Videotape Deposition of John Thomas — Blue Flame Medical LLC v. Chain Bridge Bank, N.A. (E.D. Va., Dkt. 132-2)

Summary

Case 1:20-cv-00658, Document 132-2, is Exhibit 2, an excerpt of the remote videotape deposition of John Thomas, taken by Zoom on Monday, January 11, 2021, in Blue Flame Medical LLC v. Chain Bridge Bank, N.A. The witness describes how Blue Flame Medical came to be formed after reports of a PPE shortage and agrees that the Blue Flame Medical documents are dated March 23rd. The witness also explains why Mike Gula was told to make sure the bank knew the wire was coming, saying the reference to the FBI was "in jest". Other questioning covers a March 25th email about 100 million units for the order and an April 10th email chain on which the witness says "We had a disagreement".

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Cite this document

“Videotape Deposition of John Thomas — Blue Flame Medical LLC v. Chain Bridge Bank, N.A. (E.D. Va., Dkt. 132-2).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-1-20-cv-00658-dkt-132-2-e-d-va-fa3685af62/, SHA-256 121b3a112b19e9a4444bd9729425987b9698436e11037d77eb6a422a1f61d009.

Full text

Case 1:20-cv-00658-LMB-IDD Document 132-2 Filed 05/07/21 Page 1 of 21 PageID#
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EXHIBIT 2
John Thomas CONFIDENTIAL 1/11/2021
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1 IN THE UNITED STATES DISTRICT COURT

2 FOR THE EASTERN DISTRICT OF VIRGINIA

3 (Alexandria Division)

4 - - - - - - - - - - - - - - - X

5 BLUE FLAME MEDICAL LLC, :

6 Plaintiff, :

7 v. : Civil Action No.

8 CHAIN BRIDGE BANK, N.A., : 1:20-cv-00658

9 JOHN J. BROUGH and DAVID M. :

10 EVINGER, : CONFIDENTIAL

11 Defendants. :

12 _____________________________ :

13 CHAIN BRIDGE BANK, N.A., :

14 Third-Party Plaintiff, :

15 v. :

16 JPMORGAN CHASE BANK, N.A., :

17 Third-Party Defendant. :

18 - - - - - - - - - - - - - - - X

19 Remote Deposition

20 Monday, January 11, 2021

21 Videotape Deposition via Zoom of JOHN

22 THOMAS, a witness herein, called for examination by

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1 A. Which entity are you talking about?

2 Q. Blue Flame Medical. Let me start again.

3 How did you come to found Blue Flame Medical?

4 A. Sure. Mike and I were -- well, we were in

5 close communication with one another, personally and

6 professionally, around March, even prior, of course,

7 and we were watching, like the rest of the world was,

8 public reports that there was a shortage of PPE and

9 that healthcare providers were unable to access

10 adequate amounts of PPE supplies. I was reading

11 public reports of that and chatting with Mike about

12 it. He was hearing the same thing.

13 Then I wanted to confirm that that in fact

14 was the situation, it wasn't reporters who got it

15 wrong. And I started calling up friends of mine that

16 work -- you know, CEOs of hospital systems, local

17 elected officials and others to in fact confirm that

18 that was the case. And they said, yes, that's the

19 case. In fact, major healthcare systems could not

20 even get a return phone call from their longtime

21 medical supply companies that they regularly

22 purchased from because those companies were maxed

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1 out. Mike Gula was hearing the same thing.

2 So then I started calling several

3 relationships of mine, one being Henry Huang at Great

4 Health Companion to further confirm and understand

5 why it is that there were potential shortages. And

6 once I understood that -- verified that in fact there

7 were real shortages to healthcare systems, the public

8 and the private sector were having difficulty

9 procuring these supplies, I negotiated with Henry

10 Huang, among others, to allow us to work with them

11 and procure high quality medical supplies from them.

