Full opinion text
OPINION AND ORDER JANET T. NEFF, District Judge. Plaintiffs filed this action against Defendant Huntington National Bank, seeking recovery for millions of dollars in losses sustained as a result of alleged fraudulent-business dealings with a bank customer, Cyberco Holdings, Inc., and Defendant’s handling of its Cyberco accounts. Plaintiffs’ Complaint alleged four counts: Count 1 — aiding and abetting Cyberco’s fraud; Count 2 — aiding and abetting Cyberco’s conversion of Plaintiffs’ funds; Count 3— statutory conversion under Mich. Comp. Laws § 600.2919a; and Count 4 — a claim by Plaintiff El Camino Resources for equitable recovery of $1.945 million on a theory of unjust enrichment. Following extensive and lengthy discovery, presided over by Magistrate Judge Joseph G. Scoville, Defendant filed a motion for summary judgment (Dkt. 512) as to all claims. The motion briefs and exhibits submitted by the parties exceeded several thousand pages. The Court referred the Motion to Magistrate Judge Scoville, who conducted oral argument, and after receiving supplemental briefing, issued a comprehensive Report and Recommendation, recommending that this Court grant Defendant’s Motion as to Counts 1, 2 and 3, and deny the Motion as to Count 4. The matter is now before the Court on Plaintiffs’ Objections to the Report and Recommendation. In accordance with 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b)(3), the Court has performed de novo consideration of those portions of the Report and Recommendation to which objections have been made. Having fully considered the parties’ arguments and supporting documentation, the Court denies Plaintiffs’ Objections. This case has been contentiously and exhaustively litigated for three years. The parties, and the Court, through the diligent and painstaking efforts of Magistrate Judge Seoville, have “left no stone unturned” in the advocacy and resolution of the claims and legal arguments presented. Magistrate Judge Seoville has issued a thorough and well-reasoned Report and Recommendation. He has exhaustively researched and masterfully distilled the issues in this case. Having considered Plaintiffs’ allegations of error in objection to the Report and Recommendation, Defendant’s Response, and both parties’ positions on proffered supplemental authority, the Court finds no factual or legal vulnerability in Magistrate Judge Seoville’s reasoning or conclusions. Plaintiffs first challenge the Report and Recommendation on the basis of the Magistrate Judge’s review of the foundation evidence. Plaintiffs contend that the Report and Recommendation ignored evidence showing Defendant’s knowledge of Cyberco’s scheme. Plaintiffs point to four categories of “knowledge” evidence purportedly disregarded by the Magistrate Judge: (1) evidence that Defendant knew about a “Circle of Fraud” (Pis. Obj. at 4); (2) evidence that Defendant lacked a legitimate answer to the “$50 million Question” of “So where did all this money come from?” {id. at 7-8); (3) evidence that Defendant engaged in an internal cover-up — • a conscious decision to withhold information about the “bad” Cyberco from key bank personnel responsible for interacting with Cyberco {id. at 7); and (4) evidence of atypical banking behavior in which Defendant engaged to avoid exposing Cyberco’s fraudulent scheme {id. at 10). These allegations of error ring hollow for the same fundamental reason that Plaintiffs’ arguments on the knowledge issue failed before the Magistrate Judge— they lack substance. Plaintiffs point to no legally significant shortcomings in the Magistrate Judge’s consideration of the record evidence. Instead, Plaintiffs’ cited categories of knowledge “evidence,” e.g., the “Circle of Fraud” and the “$50 million Question,” are more properly characterized as elusive theories that lack any concrete evidentiary basis. This is simply a further attempt by Plaintiffs to, in their own words, “sketch out the inference that [Defendant] knew about the Cyberco circle of fraud and the origins of the $50 million” (Pis. Obj. at 2), which falls far short under the applicable legal standards to withstand summary judgment. Plaintiffs’ objections to the Magistrate Judge’s assessment of the record evidence are therefore rejected. Plaintiffs also advance six objections to the Magistrate Judge’s legal conclusions in the Report and Recommendation, none of which this Court finds meritorious. Foremost, contrary to Plaintiffs’ contention (Pis. Obj. at 13), the Magistrate Judge’s Erie analysis was not improper, but was instead comprehensive and soundly reasoned. Plaintiffs’ criticisms of this thoughtful and thorough