UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI
___________________________________ ) MARK FAUGHN, TERRIE FAUGHN, ) MARVIN L. GLASS, CAROLYN S. ) GLASS, THOMAS MCINTYRE, ) DEBORAH MCINTYRE and ROGER ) Case No. 4:14-cv-00245 SPARKS, )
) Plaintiffs, ) ) v. ) ) JPMORGAN CHASE BANK, N.A., ) ) Defendant )
COMPLAINT
COME NOW Plaintiffs, and for their cause of action against defendant JPMorgan Chase
Bank, N.A. (JPMorgan), state as follows:
PARTIES
1. Plaintiffs Mark and Terri Faughn are citizens of Butler County, and reside at 71
County Road 454, Poplar Bluff, Missouri.
2. Plaintiffs Marvin L. and Carolyn S. Glass are citizens of Butler County, and
reside at 60 Hawkeye Lane, Harviell, Missouri.
3. Plaintiffs Thomas and Deborah McIntyre are citizens of Dent County and reside
at 19816 E. Highway 32, Salem, Missouri.
4. Plaintiff Roger Sparks is a citizen of Jackson County and resides at 524 N.E. Oaks
Ridge Drive, Lees Summit, Missouri.
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5. Defendant JPMorgan is a subsidiary of JPMorgan Chase & Co., a Delaware
corporation, with its principle place of business at 270 Park Avenue, New York, NY. JPMorgan
may be served through its registered agent, CT Corporation System, at 111 Eighth Avenue, 13th
Floor, New York, New York 10017.
JURISDICTION AND VENUE
6. This Court has personal jurisdiction over defendant by reason of defendants
contacts within this judicial district.
7. This Court has subject matter jurisdiction of this action pursuant to 28 U.S.C.
1332(a)(1) based on total diversity with an amount in excess of $75,000.00 in controversy.
8. Venue is proper pursuant to 28 U.S.C. 1391(a)(2) because the Plaintiffs are all
residents of the State of Missouri and forwarded all issued payments to Millennium from the
State of Missouri.
9. Divisional venue in Kansas City, Missouri is proper because defendants are non-
residents and Plaintiff Roger Sparks is a resident of counties of the Western Division.
ALLEGATIONS COMMON TO ALL COUNTS
10. William Wise (Wise) orchestrated a Ponzi scheme which involved using the
internet to advertise the sale of Certificates of Deposit (CDs) with unusually high rates of
interest. Investors money was then laundered and moved to offshore accounts controlled by
Wise.
11. The CDs were fake and were worthless.
12. Plaintiffs collectively paid a total $1,878,500.00 for the CDs Wise and the
Hoegels purported to sell.
13. William Wise (Wise) orchestrated the scheme.
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14. Jacqueline Hoegel and her daughter, Kristi Hoegel, (collectively, the Hoegels)
assisted Wise with the scheme.
15. In 1999, Wise established Millennium Bank (Millennium) in St. Vincent and
Grenadines in the Caribbean.
16. Millennium purported to be a subsidiary of a Swiss bank known as the United
Trust of Switzerland (UT of S).
17. Wise and the Hoegels opened accounts at Washington Mutual Bank (WAMU)
in Las Vegas, Nevada for several Las Vegas limited liability companies, including UT of S,
LLC, United T of S, LLC and Sterling I.S., LLC (collectively, Millennium Accounts). All used
the same business address in Napa, California.
18. Investors, including Plaintiffs, mailed checks to Napa, California, where the
Hoegels operated an office, or wired funds directly to bank accounts in the United States that
were designated by Wise and the Hoegels.
19. The Hoegels took the investors checks to two WAMU retail bank locations on a
frequent basis, depositing hundreds of checks in the Millennium Accounts.
20. Employees at WAMU, including a branch manager, Tamara Miller (Miller),
and a commercial banking officer, Bianca Greeves (Greeves), actively assisted the Hoegels
with the bulk deposits.
21. Miller, Greeves and other WAMU employees helped Wise and the Hoegels to
wire funds from the Millennium accounts out to bank accounts which were in off-shore banking
locations and were controlled by Wise.
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22. WAMU was one of several banks Wise used for money laundering. The other
banks, however, terminated banking services after becoming suspicious of Wise and his
activities.
23. WAMU ignored the suspicious activities of Wise and the Hoegels.
24. Miller and Greeves offered the Hoegels the ability to make deposits remotely and
to remotely wire funds off-shore.
