Exhibit 28 — Deposition of David Evinger, Blue Flame Medical v. Chain Bridge Bank (January 29, 2021)

Summary

Exhibit 28, Document 130-28, filed May 6, 2021 in Blue Flame Medical, LLC v. Chain Bridge Bank, N.A., Civil Action No. 1:20-cv-00658, Eastern District of Virginia, Alexandria Division: the remote videoconference video-recorded deposition of David Evinger, taken January 29, 2021, with Marjorie Peters as reporter. The pages include the appearances and an index listing examination by Mr. White and Plaintiff exhibits 64 to 69. Testimony at pages 122 to 125 has Mr. White asking whether callers on recorded lines were told the calls were being recorded, and Evinger testifying to no recollection of that coming up and to not knowing the specific training provided.

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Full text

EXHIBIT 28
Case 1:20-cv-00658-LMB-IDD     Document 130-28     Filed 05/06/21     Page 1 of 21
PageID# 1697

1
2
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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
BLUE FLAME MEDICAL , LLC ,
)
Page 1
5
)
6
7
8
9
10
11
Plaintiff ,
vs.
CHAIN BRIDGE BANK, N.A.,
JOHN J . BROUGH , and DAVID
M. EVINGER,
Defendant .
CHAIN BRIDGE BANK, N.A. ,
)
Civil Action No.
)
)
1 : 20-cv-00658
)
)
(LMB/ IDD)
)
)
)
)
)
)
)
Third-Party Plaintiff ,
)
12
)
vs .
)
13
)
14
15
16
17
18
19
20
21
22
JPMORGAN CHASE BANK, N . A . ,
)
Third-Party Defendant.
)
)
REMOTE VIDEOCONFERENCE
VIDEO-RECORDED DEPOSITION OF DAVID EVINGER
Friday , January 29, 2021 , 9 : 32 a .m.
Oak Hill , Virginia
Reported By : Marjorie Peters , FAPR, RMR, CRR, RSA
Job Nwnber : 4398572
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Page4
1
RE.MOTE VIDEOCONFERENCE
1
A PP EA R A N C E S
2
VIDEO-RECORDED DEPOSITION OF DA YID EVINGER,
2 ALSO PRESENT:
3 a witness herein, called by the Plaintiff Blue Flame
3 Scott F Orman, legal videographer
4 Medical, LLC, for examination, taken pursuant to the
4 Betsey Sharon, Chain Bridge Bank
5 Notice, and by Stipulated Agreement Regarding Remote
5 Ethan Bearman, Blue Flame Medical
6 Depositions, by and before 1'.farjorie Peters, a
6 John Brough, Blue Flame Medical
7 Registered Merit Reporter, Certified Realtime
7 Gabri el Torres
8 Reporter and Notary Public in and for the
8
9 Commonwealth of Virginia, at Oak Hill, Virginia, on
9
JO Friday, January 29, 2021, at 9:32 a.m.
10
11
11
12
12
13
13
14
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15
16
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n
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Page 3
Page 5
I
A P PEA RANCES
2 For the Plaintiff Blue Flame Medical:
3
Peter H. White, Esquire
Jason T. Mitchell, Esquire
4
Gregory Ketcham-Colwill, Esquire
Keni E. Ukabiala, Esquire
5
SCHUL TE ROTH & ZABEL LLP
901 Fifteenth Street, NW, Suite 800
6
Washington, DC 20005
pete.white@srz.com
7
+I 202.729.7467
8
For the Defendant Chain Bridge Bank:
9
Gary Orscck, Esquire
10
Leslie C. Esbrook, Esquire
ROBBINS, RUSSELL, ENGLERT, ORSECK, UNTEREINER &.
11
SAUBER LLP
2000 K Street, NW
12
Washington, DC 20006
gorseck@robbinsrussell.com
I 3
lesbrook@robbinsrussell.com
202.471.3996
14
202.775.4504
15 For the Third-Party Defendant, JPMorgan Chase:
I 6 Alan Schoenfeld, Esquire
Albinas Prizgintas, Esquire
17
Margarita Botero, Esquire
WIUvIBRHALE
18
1875 Pennsylvania Avenue, NW
Washington, DC 20006
I 9
olan.schoenfeld@wilmerhole.com
+ I 212 937 7294
20
21
22
IN DE X
2 EXAMINATION
3 DA YID EVINGER
4 By Mr. White
PAGE
9
5 Acknowledgment of Deponent
31 1
6 Certificate of Reporter
312
7 Errata Sheet
313
8
IN D EX O F EX HI B I TS
9 PLAINTIFF EXHIBIT
PAGE
10 Exhibit 64
e-mail 3.25.2020,
152
11
CBB00000779
12 Exhibit 65
e-mail 3.25.2020,
221
13
CBB00002699-2700
14 Exhibit 66
e-mail 3.26.2020,
228
15
CBB00002686
16 Exhibit 67
audio recording,
247
17
CBB00000707
18 Exhibit 68
audio recording,
248
19
CBB00002543
20 Exhibit 69
audio recording,
264
21
CBB00002545
22
2 (Pages 2 - 5)
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Page 122
1
MR. ORSECK: Object to form.
2
A.
If I can answer that, I don't have -- I
3 don't have a recollection of any situatio1l
4
Q.
You say you don't have a recollection.
5 ls it that you tllink that happened at some point,
6 and you just don't recall it, or you think that
7 never happened?
8
A.
Mr. White, I don't know -- I can't say
9 it never happened, but I don't have an example for
10 you that I can point to.
11
Q.
And -- go ahead. I'm sorry. I didn't
12 mean to cut you off.
13
A.
I completed.
14
Q.
You train your persom1el, who speak on
15 recorded lines. To always tell the person on the
I 6 other side that it's being recorded; correct?
17
A.
I can't speak to the exact training that
18 our team was provided.
19
Q.
So do you think that your employees are
20 instructed not to tell people that they're being
21 recorded?
22
MR. ORSECK: Objection. Foundation.
Page 123
I
A.
I would say our employees are provided
2 training on how to use their phone systems,
3 including ilieir recorded lines. But I don't have
4 any specific -
5
Q.
I'm sorry. Go ahead.
6
A.
I don't have -- I don't know the
7 training specificaUy that they're provided, but I
8 do -- I do - t11ey were provided instructions on how
9 to use t11eir phone system.
10
Q.
And part of the standard instruction is
11 when you're speaking on recorded line is to Jet the
12 party on the other side know that you are speaking
13 on a recorded line according to Chain Bridge policy;
14 correct?
15
A.
I don't know that we have a policy
16 related to - to tliat, but I --
17
Q.
Have you finished?
18
A.
Yes, sir.
19
Q.
Did anyone let the people from the State
20 of California, that you ask Mr. Brough spoke with,
21 know that the call was being recorded?
22
A.
I don't -- I don't recall that coming
Page 124
1 up.
2
Q.
You've looked at the transcript. It's
3 not on iliere, is it?
4
A.
I did not see it on t11e transcript.
5
Q.
There's notlling that happened on the
6 caJI that wasn't in the transcript; correct?
7
MR. ORSECK: Object to fom1.
8
A.
I think the transcript's materially
9 complete. I don't know, again, you know, whether it
10 was all transcnbed. We have turned over what we
11 had, and the transcript was provided.
12
Q.
Did you or Mr. Brough Jet JPMorgan know
13 that the call was being recorded when you called
14 them?
15
A.
I don't recall that corning up. Again, I
16 was focused on the call itself.
17
Q.
Do you know whether or not it's legal to
18 have a one-party recorded conversation without
19 consent with somebody from California?
20
MR. ORSECK: Object to form.
21
A.
I believe Virginia is a one-party state,
22 but I don't know California's specific rules, and I
Page 125
I don't know where -- you know, where --with respect
2 to JPMorgan, where they were residing at the time.
3
Q.
Why didn't you or Mr. Brough Jet the
4 JPMorgan people know that you were recording the
5 call witll them?
6
MR. ORSECK: Object to form.
7
A.
I can't answer for Mr. Brough, but I --
8 again, I was focused on tlle call itself, and the
9 content, and trying to discuss what we needed to for
10 our investigation.
11
Q.
Why didn't you Jet t11e people from ilie
12 State of California know that the call was being
13 recorded?
14
A.
Again, I was trying to conduct the
15 business we bad, and I was -- again, I -- at ilie
16 time, necessarily -- not necessarily aware we were
17 recording the call.
18
Q.
Again, I take it the san1e answer for
19 JPMorgan. I can restate the question, if you
20 prefer.
21
Let me just do it this way: Why
22 didn't you let JPMorgan know that the calls with
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Page 126
1 them were being recorded?
2
A.
