Court filing
9.A — In re Bank of America California Unemployment Benefits Litigation (Dkt. 591-12, S.D. Cal. No. 3:21-md-02992)
Filed October 17, 2025 in In re Bank of America California Unemployment Benefits Litigation; one of 1415 filings from this case.
Record facts
| Court | U.S. District Court for the Southern District of California |
|---|---|
| Filed | 2025-10-17 |
U.S. District Court for the Southern District of California · No. 3:21-md-02992-GPC-MSB · Doc. 591-12 · 2025-10-17 · Docket on CourtListener
Full text
DX 9.A
REDACTED VERSION OF
DOCUMENT SOUGHT TO
BE SEALED PURSUANT TO
STIPULATED
PROTECTIVE ORDER
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
SAN DIEGO DIVISION
IN RE: BANK OF AMERICA
CALIFORNIA UNEMPLOYMENT
BENEFITS LITIGATION
Case No. 1-MD-02992-GPC-MSB
EXPERT REBUTTAL REPORT OF CARL PRY
April 4, 2025
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Page i
Table of Contents:
I.
ASSIGNMENT AND ROLE ............................................................................................... 1
II.
QUALIFICATIONS ............................................................................................................ 1
III.
INFORMATION RELIED UPON ...................................................................................... 2
IV.
EXECUTIVE SUMMARY ................................................................................................. 3
V.
BACKGROUND ................................................................................................................. 8
A. Unemployment Insurance Fraud .......................................................................................... 8
B. BANA’s Response to the Widespread Fraud..................................................................... 12
C. Consent Orders and Remediation Plan .............................................................................. 16
1.
Claims Denied as of Remediation Plan ........................................................................ 18
2.
Claims Paid as of Remediation Plan ............................................................................. 18
3.
........................................................ 19
VI.
OPINIONS ......................................................................................................................... 20
A. Financial Institutions Prioritize Prompt Compensation, Even if it Results in
Overcompensation, in Responding to Consent Orders. ............................................................ 20
B.
....................................................................................................... 22
C.
.......................................................................................................... 25
D.
.................................................................................................... 27
E.
.................................................................................................... 29
VII.
CONCLUSION .................................................................................................................. 30
VIII. SIGNATURE ..................................................................................................................... 33
Appendices:
Appendix 1: CV of Carl Pry
Appendix 2: Documents Relied Upon
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Page 1
I.
ASSIGNMENT AND ROLE
1. This matter is a proposed class action brought forth by certain proposed classes of
plaintiffs (“Plaintiffs”) against Bank of America, N.A. (“Defendant” or “BANA”).
Plaintiffs allege that BANA mishandled reports of unauthorized transaction claims 1
brought by prepaid debit cardholders (“Cardholders”) who were deemed eligible by and
received unemployment insurance benefits from California’s Employment Development
Department (“EDD”) during the height of the COVID-19 pandemic in 2020-21.
2. I have been retained by counsel to BANA, Goodwin Procter LLP (“Counsel”), to serve as
an expert in regulatory compliance practices within the banking industry. Specifically, I
was asked to review and respond to certain opinions and assertions set forth in the expert
report of Greg Regan dated March 4, 2025 (the “Regan Report”) as well as the expert
report of William Abernathy, Jr. dated March 3, 2025 (the “Abernathy Report”).
II.
QUALIFICATIONS
3. I have worked for more than 35 years in the banking industry. I have served in many
positions both for and with banks of all sizes, and other financial service organizations,
including as a compliance officer, Fair Lending officer, compliance department head, and
related positions focused on consumer protection, fair lending, UDAP/UDAAP, and other
regulatory compliance areas. In my many years as a banking compliance and risk
management consultant and advisor, I have assisted hundreds of banks and nonbank
clients in many areas, including program design and implementation, development of
compliance policies, procedures, and program protocols, coordinating regulatory
examinations and compliance audits, and managing responses to findings, among many
other tasks and responsibilities. In addition, I have coordinated resolution of customer
disputes and complaints, and explained bank functions and procedures to federal
regulatory examination teams and to the public.
4. I am currently an Independent Advisor, most recently providing advisory services and
expert witness analysis and testimony for FTI Consulting, Inc. (“FTI”). Previously, I was
1 This rebuttal report sometimes uses the term “error claims” for unauthorized transaction claims. This rebuttal report
also uses the general term “claim” to mean an unauthorized transaction claim.
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Page 2
with Treliant LLC, a regulatory and risk management compliance consulting firm
headquartered in Washington, D.C., as a Senior Advisor and Managing Director (i.e., a
partner of the firm) for twelve years. For many of those years, I was the leader of the
firm’s Consumer Compliance and Fair Lending practice areas.
5. I have assisted hundreds of financial institutions, of all asset sizes, including nonbank
financial institutions, in fulfilling their regulatory compliance obligations. This involved
advising and training staff, management, and Boards of Directors on the detailed
requirements of complex banking laws and regulations, plus associated guidance and best
practice recommendations.
6. I am a Certified Regulatory Compliance Manager (“CRCM”), a nationally recognized
compliance credential managed by the American Bankers Association (“ABA”) that
requires passing a standardized examination of an individual’s ability to apply all banking
regulatory compliance requirements in situation-based questions. I was named ABA’s
annual Distinguished Service Award winner in 2015 in recognition of my contributions to
the banking industry across the country. Only one individual is named annually for this
prestigious award, reflecting ethical leadership and critical impact on financial institutions
across the country.
7. My curriculum vitae, which is attached as Appendix 1, further describes my professional
credentials and includes a listing of cases in which I was deposed and/or have testified as
an expert in the last five years as well as publications that I have authored for the last ten
years. FTI is being compensated at a rate of $715 per hour in this matter for my time. My
compensation is not conditioned on the substance or outcome of the opinions I have issued
in this report.
III.
INFORMATION RELIED UPON
8. This report is based on my experience and the information considered herein. The
conclusions described in this report are mine. The work was performed by me or other
professionals under my direct supervision. The team of people assisting me included
accountants and other professionals employed by FTI. This report should not be construed
to constitute or contain opinions on matters of law.
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9. In aiTiving at my opinions, I relied upon the information and documents referenced
throughout this rebuttal repo1t, which ai·e summarized in Appendix 2 of this rebuttal
repo1t.
10. The info1mation and opinions set fo1th in this expe1t rebuttal repo1t are based upon
materials made available to me and my staff, working at my direction, to date. If additional
materials or data relevant to this repo1t ai·e subsequently provided to me and/or my staff,
I reserve the right to revise, supplement, or amend my analysis and opinions. Specifically,
I rese1ve the right to revise, supplement, or amend my analysis and opinions if additional
infonnation or data is provided to me regai·ding potential fraudster or uninjured class
members.
IV.
EXECUTIVE SUMMARY
11. Pursuant to BANA 's remediation plan in response to consent orders filed by the Consumer
Financial Protection Bureau ("CFPB") and the Office of the Comptroller of the CmTency
("OCC"), 2 BANA provided compensation to ce1tain Cardholders,
12. As discussed further in Section V.C below, the Remediation Plan allowed (but did not
require) BANA to exclude Cardholders from compensation if the Cai·dholder: "(i) [was]
disqualified by the state from Program eligibility; (ii) [was] previously engaged in
fraudulent Program conduct, such as submission of fraudulent claims or other abuse of the
2 The tv.•o consent orders filed by the CFPB (Declaration of Connie K. Chan in Support of Plaintiffs' Motion for Class
Certification Ex. ("PX") 72, CFPB Consent Order) and the OCC (PX 73, OCC Consent Order) are hereinafter refen-ed
to as the "Consent Orders."
Page 3
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claims process; or (iii) [had] their card frozen due to legal order processes, as a result of
InternalN endor fraud investigations, or by Global Financial Crimes Compliance. " 4
13. The Regan Repo1i calculates damages in this matter for the proposed Claim Denial Class
I
I
I
14.
