jan 5 service package with notarization

8/8/2019 Jan 5 Service Package With Notarization

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D. B. Kan-on, Ph.D.

348 East Fulton StreetLong Beach, New York 11561

January 5, 2010

Judge ROY S. MAHON

Chambers

10th District Supreme Court

New York State Supreme Court

100 Supreme Court DriveMineola, NY 11501

Re: TRIBECA ASSET MANAGEMENT LLC vs. D. B. KARRON

Index # 600232/2010

Dear Honorable Judge Mahon;

Attached is my surreply to the Plaintiffs unsupported Reply Affirmation and in support of my

Affidavit in Opposition to Summary Judgment and my Memorandum of Law, reiteratingprima

facie triable grounds for trial.

The Plaintiff's reply histrionics do not address the Defendant's specific arguments in the least:

"If the defendant's alleged defenses were taken seriously that no bank or debt

purchaser could ever collect on a credit card account, then the entire economy of theUnited States and perhaps the entire world would collapse on itself. Plaintiff Reply

Affirmation at 2 Paragraph 3. Emphasis added.

The Plaintiff does not show that they purchased my particular account from Chase Bank, and that

the account was not canceled or settled. The defense exhibits show this. The exhibits proffered

by the Plaintiff are only two generations of generic references to 'pool' [s] of accounts with no

specifics.

Consider an analogous situation: I know my neighbor owed the deli 10 bucks. What if I tried

to collect that on behalf of the deli? What if the deli never gave me permission or ownership of

that particular 10 bucks? What if the deli just tacitly let me coerce the money from my neighbor

because they gave up. What if I told my neighbor "you know you owe the money, so give it up,

only give it up to me".

My main argument is "Why? Who are you to do so? Mr Collector, prove to me and the court,


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1 4 )1w\-4 )1w\-

that you have the right, standing and authority to do so". So far the Plaintiff has not shown

they have the goods: Specific documents for this specific debt. The affirmation and reply

affirmation does not have any supporting exhibits with my name and their (client or

assignor's ) names on the same page, or even in the same document.My defense is prima

facie,the lack of specifics in the plaintiffs exhibits. In my attached affirmation exhibits, I show

example sample affirmations with specific citations to particular parties from Chase Bank.

The deli may give tacit, erroneous, or fraudulent permission to let me collect settled, canceled

or otherwise noncollectable debt. The deli may give out statement copies, but there is no note,

agreement, or specification, or assignment for this particular 10 dollars. The statements do not

show assignment.

The court can not condone this practice. The "world will not collapse on itself' if the Plaintiff

had to prove by a preponderance of evidence they had the right and authority to collect this

MasterCard account to Chase from me. The Plaintiff do not have specific evidence for the court

to grant a summary judgement against myself. G-d is in the details.

Sincerely,

DB Kan-on

Pro Se


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AFFIDAVIT OF

SERVICE


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SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NASSAUTRIBECA ASSET MANAGEMENT, LLC.Plaintiff,

-against-ndex No.: 600232/2010AFFIDAVIT OF SERVICED B KARRON A/K/A DANIEL KARRONDefendant.STATE OF NEW YORK ) ss:COUNTRY OF NASSAU)I, D B K AR RO N, mailed and e-mailed a copy of the

1. SURREPLY AFFIDAVIT OF DEFENDANT2. SURREPLY EXH IBITS

to:STEVEN ROSENTHAL, ESQ. or (Attorney for Plaintiff)ATTORNEY for PLAINTIFFKIRSCHENBAUM & PHILLIPS, P.C.3000 HEMPSTEAD TURNPIKE,FOURTH FLOOR, LEVITTOWN, NEW YORK 11756+1 (516) 746-1144Signed

D B KARRONPro SeDefendant348 East Fulton StreetLong Beach, NY 11561DATE D JANUARY 5, 2011SWO RN before me this day (NOTA RY )

e t c . 2 ._PEARL APTSNotary Public, State of New YorkNo. 01AP4854300

Qualified in Nassau CountyCommission Expires March 3, 201_7

SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NASSAUTRIBECA ASSET MANAGEMENT, LLC.

Plaintiff,-against-

D B KARRON AIK/A DANIEL KARRONDefendant.

STATE OF NEW YORK)ss:

COUNTRY OF NASSAU)I, D B KARRON, mailed and e-mailed a copy of the

I. SURREPLY AFFIDAVIT OF DEFENDANT2. SURREPLY EXHIBITS

to:STEVEN ROSENTHAL, ESQ. or (Attorney for Plaintiff)ATTORNEY for PLAINTIFFKIRSCHENBAUM & PHILLIPS, P.C.3000 HEMPSTEAD TURNPIKE,FOURTH FLOOR, LEVITTOWN, NEW YORK 11756+1 (516) 746-1144Signed

Index No.: 600232/20 I0AFFIDAVIT OF SERVICE

DB KARRONPro SeDefendant348 East Fulton StreetLong Beach, NY 11561DATED JANUARY 5, 201' Wf ~ \ ' f ' - /SWORN before me this day (NOTARY) \ v; ~ ~ ; _ ~ _ W,U ~ / PEARL APT&1!.Ar


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SURREPLYAFFIDAVIT IN

OPPOSITION


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SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NASSAU----------------------------------------------------------------------TRIBECA ASSET MANAGEMENT, LLC.

Plaintiff,

-against- Index No.: 600232/2010SUR-REPLY AFFIDAVITD B KARRON A/K/A DANIEL KARRON

Defendant.----------------------------------------------------------------------STATE OF NEW YORK )

ss:COUNTRY OF NASSAU)

I, D. B. Karron, being duly sworn, deposes and says:

This is a sur-reply affidavit in opposition to the Plaintiffs reply affidavit. As shown below in

Exhibit F and G, all of the Defendants civil creditors, with the notable exception of the Plaintiff

/ Kirshenbaum and Phillips, have agreed to wait until the Defendants federal criminal and civil

problems are resolved.

The Defendant has serious Federal civil liens that are superior to any commercial or personal

civil lien, namely to the Federal Government for as much as $120,000 criminal restitution

(Exhibit E) , $5,000,000 civil penalties (Exhibit E) , and and $173,451.46. (Exhibit H) in IRS

liens.

The Defendant can not make any good faith commercial or personal civil debt settlements until

the superior Federal issues are resolved. Any funds the Defendant may earn are seized by the

Federal Government to satisfy its voracious appetite for everything the defendant may earn for

the remainder of her lifetime. These liens are non dis chargable in bankruptcy and go beyond the

grave to whatever estate the Defendant may leave to her children.

Any earning power of the Defendant was destroyed by the Felony Conviction. The Defendant

does not believe she will be able to earn a living until she wins a Civil Trial and her Felony

Conviction is overturned on Appeal. The defendant is destitute and without funds, currently on


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food stamps and Medicare (Exhibit I) and when her minimum unemployment insurance runs out

she will be on public assistance.

The Defendant does not wish to go bankrupt and is actively defendingpro se in Federal District

Court and will appeal the criminal conviction concurrent with a Civil Trial. Kirshenbaum and

Phillips can force the defendant to go bankrupt to the disservice of all of the other creditors who

have agreed to wait.

The appended cover letter for this package, the prior reply package, and the Defendants

Memorandum of Law, gives the essentials of the Defense argument. It is not appropriate to

reiterate the arguments in a surreply. The main purpose of this surreply is to provide additional

and more current material evidence.

Exhibit 1 shows a Chase Bank Credit Card Debt affidavit of debt giving full particulars with

Debtor Names, Account numbers, Dates balances and details of the chain of title to the debt.

There is only one problem with this exhibited sample affidavit. That problem is that the affiant,

Martha Kunkle, who allegedly executed, or authorized the execution of this affidavit by /MM

on May 24,2007, was deceased effective in 2005. See Exhibit C and D for more entertaining

details.

This Affidavit includes additional evidence in support of the Defense argument that Chase Bank

did not sell the Defendants account in good faith. Evidence of bad faith is shown inExhibit A.

Exhibit A is a letter to the SEC by Linda Almonte, a mid-level executive formerly employed with

JPMorgan Chase & Co. and/or Chase Bankcard Services, Inc. ("Chase Bank").

Ms. Almonte specifically discloses and blows the whistle on a variety of Chase Bank practices,

including:

1. Chase Bank sold to third party debt buyers hundreds of millions of dollars worth of

credit card accounts that were marked by Chase Bank as Judgment Accounts when in fact


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Chase Bank executives knew that many of those accounts had incorrect and overstated

balances.

2. As part of the sale of Judgment Accounts, Chase Bank executives knowingly

mischaracterized delinquent accounts as already reduced to judgment, when in fact proof

existed that no judgment existed or at the very least insufficient documentation existed to

reach that conclusion.

3. Chase Bank executives routinely destroyed information and communications from

consumers rather than incorporate that information into the consumers credit card file,

including bankruptcy notices, powers of attorney, notice of cancellation of auto-pay,

proof of payments and letters from debt settlement companies.