I don't know, Mr. White. I don't have a
3 recollection of that component of it, but we were
4 focuse.d on our discussion -- I was focused on the
5 discussions wilh JPMorgan, so I don't have a why or
6 why not we did or didn't do that.
7
Q.
To your knowledge, there was no part of
8 those conversations that was not recorded; is that
9 right?
10
MR ORSECK: Object to fom1.
11
A.
I can't say with specificity, because I
12 didn't -you know, again, I was the one that
13 dealing with the call from my office. It was from
14 my office, and I think I couldn't state that -- the
15 question that - I can't answer.
16
I think the majority of those calls
17 are there, but if you're asking me is the full call,
18 I don't -- I don't remember any material pieces that
19 are not included, but I think we turned over
20 everything that was required of us.
21
Q.
But you don't recall Mr. Brough asking
22 for pem1ission or stating his intent to record the
Page 127
1 call before beginning the recording of the call; is
2 that correct?
3
A
ldon't.
4
l\1R. \VHJTE: Okay. I note that it's
5 about 12:30, Mr. Evinger. I want to be sensitive to
6 your need for breaks and to eat and so ou during the
7 day.
8
I defer to you and counsel as to
9 when an appropriate time for that is. I'm happy to
10 keep going.
11
THE WITNESS: I would be fine with
12 taking a break now. 111at would be good.
13
l\1R. \VHJTE: Okay. Should we take a
14 lunch break? How long would you like, Mr. Evinger?
15
THE WITNESS: 1:15?
16
17 you.
18
l\1R. \VHJTE: 1: 15 is fine. Thank
THE VIDEOGRAPHER: Stand by. We're
19 going off the record. 111e time is 12:33 p.m.
20 (RECESS, 12:33 p.m. - 1:17 p.m.)
21
THE VIDEOGRAPHER: We're back ou the
22 record. The time is l : 17 p.m.
Page 128
1 BY N1R. WHITE:
2
Q.
Thank you.
3
Mr. Evinger, I'd like to focus your
4 attention on March 25, 2020.
5
Do you recall that as the date that
6 the Blue Flame Medical account was opened?
7
A.
Yes.
8
Q.
Okay. Do you recall whether you were at
9 the bank that day in person?
10
A.
I was working from the bank main office,
I I yes.
12
Q.
Was anyone else working from the bank at
13 that time?
14
A.
Yes. Our banking staff:
15 Heather Schoeppe, Mariano Castagnello and
16 Angeli Nanali, I think is the last name. Pardon me.
17 I don't have her last name perfectly articulated.
18
Q.
Was Mr. Brough there at any time on
19 March 25, 2020, in person?
20
A.
No, he was not. No, he was working from
21 home that day.
22
Q.
Obviously, tliis is post-pandemic, so I
Page 129
I assume that was not your nom1al pre-pandemic
2 staffing levels at the bank; is that right?
3
A.
That's correct. We made a change to our
4 protocols mid-March.
5
Q.
How did you become aware that Mr. Gula
6 had opened an account that day for Blue Flame
7 Medical?
8
A.
Through Heather Schoeppe.
9
Q.
What did she tell you?
10
A.
She -- it was -- we had a phone call
11 witl1 Mr. Brough. She expressed that the Blue Flame
12 Medical account had been opened earlier in the day,
13 and that she had received phone call, communication
14 with Mr. Gula, and that the account would be
15 anticipating a wire of $450 million or more.
16
Q.
So you were not aware of that account
17 opening until that phone call from Mr. Schoeppe --
18 Ms. Schoeppe?
19
A.
So earlier in the day, Heather Schoeppe
20 alerted me to a client that wanted to open an
21 account with us in person. And Heather was
22 concerned about COVID, our protocols at that time.
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Page 130
I
We had just moved them. We weren't
2 allowing clients in the banking office, and she said
3 there's a client that would like to open an account
4 in person, and I said, well, Heather, you know, do
5 your best to accommodate them, but I don't want you
6 to do anything you don't feel comfortable doing.
7
And she said, well, okay, this
8 person is persistent about opening it up. I said,
9 well, I mean, who are we talking? She told me it
10 was Mike Gula, and I just said, well, okay, he has
11 been a client of the bank. Go ahead and open up an
12 account.
13
There was no discussion about
14 anything else. Heather was actually not the person
15 who opened the account at that time, and I went
16 about my day.
17
Q.
Okay. Did she tell you what the
18 business was tliat it was being opened for, or did
19 tliat come up later?
20
A.
It came up later.
21
Q.
By tl1e time you had this, I guess what
22 would be second conversation with -- am I
Page 131
l pronouncing it right, Schoeppe?
2
A.
Yes. It's Schoeppe. That's correct.
3
Q.
At the time you had the second
4 conversation with Ms. Schoeppe, tl1e Blue Flame
Page 132
I person. That was the only frustnition.
2
Q.
Did Mr. Gula fail to provide any
3 information that was requested by the bank, to your
4 knowledge, in connection with opening the account?
5
A.
Witl1 respect lo the account opening, he
6 provided a sufficient amount to get our account
7 documents prepared.
8
Q.
Was there anything --
9
A.
I don't recall --
10
Q.
I'm sorry. I spoke over you there,
11 Mr. Evinger.
12
Was there anything in terms of
13 account's opening that he was asked to provide that
14 he did not provide to your knowledge?
15
A.
I don't know what he was asked to
16 provide by the account opening -- the personal
17 banker, Mariano, but the account was opened up on
18 the system, so I would take tliat he provided
19 infom1ation that led to the account opening.
20
Q.
So you would take from that that he had
21 provided information sufficient to open the account,
22 by the fact that it was opened by your personnel;
Page 133
1 correct?
2
A.
I would characterize that he gave us the
3 basic elements to open the account.
4
But I do -- I wasn't part of the
5 Medical account was already opened; is that correct?
5 process, so rm - I'm - our team would conduct
6
A.
Yes. It had been opened.
6 their job as they're trained to do, and they would
7
Q.
Other than this conversation with
7 process that according to our - our standards.
8 Ms. Schoeppe about Mr. Gula wanting to come to the 8
Q.
You don't have any reason to think they
9 bank to open it in person, did you have any otlier
9 did not do their job properly, did you?
10 involvement in the Blue Flan1e Medical account
l 0
A.
I don't know if they did anything other
11 opening process?
12
A.
I did not -- did not have any
13 im1olvement in the account opening.
14
Q.
So you didn't liave any role in
15 overseeing collection of information regarding the
16 account at that point?
17
A.
No.
18
Q.
Were you aware of any problems in
19 connection with the account's opening process?
20
A.
Not before the phone call. Notlling came
11 than what they were supposed to do, but I wasn't --
12 I wasn't present at the account opening.
13
Q.
Okay. So the first you became aware
14 that there was potentially a large wire coming in
15 was the conversation you had with Ms. Schoeppe later
16 in the day that you had testified about; is that
17 right?
18
A.
Approximately 4:30.
19
Q.
Tell me about that conversation.
20
A.
Heather reached out to John, and I was
21 to my attention after the conversation with Heather
21 patched into the phone call for conveniences, and
22 about the client wanting to open the account in
22 Heather described that the account was opened up
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l earlier in the day, that, you know, the client,
2 Mr. Gula, was persistent throughout the day about
3 this wire transfer that he was expecting in.
4
It was a large swn of money, 450
Page 134
5 million. Timt was new infonnation for Heather. She
6 immediately wanted to convey that to us, John Brough
7 and myself.
8
She said that the business would be
9 engaging in buying N95 masks and receiving a
10 contract wilh the State of California, and we would
11 anticipate funds of $450 million or so.
12
She thought that was ve1y large
13 amount of money, and she wanted to alert us. She
14 was - appeared to be caught off guard herself, and
15 brought John and I into the conversation.
16
Q.
What was your reaction to finding out
17 that they were expecting a wire transfer at that
18 level?
19
A.
Well, it's a highly unusual event for a
20 new business to receive such a large contract, so --
21 and that amount in and of itself is a very large
22 amount of money for any business. So, you know, it
Page 135
I warranted attention by John and I -- and me. Sorry.
2
Q.
That's quite appropriate.
3
So when you first learned about it,
4 were you concerned about the bank's ability to
5 process a wire transfer of that size?
6
MR. ORSECK: Object to form.
7
A.
I guess I would characterize it that we
8 always have to be mindful of our controls in any
9 situation. We want to make sure that we understand
10 the account, the business, the nature of the funds,
11 nature of the business, how we can seJVe that
12 client; what are the proceeds going to be used for,
13 how long will they be with the bank.
14
So that prompted, you know, us to
15 look into it further.
16
Q.