12 So Mike and I had a discussion and thought

13 that, in this moment in time, we were uniquely

14 qualified and situated with my relationships in the

15 supply chain, with my business background and with

16 Mike's connections to buyers, that we could bring

17 buyers and suppliers together and successfully

18 deliver lifesaving medical supplies. So we formed

19 Blue Flame Medical.

20 Q. You just referred to your relationships

21 with the supply chain. Are you referring to

22 Mr. Huang?

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1 bank accounts opened for them shortly before that

2 happened for Blue Flame Medical.

3 Does that sound right to you?

4 A. What do you mean by shortly?

5 Q. It doesn't really matter for --

6 MR. WHITE: Is the question just about

7 which one was first or something like that?

8 BY MR. ORSECK:

9 Q. Yeah. Did you -- did you found Blue Flame

10 Strategies and Red Line Strategies before you founded

11 Blue Flame Medical?

12 A. Yes.

13 Q. Why then did you form an LLC called Blue

14 Flame Medical given that you had these other two

15 entities already formed?

16 A. Well, those other entities were going to

17 do a variety of tasks, not just medical supply

18 distribution. And when it appeared that -- actually,

19 no. When it was clear that, for instance, we were

20 going to execute with California on their order,

21 counsel instructed us that it would make the most

22 sense to have a full-blown medical distribution

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1 company and that's its -- that's its main purpose and

2 sole purpose. So Blue Flame Medical was formed.

3 Q. Was the forthcoming transaction with

4 California the impetus to form Blue Flame Medical?

5 A. You know, I don't specifically recall. I

6 know that was one of the main drivers. As the

7 company would -- the California deal served -- sorry.

8 We're having feedback issues.

9 The California deal served as the seed

10 capital for Blue Flame Medical to become a

11 multibillion dollar company. So we realized at that

12 point that it made most sense to have its, you know,

13 own -- own company and counsel agreed. So we formed

14 Blue Flame Medical.

15 MR. ORSECK: Carolyn, can we mark as

16 Defendant's Exhibit 3 our tab 149.

17 MR. WHITE: Counsel, can you give me a

18 description or Bates number because I'm having to

19 pull it up.

20 MR. ORSECK: Oh, yeah. You know, I can do

21 it more easily once it's posted.

22 MR. WHITE: Thank you.

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1 Delaware on March 23rd. Do you agree with that?

2 A. You know, I don't recall the specifics,

3 but that sounds about right.

4 Q. It says that in the complaint. I could

5 show it to you, but I suggest you take my word for

6 it, that that's when the articles of incorporation

7 are dated and the LLC agreement is dated. They all

8 say March 23rd.

9 Can we agree on that?

10 A. Yes.

11 Q. Did you tell Ms. Yee, when you were

12 emailing with her on March 20th, that Blue Flame

13 Medical didn't exist yet?

14 A. I don't believe we had a conversation

15 about the legal status of the LLC in Delaware. But I

16 do know that I had been operating under the

17 assumption that Blue Flame Medical did exist for, I

18 believe, several weeks at that point in time. But

19 was the paperwork filed? Did we have a discussion

20 about that? I don't believe we did, but I don't

21 specifically recall that.

22 Q. Did you tell Ms. Yee, when you spoke to

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1 Q. All right. Why did you tell Mike Gula to

2 make sure the bank knows the wire is coming?

3 A. Well, it's a large transaction, so I

4 wanted to make sure that they had a heads-up not

5 just, you know, what the wire was -- who it was

6 coming from, but at that moment in time, I also was

7 focused on delays.

8 We didn't want any delays because we

9 had -- we wanted to be able to get the masks to

10 California as fast as we possibly could. So it was

11 important not just that they knew it was coming, but

12 that they understood what had to happen when the

13 money landed in our account, meaning we needed to pay

14 suppliers because many of these suppliers were

15 requiring prepayment to begin production.

16 So we wanted to get California their masks

17 as fast as possible. So I just didn't want any

18 delays on the banking side. I thought it would be

19 very wise to let the bank know that not only is the

20 money coming and from whom, but what needs to happen

21 when it arrives.

