, state and allege as follows:

46. Plaintiffs incorporate Paragraphs 1 through 45 of this Complaint as though fully

set forth herein.

47. Wise and the Hoegels represented to the public and to the Plaintiffs that

Millennium was a St. Vincent & Grenadines bank offering Certificates of Deposit for sale, and

that Millennium was a subsidiary of a Swiss bank, UT of S.

48. These representations were false and intended to deceive potential investors so

that Wise and the Hoegels could collect and steal investor funds.


7

49. The Plaintiffs relied on Wise and the Hoegels representations in electing to

forward monies to them in exchange for fake certificates of deposit issued to them, which were

worthless.

50. JPMorgan knew that Wise and the Hoegels were not conducting any banking

business, but were rather collecting and moving investor monies to accounts that Wise and the

Hoegels had established outside of the U.S.

51. No later than October 8, 2008, JPMorgan had detailed information about the true

nature of the Millennium fraud, as more particularly described in the narrative contained in

Exhibit A.

52. JPMorgan provided substantial assistance to Wise and the Hoegels, including, but

not limited to the following acts and omissions:

a. Allowing Wise and the Hoegels to use JPMorgan bank accounts

for laudering and stealing investor monies;

b. Providing remote deposit and wiring services to Wise and the

Hoegels, which facilitated the theft of investor funds;

c. Failing to close the Millennium Accounts after the banks internal

investigation revealed suspicious activity; and

d. Failing to notify law enforcement about the ongoing illegal

activities by Wise and the Hoegels.

53. Wise and the Hoegels were able to steal sums in excess of $16 million during the

period from September 25, 2008 to March 25, 2009, including monies invested by the Plaintiffs,

as the direct and proximate result of JPMorgans failure to act on its specific knowledge of the

Millennium fraud.


8

WHEREFORE, Plaintiffs respectfully request judgment against Defendant under Count I

of this Complaint for such damages as are fair and reasonable together with their costs and fees,

for interest, and for such other and further relief as the Court deems just and proper under the

circumstances.

COUNT TWO CONSPIRACY

Come now Plaintiffs, and for their cause of action against Defendant under Count Two of

this Complaint, state and allege as follows:

54. Plaintiffs incorporate Paragraphs 1 through 53 of this Complaint as though fully

set forth herein.

55. Defendant JPMorgan engaged in a civil conspiracy with Wise and the Hoegels

through the acts and omissions alleged herein.

56. The purpose of the conspiracy was to profit from the Millennium fraud.

57. Defendant, Wise and the Hoegels had a unity of purpose and common design.

58. Defendant profited from the funds that Wise and the Hoegels funneled through

the Millennium Accounts.

59. Defendant deliberately elected not to report the money laundering to law

enforcement.

60. Defendant kept its knowledge and evidence of money laundering by Wise and the

Hoegels a secret until Defendant was approached by the SEC.

61. By keeping the money laundering by Wise and the Hoegels a secret, Defendant

permitted Wise and the Hoegels to move the funds in the Millenium Accounts beyond reach of

recovery by U.S. law enforcement.


9

62. As the direct and proximate result of Defendants participation in the conspiracy,

Plaintiffs were damaged.

WHEREFORE, Plaintiffs respectfully request judgment against Defendant under Count

II of this Complaint for such damages as are fair and reasonable together with their costs and

fees, for interest, and for such other and further relief as the Court deems just and proper under

the circumstances.

Respectfully submitted,

/s/ Rick D. Holtsclaw Rick D. Holtsclaw, MO#32866 HOLTSCLAW FIRM

2029 Wyandotte, Suite 100 Kansas City, Missouri 64108 Telephone: (816) 221-2555 Facsimile: (816) 221-2508 [email protected]

ATTORNEY FOR PLAINTIFF

REQUEST FOR TRIAL BY JURY

COMES NOW the plaintiff and hereby respectfully requests trial by jury of all issues so

triable in the above-captioned cause.

/s/ Rick D. Holtsclaw ATTORNEY FOR PLAINTIFF70


(REDACTED)

Case 4:14-cv-00245 Document 1-1 Filed 03/13/14 Page 1 of 4

(REDACTED)

(REDACTED)


michelle

Hunter Declaration

Case 7:09-cv-00050-O Document 7-4 Filed 03/26/09 Page 13 of 29 PageID 190


IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF TEXAS

WICHITA FALLS DIVISION

SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. MILLENNIUM BANK,

UNITED TRUST OF SWITZERLAND S.A., UT of S, LLC, MILLENNIUM FINANCIAL GROUP, WILLIAM J. WISE, d//a STERLING ADMINISTRATION, d//a STERLING INVESTMENT SERVICES, d/b/a MILLENNIUM AVIATION,

