Deposition of JPMorgan Corporate Designee — Blue Flame Medical LLC v. Chain Bridge Bank, N.A. (E.D. Va.)
- Date
- 2021-05-06
Summary
Exhibit 47, filed May 6, 2021 as Document 130-47 in Blue Flame Medical LLC v. Chain Bridge Bank, N.A., John J. Brough, and David M. Evinger, Civil Action No. 1:20-cv-00658, in the U.S. District Court for the Eastern District of Virginia, Alexandria Division, with a third-party claim by Chain Bridge Bank, N.A. against JPMorgan Chase Bank, N.A. The 18-page exhibit contains selected pages of the remote videotaped deposition of JPMorgan's corporate designee taken February 9, 2021, marked highly confidential under a protective order. The testimony covers how the witness prepared, calls with the State of California about the March 26th, 2020 wire of approximately 456 million dollars for the benefit of Blue Flame Medical, and Chain Bridge Bank's request that JPMorgan recall the wire. Appearances list counsel for the plaintiff, the defendants and JPMorgan.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Case 1:20-cv-00658-LMB-IDD Document 130-47 Filed 05/06/21 Page 1 of 18
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EXHIBIT 47
Case 1:20-cv-00658-LMB-IDD Document 130-47 Filed 05/06/21 Page 2 of 18
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HIGHLY CONFIDENTIAL PURSUANT TO PROTECTIVE ORDER
Page 1
1 HIGHLY CONFIDENTIAL
2 PURSUANT TO PROTECTIVE ORDER
3 IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
4 (Alexandria Division)
--------------------------------x
5 BLUE FLAME MEDICAL LLC,
Plaintiff,
6
-against- Civil Action
7 No.
CHAIN BRIDGE BANK, N.A., JOHN J. 1:20-cv-00658
8 BROUGH, and DAVID M. EVINGER,
Defendants.
9 --------------------------------x
CHAIN BRIDGE BANK, N.A.,
10 Third-Party Plaintiff,
11 -against-
12 JPMORGAN CHASE BANK, N.A.,
Third-Party Defendant.
13 --------------------------------x
14 February 9, 2021
9:35 a.m.
15
16
17 Remote Videotaped Deposition of
18 RAKESH KORPAL, a 30(b) (6) Witness, held in
19 the above-entitled action, located in Tampa,
20 Florida, taken before Dawn Matera, a
21 Shorthand Reporter and Notary Public.
22
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1 APPEARANCES:
2
1 THE VIDEOGRAPHER: Good morning.
3 SCHULTE ROTH & ZABEL LLP 2 We are now going on the record. The
Attorneys for Plaintiff
4 919 Third Avenue
3 time is approximately 9:35 a.m., it is
New York, New York 10022-3921 4 the 9th of February 2021. This is the
5 (212)756-2044
6 By: WILLIAM H. GUSSMAN, JR., ESQ. 5 video-recorded deposition ofRakesh
bill.gussman@srz.com 6 Korpal in the matter of Blue Flame
7 EKENEDILICHUKWU E. UKABIALA, ESQ.
ekenedilichukwu.ukabiala@srz.com 7 Medical LLC, Plaintiff, versus Chain
8 GREGORY J. KETCHAM-COLWILL, ESQ. 8 Bridge Bank, N.A., John J. Brough and
gregory.ketcham-colwill@srz.com
9 JASON T. MITCHELL, ESQ. 9 David M. Evinger, Defendants, as well
jason.mitchell@srz.com
10 as Chain Bridge Bank, N.A.,
10
11 11 Third-Party Plaintiff, versus JPMorgan
ROBBINS RUSSELL ENGLERT ORSECK &
12 UNTEREINER
12 Chase Bank, N.A., Third-Party
Attorneys for Defendants and Third-Party 13 Defendant. Case number is
13 Plaintiff
2000 K Street, N.W., Fourth Floor
14 1:20-CV-00658.
14 Washington, D.C. 20006 15 This case is filed in the U.S.
(202)471-3902
15 16 District Court for the Eastern
By: DONALD BURKE, ESQ. 17 District of Virginia, Alexandria
16 dburke@robbinsrussell.com
By: ZACHARY N. FERGUSON, ESQ. 18 Division. This deposition is being
17 znferguson@robbinsrussell.com 19 taken via a Zoom video conference. My
18
19 20 name is Ron Marrazzo from the firm of
20
21 Veritext Legal Solutions and our court
21
22 22 reporter is Dawn Matera from the firm
Page 3 Page 5
1 APPEARANCE S : (Continued) 1 ofVeritext Legal Solutions. I am not
2
3 WILMER HALE LLP 2 related to any party in this action
Attorneys for Third-Party Defendant 3 nor am I financially interested in its
4 JPMorgan Chase Bank
7 World Trade Center, 250
4 outcome.
5 Greenwich Street 5 All counsel attending remotely
New York, New York 10007
6 will be noted in the written
6 (212)937-7294
7 By: ALAN SCHOENFELD, ESQ. 7 transcript. We can now swear in the
alan.schoenfeld@wilmerhale.com 8 witness and proceed.
8 TODD CLAYTON, ESQ.
todd.clayton@wihnerhale.com 9 RA K E S H K O RP A L , the Witness
9 10 herein, having first been duly sworn by the
-and-
11 Notary Public, was examined and testified as
10
WILMER HALE LLP 12 follows:
11 1875 Pennsylvania A venue, N. W. 13 EXAMINATIONBY
Washington, D.C. 20006
12 (202)663-6719 14 MR GUSSMAN:
13 By: ALBINAS PRIZGINTAS, ESQ. 15 Q. Good morning, Mr. Korpal. My
albinas.prizgintas@wihnerhale.com
14
16 name is Bill Gussman. I am an attorney
15 17 at the law firm Schulte Roth & Zabel. We
16 Also Present: 18 are counsel to the Plaintiff Blue Flame
17 ETHAN BEARMAN, JPMorgan Chase
18 GABRIEL TORRES, JPMorgan Chase 19 Medical. I am joined today remotely by
19 RON MARRAZZO, Videographer 20 my colleague Kenny Ukabiala. And we have
20 -oOo-
21
21 several other lawyers from my firm who
22 22 may join today in and out as the session
2 (Pages 2 - 5)
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1 today as a corporate designee except for 1 Q. And who were those people?