analysis, such as that the Magistrate Judge cited 37 new cases not cited by the parties {id.), are not persuasive allegations of error. Plaintiffs’ remaining attacks on the Magistrate Judge’s well-founded legal conclusions are likewise unpersuasive. Plaintiffs’ objections are directed at the Magistrate Judge’s assessment of the legal standard for aiding and abetting, and more specifically, the tests for “actual knowledge” and “substantial assistance.” Plaintiffs contend that the Magistrate Judge improperly applied a “super” aiding and abetting test and improperly imported this “super scienter standard” into the standard for statutory conversion under Mich. Comp. Laws § 600.2919a (Pis. Obj. 22-23). The Court disagrees. The legal standards applied by Magistrate Judge Scoville are fully supported by applicable and proper authority. Contrary to Plaintiffs’ arguments, the Report and Recommendation does not create a “new super aiding and abetting claim” (id. at 22). Plaintiffs have advanced no legitimate objection to the Report and Recommendation’s legal conclusions. Having fully considered Plaintiffs’ objections in light of the extensive legal analysis set forth in the Report and Recommendation, this Court is left with no doubt that Magistrate Judge Scoville was successful in his endeavor to properly, logically, methodically, and clearly reach the appropriate ultimate conclusions with regard to summary judgment of Plaintiffs’ claims. There is no benefit in this Court rehashing, or even attempting to supplement, the legal analysis of Plaintiffs’ claims in response to the objections raised. Magistrate Judge Scoville has addressed the legal standards and the validity of each claim with great clarity in the Report and Recommendation. He properly found evidentiary and legal support lacking to sustain Counts 1, 2 and 3 of Plaintiffs’ Complaint. The supplemental authority submitted to the Court by Defendant, Miles Farm Supply, LLC v. Helena Chemical Co., 595 F.3d 663 (2010) (Dkt. 598), bolsters the legal grounds for Magistrate Judge Scoville’s ultimate conclusions and further defeats Plaintiffs’ challenges to the Report and Recommendation. In Miles, the Sixth Circuit Court of Appeals, on February 25, 2010, again sanctioned the “actual knowledge” standard, applied by Magistrate Judge Scoville, as an essential threshold to survive summary judgment of a civil aiding-and-abetting claim such as that advanced in this case. As in Miles, Magistrate Judge Scoville effectively found no “chain of reasonable inferences” that would establish the requisite elements of actual knowledge and substantial assistance — entirely proper conclusions given the record in this ease. See id. at 666-68. The Magistrate Judge’s thoroughly researched and tightly-reasoned Report and Recommendation exhibits an intellectual rigor and discipline absent from Plaintiffs’ submissions in this case, including the objections before this Court. The Magistrate Judge unmasks Plaintiffs’ elaborate, but ultimately unsupportable, attempt to impose liability where the law clearly does not provide for it and where there was neither direct nor circumstantial evidence to support it. The Magistrate Judge’s daunting task was necessary to an analysis of the tangled legal landscape created by Plaintiffs’ overly contentious prosecution of this case. Plaintiffs have chosen the wrong forum to argue for a fundamental change in Michigan law — a change they urge to suit only their own narrow interests. For all these reasons, the Court appreciatively adopts the Magistrate Judge’s Report and Recommendation as the Opinion of this Court. The Court concludes that additional argument before this Court on the issues presented would be futile and an unnecessary expenditure of time and resources for all concerned. Plaintiffs’ Motion for Oral Argument on the Objections (Dkt. 586) is therefore denied. Accordingly, IT IS HEREBY ORDERED that Plaintiffs’ Objections (Dkt. 585) are DENIED and the Report and Recommendation (Dkt. 581) is APPROVED and ADOPTED as the Opinion of the Court. IT IS FURTHER ORDERED that Plaintiffs’ Motion for Oral Argument on the Objections (Dkt. 586) is DENIED. IT IS FURTHER ORDERED that Defendant’s Motion for Summary Judgment (Dkt. 512) is GRANTED IN PART and DENIED IN PART; Defendant’s Motion is granted with respect to all claims in Counts 1, 2 and 3 of Plaintiffs’ Complaint; Defendant’s Motion is denied with respect to Count 4 of Plaintiffs’ Complaint. Partial Summary Judgment will be entered consistent with this Opinion and Order. REPORT AND RECOMMENDATION ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT JOSEPH G. SCOVILLE, United States Magistrate