KRSTI M. HOEGEL, alk/a KRSTI M. CHRISTOPHER, alk/a BESSY LU, JACQUELINE S. HOEGEL, alk/a JACQULINE S. HOEGEL, alk/a JACKIE S. HOEGEL, PHILIPPE ANGELONI, and BRIJESH CHOPRA,

Defendants, ~d UNITED T OF S, LLC, STERLING I.S., LLC, MATRIX ADMINISTRATION, LLC,

JASMINE ADMINISTRATION, LLC, LYN P. WISE, DARYL C. HOEGEL, RYAN D. HOEGEL, and LAURIE H. WALTON,

Relief Defend~ts.

DECLARATION OF KEITH J. HUNTER

Case No.:

I, Keith J. Hunter do hereby declare under penalty of perjury, in accordance with 28

U.S.C. i 746, that the following is true ~d correct, and that I am competent to testify as to the

matters stated herein:

App. 90



1. I am over 21 years of age. I am employed by the United States Securities ~d

Exchange Commission ("Commission") as a staff account~t ~d have been employed in this

capacity since April 1999. Prior to joining the Commission, I was previously employed by the

United States Attorney's Offce for the Northern District of Texas as ~ Investigative Auditor

from September 1991 to April 1999. I am a certified public accountant (License# 54262),

licensed by the Texas State Board of Public Account~cy.

2. As a staff accountant with the Commission, my responsibilities include review of

public comp~y fin~cial statements for compli~ce with Generally Accepted Accounting

Principles, as well as review of independent audit workpapers for compliance with Generally

Accepted Auditing St~dards. I also analyze fin~cial records of non-public corporations,

parnerships, ~d individuals. This process involves tracing financial transactions to determine

their disposition ~d how those transactions occurred. Finally, I summarize such information

into various schedules ~d charts, and testify to such at hearings ~d trials.

3. I became involved in a Commission investigation into Milennium Bank

("Milennium") on or about March 3,2009 to ~alyze various bank account activity involved inthe umegistered offering of bogus "high-yield" certificates of deposit ("CDs") by Millennium

and its parent comp~y, United Trust of Switzerl~d, S.A. ("United Trust of Switzerl~d"), also

known as UT of S, LLC ("UT of S"). Milennium, located in the West Indies islands of St.

Vincent ~d the Grenadines ("SVG"), marketed its CD's on Milennium's website at

ww.mlnbank.com. and through various internet baner ads ~d lavish lifestyle magazines with

interest rates of 7% to 8%. However, according to h~d-written comments on investor checks

obtained by the staff, Milennium also offered interest rates ranging from 6.75% to 10%. These

CDs were primarily offered by Milennium's two principals, recidivists Wiliam 1. Wise

App. 91



("Wise") and Krsti Hoegel ("K. Hoegel'') through entities that either one or both of themcontrol, including Milennium Bank, United Trust of Switzerland, UT of S, and Milennium

Financial Group. Wise was ordered to comply with Pennsylvania state securities laws in 2003 in

connection with the sale of high-yield deposit agreements. Krsti Hoegel was ordered to cease

and desist from violating Minnesota securities laws in 2006.

4. My review of records relating to Milennium's business included, but was not

limited to, Milennium's UT of S ban account (account# ending X648), maintained at

JPMorgan Chase / Washington Mutual Bank ("W AMU"). This account, located in Napa,

California, was opened by K. Hoegel and Jackie Hoegel in Las Vegas, Nevada, in July 2004 and

has been used since at least October 2005 to receive investor funds for the purchase of purported

certificates of deposit. My review consisted of a comprehensive analysis for the period October

i, 2008 through February 2009, as well as an expanded review that concentrated on locating

other investor deposits, and other withdrawals to key individuals affiliated with Milennium,

Wise, and K. Hoegel for the period October 2005 through September 30, 2008. I also reviewed

the original and updated signature cards for this account, which indicate that Wise and K. Hoegel

are current authorized account signatories, as well as the Pennsylvania and Minnesota orders,

referred to above.

RECEIPT OF INVESTOR FUNDS BY THE UT OF S ACCOUNT

5. Ban statements for the UT of S account at W AMU indicate approximately

$ i 06.6 millon in deposits from July 2004 through February 2009. The Commssion has been

able to obtain, on an expedited basis, detailed records (deposit and withdrawal items) for a

majority of the transactions for the period October 2005 through Februar 28,2009 (the "review

period"). Based on this review period, at least approximately $68.6 milion was identified as

App. 92



investor funds raised from the offering of Milennium's CD's. Investor checks obtained by thestaff typically listed "UT ofS" or "United Trust of Switzerland" as the payee. The memo lines

of the checks often referenced "CD," an interest rate, Milennium Bank, the name ofa

Milennum Bank CD salesman, and/or the term "investment."

