Protective Order
- Date
- 2025-10-17
Summary
Document 591-5, filed October 17, 2025 in In re: Bank of America California Unemployment Benefits Litigation, Case No. 21-MD-02992-GPC-MSB, in the U.S. District Court for the Southern District of California, is DX 4: a redacted version of a declaration by a Managing Director in Bank of America, N.A.'s Global Financial Crimes group. It supports the bank's motion for partial summary judgment, set for hearing April 17, 2026 before Judge Gonzalo P. Curiel. The declaration describes the bank's Bank Secrecy Act and anti-money laundering obligations and states that starting in Spring 2020 the bank observed fraud affecting its prepaid cards issued for unemployment insurance programs in 12 states. It discusses the bank's Claim Fraud Filter, implemented in late September 2020, and states the bank stopped using it to close Error Claims as of June 8, 2021. It runs 17 pages.
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Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40703
Page 1 of 17
DX 4
REDACTED VERSION OF
DOCUMENT SOUGHT TO
BE SEALED PURSUANT TO
STIPULATED
PROTECTIVE ORDER
Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40704
Page 2 of 17
1 JAMES W. MCGARRY (pro hac vice)
JMcGarry@goodwinlaw.com
2 GOODWIN PROCTER LLP
100 Northern Avenue
3 Boston, MA 02210
Tel.: +1 617 570 1000
4 Fax: +1 617 523 1231
5 SABRINA M. ROSE-SMITH (pro hac vice)
SRoseSmith@goodwinlaw.com
6 MATTHEW L. RIFFEE (pro hac vice)
MRiffee@goodwinlaw.com
7 GOODWIN PROCTER LLP
1900 N Street, NW
8 Washington, DC 20036
Tel.: +1 202 346 4000
9 Fax: +1 202 346 4444
10 Attorneys for Defendant
BANK OF AMERICA, N.A.
11
12
UNITED STATES DISTRICT COURT
13
FOR THE SOUTHERN DISTRICT OF CALIFORNIA
14
SAN DIEGO DIVISION
15
16
IN RE: BANK OF AMERICA Case No. 21-MD-02992-GPC-MSB
CALIFORNIA UNEMPLOYMENT
17 BENEFITS LITIGATION DECLARATION OF MICHAEL J.
LETSON IN SUPPORT OF
18 DEFENDANT BANK OF AMERICA,
N.A.’S MOTION FOR PARTIAL
19 SUMMARY JUDGMENT
20
Date: April 17, 2026
21 Time: 1:30 p.m.
Ctrm: 12A – 12th Floor
22 Judge: Hon. Gonzalo P. Curiel
23
FILED PROVISIONALLY UNDER SEAL
24 PURSUANT TO STIPULATED PROTECTIVE
ORDER
25
26
27
28
GOODWIN PROCTER LLP
ATTORNEYS AT LAW
LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40705
HIGHLY CONFIDENTIAL
Page 3 of 17 – ATTORNEY’S EYES ONLY
1 I, Michael J. Letson, hereby declare as follows:
2 1. I am employed by Defendant Bank of America, N.A. (BANA) as
3 Managing Director in Global Financial Crimes (GFC) leading Surveillance and
4 Complex Investigations, and have served in this role since May 2023. Prior to that, I
5 led Detection and Complex Investigations from May 2023 to June 2024, and I served
6 as Head of GFC’s Financial Crimes Analytics from February 2019 through May
7 2023.
8 2. I make this declaration based upon personal knowledge and belief, upon
9 BANA’s records maintained in the ordinary course and scope of business, and upon
10 information gathered from other BANA employees within the scope of their
11 responsibilities. If called to testify as to any of the matters set forth in this declaration,
12 I could and would competently testify thereto.
13 3. In my role as Managing Director, I manage the GFC business operations
14 group at BANA whose mission is to lead the efforts of the institution to detect and
15 deter criminal misconduct and fraud and support compliance with the Bank Secrecy
16 Act and anti-money laundering (BSA/AML) obligations. Based on my various
17 positions at BANA, especially my current and prior roles with GFC, I am familiar
18 with—and in many instances developed, directed, or implemented—BANA’s fraud
19 detection capabilities and efforts, including its use of anti-fraud strategies. Through
20 2020 to early 2023, I was directly and personally involved in BANA’s response to
21 fraud, money laundering, and other crimes specifically targeting BANA’s prepaid
22 cards issued as part of State unemployment insurance (UI) programs, including
23 California’s Employment Development Department (EDD) UI program.
24 4. In my role at BANA, I am familiar with BANA’s BSA/AML
25 responsibilities, including BANA’s obligation as a national bank to detect, to report,
26 and to take reasonable steps not to permit fraud or attempted fraud using BANA’s
27 products and systems.