4. Chase Bank executives mass-executed thousands of affidavits in support of Chase

Banks collection efforts and those Chase Bank executives did not have personal

knowledge of the facts set forth in the affidavits.

Chase Bank is one of he largest credit card lenders in the country. In support of this large

operation, Chase Bank maintains a large central database of its credit card accounts, which is

called the system of record by company employees. The system of record is in fact a compilation

of many legacy databases from the many portfolio and company acquisitions Chase Bank has

made over the years. These legacy databases have varying degrees of integration depending on

the types of databases, software compatibility, time of acquisition and other factors. The centraldatabase and the legacy databases combined are referred to herein as the "System of Record".

Exhibit B is a copy of a printout of a New York Times article from October 31. 2010 on the junk

debt collection practices entitled Debt Collectors Face a Hazard: Writer's Cramp. The main

points relevant to this action are that affiants do not have personal knowledge of the material

they aver to: vis:

But lawyers who defend consumers in debt-collection cases say the banks did not invent

the

headless, assembly-line approach to financial paperwork. Debt buyers, they say, have

been

doing it for years.


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"The difference is that in the case of debt buyers, the abuses are much worse," says

Richard

Rubin, a consumer lawyer in Santa Fe, N.M.

"At least when it comes to mortgages, the banks have the right address, everyone agrees

about

the interest rate. But with debt buyers, the debt has been passed through so many hands,

often

over so many years, that a lot of time, these companies are pursuing the wrong person, or

the

charges have no lawful basis."

The debt in these cases typically from credit cards, auto loans, utility bills and so on

is sold by finance companies and banks in a vast secondary market, bundled in huge

portfolios, for pennies on the dollar. Debt buyers often hire collectors to commence a

campaign of insistentletters and regular phone calls. Or, in a tactic that is becoming increasingly popular, they

sue.

Nobody knows how many debt-collection affidavits are filed each year, but a report by

the

nonprofit Legal Aid Society found that in New York City alone more than 450,000 were

filed by debt buyers, from January 2006 to July 2008, yielding more than $1.1 billion in

judgments and settlements.

Problems with this torrent of litigation are legion, according to the Federal Trade

Commission,led by Jon Leibowitz. The agency issued a report on the subject, "Repairing a broken

System in July. In some instances, banks are selling account information that is riddled

with errors.

More often, essential background information simply is not acquired by debt buyers, in

large

part because that data adds to the price of each account. But court rules state that anyone

submitting an affidavit to a court against a debtor must have proof of that claim proper

documentation of a debt's origins, history and amount.

Without that information it is hard to imagine how any company could meet the legal

standard

of due diligence, particularly while churning out thousands and thousands of affidavits a

week.

Analysts say that affidavit-signers at debt-buying companies appear to have little choice

but to


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take at face value the few facts typically provided to them often little more than basic

ccount

information on a computer screen.

That was made vividly clear during the deposition last year of Jay Mills, an employee of

a

subsidiary of SquareTwo Financial (then known as Collect America), a debt-buying

company in

Denver.

"So," asked Dale Irwin, the plaintiffs lawyer, using shorthand for Collect

America, "if you see on the screen that the moon is made of green cheese, you

trust that CACH has investigated that and has determined that in fact, the moon is

made of green cheese?"

"Yes," Mr. Mills replied.Given the volume of affidavits, even perfunctory research seems impossible. Cherie

Thomas,

who works for Asta Funding, a debt buyer in Englewood Cliffs, N.J., said in a 2007

deposition

that she had signed 2,000 affidavits a day. With a half-hour for lunch and two brief

breaks,

that's roughly one affidavit every 13 seconds.

Exhibit C is a piece from Jan 2, 2011 in the Wall Street Journal about Martha Kunkle, who

passed away in 1995 yet was signing affidavits for Portfolio Recovery Associates through 2010.

vis:

Martha Kunkle has come back to life.

She died in 1995. Yet her signature later appeared on thousands of affidavits submitted

byone of the nation's largest debt collectors, Portfolio Recovery Associates Inc., in lawsuits

filedagainst borrowers.

Some regulators complain that the use of Ms. Kunkle's name reflects an epidemic of

mass-produced, sloppy and inaccurate documentation in the debt-collection industry.

Lawsuits have surged as more borrowers fall behind on payments and collection firmsturn to

courts to get what they are owed.


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After being sued for fraud, Portfolio Recovery Associates decided in early 2008 that anydocuments bearing Ms. Kunkle's name had "defects" and shouldn't be used when tryingto collect debts, a company spokeswoman said.

Last July, though, lawyers for Portfolio Recovery Associates sought a court judgment ina lawsuit against a Seattle woman for $2,892.10 in credit-card debt and interest that sheallegedly owed. It was a cookie-cutter case, except for one thing: To vouch for the debt'svalidity, the Norfolk, Va., company included an affidavit signed by Martha Kunkle.

Exhibit D is another piece on the same topic. As the Coroner must aver, I thoroughly examined

her, and she's not only merely dead, she's really most sincerely dead

Exhibit Eis a copy of the complaint in federal district court by the United States of America v

Daniel B. Karron. Only the First and last few pages are included, but the government is currently

suing Dr. Karron for over 5,000,000 in civil damages, which can not be obviated by bankruptcy.

Exhibit F is a copy of the settlement letter from Portfolio Recovery Associates, dropping

litigation against Dr. Karron.

Dear D.B. Karron,

As you know, Portfolio Recovery Associates, LLC has filed a court action against you

to collect a debt. Portfolio has decided to discontinue the action against you. Enclosed

please find a Stipulation of Discontinuance in connection with the above-entitled

matter. Nassau County requires both parties to sign the Stipulation before it can be filed

with their Court. Kindly sign the Stipulation and return to our office at your earliest

convenience. We will then file it with the Court.

Exhibit Fis a copy of the IRS Form 1099-C reporting cancellation of debt to the government

by Chase Bank. The Defendant believes there are more where these came from. Chase bank

has been remarkably uncooperative in this matter and has refused to cooperate in supplying

documentation to Dr. Karron. Karron believed that she had negotiated cancellation of all of the

debts with Chase Bank in 2008 prior to her incarceration with her bank officer.

Exhibit His a copy of the recent Notice of Federal Tax Lien showing a total federal lien to be


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negotiated of $173,451.46. The Defendant has been in touch with IRS agent Debra Lynch anduntil the federal civil trial is brought to conclusion, negotiations on this matter are junior to thefederal civil trial.

WHEREFORE, it is respectfully requested that the PLAINTIFF'S Summary JudgementMust be DENIED with prejudice and the AFFIDAVITS contained therein be quashed asdefective.

hsKiagyv,D B KARRONDefendant, Pro SeT e r c u T Tsif 44_2: -0e-i4Sworn to before me this 5 day of

PEARL APTSKARNotary Public, State of New YorkNo. 01 AP4854300Qualified in Nassau CountyCommission Expires March 3, 20L

negotiated of $173,451.46. The Defendant has been in touch with IRS agent Debra Lynch anduntil the federal civil trial is brought to conclusion, negotiations on this matter are junior to thefederal civil trial.

WHEREFORE, it is respectfully requested that the PLAINTIFF'S Summary JudgementMust be DENTED with prejudice and the AFFIDAVITS contained therein be quashed asdefective.

DBKARRONDefendant, Pro Se. ~ N l t ~ : J I > - D I \Sworn to before me thIS 5 day ofBecemb ,201ir({ivJ 4JII r

/PEARLAPTIiKAR vork ~ , -Notary Public, State ; 1 ~ ~ .No. Q1AP48 CountyQualified In N a s s ~ ~ r c h 3. 2 0 c lCommission Expires


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EXHIBIT A


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Kyros & Pressly60State Street Suite 700

Boston, MA 02109

ig ip _ y _@p vxmn

603-320-7030

November 30,2010

SEC Complaint Center

100 F Street N.E.

Washington D.C. 20549-1213

To whom it may concern.

My law firm and Jones, Gillaspia & Loyd L.L.P represent Linda Almonte, a mid-level

executive formerly employed with JPMorgan Chase & Co. and/or Chase Bankcard

Services, Inc. ("Chase Bank"). We make this SEC whistleblower submission on behalf of

Ms. Almonte.

Introduction

Newspaper headlines today read of possible fraud and gross neglect by bankemployees and executives in connection with the process of foreclosing on delinquent

homeowners. Many federal and state agencies have launched significant investigations

into large bank practices, including investigations of the following: (1) Bank practices of

robo-signing affidavits to support a foreclosure proceedings; (2) Bank document and

records retention policies, or lack thereof; (3) How a bank passes title of a home loan

among many different entities; And (4) how a bank accounts for and properly

memorializes amounts owed by borrowers. Some analysts worry that this "foreclosure

mess" could cost the banks billions of dollars, which clearly would have an adverse effect

not only on the Banks' securities but also may affect the value of many registered asset-back securities where the underlying home loan is part of the collateral upon which a

registered asset-backed security was issued.