22 Q. Why did you make reference to the FBI?

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1 A. I think I was saying that in jest. But it

2 was to make sure the bank is comfortable handling a

3 transaction of this magnitude.

4 Q. Mr. Bearman responds up at the top. He

5 emails Mike Gula and CC's Jennilee Brown and you and

6 says, "Mike, I was the one who warned John about

7 this. I've worked with banks. Odd money moves raise

8 red flags and can hold up transactions."

9 Do you see that?

10 A. I do.

11 Q. Did you think that was sound advice from

12 Mr. Bearman?

13 A. You know, I remember Mr. Bearman and I

14 speaking about that it would be a great idea for Mike

15 to talk to the bank in advance. It seemed to make

16 sense, just to make sure that they were aware of and

17 comfortable with it because if they weren't

18 comfortable, I wanted them to tell us. But they told

19 us the exact opposite, that they were comfortable,

20 would welcome the transaction.

21 Q. The next paragraph says, "Be very clear,"

22 in all caps, "with the bank that we have gigantic

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1 orders coming in from the state of California and we

2 will provide documentation of the order."

3 Do you see that?

4 A. I do.

5 Q. Did you agree with that advice?

6 A. Yes. Uh-huh.

7 Q. Why did you think it was important, if you

8 did -- I don't want to put words in your mouth --

9 that Blue Flame provide documentation of the order to

10 the bank?

11 A. You know, that wasn't my -- that sentence

12 wasn't obviously my particular advice. But what I

13 did agree with in that sentence was that it's

14 important that not only did we have this one order

15 that was large coming through, but that we were going

16 to have a sequence of large orders coming through.

17 So the documentation side, I don't see why

18 I would disagree with that. But I -- my -- my focus

19 in talking to Mike was just make sure the bank is

20 very clear and well aware of our business, the

21 California transaction, what has to happen when it

22 comes in so that we can fulfill our obligation to the

1 state of California, and what's going to be happening

2 on an ongoing basis.

3 Q. Did you have a view one way or the other

4 as to whether it was important for Blue Flame to

5 provide documentation of the order to Chain Bridge

6 Bank?

7 A. You know, I don't think -- after -- after

8 I received a phone call from Mike that he spoke with

9 the banking executives that everything is good and

10 that they welcomed the transaction and could spread

11 the risk and that Mike's friend who's an attorney was

12 on the line, I didn't think anything of it after that

13 point, especially when Maria Cole, our banking

14 representative, told me that she was aware of the

15 transaction the morning of and was willing and

16 planning to execute on wiring out money that day to

17 make sure we could send -- send money to suppliers to

18 start delivering to California. So I didn't think

19 anything of it.

20 Q. Did Mike Gula tell you that the bank had

21 asked for any particular documentation of the order?

22 A. I don't recall.

1 THE WITNESS: Okay. I'm ready.

2 BY MR. ORSECK:

3 Q. As best I can tell, this is at or around

4 11:33 p.m. on March 25th. That's what it says at the

5 bottom. Then you say in the first full paragraph,

6 "Lastly, I managed to make it even cleaner tonight.

7 I begged my most trusted manufacturer to make all 100

8 million units for me for this order. He agreed."

9 Right?

10 A. Yes.

11 Q. Was it your intent at this point not to

12 have Ms. Suuchi deliver any portion of the 100

13 million masks for California and to have Henry

14 deliver all of them?

15 A. No. What was going on there was Henry had

16 agreed to a supply of 200 million if I requested that

17 volume of him.

18 Q. Did you ever --

19 A. Suuchi had six million of live inventory.

20 So that's why we decided to immediately use her.

21 Q. Can you say that again? I'm afraid I

22 spoke over you.

1 A. No, it's okay. It's my fault. I was

2 going to say Suuchi had six million masks in live

3 inventory available to ship immediately. That's why

4 we in part decided to use her as a mix of vendors.

5 But Henry had agreed to supply up to 100 million.

6 Q. At what point had he agreed -- agreed to

7 do that?

8 A. You know, somewhere within a day or so of

9 this message.