15. Mr. Abernathy opines: "Regulators do not expect or tolerate payments to be made to
fraudsters under a regulato1y consent order and resulting remediation plan. Rather,
regulators expect the financial institution to develop and implement reliable processes for
effectively identifying 'hanned consumers' and excluding fraudsters."5 In support for this
opinion, Mr. Abernathy cites the criteria for the Remediation Plan Excluded Cardholders
and states:
5 Abernathy Report, p. 8.
Page 4
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Based on my experience as a long-time senior federal regulator at the OCC,
which included substantial compliance matters, it is my opinion that when
regulators require a bank to identify a population of “harmed consumers”
for remediation the bank is expected to exclude from that population
individuals who have engaged in fraud. The regulators expect the bank to
develop and implement a reliable and lawful process that will effectively
identify “harmed consumers” and exclude fraudsters. Regulators do not
expect or tolerate payments to be made to fraudsters pursuant to a regulatory
consent order and remediation plan, especially where the bank has agreed
as the Bank did here. Based
on my experience, when a bank such as Bank of America represents to its
regulators that it will do something (
) they do it.6
16. Based on a review and analysis of the documents as set forth in Appendix 2, along with
my over 35 years of experience in the banking industry—including my experience as a
compliance officer, compliance department head, and related positions focused on
consumer protection and other regulatory compliance areas—I am of the opinion
It is also my opinion that Mr. Abernathy’s assertions relating to
regulators’ expectations and tolerations are misaligned. Specifically, Messrs. Regan and
Abernathy fail to consider:
As set forth in Section V.A, the COVID-19 pandemic, Coronavirus Aid, Relief,
and Economic Security Act (“CARES Act”), and Pandemic Unemployment
Assistance (“PUA”) program resulted in an unprecedented surge in unemployment
insurance fraud in California and across the United States. The rampant fraud
occurred at both the eligibility and claim level, where fraudsters would both falsify
information to become eligible for unemployment insurance benefits and
improperly submit unauthorized transaction claims to BANA asserting that
unauthorized funds were withdrawn from the Cardholders’ account when, in fact,
those withdrawals were authorized.
6 Abernathy Report, ¶ 34.
-
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Page 6
As set forth in Section V.B,
7 Additionally, it has been well documented that given the
unprecedent events around the COVID-19 pandemic, EDD was not able to keep
up with the volume of unemployment insurance applications and struggled to
implement suitable eligibility and identity verification procedures. Further, given
the extent and scope of the fraud that infiltrated the EDD program during the
pandemic, government agencies have concluded that much of the fraud remains
undetected and will never be recovered.
As set forth in Section VI.A, when financial institutions respond to consent orders,
they almost always prioritize ensuring prompt compensation to all potentially
affected consumers. Financial institutions are more inclined to overcompensate
(including paying consumers who may not have been harmed) rather than risk
undercompensating or failing to pay consumers who were legitimately harmed.
As set forth in Section VI.B, BANA’s
For example, I estimate that around
There are valid reasons for BANA to adopt this approach,
including
7 Deposition of Michael Letson (Managing Director in BANA’s Global Financial Crimes) (“Letson Deposition”) dated
February 16, 2024, 105:18-20.
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As set forth in Section VI.C, BANA
These factors led to BANA
As set forth in Section VI.D,
Moreover,
8
As set forth in Section VI.E,
17. For all these reasons, which are summarized in Section VII, it is my opinion
8 Declaration of Laura Brys in Support of Defendants’ Memorandum in Opposition to Plaintiffs’ Motion for Class
Certification, Ex. (“DX”) 7, Declaration of William M. Martin, ¶ 14.
-
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Page 8
V.
BACKGROUND
A.
Unemployment Insurance Fraud
18. The EDD administers unemployment insurance, disability insurance, and workforce
development programs to support job seekers and employers across California.
Individuals deemed eligible by the EDD were able to access unemployment benefits
through an EDD prepaid debit card issued by BANA.
.9
19. The COVID-19 Pandemic sparked a surge in widespread unemployment beginning in the
spring of 2020, with the national unemployment rate reaching almost 15% in April of
2020:10
9 See Letson Deposition, pp. 105-109.
10 PX 72, CFPB Consent Order, p. 9. See also the unemployment rate information published by Federal Reserve Bank
of St. Louis (Federal Reserve Bank of St. Louis, Unemployment Rate).
-
FRED..d -
unemployment Rate
C: "'
~
"'
0.
15.0
12.S
10.0
7.S
5.0
2.5
Jul 2018
Jan 2019
Source: U.S. Bureau of Labor Statistics via FRED®
Shaded areas indicate US. recessions.
Jul 2019
Jan 2020
Jul 2020
Jan 2021
Jul 2021
Jan 2022
Jul 2022
Jan 2023
Jul 2023
myf.red/ g/1 EIJX
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20. In response to the sharp rise in unemployment across the country, Congress enacted the
CARES Act in March 2020. The CARES Act, inter alia, created the PUA program,11
which expanded unemployment benefits eligibility and provided greater benefit amounts
than previously available. 12 “The PUA program provided unemployment insurance
benefits for workers not eligible under regular UI rules for benefits—such as self-
employed workers and independent contractors—who were unable to work as a result of
the COVID-19 pandemic.” 13 Notably, whereas unemployment benefits recipients
previously had to provide employment and wage records from their employer to verify
eligibility, “PUA claimants could self-certify their employment history and eligibility.”14
21. As a result of the surge in unemployment, the CARES Act, and the PUA, there was an
unprecedented increase in the number of individuals seeking unemployment benefits from
the EDD. For example:
The number of unique EDD cards increased from less than one million in January
of 2020 to over six million by July 2020.15
The amount of benefits loaded onto the EDD cards increased from approximately
$1 billion in January 2020 to over $27 billion in July 2020.16
22. Unfortunately, these changes also led to unprecedented increases and levels of fraud. This
included fraud at the eligibility level
as well as at the unauthorized transaction claim level, where individuals
would submit improper claims of unauthorized transactions to BANA with the goal of
11 “In March of 2020, millions became unemployed and Congress enacted the Coronavirus Aid, Relief, and Economic
Security Act (‘CARES Act’), which created the new Pandemic Unemployment Assistance (‘PUA’) benefit.” (PX 73,
OCC Consent Order, p. 2).
12 See 15 U.S. Code § 9021. See also “Covered by PUA [...] People not eligible for, or who have exhausted all rights
to, regular unemployment compensation or extended benefits under state or federal law or Pandemic Emergency
Unemployment Compensation.” (U.S. Department of Labor. (n.d.). Pandemic Unemployment Assistance).
13 United States Government Accountability Office, Pandemic Unemployment Assistance: States’ Controls to Address
Fraud (July 23, 2024), p. 2.
14 United States Government Accountability Office, Pandemic Unemployment Assistance: States’ Controls to Address
Fraud (July 23, 2024), p. 2 (emphasis added).
15 PX 73, OCC Consent Order, pp. 2-3.
16 Id.
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getting BANA to provide credit for the allegedly unauthorized transactions that the
fraudsters would then abscond with.
23. This fraud was well publicized. Public articles, court documents, and government reports
summarize the widespread nature of the fraud that occurred in California and across the
country:
“In March 2020, millions became unemployed and Congress enacted the [CARES
Act], which created the new [PUA] benefit. The CARES Act and PUA expanded
unemployment benefits eligibility and provided greater benefit amounts than
previously available […] Along with the increases in Program participants and
benefits, the [BANA EDD Prepaid] Program experienced an increase in fraud,
including with respect to unauthorized transaction claims.”17
By January of 2021, nearly $10.4 billion in fraudulent unemployment benefits
claims and over $32 billion of unemployment benefits were stolen and illegally
issued in California.18
“While the total amount of UI fraud is unknown, since April 2021, 23 states have
reported estimates that total $60.4 billion.”19
“Nationally, the total amount of unemployment insurance fraud is staggering. The
U.S. Department of Labor, Office of Inspector General earlier this year told
Congress that ‘at least $163 billion in pandemic UI benefits could have been paid
improperly, with a significant portion attributable to fraud.’”20
“In California alone, fraudsters using stolen social security numbers and stolen or
made up names made off with what state officials conservatively estimate is $20
17 PX 73, OCC Consent Order, pp. 2-3.
18 DX 6, Declaration of Michael J. Letson, p. 6. See also California State Auditor, Employment Development
Department: Significant Weaknesses in EDD’s Approach to Fraud Prevention Have Led to Billions of Dollars in
Improper Benefit Payments (January 2021), p. 9.