I take it that increased deposits at the
17 bank also increased the bank's ability to make money
18 from those deposits, as a general rule; isn't that
19 right in?
20
A.
We invest our deposits into various
21 assets, yes, and they lead to a return. I mean,
22 that's -- we are a for-profit business, so anything
Page 136
I we take on, we look to make sure we ca1mot only
2 serve the client, but also provide an adequate
3 return.
4
Q.
By the way, who are the owners of
5 business?
6
A.
Again, Chain Bridge Bank is owned by its
7 holding company, Chain Bridge Bancorp, Inc.
8
We have shareholders at the --
9 individual shareholders at the holding~ompany
10 level.
I I
Q.
Who are the largest shareholders?
12
A.
The Fitzgerald family, which is a broad
13 tenn, but our chainnan, Peter Fitzgerald, and his
14 family own approximately, collectively, 48 percent
15 of the bank -- holding company -- bank holding
16 company.
17
Q.
Who are the next largest shareholders
18 after the Fitzgerald family?
19
A.
We have several board members who own
20 large stakes in the bank. By that, I would define
21 as somewhere between 2 to 5 percent of the holding
22 company.
Page 137
I
Q.
Who are the board members that hold 2 to
2 5 percent of the holding company's stock?
3
A.
Think for a second -- pardon me, I want
4 to make sure I go down my roster.
5
Phillip Herrick -- Herrick is one.
6
Q.
Spell that last name for me, please.
7
A.
H-E-R-R-1-C-K.
8
Q.
Thank you. Go ahead.
9
A.
Paul Schiffman.
10
Q.
Any others?
11
A.
I'm trying to think.
12
Paul Leavitt, L-E-A-V-1-T-T.
13
Just to clarify, when I provide with
14 you their ownership, it may include several forms of
15 ownership that they control, not necessarily
16 individually, but they have controlling interest
17 over.
18
Q.
Understood.
19
Are any of those folks fom1er
20 elected officials: Mr. Herrick, Mr. Schiffman or
21 Mr. Leavitt?
22
A.
Not to my knowledge.
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Page 182
1 We're used to managing monies that come in.
2
This was an unusually large amount
3 of money for any financial institution. So it
4 warranted additional review, in our -- in my
5 assessmenL
6
So we just need to make sure -- we
7 are usually liquid and have -- have funds, so it's
8 not uncommon for us to deal with this issue. One of
9 the ways we deal with it is tltrough tools like CDARS
10 and res.
I I
I think the -- the discussion
12 initially on this call was about that, as to provide
13 the -- to ready, I guess, or to examine those tools
14 to help place money in -- in those alternatives.
15
Q.
I'm going to try this one more time,
16 Mr. Evinger.
17
None of that addresses the balance
18 sheet aspect of it.
19
I'm trying to understand why
20 Mr. Brough, if you know, was concerned that you
1
2
MR. ORSECK: Object to fonn.
A.
So with respect to the size of the
Page 184
3 deposit or the relationship itself? I want to be
4 clear. We were able to handle the deposit amount
5 through our balance sheet or alternative sources.
6 But I'm not -- I don't know enough specifics about
7 anything else to commenL
8
You're just referring to the money
9 itself. That's one thing.
10
Q.
From your perspective, the an1ount of
I I money did not create a problem for the bank, from a
12 balance sheet perspective in tenns of executing this
13 transaction; do I have that correct?
14
MR. ORSECK: Same objection. I
15 think this has probably been asked a dozen times
16 now, but you can still answer it.
17
MR. WHITE: That would be the first,
18 but let's try.
19
A.
Well, I think I'm trying to convey where
20 we are just with this limited amount of infonnation.
21 could not hold that money on your balance sheet, and 21 You're -- this is a very unusual size, and it
22 that there was a problem from the balance sheet
22 warranted us to have more infom1ation and
Page 183
I being so flush with money at this time.
2
Do you know what he meant?
3
MR. ORSECK: Objection. Foundation.
Page 185
1 discussion.
2
But from a -- from a balance sheet
3 perspective, you asked were we awash in cash, I
4 Mischaracterizes the phone call.
4 guess is what -- what the term is, or money was --
5
A.
Yeah, I -- I -- I don't know. Again, I
5
Q.
I'm sorry. Just, Mr. Evinger --
6 don't want to assume what he was thinking at the
6
A.
Awash in cash.
7 tin1e. I think he, like we all were, were early on
7
Q.
"Flush with money" is the actual quote.
8 into tllis discovery and trying to evaluate it.
8
A.
"Flush with money."
9 That's where I think -- I would take away from it.
9
So, you know, money -- money was
10 That's where I was. I was trying to exan1ine and
10 flowing into our bank's balance sheet for a variety
11 evaluate, you know, it's a new account with this
11 of reasons as I pointed out.
12 large sum of money.
12
We just needed to see vis-?-vis
13
Q.
But from your perspective, there was no
13 where this deposit fits into the balance sheet. We
14 problem from a bank balance sheet perspective from
14 don't have the -- that wasn't -- that wasn't
15 taking this transaction; is that correct?
15 examined at that point, but...
16
A.
At the time, we had the capital 10
16
MR. ORSECK: I don't know if you are
17 support holding it based -- based on what was
18 conveyed to us.
19
Q.
So -- so there wasn't a problem, from
20 your perspective, from a bank balance sheet
21 perspective to doing this transaction at that time;
22 correct?
17 staying on this point in this phone call, but we
18 have been going about an hour-and-a-half, I think,
19 so at a good breaking point, let's take a short
20 bathroom break.
21
MR. WHITE: Gal)', I have a couple
22 more questions about the phone call, not here. I'm
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1 fine with stopping now or just going to those. I'm
2 moving off this topic. Up to you.
3
.MR. ORSECK: Okay. Let's just take
4 a very short break, then, if you're done with th.is
5 topic.
6
THE VIDEOGRAPHER: We're going off
7 the record. The time is 2:47 p.m.
8 (RECESS, 2:47 p.m. - 3:00 p.m.)
9
THE VIDEOGRAPHER: We are back on
10 the record. The time is 3:00 p.m.
I I BY MR. WHITE:
12
Q.
Mr. Evinger, I'd like to play you a
13 piece from later in the same conversation.
14
MR. WHI1E: Could you go ahead and
15 queue that up. For the record, it's from the
16 to 9:15 mark.
17 (Audio recording playing.)
18
Q.
Mr. Evinger, in that piece there, was it
19 you or Mr. Brough that had the longer piece of the
20 conversation that we just listened to?
21
A.
Mr. White, I was the one that had the
22 longer piece.
Page 187
1
Q.
So the "interesting; that's
2 unbelievable; Mike Gula being a very
3 entrepreneurial" - "entrepreneurial guy"; that's
4 your voice?
5
A.
Yes, it is.
6
MR. ORSECK: I'd just like to note
7 for the record that the portion we just heard, I
8 believe, jumped several minutes ahead from the
9 portion we heard prior to that So that tlris is
10 omitting a portion of the phone conversation.
11
.MR. WHI1E: Thank you.
12
Q.
When you said that the header data is
13 going to be really important to see, what did you
14 mean by that?
15
A.
So where the wire was coming from, was
16 it trnly, in fact, going to be from the State of
17 California sending the money, or was it another --
18 for whatever reason, any other entity, intern1ediary
19 sending the money.
20
Q.
The money did actually come from the
21 State of California the next day; isn't that right?
22
A.
It did come in from the State of
Page 188
1 California.
2
Q.
And the header data that you were
3 talking about here did indicate it was from the
4 State of California; correct?
5
A.
The wire came from the State of
6 California.
7
Q.
Mr. Brough mentioned that we should call
8 Peter; is that a reference to Peter Fitzgerald, the
9 chainnan?
10
A.
I I yes.
That is a reference to Peter Fitzgerald,
12
Q.
He also said maybe we should engage an
13 attorney about this.
14
Did the bank engage an attorney
15 about this transaction at this point?
I 6
A.
No. We did not engage outside counsel
17 at this point.
18
Q.
Do you know why Mr. Brough suggested
19 that perhaps you should engage an attorney at this
20 point?
21
MR. ORSECK: Object to form.
22
A.
I don't know why he said -- what I would
Page 189
1 take it as a norn1al thought to have, given all of
2 the things that were conveyed to us.
3
Q.
Did you have a phone conversation with
4 Mr. Gula after tlris conversation witl1 Ms. Schoeppe
5 and Mr. Brough?
6
A.
Yes, we did.
7
Q.
8
A.
Who was a party to that conversation?
Jolm Brough, myself, Mike Gula and
9 Brent Case, I believe is the name.
10
Q.
An attorney friend of Mr. Gula's was on
11 the phone as well; is that right?