Based upon first hand observation while an employee at Chase Bank and supported

by a large volume of documents in her possession and available for review by the SEC,

Ms. Almonte's whistleblower SEC submission discloses and chronicles similar fraud and


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gross neglect on the part of Chase Bank as it relates to the litigation and collection processfor delinquent credit card accounts. Ms. Almonte specifically discloses and blows thewhistle on a variety of Chase Bank practices, including:

1 . Chase Bank sold to third party debt buyers hundreds of millions of dollarsworth of credit card accounts that were marked by Chase Bank as JudgmentAccounts when in fact Chase Bank executives knew that many of those accountshad incorrect and overstated balances.

2. As part of the sale of Judgment Accounts, Chase Bank executives knowinglymischaracterized delinquent accounts as already reduced to judgment, when infact proof existed that no judgment existed or at the very least insufficientdocumentation existed to reach that conclusion.

3. Chase Bank executives routinelydestroyed information and communicationsfrom consumers rather than incorporate that information into the consumerscredit card file, including bankruptcy notices, powers of attorney, notice ofcancelation of auto-pay, proof of payments and letters from debt settlementcompanies.

4. Chase Bank executives mass-executed thousands of affidavits in support ofChase Banks collection efforts and those Chase Bank executives did not havepersonal knowledge of the facts set forth in the affidavits.

5. When senior Chase Bank executives were made aware of these systemicproblems, senior Chase Bank executives rather than remedy the problems immediatelyfired the whistleblower and attempted to cover up these problems.

Her disclosures may bring into question Chase Bank's representations regardingChase Bank's own securities but may also bear on certain asset-backed securities wherethe underlying assets are Chase Bank credit card accounts.

Chase Bank's Credit Card Operation

Chase Bank is one of he largest credit card lenders in the country. In support of thislarge operation, Chase Bank maintains a large central database of its credit card accounts,which is called the system of record by company employees. The system of record is infact a compilation of many legacy databases from the many portfolio and companyacquisitions Chase Bank has made over the years. These legacy databases have varyingdegrees of integration depending on the types of databases, software compatibility, time ofacquisition and other factors. The central database and the legacy databases combined arereferred to herein as the "System of Record".

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The System of Record keeps track of standard information about each credit card

account such as the current balance, the current amount due, a history of payments and

borrower-specific credit limits. Many departments within Chase Bank access the System

of Records for a variety of purposes.

One such purpose is to keep tract of on-time and delinquent accounts. The System

of Record automatically or manually allows for the creation of specific status codes based

upon the borrower's payment status. One such status option is to code a credit card

account as in "litigation," which means that Chase Bank has elected to sue the credit card

borrower for the unpaid balance. Once an account is coded "litigation" it is hereinafter

referred to as a "Litigation Account". It is believed that in late 2009, Chase Bank had

close to $5 billion dollars of aggregate accounts deemed Litigation Accounts

Once a credit card account becomes a Litigation Account, at least three effects occur that

are important for this whistleblower submission. First, Chase Bank has a specificdepartment that is responsible for all activity on every Litigation Account. This internal

department is called the "Credit Card Litigation Department". Second, the above-described

System of Record is no longer the primary database to record and maintain facts andinformation about the real-time status of a Litigation Account. As explained below, the

Credit Card Litigation Department has its own databases and record keeping processes.Third, credit card borrowers routinely send to Chase Bank material correspondence about

the borrower's account such as settlement offers, bankruptcy notices, statement disputes,

proof of payment and debt settlement letters and notices. Once an account becomes a

Litigation Account, the process of assimilating these material inbound correspondencesfalls to the Credit Card Litigation Department.

Credit Card Litigation Department

The Credit Card Litigation department performs three broad tasks:

Pre-Litigation

First within the Credit Card Litigation Department is a group of employees called

the "Pre-Litigation Group". This group is responsible for assimilating all information and

documents necessary to file a lawsuit against the borrower for the unpaid balance. Thegroup also makes a final attempt to collect the unpaid balance by sending to the clientwritten notice of Chase Bank's intent to sue and also telephoning the consumer to orally

deliver a final demand for payment. The Pre-Litigation Group is also responsible for

incorporating all inbound communications from account holders from the time the credit

card account is marked for litigation on the System of Record until the account is assigned

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for litigation as discussed below. These inbound communications are material and

include bankruptcy notices, settlement offers, statement disputes, powers of attorney,

notice of cancelation of auto-pay, proof of payment, and communications from debt

settlement and credit counseling companies.

Litigation

The Credit Card Litigation Department handles litigation in one of two manners. In

some states, Chase Bank has set up its own group of lawyers to litigate unpaid accounts. If

a borrower resides in a state where Chase Bank has elected to litigate unpaid accounts

using its own team of lawyers, then that Litigation Account is assigned to that group of

lawyers. Chase Bank has a second litigation track for borrowers that reside in states in

which Chase Bank has elected not to litigate these files using in-house lawyers. In this

second track, the Credit Card Litigation Department assigns a Litigation Account to a pre-

approved third party law firm.

The Credit Card Litigation Department maintains a separate database of all

Litigation Accounts, which hereinafter is referred to as the "Litigation Database". The

Litigation Database is not integrated with the System of Record. All litigation activity

performed by in-house Chase Bank lawyers is inputted directly into the Litigation

Database. Third party law firms maintain their own database and at regular intervals the

third party law firms transmit via FTTP (or similar automated protocols or even by email)the data and information from these many third party law firms for assimilation into the

Litigation Database.

The Credit Card Litigation Department also supports litigation activity by providing

in-house lawyers and third party lawyers with executed affidavits in support of lawsuits

brought to reduce unpaid balances to judgment. When a bank seeks to reduce a delinquent

credit card account to a court judgment, the bank must bring suit and reduce that suit to

judgment. While each state has its own unique rules and procedures, every state at some

point in the process requires that a person with personal knowledge execute an affidavit

setting forth basic facts of the debt. This type of affidavit is hereinafter referred to as a

"Judgment Affidavit". The Credit Card Litigation Department assigns a handful of

executives to execute Judgment Affidavits, and these assigned employees are hereinafter

termed the "Affidavit Signers".

In order to produce the information necessary to generate a Judgment Affidavit,

employees of Chase Bank need to reconcile the data and information contained in the

System of Accounts, the Litigation Database and at times the databases maintained by

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third party law firms. Given that the System of Records includes a collection of legacydatabases, this reconciliation process can be tedious and is prone to significant errors.

Post Judgment Activities

Once a Litigation Account is reduced from an unpaid account to an enforceablejudgment, that account status is so notated on the Litigation Database. Such an account ishereinafter referred to as a "Judgment Account". The Credit Card Litigation Departmentthird function is to coordinate and facilitate all post judgment activities on a Judgment

Account. This type of activity includes, among many activities, preparing JudgmentAccounts for sale to debt buyers. Before a Judgment Account may be sold to a third partydebt buyer, Chase Bank must perform some level of diligence on the Judgment Accounts

being sold, including a review of the file to determine that the actual judgment is in ChaseBank's possession and a review of the file to determine that the appropriate court officialsand bank employees have executed the judgment. Additionally, Chase Bank using

statistical models and algorithms should test the amount of the judgment with the actualamount owed so any discrepancies can be corrected. Traditionally, Judgment Accountsare sold in batches and in relatively small dollar amounts when compared to industrypractices of selling charge off accounts to collection agencies, as a Judgment Account is

more expensive for a debt buyer because the account is readily enforceable, as it hasalready been reduced to judgment.

Linda Almonte an important executive in the Credit Card Litigation Department

From May 2009 through November 2009 Linda Almonte was a mid level executivewithin the Credit Card Litigation Department at Chase Bank. She came to Chase Bankfrom Washington Mutual, where she had spent four years in a variety of compliance

related executive positions. While at Chase Bank, Ms. Almonte supervised employeesacross the litigation and post-judgment functions of the department. She routinelyinteracted with all executives in the department and with other senior executives from

across the entire bank.

In mid October 2009 Ms. Almonte was instructed to spearhead the review anddiligence of what was described in real time as the largest sale of Judgment Accounts in

Chase Bank memory. National Loan Exchange was brokering the large judgment sale forChase Bank. The sale called for the sale of over 23,000 Judgment Accounts with a facevalue of over $200,000,000.

The results of her preliminary diligence while working with National Loan

Exchange were alarming: Ms. Almonte and her group reviewed 11, 472 Judgment

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Accounts where the borrower resided in California. 44% of the Judgment Accounts did

not have the judgment or if the file contained the judgment then it was not properly signed

or date-stamped by the court. In some instances a Judgment Account had a judgment

against Chase Bank, yet the Litigation Database had the accounts listed as a judgment in

favor of Chase Bank. In multiple accounts, Ms. Almonte and her team found Release ofLiens and Satisfaction of Judgments indicating that the account was paid in full, but Chase

Bank senior executives specifically instructed Ms. Almonte to ignore those documents and

sell those accounts as Judgment Accounts with out adjusting the account balance.Additionally, some of Ms. Almonte's preliminary diligence showed a large number of

accounts with discrepancies and that the actual amounts owed Chase Bank was less than

the amount set forth in the Judgment Accounts.