2 topics 9 and 10? 2 A That would be Art Neville, the
3 A Yes. 3 relationship person. His manager, Max
4 Q. Okay. As to the topics in this 4 Leonard. Ana Prieto, the client service
5 notice, other than 9 and 10, do you have 5 person. Brian Stephenson in global
6 the information known or reasonably 6 security investigations. And certainly
7 available to JPMorgan with respect to 7 Alan Schoenfeld from legal counsel.
8 those topics? 8 Q. Anybody else?
9 A Yes. 9 A Well, we have internal legal
10 Q. How did you go about obtaining 10 counsel, as well.
11 that knowledge that was either known or 11 Q. Did you learn any facts
12 reasonably available to JPMorgan as to 12 relevant to the topics in Exhibit 80 from
13 the topics in Exhibit 80? 13 internal legal counsel at JPMorgan?
14 A As far as the transaction is 14 A No.
15 concerned, it's something that I was very 15 Q. Did you learn any facts
16 much aware of when it occurred. And ther 16 relevant to the topics in Exhibit 80 from
17 there were subsequent preparation with 17 Mr. Schoenfeld?
18 other parties to the transaction within 18 A No. The documents themselves
19 the bank, within JPMorgan Chase, so that 19 were reviewed, as well as conversations
20 I could be educated on the topic. 20 with those individuals that I mentioned.
21 MR. SCHOENFELD: So Rakesh, ir 21 Q. In other words, you reviewed
22 answering this series of questions you 22 documents with Mr. Schoenfeld, but
Page 15 Page 17
1 can say who you spoke to to prepare 1 Mr. Schoenfeld did not independently
2 for this testimony and the types of 2 provide you with any factual information
3 documents you reviewed to prepare for 3 beyond what was in the documents that you
4 this testimony. But you shouldn't 4 reviewed with Mr. Schoenfeld; is that
5 disclose further any communications 5 correct?
6 with counsel about your preparation. 6 A. That's correct.
7 THE WITNESS: Okay. 7 Q. Okay. And so I just want to
8 A So I've spoken with the client 8 make sure that we have a complete list of
9 service person, relationship team, as 9 people with whom you did learn facts
10 well as the investigations team to 10 relevant to the topics in Exhibit 80.
11 understand the discussions they may have 11 I think you mentioned
12 had with other parties to this 12 Mr. Neville. Is it Mr. --
13 transaction. As well as I have certainly 13 A. Leonard.
14 reviewed the transaction payment 14 Q. I'm sorry?
15 instructions, the execution and the 15 A. Leonard.
16 return of funds. 16 Q. Mr. Leonard. Ms. Prieto and
17 Q. How many -- in preparation for 17 Mr. Stephenson?
18 today's deposition as the corporate 18 A. That's right.
19 representative of JPMorgan Chase, with 19 Q. Were there any others?
20 how many people did you speak to 20 A. Not that I can recall.
21 understand the facts? 21 Q. What information do you recall
22 A Approximately six. 22 learning from Mr. Neville relevant to the
5 (Pages 14 - 17)
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1 topics in Exhibit 80? 1 the transaction that had been executed
2 A His contacting the State of 2 for 456 million dollars by them in favor
3 California regarding this transaction. 3 of Chain Bridge Bank in McLean, Virginia,
4 Q. What did Mr. Neville tell you 4 in further benefit of Blue Flame Medical.
5 about his contact with the State of 5 Q. And did the State of California
6 California with respect to this 6 validate that they knew the transaction
7 transaction? 7 on that telephone call with Mr. Neville?
8 A He contacted the State of 8 A Not on the initial call.
9 California to determine if they know the 9 Q. Did they subsequently validate
10 transaction, that was the initial 10 that they knew the transaction?
11 conversation. 11 A They did.
12 Q. For the record, when you and I 12 Q. Do you know when they did?
13 are using the term "transaction" in this 13 A Don't know the time, no.
14 conversation, can we agree that this is 14 Q. Was it the same day?
15 in reference to the March 26th, 2020 wire 15 A It was the same day.
16 from JPMorgan to Chain Bridge Bank for 16 Q. Did you learn any other factual
17 the benefit of Blue Flame Medical for 17 information from Mr. Neville regarding
18 approximately 456 million dollars? 18 the topics in Exhibit 80?
19 A Yes. Just one caveat there. 19 A The only other topic I learned
20 That it was by order of State of 20 from Mr. Neville is the Treasurer's
21 California. 21 Office was going to contact the General
22 Q. Do you know when Mr. Neville 22 Services Office to understand if they had
Page 19 Page 21
1 contacted the State of California to 1 completed their due diligence to validate
2 determine if they know the transaction? 2 the transaction.
3 A On March 26th, approximately 3 Q. Was that something that
4 noon Eastern. 4 Mr. Neville learned on that call that you
5 Q. Was that before or after the 5 referenced previously at noon Eastern on
6 wire was sent? 6 March 26th, 2020?
7 A It was after the wire was sent. 7 A Yes.
8 Q. Did Mr. Neville tell you 8 Q. Did you learn any other facts
9 anything further about his conversation 9 from Mr. Neville relevant to the topics
10 with the State of California? 10 in Exhibit 80?
11 A Mr. Neville stated that he was 11 A Later that day on a subsequent
12 reviewing it with the State of 12 conversation, State of California had
13 California, with the Treasurer's Office. 13 requested the funds be recalled.
14 He had not come back with any additional 14 Q. What did Mr. Neville
15 information. 15 specifically tell you about that
16 Q. With whom did Mr. Neville speak 16 conversation?
17 at the State of California? 17 A I would have to say, I am going
18 A I don't know. 18 to paraphrase, because I don't recall the
19 Q. What was the content of the 19 exact language, but something to the
20 discussion with the State of California 20 effect of the Treasurer's Office was not
21 around noon Eastern on March 26th, 2020~ 21 comfortable with the diligence, due
22 A He was to validate if they know 22 diligence that the General Services
6 (Pages 18 - 21)
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1 Office completed. 1 MR. SCHOENFELD: Objection.
2 Can you give me a second 2 Q. To your knowledge?
3 because I am hearing noise from 3 MR. GUSSMAN: Let me rephrase
4 downstairs and I just want to close the 4 that.