Judge. TABLE OF CONTENTS Page Applicable Standard............................................................884 Proposed Findings of Fact.......................................................884 A. Dramatis Personae....................................................885 B. Plaintiffs’ Transactions With Cyberco and Teleservices ..................886 1. ePlus Group Leasing Transactions ..................................886 2. El Camino Resources, Ltd. Leasing Transactions......................887 C. Relationship Between Cyberco and Huntington National Bank...........888 1. Beginnings of Relationship.........................................888 2. Investigation by Gail White.........................................890 3. Huntington Decides to End the Banking Relationship With Cyberco.....891 4. Huntington Goes to the FBI........................................892 5. Timing of Plaintiff s’ Transactions...................................896 Discussion.....................................................................897 I. Counts 1 and 2: Aiding and Abetting Fraud and Conversion..............897 A. Erie Considerations................................................897 B. Michigan Follows Traditional Tort Law for Secondary Liability........898 C. Development of the Aiding-andr-Abetting Theory in Tort Law...........901 D. Likely Ruling of Michigan Supreme Court............................905 1. Knowledge....................................................905 2. Substantial Assistance..........................................910 E. Analysis of Plaintiffs’Aiding-and-Abetting Claims ...................914 1. Underlying Torts...............................................914 2. Sufficiency of the Evidence of Actual Knowledge...................916 (a) Direct evidence.............................................916 (b) Circumstantial evidence.........................■.............920 3. Sufficiency of the Evidence of Substantial Assistance ...............926 II.Count 3: Statutory Conversion.........................................930 III.Count 4: Unjust Enrichment and Constructive Trust (El Camino Only) ..................................................... 930 Recommended Disposition................ .....................................934 This is a civil action arising under Michigan tort law. This court has subject-matter jurisdiction under 28 U.S.C. § 1332(a)(1) because of complete diversity of citizenship and the requisite amount in controversy. Plaintiffs, computer leasing companies, seek to hold defendant Huntington National Bank responsible for losses incurred by plaintiffs in connection with fraudulent computer leasing transactions between plaintiffs and Cyberco Holdings, Inc. Plaintiff El Camino Resources, Ltd. purchased over $11.5 million, and plaintiff ePlus Group over $14.5 million in computer equipment, for the purpose of leasing the equipment to Cyberco. Plaintiffs allege that they were victims of fraud by Cyberco and related entities and that defendant Huntington National Bank, Cyberco’s principal financial institution and depository, aided and abetted Cyberco in committing fraud and conversion. Plaintiffs seek judgment against Huntington National Bank in an amount exceeding $32 million. (Compl. ¶¶ 143,151,156-57, 165). Plaintiffs’ complaint asserts four counts against Huntington National Bank: aiding and abetting Cyberco’s fraud (count 1); aiding and abetting Cyberco’s conversion of plaintiffs’ funds (count 2); statutory conversion under Mich. Comp. Laws § 600.2919a (count 3); and equitable recovery by El Camino of $1.945 million received by the Bank under a theory of unjust enrichment (count 4). Presently pending before the court is defendant’s motion for summary judgment (docket # 512), which District Judge Janet T. Neff has referred to me for the issuance of a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). The parties have submitted massive briefs and voluminous evidentiary material in support of and in opposition to defendant’s dispositive motion. I conducted a oral argument on the motion on June 12, 2009. In essence, defendant argues that plaintiffs cannot establish the underlying torts of fraud or conversion by Cyberco, nor have they presented a jury-submissible case on the elements of aiding and abetting sufficient to hold Huntington National Bank responsible for the torts of others. After review of the record, I conclude that plaintiffs’ proofs are insufficient to create liability against Huntington on an aiding- and-abetting theory. I therefore recommend dismissal of counts 1 and 2 on this basis, without reaching the merits of the underlying torts. I further conclude