25. Given remote access, the Hoegels began moving investor monies in and out of the
Millennium Accounts from their own office.
26. The rapid movement of money in and out of the Millennium Accounts activated
an alert of WAMUs internal monitoring system.
27. The alert resulted in multiple investigative audits of the Millennium accounts and
an investigation of Wise and the Hoegels.
28. JPMorgan acquired WAMUs assets, including the Millennium accounts, from
the Federal Deposit Insurance Company on September 25, 2008, following WAMUs failure.
29. The audits of the WAMU accounts generated investigative reports for specific
review periods, one of which ran from May 31, 2008 to October 8, 2008, bridging the date of
JPMorgans acquisition of WAMU.
30. The report for the May 31, 2008 to October 8, 2008 review period was prepared
on or after October 8, 2008, so the entity that prepared the investigative report was JPMorgan,
which had already acquired WAMU.
31. The October 8, 2008 report (Exhibit A to this Complaint) included a detailed
narrative, summarizing the suspicious activities related to Wise, the Hoegels and the Millennium
Accounts.
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32. The October 8, 2008 report demonstrates that by October 8, 2008, JPMorgan had
specific and actual knowledge of the fraudulent activities of Wise and the Hoegels.
33. The October 8, 2008 report reveals that the bank, after its acquisition by
JPMorgan, had elected not to report these illegal activities to law enforcement authorities.
34. JPMorgans Anti-Money Laundering Operations Unit, located in San Antonio,
Texas, conducted an investigative audit for the period from October 8, 2008 to February 20,
2009, and created an investigative file, summarizing the suspicious activities for that period.
35. On March 25, 2009, the Securities and Exchange Commission (SEC) filed an
enforcement action in U.S. District Court for the District of Northern Texas, SEC v. Millennium
Bank, et al, N.D.Tex, Wichita Falls Division, Case No. 7:09-cv-00050-O (SEC Action),
seeking injunctive and other relief to shut down the Millennium fraud. See Exhibit B, Hunter
Declaration, filed in support of the SECs motion.
36. In response to a request from the SEC, a compliance manager for JPMorgans
Anti-Money Laundering Operations Unit, Casey Stein (Stein), signed a sworn declaration
dated March 23, 2009, which summarized the results of his units investigation of the
Millennium Accounts (Stein Declaration, Exhibit C). The Stein Declaration was also filed in
support of the SECs motion for a restraining order against Millennium.
37. The Stein Declaration demonstrates that no later than February of 2009, Stein, and
therefore JPMorgan, knew that Wise and the Hoegels were laundering money.
38. Stein and JPMorgan had specific knowledge of the Millennium fraud as far back
as September 25, 2008, the date of JPMorgans acquisition of WAMU.
39. During the six-month period from JPMorgans acquisition of WAMU and the
filing of the SEC action, JPMorgan took no action to shut down the Millennium Accounts.
Case 4:14-cv-00245 Document 1 Filed 03/13/14 Page 5 of 9
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40. During the six-month period from JPMorgans acquisition of WAMU and the
filing of the SEC action, JPMorgan continued to provide uninterrupted banking services to Wise.
41. JPMorgan was legally required to notify a law enforcement agency of the illegal
activity that was discovered during the audit and investigation of the Millennium accounts.
42. During the six-month period from JPMorgans acquisition of WAMU and the
filing of the SEC action, JPMorgan did not notify law enforcement of the illegal activities
discovered during the audit and investigation of the Millennium accounts.
43. During this six month period, over $16 million passed in and out of the bank, and
ended up in overseas accounts beyond the reach of U.S. law enforcement authorities.
44. JPMorgan, by its acts and omissions, knowingly aided and abetted the
Millennium fraud, causing investors, including Plaintiffs, to lose their investment monies.
45. The loss of Plaintiffs investment monies was a reasonably foreseeable result of
JPMorgans failure to notify law enforcement of the Millennium scheme.
COUNT ONE AIDING AND ABETTING COMMON LAW FRAUD
Come now Plaintiffs, and for their cause of action against Defendant under Count One of
this Complaint, state and allege as follows:
46. Plaintiffs incorporate Paragraphs 1 through 45 of this Complaint as though fully
set forth herein.
47. Wise and the Hoegels represented to the public and to the Plaintiffs that
Millennium was a St. Vincent & Grenadines bank offering Certificates of Deposit for sale, and
that Millennium was a subsidiary of a Swiss bank, UT of S.