6. These funds were raised from over 375 investors across the country - from

Alaska, to Texas (including Wichita Falls, Texas), to Florida to New York, as well as from some

foreign investors located in Canada and Shanghai, China. These funds appear to have been sent

by investors to Milennium at its location in St. Vincent and the Grenadines, packaged offshore

and then shipped to UT ofS's Napa, California office via FedEx or U.S. maiL. Federal Express

shipping records reflect shipments to 3432 Valle Verde Dr., Napa, Californa from Millennum

Ban. During 2008 and 2009, Wise, Jackie Hoegel, Brijesh Chopra, and Philippe Angeloni all

received and/or shipped packages biled to the Milennium Bank Federal Express account. In the

four month period from October i, 2008 through February 28,2009, UT ofS, LLC paid over

$24,000 in Federal Express shipping costs.

7. Once received in Napa, a significant portion ofthe checks were deposited into the

UT of S account via remote deposit machines from W AMU that Milennum had on-site at its

office in Napa. According to W AMU, remote deposit machines are offered for purchase by

W AMU and allow W AMU's customers and merchants greater flexibilty in conducting their

banng needs. These devices scan an investor check, causing it to be immediately deposited to

the customer's (UT of S) account. According to documents obtained from W AMU, the remote

deposit machines were requested by Krsti Hoegel and stationed at UT ofS's office at 3432

Valle Verde Dr., Napa, California. Under the agreement with W AMU, the customer (UT ofS /

App. 93



Millennium) is required to properly dispose of the deposited item/check within approximately 30

days.

DISBURSEMENTS FROM THE UT of S ACCOUNT

8. During the relev~t period, all investor funds appear to have been commingled in

the UT ofS account at WAMU, used for operating expenses ofUT ofS, and subsequently

disbursed to Wise, K. Hoegel, Brijesh Chopra, and Philippe Angeloni; Wise and K. Hoegel's

relatives; and entities Wise ~d K. Hoegel control. Specifically, based on my review of the ban

records and other documentation, it appears that the majority of investor funds were used by,

and/or tr~sferred to the following individuals ~d entities (shown with approximate amounts

received):

a. Wise (includinp entities under his control, Sterling Administration,

Sterling Investment Services, Milennium Aviation): $12.3 milion

b. K. Hoegel: $965,000

c. Jackie Hoegel (K. Hoegel's mother): $854,000

d. Brijesh Chopra: $90,000

e. Philippe Angeloni: $20,000

f. Lynn Wise (Wise's wife): $1.6 milion

g. Daryl Hoegel (Jackie Hoegel's husband): $130,000

h. Ryan Hoegel (K. Hoegel's brother): $34,000

1. Laurie Walton: $323,000

J. United T of S, LLC: $225,000

k. Sterling I.S., LLC: $504,000

L. Matrix Administration, LLC: $476,000

App. 94



m. Jasmine Administration, LLC: $18,000

n. Milennium Fin~cial Group: $20,000

o. United Trust of Switzerland, S.A.: $2.6 milion

p. UT ofS, LLC (operating expenses): $1.1 milion

In addition, other disbursements relating to credit cards ($2.8 milion), automobiles

($820,000), aviation ($870,000), ~d wine ($90,000) were also identified. There may be otherentities or individuals who received investor fuds as welL.

9. It appears that Wise directed transfers to his various business entities, namely

Sterling Investment Services, Sterling Administration, and Milennium Aviation. Approximately

$2.6 milion was tr~sferred to United Trust of Switzerland and approximately $6.6 milion was

transferred to or for the benefit of Sterling Investment Services/Sterling Administration. Of this

$6.6 milion, approximately $4.7 millon was wire transferred to ~ entity named Caribbean

Money Market Brokers, Ltd., located on the Caribbean isl~d of Port of Spain, Trinidad. I have

not been able to determine the disposition of the fuds tr~sferred to United Trust of

Switzerl~d, Sterling Investment Services and Sterling Administration.

10. There does not appear to be any withdrawals from the account to properly invest

all of the identified investor fuds. Exhibit 1 to this declaration is a summary overview of the

UT of S account that I prepared, which identifies disbursements to Wise, K. Hoegel, and other

persons affliated with Milennium, namely, the Defendants ~d Relief Defendants.

