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WAIFA Bank Mock Complaint Letter

SUPERIOR COURT OF THE STATE OF NEW YORK

FOR THE COUNTY OF QUEENS, NORTHEASTERN DISTRICT


CLASS ACTION COMPLAINT

JANET SMITH, RYAN WHITE, HARRY

GILL, LUCAS WILSON, KATE ANDERSON

ROGER HARPER, WEI FANG, On

Their Own Behalf and on the Behalf of All

Others Similarly Situated:


1. FRAUD

2. BREACH OF CONTRACT

3. INTENTIONAL INFLICTION OF DISTRESS


Plaintiffs,

vs.

BANK OF AMERICA NEW YORK CITY DEMAND FOR JURY TRIAL

BRANCH MANAGEMENT AND

OPERATIONS TEAM

Defendants


Plaintiffs, by their undersigned attorneys, for their Class Action Complaint against the defendant, alleges as follows:


INTRODUCTION

  1. This case arises out of Bank of America’s lack of timely management during a period where our clients and their privacy were put at risk. Bank of America’s policy where they claim that they will take up to 45 days to investigate financial fraud in their system has proven to be insufficient and damaging towards its customers.

  2. Bank of America offered no knowledge of the scams to the public, in regards to the frauds themselves, who were responsible, and whether they were going to return the stolen money to the victims’ accounts.

  3. On April 9th, 2014, Bank of America was ordered to pay $727 million in consumer relief for illegal credit card practices due to deceptive marketing, unfair billing practices, and enforcement action.

  4. On June 26th, 2018, Bank of America contributed $102 million to a Ponzi scheme.

  5. On May 22nd, 2022, Bank of America paid $10 million for improperly garnishing customer accounts.

  6. As a result of Bank of America’s lack of conduct, Janet Smith, Ryan White, Harry Gill, Lucas Wilson, Kate Anderson, Roger Harper, Wei Fang, and Wang Ku were subjected to a loss of $8,250,256. The majority of the Defendant’s victims were of the working class and were unable to financially compensate for their living expenses. The Defendant did not target a specific group of people but chose people who participated in their business long-term in order to elicit money from them slowly from their bank accounts hoping they wouldn’t notice.



VENUE AND JURISDICTION

  1. This Court has jurisdiction because the Defendant Bank of America operates in the county of Queens, State of New York. Under the Federal Code Provision of Bank Fraud, 18 U.S.C. describes a federal bank offense.

  2. Venue is proper in the county of Queens pursuant to NY CPLR §503F in the New York Consolidated Laws - Civil Practice Law and Rules where an action of consumer credit transaction arose from the defendants resident.



THE PARTIES

  1. The Plaintiffs

  2. Plaintiff Janet Smith is a resident in Flushing, New York. During the class period, she noticed large amounts of funds disappearing from her mortgage fund account. They were being transferred out of her account to a third party processor. She had lost over half the money saved in this account that she needed to pay off her family’s house mortgage. She also reports several unauthorized debit transactions.

  3. Plaintiff Ryan White is a resident in Elmhurst, New York. During the class period, he realized massive amounts of money from the college fund account his parents created had disappeared. He reports debit transactions being sent to his account, despite neither him nor his parents having any recollection of sending the transactions or making any withdrawals. In fact, White and his family have only made withdrawals from their checking account for the last few months, while his college fund account has only received deposits. It was around the same time as the previous plaintiff in which the account received a debit transaction. White reports to have lost almost half of the money originally present in the account, preventing him from being able to sufficiently pay off his tuition for his second year of college.

  4. Plaintiff Harry Gill is a resident in Forest Hills, New York. During the class period, he was denied access to his Bank of America account and received several Bank Overdraft fees totaling up to $1340. He reports that he has not drawn money from his account and suspects that his identity has been stolen under the Defendant’s supervision.

  5. Plaintiff Lucas Wilson is a resident in Forest Hills, New York. During the class period he received an email about an investment opportunity offered by the Bank of America. He was granted a meeting with a team of representatives and earlier investors, which was meant to insure Wilson of the investment scheme’s credibility. His placement of $75,000 had not been meet with any financial benefits, and has had a portion of his income effectively embezzled by managers of the bank.

  6. Plaintiff Kate Anderson is a resident in Soho, New York. During the class period, she was approached by a Bank of America representative during her work hours, who informed her of an investment opportunity she was eligible for, as a result of her company’s recent business transaction. The representative promised a significant return of 200k, and showed her the necessary documents to gain her trust in the matter. After discussing the investment opportunity with other bank managers, she contributed $80,000 of her own money to the bank's investment pool. However, weeks after her initial investment, she reports not receiving any money despite the amount she contributed. Moreover she was unable to directly speak with any employee or manager of the bank, and any email she received regarding the situation was automated and referred to the bank's website. Ultimately, a significant portion of her life savings have been effectively stolen from her.