48. These representations were false and intended to deceive potential investors so
that Wise and the Hoegels could collect and steal investor funds.
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49. The Plaintiffs relied on Wise and the Hoegels representations in electing to
forward monies to them in exchange for fake certificates of deposit issued to them, which were
worthless.
50. JPMorgan knew that Wise and the Hoegels were not conducting any banking
business, but were rather collecting and moving investor monies to accounts that Wise and the
Hoegels had established outside of the U.S.
51. No later than October 8, 2008, JPMorgan had detailed information about the true
nature of the Millennium fraud, as more particularly described in the narrative contained in
Exhibit A.
52. JPMorgan provided substantial assistance to Wise and the Hoegels, including, but
not limited to the following acts and omissions:
a. Allowing Wise and the Hoegels to use JPMorgan bank accounts
for laudering and stealing investor monies;
b. Providing remote deposit and wiring services to Wise and the
Hoegels, which facilitated the theft of investor funds;
c. Failing to close the Millennium Accounts after the banks internal
investigation revealed suspicious activity; and
d. Failing to notify law enforcement about the ongoing illegal
activities by Wise and the Hoegels.
53. Wise and the Hoegels were able to steal sums in excess of $16 million during the
period from September 25, 2008 to March 25, 2009, including monies invested by the Plaintiffs,
as the direct and proximate result of JPMorgans failure to act on its specific knowledge of the
Millennium fraud.
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WHEREFORE, Plaintiffs respectfully request judgment against Defendant under Count I
of this Complaint for such damages as are fair and reasonable together with their costs and fees,
for interest, and for such other and further relief as the Court deems just and proper under the
circumstances.
COUNT TWO CONSPIRACY
Come now Plaintiffs, and for their cause of action against Defendant under Count Two of
this Complaint, state and allege as follows:
54. Plaintiffs incorporate Paragraphs 1 through 53 of this Complaint as though fully
set forth herein.
55. Defendant JPMorgan engaged in a civil conspiracy with Wise and the Hoegels
through the acts and omissions alleged herein.
56. The purpose of the conspiracy was to profit from the Millennium fraud.
57. Defendant, Wise and the Hoegels had a unity of purpose and common design.
58. Defendant profited from the funds that Wise and the Hoegels funneled through
the Millennium Accounts.
59. Defendant deliberately elected not to report the money laundering to law
enforcement.
60. Defendant kept its knowledge and evidence of money laundering by Wise and the
Hoegels a secret until Defendant was approached by the SEC.
61. By keeping the money laundering by Wise and the Hoegels a secret, Defendant
permitted Wise and the Hoegels to move the funds in the Millenium Accounts beyond reach of
recovery by U.S. law enforcement.
Case 4:14-cv-00245 Document 1 Filed 03/13/14 Page 8 of 9
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62. As the direct and proximate result of Defendants participation in the conspiracy,
Plaintiffs were damaged.
WHEREFORE, Plaintiffs respectfully request judgment against Defendant under Count
II of this Complaint for such damages as are fair and reasonable together with their costs and
fees, for interest, and for such other and further relief as the Court deems just and proper under
the circumstances.
Respectfully submitted,
/s/ Rick D. Holtsclaw Rick D. Holtsclaw, MO#32866 HOLTSCLAW FIRM
2029 Wyandotte, Suite 100 Kansas City, Missouri 64108 Telephone: (816) 221-2555 Facsimile: (816) 221-2508 [email protected]
ATTORNEY FOR PLAINTIFF
REQUEST FOR TRIAL BY JURY
COMES NOW the plaintiff and hereby respectfully requests trial by jury of all issues so
triable in the above-captioned cause.
/s/ Rick D. Holtsclaw ATTORNEY FOR PLAINTIFF70
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michelle
Hunter Declaration
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IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF TEXAS
WICHITA FALLS DIVISION
SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. MILLENNIUM BANK,
UNITED TRUST OF SWITZERLAND S.A., UT of S, LLC, MILLENNIUM FINANCIAL GROUP, WILLIAM J. WISE, d//a STERLING ADMINISTRATION, d//a STERLING INVESTMENT SERVICES, d/b/a MILLENNIUM AVIATION,
KRSTI M. HOEGEL, alk/a KRSTI M. CHRISTOPHER, alk/a BESSY LU, JACQUELINE S. HOEGEL, alk/a JACQULINE S. HOEGEL, alk/a JACKIE S. HOEGEL, PHILIPPE ANGELONI, and BRIJESH CHOPRA,
Defendants, ~d UNITED T OF S, LLC, STERLING I.S., LLC, MATRIX ADMINISTRATION, LLC,
JASMINE ADMINISTRATION, LLC, LYN P. WISE, DARYL C. HOEGEL, RYAN D. HOEGEL, and LAURIE H. WALTON,
Relief Defend~ts.
