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Home Source documents Exhibit 02 — Blue Flame Medical LLC v. Chain Bridge Bank, N.A., et al.

Exhibit 02 — Blue Flame Medical LLC v. Chain Bridge Bank, N.A., et al.

Factual Summary

Korpal testifies the operative question was "[h]ad the funds been credited to the ultimate beneficiary's account or not," and confirms that had they been credited, recovery "would require debit authorization potentially from the beneficiary or the beneficiary account owner" — i.e., Blue Flame's own consent. Korpal confirms JPMorgan had no such authorization from Blue Flame and understood Blue Flame had not authorized the funds' return. Asked whether JPMorgan understood Chain Bridge to have fraud concerns, Korpal testifies: "I don't believe they said fraud. I think they just were suspicious," recalling only that the transaction "didn't smell right" to Chain Bridge.

Key Facts

  • Korpal's testimony frames the credited/not-credited question as legally load-bearing: if credited, reversal would need Blue Flame's own debit authorization, which JPMorgan concedes it never had and knew it never had — a data point sharpening the stakes of this docket's already-documented credited/not-credited dispute.
  • Korpal's characterization ("didn't smell right," "suspicious," not "fraud") is a more measured account than some other witnesses' characterizations of Chain Bridge's concerns elsewhere in this docket.
  • Confirms Blue Flame never authorized the return, corroborating Gula's own testimony elsewhere in this docket that the funds were taken "without asking."

Source Caveats

  • Excerpted testimony only, spanning noncontiguous transcript pages.
  • Korpal's characterization of Chain Bridge's stated concerns ("suspicious," not "fraud") is his own recollection and is not treated here as the complete or exclusive account of the bank's stated position.
Date
2021-05-20