19 Pandemic Oversight, Pandemic Unemployment Insurance: How much has been paid to fraudsters? (January 22,
2025).
20 NPR, Pandemic-related fraud totaled billions. California is trying to get some of it back (October 18, 2022), p. 4.
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Page 11
billion. That's about 11% of the $177 billion in jobless benefits paid out for COVID-
19 relief.”21
“In September 2023, [the United States Government Accountability Office
(“GAO”)] estimated that the amount lost to fraud in DOL’s UI programs during the
pandemic—from April 2020 through May 2023—was likely between $100 billion
and $135 billion.”22
“Of the 4 states we [the U.S. Department of Labor] tested, from March 28, 2020,
through September 30, 2020, we estimated $30.4 billion of the $71.7 billion in PUA
and FPUC benefits were paid improperly (42.4 percent). We estimated $9.9 billion
of that was paid to likely fraudsters (13.8 percent). Notably, in the 4 states, 1 in 5
dollars initially paid in PUA benefits went to likely fraudsters. The percentages of
improper payments identified during this audit applied only to the 4 states and were
not projected to the nation.”23
“Paying claimants accurately and preventing improper payments, including fraud,
continued to challenge states throughout the effective period for the CARES Act
and CAA—March 28, 2020, through March 14, 2021. To assess eligibility, we [the
U.S Department of Labor] statistically sampled and tested 214 cases in the 4 states
where claimants received either PUA or regular UI with an FPUC supplement
between March 28, 2020, and September 30, 2020. Additionally, we judgmentally
selected 40 cases (10 from each of the 4 states) from January 1, 2021, through
March 14, 2021, to assess any impact of legislative changes after CAA required
proof of wages for PUA rather than relying solely on self-certification. From March
21 Id.
22 United States Government Accountability Office, Pandemic Unemployment Assistance: States’ Controls to Address
Fraud (July 23, 2024), p. 1.
23 U.S Department of Labor, Report to the Employment and Training Administration, COVID-19: ETA and States did
not Protect Pandemic-Related UI Funds from Improper Payments Including Fraud or from Payment Delays,
(September 30, 2022), p. 3.
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Page 12
28, 2020 through September 30, 2020, we found the 4 states paid 118 of 214 cases
improperly—$1,435,132 of the total $3,381,823 (42.4 percent) paid.”24
“The unprecedented demand for UI benefits and the need to quickly implement the
new programs increased the risk of fraud. In February 2023, the Comptroller
General of the United States testified before the Committee on Ways and Means of
the U.S. House of Representatives that DOL and the states were not adequately
prepared to handle UI fraud risks when the pandemic began. In March 2023, we
[the GAO] were asked to continue our work to develop a comprehensive estimate
of UI fraud during the pandemic and address DOL and states’ efforts for identifying
and recovering UI overpayments. In September 2023, we estimated that the amount
lost to fraud in DOL’s UI programs during the pandemic—from April 2020 through
May 2023—was likely between $100 billion and $135 billion. Additionally, our
analysis found higher fraud rates for PUA payments than for other UI program
payments.”25
“States faced challenges in rapidly implementing their new PUA programs and in
establishing effective antifraud controls in response to the unprecedented
unemployment caused by the COVID-19 pandemic.”26
B.
BANA’s Response to the Widespread Fraud
24. BANA investigated the fraud discussed in Section V.A and found detailed instructions on
the dark web27
28 Additionally, BANA, government
committees, and the California State Auditor observed:
24 U.S Department of Labor, Report to the Employment and Training Administration, COVID-19: ETA and States did
not Protect Pandemic-Related UI Funds from Improper Payments Including Fraud or from Payment Delays,
(September 30, 2022), p. 4.
25 United States Government Accountability Office, Pandemic Unemployment Assistance: States’ Controls to Address
Fraud (July 23, 2024), p. 1.
26 Id.
27 See DX 103, Dark Web Materials Id.me Bypass and DX 121, Dark Web Materials.
28 DX 6, Declaration of Michael J. Letson, pp. 8-9.
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•
•
•
•
"EDD [ ... ] adopted a 'pay and chase' model and processed incoming claims
quickly; EDD staff understood that less time should be spent on checking
eligibility of claimants as this would slow down paying out benefits. This led to
many bad actors like international organized crime and individual criminals
cashing in while eligible claimants were unable to obtain their benefits."32
•
"California was [ ... ] one of the states that failed to cross reference applicants with
incarcerated individuals, another poor decision that occmTed [ ... ] . The California
Auditor estimates the state lost around $810 million dollars in fraudulent claims
to incarcerated individuals alone. "33
•
"Due to outdated IT systems, staffing shortages, and new programs being
implemented, many states did not deploy any anti-fraud measmes, leading to
criminals being able to successfully file fraudulent claims and avoid detection."34
•
"Organized crime played a major role in the proliferation ofUI fraud by targeting
preexisting system vulnerabilities. Foreign nations, organized criminal gangs,
prison inmates, and those acting on their behalf, filed fraudulent claims in multiple
states. "35
29 DX 6, Declaration of Michael J. Letson, pp. 8-9.
30 DX 6, Declaration of Michael J. Letson, p. 9.
31 DX 7, Declaration of William M. Martin, p. 3. See also Califomia State Auditor, Employment Development
Department: Significant Weaknesses in EDD 's Approach to Fraud Prevention Have Led to Billions of Dollars in
Improper Bene.fit Payments (January 2021), p. 15.
32 DX 14, Examining Widespread Fraud in Pandemic Unemployment Relief Programs (September 10, 2024), p. 28.
33 DX 14, Examining Widespread Fraud in Pandemic Unemployment Relief Programs (September 10, 2024), p. 30.
34 DX 14, Examining Widespread Fraud in Pandemic Unemployment Relief Programs (September 10, 2024), p. 6.
35 DX 14, Examining Widespread Fraud in Pandemic Unemployment Relief Programs (September 10, 2024), p. 7.
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•
"EDD's disjointed approach to fraud prevention has placed its UI program at a
higher risk for fraudulent activity. It has not established a centrnlized unit to
manage its fraud detection effo1is, and it does not reliably track suspicious claims
to ensure that it is taking appropriate action to resolve any issues, including those
that suggest fraud has occmTed. "36
•
"EDD has not assigned responsibility to any single depaiimental unit for ensuring
that its fraud detection effo1is operate as intended, contributing to its disjointed
approach to stopping fraud."37
25. As indicated above in Section V.A,
26.
42 Fmther, given the
36 California State Auditor, Employment Development Department: Significant Weaknesses in EDD 's Approach to
Fraud Prevention Have Led to Billions of Dollars in Improper Benefit Payments (Janua1y 2021), p. 33.
31 Id.
38 DX 6, Declaration of Michael J. Letson, pp. 11-12.
39 DX 6, Declaration of Michael J. Letson, pp. 11-12.
40 Letson Deposition, 105:18-20.
41 Letson Deposition, 105:22-23.
42 Letson Deposition, 108: 19-109: 15.
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27.