DECLARATION OF KEITH J. HUNTER
Case No.:
I, Keith J. Hunter do hereby declare under penalty of perjury, in accordance with 28
U.S.C. i 746, that the following is true ~d correct, and that I am competent to testify as to the
matters stated herein:
App. 90
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1. I am over 21 years of age. I am employed by the United States Securities ~d
Exchange Commission ("Commission") as a staff account~t ~d have been employed in this
capacity since April 1999. Prior to joining the Commission, I was previously employed by the
United States Attorney's Offce for the Northern District of Texas as ~ Investigative Auditor
from September 1991 to April 1999. I am a certified public accountant (License# 54262),
licensed by the Texas State Board of Public Account~cy.
2. As a staff accountant with the Commission, my responsibilities include review of
public comp~y fin~cial statements for compli~ce with Generally Accepted Accounting
Principles, as well as review of independent audit workpapers for compliance with Generally
Accepted Auditing St~dards. I also analyze fin~cial records of non-public corporations,
parnerships, ~d individuals. This process involves tracing financial transactions to determine
their disposition ~d how those transactions occurred. Finally, I summarize such information
into various schedules ~d charts, and testify to such at hearings ~d trials.
3. I became involved in a Commission investigation into Milennium Bank
("Milennium") on or about March 3,2009 to ~alyze various bank account activity involved inthe umegistered offering of bogus "high-yield" certificates of deposit ("CDs") by Millennium
and its parent comp~y, United Trust of Switzerl~d, S.A. ("United Trust of Switzerl~d"), also
known as UT of S, LLC ("UT of S"). Milennium, located in the West Indies islands of St.
Vincent ~d the Grenadines ("SVG"), marketed its CD's on Milennium's website at
ww.mlnbank.com. and through various internet baner ads ~d lavish lifestyle magazines with
interest rates of 7% to 8%. However, according to h~d-written comments on investor checks
obtained by the staff, Milennium also offered interest rates ranging from 6.75% to 10%. These
CDs were primarily offered by Milennium's two principals, recidivists Wiliam 1. Wise
App. 91
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Case 4:14-cv-00245 Document 1-2 Filed 03/13/14 Page 3 of 13
("Wise") and Krsti Hoegel ("K. Hoegel'') through entities that either one or both of themcontrol, including Milennium Bank, United Trust of Switzerland, UT of S, and Milennium
Financial Group. Wise was ordered to comply with Pennsylvania state securities laws in 2003 in
connection with the sale of high-yield deposit agreements. Krsti Hoegel was ordered to cease
and desist from violating Minnesota securities laws in 2006.
4. My review of records relating to Milennium's business included, but was not
limited to, Milennium's UT of S ban account (account# ending X648), maintained at
JPMorgan Chase / Washington Mutual Bank ("W AMU"). This account, located in Napa,
California, was opened by K. Hoegel and Jackie Hoegel in Las Vegas, Nevada, in July 2004 and
has been used since at least October 2005 to receive investor funds for the purchase of purported
certificates of deposit. My review consisted of a comprehensive analysis for the period October
i, 2008 through February 2009, as well as an expanded review that concentrated on locating
other investor deposits, and other withdrawals to key individuals affiliated with Milennium,
Wise, and K. Hoegel for the period October 2005 through September 30, 2008. I also reviewed
the original and updated signature cards for this account, which indicate that Wise and K. Hoegel
are current authorized account signatories, as well as the Pennsylvania and Minnesota orders,
referred to above.