12
A.
That is correct.
13
Q.
Did that phone call come inm1ediately
14 after this conversation that we just listened to?
15
A.
C.ame very shortly after it. I don't
16 know the exact time at which tliat started, but it
17 was the next -- next tiring we did, I guess, is we
18 made outreach to Mike Gula.
19
Q.
Does Chain Bridge Bank normally call
20 customers who are expecting large wire transfers?
21
A.
We would when the circumstances warrant
22 it. Given that this was a new account, the
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l circumstances certainly warranted it, along with the
very large size of the money that was coming in.
2
3
Q.
The records we have seen, Mr. Evinger,
4 indicate that this conversation lasted about 19
5 minutes.
6
Does that accord with your
7 recollection of the length of the conversation that
8 you and Mr. Brough had with Mr. Gula and Mr. Case?
9
A.
Yes, that does.
10
Q.
Did Mr. Gula tell you about Blue Flame
11 Medical during that conversation?
12
A.
He provided us with a brief overview of
13 Blue Flame Medical, and its intended new business.
14
Q.
I take it he told you as well about the
15 contract to supply 100 million N95 masks to the
16 State of California; correct?
17
A.
He reviewed the contract with the State
18 of California with us, and gave us an overview.
19
Q.
I take it he also told you or confin.ned,
20 because you had already heard it, that Blue Flame
21 was expecting a wire for over $450 million either
22 that day or the following day from the State of
Page 191
1 California; is that right?
2
MR. ORSECK: Object to form.
3
A.
Mr. Gula was asking us on the call
4 several times whether the wire had arrived yet or
5 not. He had -- he has wanted to know if it had hit
6 our wire room on our call, and asked if we could
7 check.
8
Q.
Did you all check during the call?
9
A.
I do recall checking, and I e-mailed him
10 back. Whether it was during the call or shortly
11 thereafter -- I know we did it after. But I'm not
12 sure if we did it during the call because we were
13 talking to him, but he wanted us to verify whether
14 the wire had already arrived or not
15
Q.
He disclosed to you the amount of the
16 wire that he was expecting; is that correct?
17
A.
Yes. He told us it was going to be for
18 $450 million, approximately, and it was a down
19 payment towards a larger amount -- contract that
20 they had with the state.
21
Q.
Do you recall him telling you that the
22 manufacturer of the masks -- one of the
Page 192
l manufacturers was a Chinese company called Great
2 Health Companion?
3
Do you recall that coming up during
4 the call?
5
A.
He spoke about a company. I believe
6 that was correct. Great Health - Greater Health.
7 I believe he referenced that.
8
Q.
And that they were going to be
9 manufacturing the masks in China; is that correct?
IO
A.
Yes. The masks would be manufactured in
11 China.
12
Q.
Did he also tell you the name of the
13 company that was -- that was the owner of
14 Great Health Companion, Hakim Unique -- I am sorry,
15 Hakim Unique Internet Company?
16
Did he tell you that?
17
A.
I seem to recall that, yes. And it was
18 hard to understand what it - what the name was on
19 the call or to spell it, but that sounds like
20 something - yes, U1at som1ds as if U1at was said.
21
Q.
And he told you that Blue Flame was
22 going to use the funds wired by California to pay
Page 193
I the suppliers of the masks for California's order;
2 isn't that right?
3
A.
He gave us rough -- rough details. He
4 was not specific with amounts or -- or dates or
5 times. It was general -- generalizations were
6 provided.
7
Q.
Did he confim1, as you had heard before,
8 that Blue Flame would not be wiring all of the funds
9 that were wired to it out of the account at
10 Chain Bridge Bank?
11
Do you recall him saying that?
12
A.
I don't -- I don't -- I don't remember
13 exactly it said that way, but it can1e across is that
14 there would be money moving out within several day
15 or sooner, for purchases of personal protective
16 equipment.
17
He was not able to provide us with
18 exact information of that or the timing or the
19 dollar amounts of those outgoing at that point of
20 the call.
21
So I don't know how much would be
22 remaining in the account, if you will.
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2
Page 198
Q.
You can answer.
A.
Those weren't done using -- using my
3 phone.
4
Q.
Whose phone was used for those?
5
A.
Mr. Brough's cell phone.
6
Q.
Were the calls placed on Mr. Brough's
7 cell phone?
8
A.
Which call -- which call specifically
9 are you referring to, Mr. White?
10
Q.
You mentioned three recorded calls that
I I were recorded on Mr. Brough's cell phone. What I
12 want to know is whose phone was used to make those
13 calls?
14
MR. ORSECK: Object to forn1.
15
A.
I -- I made outbound calls from my desk
16 phone.
17
Q.
18
A.
Just like -- I'm sorry. Go ahead.
His call - the call in question with
19 Mr. Gula was made outbound from my desk.
20
Q.
The other calls that were --
21
A.
Mr. Brough--
22
Q.
Go ahead. Sorry.
1
A.
Can I finish?
2
Q.
Sony.
Page 199
3
A.
Mr. Brough was on his -- I dialed him on
4 his cell phone.
5
Q.
Finished?
6
A.
Yes.
7
Q.
So there was -- there were calls made
8 from your office phone, as this one was, that were
9 recorded, in relation to this transaction; isn't
10 that right?
11
A.
Those recordings were not done using my
12 phone, but there were recordings made of calls from
13 my office.
14
Q.
The calls that were recorded were from
15 the same phone you used to make this call with
16 Mr. Gula; correct?
17
A.
Yes. And the same -- I called from my
18 office, my desk phone.
19
Q.
But that device that's probably to your
20 left right now was used for those calls and this
21 call with Mr. Gula; correct?
22
MR. ORSECK: Object to forn1.
Page 200
1
A.
I was in my office -- I'm not in my
2 current office right now, just for clarity, and for
3 the record. I'm in a different office that has -- a
4 little quieter, but calls that were made were all
5 made from -- from my office phone out
6
Q.
Was your concern here for your customer,
7 Mr. Gula, to make sure that he was not the victim of
8 something untoward?
9
A.
That was certainly a concern, and it
10 needed to be vetted.
I I
Q.
But as a matter of fact, you found out
12 from vetting it that the State of California did --
13 had, in fact, vetted Blue Flame Medical. It did, in
14 fact, intend to send them over $450 million;
15 correct?
16
MR. ORSECK: Object to fonn.
17 Foundation.
18
A.
Mr. White, I think where the concern
19 can1e in is that Mr. Gula didn't have a lot of
20 specifics on how this contract were procured. He
21 mentioned his business partner, Mr. Thomas. But he
22 really couldn't offer much detail on how the
Page 201
1 contract came about and/or how the
2 vendor/manufacturing process was going to work with
3 respect to delivery.
4
So with that, we still had more
5 unanswered questions in terms of -- you know, we
6 actually asked him, I think, are you -- are you
7 sure, or conversation arotmd are you, you know --
8 how well do you know these people?
9
He made reference to, what he
10 knew - I think it was Mr. Wong - Herny Huang. I'm
11 sony if I pronounced the name wrong. But that's a
12 name that kind of crone up, I believe, in the call.
13
And that they knew him, and they
14 trusted him, and we kind of probed, but he was
15 wiable to really fulfill and provide any -- any
16 pe1iinent details on his vendor, his supplier.
17
Q.
Well, it turned out, Mr. Evinger, that
18 the State of California was satisfied enough with
19 their diligence as to Blue Flame Medical because
20 they sent $456 million to your bank for that
21 account, the very next day; isn't that right?
22
MR. ORSECK: Objection to the
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Page 202
l testimony by counsel, and foundation.
2
Q.
You can answer.
3
A.
I don't know what process was conducted
4 at the State of California. I only know we had more
5 work to do, more m1answered questions. We needed to
6 get documentation for us to support this.
7
At this point, we haven't received
8 any. We were verbally requesting it. There was a
9 acceptance from Mr. Gula to provide documentation.
l O
Q.
What was it that you verbally requested?
11
A.
We asked to see the copies of these
12 contracts, and that would be reference to the State
13 of California, and also his manufacturer.
14
Q.
I know you followed up with Mr. Gula
15 about some other documentation by e-mail.
16
Did you fol.low one about this
17 document that you supposedly requested during that
18 non-recorded call by e-mail as well?
19
MR. ORSECK: Object to fonn.
20
Q.
You can answer.
21
A.
The e-mail that was a follow-up to our
22 conversation, and it just reminded him to send us
Page 203
Page 204
MR. WHITE: I think you have to hit
2 the refresh button to get the new one to show up.
3
MR. ORSECK: Right. Thank you.
4
A.
Mr. White, I'm going to go ahead and
5 read it and refresh my memory on this.