5 door? 5 Q. Did officials from Chain Bridge
6 Q. Sure. 6 Bank communicate to JPMorgan other
7 A Sorry, that was my father 7 reasons why they were uncomfortable with
8 downstairs, it was distracting me. 8 the wire?
9 Q. No problem. Are you 9 MR. BURKE: Objection,
10 comfortable proceeding at this point? 10 foundation.
11 A Yes. 11 A The account was a new account
12 Q. Okay. Do you know what time 12 and had no funds in the account and the
13 that subsequent conversation was that 13 value of the transaction was
14 Mr. Neville had with the State of 14 approximately 50 percent of their asset
15 California? 15 base.
16 A I would say it was 16 Q. Did they communicate to
17 approximately 2 p.m. Eastern. 17 JPMorgan any other reason that they
18 Q. Was Mr. Neville the only 18 wanted the wire to be recalled?
19 representative of JPMorgan on that call 19 A No.
20 with the California State Treasurer's 20 Q. I'm sorry, did you say yes?
21 Office? 21 A I said no, they did not
22 A I don't know. I was not part 22 communicate any other reason.
Page 23 Page 25
1 of that call. 1 Q. How did they communicate the
2 Q. Was that call before or after 2 concerns that they had to JPMorgan?
3 JPMorgan communicated to Chain Bridge 3 A Via telephone call.
4 Bank that they would seek to recall the 4 Q. And with whom did they speak at
5 wire? 5 JPMorgan on that telephone call?
6 A. We did not communicate to Chain 6 A It was with Tim Coffey who
7 Bridge Bank that we would seek to recall 7 reported into me as well as myself and as
8 the wire. Chain Bridge Bank requested 8 I had stated earlier, the president of
9 that we recall the wire. 9 the bank and the CEO of the bank. That's
1O Q. How did Chain Bridge Bank 10 how they labeled themselves.
11 request that you recall the wire? 11 Q. Okay. Did JPMorgan record any
12 A. It was during a phone 12 of the telephone conversations it had
13 conversation that I had with their CEO 13 with representatives of Chain Bridge
14 and the president of Chain Bridge Bank. 14 Bank?
15 Q. And what was JPMorgan's 15 A No.
16 understanding as to why Chain Bridge Bank 16 Q. Are you aware that
17 wanted JPMorgan to recall the wire? 17 representatives of Chain Bridge Bank
18 A. They were uncomfortable with 18 recorded some of those conversations or
19 the large value of the transaction at 457 19 at least portions of those conversations?
20 million. 20 A Not at the time.
21 Q. Were they uncomfortable with 21 Q. You're aware of that now?
22 the transaction for any other reason? 22 A Yes.
7 (Pages 22 - 25)
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1 Q. I take it they did not inform 1 transaction is screened again for any
2 you at the time that the conversations 2 suspicious activity. Assuming that there
3 were being recorded? 3 is suspicious activity, then we would
4 A No, they did not. 4 validate that transaction with the
5 Q. All right. I am going to come 5 originator of the transaction and then
6 back to some of the topics that we were 6 ultimately if it's determined that it is
7 just talking about, but I do want to just 7 a valid transaction, it's released.
8 ask you briefly about you and your role 8 And then the last group that I
9 at JPMorgan before we go too far down 9 manage is the funds control team, which
10 into the details. Got a little 10 determines if the transaction that's
11 sidetracked. We will come back that. 11 being executed by the originating party,
12 But, Mr. Korpal, what is your 12 they have sufficient funds or a credit
13 current position at JPMorgan? 13 line in place to be able to execute or
14 A I am responsible for controls 14 release that transaction on to be
15 utility, which encompasses three 15 settled.
16 functions. One is our sanctions 16 Q. Okay. How long have you been
17 screening production team, our fraud or 17 working at JPMorgan?
18 payments control team, and then a funds 18 A 40 years.
19 controller credit risk function. 19 Q. What year did you start, 1981?
20 Q. And how do you describe your 20 A January 6th, 1981.
21 core responsibilities with respect to 21 Q. What did you do before that?
22 those functions? 22 A Before January 6th, 1981?
Page 27 Page 29
1 A I am the manager of the three 1 Q. Yes, before joining JPMorgan in
2 teams. 2 1981.
3 Q. And what functions do you 3 A I was a student in college.
4 perform or oversee with respect to wire 4 Q. Where did you get your
5 transfers? 5 undergraduate degree?
6 A In simple terms, the three 6 A Queens College, City of New
7 groups are acting as a pay/no pay agent 7 York.
8 as it relates to the overall transaction 8 Q. And what year did you receive
9 processmg. 9 the degree?
10 So if we look at sanctions, 10 A I believe it was 1983. '82.
11 certainly we understand that there are 11 Q. So you were working at JPMorgan
12 lists that are determined by the U.S. 12 while you were still receiving your
13 government that say these are sanctioned 13 degree?
14 entities and do not want to pay those 14 A Yes.
15 sanctioned entities. So if a transaction 15 Q. Do you have any postgraduate
16 alerts, it's to a sanctioned entity, and 16 degrees?
17 then the team would refer it to our 17 A I do. I have a masters from
18 compliance team. 18 Adelphi University in Garden City, New
19 If on the other hand, it can be 19 York.
20 passed, then they pass the transaction. 20 Q. What is the masters in?
21 It then rolls into our fraud screening 21 A It's in corporate finance.
22 engine, global payment guardian where the 22 Q. What year did you receive that?
8 (Pages 26 - 29)
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1 brokers 99 percent of the time, how were 1 return the funds to JPMorgan?
2 those funds recovered? 2 A No.
3 A We would speak with the 3 Q. Did JPMorgan understand that
4 financial institution that received the 4 Blue Flame Medical was not involved --
5 funds. There would be a mutual 5 let me rephrase that.
6 discussion to understand where those 6 Did JPMorgan understand that
7 funds are and determining if there is any 7 Blue Flame Medical had not authorized thE
8 viability in us being able to recover 8 return of the funds to JPMorgan?
9 those funds. 9 A Yes.