RECEIPT OF INVESTOR FUNDS BY THE UT OF S ACCOUNT
5. Ban statements for the UT of S account at W AMU indicate approximately
$ i 06.6 millon in deposits from July 2004 through February 2009. The Commssion has been
able to obtain, on an expedited basis, detailed records (deposit and withdrawal items) for a
majority of the transactions for the period October 2005 through Februar 28,2009 (the "review
period"). Based on this review period, at least approximately $68.6 milion was identified as
App. 92
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Case 4:14-cv-00245 Document 1-2 Filed 03/13/14 Page 4 of 13
investor funds raised from the offering of Milennium's CD's. Investor checks obtained by thestaff typically listed "UT ofS" or "United Trust of Switzerland" as the payee. The memo lines
of the checks often referenced "CD," an interest rate, Milennium Bank, the name ofa
Milennum Bank CD salesman, and/or the term "investment."
6. These funds were raised from over 375 investors across the country - from
Alaska, to Texas (including Wichita Falls, Texas), to Florida to New York, as well as from some
foreign investors located in Canada and Shanghai, China. These funds appear to have been sent
by investors to Milennium at its location in St. Vincent and the Grenadines, packaged offshore
and then shipped to UT ofS's Napa, California office via FedEx or U.S. maiL. Federal Express
shipping records reflect shipments to 3432 Valle Verde Dr., Napa, Californa from Millennum
Ban. During 2008 and 2009, Wise, Jackie Hoegel, Brijesh Chopra, and Philippe Angeloni all
received and/or shipped packages biled to the Milennium Bank Federal Express account. In the
four month period from October i, 2008 through February 28,2009, UT ofS, LLC paid over
$24,000 in Federal Express shipping costs.
7. Once received in Napa, a significant portion ofthe checks were deposited into the
UT of S account via remote deposit machines from W AMU that Milennum had on-site at its
office in Napa. According to W AMU, remote deposit machines are offered for purchase by
W AMU and allow W AMU's customers and merchants greater flexibilty in conducting their
banng needs. These devices scan an investor check, causing it to be immediately deposited to
the customer's (UT of S) account. According to documents obtained from W AMU, the remote
deposit machines were requested by Krsti Hoegel and stationed at UT ofS's office at 3432
Valle Verde Dr., Napa, California. Under the agreement with W AMU, the customer (UT ofS /
App. 93
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Millennium) is required to properly dispose of the deposited item/check within approximately 30
days.
DISBURSEMENTS FROM THE UT of S ACCOUNT
8. During the relev~t period, all investor funds appear to have been commingled in
the UT ofS account at WAMU, used for operating expenses ofUT ofS, and subsequently
disbursed to Wise, K. Hoegel, Brijesh Chopra, and Philippe Angeloni; Wise and K. Hoegel's
relatives; and entities Wise ~d K. Hoegel control. Specifically, based on my review of the ban
records and other documentation, it appears that the majority of investor funds were used by,
and/or tr~sferred to the following individuals ~d entities (shown with approximate amounts
received):
a. Wise (includinp entities under his control, Sterling Administration,
Sterling Investment Services, Milennium Aviation): $12.3 milion
b. K. Hoegel: $965,000
c. Jackie Hoegel (K. Hoegel's mother): $854,000
d. Brijesh Chopra: $90,000
e. Philippe Angeloni: $20,000
f. Lynn Wise (Wise's wife): $1.6 milion
g. Daryl Hoegel (Jackie Hoegel's husband): $130,000
h. Ryan Hoegel (K. Hoegel's brother): $34,000
1. Laurie Walton: $323,000
J. United T of S, LLC: $225,000
k. Sterling I.S., LLC: $504,000
L. Matrix Administration, LLC: $476,000
App. 94
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Case 4:14-cv-00245 Document 1-2 Filed 03/13/14 Page 6 of 13
m. Jasmine Administration, LLC: $18,000
n. Milennium Fin~cial Group: $20,000
o. United Trust of Switzerland, S.A.: $2.6 milion
p. UT ofS, LLC (operating expenses): $1.1 milion
In addition, other disbursements relating to credit cards ($2.8 milion), automobiles
($820,000), aviation ($870,000), ~d wine ($90,000) were also identified. There may be otherentities or individuals who received investor fuds as welL.
9. It appears that Wise directed transfers to his various business entities, namely
Sterling Investment Services, Sterling Administration, and Milennium Aviation. Approximately
$2.6 milion was tr~sferred to United Trust of Switzerland and approximately $6.6 milion was
transferred to or for the benefit of Sterling Investment Services/Sterling Administration. Of this
$6.6 milion, approximately $4.7 millon was wire transferred to ~ entity named Caribbean
Money Market Brokers, Ltd., located on the Caribbean isl~d of Port of Spain, Trinidad. I have
not been able to determine the disposition of the fuds tr~sferred to United Trust of
Switzerl~d, Sterling Investment Services and Sterling Administration.