Ms. Almonte's review raised real concerns about more narrowly the legality and

appropriateness of the specific judgment sale and more generally the entire operational

process of the Credit Card Litigation Department. Ms. Almonte raised her concerns to herimmediate supervisor who took no action to stop the judgment sale. Ms. Almonte

escalated her concerns and in November, 2009, literally while a senior litigation counsel

from Chase Bank was traveling from New York to meet with her, Ms Almonte was fired

and walked out of the offices by security. The sale was consummated with DebtOne LLC

after Ms. Almonte was terminated with senior Chase Bank executives fully aware of the

above facts. Ms. Almonte additionally made sure that each attorney of record for each

judgment was made aware of her diligence.

Specific Disclosures

Based upon the first hand diligence Ms. Almonte performed in late 2009, based

upon first hand knowledge Ms. Almonte gained from May 2009 until November 2009,

based upon documents in her possession and available for review by the SEC, this SEC

whistleblower submission makes the following assertions, which are intended to be

illustrations and not exhaustive:

1. The Pre-Litigation Group in the Credit Card Litigation Department routinely

destroyed material, inbound communications from borrowers including

bankruptcy notices, settlement communications, and debt settlement companycommunications. To the extent the Pre-Litigation Group did not destroy these

inbound communications, the group failed to timely incorporate the information

contained in these communications into the Litigation Database. In one instance,

Ms. Almonte witnessed the head of the Pre-Litigation Group shred such

documents before incorporation into the Litigation Database. Failing to properly

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record the information and data contained in these inbound communications tothe Litigation Database rendered the information therein inaccurate.

2. Senior Chase Bank executives instructed Chase Bank employees removeimportant information and data from Litigation Accounts, as the retention of the

information would have resulted in increased computer hardware costs.Removing important consumer information rendered the information in theLitigation inaccurate and unreliable.

3. The information and facts set forth in a Judgment Affidavit required ameaningful reconciliation among the System of Record (including at timesmultiple legacy databases that compromise the System of Record), the LitigationDatabase and at times third party law firms' own databases. At no time did theAffidavit Signers perform this reconciliation, relying on hourly workers toperform this process. Hence the Affidavit Signers did not have personalknowledge of the facts set forth in the Judgment Affidavits.

4. The Affidavit Signers in a cavalier fashion almost flaunted their lack ofpersonal knowledge of the facts contained in the Judgment Affidavits. Onnumerous occasions, Ms. Almonte witnessed these Affidavit Signers workthrough at times 3-feet tall stacks of Judgment Affidavits at once during weeklymulti-hour long, non-related company meetings. The notaries were not presentat these meetings. The Affidavit Signers simply relied on hourly workers toreconcile amounts owed and then treated the actual execution of the affidavits asbusy work to be performed while the Affidavit Signers could focus on othermatters.

5. The reconciliation process itself was manual in nature, cumbersome at bestand prone to significant errors. Chase Bank failed to properly integrate itscomputer systems and databases so the underlying facts of these affidavitsrequired the reconciliation of information from multiple databases. Thediligence performed by Ms. Almonte in late 2009 uncovered errors in the actualamount owed by a borrower and the amount Chase Bank claimed to be owed inthe Judgment Affidavit. Indeed, Ms. Almonte determined that as many as 20%of the Judgment Accounts to be sold failed an internal test to check for accuracy.Such errors could be the result of systemic errors in the reconciliation process,which Chase Bank could have resolved if it unified its database onto oneplatform.

6. Chase Bank failed to properly maintain records and documents that supportedthe status of a Judgment Account. For example, a Chase Bank required practicewas to maintain a copy of a judgment secured in Chase Bank's favor in theaccount file. In late 2009, Ms. Almonte audit work found that in a largepercentage of the files, Chase Bank did not have a record of obtaining such a

7


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-77

judgment and in fact in some files the records indicated that the borrower had

judgments against Chase Bank.

7. Chase Bank sold to third party debt buyers hundreds of millions of dollarsworth of credit card accounts that were marked as Judgment Accounts when in

fact Chase Bank knew that many of those accounts had material defects, were notin fact Judgment Accounts and had incorrect and overstated balances.


mischaracterized delinquent accounts as already reduced to judgment, when infact proof existed that no judgment existed.


mischaracterized delinquent accounts as Judgment Accounts when insufficient

documentation existed to reach that conclusion.

Conclusion

The facts as set forth herein show evidence of violations of federal law that aresubject to the SEC Whistleblower Program. Additionally the conduct articulated herein

could give rise to significant liabilities to Chase Bank, which in turn could affect the valueof its securities. My client may be willing to meet with an investigator from your office(or the appropriate federal agency) and may be willing to produce the extensive

documentation in her possession that evidences the facts as set forth herein.

I am available on an ongoing basis to discuss this matter should the need arise.

Sincerely,

George Pressly. ESQ.

8


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EXHIBIT 1

Case 4:08-cv-00036-RKS Document 1-1 Filed 05/21/08 Page 1 of 2


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AFFIDAVIT FORM1, being duly sworn, hereby state and attest that I am the designated ag ent

of Providian N ational Barth ("Providian"), a national banking association, one of theseller in that certain Purchase and Sales A greement by and am ong Providian NationalBank, Providian Bank and Portfolio Recovery Associates ("Purchaser"), dated as of12/05/05 fthe Agreement")

The account billing statement of CO LE; JEANIE C ,425449140 0850471,_the Cardho lder to the best of my know ledge, reflects a trueand correct accounting of the cardholder's credit card account; that as of12/05/05, the sum of $ 5911.87 was du e toProvidian or any of its affiliates; and that,no FLO of,this sum has been paid orsatisfied, In accordance with the Agreement, Providian sold, assigned andconveye d to Purchaser a ll right, title and interest in and to the A ccount andits unpaid balance

Executed on M ay 24, 2007 at Arlington, Texas,.604.14.1111_11",_; Martha Kunkle, Designated Agent

Subscribed and sworn to me this 24 th day of May, 2007

C a u 1 4 9 m b i u n o Ze:.gy C 3 I T u r l is s i o n E * : ie s1 1 n 7 / 2 0 1 0Case 4:08-cv-00036-RKS Document 1-1 Filed 05/21/08 Page 2 of 2


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EXHIBIT B


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1/5/2011 Robo-Signing at Companies That Buy ...

I P New l jo rk 'On t o - Reprints

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BESTL IA

IT O R I

October 31, 2010

Debt Collectors Face a Hazard: Writer'sCrampBy DAVID SEGAL

When Michael Gazzarato took a job that required him to sign hundreds of affidavits in a single

day, he had one dem and for his employer: a much better pen.

"They tried to get me to do it with a Bic, and I wasn't going I wasn't having it," he said. "It

was bad when I had to use the plastic Papermate-type pen. It was a nightmare."

The complaint could have come from any of the autograph marathoners in the recent m ortgage

foreclosure mess. But M r. Gazzarato was speaking at a deposition in a 2007 lawsuit against

Asset Acceptance, a compan y that buys consu mer debts and then tries to collect.

His job was to sign affidavits, swearing that he had personally reviewed and verified the records

of debtors a time-consuming task when done correctly.

Sound fam iliar?

Bank s have been und er siege in recent weeks for widespread corner-cutting in the rush to

process delinquent m ortgages. The accusations have stirred outrage and set off investigations

by attorneys general across the country, prompting several leading banks to temporarily cease

foreclosures.

But lawyers w ho defend consum ers in debt-collection cases say the banks did not invent the

headless, assemb ly-line approach to financial paperw ork. Debt buyers, they say, have been

doing it for years.

"The difference is that in the case of debt buyers, the abuses are much worse," says Richard

Rubin, a consumer lawyer in Santa Fe, N.M.

"At least when it comes to mortgages, the banks have the right address, everyone agrees about

the interest rate. But w ith debt buyers, the debt has been passed through so many hands, often

over so m any years, that a lot of time, these companies are pu rsuing the wrong person, or the

charges have no lawful basis."

nytimes.com/2010/11/01/.../Oldebt.ht... 1


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The debt in these cases typically from credit cards, auto loans, utility bills and so on is sold

by finance compan ies and ban ks in a vast secondary m arket, bundled in h uge portfolios, for

pennies on the dollar. Debt buyers often hire collectors to com men ce a campa ign of insistent

letters and regu lar phone ca lls. Or, in a tactic that is becom ing increasingly popu lar, they su e.

Nobody knows how many debt-collection affidavits are filed each year, but a report by the

nonprofit Legal Aid Society found that in New York C ity alone more than 450,000 were filed bydebt buyers, from January 20 06 to July 2008, yielding m ore than $1.1 billion in judgments an d

settlements.