28
GOODWIN PROCTER LLP
ATTORNEYS AT LAW
1
LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40706
HIGHLY CONFIDENTIAL
Page 4 of 17 – ATTORNEY’S EYES ONLY
1 BANA’s Fraud Prevention Responsibilities and Strategies
2 5. As a national bank, BANA has a statutory and regulatory obligation to
3 take efforts not to permit BANA’s products and systems—including BANA UI
4 prepaid cards—from being used as instruments of fraud, money laundering, other
5 criminal activities. Under the BSA and other anti-money laundering laws, regulations,
6 and guidance, this includes the requirement to monitor transactions and to report on
7 suspicious financial activity.
8
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11 6.
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21 7. Any fraud strategy can impact persons whose card activities or
22 observable characteristics appear to be fraudulent or suspicious but are not, in fact,
23 fraudulent for a particular cardholder. In my experience, it is never BANA’s intention
24 to inconvenience valid benefits recipients; however, no fraud strategy is 100%
25 effective at identifying only fraudulent activity. That is in the nature of reasonable
26 strategies (like the Claim Fraud Filter (CFF) described below), which are an important
27 tool used for fraud deterrence across the American economy.
28
GOODWIN PROCTER LLP
ATTORNEYS AT LAW
2
LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40707
HIGHLY CONFIDENTIAL
Page 5 of 17 – ATTORNEY’S EYES ONLY
1 8. At all times when assessing and implementing fraud strategies across all
2 of BANA’s products (including UI prepaid cards),
3
4
5
6
7
8 .
9 9. As a reasonable control to help keep the Bank from being used as a means
10 of fraud, BANA has historically used and continues to use
11
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18
19 .
20 BANA’s Observations of Fraud During the Pandemic
21 10. Throughout the pandemic, in compliance with its obligations under the
22 BSA,
23
24
25 . FinCEN is a bureau of the Department of the Treasury.
26 FinCEN is the primary federal authority responsible for safeguarding the financial
27 system from fraud and other forms of illicit use; for collecting, and analyzing and
28 disseminating financial intelligence; and for implementing and enforcing BSA and
GOODWIN PROCTER LLP
ATTORNEYS AT LAW
3
LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40708
HIGHLY CONFIDENTIAL
Page 6 of 17 – ATTORNEY’S EYES ONLY
1 AML requirements. FinCEN is the United States partner with other countries’ similar
2 agencies that coordinate in the detection and investigation of financial crimes
3 worldwide.
4
5 .
6 11. Starting in Spring 2020, BANA observed, and was informed by law
7 enforcement agencies and other third-party sources of massive fraud and illegality in
8 UI programs and affecting BANA prepaid cards issued to distribute benefits for UI
9 programs in 12 states. The fraud was different in type and in scale from anything
10 BANA had seen previously in its UI prepaid programs. In my professional
11 experience, the scale of this fraud and misuse was unprecedented. These sentiments
12 appear to be shared by law enforcement: the then-chief of Secret Service
13 investigations Jeremy Sheridan pronounced that pandemic-era unemployment
14 benefit abuse was “the largest fraud scheme that I’ve ever encountered.” ‘Easy
15 money’: How international scam artists pulled off an epic theft of COVID benefits,
16 NBC, Aug. 15, 2021, https://www.nbcnews.com/news/usnews/easy-money-how-
17 international-scam-artists-pulled-epic-theft-covid-n1276789. This was not a
18 situation where fraud was more common simply because the programs had grown
19 larger. Instead, the pandemic created opportunities for benefits eligibility and
20 unauthorized transaction claims (Error Claims) fraud types that had not been
21 prevalent before and, in the case of benefits eligibility fraud, was not even possible
22 on a wide scale before.
23 12. Beginning in May 2020,
24
25
26
27 .