10. There does not appear to be any withdrawals from the account to properly invest
all of the identified investor fuds. Exhibit 1 to this declaration is a summary overview of the
UT of S account that I prepared, which identifies disbursements to Wise, K. Hoegel, and other
persons affliated with Milennium, namely, the Defendants ~d Relief Defendants.
1 1. Exhibit 1 also identifies approximately $3 milion in payments back to investors
from October 2008 through February 2009, representing an investment "return" on the CD or a
purorted maturity redemption of the CD. However, given that little or no investment activity
-,
App.95
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was ever conducted out of this account, it appears such payments represent Ponzi payments from
other investors, ~ example of which is discussed below.
POSSIBLE PONZI PAYMENTS TO INVESTORS
12. On December 23,2008, the checks ofthree investors from Maryl~d ($50,000),
Oregon ($15,000), ~d San Fr~cisco ($20,000) were deposited into the UT ofS account. The
bal~ce in this account prior to these deposits was $1,937.08. After the receipt of these deposits,
the following withdrawals were made from the account.
. $26,254.99 to other investors
. $12,000.00 to Lynn Wise
$ 6,675.00 to Laurie Walton (affiiated with Wiliam Wise)
. $20,000.00 to Sterling I.S., LLC
. $10,140.89 to Old World Provisioning, LLC
$ 5,313.39 to various credit card companies
. $ 13 1.91 to FedEx
$ 75.00 to Reginald Sharpe
$ 2,401. 1 6 to Ilegible / Global Group
13. After these withdrawals, the account reflected a bal~ce of $3,944.74. Thus, as
outlined above, it does not appear that the funds from these investors in Maryland, Oregon, and
San Fr~cisco were ever invested. The disposition or purpose of the $20,000 to Sterling I.S.,
LLC, Wise's comp~y, is unown.
14. In summary, UT ofS's ban records establish the following: (1) there is no
evidence that all investor fuds were used for legitimate baning or investment activities; (2)
investor funds were commingled in the account; (3) money movement in the W AMU account
App. 96
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Case 4:14-cv-00245 Document 1-2 Filed 03/13/14 Page 8 of 13
included transfers to/from each of the Defendants, linking all of them to the scheme; (4) milions
of dollars of new investor monies were used to make apparent Ponzi payments to earlier
investors; (5) each of the individual Defend~ts diverted investor funds for their personal use
(totaling approximately $14.2 milion); (6) each of the ReliefDefend~ts received from tens of
thous~ds to milions of dollars of investor fuds (totaling approximately $3.3 milion) for no
apparent consideration; and (7) investor fuds were also used to pay at least $2.8 milion in
credit card expenses, $820,000 in auto expenses, $870,000 in aviation expenses, and $90,000 in
wine expenses (totaling approximately $4.6 milion).
Executed this 23rd day of March, 2009.
~;7~Keith 1. Hunter, C.P.A.
App. 97
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Exhibit
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Bank Account Summary Overview
Case Name:Bank Name:Account Name:Account #:Period:
Milennium Bank (FW - 03366)JPMorgan Chase / Washington MutualUT of S, LLC983949648October 2005 - February 2009
Investor Deposits:Investor Deposits
Withdrawals by Defendants and Relief Defandants:
Defendants:William J. Wise
Sterling iS d/b/a Sterling Investment ServicesSterling AdministrationCaribbean Money Market Brokers - Sterling AdministrationMillennium Aviation (Base Ops)
Kristi M. HoegelJacqueline S. HoegelBrijesh ChopraMillennium Financial GroupPhilippe AngeloniUnited Trust of Switzerland SA
Total Withdrawals by Defendants:
Relief Defendants:United T of S, LLCSterling I.S., LLCMatrix Administration, LLCJasmine Administration, LLCLynn P. WiseDaryl C. HoegelRyan D. HoegelLaurie Walton
Total Withdrawals by Relief Defendants:
Other Notable Withdrawals:Potential Investor Returns (Oct. 2008 - Feb. 2009)Millennium TrustAutosAviationCashCredit CardWineShipping
Total Other Notable Withdrawals:
Net Difference (withdrawals not yet identified by the staff
($5,676,373)($1,079,000)
($813,000)($4,752,000)
($70,000) ($12,390,373)
($965,626)($854,254)($90,000)($20,145)($20,000)
($2,690,578)
($225,600)($504,300)($476,405)
($18,000)($1,683,500)
($130,825)($34,950)
($323,120)
($3,029,729)($1,237,206)
($823,582)($877,891 )
($33,681 )($2,885,420)
($92,433)($24,206)
8:'"'Ii;ooa:~i5"-
EXHIBIT\,~ ~(/
$68,624,772
($17,030,975)
($3,396,700)
($9,004,148)
$39,192,948
App. 98
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Attestation Case 7:09-cv-00050-O Document 7-4 Filed 03/26/09 Page 24 of 29 PageID 201
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I HEREBY ATIST
UNITED STATES OF AMERICASECURITIES AND EXCHANGE COMMISSION
ATTESTATION
that:
A dilgent search has this day been made of the records and files of this Commission and the
records andfiles do not disclose, that any registration statement has been received in this
Commission under the names Milennium Bank, United Trust of Switzerland s.A. or UT of S.