10 And then assuming that was the 10 Q. Was it JPMorgan's understanding
11 case, we would submit a recall request to 11 that Chain Bridge Bank had concerns that
12 the financial institution and then 12 there could be fraud with respect to this
13 receive those funds back. 13 transaction?
14 Q. And how was it determined 14 A I don't believe they said
15 whether there was any viability in 15 fraud. I think they just were
16 JPMorgan being able to recover funds? 16 susp1c10us.
17 A The financial institution that 17 Q. Do you recall that they said
18 received the moneys was the only one who 18 that the transaction didn't smell right
19 had visibility into the account, the 19 to them?
20 balances or the status of the funds. 20 A They just said that the
21 Q. What do you mean by status of 21 transaction was suspicious.
22 the funds? 22 Q. Do you recall whether they had
Page 39 Page 41
1 A Had the funds been credited to 1 asked JPMorgan whether California had
2 the ultimate beneficiary's account or 2 confirmed whether or not it was fraud?
3 not. 3 A. They did not ask that.
4 Q. And if they had been credited 4 Q. Well, we will listen to some
5 to the ultimate beneficiary's account, 5 audio tapes later, and we can revisit
6 that would mean they would not be able to 6 that.
7 be returned to JPMorgan, correct? 7 MR. GUSSMAN: I would like to
8 MR. SCHOENFELD: Objection. 8 take a break at this point in time for
9 MR. BURKE: Objection to the 9 about 10 minutes, if that's okay with
10 form. 10 you. Mr. Korpal?
11 Q. Can you answer that question, 11 THE WITNESS: Yes, sure.
12 Mr. Korpal? 12 THE VIDEOGRAPHER: The time is
13 A The funds could be recovered. 13 approximately 10:28 a.m., we are going
14 However, it would require debit 14 off the record.
15 authorization potentially from the 15 (Off the record.)
16 beneficiary or the beneficiary account 16 THE VIDEOGRAPHER: The time is
17 owner. 17 approximately 10:40 a.m., we are back
18 Q. And here, with respect to the 18 on the record.
19 wire transfers we've been discussing 19 BY MR. GUSSMAN:
20 regarding Chain Bridge Bank and Blue 20 Q. Mr. Korpal, how much time did
21 Flame Medical, are you aware of any 21 you spend preparing for your 30(b)(6)
22 authorization of Blue Flame Medical to 22 testimony?
11 (Pages 38 - 41)
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1 A I am trying to calculate the 1 transaction. The transaction was then
2 hours. 2 delivered into our wire payments
3 Q. Approximately. 3 platform. And then it alerted within our
4 A About 12 hours, I would say. 4 roll payment guardian application which
5 Q. And did you spend additional 5 is screening for suspicious transaction
6 time preparing individually or that's 6 activity.
7 part of the 12 hours? 7 The agent then contacted the
8 A That's part of the 12 hours. 8 State of California to validate the
9 Q. Got you. Thanks. 9 transaction in addition to some research
10 So I just want to try to walk 10 the agent would have conducted. Receivec
11 through, Mr. Korpal, the history of the 11 approvals from her manager. And then a
12 wire transaction that we've been talking 12 third manager or team lead released the
13 about in sort of an organized fashion. 13 transaction for delivery to Chain Bridge
14 We have skipped around a little bit. I 14 Bank in McLean, Virginia.
15 just want to preview for you what I am 15 Q. Okay. Let's go over some of
16 trying to develop is JPMorgan's 16 that.
17 understanding as to the chronology of 17 Who was the agent that you
18 events with respect to that March 26th 18 mentioned?
19 wire and the events on March 26th 19 A Michelle Long is her name. She
20 relating to that wire or around March 20 is on our team.
21 26th. 21 Q. And did she then get approval
22 When did JPMorgan first receive 22 from her manager following her review?
Page 43 Page 45
1 an instruction from the State of 1 A. She communicated with the State
2 California to wire approximately $457 2 of California first. And the State of
3 million to Chain Bridge Bank for the 3 California approved the transaction for
4 benefit of Blue Flame Medical? 4 release and confirmed it to be valid, at
5 A That would be March 26th, 2020. 5 which point Michelle would have requested
6 Q. How did it receive that 6 approval from a manager, given the large
7 instruction? 7 value of the transaction, that she had
8 A The instructions are entered, 8 followed the appropriate steps to
9 verified and released by the client using 9 authenticate and validate the transaction
10 an electronic portal channel that we 10 for release.
11 provide to our clients called Access, 11 Q. Okay. And do you know, who did
12 A-C-C-E-S-S. 12 Michelle Long speak with at the State of
13 Q. Do you know when the 13 California?
14 instructions were entered into Access? 14 A. I believe it was Natalie
15 A Based on the documentation that 15 Gonzalez.
16 I saw, it was slightly after 8 p.m. 16 Q. Okay. And then after Michelle
17 Pacific coast time on March 26th, 2020. 17 Long validated the transaction by
18 Q. Okay. And what happened after 18 confirming with the State of California
19 that instruction was entered into the 19 that it was approved, what did she do
20 Access system by the State of California? 20 next?
21 A A second operator in the State 21 A. She then would submit a request
22 of California reviewed and released the 22 into the managers, would be myself,
12 (Pages 42 - 45)
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1 Jennifer Robinson and Tim Coffey. 1 or above.
2 Because it was a transaction 2 Q. And Su Nguyen undertook those
3 that was larger than $50 million, it 3 steps and completed them to JPMorgan's
4 requires a vice president or above to 4 satisfaction, correct?
5 review and validate the steps that were 5 A Yes, and then released the
6 taken to authenticate the transaction and 6 transaction.
7 validate the transaction for release. 7 Q. What time was the wire transfer
8 Q. And did such a review and 8 released?
9 validation occur by a manager? 9 A Approximately noon Eastern.
10 A Yes, Tim Coffey. 10 Q. Prior to the time the wire was
11 Q. And did Mr. Coffey approve the 11 released, had JPMorgan spoken to Chain
12 transaction? 12 Bridge Bank?
13 A He did. 13 A Prior to the transaction being
14 Q. And what happened after that? 14 released? No.
15 A The approval from Tim Coffey is 15 Q. Prior to the time when the
16 attached to the transaction case file. 16 transaction was released, how many times
17 And then a second manager reviews all of 17 had JPMorgan spoken with a representativ<
18 the work that Michelle had completed, the 18 of the State of California with respect
19 conversation or the validation of the 19 to the transfer?