  7. Plaintiff Roger Harper is a resident in Flushing, New York. During the class period, he saved up $20,000 for his son’s college education as well as an additional $50,000. He reports that he had been paying his rent and utility bills and recently noticed that the transactions between him and his landlord were incorrect. Furthermore, Harper reports receiving suspicious payment deductions despite the fact that he doesn’t share his bank account with anyone. Plaintiff Harper suffered damages including loss of personal property as well as a foreclosure on his family’s home.

  8. Plaintiff Wei Fang is a resident in Garden City, New York. During the class period, she had lost over $65,700 from her savings account. The money in her account was meant to pay off her house mortgage, as well as be used as her imminent retirement fund. She reports that for the past few weeks massive credit card transactions have been made on her name, despite Fang not having actually used her credit herself in any past transaction in the last 6 months.

  9. Plaintiff Wang Ku is a resident in Bethpage, New York. During the class period, she had her tax returns filed in her name which she reports to have not known about. Due to Bank of America’s security breach, she has not been able to deposit her tax refund checks.





B. The Defendant

  1. Defendant Bank of America, National Association (“Bank of America”) is a National Banking Association with its principal place of business in Charlotte, North Carolina. Bank of America does business throughout the State of New York, including the county of Queens, and has provided banking services to Janet Smith, Ryan White, Harry Gill, Lucas Wilson, Kate Anderson, Roger Harper, Wei Fang, and Wang Ku.


DEBIT TRANSACTION FRAUD

  1. Starting on July 11th, 2022 clients reported massive amounts of money disappearing from their bank accounts. At the same time, their accounts were reported to have received debit transactions.

  2. Receipts indicate that Bank of America has received $780,000 in the past weeks since July 11th, 2022 from identified third parties, which were where the money from clients were transferred to.

  3. The Bank of America knew of the merchants who were taking money from its clients’ account. They had documentation consisting of the merchants’ names, addresses, and employment, yet the Bank of America's past public statements indicate their knowledge of the frauds and to an extent, the people responsible. Yet, they claimed ignorance to the identities of any of the individuals responsible for the fraud operation. The bank continues to deny the $780,000 they’ve received, despite the documentation confirming this transaction being made available to the public by Bank of America employees.

  4. Various debit transactions are being sent to the clients’ accounts, despite a lack of sufficient authorization from the actual owners of the accounts. The debit transactions originated from a third party processor owned by merchants who are unidentified. Furthermore our clients insist on having no connection to or knowledge of the merchants gathering their funds.

  5. Leaked emails from Bank of America’s management team imply an effort to conceal evidence of false debit transactions being sent to their clients accounts.


PANDEMIC FUND ABUSE AND IDENTITY FRAUD

  1. Taxpayers relied on the banks to distribute needed funds to families and small businesses to save them from the pandemic-induced economic collapse.

  2. The Bank of America botched the distribution of state unemployment benefits to citizens who required the funds during the pandemic.

  3. The fraud that was carried out during the pandemic include:

    1. Significant amount of identity theft that affected eligible cardholders with legitimate prepaid debit card accounts.

    2. Significant number of criminals who applied for and began receiving unemployment insurance benefits who filed false error claims to access additional funds.

  4. The Bank of America had a flawed fraud filter system which caused rapid account freezes across all of their clients’ insurance benefits, inhibiting them from being accessed.

  5. Several customers report having lost large sums of money as a result of unauthorized transactions on their credit cards.

  6. The bank's management teams did not offer any substantial assistance or meaningful acknowledgement of the situation. Most customers who emailed their bankers about the situation received an automated email with vague instructions and lack of assistance. Those who called the bank were put on hold for hours. Any customers who actually received a response were told that agents were continuously working to handle the frozen account and credit card fraud, but the clients received no response on the situation. Additionally, despite telling customers that bank agents would be available around the clock, agents had a restricted work schedule, which prevented them from addressing identity fraud complaints around the clock. Moreover, there is no evidence of the bank making any effort to fix the issue or sufficiently acknowledge the problem.


THE PONZI SCHEME

  1. Starting in 2018, Defendant Bank of America was sued for aiding and abetting in a Ponzi scheme where investors lost their money. They believed their money would not have been lost had it not been for Bank of America’s assistance. Bank of America has contributed $30 million to carry out this ponzi scheme. Managers of the bank were reported to have approached investors, promising them massive returns in exchange for money. Yet, the Bank of America portfolio managers who received investment money did not invest any of it. The portfolio managers continued to garner investors, with the same promises of massive returns on their investment. Again, the new investor’s money was also not invested, and was instead given to the earlier investors. The new investors were effectively robbed of their money due to a false promise of huge returns made by the bank, and the earlier investors did not receive the amount of money worth their investments. Essentially no investor received what they truly deserved from the bank. The Bank of America’s management team’s deceptive tactics were indicated by its reports of overly consistent returns in the past 20 years, despite the economic conditions per year, especially the 2008 recession and 2022 inflation.