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
extent and scope of the fraud that infiltrated the EDD program during the pandemic,
government agencies have concluded that much of the fraud remains undetected and will
never be recovered. 43
44 Pursuant to Regulation E, once a consumer
notified BANA of any "en or" or "unauthorized electrnnic fund transfer,"45 BANA was
required to "investigate the alleged en or, detennine whether an en or has occuned, and
report or mail the results of such investigation and detennination to the consumer within
ten business days.',46
28. In response,
43 "Although the full extent of this fraud and the money lost may never be fully known, the U.S. Govemment
Accountability Office (GAO) estimates that about 11 to 15 percent of total benefits pa.id during the pandemic were
fraudulent, totaling between $100 to $135 billion." (DX 14, Examining Widespread Fraud in Pandemic
Unemployment Relief Programs (September 10, 2024)). See also California. State Auditor, Employment Development
Department: Significant Weaknesses in EDD 's Approach to Fraud Prevention Have Led to Billions of Dollars in
Improper Benefit Payments (Janua1y 2021), p. 15 ("[I]t seems highly unlikely that EDD will be able to investigate
more than a small fraction of these fraudulent claims, let alone recover a significant portion of the lost funds.").
44 DX 6, Declaration of Michael J. Letson, pp. 11-12. See also DX 103, Dark Web Materials Id.me Bypass. and DX
121, Dark Web Materials.
45 15 U.S.C. § 1693f(f)(l).
46 15 U.S.C. § 1693f(a)(3).
47 DX 6, Declaration of Michael J. Letson, p. 11.
48 15 U.S.C. § 1693f(c).
49 I understand the Plaintiffs have only challenged and sought to certify a proposed class based on Indicator 1.
50 Deposition of William Martin dated Febrnary 14, 2024 ("Martin Deposition"), 125: 18-21.
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C.
Consent Orders and Remediation Plan
29. In July of 2022, the OCC and the CFPB issued the Consent Orders against BANA,
relating, in pait, to BAN A's use of the CFF. Article IX of OCC Consent Order and Section
VII of the CFPB Consent Order obligated BANA to submit a comprehensive remediation
and redress plan to resolve the issues identified in the respective Consent Orders.
30. BANA submitted
31.
51 BANA PowerPoint titled Benefits Fraud I Pattems Observed (BANA_EDD_MDL-00430148) at 148-150.
52 DX 6, Declaration of Michael J. Letson, p. 12. See also Deposition of Shane Daniels (Head of Consumer and Small
Business Claims Operations) ("Daniels Deposition"), 153:4-10,
56 PX 74, Remediation Plan, p. 15.
Page 16
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I
I
I
32. Removed from the population identified above were the Remediation Plan Excluded
Cardholders- i.e., Cardholders who: "(i) [were] disqualified by the state from Program
eligibility; (ii) [BANA was able to determine were] previously engaged in fraudulent
Program conduct, such as submission of fraudulent claims or other abuse of the claims
process; or (iii) [] had their card frozen due to legal order processes, as a result of
Intemal/V endor fraud investigations, or by Global Financial Crimes Compliance. "57
33.
34.
57 PX 74, Remediation Plan, p. 3.
58 PX 74, Remediation Plan, pp. 6-8.
59 PX 74, Remediation Plan, p. 12.
60 For fwiher discussion of the IRP, see Section VI.E.
Page 17
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35.
36.
37.
1.
•
•
-
63
2.
62 PX 74, Remediation Plan, p. 5.
63 PX 74, Remediation Plan, footnote 16.
Page 18
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•
•
•
3.
38.
64 DX 43, BANA's Second Set of Responses to Plaintiffs' Seventh Set ofROGs (ROG 39), pp. 8-10.
65 See DX 7, Mrutin Declaration, ,r 8 and PX 74, Remediation Plan, pp. 4-5.
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Page 20
VI.
OPINIONS
A.
Financial Institutions Prioritize Prompt Compensation, Even if it Results in
Overcompensation, in Responding to Consent Orders.
39. When financial institutions respond to consent orders, they almost always prioritize
ensuring prompt compensation to all potentially affected consumers. Financial institutions
are more inclined to overcompensate (including paying consumers who may not have been
harmed) rather than risk undercompensating or failing to pay consumers who were
legitimately harmed.
40. Enforcement actions, such as consent orders issued by federal banking regulators
(especially ones that are made public, such as the ones here issued by the CFPB and OCC),
almost always provide for remedial actions financial institutions must take to resolve
alleged violations. Alleged violations and public enforcement of consumer protection laws
and regulations (like EFTA and Regulation E) can carry a high degree of reputation risk66
for the institution. Reputation risk is in addition to compliance risk67 (i.e., risk of criticism
by the bank’s examiners, which will be enhanced in the years after an enforcement action
is issued), as well as litigation risk (the risk the bank may be sued by its customers).
Therefore, in order to reduce these risks, banks typically take an extremely generous and
consumer-friendly position when agreeing to and implementing remediation plans
required by and agreed to pursuant to regulatory consent orders. Put simply, in my
experience, banks try their best to remediate the alleged wrongdoing and put these
significant matters behind them as soon as possible, even if that means compensating
individuals who were not actually harmed by the alleged conduct.
66 See e.g., “Litigation can expose a bank to negative public opinion. A damaged reputation may affect the bank’s
ability to establish new relationships or services or to continue servicing existing relationships, which may adversely
affect current and future earnings. Widely publicized litigation, regardless of its ultimate outcome, can affect a bank’s
community standing, limit its business opportunities, and impair its basic franchise value. Some banks have elected
to settle litigation rather than be subject to prolonged court cases. Settlement is designed to limit negative publicity
and avoid prolonged reputation damage. Limiting reputation damage is particularly important for business lines, such
as asset management, that depend on a sound reputation.” (Office of Comptroller of the Currency, Comptroller’s
Handbook: Safety and Soundness (January 2015), p. 3.
67 See e.g., “Compliance risk is the threat to an organization’s finances, organization, and reputation due to violations
of rules, regulations, and laws governing its activity. Compliance risk can attract the attention of local, state, and
federal regulators and result in fines, penalties, and civil and criminal court proceedings. A compliance failure can
also expose an organization to reputational risk, which can impact its stock price and the public’s perception of the
brand and alienate customers and employees.” (Dow Jones, What is Compliance Risk?).
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Page 21
41. In the present situation, where BANA was addressing public enforcement actions that
involved a consumer protection rule (Regulation E), and which also involved financial
remuneration to potentially impacted consumers, it would be expected that it would act in
a manner to quickly and comprehensively satisfy the conditions of the CFPB’s and OCC’s
Consent Orders and the Remediation Plans above all else. This would mean almost always
choosing to err on the side that would benefit a potentially impacted consumer even if it
would result in them getting overpaid.68 Further, compensation would be provided to a
consumer in many instances even without conclusive information that the consumer was
legitimately financially harmed at all. The risk that a consumer, whom the bank’s
regulators believed may have been legitimately harmed, would not receive compensation
required by the consent orders far outweighs the negative financial impact on the bank
that would result from compensating consumers that are not entitled to it (or where it is
debatable or unclear whether compensation is justified or required by the consent orders
or any other applicable rule or law). As discussed further below,
42. This fact is ignored by Mr. Abernathy when he opines that regulators expect banks to
exclude fraudsters when implementing remediation plans and that regulators would not
“tolerate” payments to fraudsters. 69 The primary purpose of remediation plans is to
remediate consumers who were potentially affected by the alleged conduct. While I agree
that regulators do not want banks to make payments to fraudsters, they do not want to
relieve banks from making payments to those entitled to receive them, and there may be
many practical reasons to err on the side of being overinclusive to avoid being
underinclusive or to avoid delays in making payments.
43. Mr. Abernathy fails to properly consider all of the circumstances as to why making some
payments to fraudsters was unavoidable in this case. For example, as discussed above,
BANA frequently did not possess evidence necessary to reach a conclusion, one way or
68
PX 74, Remediation Plan, p. 5).