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GOODWIN PROCTER LLP
ATTORNEYS AT LAW
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
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HIGHLY CONFIDENTIAL
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1 13. Also in May 2020, BANA was first alerted to benefits eligibility fraud
2 when the U.S. Secret Service issued an alert about massive fraud being perpetrated
3 against state unemployment programs. A true and correct copy of the alert is attached
4 to the Declaration of Laura G. Brys in Support of BANA’s Request for Judicial
5
6
7
Notice (the “Brys RJN Decl.”) as RJN 5 (BANA_EDD_MDL-00205361).1
-
8
9
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11
12
13 14. Ultimately, law enforcement uncovered criminal conduct stretching
14 across the globe, and domestic networks of “money mules” who occupied themselves
15 all day long with applying for unemployment or making cash withdrawals using
16 wrongfully obtained BANA UI prepaid cards. FinCEN, Advisory on Imposter Scams
17 and Money Mule Schemes Related to Coronavirus Disease 2019 (COVID-19) (July
18 7, 2020), https://www.fincen.gov/sites/default/files/advisory/2020-07-
19 07/Advisory_%20Imposter_and_Money_Mule_COVID_19_508_FINAL.pdf. PUA
20 fraud also occurred within California’s state prison system, as BANA observed (and
21 California’s State Auditor and various news organizations later reported) that an
22 estimated $810 million in benefits was fraudulently obtained by prisoners making
23 fraudulent unemployment claims. As of January 2021, California’s State Auditor
24 estimated nearly $10.4 billion in fraudulent claims. Subsequent reports have
25 estimated in excess of $32 billion of unemployment benefits were stolen and
26 illegitimately issued in California. Auditor of the State of California, Significant
27 Weaknesses in EDD’s Approach to Fraud Prevention Have Led to Billions of Dollars
28 1
Exhibits to the Brys RJN Declaration shall be referred to as “RJN.”
GOODWIN PROCTER LLP
ATTORNEYS AT LAW
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
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HIGHLY CONFIDENTIAL
Page 8 of 17 – ATTORNEY’S EYES ONLY
1 in Improper Benefit Payments, (Jan. 2021),
2 https://information.auditor.ca.gov/pdfs/reports/2020-628.2.pdf.
3 15.
4
5
6 .
7 16. Despite BANA’s best efforts,
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ATTORNEYS AT LAW
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
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HIGHLY CONFIDENTIAL
Page 9 of 17 – ATTORNEY’S EYES ONLY
1
2
3
4 .
5 18.
6
7
8
9
10
11 . A true and correct copy of are attached
12 to the Declaration of Laura G. Brys in Support of BANA’s Partial Motion for
13 Summary Judgment (the “Brys SJ Decl.”) as DX 88 (BANA_EDD_MDL-00088506)
14 and are imbedded in contemporaneous compilations the Bank obtained from third-
15 party vendors that are attached as DX 102 (BANA_EDD_MDL-00125116) and DX
16 87 (BANA_EDD_MDL-00088501).2
17
18
19
20
21
22 . See
23 “Bandemic (E.D.D.)” by Shoreline Mafia, available at
24 https://www.youtube.com/watch?v=vut-17KzZJk (last accessed Oct. 17, 2024);
25 “EDD” by ShotOff & Nuke Bizzle, available at
26 https://www.youtube.com/watch?v=K0ck7hTsug8 (last accessed Oct. 17, 2024).
27
28 2
Exhibits to the Brys SJ Declaration shall be referred to as “DX.”
GOODWIN PROCTER LLP
ATTORNEYS AT LAW
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40712
HIGHLY CONFIDENTIAL
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1 19.
2
3
4
5
6
7
- 20. GFC’s and law enforcement’s investigations in the first six months of
the pandemic yielded two key observations that were themes of fraud and suspicious
8 activity in State UI programs that used BANA prepaid cards:
9
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16 21. To combat the staggering levels of UI fraud, BANA
17
18
19 Specifically for California,
20 A true and correct
21 copy of certain are attached to the
22 Brys SJ Declaration as DX 161 (BANA_EDD_MDL-00617457), DX 162
23 (BANA_EDD_MDL-00617463), and DX 77 (BANA_EDD_MDL-00082907).
24
25
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
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HIGHLY CONFIDENTIAL
Page 11 of 17 – ATTORNEY’S EYES ONLY
1
2
3 22. BANA soon came to realize that
4
5
6
7 . Public reports also began to emerge that
8 EDD was unable to manage the avalanche of unemployment claims. E.g., Auditor of
9 the State of California, Significant Weaknesses in EDD’s Approach to Fraud
10 Prevention Have Led to Billions of Dollars in Improper Benefit Payments, (Jan.
11 2021), https://information.auditor.ca.gov/pdfs/reports/2020-628.2.pdf. As a report
12 issued by the United States House Committee on Oversight and Accountability
13 recently explained:
14 EDD staff under Su’s leadership adopted a ‘pay and chase’
15
model and processed incoming claims quickly; EDD staff
understood that less time should be spent on checking eligibility
16 of claimants as this would slow down paying out benefits. This
led to many bad actors like international organized crime and
17 individual criminals cashing in while eligible claimants were
unable to obtain their benefits.
