Deposition of Sean O'Malley (Exhibit 105) — Blue Flame v. Chain Bridge

Summary

Exhibit 105, Document 142-6 in Case 1:20-cv-00658-LMB-IDD, filed 05/20/21: pages from the CONFIDENTIAL transcript of the April 6, 2021 deposition of Sean O'Malley in Blue Flame Medical LLC v. Chain Bridge Bank, N.A. The appearance pages list counsel for Chain Bridge Bank, N.A., for Blue Flame Medical LLC and Mr. O'Malley, and for Third-Party Defendant JPMorgan Chase Bank. In the testimony, Mr. Madden asks about the customer due diligence process banks use in opening new accounts. Mr. O'Malley answers that a customer risk profile is unique to each institution and describes enhanced due diligence, periodic review, jurisdiction of domicile and industry classification.

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EXHIBIT 105
Case 1:20-cv-00658-LMB-IDD     Document 142-6     Filed 05/20/21     Page 1 of 5 PageID#
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Case 1:20-cv-00658-LMB-IDD     Document 142-6     Filed 05/20/21     Page 2 of 5 PageID#
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Sean O'Malley
CONFIDENTIAL
4/6/2021
Page 2 (2 - 5)
Page 2
Page 4
1 counsel for Defendants/Third Party Plaintiff in the
1 APPEARANCES (Continued):
2 above entitled matter, pursuant to notice, the
2
3 witness being duly sworn by MARY GRACE CASTLEBERRY, a
3
4 Notary Public in and for the State of Maryland, taken
5 at 9:32 am. EDT, Tuesday, April 6, 2021, and the
6 proceedings being taken down by Stenotype by MARY
7 GRACE CASTLEBERRY, RPR, and transcribed under her
8 direction.
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On behalf of the Defendants/Third-Party
Plaintiff Chain Bridge Bank, N.A.:
MATTHEW M. MADDEN, ESQ.
LESLIE ESBROOK, ESQ.
Robbins Russell Englert, Orseck,
Untereiner & Sauber
2000 K Street, N.W., 4th Floor
Washington, D.C. 20006
(202) 775-4500
mmadden@robbinsrussell.com
lesbrook@robbinsrussell.com
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1 APPEARANCES:
1 APPEARANCES (Continued):
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On behalf of the Plaintiff Blue Flame Medical
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LLC and Mr. O'Malley:
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JASON MITCHELL, ESQ.
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ANGIE GARCIA, ESQ.
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Schulte Roth & Zabel
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901 15th Street, N.W., Suite 800
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Washington, D.C. 20005
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(202) 729-7476
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j ason.mitchell@srz.com
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angela.garcia@srz.com
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On behalf of the Third-Party Defendant JPMorgan
Chase Bank:
ALBINAS PRlZGINTAS, ESQ.
Wilmer Cutler Pickering Hale & Dorr LLP
1875 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(212) 663-6981
albinas .prizgintas@wilmerhale.com
and
GABRIEL TORRES, ESQ.
JPMorgan Chase
Assistant General Counsel
383 Madison Avenue
New York, New York 10179
(212) 270-6000
ALSO PRESENT:
JASON AQUI, Videographer
Alderson®  ATMtpomtComp,ny
www. trustpoint. one
800.FOR.DEPO
(800.367.3376)
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Sean O'Malley
CONFIDENTIAL
4/6/2021
Page 19 (70 - 73)
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Page 70
(Recess.)
THE VIDEOGRAPHER: We are now back on the
3 record. The time is 10:58 a.m.
4 BY MR. MADDEN:
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Q. Welcome back, Mr. O'Malley. Are you
6 familiar with the customer due diligence process that
7 banks use in connection with opening new accounts?
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A. Yes, I am.
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Q. And does that process generally involve
10 the collection of information from the prospective
11 customer?
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A. Yes, it does.
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Q. And the information the customer provides
14 is then in tum used to determine, among other
15 things, the customer's risk profile; is that correct?
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A. That is correct.
Q. And what is the risk profile, generally
18 speaking?
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A. You're looking for a definition of the
20 customer risk profile?
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Q. Yeah, a description really. What is it
22 and what is it used for?
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A. The customer risk profile is -- it's
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2 unique to each institution. Each has their own way
3 of evaluating customer risk profile. It's a way of
4 looking at multiple pieces of information that they
5 collect and evaluating where, based on their own
6 approach to segmenting customers, where that risk
7 profile fits.
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Most institutions have at least a high,
9 medium and low or at least a high, low, you know,
10 customer risk rating tiering, if you will, based on
11 the information that they collect. That information
12 is used primarily in two ways in most institutions.
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First is that you'll go through and do the
14 preliminary risk rating and, depending on where they
15 fall, if they fall in one of the higher categories,
16 you will conduct what is typically called enhanced
1 7 due diligence. So you'll ask for additional
18 information or additional documentation from that
19 particular customer.
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And the second is to determine the
21 periodic review; in other words, how frequently that
22 institution is going to go back to that customer to
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1 refresh the information on the customer risk profile
2 and basically make an updated assessment of where
3 they belong based on that institution's customer risk
4 rating tiering.
5
Q.
Okay. Thank you for that.
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Now, among the multiple pieces of
7 information that banks typically collect and
8 evaluate, is one of them the customer's
9 jurisdictional or geographic risk?
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A.
Yes. Most commonly it's their
11 jurisdiction of domicile.
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Q.
And is another piece of information the
13 nature of the customer's business?
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A.
Many institutions use that. I think
15 you're referring to the industry and some
16 institutions will use the specifying industry that a
1 7 customer is in such as the NAICS code. The North
18 American Industry Classification Codes.
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Q. For example, would, all else equal, a
20 consulting company likely have a different risk
21 profile than an international importer?
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A.
I'm sorry, what was the first example? An
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1 LLC what?
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Q. No, I'll restate it. I might have cut
3 out.
Okay.
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A.
Q. For example, all else being equal, would a
6 consulting company have a lower risk profile than an
7 international importer?
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A. I believe -­
Q. Based on --
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A. -- a domestic consulting company.
Q. Sure.
A.
Right. It would depend on the type of
13 consulting that they're doing. Some types of
14 consulting are considered riskier than others
15 depending on the underlying industry obviously.
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An export-import business is -- you know,
1 7 typically you're involving cross-border transactions
18 so that, you know, that can be -- that's something
19 that's taken into account. Anything that is
2 0 transnational will -- will typically be determined to
21 have a higher risk rating than something purely
22 domestic.
Alderson®  ATIUl!pomtComp,ny
www. trustpoint. one
800.FOR.DEPO
(800.367.3376)
Case 1:20-cv-00658-LMB-IDD     Document 142-6     Filed 05/20/21     Page 5 of 5 PageID#
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