Problems w ith this torrent of litigation are legion, according to the Federa l Trade Com mission,

led by Jon Leibowitz. The agency issued a report on the subject, "Repairing a broken Systei,,,

in July. In some instan ces, banks are selling accoun t information that is riddled with errors.

More often, essential background information simply is not a cquired by debt bu yers, in large

part because that data ad ds to the price of each acco un t. But court rules state that anyon esubm itting an affidavit to a court against a d ebtor must ha ve proof of that claim proper

documentation of a debt's origins, history an d am ount.

Without that information it is hard to imagine how a ny com pany cou ld meet the legal standard

of due diligence, particularly while churn ing out thousa nds an d thousa nds of affidavits a week.

Analysts say tha t affidavit-signers at debt-buying com panies appear to have little choice but to

take at face value the few facts typically provided to them often little m ore than b asic account

information on a com puter screen.

That was made vividly clear during the deposition last year of Jay M ills, an employee of a

subsidiary of SquareTwo Financial (then known as Collect America), a debt-buying company in

Denver.

"So," asked Dale Irwin, the plaintiffs lawyer, using shorthand for Co llect America, "if you see on

the screen that the m oon is m ade of green cheese, you trust that CACH has investigated that

and h as determined that in fact, the moon is made of green cheese?"

"Yes," Mr. Mills replied.

Given the volume of affidavits, even perfunctory research seems imposs ible. Cherie Thomas,

who w orks for Asta Fund ing, a debt buy er in Englewood Cliffs, N.J., said in a 200 7 deposition

that she had signed 2,000 affidavits a day. With a half-hour for lunch an d two brief breaks,

that's roughly one affidavit every 13 seconds.



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Executives at debt-buying firms say they have systems to ensure the accuracy of their

affidavits. Robert Michel, chief financial officer at Asta Funding, says his company hires outside

lawyers to read over a ffidavits, then has staff employees check their work.

"The people who work in this area are well trained, and they know that when they sign a

statement they have to follow certain procedures," he said. "They know what they are doing."

He added that the pace of affidavits filed by Asta had dwindled since 2007 and was now closer

to "several hundred" a day, rather than 2,000.

Even if debt buyers purchase the requisite information directly from a bank, it may be flawed.

Linda Almonte oversaw a team of advisers, analysts and managers at JPMorgan Chase last

year, when the company was preparing the sale of 23,000 delinquent accounts, with a face

value of $200 m illion. W ith the debt sold at roughly 13 cents on the dollar, the sale was

supposed to n et $26 m illion.

As the date of the sale approached, M s. Almonte and her employees started to notice mistakes

and inconsistencies in the accounts.

"We found that with about 5,000 accounts there were incorrect balances, incorrect addresses,"

she said. "There were even cases w here a consum er had won a judgment against Chase, but it

was still part of the package being sold."

Ms. Almonte flagged the defects with her m anager, but he shrugged them off, she says, and he

urged her and her colleagues to complete the deal in time for the compan y's coming earningsreport. Instead, she contacted senior legal counsel at the company. Within days, she was fired.

She has since filed a wrongful termination suit against Chase.

A Chase spokesm an declined to com ment, citing the p ending litigation.

The m ajority of lawsuits filed in debt collection cases go un answered, wh ich is why m ost end

with default judgm ents v ictories for creditors that allow them to use court officers or sheriffs

to garnish wages or freeze bank accounts, among other remedies.

There is a persistent argument about why so few consum ers respond in these cases. Consumers

often know they owe the debt and conclude that fighting about it is pointless, said Barbara

Sinsley, general counsel at DBA International, a trade group of debt buyers.

Lawyers for consum ers, on the other hand, contend that few deb tors ever learn about the legal

action until it is too late, often because the process server charged with alerting them never

actually delivered a notification. In those instances when a consumer hires a lawyer, the



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consumer often prevails.

"I've lost four and I've taken about 5,000 cases," said Jerry Jarzombek, a consumer lawyer in

Fort Worth. "If the case goes to trial, I say to the judge, 'Your honor, imagine if someone came

in here to give eyewitness testimony in a traffic accident case and they didn't actually see the

crash. They just read about it somewhere. Well, this is the same thing.' The debt buyers don't

know anything about the debt. They just read about it."

Every plaintiffs lawyer and consum er advocate in this field has a theory about why there has

been so much fury over mortgage paperwork abuses but so little about debt collections. The

stakes in collections cases are smaller, and of course, debt buyers were never given a taxpayer

bailout.

"But what people don't realize," said Daniel Edelm an, a plaintiff's lawyer in Chicago, "is that the

mortgage issue and debt collections are intimately connected. The millions of default judgments

out there you better believe that's one reason tha t homeowners can't afford their homes."

Andrew Martin contributed reporting.



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ased Woman's Name W as Robo-Signed on T housands of Affidavits I http://foreclosuregate.prosepoint.com/story/deceased-womans-na

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Deceased Woman's Name Was

Robo-Signed on Thousands of AffidavitsFront Page

by Jessica Silver-Greenberg, Wall St JournalMAINSTREAM MEDIA

Sunday, January 2nd, 2011

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Martha Kunkle has come back to life.

She died in 1995. Yet her signature later appeared on thousands of affidavits submitted by

one of the nation's largest debt collectors, Portfolio Recovery Associates Inc., in lawsuits filed

against borrowers.

NAVIGATION

CONTRIBUTORS

I MAGE GALLERY

Some regulators complain that the use of Ms. Kunkle's name reflects an epidemic of

mass-produced, sloppy and inaccurate documentation in the debt-collection industry.

Lawsuits have surged a s more borrowers fall behind on payments and collection firms turn to

courts to get what they are owed.

After being sued for fraud, Portfolio Recovery Associates decided in early 2008 that any

documents bearing Ms. Kunkle's name had "d efects" and shouldn't be used when trying to collect debts, a company

spokeswoman said.

Last July, though, lawyers for Portfolio Recovery Associates sought a court judgment in a lawsuit against a Seattle woman for$2,892.10 in credit-card debt and interest that she allegedly owed. It was a cookie-cutter case, except for one thing: To vouch for

the debt's validity, the Norfolk, Va., company included an affidavit signed by Martha Kunkle.

The spokeswoman said the document was "inadvertently used by our outside counsel" because of "human error," adding that the

suit was dropped later "upon review of the case."

The company said Ms. Kunkle's name isn't on any other affidavits submitted to judges since early 2008 by Portfolio Recovery

Associates or outside lawyers who handle most of its debt-collection cases.

"When you see corner-cutting like this, it's alarming," Minnesota Attorney General Lori Swanson said about the Kunkle case. Ms.

Swanson is investigating num erous buyers and collectors of consumer debt for falsifying affidavits. A spokeswoman for the

company, the second-largest debt buyer in the U.S. by revenue, said the company is unawa re of the investigation and declined

further comment.

Missouri Attorney General Chris Koster said he wants to investigate whether Martha Kunkle's name appears on any affidavits

used to collect debt in the state of Missouri.

Some judges say robo-signing, in which affidavits are signed without fully reviewing underlying documentation, is more common in

debt-collection cases than foreclosures. In July, the Federal Trade Commission recommended that state regulators require the

disclosure of "more information" by debt collectors and buyers, concluding that they might be relying on erroneous or incomplete

paperwork when suing to recover money.

"I've watched and wanted to tell defendants in these suits to dem and proof of the underlying debt because that proof is so often

flimsy," said Jeffrey Lipman, a ma gistrate judge in Polk County, Iowa, which includes Des Moines, the sta te's capital. Court rules

give him little leeway to instruct borrowers in court.

Large debt collectors such as Portfolio Recovery Associates and publicly traded rivals Encore Capital Group Inc. and

Acceptance Capital Corp. frequently buy delinquent accounts in bulk. Information about each d ebt sometimes is little more than a

line in a spreadsheet with the borrower's name and amount owed, according to lawyers who represent borrowers. As of Sept. 30,

1/4/2011


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ased Woman's Name W as Robo-Signed on T housands of Affidavits I http://foreclosuregate.prosepointcom/story/deceased-womans-n

Portfolio Recovery Associates had $91.5 million in revenue from lawsuits it won, or 34% of its overall revenue.Powered by ProsePoint

In2008, Judy Montoya, a n employee at Portfolio Recovery Associates, testified in a debt-collection suit filed by the company tha t

its "legal specialists" sign as many as 200 affidavits a day. The company's spokeswoman said such employees sign an average of

100 affidavits a day and are guided by "a very rigorous set of policies and procedures." Ms. Montoya couldn't be reached to

comment.

Questions about Martha Kunkle first popped up in 2008 after her name appeared in thousands of affidavits generated by a unit of

Providian National Corp. The credit-card issuer sold an undisclosed num ber of delinquent account balances to Portfolio Recovery

Associates and other debt collectors, which then sued the borrowers to collect the debt.