Full text

EXHIBIT 2
Case 1:20-cv-00658-LMB-IDD     Document 145-3     Filed 05/20/21     Page 1 of 11 PageID#
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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.
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  A P P E A R A N C E S :
2
3
      SCHULTE ROTH & ZABEL LLP
      Attorneys for Plaintiff
4
           919 Third Avenue
           New York, New York 10022-3921
5
           (212)756-2044
6
      By:   WILLIAM H. GUSSMAN, JR., ESQ.
            bill.gussman@srz.com
7
            EKENEDILICHUKWU E. UKABIALA, ESQ.
            ekenedilichukwu.ukabiala@srz.com
8
            GREGORY J. KETCHAM-COLWILL, ESQ.
            gregory.ketcham-colwill@srz.com
9
            JASON T. MITCHELL, ESQ.
            jason.mitchell@srz.com
10
11
      ROBBINS RUSSELL ENGLERT ORSECK &
12
      UNTEREINER
      Attorneys for Defendants and Third-Party
13
      Plaintiff
           2000 K Street, N.W., Fourth Floor
14
           Washington, D.C. 20006
           (202)471-3902
15
      By:  DONALD BURKE, ESQ.
16
           dburke@robbinsrussell.com
      By:  ZACHARY N. FERGUSON, ESQ.
17
           znferguson@robbinsrussell.com
18
19
20
21
22
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  A P P E A R A N C E S : (Continued)
2
3
      WILMER HALE LLP
      Attorneys for Third-Party Defendant
4
      JPMorgan Chase Bank
           7 World Trade Center, 250
5
           Greenwich Street
           New York, New York 10007
6
           (212)937-7294
7
      By:  ALAN SCHOENFELD, ESQ.
           alan.schoenfeld@wilmerhale.com
8
           TODD CLAYTON, ESQ.
           todd.clayton@wilmerhale.com
9
                  -and-
10
      WILMER HALE LLP
11
           1875 Pennsylvania Avenue, N.W.
           Washington, D.C. 20006
12
           (202)663-6719
13
      By:   ALBINAS PRIZGINTAS, ESQ.
            albinas.prizgintas@wilmerhale.com
14
15
16
  Also Present:
17
      ETHAN BEARMAN, JPMorgan Chase
18
      GABRIEL TORRES, JPMorgan Chase
19
      RON MARRAZZO, Videographer
20
                  ~oOo~
21
22
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1
      A .     H a d  t h e  f u n d s  b e e n  c r e d i t e d  t o
2
  t h e  u l t i m a t e  b e n e f i c i a r y ' s  a c c o u n t  o r
3
  n o t .
4
      Q .     A n d  i f  t h e y  h a d  b e e n  c r e d i t e d
5
  t o  t h e  u l t i m a t e  b e n e f i c i a r y ' s  a c c o u n t ,
6
  t h a t  w o u l d  m e a n  t h e y  w o u l d  n o t  b e  a b l e  t o
7
  b e  r e t u r n e d  t o  J P M o r g a n ,  c o r r e c t ?
8
            M R .  S C H O E N F E L D :   O b j e c t i o n .
9
            M R .  B U R K E :   O b j e c t i o n  t o  t h e
1 0
      f o r m .
1 1
      Q .     C a n  y o u  a n s w e r  t h a t  q u e s t i o n ,
1 2
  M r .  K o r p a l ?
1 3
      A .     T h e  f u n d s  c o u l d  b e  r e c o v e r e d .
1 4
  H o w e v e r ,  i t  w o u l d  r e q u i r e  d e b i t
1 5
  a u t h o r i z a t i o n  p o t e n t i a l l y  f r o m  t h e
1 6
  b e n e f i c i a r y  o r  t h e  b e n e f i c i a r y  a c c o u n t
1 7
  o w n e r .
1 8
      Q .     A n d  h e r e ,  w i t h  r e s p e c t  t o  t h e
1 9
  w i r e  t r a n s f e r s  w e ' v e  b e e n  d i s c u s s i n g
2 0
  r e g a r d i n g  C h a i n  B r i d g e  B a n k  a n d  B l u e
2 1
  F l a m e  M e d i c a l ,  a r e  y o u  a w a r e  o f  a n y
2 2
  a u t h o r i z a t i o n  o f  B l u e  F l a m e  M e d i c a l  t o