10 Q. If you go down two paragraphs, you say, "I

11 pray the wire goes through in the morning," right?

12 A. Yes.

13 Q. And then you say, "My manufacturer is

14 loading up the jet as we speak and I'm on the hook

15 for it now."

16 Was that Mr. Huang you were referring to?

17 A. You know, I don't recall. I know we were

18 under a lot of pressure from Suuchi who had live

19 inventory. I know that Mr. Huang also had some live

20 inventory. I don't recall which -- which

21 manufacturer, but I just know that we were making

22 commitments to -- to vendors that this deal was going

1 A. Well, I think I reference -- I think I

2 reference it later on in the text that we were

3 talking to both Mercury Air and Henry, of course, our

4 manufacturers, that planes would need to be landing

5 with frequency to deliver the inventory.

6 Q. And at the bottom of that page that ends

7 in 59, when you say "to meet our deadline for

8 California," are those the deadlines stated on the

9 next page on page 960 in the chart excerpted in the

10 middle of the page?

11 A. So this was a rough delivery schedule.

12 All I know is we were intending to deliver 100

13 million masks to the state of California as quickly

14 as possible.

15 Q. Well, you sent this chart to Mr. Kim. Did

16 you mean for him to understand that the 100 million

17 mask delivery would be completed by April 24th?

18 A. I believe I said -- hold on. Let me go

19 find it. I'll repeat the sentence. "As Dan and I

20 discussed, my team has put together a list of rough

21 delivery timelines." So that's what I meant.

22 Q. Okay. And at the bottom of that page,

1 when you say that you were going to, quote, "to meet

2 our deadline for California," what deadline is that?

3 A. A deadline to deliver as fast as possible.

4 Q. That was the deadline, as fast as

5 possible?

6 A. Yes.

7 Q. Did you say anything like that to Mr. Kim

8 or Mr. Wong in this text?

9 A. I'm not sure exactly what you're asking.

10 Q. Right. I'll be more specific. On page

11 960 at 11:46 p.m., I think you sent into the text

12 chain the chart, which I believe is the same one that

13 was at DX-24, right?

14 A. Okay.

15 Q. What were you attempting to convey by

16 sending that chart to Mr. Kim and Mr. Wong?

17 A. That there was a rough delivery schedule

18 of when we were pushing to deliver the masks. And

19 this was our internal schedule.

20 Q. Did you call this an internal schedule in

21 your text?

22 A. I don't remember.

1 A. If necessary. I think Henry had it all

2 under control, but if he ran into an issue, Mercury

3 Air had a commercial fleet available.

4 Q. Let's turn to March 26th. That's the day

5 of the wire transaction. According to the complaint,

6 Maria Cole confirmed to you at 11:59 a.m. her bank

7 had received a wire transfer at that point. Do you

8 remember that phone conversation?

9 A. I do.

10 Q. What did she say exactly, to the best of

11 your recollection?

12 A. Well, I believe the sequence was

13 California had confirmed that they had sent the wire

14 on their side. I believe I spoke with Maria Cole.

15 She was well aware of the transaction incoming as

16 well as -- at that time I don't think the wire had

17 landed at the bank, that -- but we walked through the

18 business, the future business that we'd be doing with

19 their bank. She was well aware of that.

20 What would need to happen when the money

21 landed in the account and posted in our account, that

22 we would need to wire out money immediately. She

1 said she was aware of that. And she checked, I

2 believe, on the first phone call to see if the funds

3 had come in the bank. I don't believe they had at

4 that point. She said -- I think she said she would

5 call me when it landed.

6 Then I was on the phone with Ethan Bearman

7 and my business partner, Mike Gula. Mike was

8 clicking the refresh button on his online portal.

9 When he saw -- first I think we received an incoming

10 wire email notification. Then shortly thereafter, I

11 believe the money posted in our Blue Flame Medical

12 online account that Mike Gula saw.