1 1. Exhibit 1 also identifies approximately $3 milion in payments back to investors

from October 2008 through February 2009, representing an investment "return" on the CD or a

purorted maturity redemption of the CD. However, given that little or no investment activity

-,

App.95



was ever conducted out of this account, it appears such payments represent Ponzi payments from

other investors, ~ example of which is discussed below.

POSSIBLE PONZI PAYMENTS TO INVESTORS

12. On December 23,2008, the checks ofthree investors from Maryl~d ($50,000),

Oregon ($15,000), ~d San Fr~cisco ($20,000) were deposited into the UT ofS account. The

bal~ce in this account prior to these deposits was $1,937.08. After the receipt of these deposits,

the following withdrawals were made from the account.

. $26,254.99 to other investors

. $12,000.00 to Lynn Wise

$ 6,675.00 to Laurie Walton (affiiated with Wiliam Wise)

. $20,000.00 to Sterling I.S., LLC

. $10,140.89 to Old World Provisioning, LLC

$ 5,313.39 to various credit card companies

. $ 13 1.91 to FedEx

$ 75.00 to Reginald Sharpe

$ 2,401. 1 6 to Ilegible / Global Group

13. After these withdrawals, the account reflected a bal~ce of $3,944.74. Thus, as

outlined above, it does not appear that the funds from these investors in Maryland, Oregon, and

San Fr~cisco were ever invested. The disposition or purpose of the $20,000 to Sterling I.S.,

LLC, Wise's comp~y, is unown.

14. In summary, UT ofS's ban records establish the following: (1) there is no

evidence that all investor fuds were used for legitimate baning or investment activities; (2)

investor funds were commingled in the account; (3) money movement in the W AMU account

App. 96



included transfers to/from each of the Defendants, linking all of them to the scheme; (4) milions

of dollars of new investor monies were used to make apparent Ponzi payments to earlier

investors; (5) each of the individual Defend~ts diverted investor funds for their personal use

(totaling approximately $14.2 milion); (6) each of the ReliefDefend~ts received from tens of

thous~ds to milions of dollars of investor fuds (totaling approximately $3.3 milion) for no

apparent consideration; and (7) investor fuds were also used to pay at least $2.8 milion in

credit card expenses, $820,000 in auto expenses, $870,000 in aviation expenses, and $90,000 in

wine expenses (totaling approximately $4.6 milion).

Executed this 23rd day of March, 2009.

~;7~Keith 1. Hunter, C.P.A.

App. 97



Exhibit



Bank Account Summary Overview

Case Name:Bank Name:Account Name:Account #:Period:

Milennium Bank (FW - 03366)JPMorgan Chase / Washington MutualUT of S, LLC983949648October 2005 - February 2009

Investor Deposits:Investor Deposits

Withdrawals by Defendants and Relief Defandants:

Defendants:William J. Wise

Sterling iS d/b/a Sterling Investment ServicesSterling AdministrationCaribbean Money Market Brokers - Sterling AdministrationMillennium Aviation (Base Ops)

Kristi M. HoegelJacqueline S. HoegelBrijesh ChopraMillennium Financial GroupPhilippe AngeloniUnited Trust of Switzerland SA

Total Withdrawals by Defendants:

Relief Defendants:United T of S, LLCSterling I.S., LLCMatrix Administration, LLCJasmine Administration, LLCLynn P. WiseDaryl C. HoegelRyan D. HoegelLaurie Walton

Total Withdrawals by Relief Defendants:

Other Notable Withdrawals:Potential Investor Returns (Oct. 2008 - Feb. 2009)Millennium TrustAutosAviationCashCredit CardWineShipping

Total Other Notable Withdrawals:

Net Difference (withdrawals not yet identified by the staff

($5,676,373)($1,079,000)

($813,000)($4,752,000)

($70,000) ($12,390,373)

($965,626)($854,254)($90,000)($20,145)($20,000)

($2,690,578)

($225,600)($504,300)($476,405)

($18,000)($1,683,500)

($130,825)($34,950)

($323,120)

($3,029,729)($1,237,206)

($823,582)($877,891 )

($33,681 )($2,885,420)

($92,433)($24,206)

8:'"'Ii;ooa:~i5"-

EXHIBIT\,~ ~(/

$68,624,772

($17,030,975)

($3,396,700)

($9,004,148)

$39,192,948

App. 98



Attestation Case 7:09-cv-00050-O Document 7-4 Filed 03/26/09 Page 24 of 29 PageID 201


I HEREBY ATIST

UNITED STATES OF AMERICASECURITIES AND EXCHANGE COMMISSION

ATTESTATION

that:

A dilgent search has this day been made of the records and files of this Commission and the

records andfiles do not disclose, that any registration statement has been received in this

Commission under the names Milennium Bank, United Trust of Switzerland s.A. or UT of S.