69 Abernathy Report, p. 18.
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the other, as to whether the person holding the account was a legitimate EDD benefits
recipient, or one of the hundreds of thousands of EDD cardholders who obtained benefits
through fraud. Additionally, as discussed further herein, BANA
-
Mi·. Abernathy's logic is entirely inconsistent with this premise and the facts
and circumstances slmounding these Consent Orders. I.e.,
44. To further reiterate the points discussed above, both regulators and banks generally wish
to remediate hanned cardholders as quickly as possible. Mi·. Abernathy's opinion is also
counter to this premise,
As such, Mi·. Abernathy's opinion is
misaligned.
45. BANA's
70 PX 74, Remediation Plan, footnote 16.
Page 22
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46. For any bank, when responding to a consent order or other enforcement action (whether
public or not), a primaiy goal is to act expeditiously and to eIT on the side of consumers
so as to not ti·igger or invite unnecessa1y scmtiny from enforcement or superviso1y
regulators reviewing the implementation of a consent order and remediation plan. In
BANA 's case,
47.
that approximately
This number includes some Cardholders that ai·e not paii of the proposed Claim Denial
71 PX 74, Remediation Plan, p. 4.
72 BANA's Response to Inte1rngs. 2 and 6 dated December 1, 2023, Exhibit 1.
73
Page 23
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48. As BANA noted in the Remediation Plan,
75 This is consistent with the testimony
provided by Jennifer Lennon, Senior Vice President and a Product Management and State
Liaison at BANA. Ms. Lennon stated:
77 it is reasonable for a bank to conclude that
the manual review is not worthwhile. Also, recall that BANA
PX 74, Remediation Plan, footnote 16.
76 Deposition of Jennifer Lennon dated February 23, 2024 ("Lennon Deposition"), 77:7-17. See also Lennon
Deposition, 80:7-15,
78 See Section VI. C for further discussion of the limited evidence available during manual reviews.
Page 24
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Page 25
50. In summary, BANA’s decision to
While reasonable and consistent with
regulator expectations,
C.
.
51. BANA had limited time to complete its investigation of claims under Regulation E and
often had limited evidence to review, leading to BANA
52.
53. The CFPB Consent Order described BANA’s manual review process prior to the
implementation of the CFF as follows:
From January 2020 until late-September 2020, upon receiving a notice of
error from an unemployment insurance benefit prepaid debit cardholder
concerning alleged unauthorized EFTs, [BANA] would conduct an
investigation that could include, among other steps: comparing the location
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40930
Page 28 of 46
54.
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
of the 1rnnsaction with the consumer's residence or habitual transactions;
accessing A TM camera footage (if the alleged unauthorized activity
occmTed at a [BANA] ATM); and contacting the cardholder for fmiher
infonnation. 79
-
82
55. The other step mentioned in the CFPB Consent Order (i.e. , comparing the withdrawal
location to principal residence or previous withdrawals) is a reasonable step, -
79 PX 72, CFPB Consent Order, ,r 12. See also PX 82, Adequate Investigation Standard Operating Procedw·e and
Expe1t Class Certification Repo1t of J. Daniel Kreis, dated August 29, 2024, Section VII.B., in which Mr. Kreis opined
'
provide sensible procedures for EFTA/Reg E
compliance that are consistent with well-established industly standards for investigating unauthorized transaction
claims."
80 See Email from Christine Channels to William Fox, Paiz Ahmad and Paul Simpson dated October 6, 2020
(BANA_EDD _MDL-00120424).
81 The Martin Declaration discusses this point with respect th
(BANA_EDD_
(BANA_EDD_MDL_00698618), and
(BANA_EDD_MDL_00137325).
Page 26
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_
_ 83
56. The Additional Fraud Review,
57. As mentioned above in Section V.C.3,
83 Email from Christine Channels to William Fox, Faiz Ahmad and Paul Simpson dated October 6, 2020
(BANA_EDD _MDL-00120424).
84 DX 7, Ma1tin Declaration, ,r 14.
85 DX 7, Ma1tin Declaration, ,r 8.
Page 27
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58. The Maitin Declaration indicates that,
59. Importantly,
60. The Bank's
86 DX 7, Martin Declaration, ,r 12.
87 See e.g.:
•
Daniels Deposition,
•
•
(DX 7, Ma1tin Declaration, ,r 14).
89 Lennon Deposition, 112:12-113:8 and 105:10-20. See also DX 6, Declaration of Michael J. Letson, p. 7.
Page 28
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stating:
61. I agree with Mr. Maitin's conclusion.
62.
-
63.
90 DX 7, Ma1tin Declaration, ,r 13.
91 DX 7, Ma1tin Declaration, ,r 14.
Page 29
90 The Ma1tin Declaration concludes by
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64. The evidence reviewed indicated that,
65.
VII.
CONCLUSION
66. Given the analysis set fo1th above, it is improper, in my opinion, for Mr. Regan to assume
that a Cardholder is not a fraudster, or that BANA has ah-eady detennined that a cardholder
92 DX 8, Declaration of Jennifer Lennon dated Janua1y 17, 2025, pp. 4-5.
93 DX 8, Declaration of Jennifer Lennon, p. 5.
9
can be found on page 8 of PX 147, 1st Addendum to the Remediation Plan.
Page 30
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40935
Page 33 of 46
67.
HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
is an "Affected Consumer"95 or submitted a legitimate unauthorized ti·ansaction claim
under the EFT A,
96
Similarly, I disagree with Mr. Abernathy's asse1iion that regulators do not tolerate
payments to fraudsters or persons who were not actually haimed in remediation orders.
•
As set fo1ih in Section V.A, the COVID-19 pandemic, CARES Act, and PUA
prograin resulted in an unprecedented surge in unemployment insurance fraud in
California and across the United States. The rampant fraud occuned at both the
eligibility and claim level, where fraudsters would both falsify inf 01mation to
become eligible for unemployment insurance benefits and improperly submit
unauthorized ti·ansaction claims to BANA asse1i ing that unauthorized funds were
withdrawn from the Cai·dholders' account when, in fact, those withdrawals were
authorized .
•
97 Additionally, it has been well documented that given the
unprecedent events ai·olmd the COVID-19 pandemic, EDD was not able to keep
up with the volume of unemployment insurance applications and stmggled to
95 Affected Consumer "means a consumer who during the Relevant Period: (1) qualified for and received government
unemployment insurance benefit payments electronically though prepaid debit cards issued by Respondent; (1) filed
a notice of eITor concerning alleged unauthorized EFTs with Respondent; and (3) for whom Respondent inco1Tectly
determined, based solely on the results of Respondent's Fraud Filter, that no e1mr occmTed, and, as a result,
Respondent (i) denied the consumer's eITor claim or reversed permanent credits previously granted to the consumer
and (ii) froze or, after March 17, 2021, blocked the consumer's unemployment insurance benefit prepaid debit card
account." (PX 72, CFPB Consent Order, p. 3).
96 Regan Repo1t, ,i 54.
97 Letson Deposition, 105:18-20.
Page 31
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implement suitable eligibility and identity verification procedures. Fmther, given
the extent and scope of the fraud that infiltrated the EDD program during the
pandemic, government agencies have concluded that much of the fraud remains
undetected and will never be recovered.
•
As set fo1th in Section VI.A, when financial institutions respond to consent orders,
they almost always prioritize ensming prompt compensation to all potentially
affected consumers. Financial institutions are more inclined to overcompensate
(including paying consumers who may not have been haimed) rather than risk
undercompensating or failing to pay consumers who were legitimately haimed.