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1
  r e t u r n  t h e  f u n d s  t o  J P M o r g a n ?
2
      A .     N o .
3
      Q .     D i d  J P M o r g a n  u n d e r s t a n d  t h a t
4
  B l u e  F l a m e  M e d i c a l  w a s  n o t  i n v o l v e d  - -
5
  l e t  m e  r e p h r a s e  t h a t .
6
            D i d  J P M o r g a n  u n d e r s t a n d  t h a t
7
  B l u e  F l a m e  M e d i c a l  h a d  n o t  a u t h o r i z e d  t h e
8
  r e t u r n  o f  t h e  f u n d s  t o  J P M o r g a n ?
9
      A .     Y e s .
1 0
      Q .     W a s  i t  J P M o r g a n ' s  u n d e r s t a n d i n g
1 1
  t h a t  C h a i n  B r i d g e  B a n k  h a d  c o n c e r n s  t h a t
1 2
  t h e r e  c o u l d  b e  f r a u d  w i t h  r e s p e c t  t o  t h i s
1 3
  t r a n s a c t i o n ?
1 4
      A .     I  d o n ' t  b e l i e v e  t h e y  s a i d
1 5
  f r a u d .   I  t h i n k  t h e y  j u s t  w e r e
1 6
  s u s p i c i o u s .
1 7
      Q .     D o  y o u  r e c a l l  t h a t  t h e y  s a i d
1 8
  t h a t  t h e  t r a n s a c t i o n  d i d n ' t  s m e l l  r i g h t
1 9
  t o  t h e m ?
2 0
      A .     T h e y  j u s t  s a i d  t h a t  t h e
2 1
  t r a n s a c t i o n  w a s  s u s p i c i o u s .
2 2
      Q .     D o  y o u  r e c a l l  w h e t h e r  t h e y  h a d
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  m i l l i o n .
2
      Q .     A n d  d i d  y o u  r e c e i v e  t h e
3
  d e t a i l s ?
4
      A .     I  h a d  r e c e i v e d  t h e  d e t a i l s
5
  s u b s e q u e n t  t o  t h a t  c o n v e r s a t i o n  b a s e d  o n
6
  m y  f o l l o w - u p  w h e n  s h e  c o n f i r m e d  t h e
7
  t r a n s a c t i o n  h a d  b e e n  c o m p l e t e d .
8
      Q .     S o  w h a t  h a p p e n e d  n e x t ,
9
  M r .  K o r p a l ?   D i d  y o u  r e v i e w  t h o s e
1 0
  d e t a i l s ?
1 1
      A .     I  a s k e d  T i m  C o f f e y  t o  p u l l  t h e
1 2
  t r a n s a c t i o n  d e t a i l s  f o r  m e .   I  r e v i e w e d
1 3
  t h e  t r a n s a c t i o n  d e t a i l s .   A n d  I  a s k e d  T i m
1 4
  C o f f e y  t o  c a l l  C h a i n  B r i d g e  B a n k  t o
1 5
  d e t e r m i n e  i f  t h e y  k n e w  t h e  b e n e f i c i a r y  o f
1 6
  t h e  f u n d s  a n d  w h a t  t h e  d i s p o s i t i o n  o f  t h e
1 7
  t r a n s a c t i o n s  o r  t h e  f u n d s  w e r e  a t  t h a t
1 8
  p o i n t .
1 9
            H e  c a m e  b a c k  t o  m e  a n d
2 0
  c o n f i r m e d  t h a t  t h e y  h a d  r e c e i v e d  t h e
2 1
  t r a n s a c t i o n .   T h e y  w e r e  s u s p i c i o u s  o f  i t .
2 2
  A n d  t h e y  h a d  h e l d  t h e  f u n d s  a n d  n o t
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1
  c r e d i t e d  t h e  a c c o u n t  o f  B l u e  F l a m e
2
  M e d i c a l .
3
            T i m  a n d  I  t h e n  s p o k e  w i t h  B l u e
4
  F l a m e  M e d i c a l  t o  u n d e r s t a n d ,  a g a i n ,  t h e
5
  d i s p o s i t i o n  o f  t h e  f u n d s  a n d  w h a t  t h e i r
6
  c o n c e r n s  w e r e  w i t h  t h e  t r a n s a c t i o n .
7
            T h e y  c o n f i r m e d  t h a t  t h e
8
  t r a n s a c t i o n  h a d  n o t  b e e n  c r e d i t e d  t o  B l u e
9
  F l a m e  M e d i c a l ' s  a c c o u n t .   T h i s  w a s  a
1 0
  n e w l y  e s t a b l i s h e d  a c c o u n t  w i t h  n o
1 1
  b a l a n c e s .   A n d  t h e  a c c o u n t  - -  s o  t h e n  I
1 2