6
Q.
Sure. That's fine, Mr. Evinger. For
7 reference, everything after the top two-thirds of
8 the first page is something we've already looked at,
9 but you're welcome to refresh your recollection.
10
A.
Okay.
I I
Q.
Have you reviewed it, Mr. Evinger?
12
A.
Yes, I have.
13
Q.
The second e-mail down is from
14 Mr. Brough indicating that you and he had spoken to
15 Mike Gula; do you see where I am?
16
A.
Yes, I do.
17
Q.
Mr. Brough writes, "We called Peter to
18 bring him up to speed. Peter also thinks it's a
19 scam."
Is that Peter Fitzgerald?
A.
That is Peter Fitzgerald.
20
21
22
Q.
What scam did Peter Fitzgerald think it
Page 205
1 the contracts for us. So we did follow up with that
I was?
2 request. That was shortly after we got off the
3 phone with him.
4
MR. WHITE: Can you go to Tab 3,
5 please. This is March 25 e-mail, BFM13445.
6
I'm sorry, Greg. That's -- in the
7 interest of time, let's skip that and go to what is
8 our Tab 4, March 25 e-mail from Ms. Schoeppe to
9 Mr. Brough with Mr. Evinger copied.
10
I think it's already Plaintiffs
11 Exhibit 17.
12
MR. COLWILL: Yes.
13 (Previously marked Plaintiff Exhibit 17, e-mail
14 3.25.2020, CBB00000761-63, was presented.)
15 BYN1R. WHITE:
16
Q.
Mr. Evinger, you should be able to see
17 that now.
18
A.
I'm in the folder. I see it. It's
19 Exhibit 17?
20
Q.
Correct.
21
MR. ORSECK: Sorry. Mine's still
22 just showing the same Exhibit 46.
2
MR. ORSECK: Objection. Foundation.
3
A.
Mr. White, I don't know what Peter was
4 thinking about that. I would sunnise that, you
5 know, we all sort of had unanswered questions.
6
MR. ORSECK: No, no, no, no. Don't
7 sumtise. The question is do you know. So you need
8 to testify to your own knowledge.
9
A.
Pardon me.
10
MR. WHITE: Allow him to finish his
11 answer.
12
Q.
Go ahead, Mr. Evinger. Go ahead.
13 Finish your --
14
A.
I don't know what Peter Fitzgerald meant
15 by it was a scam.
16
Q.
You were part of the conversation with
17 Mr. Fitzgerald; correct?
18
A.
I was on the phone with him, yes.
19
Q.
Did he -- is Mr. Brough correct here,
20 that Mr. Fitzgerald said he thought it was a scam?
21
A.
I think there were -- all of us bad
22 unanswered questions, and I think all ofus were
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Page 208
1 wondering what was transpiring. We didn't have any
1 certainly has elements of -- that there are red
2 validation or documentation to support this, so
2 flags that still needed to, you know, be cleared.
3 we -- we have seen clients of ours get put into
3
Is it a scam? I don't know that --
4 compromised situations, and you know, tl1at --
4 I didn't use tl1at word, but we certainly, you know,
5 it's -- it would just seem with this size
5 were concerned about this not going well for -- for
6 transaction, and the relevant lack of experience for
6 either party.
7 selling these products that it could -- it could be
7
Q.
Well, it certainly didn't end up going
8 something that didn't pan out.
8 well for either party; isn't that correct?
9
Q.
Did Peters Fitzgerald tell you during
9
A.
I guess that's your -- your side of it.
10 your conversation that he thought this was a scan1?
10 I -- we didn't have the documentation to -- to
I I
A.
I don't recall that specifically, but
I I confim1 that there was a cont.ract with California,
12 you can --you can read the e-mail for yourself. I
12 tliat there were vendors tliat were sufficient to
13 know -- I know that we all had unanswered questions 13 provide delivery of these contracts.
14 and there was more work to be done.
14
So we were still left with a lot of
15
Q.
Did you get the impression tl1at
15 unanswered questions and a lot of red flags tl1at
16 Mr. Fitzgerald thought it was a scam during your
16 remained.
17 conversation, as Mr. Brough indicates here?
17
Q.
Isn't California's approval of a wire of
18
Did you share that impression?
18 $450 million enough to prove to you as bankers that
19
A.
I don't know that I shared that
19 they did indeed have a cont.ract with Blue Flame
20 impression. My impression was tl1at we were trying 20 Medical?
21 to understand the overall contract with California,
21
MR. ORSECK: Object to fonn.
22 the movements of money, the suppliers, and we were 22
A .
I don't know what approval process or
Page 207
1 trying to obtain the necessary information to make a
2 good, infom1ed decision, so ...
3
Q.
Mr. Brough is stating here tl1at he
4 thought it was a scam.
5
Did you agree?
6
MR. ORSECK: You mean that Mr. --
7 that Peter thought it was a scam; right?
8
MR. WHITE: No. That's not what I
9 said.
10
MR. ORSECK: Okay.
11 BY MR. WHITE:
12
Q.
Did you agree with Mr. Brough that this
13 was a scam?
14
15
16
MR. ORSECK: Okay. Sorry.
Objection. Foundation.
A.
I don't -- I don't know. With respect
Page 209
1 due diligence California did. That was the stage,
2 and I can't answer for California.
3
Q.
As a matter of fact, tl1eir approval
4 process is none of your business, is it?
5
MR. ORSECK: Object to fom1.
6 Foundation.
7
A.
I don't -- witll respect to understanding
8 our client, I would want to make sure tliat iliey had
9 done their due diligence, and they were co1nfortable
10 proceeding in this size transaction.
11
Q.
Again, clearly, iliey were because tlley
12 transferred the money; correct?
13
MR. ORSECK: Objection to the
14 argumentative non-question.
15
Q.
You can answer.
16
A.
I don't know that we -- I don't know
17 to Mr. Brough here, he obviously -- you know, I'm 011 17 tliat we had sufficient infonuation to detennine
18 this e-mail, and he's alerting Heather to what took
18 that, and certainly not at this stage.
19 place, but we were still trying to give an
19
Q.
They did, in fact, wire tlle money,
20 opportunity for our client to provide us with
20 didn't tlley?
21 infomiation to rule that out.
21
A.
The money was wired the next day on --
22
If we don't have infomiation, it
22
Q.
The exact amount that Mr. Gula told you
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l
Do I have that right?
2
A
That's correct.
3
Q.
Which one was first?
4
A
So we placed an initial phone call to
5 the Department of General Services. That was an
6 initial outreach shortly after receiving the wire.
7 111ere was really no conunwucation with that call.
8
Q.
What was the purpose of that call?
9
A
We wanted to confirm that they, being
l O California, intended to order or have a contract for
11 $450 million with Blue Flame Medical.
12
Q.
Did they confirm that?
13
A
Well, Mr. White, our itutial call was
Page 246
14 simply to leave our name and number and who we were,
15 to return our call. We didn't speak to anyone with
16 any -- any specificity.
17
!\flt WHITE: I'm going to load up
18 Tab 16, Greg. It's a transcript of a -- I believe
19 it's a voicemail that we received in discovery,
20 although I'll ask you to describe what it is.
21
It would be the next sequential
22 Plaintiffs Exhibit, which is --
Page 247
Page 248
1
A.
That's what the message said, yes.
2
Q.
Then you called her back; right?
3
A.
Yes. We called back. We wanted to
4 speak with her directly.
5
MR WHI1E: If you could play Tab
6 17. This will be the next sequential exhibit
7 number.
8 (Plaintiff Exhibit 68, audio recording, CBB00002543
9 was marked for identification.)
10
MR COLWILL: 68.
I I
MR. WHITE: It's an audio recording,
12 Plaintiff's Exhibit 68.
13 (Audio recording played.)
14 BY MR. WHITE:
15
Q.
Mr. Evinger, that's your voice on that
16 call; correct?
17
A.
Yes, it is.
18
Q.
How did this call come to be recorded?
19
A.
John Brough used his cell phone.
20
Q.
Was John Brough -- were you in your
21 office when you placed this call?
22
A.
Yes, we were.
Page 249
MR. COL WILL: 67. It's an audio
1
Q.
I take it you placed the call in
2 recording.
3
MR. WHITE: Plaintiff's Exhibit 67.
4 It's what?
5
MR. COL WILL: Audio recording.
6
MR. WHITE: It's an audio recording.
7 Thank you.
8 (Plaintiff Exhibit 67, audio recording, CBB00000707
9 was marked for identification.)
10 (Audio recording played.)
11
Q.
Mr. Evinger, was that a voicemail --
12 excuse me -- left on your office line on the 26tl1 of
13 March?
14
A.
Yes.