20 conversation with the State of California 20 A I believe it was just Michelle
21 and the authorized party, as well as Tim 21 Long that one time to authenticate and
22 Coffey's approval. 22 validate the transaction.
Page 47 Page 49
1 And then the transaction was 1 Q. Okay. And specifically, what
2 released for settlement with Chain Bridge 2 was the process she followed to
3 Bank. 3 authenticate and validate the
4 Q. Who was the second manager that 4 transaction?
5 Michelle sought approval from and 5 MR. SCHOENFELD: Objection.
6 received approval from? 6 Q. You can answer, Mr. Korpal.
7 A His name is Su, S-U, Nguyen, 7 A. I thought I heard an objection.
8 N-G-U-Y-E-N. 8 MR. SCHOENFELD: When I object,
9 Q. And do you know what Su Nguyen 9 you can go ahead and answer unless I
10 did in connection with reviewing the 10 tell you not to.
11 transaction? 11 THE WITNESS: Okay. I'm sorry.
12 A As part of the procedure, he 12 A. So Michelle would have followed
13 would validate the search that -- the 13 a script. We have a script for all of
14 independent search that Michelle would 14 our agents, which outlines the verbiage
15 have done; the confirmation of the 15 that they should be using to confirm the
16 conversation that she had with the State 16 transaction and confirm the caller that
17 of California; what she utilized in terms 17 they are speaking with as well.
18 of information to contact them. And then 18 Q. And she actually did that in
19 authenticate them. 19 accordance with the script, correct?
20 And then, in addition, that 20 A. Yes.
21 there was an approval for a 50 million or 21 Q. Did anybody else at JPMorgan
22 larger transaction from a vice president 22 have a conversation with the State of
13 (Pages 46 - 49)
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1 California regarding the wire transfer 1 deal?
2 prior to it being released? Including, I 2 A It was a conversation that the
3 am talking about people in the banking 3 client service and the relationship team
4 side, Mr. Neville you mentioned earlier. 4 had with the State of California to
5 Did anybody else at JPMorgan, 5 understand the purpose of the
6 not just in your unit or in your area, 6 transaction.
7 but did anybody else at JPMorgan have a 7 Q. Who participated in that
8 discussion with the State of California 8 conversation?
9 regarding this wire transfer or the 9 A It would be Art Neville, Ana
10 transaction to which it related prior to 10 Prieto and the State of California.
11 the transfer being sent to Chain Bridge 11 Q. What was the purpose of that
12 Bank for the benefit of Blue Flame 12 telephone call? I assume it was a
13 Medical? 13 telephone call.
14 A. Not that I am aware of. 14 A There was a telephone call to
15 Q. Did JPMorgan come to learn that 15 validate if they understood the
16 the purpose of the transfer was in 16 transaction, whether it was valid
17 connection with payment of procurement of 17 transaction and what the purpose of the
18 PPE, personnel protection equipment, 18 transaction was.
19 related to issues around the pandemic? 19 Q. And what did the State of
20 A. Yes. 20 California tell Mr. Neville and
21 Q. When did it learn that? 21 Ms. Prieto about the purpose of the
22 A. After the transaction had been 22 transaction?
Page 51 Page 53
1 released to Chain Bridge Bank. 1 A That it was to acquire personal
2 Q. After the wire transfer went 2 protection equipment for the State of
3 out around noon Eastern, some point after 3 California.
4 that? 4 Q. Did the State of California
5 A Yes. 5 provide any further information about the
6 Q. And did JPMorgan learn that the 6 transaction to acquire PPE?
7 purpose of the transfer was in connection 7 A No.
8 with payment or procurement of PPE prior 8 Q. Well, did the State of
9 to the time that Chain Bridge Bank asked 9 California confirm that the purchase
10 JPMorgan to recall the wire? 10 transaction was between the State of
11 A Sorry, could you restate that 11 California and Blue Flame Medical?
12 one more time? 12 A I don't know for sure. I
13 Q. Actually, let me rephrase it. 13 wasn't part of that conversation.
14 Slightly different question. 14 Q. Did the State of California
15 Did JPMorgan learn that the 15 confirm that the amount of the wire,
16 purpose of the transfer was in connection 16 $456,880,600, was the correct amount witl
17 with payment for procurement of PPE prio 17 respect to the transaction?
18 to the time that JPMorgan issued a 18 A Yes.
19 request to recall the wire transfer? 19 Q. Are you able to tell me
20 A Yes. 20 anything else about what the State of
21 Q. How did it learn that the 21 California said about its transaction
22 transfer was in connection with the PPE 22 with Blue Flame Medical on that telephom
14 (Pages 50 - 53)
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1 call? 1 California and Chain Bridge Bank prior to
2 A. Again, just paraphrasing, but 2 that.
3 the call was with the Treasurer's Office 3 Q. Okay. I want to go back
4 and they had some concerns regarding the 4 through the sequence of events. And I
5 diligence that was performed by the 5 think we essentially got to the point
6 General Services Office in instructing 6 where the wire was released around noon
7 this transaction. 7 Eastern following the protocols that your
8 Q. Did the representative of the 8 group engaged in. Do you recall that?
9 Treasurer's Office explain why they had 9 A Yes.
10 concerns regarding the diligence that was 10 Q. What happened after the wire
11 performed? 11 was sent?
12 A. They did not. 12 A I had actually requested a copy
13 Q. Did the State of California 13 of the wire based on a prior conversation
14 officials from the Treasurer's Office -- 14 I had with the client service team for
15 well, let me ask a different question. I 15 State of California. The client service
16 will withdraw that question. 16 team are employees of JPMorgan.
17 Was there any discussion about 17 Q. What was the prior conversation
18 communications from Chain Bridge Bank on 18 that you had with the client service
19 the call with the State of California? 19 team?
20 A. Not that I am aware of. 20 A On the night before, the client
21 Q. Do you know if Chain Bridge 21 service team had called me, March 25th,
22 Bank officials had spoken with officials 22 that is, about 6 p.m., and asked for me
Page 55 Page 57
1 from the State of California prior to the 1 to assist in facilitating a transaction,
2 time that JPMorgan and the California 2 a large-value transaction for 500
3 state treasury's office had the call that 3 million, which had not occurred on March
4 you just referenced? 4 25th.