•
As set fo1th in Section VI.B, BANA's
•
As set fo1th in Section VI. C, BAN
Page 32
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•
As set forth in Section VI.D,
•
As set fo1th in Section VI.E,
VIII. SIGNATURE
Executed April 4, 2025
98 DX 7, Declaration of William M. Martin, ,r 14.
Page 33
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Expert Rebuttal Report of Carl Pry dated April 4, 2025
Appendix 1: CV of Carl Pry
Page 1
Carl Pry, CRCM, CRP
Curriculum Vitae
Introduction
Experienced and well-rounded compliance, consumer protection, anti-fraud, and fair lending executive
with over 35 years of experience in banking law and regulatory compliance. Possesses managerial
experience and thought leadership, with extensive presentation and writing background. Versed in all
aspects of consumer and commercial banking law and compliance, including consumer protection and fair
lending, UDAP/UDAAP, deposits/operations, lending, financial crimes, anti-fraud measures, investment,
operational risk, privacy, tax, legal issues, electronic/online banking, payments, and risk management
issues.
Education, Licenses and Certifications
•
Bowling Green State University, Bachelor of Science in Business Administration (specialization in
Finance)
•
University of Toledo, Juris Doctor (passed the Florida Bar Exam)
•
University of Toledo, Master of Business Administration (specialization in Financial Management)
•
Certified Regulatory Compliance Manager (CRCM), current
•
Certified Risk Professional (CRP), current
Experience
Throughout Mr. Pry’s more than thirty-five years in the banking industry, he has worked in many positions
both for and with banks of all sizes, and other financial service organizations, in positions such as teller,
customer service representative, loan officer, branch manager, compliance officer, Fair Lending officer,
department head (commercial compliance), and related positions focused on customer service, consumer
protection, fair lending and UDAP/UDAAP, anti-fraud measures, deposit, lending and marketing, branch
operations, financial fraud and crime, and regulatory compliance. In his many years as a banking
compliance and risk management consultant, he has assisted dozens of banks and nonbank clients in many
areas, including program design and implementation, development of compliance policies, procedures, and
program protocols, coordinating regulatory examinations and compliance audits, and managing responses
to findings, among many other tasks and responsibilities. In addition, he has coordinated resolution of
customer disputes, complaints, explained bank functions and procedures to federal regulatory examination
teams, and to the public.
Mr. Pry is an Independent Advisor, most recently providing expert witness testimony for FTI Consulting,
Inc. Previously, he was with Treliant LLC, a regulatory and risk management compliance consulting firm
headquartered in Washington, D.C., as a Senior Advisor and Managing Director (i.e., a partner of the firm)
for twelve years. For many of these years he was the leader of the firm’s Consumer Compliance and Fair
Lending practice areas. He has assisted hundreds of financial institutions, of all asset sizes, and nonbank
financial institutions, in fulfilling their regulatory compliance obligations. To a great degree this has
involved training staff, management, and Boards of Directors on the detailed requirements of complex
banking laws and regulations, plus associated guidance and best practice recommendations.
During the last thirty years, he has provided a great deal of regulatory compliance and operational training
for national and state banking associations, federal and state banking agencies and many individual financial
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40939
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Expert Rebuttal Report of Carl Pry dated April 4, 2025
Appendix 1: CV of Carl Pry
Page 2
institutions across the United States, as well for various federal regulatory agencies such as the FDIC and
NCUA, where he provided instruction in laws and regulations such as Fair Lending (ECOA/Regulation B
and FHA), and the Bank Secrecy Act (BSA) and anti-money laundering (AML) provisions, including anti-
fraud measures, among others. He has also conducted hundreds of training sessions for the American
Bankers Association, Consumer Banking Association, Mortgage Bankers Association, over two dozen
individual state banking and bar associations, and various other industry trade groups and associations. He
has trained newly-commissioned FDIC examiners at their examiner school, and in 2023 he trained staff at
the Federal Home Loan Bank of Topeka. He has also been vetted and approved by both the OCC and
Department of Justice to deliver training for related to a consent order.
He is a Certified Regulatory Compliance Manager (CRCM), a nationally recognized compliance credential
managed by the American Bankers Association (ABA) that requires passing a standardized examination of
an individual’s ability to apply all banking regulatory compliance requirements in situation-based questions.
The CRCM candidate is only eligible to take the test and become certified after obtaining sufficient industry
experience and must maintain continuing professional education over the life of the certification. The
CRCM is widely recognized as the standard of professional expertise in the financial institution regulatory
compliance field. He also served on the ABA’s CRCM Board for over twelve years. This Board determines
the subject matter content of the CRCM examination, authors test questions, and evaluates standards for
certification. He is also a Certified Risk Professional (CRP), which is a certification of the Bank
Administration Institute (BAI), which recognizes a professional’s expertise and experience in the area of
banking risk management.
He has also served for over eighteen years on the ABA Bank Compliance magazine’s Editorial Advisory
Board, and currently serves as its Co-Chair. He has authored more than ninety feature articles and columns
on regulatory compliance matters impacting the banking industry. He has also authored dozens of additional
articles and columns for various other industry publications, including the ABA Banking Journal, the
American Banker, the ABA Bank Marketing magazine, and various state bar association journals and
publications.
He has also served as an Instructor at the ABA’s Foundational, Intermediate, and Advanced Compliance
Schools, where he has provided instruction on laws and regulations including the Truth in Lending Act
(TILA; Regulation Z), the Equal Credit Opportunity Act (ECOA; Regulation B), the Home Mortgage
Disclosure Act (Regulation C; HMDA), Community Reinvestment Act (CRA), and the Bank Secrecy Act
(BSA), among others. He also serves as an adjunct member of the ABA’s Compliance School Board.
He was named ABA’s annual Distinguished Service Award winner in 2015 in recognition of his
contributions to the banking industry across the country. Only one individual is named annually for this
prestigious award, reflecting ethical leadership and critical impact on financial institutions across the
country.
Qualifications
•
Executive, Senior Leadership and Department/Service Line Leader
•
Fair Lending Officer
•
Fair Lending Analytics and Reporting
•
Compliance Program Director
•
Operations Officer
•
Regulatory Compliance Senior Management
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40940
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Expert Rebuttal Report of Carl Pry dated April 4, 2025
Appendix 1: CV of Carl Pry
Page 3
•
Tax Reporting and Analysis
•
Risk Management and Risk Assessment Specialist
•
Retail Branch Management Professional, Branch Manager
•
Mortgage Regulatory Compliance Specialist
•
Regulatory Compliance Litigation Support
Regulatory Compliance Publications
Mr. Pry has authored and published over one hundred risk management, tax, Internet banking, and
regulatory compliance articles and reference materials in national and regional financial institution and
bar association publications. Mr. Pry also serves on the editorial advisory board of the American Bankers
Association’s Bank Compliance magazine.
Mr. Pry’s publications within the last ten years include the following:
•
Reconsideration of value (ROV): A critical component of appraisal review, ABA Bank Compliance,
May 2025, Print.
•
New FDIC Signage Rules for Digital Channels: Ensuring Digital Signage is Compliant, ABA Bank
Compliance, March 2025, Print.
•
Preparing for 2025: Navigating Compliance in a Time of Change, Cover Story, ABA Bank
Compliance, January 2025, Print.
•
So You Want to Be a Certified Regulatory Compliance Manager? ABA Bank Compliance, April
2024, Print.
•
Compliance Priorities for 2024, ABA Bank Compliance, January 2024, Print. (Reprinted in ABA
Banking Journal, January 2024)
•
Fair Lending Data Requirements for Fannie/Freddie Servicers, Column, ABA Bank Compliance,
March 2023, Print.
•
Compliance Priorities for 2023, Cover Story, ABA Bank Compliance, January 2023, Print.
(Reprinted in ABA Banking Journal, January 2023)
•
Understanding Digital Redlining, Feature, ABA Bank Compliance, October 2022, Print.
•
Appraisal Bias – What Can Banks Do About It? Column, ABA Bank Compliance, May 2022, Print
•
2022: On the Horizon, Feature, ABA Bank Compliance, March 2022, Print.
•
Fair Servicing – More Important Than Ever, Column, ABA Bank Compliance, Jan. 2022, Print.
•
Fair Lending and Prohibited Bases – New Developments, Feature, ABA Bank Compliance, Nov.
2021; Print.