15
Q.
This is in respo11Se to the call you made
16 to the State of California seeking confinnation
17 about the wire transfer; is that correct?
18
A.
Yes.
19
Q.
Ms. Chang -- Ms. Chang, I'm sorry,
20 co1Jfinned that the wire tra11Sfer in the specific
21 an1ount from the State of California was a legitimate
22 transfer; is that correct?
2 response to the voicemail; is that correct?
3
A.
That's right. The call was placed based
4 on the number left on the voice mail.
5
Q.
I note that the recording starts in the
6 middle of the call.
7
Do you know why that is?
8
A.
I don't know.
9
Q.
Did Mr. Brough or you let Ms. Chang know
10 that the call was being recorded?
11
A.
I don't recall that coming up, no.
12
Q.
Did Mr. Brough take out his cell phone
13 to record this call?
14
A.
I don't -- I don't remember.
15
Q.
Why did you want to talk to tl1e
16 treasurer's office?
17
A.
I think it would be appropriate for us
18 to get confirmation from the source of the payment,
19 that it was properly authorized for this amount of
20 money. It was also offered and we accepted. We
21 didn't reject it. It would ...
22
Q.
After this call, you did, in fact, have
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1 a call wit11 the California State Treasurer's Office;
2 correct?
3
A.
They did -- they did eventually call us,
4 yes.
5
Q.
That was a Mr. Mark Hariri and
6 Ms. Natalie Gonzales; is that right?
7
A.
Yes. That sounds right. I think she
8 may go by Saunders [ph]. I'm not 100 percent sure
9 of that.
10
Q.
Did they say why they were calling?
11
A.
They were following up on the request
12 for -- from the Department of General Services for
13 Ms. Chang.
14
Q.
Did they confim1 for you that the wire
15 transfer was indeed in connection with an agreement
16 with Blue Flame Medical to supply N95 masks?
17
A.
They made reference to that the state
18 was attempting to purchase N95 masks.
19
Q.
Why did you want to speak with them?
20
A.
We wanted to confinn that the wire was
21 proper -- properly authorized in their office, and
22 that the funds were intended to go to Blue Flame
Page 252
1 send the money to them; correct?
2
MR. ORSECK: Object to fom1.
3
A.
That's the -- during the discussion,
4 they were trying to figure out more information
5 about Blue Flame. We had a discussion about the
6 purpose of our call, I guess, and we wanted to make
7 sure that they were comfortable wiring in the money
8 to the account that had just been opened a few days
9 ago - or a day ago.
10
Q.
I think you just testified that they
11 said yes, that they had intended to send that money
12 into that account; isn't that correct?
13
A.
They believed they were purchasing
14 100 million N95 masks for the State of California,
15 and that was what was authorized.
16
Q.
And that they were purchasing them from
17 Blue Flame Medical; correct?
18
A.
That was the name, I believe, that they
19 used on their -- their contract or call, yes.
20
Q.
Well, certainly, that satisfied your
21 curiosity as to whether there was an agreement
22 between the State of California and Blue Flame
Page 251
Page 253
1 Medical, and they knew about the - about the
1 Medical to supply 100 million N95 masks; correct?
2 overall transaction.
2
MR. ORSECK: Object to fom1.
3
Q.
And you confinned that the funds were
3
A.
Yeah. I think I already - we didn't
4 properly authorized; correct?
5
A.
There was a discussion about that.
6
Q.
And they told you that the fund -- that
7 the transfer had been authorized to Blue Flame
8 Medical; correct?
9
A.
Tuey said that the funds were approved
10 for the purchase.
11
Q.
And that the funds were being sent to
12 Blue Flame Medical for the purchase ofN95 masks;
13 correct?
14
A.
That's what they thought they were
15 purchasing, yes.
16
Q.
And that Blue Flame Medical was the
17 intended recipient; correct?
18
A.
They referenced Blue Flame, I believe,
19 yes.
20
Q.
So they had confirmed all of the aspects
21 that you wanted confirmed; that there was an
22 agreement "~th Blue Flame Medical, and they meant to
4 have a copy of the contract. We also didn't have
5 that Blue Flan1e purchase -- actually procured this
6 from their supplier. The impression was that they
7 were buying --
8
Q.
I'm sorry. You said the impression is
9 that they were buying, but I didn't let you finish.
10 Go ahead.
11
A.
That they were -- they were acquiring --
12 purchasing 100 million N95 masks in a short delivery
13 period, within a short time. That's my
14 recollection.
15
Q.
Where did you get that recollection --
16 where did you gel that impression? Is that
17 something they told you?
18
A.
There was a lot -- they said this was a
19 special purchase that was outside their normal
20 procurement process. They had been authorized, and
21 they were purchasing this because of the pandemic.
22
So they --you know, they had a
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Page 254
1 belief that they were -- my understanding was they
2 were getting 100 -- 100 million masks delivered.
3
Q.
That's what the contract was for,
4 correct, 100 million N95 masks?
S
That's what Mr. Gula had told you it
6 was for; isn't that right?
7
A.
That's what he com1eyed to us in the
8 phone call.
9
Q.
And that's what California conveyed to
10 you as well; correct?
11
MR. ORSECK: Pete, I'm sorry, but
12 you've asked this so many times, and he's answered
13 it so many times, and it's late in the day.
14
15
So you can answer it once more.
MR. WHITE: We're going to keep
16 going until he does.
17
MR. ORSECK: He's answered it, and
18 he's answered it to your satisfaction, but you just
19 keep asking it over and over again. So I object.
20 BY tvlR. WHITE:
21
22
Q.
A.
Go ahead and answer.
Can you -- I hate to do this to you, but
Page 255
Page 256
1 research on their end and work with their bank,
2 JPMorgan, who had made outreach, apparently.
3
Q.
Ms. Gonzales recalls that during that
4 conversation, she asked whether the money -- the
S wire had been deposited into the Blue Flame Medical
6 account.
7
Do you remember her asking about
8 that?
9
A.
There was a discussion about funds, and
10 if they had -- they were in the account and had --
11 was all of the money still available or was money
12 not there.
13
And so I think tlmt she asked --
14 inquired about did we still have possession of the
IS money, and she was comforted that we had the mone,
16 and a hold on it while they and we detennined if it
17 was all in place properly.
18
Q.
She calls you saying that the money had
19 not been deposited into the Blue Flame Medical
20 account. Is her recollection on that accurate?
21
A.
Well, what I recall is we were
22 discussing Chain Bridge Bank having possession of
Page 257
I I lost my train of thought. I know you're going to
1 the money, and it was all still there.
2 tell me I already know the question, but could you
3 please repeat it again?
4
Q.
You know what, I'm not. It is late in
S the day, and Mr. Orseck has a fair point. Let's
6 move on from that.
7
During this conversation, did you
8 offer to return the wire to California?
9
A.
I don't recall it being on our first --
10 first call with California. I spoke to them. They
11 seemed a little bit unsure, and they were going
2
I guess, in my tenninology, ifl
3 said, you know, we had a hold on it, so - and the
4 availability would have been subject to our ftmds
5 availability policy.
6
So I don't know that I - I know we
7 talked about funds and whether they're still there
8 at the bank. If her impression was that -- that I
9 said no, I don't -- I don't know that I have any
10 i.nfonnation to recollect that, and I don't have -- I
11 don't have a memo1y of that specifically, but I know
12 to -- they had outreach apparently from JPMorgan, so 12 we talked about whether the ftmds were still at the
13 I think the two banks calling about the san1e
13 bank and whether we had possession of them and would
14 transaction caused them some confusion.
14 hold them during this time.
IS
They wanted to take some time and
15
But my -- my statement, I guess
16 revisit, get back to us.
16 would --
17
Q.
Did you offer to rehlfl1 the wire?
17
Q.
But -- go ahead. Go ahead.
18
A.
In part of our discussion, we proposed
18
A.
So I was going to say that if I heard
19 that we could hold the money, or we could return the 19 you correctly, she was saying the ftmds -- she --
20 money. They did not want us to return the money at
21 that stage.
22
They were continuing to conduct some
20 can you repeat the question again, I guess?
21
I lost my lraiu of thoughl
22
Q. That's fine.
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I
Is it your testimony that you did
2 not tell her that the funds had already been
3 credited to the Blue Flame Medical account?
4
MR. ORSECK: Object to fonn.
Page 258
5
A.
I don't know tlial I specifically said --
Page 260
I
MR. ORSECK: Object to fonn. Asked
2 and answered.
3
4
Q.
Youcananswer.
A.
Sony, Mr. White. I was taking a sip of
5 water.
6 again, my conversation would revolve around us
6
Q.
All right.
7 holding the funds, having control of the funds while
7
A.