5 A No, not that -- no, I was not 5 And I followed up on March 26th
6 aware of any conversation prior to that. 6 with the client service person at
7 Q. To be clear on the record, you 7 JPMorgan at approximately 11 a.m. Eastern
8 don't know either way whether there were 8 time to ask if the transaction had been
9 or whether there weren't, is that -- 9 executed, and they stated that it was
10 A That's right. That's right. 10 early in California. And then ultimately
11 Q. Just because the record may be 11 the client service person confirmed the
12 a little wonky there, let me just ask 12 transaction had been completed and
13 that again. 13 thanked me for assisting.
14 A Sure. 14 And at that point I still had
15 Q. To your knowledge, you don't 15 not seen the details of the transaction,
16 know whether officials from Chain Bridge 16 so I asked my team, Tim Coffey, to pull
17 Bank had spoken with officials from the 17 the transaction details so that I could
18 State of California prior to the call 18 review them.
19 between the State of California and 19 Q. Thank you for that. So I just
20 JPMorgan that we were just discussing? 20 want to follow up on a couple of things
21 A No, I am not. I was not aware 21 from your answer.
22 of any conversation with the State of 22 What did JPMorgan know about
15 (Pages 54 - 57)
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1 the transaction on March 25th? 1 conversations with the State of
2 A That it was a large-value 2 California regarding this transaction on
3 transaction for 500 million, 3 March 25th?
4 approximately, dollars. 4 A I don't know how they were
5 Q. Did JPMorgan know who its 5 informed.
6 customer was with respect to that 6 Q. Did you speak with Ms. Cantrell
7 transaction? 7 in preparation for today's deposition?
8 A Yes. It was the State of 8 A I did not.
9 California. 9 Q. Did you seek to learn how
10 Q. Did it know anything about 10 JPMorgan became aware of this transacti01
11 where the money was going to be wired on 11 on March 25th, as part of your
12 March 25th? 12 preparation for today's deposition?
13 A No. 13 A I did not.
14 Q. How did it know that there was 14 Q. And the telephone call you had
15 a large-value transaction for $500 15 with Ms. Cantrell at around 6 p.m. on
16 million involving the State of California 16 March 25th, what do you recall
17 on March 25th? 17 specifically about that telephone
18 A It was a telephone conversation 18 conversation?
19 where the client service person called me 19 A She informed me that the State
20 directly. 20 of California had a large-value
21 Q. I'm sorry. I understand that 21 transaction for approximately $500
22 the client service person called you 22 million and if I could assist in
Page 59 Page 61
1 directly. Am I right that that was after 1 facilitating that transaction to be sent
2 the client service person talked to 2 out.
3 somebody with the State of California? 3 Q. What did you do in response to
4 A I don't know. I received a 4 that telephone conversation?
5 call at 6 p.m., March 25th informing me 5 A Nothing. I was waiting for her
6 that the State of California was going to 6 to come back to me.
7 execute a $500 million transaction and 7 Q. Did you assist in facilitating
8 they needed my assistance to help 8 the transaction?
9 facilitate that, as the wire system was 9 A I did not.
10 about to close. 10 Q. Going back to the sequence of
11 Q. And who was it that called you? 11 events, what happened at JPMorgan
12 A June Cantrell. 12 following the release of the wire around
13 Q. And how is it Ms. Cantrell 13 noon Eastern? What was the first thing
14 learned about this transaction? 14 that JPMorgan did with respect to that
15 A I don't know. 15 wire transfer after the wire was
16 Q. Had the transaction been 16 released?
17 entered into the Access system at this 17 A I had called June Cantrell to
18 point in time? 18 understand that the transaction she had
19 A No. 19 called me about the night prior had been
20 Q. So do you know whether 20 released and if I could receive the
21 Ms. Cantrell or anybody else at JPMorgan 21 transaction details, given the value of
22 had conversations, had a conversation or 22 the transaction at approximately $500
16 (Pages 58 - 61)
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1 million. 1 holding the funds. They had not credited
2 Q. And did you receive the 2 the account of Blue Flame Medical.
3 details? 3 Q. Did JPMorgan ever reach out to
4 A I had received the details 4 Blue Flame Medical?
5 subsequent to that conversation based on 5 A Not that I am aware of
6 my follow-up when she confirmed the 6 Q. In the time that you first
7 transaction had been completed. 7 reached out to Mr. Coffey to ask him to
8 Q. So what happened next, 8 call Chain Bridge Bank to the time when
9 Mr. Korpal? Did you review those 9 you learned from Chain Bridge Bank that
10 details? 10 the owner of the account was a lobbyist
11 A I asked Tim Coffey to pull the 11 in the area, did JPMorgan do anything
12 transaction details for me. I reviewed 12 else with respect to the transaction?
13 the transaction details. And I asked Tim 13 A Not with the transaction, no.
14 Coffey to call Chain Bridge Bank to 14 Q. Did JPMorgan do anything else
15 determine if they knew the beneficiary of 15 to follow up with respect to the
16 the funds and what the disposition of the 16 transaction prior to the time that it
17 transactions or the funds were at that 17 issued a recall request to Chain Bridge
18 point. 18 Bank?
19 He came back to me and 19 A Yes, that was when Art Neville,
20 confirmed that they had received the 20 the relationship person, and Ana Prieto,
21 transaction. They were suspicious of it. 21 the client service person, contacted the
22 And they had held the funds and not 22 State of California to determine if they
Page 63 Page 65
1 credited the account of Blue Flame 1 knew the transaction and the purpose of
2 Medical. 2 the transaction.
3 Tim and I then spoke with Blue 3 Q. And when did they do that
4 Flame Medical to understand, again, the 4 relative to the conversations that you
5 disposition of the funds and what their 5 and Mr. Coffey had with Chain Bridge
6 concerns were with the transaction. 6 Bank?
7 They confirmed that the 7 A Immediately after or right
8 transaction had not been credited to Blue 8 before. It was very close to that time.