BANK OF AMERICA’S KNOWLEDGE AND SUBSTANTIAL INVOLVEMENT

  1. During the relevant time period, Bank of America knowingly garnished their customer’s accounts in order to help its creditors. They knowingly turned a blind eye to the debit transaction and identity fraud scams affecting their clients. Despite complaints from the clients on money and personal information being taken by third parties, the bank did not offer any legitimate assistance or provide any form of investigation to the scams. They merely acknowledged the missing money in the emails sent to their clients, but the issue remains ongoing. Any response from the bank to the clients regarding the situation were merely automated messages regarding the issue, without any mention of what progress was being made to stop the scam.

  2. The bank made public statements to the general public and its clients that the missing funds were merely a technical error. Since then, the bank has received $780,000 in fees from the third party processors around the time of the frauds’ occurrences. Despite having reports of the frauds occurring and having full knowledge of the situation, the banks made no effort to sufficiently identify those responsible for the guard, nor did they identify a proper solution to the problems. After knowing those responsible for the scam, the bank did not hold the third party processors siphoning money from our clients accounts responsible in any way, rather the bank had allowed them to continue with their fraud in exchange for fees. The debit transactions were recorded being sent to the clients accounts in order to gather money from them, yet the bank has both denied the existence of the transactions and tried to hide evidence of them from the public. Yet they have been released to the public regardless of their efforts to hide evidence.

  3. Flawed fraud filter: In the fall of 2020 and continuing through mid 2021, BOA changed its practices for investigating prepaid debit card fraud on the unemployment insurance benefit accounts. Rather than conducting reasonable and thorough investigations, it implemented a meager fraud filter with a simple set of flags that triggered an account freeze. This led to an influx of the unemployment insurance benefits getting frozen, putting thousands of legitimate cardholders that needed the money in an even more precarious financial situation.

  4. Bank of America’s system was largely inconvenient for customers who wanted to fix their situation: It was difficult for customers to unfreeze their prepaid debit cards or report fraudulent use of their cards. Those with unemployment insurance benefits could not make reports online or in person at bank branches. People were kept on hold for hours every day for weeks in desperate attempts to communicate with someone at the bank. Moreover, although the bank told customers that they had agents that were working around the clock, they actually had a more restricted schedule.

  5. Bank of America virtually led their customers down a black hole: When customers sought assistance to regain their unemployment insurance benefits, the bank sent them back to the California state unemployment department for verification. However, Bank of America and the California state unemployment department had met dozens of times during the summer of 2020, and BOA should have known that sending desperate consumers to them was hopeless.



CLASS ACTION ALLEGATIONS

  1. Plaintiffs bring this action on their own behalf and on behalf of all persons similarly situated. The proposed Class is defined as follows:

Any and all persons or entities who from June 15, 2018 to August 10, 2022 either (a) had been exposed to Bank of America’s breach in security, (b) dealt with the inefficient and untimely management of Bank of America’s financial fraud investigations, or (c) was emotionally distressed under the actions of the Defendant. Excluded from the Class are the Defendants herein, all officers and directors of the Defendants, any individuals or entities employed by the Defendants, and their legal representatives, heirs, successors, or assigns.




CAUSE OF ACTION

FIRST CAUSE OF ACTION

FRAUD

  1. The bank’s failure to actively investigate the fraud indicates their desire to cover up the fraud incident. Moreover they actively made contradictory statements to evidence of the fraud being displayed to the public, as means of discrediting the claims of lost funds. They’ve claimed the intentional fraud attempts were mere technical errors in the banking system, despite this not being the case.

  2. Due to Bank of America’s cover up of the fraud, they acted in violation of 18. U.S.C section 1517 of title XXV of the act of November 20, 1990. Furthermore, they have attempted to obstruct evidence that would prove the occurrence of the frauds.

  3. The Defendant has been caught involved in Ponzi schemes before as shown in the case Arreola vs. Bank of America. This signifies that they are fully aware of the consequences of financial fraud.

  4. The Defendant has had to pay reimbursements to multiple parties in the course of the past 8 years. The continuous pattern shows that the Defendant has done little to prevent financial fraud schemes from happening again.

  5. Plaintiff Gill had a steady balance in his bank account and never overdrew too much money. However, he was falsely charged with overdraft fees by the Defendant. He could access his account either and when he brought this to the Defendants attention, he was dismissed. The Defendant demonstrates being involved in financial fraud by knowingly overcharging the Plaintiff as well as their lack of action towards their complaint.

  6. The Defendant expects payment immediately if they overdraw a customer’s account. In the case where the Defendant falsely overdraws an account, it deceives the customer as well as benefits the Defendant if no action is taken.