Most of the debt was racked up before 2004. Providian was acquired in 2005 by Washington Mutual Inc. The Seattle company'sbanking operations failed in 2008 and were sold to J.P. Morgan Chase & Co., which declined to comment.

Concerns about Ms. Kunkle's affidavits were raised in 2008 by lawyers for Jeanie Cole, one of thousands of Montana residents

sued by Portfolio Recovery Associates to collect debts. After failing to locate Ms. Kunkle, lawyers for Ms. Cole interviewed her

daughter, who worked at Providian in a document-processing division.

The daughter testified in a deposition that other Providian employees used the name Martha Kunkle when signing affidavits. Along

with other employees, the da ughter was responsible for signing affidavits. After countersuing Portfolio Recovery Associates for

alleged violations of the Fair Debt Collection Practices Act, Ms. Cole wa s the lead plaintiff in a 2008 federal-court suit in Montana

alleging the company targeted 16,000 borrowers using "false and misleading" affidavits.

Read more: http://online.wsj.com/article

/SB10001424052970204204004576049902142690400.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Add new comment e I ala

COMMENTS

JUDGES ARE ALSO BOUGHT-AND-PAID FOR

Dead robo-signers, yet another violation of our rights. Add it to the list of gov't violations of our right: They violate the 1st

Amendment by placing protesters in cages, banning books like "America Deceived II" a nd censoring the internet. They violate

the 2nd Amendment by confiscating guns. They violate the 4th and 5th Amendment by molesting airline passengers. They

violate the entire Constitution by starting undeclared wars for foreign countries. Impeach Obama and sweep out the Congress,

except Ron Paul. (Last link of Banned Book): http://www.iuniverse.com/Bookstore/BookDetail.aspx?Bookld=SKU-000190526

Submitted by Anonymous on Mon, 03/01/2011 - 10:10.

1/4/2011


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EXHIBIT D


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&An Execut-rwe Conference fromMrW A I L g i l in . 1 0 1 1 R V I T

E CO n o n i l e sCREATING ENVIRONMENTAL CAPITAL

PARTICIPANTS INCLUDE Request anInvitation

ECOnomics.wsj.com

1 / 5 / 2 0 1 1 Dead S oul Is a Debt Col lector - WSJ .com

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T H E W A L L S M E L T J O U R N A L .SJ.ccm

MARKETS DECEMBER 31, 2010

Dead Soul Is a Debt Collector

Deceased Woman's Name Was Robo-Signed on Thousands of Affidavits

ByJESSICASILVER-GREENBERG

Martha Ku nkle has come ba ck to li fe .

She d ied in 1 995. Ye t her s ignature la te r appeared on thou sands o f a f f idav i ts subm itted by one o f the nat ion 'slargest debt collectors, Portfolio Recovery Assoc iates Inc . , in lawsui ts f i led against borrowers .

Som e regula tors compla in that the use o f Ms . Kunkle 's nam ere f lec ts an ep idem ic o f m ass-produce d, s loppy and inaccuratedocum entat ion in the debt-co l lec t ion industry . Lawsui ts havesurged as m ore borrowers fa l l beh ind on paym ents and

co l lec t ion f i rms turn to cou r ts to ge t what they are ow ed.

After being sued for fraud, Portfolio Recovery Associates

dec ided in ear ly 2008 th a t a n y d o c um e n ts b e a r in g Ms .Kunkle 's name had "de fects " and shouldn ' t be used w hen t ry ing

to co l lec t debts , a company spokeswoman said.

Last July, though, lawyers for Portfolio Recovery Associates

sought a court judgment in a lawsuit against a Seatt le womanfor $ 2 ,892 .10 in c red i t-card debt and inte res t that she a l l eged lyowed. It was a cookie-cutter case, except for one thing: To

vouch for the debt's validity, the Norfolk, Va., company

inc luded an af f idav i t s igned b y Martha K unkle .

The spokeswom an said the docum ent was " inadver tent ly usedby our ou ts ide counse l " because o f "huma n er ror ," adding thatthe su i t was d ropped later "upon rev iew o f the case . "

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Details about Martha Kunkle, w hose name appearedon thousands of affidavits used to collect credit-carddebts

Died in 1995

Name was used by employees who workedwith her daughter

Minnesota's attorney general is investigating

numerous buyers and collectors of

consumer debt for falsifying affidavits

The com pany sa id M s . Kunkle 's name i sn 't on any o ther a f fidav its subm itted to judges s ince ear ly 2008byPortfolio Recovery Associates or outside lawyers who handle most of its debt-collection cases.

"W hen you see corner -cutt ing l ike this , it ' s a larming," Minnesota Attorney Genera l Lor i Sw anson sa id abou t theKunkle case . M s . Swans on i s inves tigat ing num erous b uyers and co l l ec tors o f consum er debt fo r fa ls ify ingaf f idav i ts . A spokeswom an for the com pany, the second- largest deb t buyer in the U.S. by revenue, sa id thecom pany is unaware o f the invest igat ion and dec l ined fur ther comm ent.

Missouri At torney Genera l Chris Kos te r sa id he wants to inves t igate whether Martha K unkle 's name app ears on

any af f idav its used to co l lec t debt in the s tate o f M issour i .

.. .wsj.com/.. ./S B1000142405297020420... 1


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Bulk Debt

Portfolio Recovery Associates'

legal collections and quarterly

revenue, in millions of dollars

Legal collections ........... Revenue

0 -

2002 '09

Swam the ccaliwy.5filing5

$100..

40

1 / 5 / 2 0 1 1 D e a d S o u l Is a D ebt Col lector - WSJ.com

Som e jud ges say robo-s igning , in which a f fidav i ts are s igned wi thout ful ly rev iewing un der ly ing do cum entat ion,

is m ore com m on in debt -co l lection cases than forec losures . In July , the Federa l Trade C om miss ion

recomm ended that state regulators require the disclosure of "more information" by debt collectors and buyers,

conclud ing that they might be re ly ing on erroneou s or incomple te paperwork w hen suing to recover mo ney .

" I 've watched a nd wan ted to te l l defendants in these sui ts to dem and proo f o f the under ly ing debt becau se that

proo f i s so o f ten f l im sy, " sa id Jef f r ey L ipman, a m agistra te judge in Po lk Cou nty, Iowa, which inc ludes D es

Moines, the sta te 's capi ta l . Cour t ru les g ive h im l it t l e l eeway to instruct bo r rowers in cour t .

large debt collectors such as Portfolio Recovery Associates and publiclyt raded r iva ls Encore Ca pi ta l Group Inc . and Asset Acceptance C api ta l Corp.

f requent ly buy de l inquent accou nts in bulk. Inform at ion about each d ebt

som et imes is l it t le m ore than a l ine in a spreadshee t wi th the bor rower 's

nam e and am ount owed , according to lawyers who represent borrowers . As

of Sept. 3o, Portfolio Recovery Associates had $91.5 m illion in revenue

from lawsuits it won, or 34% of its overall revenue.

In2008,Judy Montoya, an employee at Portfolio Recovery Associates,

test i f ied in a debt-col lect ion suit f i led by the company that i ts " legal

special ists" s ign as m any a s 200affidavits a day. The company's

spokeswom an sa id such em ployees s ign an average o f 10 0 a f f idav i ts a day

and are guided b y "a very r igorous se t o f po l ic ies and procedu res ." Ms.

Montoya couldn't be reached to comment.

Que st ions abou t Mar tha Ku nkle f irs t popped up in 2008a f ter her name

appeared in thousands o f a f f idav i ts generated by a uni t o f Prov id ian

Nationa l Corp. The cred i t -card issuer so ld an und isc losed nu m ber o f

delinquent account ba lances to Portfolio Recovery Associates and other debt collectors, which then sued the

borrowers to collect the debt.

Most o f the debt was racked u p be fore 2004.Providian was acqu ired in2005by Washington Mutual Inc. The

Seat t le com pany 's banking operat ions fa il ed in 2008and we re so ld to J .P . Morgan Chase & Co . , which dec l ined

to comment.

Conce rns abou t Ms. Kun kle 's a f f idav i ts were ra ised in2008by lawyers for Jeanie Co le , one o f thousand s o f

Montan a residents sued by Portfolio Recovery Associates to collect debts. After failing to locate Ms. Kunk le,

lawyers for Ms. Cole interviewed her daughter, who worked a t Providian in a documen t-processing division.

The dau ghter test if ied in a deposi t ion that o ther Prov id ian employees u sed the nam e Ma r tha Kunkle whe n

signing aff idavits. Along with other employees, the daughter was responsible for s igning aff idavits. After

countersuing Portfolio Recovery Associates for alleged violations of the Fair Debt C ollection Practices Act,

Ms. Co le was the lead plainti ff in a 2008f edera l -cour t su it in Montana a l leg ing the compan y targeted 16,o o o

borrowers using "false and misleading" affidavits.