  a s k e d  i f  t h e y  k n e w  t h e  o w n e r  o f  t h e
1 3
  a c c o u n t  a n d  t h e y  s a i d  y e s ,  h e  i s  a
1 4
  l o b b y i s t  i n  t h e  a r e a .
1 5
      Q .     W h a t  d i d  C h a i n  B r i d g e  B a n k  t e l l
1 6
  M r .  C o f f e y  w i t h  r e s p e c t  t o  t h e  s u s p i c i o n s
1 7
  t h e y  h a d  r e l a t i n g  t o  t h e  t r a n s a c t i o n ?
1 8
      A .     T h e  f i r s t  c o n v e r s a t i o n  t h a t  T i m
1 9
  h a d  w i t h  t h e  C h a i n  B r i d g e  B a n k  w a s  t h a t
2 0
  t h e y  w e r e  c o n c e r n e d  w i t h  t h e  s i z e  o f  t h e
2 1
  t r a n s a c t i o n .   T h e y  h a d  n e v e r  r e c e i v e d  a
2 2
  t r a n s a c t i o n  t h a t  l a r g e  a n d  t h a t  t h e y  w e r e
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  h a d  c o n c e r n s  w i t h  t h e  t r a n s a c t i o n .   A n d
2
  t h e n  w e  s u b s e q u e n t l y  d i s c o v e r e d  t h a t  t h e
3
  r e m a i n i n g  p a r t y  a l s o  h a d  c o n c e r n s  w i t h
4
  t h e  d i l i g e n c e  t h a t  w a s  p e r f o r m e d  t o
5
  e x e c u t e  t h a t  t r a n s a c t i o n .
6
      Q .     A n d  i n  y o u r  v i e w ,  d i d  a l l  o f
7
  t h o s e  c o n c e r n s  l e a d  t o  a  n e e d  f o r  J P
8
  M o r g a n  t o  c a l l  t h e  f u n d s  b a c k ?
9
      A .     T h e r e  w a s  n o t  a  n e e d  f o r  J P
1 0
  M o r g a n  C h a s e  t o  c a l l  t h e  f u n d s  b a c k .
1 1
      Q .     A n d  w h y  w a s  t h a t ?   W h y  w a s n ' t
1 2
  t h e r e  a  n e e d ?
1 3
            M R .  S C H O E N F E L D :   O b j e c t i o n .
1 4
      A .     T h e  f u n d s  w e r e  b e i n g  h e l d  b y
1 5
  C h a i n  B r i d g e  B a n k .
1 6
      Q .     D o  y o u  u n d e r s t a n d  w h y
1 7
  M r .  C o f f e y  u s e d  t h e  w o r d  " n e e d "  i n
1 8
  c o n n e c t i o n  w i t h  t h e  r e q u e s t  t o  r e c a l l  t h e
1 9
  f u n d s  f r o m  C h a i n  B r i d g e  B a n k ?
2 0
      A .     I f  y o u  c o u l d  p l a y  t h a t
2 1
  r e c o r d i n g  a g a i n ,  o r  i f  y o u  h a v e  a
2 2
  t r a n s c r i p t .   I  a m  n o t  s u r e  I  u n d e r s t o o d
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1
  where "need" was utilized.
2
            MR. BURKE:  Zach, if you're able
3
      to play the recording again, I think
4
      it's, I think we could get it in the
5
      first 30 seconds or so.
6
            (Audio played.)
7
      Q.    Mr. Korpal, did you hear that
8
  time Mr. Coffey's reference to a need to
9
  call the funds back?
10
      A.    Yes.
11
      Q.    Do you have an understanding of
12
  why he referred to a need to call the
13
  funds back?
14
      A.    Yes.  So we were concerned,
15
  again, as I have articulated earlier,
16
  that parties to the transaction, the
17
  State of California, the originator of
18
  the transaction, the beneficiary bank,
19
  Chain Bridge Bank, the history of the
20
  account, all were red flags.
21
            So probably a poor choice on
22
  his part around need.  But we decided
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  t h a t  w e  w o u l d  i s s u e  t h e  r e c a l l  r e q u e s t
2
  t h a t  C h a i n  B r i d g e  B a n k  h a d  s u g g e s t e d  t h a t
3
  w e  d o .   S o  t h a t  w e  c a n  r e t u r n  t h e  f u n d s
4
  t o  t h e  S t a t e  o f  C a l i f o r n i a .
5