•
2020’s In the Rearview (Finally); What’s in Store for 2021? Feature, ABA Bank Compliance, Jan.
2021; Print.
•
What Can We Expect for HMDA in 2020? Feature, ABA Bank Compliance, Jan. 2020; Print.
•
2018 HMDA Data is Submitted – Now What? Feature, ABA Bank Compliance June 2019; Print.
•
Compliance in 2019: What to Expect, and Where Should Your Focus Be? Feature, ABA Bank
Compliance Jan. 2019; Print.
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Expert Rebuttal Report of Carl Pry dated April 4, 2025
Appendix 1: CV of Carl Pry
Page 4
•
Magically-Expanding LARs: Increased Data Collection and Submission Responsibilities under
HMDA and ECOA, Feature, ABA Bank Compliance, August 2017, Print.
•
What is a REMA and What Should You Do About It? Column, ABA Bank Compliance, June 2017,
Print.
•
Is There No Such Thing as a Preapproval Anymore? Column, ABA Bank Compliance, Jan. 2017,
Print.
•
Don’t Overlook the Military Lending Act, Column, ABA Bank Compliance, June 2016, Print.
•
Conducting Drawings and Contests: Can We Do It? Feature, ABA Bank Compliance, June 2016,
Print.
•
Planning for 2016 – 10 Issues to Put on Your List, Feature, ABA Bank Compliance, Jan. 2016, Print.
•
The Natural Next Step: Fair Lending in Servicing, Column, ABA Bank Compliance, Jan. 2016, Print.
•
Obscure Corner of TRID – Trust Coverage - Column, ABA Bank Compliance, Nov. 2015, Print.
•
How to Deal with ApplyPay? Column, ABA Bank Compliance, Sept. 2015, Print.
•
TRID Round 2, Column, ABA Bank Compliance, June 2015, Print.
•
Not Just a Paperwork Switch: TRID Involve Critical Process Changes that Banks Should be Working
on Now, Column, ABA Bank Compliance, April 2015, Print.
•
3 Shades of Red(lining), Column, ABA Bank Compliance, March 2015, Print.
•
Understanding the Total Exceptions Picture, Column, ABA Bank Compliance, March 2015, Print.
Regulatory Compliance Teaching Experience and Industry Appearances
Mr. Pry develops and delivers extensive risk management, tax, accounting, regulatory compliance, and
bank operations training materials for multiple organizations across the country. His resource materials
and additional job aids, charts, guides, and interpretive summaries are widely used by industry
professionals in banks and other financial institutions across the country.
A sampling of the organizations includes:
•
AllRegs – Compliance Instructor
•
American Bankers Association – Lead Instructor for Private CFPB-Regulated In-Bank Compliance
Schools for large financial institutions
•
American Bankers Association – Instructor, Foundational Compliance School
•
American Bankers Association – Instructor, Intermediate Compliance School
•
American Bankers Association – Regulatory Compliance Webinar Instructor for multiple webinars
•
Alabama Bar Association – Guest Speaker
•
Alabama Bankers Association – Compliance Instructor
•
American Land Title Association (ALTA) – Guest Speaker
•
American Strategic Learning Institute – Compliance Instructor
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40942
Page 40 of 46
Expert Rebuttal Report of Carl Pry dated April 4, 2025
Appendix 1: CV of Carl Pry
Page 5
•
Bank Administration Institute – Compliance Instructor
•
Bank Compliance Association of Connecticut – Compliance Instructor
•
BankersOnline – Compliance Instructor
•
California Bankers Association – Compliance Instructor
•
Center for Financial Training – Compliance Instructor
•
Central Florida Compliance Association – Compliance Instructor
•
Chicagoland Compliance Association, Inc. – Compliance Instructor
•
Connecticut Bankers Association – Compliance Instructor
•
Credit Union Executive Society (CUES) – Compliance Instructor, instructor for multiple webinars
•
Dallas Area Compliance Association – Compliance Instructor
•
Eastern Massachusetts Compliance Network – Compliance Instructor
•
Federal Deposit Insurance Corporation (FDIC) – Compliance Instructor
•
Federal Home Loan Bank (FHLB) – Keynote Speaker
•
Florida Bankers Association –Compliance Instructor
•
Georgia Bankers Association – Compliance School and Compliance Conference Instructor
•
Heartland Compliance Association – Compliance Instructor
•
Illinois Bankers Association – Compliance Instructor
•
Indiana Bankers Association – Compliance Instructor
•
Indiana Department of Financial Institutions – Compliance Instructor
•
Iowa Bankers Association – Compliance Instructor
•
Kansas Bankers Association – Compliance Instructor
•
Massachusetts Bankers Association – Compliance Instructor
•
Michigan Bankers Association – Compliance Instructor
•
Missouri Bankers Association – Compliance Instructor
•
Mississippi Bankers Association – Compliance Instructor
•
Montana Bankers Association – Compliance Instructor
•
National Credit Union Administration (NCUA) – Backup Instructor for NCUA Compliance School
•
Nebraska Bankers Association – Compliance Instructor
•
New Hampshire Bankers Association – Compliance Instructor
•
New Jersey Bankers Association – Compliance Instructor
•
New York Bankers Association – Compliance Instructor
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40943
Page 41 of 46
Expert Rebuttal Report of Carl Pry dated April 4, 2025
Appendix 1: CV of Carl Pry
Page 6
•
North Carolina Bankers Association – Compliance Instructor
•
Ohio Bankers Association – Compliance Instructor
•
OnCourse Learning (formerly Total Training Solutions) – Compliance Lecturer and instructor for
hundreds of webinars
•
Oregon Bankers Association – Compliance Instructor
•
Sioux Falls (South Dakota) Compliance Professionals Organization – Compliance Speaker
•
South Carolina Bankers Association – Compliance Instructor
•
South Florida Compliance Association – Compliance Instructor
•
Suncoast Bankers Compliance Association (Florida) – Compliance Instructor
•
Tennessee Bankers Association – Compliance Instructor
•
Texas Bankers Association – Compliance Instructor
•
Tri-State League of Financial Institutions – Compliance Instructor
•
Utah Bankers Association – Compliance Instructor and Keynote Speaker
•
Virginia Association of Community Bankers – Compliance Instructor
•
Virginia Bankers Association – Compliance Instructor
•
Washington Bankers Association – Compliance Instructor
•
Western Massachusetts Bankers Association – Compliance Instructor
Litigation Support
Mr. Pry has served as litigation support for various law firms to defend financial institutions on subject
matters including, but not limited to:
•
Bank Core Processing Servicing and Operations
–
Commercially-reasonable policies, procedures, and practices
•
Check fraud and related financial fraud
•
Equal Credit Opportunity Act (ECOA) and Regulation B
–
Fair lending principles, including disparate treatment and disparate impact
–
Statistical analyses and reporting
•
Electronic Fund Transfer Act (EFTA) and Regulation E
–
Disputes and fraud
–
Resolution timeframes
•
Bank Secrecy Act (BSA), USA PATRIOT Act and Anti-Money Laundering (AML)
–
Reporting responsibilities
–
Customer Identification Program (CIP) responsibilities
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40944
Page 42 of 46
Expert Rebuttal Report of Carl Pry dated April 4, 2025
Appendix 1: CV of Carl Pry
Page 7
–
Identification of suspicious activities
–
Identity verification, identity theft, and synthetic identity theft
•
Fair Credit Reporting Act (FCRA)
–
Meaning of “consumer report” and “consumer report information”
–
Identify Theft Prevention Program
–
Use of consumer reports
•
Real Estate Settlement Procedures Act (RESPA) and Regulation X
–
Escrow accounting
–
Kickbacks and unearned fees
–
Servicing requirements
•
Truth in Lending Act (TILA) and Regulation Z
–
Coverage of consumer-purpose loans
–
Calculation of Annual Percentage Rate
–
Reimbursement
Recent Expert Witness Services (Last Five Years)
Rodeo Electrical Service, Inc., and Scott Rosenberg v. Sunflower Bank. State of New Mexico Case No. D-
101-CV-2020-1341. Testified at Trial
Marco A. Fernandez, individually and as a representative of the class, Plaintiff, vs. Corelogic Credco,
LLC, Defendant. United States District Court, Southern District of California, Case No. 3:20-cv-1262-
JM-AGS). Expert Witness Reports.