Last year, Portfolio Recovery Associates agreed to settle the Mon tana suit. Terms of the dea l weren't disclosed,but the com pany 's spokeswom an sa id it adm it ted no wrongdo ing. She wou ldn ' t say how m any borrowers were

sued u sing docum ents s igned by M ar tha Kunkle . Ms. Co le i s prohibited f rom com m enting under terms o f the

settlement.

"I would like to reinforce that these were not Portfolio Recovery Associates affidavits," the spokeswoman said.

The com pany sa id i t m oved qu ick ly to a ler t its outs ide lawyers that Kunkle docum ents shouldn ' t be re l ied on

when trying to collect debts.

The lawsui t aga inst the Seatt l e wom an inc luded an O ctober 2006affidavit in which "Martha K unkle,

Designated Agent" for Providian, swore "to the best of my kn owledge" that the am ount owed "reflects a true

and correct accounting of the cardholder's credit card account."

.. .ws j . com/ . . . /SB1000142405297020420... 2


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1 / 5 / 2 0 1 1 Dead S oul I s a Debt Co l l ec tor - WSJ .com

Robert Scanlon, the law yer who filed the suit for Portfolio Recovery Associates, wouldn't comm ent on the case

o r how l ong he has s ue d b o r r owe rs on b e ha l f o f the c ompany . The bo r r owe r a l s o de c l ine d to c om me nt .

Copyright 2010 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and

by copyright law . For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit

...wsj.com/ .../SB1000142405297020420... 3


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. n0n0 F I LE

ECF CASE

08 Civ.

O s23

\\\ 1 N c l \ t

coNinuAr t

m c M e i rb A R ,Unit 5taSesAttoori fokliie

k

Southern District of New York

By: MATTHEW L. SCHWARTZ

Assistant United States Attorney

86 Chambers StreetNew York, New York 10007

Telephone: (212) 637-1945

Facsimile: (212) 637-2750

E-mail: [email protected]

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA,

Plaintiff,

v.

DANIEL B. KARRON,

Defendant.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

Plaintiff the United States of America, by its attorney Michael J. Garcia,

United States Attorney for the Southern District of New York, herein alleges for its

complaint as follows:

INTRODUCTION

1. This is a civil action brought by plaintiff, the United States of America,

on behalf of its agency the United States Department of Commerce ("Commerce"),

against the defendant, Daniel B. Karron ("Karron"), under the provisions of the

False Claims Act, 31 U.S.C. 3729, et seq.(the "False Claims Act"), to recover

damages sustained by, and penalties owed to, the United States as a result of

Karron's having knowingly presented or caused to be presented to the United States


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37. On or about June 13, 2007, a federal grand jury in the Southern

District of New York indicted Karron on one count of misapplying federal grant

funds, in violation of 18 U.S.C. 666. On or about May 21, 2008, a superceding

indictment was filed in United States v. Karron, 07 Cr. 541 (RPP), adding a

forfeiture count.

38. On or about June 11, 2008, a federal jury convicted Karron of violating

18 U.S.C. 666 in connection with the Grant.

39. On or about October 24 and 31, 2008, the Hon. Robert P. Patterson

sentenced Karron to a term of seven and a half months imprisonment, three years

supervised release, a $100 mandatory assessment, and restitution in the amount of

$120,000.00.

FIRST CLAIM

(FALSE CLAIMS ACT, 31 U.S.C. 3729(a)(1))

40. The United States incorporates by reference paragraphs 1 through 39

above as if fully set forth herein.

41. The United States seeks relief against Karron under Section 3729(a)(1)

of the False Claims Act, 31 U.S.C. 3729(a)(1).

42. As set forth above, Karron knowingly, or with reckless disregard for

the truth, presented and caused to be presented to an officer, employee or agent of

the United States, through Commerce, either directly or indirectly, false or

fraudulent claims for ATP Grant payments.

43. The United States, through Commerce, paid such false or fraudulent

claims because of the acts and conduct of Karron.

10


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44. By reason of Karron's false claims, the United States has sustained

damages in an amount to be determined at trial.

SECOND CLAIM

(FALSE CLAIMS ACT, 31 U.S.C. 3729(a)(2))



46. The United States seeks relief against Karron under Section 3729(a)(2)

of the False Claims Act, 31 U.S.C. 3729(a)(2).

47. As set forth above, Karron knowingly, or in reckless disregard for the

truth, made, used, and caused to be made and used, false records and statements to

get false and fraudulent claims for ATP Grant money paid by Commerce.

48. The United States, through Commerce, paid such false or fraudulent

claims because of the acts and conduct of Karron.

49. By reason of these false claims, the United States has sustained

damages in an amount to be determined at trial.

THIRD CLAIM

(CONVERSION)



51. All ATP Grant payments up to the amount of $1,345.500.00 made to

CASI are the lawful property of the United States of America.

52. Karron knowingly converted these funds for his own use, in derogation

of the rights of the United States, which is entitled to these funds.

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53. As a result of the conversion by Karron, the United States has been

damaged in the amount of $1,345.500.00, representing the ATP Grant payments

Karron has wrongfully withheld from the United States.

FOURTH CLAIM(UNJUST ENRICHMENT)



55. The United States made ATP Grant payments to CASI and for the

benefit of Karron when they were not entitled to those payments.

56. Karron has been unjustly enriched by retaining the use and enjoyment

of the ATP Grant payments, to which he was not entitled.

57. Karron has been unjustly enriched in the amount of $1,345.500.00,

representing the ATP Grant payments which he used for his own benefit, but to

which he was not entitled.

58. The circumstances of Karron's receipt of these ATP Grant payments

are such that, in equity and good conscience, Karron should not retain these

payments.

FIFTH CLAIM(FRAUD)



60. Karron made material misrepresentations of fact to the United States,

through Commerce, with knowledge of, or in reckless disregard of, their truth, in

12


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connection with CASI's claim for ATP Grant payments.

61. Karron intended that the United States rely upon the accuracy of the

false representations referenced above.

62. The United States made substantial payments of money to CASI in

justifiable reliance upon their false representations.

63. Karron's actions caused the United States to be damaged in an amount

to be determined at trial.

SIXTH CLAIM

(PAYMENT MADE UNDER MISTAKE OF FACT)



65. The United States seeks relief against Karron to recover monies paid

under mistake of fact.

66. The United States made ATP Grant payments to CASI under the

erroneous belief that the information in Karron's claims for payment complied with

the applicable rules and guidelines. This erroneous belief was material to the

United States' decision to make these payments. In such circumstances, payment

was by mistake and was not authorized.

67. Because of these payments by mistake, Karron has received money to

which they are not entitled.

68. By reason of the foregoing, the United States was damaged in an

amount to be determined at trial.

WHEREFORE, plaintiff, the United States of America, requests that

13


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judgment be entered in its favor and against defendant Daniel B. Karron as follows:

(a) On all Claims for relief, summary judgment as to liability pursuant to

the estoppel provisions of the False Claims Act, 31 U.S.C. 3731(d),

and the doctrines of collateral estoppel and res judicata, based on

Karron's conviction.

(b) On the First and Second Claims for relief (Violations of the False

Claims Act, 31 U.S.C. 3729(a)(1) and (2)), for treble the United

States' damages, $1,345.500.00, plus an $11,000.00 penalty for each

false claim presented;

(c) On the First and Second Claims for relief, an award of costs pursuant

to 31 U.S.C. 3729(a);

(d) On the Third Claim for relief (Conversion), in an amount to be

determined at trial, together with costs and interest;

(e) On the Fourth Claim for relief (Unjust Enrichment), in an amount to

be determined at trial, together with costs and interest;

On the Fifth Claim for relief (Fraud), in an amount to be determined at

trial, together with costs and interest;

(g) On the Sixth Claim for relief (Payment Made Under Mistake of Fact),

in an amount to be determined at trial, together with costs and

interest; and

(h) awarding such further relief as is proper.

14


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Dated: New York, New York

November 24, 2008

MICHAEL J. GA C IA

United Sta

By:

EW L. CH RTZ

Assistant United States Attorney

Telephone: (212) 637-1945

Facsimile: (212) 637-2750

E-mail: [email protected]

15


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EXHIBIT F


45/131

Since .ply,

.1y:et Macma,

Portfolio Recovery Assoc140 Corporate BlvdNorfolk, VA 23502PH: 1-866-428-8102

P O R T F O L IO R E C O V E R Y ASSOCIATES, LLCLitigation Department

140 Corporate Boulevard Norfolk, VA 23502Telephone: 1 (866) 428-8102

Fax: (757) 518-1773

Hours of Operation: Monday through Friday 8 AM to 9 PM (EST)

April 6, 2010

D.B. Karron348 E. Fulton St.Long Beach, NY 11561

Re: Portfolio Recovery Associates LLC v. D.B. KarronIndex No: CV-002298-10Capital One Bank

Original Balance: $8,296.40

Dear D.B. Karron,

As you know, Portfolio Recovery Associates, LLC has filed a court action against you to collect adebt. Portfolio has decided to discontinue the action against you. Enclosed please find a Stipulation ofDiscontinuance in connection with the above-entitled matter. Nassau County requires both parties to signthe Stipulation before it can be filed with their Court. Kindly sign the Stipulation and return to our office atyour earliest convenience. We will then file it with the Court.