LLC, pursuant to the provisions of any of the Acts administered by the Commission.
on fie in this CommissionMarch 20, 2009
(Date) ~s fvRecords Offcer
It is hereby certified that the Secretary of the U.S. Securities and ExchangeCommission, Washington, D.C., which Commission was created by theSecurities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is officialcustodian of the records and files of said Commission, and all records andfiles created or established by the Federal Trade Commission pursuant tothe provisions of the Securities .Act of 1933 and transferred to thisCommission in accordance with Section 210 of the Securities ExchangeAct of 1934, and was such official custodian at the time of executing theabove attestation, and that helshe, and persons holding the positions ofDeputy Secretary, Assistant Director, Records Officer, Branch Chief ofRecords Management, and the Program Analyst for the Records Officer,or anyone of them, are authorized to execute the above attestation.
For the Commission~ 7J. Y1~Secretary
App. 99
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Stein Declaration
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DECLARATION OF CASEY STEINI, Casey Stein, do hereby dei:clare under penalty of perjury, in accordance with 28 U.S.c.
1746. that the ftllowing is true and correct, and that I am competent to testify to the matters
stated herein:
1. I am over 2 i years of age and employed by JPMorgan Chase/Wa,'iington Mutual
("WAMU"). i am a Compliance Manager and I supervise WAMU employees who reviewcustomer account transactions which might involve ilegal activities.
2. In mid-February 2009, during the normal course of operations, an investigatorwithin my department noticed unusual deposit items and wre activity in W AMU account endingin #648 during January 2009. The aCcount is a Business Corporations/Joint Ventures Analysis
Checking Account in the name ofUT ofS,LLC and was opened on 07/08/2004 ("'the tIT ofS,
LLC Accom:if'). Willam J. Wise ("Wise") and Kristi M. Hoege! ("Hoegel") have joint signature
authority fur the account
3. The unusual actIvity on the UT ofS,LLC Account involved rapid movement offunds and international wire transfers to countries with an increased risk for potential money
laundering. further, a large portion of the funds that were deposited into the UT ofS, LtCAccount were being redistributed to Wise, Hoegel, and their apparent relatives, including
payment to credit cards, and a minimal amount was distdbuttxi to companies n a related line of
business.
4. As a service to its custorncrs, the W AMU branch offices offer "remote deposits
devices," which allow the customer to deposit checks into the account from the customer's
business location. 'rhe devices scan the checks and the funds are electronically deposited into
the customer's account.
App. 100
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5. The Iff ufS,LLC Account activity rel1ects many "remote items deposits.' andcustomer deposits in significant amounts, followed by large outgoing domestic and international
wires to various individuals, including Wise, Hoegel, apparent famHy members, and entities and
businesses controlled by Wise andor the Hoegels. The remote items deposited in the liT of S,
LLC Account consist of transit checks from various individuals. 'rhc memo Hnes on the checks
typically include reIrences to "CD" and interest rates ranging from 6.75% to 10%.
6. A W AMU employee working at my direction performed an investigation into theaccount activity and reported his findings to me in the nornial course of business. Among otherthings, the employee repoftt-'d that from a tally f checks deposited into the U1' of S, LLC
Account fom 07/18/2005 to 03/06/2009, the total amount of possible investor funds was in
excess of $43,000,000. This amount does not include wire transfers and other possible types of
deposits.