9 Flame Medical's account. This was a 9 Q. Did someone internally at
10 newly established account with no 10 JPMorgan ask Mr. Neville to have that
11 balances. And the account -- so then I 11 telephone call with the State of
12 asked if they knew the owner of the 12 California?
13 account and they said yes, he is a 13 A Yes. I believe I did. I had
14 lobbyist in the area. 14 asked Ana Prieto who the relationship
15 Q. What did Chain Bridge Bank tell 15 banker was for the State of California,
16 Mr. Coffey with respect to the suspicions 16 and I asked Mr. Neville to contact the
17 they had relating to the transaction? 17 State of California to raise the
18 A The first conversation that Tim 18 awareness of this transaction.
19 had with the Chain Bridge Bank was that 19 Q. What specifically did you tell
20 they were concerned with the size of the 20 to Mr. Prieto or Mr. Neville in this
21 transaction. They had never received a 21 regard?
22 transaction that large and that they were 22 A That there was a large-value
17 (Pages 62 - 65)
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1 transaction that had been delivered out 1 Q. And did JPMorgan also
2 to a bank in McLean, Virginia and it was 2 understand that Chain Bridge Bank had
3 issued by the State of California. And 3 reached out directly to the State of
4 while we validated it through our steps, 4 California with respect to the
5 we needed to raise the awareness to a 5 transaction?
6 more senior person at State of California 6 A During the conversation that I
7 to determine if they know the 7 had with them, no, I did not know that.
8 transaction. 8 Q. Did JPMorgan know that prior to
9 Q. Do you know whether or not you 9 the time that it issued the recall
10 referenced any information you learned 10 notice?
11 from Chain Bridge Bank in your 11 A That Chain Bridge Bank had
12 conversations with Mr. Prieto and 12 contacted the State of California?
13 Mr. Neville? 13 Q. Correct.
14 A I don't recall, which is why I 14 A I did not know that, no.
15 say that conversation was either right 15 Q. Did JPMorgan know that?
16 before or right after. But it was at the 16 A I don't know.
17 time, just about when we spoke with the 17 Q. 0 kay. You referenced a
18 Chain Bridge Bank. 18 conversation that Mr. Coffey and you had
19 Q. Did JPMorgan's communications 19 with Chain Bridge Bank, and a
20 with Chain Bridge Bank heighten their 20 conversation that Mr. Neville and
21 concerns with respect -- let me rephrase 21 Ms. Prieto had with representatives of
22 that. 22 the State of California following the
Page 67 Page 69
1 Did JPMorgan's conversations 1 release of the wire.
2 with Chain Bridge Bank increase any 2 What else occurred at JPMorgan
3 concerns that JPMorgan had with respect 3 prior to the time that JPMorgan issued
4 to whether or not there was fraud in 4 the recall request with respect to the
5 connection with the transaction? 5 wire?
6 A You're asking if JPMorgan, 6 A I had performed some open text
7 after the conversation with Chain Bridge 7 search to understand if there was any
8 Bank, determined that this transaction 8 history for a company called Blue Flame
9 was fraudulent or potentially fraudulent? 9 Medical in the area.
10 Q. I am asking whether JPMorgan, 10 I had requested my counterparts
11 after the conversation with Chain Bridge 11 in the sanctions team to perform some
12 Bank, was more concerned that there coula 12 searches as well, using tools that they
13 be fraud involved with this transaction? 13 have available to them, as well as our
14 A We found it to be more 14 compliance team, to perform some
15 suspicious given that the beneficiary 15 searches, as well, using tools they had
16 bank was concerned with the transactions 16 to determine if they can locate any
17 as well. And that they had confirmed 17 history on Blue Flame Medical.
18 that they held the funds and that the 18 Q. And what do you recall
19 account was a newly established account 19 specifically you learned as a result of
20 by a lobbyist in the area. 20 your requests to do additional work?
21 There were a number of red 21 A The sanctions team and the
22 flags associated with it. 22 compliance team came back with no
18 (Pages 66 - 69)
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1 Q. Between the time the recall 1 We had issued a recall request,
2 notice was sent and the notice that the 2 had not received the funds. Called Chain
3 funds were credited to the State of 3 Bridge Bank. At that point they were
4 California from JPMorgan at around 4 p.m 4 processing the recall -- return of funds,
5 Eastern, were there any other 5 sorry. We had not received the funds
6 communications that JPMorgan had with 6 again. Called them and Chain Bridge Bank
7 anybody outside JPMorgan with respect to 7 confirmed they were verifying or
8 this transaction? 8 releasing the funds back to JPMorgan
9 A Yes, with the State of 9 Chase.
10 California. The State of California 10 And that was it, that I am
11 was -- they were asking about the status 11 aware of.
12 of the recall of funds. 12 Q. Okay. I think you answered a
13 Q. Prior to the time that you 13 different question than I asked. I think
14 authorized the issuance of the recall 14 you answered the question how many times
15 request, were there conversations with 15 did JPMorgan speak with Chain Bridge Bank
16 the State of California about the recall 16 following the recall request. Is that
17 request? 17 the question that you just answered?
18 A Prior to issuing the recall? 18 A. Yes.
19 Q. Yes. 19 Q. Okay. I actually was asking
20 A No. 20 how many times did JPMorgan have
21 Q. When did California first learn 21 conversations with the State of
22 that JPMorgan had issued a recall request 22 California following the issuance of the
Page 83 Page 85
1 with respect to the wire? 1 recall request on March 26th?
2 A. It was after we had issued the 2 A I don't know.
3 recall request. 3 Q. Well, I think you -- well, is
4 Q. How was California informed 4 it your testimony that JPMorgan did have
5 about that recall request? 5 at least one conversation with the State
6 A. They were informed by their 6 of California following the issuance of
7 client service person, Ana Prieto. And I 7 the recall request?
8 don't know if she called or sent them an 8 A Yes.
9 e-mail, but stated that we had recalled 9 Q. Did JPMorgan have more than one
10 the funds. 10 conversation with the representatives of
11 Q. Okay. I want to try to see 11 the State of California following the
12 what we know about specifically the 12 issuance of the recall request on March
13 sequence of communications with the State 13 26th?
14 of California following the issuance of 14 A I don't know.