So as I said, the funds were memo-posted
8 she worked to do further work with the department
8 to the client's account and then a hold placed
9 and her -- her office, JPMorgan.
9 during this process, so I think there was some
10
Q.
Her recollection is that you told her
10 confusion around that temtinology and how it was
I I that the funds had not been credited to the
I I conveyed.
12 Blue Flame account at the time of your conversation. 12
My memory was that the conversation
13
A.
I guess there's a difference in
13 was more around the bank maintaining that hold
14 temtinology.
14 while -- while they did more research.
15
MR. ORSECK: Hey. You didn't get a
15
Q.
How were the funds logistically moved
16 question yet. You didn't get a question yet.
16 out of the Blue Flame account and back to California
17
Q.
You may finish. Difference in
17 by Chain Bridge Bank?
18 tenninology about what?
18
A.
JPMorgan sent a wire recall notice over
19
MR. ORSECK: Objectto fom1.
19 Fedline.
20
A.
Going back to the conversation we had
20
Q.
Did you infonn JPMorgan that the money
21 about whether we had possession of the funds or not, 21 was in the customer's account, and not in the bank's
22 the terminology, to me, credited would mean final
22 general ledger account at the time?
Page 259
l credit versus memo post with a hold, but that was a
2 general tem1.
3
I don't know that -- I don't recall
4 the specific details of that conversation, but we
5 did talk about maintaining the funds until there was
6 further resolution on their end.
7
They agreed to do so.
8
Q.
Did you tell her at this point that the
9 funds were in the Blue Flame accollllt?
10
A.
Again, I -- I don't recall that specific
11 point. I recall a general conversation about the
12 bank having the funds and having a hold on them.
13
If that implied that they were in
14 the account, I don't have any reason -- I don't know
15 what she was thinking about. She didn't -- she
16 wasn't overly specific one way or the other about
17 it. She just wanted, I think, a -- general
18 knowledge that we -- we had still control of the
19 wire.
20
Q.
But, in fact, the funds were, in fact,
21 in the Blue Flame Medical account subject to the
22 hold that you spoke of; is that correct?
Page 261
l
A.
I don't know that that specific -- that
2 those specifics had came up. They were aware that
3 they sent the money to Chain Bridge Bank for credit
4 to Blue Flame.
5
Q.
Do you recall discussion about whether
6 to get an indemnification letter from JPMorgan in
7 connection with the return of these funds?
8
A.
Yes.
9
Q.
What do you recall about tliat?
10
A.
I think it was raised by Claudia Mojica,
11 on a phone conversation.
12
Q.
\\That would you need an indemnification
13 for?
14
A.
We didn't view there was a need for an
15 indemnification based on the recall because the
16 recall had that indemnification built in, and we
17 viewed JPMorgan, you know, as our counterparty.
18
Frequently, indemnification letters
19 are -- SOil)' . Indemnification letters can be used
20 with other parties that you don't necessarily have a
21 knowledge of or a mechanism to transact, so sort of
22 outside the nom1aJ process over Fedline.
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Page 262
Page 264
1
Q.
So it's your understanding that JPMorgan
l There were several JPMorgan calls that were. I
2 was on the hook for any liability that would accrue
2 apologize. I don't -- I don't have whether that one
3 in connection with improperly removing these funds
3 was one of them or not. But I --
4 such that you did not need an indemnification letter
5 from them regarding this transaction; is that
6 correct?
7
MR. ORSECK: Object to fom1.
8
A.
So I would characterize, by using
9 Fedline, we used the proper tools to -- to honor
10 JPMorgan's request.
I I
Q.
lf anything improper happened in that
12 regard, then JP -- JPMorgan would be required to
13 indenmify Chain Bridge Bank for it without the need
14 of an indemnification letter; isn't that correct?
15
MR. ORSECK: Object to form.
16
A.
That's my understanding with that. Part
17 of the fed.
18
Q.
Was it your suggestion to JPMorgan that
19 they recall the wire?
20
A.
I recall that I raised it as an option.
21 It was certainly not a demand for a return wire. It
22 was discussed and evaluated as an option, and the
Page 263
1 money was also an option. JPMorgan was, at a point,
2 comfortable with that.
3
Q.
When you raised it withRakesh Korpal of
4
MR. WHITE: What's the nexi
5 sequential exhibit munber?
6
MR COLWILL: 69.
7
Q.
I'm going to play for you Plainti.ft's
8 Exhibit 69, which is ru1 audio recording of a
9 March 26th phone call, which I believe to be between
10 you, Mr. Brough, and Tim Coffey of JPMorgan, on the
11 afternoon of March 26th.
12 (PlaintiffExhibit 69, audio recording, CBB00002545,
13 was marked for identification.)
14 (Audio recording played.)
15 BY MR. WHITE:
16
Q.
Is that the conversation that you were
17 referring to earlier?
18
A
Yes.
19
Q.
That's your voice, Mr. Brough's voice
20 and Tim Coffey of JPMorgan's voice; is that right?
21
A.
Yes.
22
Q.
They're taking you up on the suggestion
Page 265
1 that they issue a recall for the funds --
2
MR. ORSECK: Object to fom1.
3
Q.
-- is that correct?
4 JPMorgan, his response was that he was comfortable
4
Sorry. I was waving to someone
5 with you, meaning Chain Bridge Bank, holding the
6 money right now; isn't that correct?
7
A.
For that time being, he was.
8
Q.
How did it come to pass later that the
9 request was generated by JPMorgan to recall the
10 wire?
11
A.
We received a follow-up phone call
12 stating that the State of California would be
13 recalling -- recalling the wire, and we honored that
14 recall. They were -- they were -- the phone call
15 was they were recalling the wire.
16
Q.
Is that the phone call with Tim Coffey
17 of JPMorgan?
18
A.
I believe that's correct.
19
Q.
That call was recorded as well; isn't
20 that right?
21
A.
I don't know if that -- I can't recall
22 off the top of my head, Mr. White, what it was.
5 else, Mr. Evinger, at the door.
6
Go ahead. You can answer.
7
A.
That's not the way I characterized it.
8 JPMorgan had its own independent investigation. In
9 fact, as I understood, started before ours, and they
10 were a bit unsure, so they were going to proceed in
11 that mam1er.
12
They made their own independent
13 decision.
14
Q.
You did, in fact, get fonner -- fonnal
15 notice to recall the wire, is that right, from
16 JPMorgan?
17
A.
Yes. JPMorgan did send it.
18
Q.
Why did you or Mr. Brough ask that that
19 communication be done by Fedline?
20
A.
We viewed tl1at and understand that to be
21 the proper way to do a recall of the wire.
22
Q.
And you believe that to be proper even
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Page 278
l need for those accounts, so he understood that, but
2 he wanted to have his other accounts remain open, as
3 he was winding down his businesses.
4
Q.
I think I may have lost you for a minute
5 there, Mr. Evinger.
6
Could you -- let me just try it
7 again. I apologize if I have to repeat myself here.
8
Did you tell Mr. Gula why
9 Chain Bridge Bank was closing the Blue Flame Medical
10 accounts?
11
A.
I recall we just told him that we would
12 be closing out his accounts. We would no longer
13 conduct business, you know, with that -- those
14 entities, and he seemed to understand that. I don't
15 know lhat it was a very lengthy or detailed
16 conversation, but it was conveyed to him that the
17 Blue Flame accounts would no longer -- and I believe
18 there was another - third -- third entity involved
19 that would have been closed out.
20
He wanted to have his other accow1ts
21 remain open.
22
Q.
My question was did you tell hinl why the
Page 279
I accounts were being closed?
2
A.
Well, we said we would -- the wire --
3 following the wire recall from the State of
4 California, and we suggested that he work with
5 another bank on this. We weren't -- we weren't
6 satisfied with -- obviously, we didn't get the
7 documentation.
8
Our due diligence never was
9 satisfied. We had concerns over die -- over d1e
10 origins of the -- of where the money may go. We
11 suggested that he find another partner, and he
12 was -- he was amenable to that, I guess, or he
13 didn't reject that, but I don't think there was a
14 lot of discussion or dialogue about it.
15
Q.
So you told Mr. Gula during that
16 conversation that part of I.he reason tliat the
17 account was being closed is that you were not
18 satisfied; that you did not get the documents
19 required? You told him that during that
20 conversation?
21
A.
No. Mr. White, I apologize. I was
Page 280
I the account. I don't recall us conveying a specific
2 message. We -- the only message we -- that I recall
3 us conveying is that the accounts were being closed.
4 What I was explaining to you was our rationale that
5 we -- we had.
6
Q.