  7. Plaintiff Harper reports that the suspicious transactions that came from his account was a result of Bank of America increasing the transaction fee without notifying him. He brought this to the Defendant’s attention but received no response from the Defendant.

  8. Unauthorized payments and transactions are an act of financial fraud as it directly harms the Plaintiffs only for the gain of the Defendant.


SECOND CAUSE OF ACTION

BREACH OF CONTRACT

  1. The bank’s effort to cover up the schemes of the fraudsters, as well as its acceptance of fees to allow the frauds to occur indicate its violation of 18 U.S.C 1344 and 18 U.S.C 1341, as it is complicit in fraud. Actively hiding the occurrence of the fraud indicates the bank’s active involvement in the schemes against the Plaintiffs. The bank’s violation of 18 U.S.C 1344 and 18 U.S.C 1341 is indicated by their management team’s contribution to the debit transaction fraud, credit card fraud, ponzi schemes, and poor management of their fraud system which led to account freezes and prevented people from accessing insurance benefits.

  2. The Bank of America’s abuse of power and conflict actions within the identity fraud case and poor management of fraud are cause for enforcement of the Consumer Financial Protection Act, in which they are to be held accountable by the Consumer Financial Protection Bureau. This is further shown by their denial of their involvement in the fraud.

  3. Under the Defendant's Privacy Policy for Consumers, Bank of America is required to make any inquiries considered appropriate in order to verify the consumer’s identity and reach a conclusion of whether or not the consumer’s account needs to be maintained or closed. However, due to their security breach, the Defendant was unable to verify the identities of the Plaintiffs properly and resulted in situations that dealt with financial loss.

  4. Under the Defendant’s Insufficient Funds - Overdrafts and Returned Items section, Bank of America is only allowed to charge overdraft fees to a customer's account if they don’t have sufficient funds in their account. If a customer receives an overdraft fee from the Defendant, it is a breach of contract.


THIRD CAUSE OF ACTION

INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

  1. Due to the bank’s involvement in the ponzi scheme, the Bank of America has violated several fraud, theft, and money laundering laws. The bank failed to compensate for the money lost by the Plaintiffs and thus worsened the emotional being of those affected.

  2. Plaintiff Smith suffered emotional distress due to her inability to pay off her family’s mortgage with funds saved up with the Defendant. This forced her to take several more jobs and night shifts in which she lost sleep as well as time for her kids.

  3. Plaintiff White struggled to pay for his college tuition and overall lost 2 years of his education due to the inadequacies of the Defendant.

  4. Plaintiff Gill had lost over $100,000 from his mortgage fund account, which he had been attempting to pay off for years. He also lost access to his bank account, and was unable to

  5. Plaintiff Wilson had lost $75000 in a Bank of America investment scheme, as he was promised a significant monetary return to which he was never given.

  6. Plaintiff Anderson was a victim to the investment scheme organized by the bank’s managers. She invested $80,000 of her own income to the bank, as she was promised a $200,000 return, yet was never given any money.

  7. Plaintiff Harper suffered emotional distress due to the foreclosure of his family’s house and he also struggled to find a place to live for himself and his family. He was hospitalized for his heart condition as a result of working too many jobs in an attempt to gain his house back.

  8. Plaintiff Fang suspects that her identity has been stolen. Her friends had received strange links from her email and phone number. When they clicked on the link, they were redirected to a strange site and had their information taken. They blame Plaintiff Fang for their misfortune and took measures to exclude Fang from social gatherings which has taken a toll on Fang emotionally.

  9. Plaintiff Ku lost over $3000 in tax refund checks. She was also contacted by the IRS and received a warning letter. She did not know how to defend herself from accusations that she had committed tax fraud.


PRAYER FOR RELIEF

WHERE, the Plaintiffs and Class Members pray for judgment as follows:

  1. For general and special damages in an amount according to proof;

  2. For damages in an amount sufficient to punish the Defendant and deter them from engaging in harmful conduct in the future;

  3. For restitution of all money lost in investments and fraud;

  4. For attorneys fees and all costs of suit to be incurred;

  5. For prejudgment interest;

  6. For full accountability to be taken by the bank for their cooperation in the fraud.

  7. For the bank to abide by all laws relevant to financial fraud, and cooperate with government and federal consumer agencies.

  8. For the identification of all parties involved in malicious fraud operations, including the fraudsters and names of employees responsible for fraud.

  9. For the defendant's full acknowledgement of the frauds and fraudsters to be sufficiently identified and made known to the public.

  10. For the plaintiffs investment promises to be met by the bank.

  11. For other relief that is deemed proper and necessary.



JURY DEMAND


Plaintiffs and Class respectfully demand a trial by jury on all claims so triable.


DATED: August 19th, 2022


Attorneys of the Plaintiff and the Class



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