that plaintiffs cannot establish liability under Michigan’s conversion statute, as it has been authoritatively construed by the state Supreme Court. On this basis, I recommend entry of judgment on behalf of defendant on count 3. El Camino’s claim in count 4 for unjust enrichment and imposition of a constructive trust seeks to recover $1.945 million received by Huntington Bank from Teleservices, Inc., an affiliate company of Cyberco. El Camino alleges that this money is traceable to the proceeds of fraud received by Teleservices from El Camino the day before the payment. This claim is triable to the court without a jury. I recommend that defendant’s motion for summary judgment on count 4 be denied. Drawing all reasonable inferences in El Camino’s favor, I find that a reasonable judge, sitting in equity, could find that defendant’s retention of these funds may be unjust. However, a reasonable judge could just as easily find on this record that El Camino’s negligence in failing to protect itself and its business partners in connection with the Cyberco transactions makes equitable relief against Huntington Bank inappropriate. This issue depends on a balance of the facts and equities in the case, an inappropriate subject for summary judgment. Applicable Standard Summary judgment is appropriate when the record reveals that there are no genuine issues as to any material fact in dispute and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Sybrandt v. Home Depot, U.S.A., Inc., 560 F.3d 553, 557 (6th Cir.2009). The standard for determining whether summary judgment is appropriate is “whether ‘the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ ” Moses v. Providence Hosp. Med. Centers, Inc., 561 F.3d 573, 578 (6th Cir.2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)); see Cady v. Arenac County, 574 F.3d 334, 339 (6th Cir.2009). The court must consider all pleadings, depositions, affidavits, and admissions on file, and draw all justifiable inferences in favor of the party opposing the motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). When the party without the burden of proof seeks summary judgment, that party bears the initial burden of pointing out to the district court an absence of evidence to support the nonmoving party’s case, but need not support its motion with affidavits or other materials “negating” the opponent’s claim. See Morris v. Oldham County Fiscal Court, 201 F.3d 784, 788 (6th Cir.2000); see also Minadeo v. ICI Paints, 398 F.3d 751, 761 (6th Cir.2005). Once the movant shows that “there is an absence of evidence to support the non-moving party’s ease,” the nonmoving party has the burden of coming forward with evidence raising a triable issue of fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). To sustain this burden, the nonmoving party may not rest on the mere allegations of his pleadings. Fed. R. Crv. P. 56(e); see Everson v. Leis, 556 F.3d 484, 496 (6th Cir.2009). The motion for summary judgment forces the nonmoving party to present evidence sufficient to create a genuine issue of fact for trial. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir.1990). “A mere scintilla of evidence is insufficient; ‘there must be evidence on which a jury could reasonably find for the [non-movant].’ ” Dominguez v. Correctional Med. Servs., 555 F.3d 543, 549 (6th Cir.2009) (quoting Anderson, 477 U.S. at 252, 106 S.Ct. 2505); see Reed v. International Union, United Auto., Aerospace & Agric. Implement Workers of Am., 569 F.3d 576, 579 (6th Cir.2009). Proposed Findings of Fact Introductory Statement. This case has been the subject of protracted and often rancorous discovery and pretrial proceedings. The parties have taken numerous depositions and have conducted extensive document discovery. The court was called upon on more than one occasion to intervene on issues of discovery of electronically stored information, and probably allowed plaintiffs access to a greater scope of electronically stored information than in any other civil case in the history of this court. Furthermore, the parties are embroiled in litigation in the bankruptcy court involving both Cyberco and Teleservices, Inc., a related corporation. Finally, the parties have had access to the records of criminal cases in this court against the Cyberco principals, including Krista Watson, Paul Wright, and James Horton. As a result, the parties have had more than ample opportunity to prove their claims and have amassed a huge evidentiary record in support of their respective contentions. The device employed by Judge Neff to simplify such cases — the filing of statements of material facts — has been largely unsuccessful