13 Mike Gula, I believe -- yes, he

14 confirmed -- I think I heard Claire or Hannah squeal,

15 who was in his office because she, too, saw the

16 money. I then immediately turned around and called

17 Maria Cole again. I said I believe the money is

18 posted in our account and to the best of my

19 recollection, she used the phrase, ooh, boy that's a

20 lot of money. And I said, sure is, Maria. We need

21 to get a chunk of this money out the door, wired out

22 immediately, so we don't miss the wire cutoff for

1 today because we have to deliver masks to the state

2 of California, we've got a schedule to keep. She

3 said, I understand. Your online portal is not set up

4 for you to execute the wires, but that's not a

5 problem. She has to fill out one piece of paper

6 work. She will be right back and we can just execute

7 the wire and get it to Suuchi's domestic bank.

8 I believe either at that -- around that

9 same time, Ethan Bearman also emailed wire

10 instructions for Suuchi to Maria Cole, I believe it

11 was. I hung up. Maria said she'd call me back. I

12 didn't think anything of it. Went about our

13 business, talking with other customers.

14 And then we received an email. Would you

15 like the full sequence of things or --

16 Q. No, I just wanted to know what -- I just

17 wanted to know what you discussed with Maria Cole.

18 A. Sure.

19 Q. And I was told not to interrupt you, so I

20 let you go on.

21 A. I appreciate that. Thank you.

22 Q. All right. You learned later that

1 afternoon that the wire had been canceled. The

2 complaint at paragraph 71 says 3:36 p.m. Eastern

3 Daylight Time. I know you probably don't remember

4 the exact time, but do you recall that happened in

5 the afternoon?

6 A. Yes.

7 Q. All right. Can you go back, please -- how

8 did you learn of that, by the way?

9 A. Learn about what? The wire?

10 Q. About the -- that California or

11 California's bank requesting return of the wire.

12 A. Well, when -- I'm trying to think of the

13 sequence of things. We were waiting for Maria to

14 call us back -- call me back to execute the wire out

15 to Suuchi and I think shortly thereafter, Mike Gula

16 was locked out of his online portal. He called me as

17 if some -- because something's wrong.

18 And then all of us as a company tried to

19 get ahold of somebody at Chain Bridge Bank, not

20 knowing what was going on, but that there might have

21 been a problem. And then I think Mr. Brough, I think

22 that's his last name, emailed us saying they had --

1 I'm paraphrasing -- but they had stolen our money and

2 sent it back to California.

3 Q. Mr. Brough said they had stolen your money

4 and sent it back to California?

5 A. I am editorializing. But he had said that

6 they sent it back to California.

7 Q. I see. Okay. Would you turn back to

8 DX -- Defendant's Exhibit 5, which is the set of text

9 messages between you and Matt Littman.

10 A. All right.

11 Q. And when you have it -- all right. And if

12 you would go to page 200083, please.

13 A. Do you know what page in the document that

14 is?

15 Q. I do.

16 A. I'm almost there. I figured out how to do

17 it.

18 MR. WHITE: What were the last two digits,

19 Gary?

20 MR. ORSECK: 83.

21 MR. WHITE: Thank you.

22 THE WITNESS: May I read it quickly?

1 A. He was confused. He was confused and I

2 just made it very clear what the situation was.

3 Q. He was confused because he thought the

4 deal was for 3M masks and the deal wasn't for 3M

5 masks; is that what you mean?

6 A. No. I think he was confused in that

7 moment. I'm not sure. You have to ask Mr. Wong

8 actually. I don't want to speak for him.

9 Q. Okay. At any rate, you had a disagreement

10 in this email chain about what was to be provided

11 under the original invoice, correct?

12 MR. WHITE: Objection. The document

13 speaks for itself, but you can answer.

14 THE WITNESS: We had a disagreement, yes.

15 BY MR. ORSECK:

16 Q. As of this date, April 10th represented on

17 Exhibit 28, did you remain hopeful that you might

18 complete a transaction with California for N95 masks?

19 A. I don't know what I remained. Yes, I was

20 hoping, but it was pretty clear that there was no

21 transaction to be had. The deal was blown up.

22 Q. You continued to engage with California

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