Thank you for your kind cooperation, and should you have any questions, please do not hesitate tocontact me.

MBM:ldlEnc.

This communication is from a debt collector and is an attempt to collect a debt.

Any information obtained will be used for that purpose.

NOTICE: SEE ADDITIONAL PAGE(S) FOR IMPORTANT INFORMATION


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DISTRICT COURT OF THE COUNTY OF NASSAU

FIRST DISTRICT

PORTFOLIO RECOVERY ASSOCIATES, LLC,

Plaintiff

-against-

D.B. KARRON,

Defendant,

STIPULATION OF

DISCONTINUANCE

Index No: CV-002298-

10

IT IS HEREBY STIPULATED, by the undersigned, the attorney of record for the Plaintiff,

Portfolio Recovery Associates, LLC, to the above-entitled matter, that whereas no party is an infant

or incompetent person for whom a committee has been appointed and no person not a party has an

interest in the subject matter of the action, the above-entitled action be, and the same hereby is,

discontinued without prejudice and without costs to either party as against the other. This

stipulation may be filed without further notice with the Clerk of the Court.

Dated: April , 2010

By:Mary Beth Macina, Esq.

Attorneys for Plaintiff

140 Corporate Boulevard

Norfolk, VA 23502

866-428-8102

D. B. Karron

348 E. Fulton Street

Long Beach, NY 11561

File No: 4802132398884729

This communication is from a debt collector and is an attempt to collect a

debt. Any information obtained will be used for that purpose.


47/131

EXHIBIT G


48/131

CHASE0P.O. BOX 15298WILMINGTON DE 19850

Tax Year 2009 Form 1099-C Cancellation of Debt (Copy B)

This is important tax information and is b eing furnished to the Internal

Revenue Service. If you are required to file a return, a negligence

penalty or other sanction may be imposed on you if taxable income

results from this transaction and the IRS determines that it has not

been reported.

btor's Information Creditor's Information

92573 TAS 1Z2 2010 - 0055 0032 80 (00.350) Federal ID Number: 22-2382028

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1...........................................................................

CHASE BANK USA, NA

D. B KARRON

348 E FULTON STLONG BEACH, NY 11561

Form 1099-C Questions

Phone Support: 866-578-2888

tor's ID Number: 054-42-5466 Original

mmary of Form 109 9-C Cancellation of Debt

Description Amount Box

(OMB No. 1545-1424)

Description Amount

Date Canceled (See Details) 5. Was borrower personally liable for repayment of the debt? (See Details

Amount of debt canceled $19,406.64 6. Bankruptcy No

Interest if included in box 2 $0.00 7. Fair market value of property $0.00

Debt Description CREDIT CARD ACCOUNT

ails of Form 1099-C Cancellation of Debt

ount Number Box #1 Box #2 Box #3

t Description Date Amt. of debt Int. included

canceled canceled in box 2

1683066629475 02/08/2009 $19,406.64 $0.00

(OMB No. 1545-1424)

Other Boxes

#4 Debt description CREDIT CARD ACCOUNT

#5 Was borrower personally liable for repayment of the debt? Yes

#6 Bankruptcy No

Page 1


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nstructions for Debtorote. You may not have to include in income all or a portion of certain qualifiedincipal residence indebtedness canceled in 2009. See Pub. 4681, Canceled

ebts, Foreclosures, Repossessions, and Abandonments (for individuals), forore information.

Box 1. Shows the date the debt was canceled.

Box 2. Shows the amount of debt canceled. Note: If you do not agree with thamount, contact your creditor.

a federal government agency, certain agencies connected with the Federal

overnment, financial institution, credit union, or an organization having a

gnificant trade or business of lending money (such as a finance or credit cardompany) cancels or forgives a debt you owe of $600 or more, this form must

e provided to you. Generally, if you are an individual, you must include all

anceled amounts, even if less than $600, on the "Other income" line of Form040. If you are a corporation, partnership, or other entity, report the canceled

ebt on your tax return. See the tax return instructions.

owever, some canceled debts are not includible, or fully includible, in your

come, such as certain student loans, certain debts reduced by the seller after

urchase, qualified farm debt, qualified real property business debt, qualifiedincipal residence indebtedness, or debts canceled in bankruptcy. See Pub.

681. Do notreport a canceled debt as income if you did not deduct it but wouldve been able to do so on your tax return if you had paid it. Also, do not includenceled debts in your income to the extent you were insolvent immediately

efore the cancellation of the debt. If you exclude a canceled debt from yourcome, file Form 982, Reduction of Tax Attributes Due to Discharge of

debtedness (and Section 1082 Basis Adjustment).

ccount number. May show an account or other unique number the creditorssigned to distinguish your account.

Box 3. Shows interest if included in the canceled debt in box 2. See Pub. 525Taxable and Nontaxable Income, to see if you must include the interest in groincome.

Box 4. Shows a description of the debt. If box 7 is completed, box 4 shows adescription of the property.

Box 5. Shows whether borrower is personally Yk i .b?e for repaymentof the debtSee Pub. 4681 for reporting instructions.

Box 6. If the box is marked, the creditor has indicated the debt was canceled a bankruptcy proceeding.

Box 7. If, in the same calendar year, a foreclosure or abandonment of propertoccurred in connection with the cancellation of the debt, the fair market value(FMV) of the property will be shown, or you will receive a separate Form1099-A, Acquisition or Abandonment of Secured Property. Generally, the grosforeclosure bid price is considered to be the FMV. For an abandonment orvoluntary conveyance in lieu of foreclosure, the FMV is generally the appraisedvalue of the property. You may have income or loss because of the acquisition

or abandonment. If the property was your main home, see Pub. 523, SellingYour Home, to figure any taxable gain or ordinary income. See Pub. 4681, forinformation about foreclosures and abandonments.

Page 2


50/131

unt Number Box #1

Description Date

canceled

182034748487 04/19/2009

Box #2

Amt. of debt

canceled

$1,154.39

CHASE0P.O. BOX 15298

WILMINGTON DE 19850

Tax Year 2009 Form 1099-C Cancellation of Debt (Copy B)

This is important tax information and is being furnished to the Internal

Revenue Service. If you are required to file a return, a negligence

penalty or other sanction may be imposed on you if taxable income

results from this transaction and the IRS determines that it has not

been reported.

btor's Information Creditor's Information

21389 TAS 1Z1 2010 - 0055 0032 80 (00.350)

IHhIIuIIIIIIIIIIII ...... IIuIIuIIuIIIIIIuII l IIIIIIIIIIIIuIIII l I

DR D B KARRON

348 E FULTON STLONG BEACH, NY 11561

Federal ID Number: 22-2382028

CHASE BANK USA, NA

Form 1099-C Questions

Phone Support: 866-578-2888

tors

mmary

ID Number: 054-42-5466 Original

of Form 1099-C Cancellation of Debt (OMB No. 1545-1424)

Description Amount Bo x Description Amount

Date Canceled (See Details) 5. Was borrower personally liable forrepayment of the debt? (See Details)

Amount of debt canceled $1,154.39 6. Bankruptcy No

Interest if included in box 2 $0.00 7. Fair market value of property $0.00

Debt Description CREDIT CARD ACCOUNT

ails of Form 1099-C Cancellation of Debt (OMB No. 1545-1424)

Box #3 Other Boxes

Int. included

in box 2

$0.00 #4 Debt description CREDIT CARD ACCOUNT

#5 Was borrower personally liable for repayment of the debt? Yes

#6 Bankruptcy No

Page 1


51/131

nstructions for Debtor

ote. You may not have to include in income all or a portion of certain qualified

rincipal residence indebtedness canceled in 2009. See Pub. 4681, Canceled

ebts, Foreclosures, Repossessions, and Abandonments (for individuals), for

ore information.

Box 1. Shows the date the debt was canceled.

Box 2. Shows the amount of debt canceled. Note: If you do not agree with tamount, contact your creditor.

a federal government agency, certain agencies connected with the Federal

overnment, financial institution, credit union, or an organization having a

gnificant trade or business of lending money (such as a finance or credit card

mpany) cancels or forgives a debt you owe of $600 or more, this form must

e provided to you. Generally, ifyou are an individual, you must include all

nceled amounts, even if less than $600, on the "Other income" line of Form

040. If you are a corporation, partnership, or other entity, report the canceled

ebt on your tax return. See the tax return instructions.

owever, some canceled debts are not includible, or fully includible, in your

come, such as certain student loans, certain debts reduced by the seller after

urchase, qualified farm debt, qualified real property business debt, qualified

rincipal residence indebtedness, or debts canceled in bankruptcy. See Pub.

681. Do not report a canceled debt as income if you did not dedu

jan 5 service package with notarization

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