7. At my direction" on February 27,2009, the SmaH Business Manager at the bank's
Napa Valley branch conducted a physical inspection of the 0'1' ofS, LLC office at 3432 ValleVerde Drive, Napa, California. The branch m~\Iager's inspection" which was reported to me in
the nonnal course of business. noted that the offce has no signage, and the remote deposit
machine wa.: present at the location. While inspecting the premises, the branch manager
overheard the U1' of S, LLC office receptionist ask a caller if he/she wanted to rollover a
matured CD to a new one.
8. On February 27, 2009, at approximately 4:08 p.m. CST, I placed a can to BoegeJ.
Other W AMU employees working at my direction listened to the calL. Boegel stated, amongother things, that: (I) Wise is her boss; (2) Wise owns United Trust of Switzerland, a/k/a U1' of
S, which owns Milennium Bank; (3) she did not knO\v why the memo section of the checks
App.101
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Case 4:14-cv-00245 Document 1-3 Filed 03/13/14 Page 3 of 4
deposited into the 0'1' of S, TJ...C Account referred to CDs and interest rates; (4) her business did
not oftr CDs; (5) she was not licensed to oHer CDs; (6) checks being deposited into the UT of
S, LtC account arrive in Napa by mail; (7) Jackie loegel is her mother, Ryan Hocgcl is her
brother, and Daryl Hoegel is Jackie's husband.
9. On March 9,2009, W AMlJ froze the UI' of S, LLC Account on a temporary
basis. The account currently holds approximately $34,500. The funds wJ be released and the
account wil be closed \vithin the next several days.
Executed March 23, 2009
#"~/.,- ~~"::'" ""~: ,-CASEY STEIN
App.l02
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3/11/2014 Missouri Western Civil Cover Sheet
1/2
JS 44 (Rev 09/10)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
CIVIL COVER SHEET
This automated JS-44 conforms generally to the manual JS-44 approved by the Judicial Conference of the United States in
September 1974. The data is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. The
information contained herein neither replaces nor supplements the filing and service of pleadings or other papers as required
by law. This form is authorized for use only in the Western District of Missouri.
The completed cover sheet must be saved as a pdf document and filed as an attachment to the
Complaint or Notice of Removal.
Plaintiff(s): Defendant(s):
First Listed Plaintiff:
James Mark Faughn ;
1 Citizen of This State;
County of Residence: Outside This District
Additional Plaintiff(s):
Terrie Lynn Faughn ;
1 Citizen of This State;
Thomas Charles McIntyre ;
1 Citizen of This State;
Debbie Wolters McIntyre ;
1 Citizen of This State;
Marvin L Glass ;
1 Citizen of This State;
Carolyn S Glass ;
1 Citizen of This State;
Roger A. Sparks ;
1 Citizen of This State;
First Listed Defendant:
JPMorgan Chase Bank, N.A. ;
2 Citizen of Another State;
County of Residence: Outside This District
County Where Claim For Relief Arose: Jackson County
Plaintiff's Attorney(s): Defendant's Attorney(s):
Rick Holtsclaw (James Faughn)
Holtsclaw Firm
2029 Wyandotte St., Ste. 100
Kansas City, Missouri 64108
Phone: 816-221-2555
Fax: 816-221-2508
Email: [email protected]
Case 4:14-cv-00245 Document 1-4 Filed 03/13/14 Page 1 of 2
3/11/2014 Missouri Western Civil Cover Sheet
2/2
Basis of Jurisdiction: 4. Diversity of Citizenship
Citizenship of Principal Parties (Diversity Cases Only)
Plaintiff: 1 Citizen of This State
Defendant: 2 Citizen of Another State
Origin: 1. Original Proceeding
Nature of Suit: 370 Fraud Actions
Cause of Action: Aiding and Abetting Common Law Fraud; Conspiracy
Requested in Complaint
Class Action: Not filed as a Class Action
Monetary Demand (in Thousands):
Jury Demand: Yes
Related Cases: Is NOT a refiling of a previously dismissed action
Signature: Rick Holtsclaw
Date: 3/11/2014
If any of this information is incorrect, please close this window and go back to the Civil Cover Sheet Input form to make the correction and generate
the updated JS44. Once corrected, print this form, sign and date it, and submit it with your new civil action.
Case 4:14-cv-00245 Document 1-4 Filed 03/13/14 Page 2 of 2
COMPLAINT