LLC, pursuant to the provisions of any of the Acts administered by the Commission.

on fie in this CommissionMarch 20, 2009

(Date) ~s fvRecords Offcer

It is hereby certified that the Secretary of the U.S. Securities and ExchangeCommission, Washington, D.C., which Commission was created by theSecurities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is officialcustodian of the records and files of said Commission, and all records andfiles created or established by the Federal Trade Commission pursuant tothe provisions of the Securities .Act of 1933 and transferred to thisCommission in accordance with Section 210 of the Securities ExchangeAct of 1934, and was such official custodian at the time of executing theabove attestation, and that helshe, and persons holding the positions ofDeputy Secretary, Assistant Director, Records Officer, Branch Chief ofRecords Management, and the Program Analyst for the Records Officer,or anyone of them, are authorized to execute the above attestation.

For the Commission~ 7J. Y1~Secretary

App. 99



Stein Declaration



DECLARATION OF CASEY STEINI, Casey Stein, do hereby dei:clare under penalty of perjury, in accordance with 28 U.S.c.

1746. that the ftllowing 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 reviewcustomer account transactions which might involve ilegal activities.

2. In mid-February 2009, during the normal course of operations, an investigatorwithin my department noticed unusual deposit items and wre activity in W AMU account endingin #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 offunds 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, LtCAccount were being redistributed to Wise, Hoegel, and their apparent relatives, including

payment to credit cards, and a minimal amount was distdbuttxi to companies n 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



5. The Iff ufS,LLC Account activity rel1ects many "remote items deposits.' andcustomer 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 andor 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 reIrences to "CD" and interest rates ranging from 6.75% to 10%.

6. A W AMU employee working at my direction performed an investigation into theaccount activity and reported his findings to me in the nornial course of business. Among otherthings, the employee repoftt-'d that from a tally f checks deposited into the U1' of S, LLC

Account fom 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 ValleVerde 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, amongother 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



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

not oftr 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 loegel 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 wJ be released and the

account wil be closed \vithin the next several days.

Executed March 23, 2009

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

App.l02



3/11/2014 Missouri Western Civil Cover Sheet

1/2

JS 44 (Rev 09/10)

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF MISSOURI

CIVIL COVER SHEET

This automated JS-44 conforms generally to the manual JS-44 approved by the Judicial Conference of the United States in

September 1974. The data is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. The

information contained herein neither replaces nor supplements the filing and service of pleadings or other papers as required

by law. This form is authorized for use only in the Western District of Missouri.

The completed cover sheet must be saved as a pdf document and filed as an attachment to the

Complaint or Notice of Removal.

Plaintiff(s): Defendant(s):

First Listed Plaintiff:

James Mark Faughn ;

1 Citizen of This State;

County of Residence: Outside This District

Additional Plaintiff(s):

Terrie Lynn Faughn ;


Thomas Charles McIntyre ;


Debbie Wolters McIntyre ;


Marvin L Glass ;


Carolyn S Glass ;


Roger A. Sparks ;


First Listed Defendant:

JPMorgan Chase Bank, N.A. ;

2 Citizen of Another State;

County of Residence: Outside This District

County Where Claim For Relief Arose: Jackson County

Plaintiff's Attorney(s): Defendant's Attorney(s):

Rick Holtsclaw (James Faughn)

Holtsclaw Firm

2029 Wyandotte St., Ste. 100

Kansas City, Missouri 64108

Phone: 816-221-2555

Fax: 816-221-2508

Email: [email protected]


3/11/2014 Missouri Western Civil Cover Sheet

2/2

Basis of Jurisdiction: 4. Diversity of Citizenship

Citizenship of Principal Parties (Diversity Cases Only)

Plaintiff: 1 Citizen of This State

Defendant: 2 Citizen of Another State

Origin: 1. Original Proceeding

Nature of Suit: 370 Fraud Actions

Cause of Action: Aiding and Abetting Common Law Fraud; Conspiracy

Requested in Complaint

Class Action: Not filed as a Class Action

Monetary Demand (in Thousands):

Jury Demand: Yes

Related Cases: Is NOT a refiling of a previously dismissed action

Signature: Rick Holtsclaw

Date: 3/11/2014

If any of this information is incorrect, please close this window and go back to the Civil Cover Sheet Input form to make the correction and generate

the updated JS44. Once corrected, print this form, sign and date it, and submit it with your new civil action.


COMPLAINT

mark faughn, terrie faughn, marvin l. glass, carolyn s. glass, thomas mcintyre, deborah mcintyre and...

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