Videotape Deposition of Sean O'Malley — Blue Flame Medical LLC v. Chain Bridge Bank, N.A. (Dkt. 160-9)
Summary
This is Exhibit 127 in Document 160-9 of Case 1:20-cv-00658, excerpts of the remote videotape deposition via Zoom of Sean O'Malley, taken Tuesday, April 6, 2021. Asked whether funds memo posted to a customer account at Chain Bridge Bank were available to the customer, the witness says that a memo posting is a transaction and, for a wire transfer, means the funds were received by the customer's account. The witness adds that because a hold had been placed on the funds, they were in the account but not available for use.
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“Videotape Deposition of Sean O'Malley — Blue Flame Medical LLC v. Chain Bridge Bank, N.A. (Dkt. 160-9).”
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Case 1:20-cv-00658-LMB-IDD Document 160-9 Filed 05/27/21 Page 1 of 7 PageID#
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EXHIBIT 127
Sean O’Malley CONFIDENTIAL 4/6/2021
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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, :
11 Defendants. : CONFIDENTIAL
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 Tuesday, April 6, 2021
21 Videotape deposition via Zoom of SEAN
22 O'MALLEY, a witness herein, called for examination by
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Sean O’Malley CONFIDENTIAL 4/6/2021
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1 respect to whether those laws were violated or were
2 not violated. I merely point out the one instance
3 where I think it may have happened.
4 Q. Do you have any opinion on whether funds
5 that had been memo posted to a customer account at
6 Chain Bridge Bank were or were not available in that
7 account for the customer's use?
8 MR. MITCHELL: Object to the form.
9 THE WITNESS: I do have an opinion.
10 BY MR. MADDEN:
11 Q. What is your opinion?
12 A. My opinion is that, based on my experience
13 in reviewing, in many cases, transactions going back,
14 you know, years in some instances, that a memo
15 posting is frequently a term used in banking for a
16 transaction.
17 So in my experience, when I review a set
18 of transactions often in a spreadsheet listing all of
19 a client's activity, it will have a series of dates,
20 amounts and there are -- the term memo posting credit
21 or debit will be used to indicate which way the funds
22 are flowing. So based on my experience, a memo
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Sean O’Malley CONFIDENTIAL 4/6/2021
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1 posting is a transaction.
2 Q. And then -- sorry. In the spreadsheet
3 you're describing, did I understand you right that
4 there's an indication of either the term "memo
5 posting" or the term "debit" or the term "credit"?
6 A. No, there -- I'm sorry if I wasn't clear.
7 There are two terms. It's memo posting credit or
8 memo posting debit indicating which way the funds are
9 flowing.
10 Q. Okay. I think I understand.
11 A. Okay.
12 Q. And on the spreadsheet you're thinking
13 about, you understand either memo posting credit or
14 memo posting debit to refer to a transaction?
15 A. That is correct, yes.
16 Q. My question, which I think was a little
17 bit different --
18 A. Okay.
19 Q. -- is whether you have any opinion on
20 whether funds that Chain Bridge Bank memo posts to a
21 customer's account are or are not available to that
22 customer for its use?
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1 MR. MITCHELL: Object to the form.
2 THE WITNESS: Well, when you're talking
3 about a memo posting, part of that question, we have
4 to consider the circumstances, right? We are dealing
5 with a wire transfer here. Wire transfers, by their
6 very nature, are designed to be instantaneous or
7 nearly instantaneous.
8 So in this circumstance, I would interpret
9 memo posting with respect to a wire transfer to mean
10 that the funds have been received by the customer's
11 account. The customer's account now has those funds.
12 BY MR. MADDEN:
13 Q. And what's the basis of that
14 interpretation?
15 A. The basis for that is my experience and
16 understanding with respect to the nature and intent
17 of wire transfers as well as my experience having
18 reviewed transactional activity for, you know, a
19 number of clients where it's quite common to see the
20 phrase memo posting, again, memo posting credit or
21 debit, depending on which way the funds are flowing,
22 to be used to describe a transaction.
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1 So when I see the phrase "memo posting,"
2 to me that means transaction.
3 Q. And is it significant to your opinions in
4 this case that you interpret any memo posting of the
5 wire to Blue Flame Medical's account to have made
6 those funds available to Blue Flame Medical?
7 MR. MITCHELL: Object to the form.
8 THE WITNESS: I'm sorry, can you --
9 BY MR. MADDEN:
10 Q. I can try, yes.
11 A. Yeah, sorry about that.
12 Q. Is your understanding of what it means to
13 memo post a wire to a customer's account significant
14 to your opinions on the reasonableness of Chain
15 Bridge's actions in this case?
16 MR. MITCHELL: Object to the form.
17 THE WITNESS: It does influence it
18 because, in my opinion, it indicates that the funds
19 were in Blue Flame Medical's account.
20 BY MR. MADDEN:
21 Q. And is it also significant because it
22 indicates that those funds were available for Blue
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1 Flame Medical's use in that account?
2 A. Well, but the hold had been placed on, so
3 they weren't really available for use based on that
4 fact. They were in the account, but the hold was
5 placed on it so that they could not be withdrawn from
6 the account. So they weren't -- I wouldn't classify
7 them as available for use, but they were in the
8 account.
9 And the conversation that you played
10 with -- involving John Brough actually reflected that
11 fact, that the funds were in the customer account.
12 Q. Okay.
13 MR. MITCHELL: Matt, when you have a --
14 sorry. I know it's --
15 MR. MADDEN: We can go off the record.
16 MR. MITCHELL: It's been over an hour,
17 yeah.
18 MR. MADDEN: Yeah.
19 THE VIDEOGRAPHER: Off the record at 5:45.
20 (Recess.)
21 THE VIDEOGRAPHER: We are now back on the
22 record. The time is 5:53 p.m.
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