18
19 H. Comm. on Oversight and Accountability Majority Staff, Examining Widespread
20 Fraud in Pandemic Unemployment Relief Programs (Sept. 10, 2024),
21 https://oversight.house.gov/wp-content/uploads/2024/09/UI-Report-FINAL.pdf. By
22 mid-September 2020, the Governor shut down EDD so it could take two weeks to
23 implement a new process to fight fraudulent applications for benefits and clean a
24 backlog of pending applications. See EDD Announces Reset in Response to Strike
25 Team Recommendations to Process Claims Faster, Reduce Fraud and Tackle
26 Backlog Issue, EDD, New Release No. 20-49, Sept. 19, 2020,
27 https://edd.ca.gov/About_EDD/pdf/news-20-49.pdf.
28
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ATTORNEYS AT LAW
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
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HIGHLY CONFIDENTIAL
Page 12 of 17 – ATTORNEY’S EYES ONLY
1 23. To further combat the staggering level of UI fraud and to meet its
2 responsibilities under BSA/AML laws, BANA
3
4
5 .
6 24. BANA’s fraud strategies for these UI programs, developed in the
7 pandemic, have
8
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21 .
22 BANA’s Research, Development, and Implementation of the CFF
23 25. Beginning in June 2020, Error Claims submitted on UI prepaid cards
24 generally, and EDD prepaid cards specifically,
25
26
27 26. Around that time, and in part
28
GOODWIN PROCTER LLP
ATTORNEYS AT LAW
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
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HIGHLY CONFIDENTIAL
Page 13 of 17 – ATTORNEY’S EYES ONLY
1
2 . This scheme involved situations
3 where
4
5
6 BANA was required to investigate those Error Claims and, as I
7 understand the legal requirements, if BANA was unable to complete the investigation
8 in 10 business days, BANA was required to issue a “provisional” credit to the
9 account.
10
11 . We
12 found that
13
14
15
16
17
18 .
19 27.
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40716
HIGHLY CONFIDENTIAL
Page 14 of 17 – ATTORNEY’S EYES ONLY
1
2
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4
5 28. BANA’s experienced fraud detection specialists
6
7
8 In particular,
9
10 A true and correct copy of
11 are
12 attached to the Brys SJ Declaration as DX 83 (BANA_EDD_MDL-00087715) and
13 DX 183 (BANA_EDD_MDL-00055974).
14
15
16
17 29. In the late summer of 2020,
18
19
20 . At the time, these teams and
21 I were
22
23
24 .
25 30.
26
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GOODWIN PROCTER LLP
ATTORNEYS AT LAW
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40717
HIGHLY CONFIDENTIAL
Page 15 of 17 – ATTORNEY’S EYES ONLY
1
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7 31.
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14 32.
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19 33. At the time the CFF was implemented, in late September 2020,
20
21
22
23 .
24 34.
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
Case 3:21-md-02992-GPC-MSB Document 591-5 Filed 10/17/25 PageID.40718
HIGHLY CONFIDENTIAL
Page 16 of 17 – ATTORNEY’S EYES ONLY
1 35.
2
3
4
5
6
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8
9
10
11 A true and correct copy of a
12 is attached to the Brys SJ Declaration as DX 109
13 (BANA_EDD_MDL-00143629). Additionally,
14
15
16
17 A true and correct copy of a
18 is attached to the Brys SJ Declaration as DX 180
19 (BANA_EDD_MDL-00884200). This seemed to underscore the fact that the EDD
20 program and claims process had been riddled with fraud, and that
21
22
23
24
- .
36. Given the clear evidence of massive fraud specifically designed to
exploit BANA’s obligations to issue provisional credit, BANA determined that
25
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LETSON DECL. ISO MOT. FOR PARTIAL SJ CASE NO. 21-MD-02992-GPC-MSB
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Page 17 of 17
HIGHLY CONFIDENTIAL-ATTORNEY'S EYES ONLY
37. As of June 8, 2021, SANA discontinued using the CFF to close Error
2 Claims.
3 I declare under the penalty of perjury that the foregoing is true and correct.
4 Executed on this &'1eaay of October, 2025.
5
6
7 MICHAEL J. LETSON
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LETSON DECL. ISO Mur. FOR PARTIAL SJ CASE No. 21-MD-02992-GPC-MSB
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