But -- but t.o be clear, that was not
7 conveyed to Mr. Gula, the rationale. That was your
8 internal delibemtions; is that right?
9
A.
Those were our internal deliberations.
10 We do not convey the specifics.
11
Q.
The internal -- the internal
12 deliberations, of course, would not involve
13 Mr. Gula.
14
Was that just you and Mr. Brough, or
15 were other people involved in that?
16
A.
It was primarily Mr. Brough and I that
17 would - were -- were involved with that decision.
18
Q.
And die documents that you did not get,
19 there you're referring to the contract that you said
20 that you had asked for in the unrecorded
21 conversation with Mr. Gula; is d1at right?
22
A.
Yes. We never got the supporting
Page 281
I materials that were requested in our conversation or
2 by -- by e-mail.
3
Q.
If he had sent you ilie contract on the
4 26d1, would you have let die transaction remain?
5
A.
I can't answer that hypothetical. I
6 don't -- I don't have -- I would have to have the
7 infom1ation in order to evaluate it. Given this --
8
Q.
Certainly by the time -- I'm sorry. Go
9 ahead.
10
A.
It was -- I apologize.
11
So you asked me if we merely had the
12 contract, why I would have to see what was presented
13 to me and the quality of it, the documentation, the
14 details within it before I could render a decision.
15
Q.
The State of California had told you
16 that they were satisfied, and diat d1ey liad come to
17 an agreement with Blue Flame Medical; correct?
18
MR ORSECK: Object to fom1.
19
A.
They --
20
.MR. ORSECK: Object to fonn.
21
Excuse me. I was on mute.
22 explaining to you why we made the decision to close 22
Asked and answered multiple bmes.
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Page 282
I
A.
Mr. White, the -- I think the State of
2 California believed they were dealing with a
3 well-established medical supplier who could provide
4 them with N95 masks, but I don't know that that --
5 that they conveyed infom1ation to us on our call
6 that that's what they believed they were working
7 with.
8
Q.
Who from the State of California told
9 you that?
10
A.
In our conversations with Natalie and
I I Mark, we had, you know, general discussion there.
12 We -- when we were conducting our information
13 gathering, they were surprised to hear that it was a
14 brand-new account
15
There was more discussion about
16 Blue Flame itself, and that they were formed just a
17 few days ago. I don't believe they were aware of
18 that, so they were looking into whether that was the
19 case or not, whet.her -- their due diligence process.
20
At the same time, they were also
21 hearing from their banker at JPMorgan. I don't know
22 any of the discussions with that, but I think both
Page 283
1 of those tirings certainly called for lhem to
2 investigate further.
3
Q.
Is tl:ris one of the conversations that
4 Mr. Brough surreptitiously recorded?
5
l\ffi.. ORSECK: Object to form.
6
A
I don't -- I don't recall whether that
7 conversation was one of the ones that were recorded
8 or not. I'm just going off my memory of the call
9 with califomia.
l O
Q.
Aud the participants in that call were
11 you, Mr. Brough; Natalie, either Gonzales or the
12 otl1er last name that you remember; and Mark Hariri;
13 is tllat correct?
14
A
That sounds correct
15
Q.
You also mentioned tl1at you, the bank I
16 asswne you mean, had concems about where the money
17 may go.
18
What do you mean by that?
19
A.
We didn't have any supporting
20 documentation for their manufacturing contract. We
21 had couJlicling information provided to us.
22
Wednesday evening when we talked to
Page 284
I Mike Gula, he provided us with wire instructions
2 that were from Greater Health, the
3 Winguard Industries, I believe.
4
However, other wiring instmctions
5 for a different vendor were provided to the bank the
6 next morning. I was unaware of those wiring
7 instmctions, but I know that those were presented
8 to the bank. So that is something that would
9 raise -- raise a red flag with us; that on one hand
10 we were told that the money was going t.o one place,
I I and then subsequently directed t.o another.
12
Q.
So having multiple suppliers raises a
13 red flag for you, for a vendor?
14
A.
I think in this case, our call with
15 Mr. Gula on Wednesday evening, he referenced and
16 only referenced his contacts with the Greater Health
17 entity, Mr. Wang.
18
He did not reference his other
19 supplier or vendor, and it seemed that that changed.
20 That was another piece of infonuation that caused us
21 concern.
22
Q.
Why is it concerning that a supplier has
Page 285
1 multiple vendors?
2
A.
May not necessarily be, but what was
3 presented to us was a -- was a large vendor contract
4 that was going to be fulfilled by one entity, and it
5 wasn't explained to us that there would be other
6 entities and who those were.
7
That would also be part of what we
8 would want to leam by asking for more
9 documentation.
10
Q.
You did not close any other accounts
11 that Mr. Gula was involved in; is that correct?
12
A.
We left it -- per his request, we left
13 open his accounts that bad been with us prior to his
14 opening of the Blue Flame relationship, and I
15 believe it's Red Line Strategies and Blue Flame
16 Strategies.
17
18
Q.
And his personal accounts; correct?
A.
Yes. Pardon me. His personal account
19 was left open.
20
Q.
Those were ultimately closed by
21 Chain Bridge Bank as well; isn't that correct?
22
A.
The accounts were closed later on in the
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I summer of this past -- 2020. I don't know the exact
2 dates. Some of them were closed likely by Mr. Gula
3 through the wind-down of his businesses, and then
4 the others we were detennining that it was better
5 that we exit the relationship, and gave him notice
6 of that.
7
Q.
\Vho made that decision?
8
A.
That was made in conjunction with our
9 management team.
IO
Q.
Who is that?
I I
A.
That would have included John Brough,
12 myself, and Betsy Sharon.
13
Q.
What was the reason for closing those
14 accounts?
15
A.
Well, I tllink it was difficult to
16 continue on with a relationsllip where the client is
17 suing tl1e bank for tllis purpose. We felt like we
18 had allotted llim an appropriate amount of time to
19 wind down his accounts, and we went ahead and
20 notified him that we would exit the relationship.
21
Q.
So that was a result of the filing of
22 the lawsuit, the closing of the other accounts; is
Page 287
l that correct, Mr. Evinger?
2
A.
I guess that's how I would characterize
3 it.
4
Q.
Tunting back to Plaintiffs Exllibit 71,
5 there is a reference from Ms. Schoeppe to -- stating
6 that she will close the Blue Flame Medical once the
7 wire is returned.
8
Do you see tl1at?
9
It's on the tllird page, Mr. Evinger.
10
A.
Thank you for that.
11
Q.
Are you with me there?
12
13
A.
I see it. Yes.
Q.
I take it the reason that you wouldn't
Page 288
I memo-posted, we would need to close it out the next
2 day.
3
Heather was just infomting, I tllink,
4 us, that it needed to go through nightly processing,
5 nom1al course of business, and then it would be
6 closed the next day.
7
Q.
So she needed the payment order for
8 return of the wire to be processed before closing
9 the account; correct?
10
A.
That day's transactions would have to be
I I settled, yes, and then when the funds -- when there
12 was -- when that occurred, tllen tl1e account would be
13 closed. That would have been the next business day.
14
Q.
So is it correct that she needed the
15 payment order for the retum wire to be processed,
16 so that there would be a zero balance before she
17 closed tl1e account; is that correct?
18
A.
There has to be -- there would have to
19 have been a zero balance for her to close the
20 account, so ...
21
Q.
To get to a zero balance at that point,
22 the payment order for the return wire needed to be
Page 289
1 processed, which may not happen until oventight; is
2 that correct?
3
A.
The payment order was processed that
4 day. The account would then have to go through
5 nightly processing, and then next business day, she
6 could, as I understand it, place the hold -- or
7 that's incorrect -- close the account, I meant to
8 say.
9
Q.
When you mentioned "payment order," what
10 is the fom1 of that payment order that sends the
11 funds back to Califonlia?
12
13
A.
I'm sony. The recall.
Q.
Does that take the form of a payment
14 want to close the account at that point, is tllat the
14 order, in your system?
15 funds were still in the account; is that right?
15
A.
The recall would be what was used to
16
MR ORSECK: Objection. Foundation.
16 send back.
17
A.
As we've covered, the -- the account
17
Q.
Is that processed through the payment
18 would be closed the next day because tlle memo post 18 order?
19 in it would have to be processed out, the offsetting
19
A.
I don't have -- I'm not -- I don't have
20 transaction. I don't know how else to say it.
21
But when the account had been
22 opened, there had been a t.ransaction in it,
20 an answer to your question about whether it is or is
21 in the payment order. I'm going to ...
22
Q.
So you just don't know as a mechanical
73 (Pages 286 - 289)
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Case 1:20-cv-00658-LMB-IDD     Document 130-28     Filed 05/06/21     Page 21 of 21
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