      Q .     D o  y o u  r e c a l l  h e a r i n g ,  t o w a r d s
6
  t h e  e n d  o f  t h e  c a l l ,  M r .  C o f f e y  s a y :
7
  W e ' l l  g e t  t h a t  s e r v i c e  m e s s a g e  o u t  n o w
8
  a n d  a s  q u i c k l y  a s  y o u  c a n  r e t u r n  i t ,  t h a t
9
  w o u l d  b e  g r e a t ?
1 0
      A .     Y e s .
1 1
      Q .     A n d  d o  y o u  u n d e r s t a n d  w h y
1 2
  M r .  C o f f e y  w a s  a s k i n g  C h a i n  B r i d g e  B a n k
1 3
  t o  r e t u r n  t h e  f u n d s  q u i c k l y ?
1 4
      A .     Y e s .   I t  w o u l d  a l l o w  u s  t o  b e
1 5
  a b l e  t o  r e t u r n  t h e  f u n d s  t o  t h e  S t a t e  o f
1 6
  C a l i f o r n i a .   A n d  i f  t h e y  w a n t e d  t o
1 7
  r e - e x e c u t e  t h e  t r a n s a c t i o n ,  t h a t  t h e r e
1 8
  w a s  s u f f i c i e n t  t i m e  f o r  t h e m  t o
1 9
  r e - e x e c u t e  t h e  t r a n s a c t i o n .
2 0
      Q .     I  s o .   D u r i n g  t h i s  c a l l ,  d i d
2 1
  M r .  C o f f e y  e v e r  r e f e r  t o  a  s u g g e s t i o n  o r
2 2
  r e q u e s t  f r o m  C h a i n  B r i d g e  B a n k  t h a t  t h e
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  1. Exhibit 05 — Blue Flame Medical LLC v. Chain Bridge Bank, N.A., et al.same docket · 2021-05-20
  2. Exhibit 01 — Blue Flame Medical LLC v. Chain Bridge Bank, N.A., et al.same docket · 2021-05-20
  3. Exhibit 87 No Pex Bfm000203903 PDFsame docket · 2021-05-20
  4. CalMatters Article on Blue Flame Mask Deal (Exhibit 3) — Blue Flame v. Chain Bridgesame docket · 2021-05-20
  5. Deposition of Mike Gula (Exhibit 110) — Blue Flame v. Chain Bridgesame docket · 2021-05-20
  6. Defendants’ Motion for Summary Judgmentsame docket · 2021-05-20
  7. Deposition of Daniel Kim (Exhibit 112) — Blue Flame v. Chain Bridgesame docket · 2021-05-20
  8. Declaration of Henry Huang - Blue Flame v. Chain Bridge 2same docket · 2021-05-20
  9. Deposition of Sean O'Malley (Exhibit 105) — Blue Flame v. Chain Bridgesame docket · 2021-05-20
  10. Confidential Pursuant To Protective Ordersame docket · 2021-05-20
  11. Blue Flame v. Chain Bridge — Suuchi Email on Mask Pricing and Capacity (Exhibit 94)same docket · 2021-05-20
  12. Exhibit - Blue Flame Medical LLC v. Chain Bridge Bank, N.A., et al., Civ. No. 1 (2021-05-20)same docket · 2021-05-20
  13. Blue Flame v. Chain Bridge — Gula Email Forwarding Blue Flame EIN (Exhibit 103)same docket · 2021-05-20
  14. Beware of Fraudulent Activity! - DGS has recently been made aware of fraudulent Purchase Orders and Spoof emails issued tosame docket · 2021-05-20
  15. California DGS Email Forwarding Records to FBI (Exhibit 109) — Blue Flame v. Chain Bridgesame docket · 2021-05-20
  16. Beware of Fraudulent Activity! — DGS has recently been made aware of fraudulent Purchase Orders and Spoof emailssame docket · 2021-05-20
  17. California DGS Email to FBI on Blue Flame Docs (Exhibit 110) — Blue Flame v. Chain Bridgesame docket · 2021-05-20
  18. California DGS Email on Medical Supplies Listing (Exhibit 89) — Blue Flame v. Chain Bridge (2021-05-20)same docket · 2021-05-20
  19. Plaintiff Blue Flame Medical Llc’S Memorandum Of Lawsame docket · 2021-05-20
  20. Plaintiff Blue Flame Medical Llc’S Memorandum Of Lawsame docket · 2021-05-20

Part of: E.D. Va., CourtListener docket 477405 · Other pandemic litigation · Exhibits and declarations · Federal court dockets (PACER) · 2021 · Source documents

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