15 the recall request. 15 Q. Because I think my question
16 On March 26th, how many times 16 earlier was a little sloppy. Did
17 did JPMorgan have telephone conversations 17 JPMorgan have at least one conversation
18 with the State of California regarding 18 on March 26th with the State of
19 the transaction following the recall 19 California following the issuance of the
20 request? 20 recall request?
21 A. Following the recall request, I 21 A They did have a conversation
22 believe it was twice. 22 following the recall request.
22 (Pages 82 - 85)
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1 Q. Okay. What do you know about 1 of funds was from Chain Bridge Bank to
2 that conversation? 2 JPMorgan, and the Chain Bridge Bank
3 A It was inquiring if the funds 3 representative confirmed that they were
4 had been received back. And the client 4 working to return the funds.
5 service person confirmed that the funds 5 Q. Did the Chain Bridge Bank
6 had not been received back and then they 6 representative say anything beyond that?
7 would advise them when the funds are 7 A I don't know.
8 back. 8 Q. Do you know anything else about
9 Q. Who participated on that call 9 that call?
10 from JPMorgan's side? 10 A Idonot.
11 A It would have been Ana Prieto 11 Q. How about the second call?
12 and Art Neville. 12 What was the substance of the second call
13 Q. Do you know anything else about 13 between JPMorgan and Chain Bridge Ban1
14 what was said on that call? 14 following the issuance of the recall
15 A Idonot. 15 notice on March 26th?
16 Q. Do you know whether there was 16 A It was, again, Tim Coffey
17 any additional conversation with the 17 calling Chain Bridge Bank to ask what the
18 State of California on March 26th, 18 status of the return of funds was. And
19 following the issuance of the recall 19 they confirmed that the funds were being
20 request? 20 returned or approved to be returned at
21 A I do not know of any other 21 that point.
22 conversations with the State of 22 Q. Other than the conversations
Page 87 Page 89
1 California and JPMorgan Chase. 1 that you already testified about between
2 Q. I would like to go back to the 2 JPMorgan and Chain Bridge Bank, JPMorgan
3 conversations with Chain Bridge Bank 3 and representatives of the State of
4 following the issuance of the recall 4 California, JPMorgan and representatives
5 request. 5 of the California Highway Patrol, did
6 I think you referenced two 6 JPMorgan have any other conversations
7 conversations that JPMorgan had with 7 concerning this transaction with anyone
8 Chain Bridge Bank officials following the 8 outside of JPMorgan on March 26th, 2020?
9 issuance of the recall request on March 9 A. Not that I am aware of.
10 26th, 2020; am I correct? 10 MR. GUSSMAN: I think now is a
11 A Yes. 11 good time for a break.
12 Q. Who participated on the first 12 THE VIDEOGRAPHER: The time is
13 communication or conversation with Chair 13 approximately 11 :45 a.m., we are going
14 Bridge Bank following the recall request? 14 off the record.
15 A Tim Coffey. 15 (Off the record.)
16 Q. And do you know with whom Tim 16 THE VIDEOGRAPHER: The time is
17 Coffey spoke? 17 approximately 11 :56 a.m., we are back
18 A It would have been David 18 on the record.
19 Evinger. 19 BY MR. GUSSMAN:
20 Q. And what specifically was 20 Q. Mr. Korpal, I would like to try
21 discussed on that call? 21 could complete the chronology of events
22 A What the status of the return 22 on March 26th to see if there is anything
23 (Pages 86 - 89)
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1 that we haven't talked about already. I 1 representatives of Chain Bridge Bank?
2 think we left off with you confirming 2 A Not that I am aware of
3 that you were not aware of any additional 3 Q. At any point prior to March
4 conversations on March 26th that 4 26th, had any additional conversations
5 representatives of JPMorgan had with 5 about this transaction with
6 people outside of JPMorgan. 6 representatives of Chain Bridge Bank?
7 I would like to ask you whether 7 A Not that I am aware of
8 you know of any additional conversations 8 Q. After March 26th, did
9 that, internally, JPMorgan had regarding 9 representatives of JPMorgan have
10 this transaction following the issuance 10 conversations about this transaction with
11 of the -- sorry, following the issuance 11 representatives of the State of
12 of the recall notice? 12 California?
13 A Following the issuance of the 13 A After the return of funds; is
14 recall notice, the only conversations 14 that correct?
15 would have been determining the status of 15 Q. After March 26th.
16 the recall and then ultimately that the 16 A Oh, okay.
17 funds had been successfully recalled and 17 Q. The funds were returned on
18 credited to the State of California's 18 March 26th, correct?
19 account. 19 A Yes, sorry.
20 Q. Prior to JPMorgan's issuance of 20 Not that I am aware of
21 the recall notice, did JPMorgan conduct 21 Q. Were there conversations after
22 any diligence on Chain Bridge Bank? 22 the return of funds but still on March
Page 91 Page 93
1 A Those were the requests that I 1 26th that JPMorgan had with the State of
2 had to the sanctions team and the 2 California that we have not talked about?
3 compliance team using tools that they had 3 A. There would have been one
4 available to them, as well as our global 4 communication that I am aware of. I am
5 security investigations team to determine 5 not sure when that actually took place.
6 if they had any intelligence from local 6 And that is with the State Treasurer's
7 law enforcement, and then my open text 7 Office who had confirmed that they were
8 search on Blue Flame Medical. 8 concerned about the due diligence of the
9 Q. My question was -- I want to 9 transaction that would have been -- that
10 make sure you were answering a question ] 10 was performed by the General Procurement
11 asked. 11 Services office.
12 My question is, prior to 12 Q. Did the State Treasurer's
13 JPMorgan's issuance of the recall notice, 13 Office explain what concerns they had
14 did JPMorgan conduct any diligence on 14 about the due diligence that had been
15 Chain Bridge Bank, not Blue Flame 15 performed?
16 Medical. 16 A. Notthatlamawareof.
17 A Oh, I'm sorry. No, not that I 17 Q. I apologize if we covered this
18 am aware of 18 somewhere before, but who at JPMorgan was
19 Q. Let's move past March 26th, 19 on that call?
20 2020. On the days that followed, did 20 A. It would have been Art Neville,
21 JPMorgan have any additional 21 who was the relationship banker for the
22 conversations about this transaction with 22 State of California, and Ana Prieto, who
24 (Pages 90 - 93)
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