Paul H. Hulsey and Hulsey Law Group, LLC, Plaintiffs. vs. Frank M. Cisa; Cisa & Dodds, LLP;
Pinnacle Bank, Successor in Interest to Southcoast Community Bank; Robert A. Daniel, Jr.; Lawton
Limehouse, Sr.; Lawton Limehouse, Jr.; L&L Services, LLC; WLL, LLC; Richard B. Homes; Richard B.
Homes, CPA, LLC; United Bank, Successor in Interest to CresCom Bank, Defendants. United States
District Court for the District of South Carolina, Charleston Division, Civil Docket No. 2:17-cv-03095-
JD. Expert Witness Reports and Deposition.
Sparkman v. Comerica Bank, Conduent, United States District Court, Northern District of California,
Case No. 4:23-cv-02028-DMR. Expert Witness Report and Deposition; potential Testimony.
Scroggins v. LexisNexis Risk Solutions FL, Inc., United States District Court, Eastern District of Virginia,
Civil Action No. 3:22-cv-545-MHL. Expert Witness Reports and Deposition; potential Testimony.
Nauful v. Navy Federal Credit Union, United States District Court, South Carolina District, Case No.
3:23-cv-02357-MGL. Expert Witness Reports and Deposition; potential Testimony.
Spectrum v. Capital One Bank, N.A., Supreme Court of the State of New York, Index No.: 653779/2023.
Expert witness report and Deposition.
CFPB v. FirstCash, United States District Court, Northern District of Texas, Civil Action No. 21-2151.
Expert Witness Report and potential Deposition.
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40945
Page 43 of 46
Expert Rebuttal Report of Carl Pry dated April 4, 2025
Appendix 1: CV of Carl Pry
Page 8
Leyva v. Space Coast Credit Union, United States District Court, Southern District of Florida, Case No.
2:24-cv-14168-DMM. Expert Witness Report and Deposition.
* Note other litigation support-related work done pursuant to position at Treliant LLC, and is therefore
restricted under confidentiality provisions of contract with Treliant LLC.
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40946
Page 44 of 46
Expert Rebuttal Report of Carl Pry dated April 4, 2025 HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY
Appendix 2: Documents Relied Upon
Page 1
I reviewed or supervised FTI in its review of the following documents, in whole or in part, in
forming the expert opinions set forth in my rebuttal report:
Expert Reports
1. Expert Class Certification Report of J. Daniel Kreis, filed In re Bank of America California
Unemployment Benefits Litigation (August 29, 2024), Case No. 3:21-md-02992-GPC-
MSB.
2. Expert Report of Greg J. Regan, CPA/CFF, CFE, filed In re Bank of America California
Unemployment Benefits Litigation (March 4, 2025), Case No. 3-21-md-02992-GPC-MSB.
3. Expert Report of William J. Abernathy Jr., filed In re Bank of America California
Unemployment Benefits Litigation (March 3, 2025), Case No. 3:21-md-02992-GPC-MSB.
Depositions and Related Exhibits
4. Deposition of Jennifer Lennon dated February 23, 2024, filed In re: Bank of America
California Unemployment Benefits Litigation, No. 3:21-02992-md-LAB-MSB.
5. Deposition of Michael Letson dated February 16, 2024, filed In re: Bank of America
California Unemployment Benefits Litigation, Case No. 3:21-md-02992-LAB-MSB.
6. Deposition of Shane Daniels dated February 6, 2024, filed In re: Bank of America
California Unemployment Benefits Litigation, Case No. 3:21-md-02992-LAB-MSB.
7. Deposition of William Matthew Martin dated February 14, 2024, filed In re: Bank of
America’s California Unemployment Litigation, Case No. 3:21-md-02992-LAB-MSB.
Declarations
1. Declaration of Laura Brys in Support of Defendant’s Memorandum in Opposition to
Plaintiffs’ Motion for Class Certification, Ex. (“DX”) 6, Declaration of Michael J. Letson.
2. DX 7, Declaration of William M. Martin.
3. DX 8, Declaration of Jennifer Lennon.
Court Documents, Consent Orders, and Remediation Plan
4. BANA Response to Interrogs. 2 and 6 dated December 1, 2023, Exhibit 1.
5. DX 14, Examining Widespread Fraud in Pandemic Unemployment Relief Programs
(September 10, 2024).
6. DX 103, Dark Web Materials Id.me Bypass.
7. DX 121, Dark Web Materials.
8. DX 43, BANA’s Second Set of Responses to Plaintiffs’ Seventh Set of ROGs (ROG 39).
9. PX 147, 1st Addendum to the Remediation Plan (October 12 version).
10. Declaration of Connie K. Chan in Support of Plaintiffs’ Motion for Class Certification, Ex.
(“PX”) 72, Consumer Financial Protection Bureau (“CFPB”) Consent Order.
11. PX 73, Office of Comptroller of the Currency (“OCC”) Consent Order.
12. PX 74, Unemployment Insurance Prepaid Card Program Remediation Plan.
13. PX 82, Adequate Investigation Standard Operating Procedure.
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40947
Page 45 of 46
Expert Rebuttal Report of Carl Pry dated April 4, 2025 HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY
Appendix 2: Documents Relied Upon
Page 2
Publications
14. California State Auditor, Employment Development Department: Significant Weaknesses
in EDD’s Approach to Fraud Prevention Have Led to Billions of Dollars in Improper
Benefit Payments (January 2021).
15. Dow Jones, What is Compliance Risk?
16. Federal Reserve Bank of St. Louis, Unemployment Rate.
17. NPR, Pandemic-related fraud totaled billions. California is trying to get some of it back
(October 18, 2022).
18. Office of Comptroller of the Currency, Comptroller’s Handbook: Safety and Soundness
(January 2015).
19. Pandemic Oversight, Pandemic Unemployment Insurance: How much has been paid to
fraudsters? (January 22, 2025).
20. U.S Department of Labor, Report to the Employment and Training Administration,
COVID-19: ETA and States did not Protect Pandemic-Related UI Funds from Improper
Payments Including Fraud or from Payment Delays (September 30, 2022).
21. U.S. Department of Labor. (n.d.), Pandemic Unemployment Assistance.
22. United States Government Accountability Office, Pandemic Unemployment Assistance:
States’ Controls to Address Fraud (July 23, 2024).
Other
23. 15 U.S. Code § 1693f.
24. 15 U.S. Code § 9021.
25. BANA PowerPoint titled Benefits Fraud | Patterns Observed (BANA_EDD_MDL-
00430148).
26. Denial Evidence Template for Cardholder Eric Kessler (BANA_EDD_MDL_00698618).
27. Denial
Evidence
Template
for
Cardholder
Michael
Sims
II
(BANA_EDD_MDL_00137325).
28. Denial Evidence Template for Cardholder Richard Caton (BANA_EDD_MDL_00137712).
29. DX 58, R.S. Additional Fraud Review PowerPoint Presentation (BANA_EDD_MDL-
00884193).
30. DX 59, D.D. Additional Fraud Review PowerPoint Presentation (BANA_EDD_MDL-
00884004).
31. DX 62, K.S. Additional Fraud Review PowerPoint Presentation (BANA_EDD_MDL-
0084006).
32. Email from Christine Channels to William Fox, Faiz Ahmad and Paul Simpson dated
October 6, 2020 (BANA_EDD_MDL-00120424).
Case 3:21-md-02992-GPC-MSB Document 591-12 Filed 10/17/25 PageID.40948
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