in identifying points of agreement and disagreement, principally because the nonmoving parties refuse to concede any harmful fact, regardless of the evidence, and often rely on inferences that are neither reasonable nor fairly supported by the record. In those relatively few instances where this process resulted in agreement, the Statement of Material Facts is cited as “SMF.” In the following proposed Findings of Fact, I have not attempted to engage every factual dispute between the parties, many of which are immaterial to resolution of the case. I have especially avoided controversies involving the validity of the underlying torts of fraud and conversion committed by Cyberco and related parties. Rather, I have assumed that plaintiffs can mount a jury-submissible case of fraud and conversion committed by Cyberco and have focused only on the question whether, assuming the commission of underlying torts, plaintiffs have sufficient evidence to present their aiding-and-abetting claims against Huntington to a jury under counts 1 and 2 of the complaint. Likewise, for reasons explained more fully in section I.E.2.(b) of the Discussion section, I do not address plaintiffs’ efforts to show that Huntington violated its anti-money-laundering obligations or violated its duties to the federal government as a national bank, because in the circumstances of this case those facts, even if true, do nothing to prove that Huntington was aiding and abetting a known fraud. The facts set forth below attempt to identify the parties and transactions at issue and to give a general description of the relevant events giving rise to Huntington’s alleged liability. Further facts are developed in connection with analysis of plaintiffs’ claims in the “Discussion” section of this report and recommendation. The record before the court establishes the following material facts, with all factual disputes and all reasonable inferences resolved in favor of the plaintiffs. A. Dramatis Personae 1. Plaintiff El Camino Resources, Ltd. is a California corporation, with principal place of business in Chatsworth, California. It is a privately owned leasing company that has been in the business of leasing computer equipment since the late 1970’s. (Compl. ¶¶ 1, 9). 2. Plaintiff ePlus Group, Inc. is a Virginia corporation, with principal place of business located in Herndon, Virginia. It is a wholly owned subsidiary of ePlus, Inc., a publicly traded corporation. ePlus Group is also engaged in the business of leasing computers. (Compl. ¶¶ 2,10). 3. Defendant The Huntington National Bank is a national banking association organized under federal law. The Bank’s main office is located in Columbus, Ohio, but it maintains branches across the State of Michigan, including the City of Grand Rapids. (Def. Ex. 1). Huntington established a comprehensive banking relationship with Cyberco beginning in 2002, ultimately extending loans to it exceeding $17 million. (SMF ¶ 6). 4. Cyberco Holdings, Inc., a Michigan corporation, was established by Barton Watson in 1992, and held itself out as a computer sales and consulting business. (Ex. 170). The enterprise used a number of names, some of which may have pertained to separate corporations, while others were trade names. These names included CyberNet, CyberNet Engineering, and Corporate Property Associates. Cyberco’s operations came to a halt on November 17, 2004, when agents of the FBI executed search warrants on Cyberco’s office in downtown Grand Rapids, Michigan, and served seizure warrants for the bank accounts of Cyberco and its officers. Cyberco is now in an involuntary bankruptcy proceeding in this court (In re Cyberco Holdings, Inc., No. 04-14905 (W.D.Mich.Bankr.)). 5. The principals of Cyberco included Barton Watson, Krista Kotlarz Watson, and James M. Horton. Barton Watson committed suicide on November 24, 2004, shortly after the massive Cyberco fraud came to light. By indictment filed on November 30, 2006, the United States charged Krista Watson and others with conspiracy to commit bank fraud, mail fraud, and money laundering (count 1), defrauding Huntington National Bank and deceiving it into loaning $17 million to Cyberco (count 2), money laundering (counts 3, 5 and 6), and income tax evasion (counts 7, 8 and 9). Krista Watson pleaded guilty to the conspiracy charge and to income tax evasion, and is serving an 84-month prison sentence. (United States v. Watson, case no. l:06-cr-290). By felony information filed April 17, 2006, James Horton was charged with conspiracy to commit bank fraud, mail fraud, and money laundering (count 1), defrauding Huntington National Bank into advancing loans to Cyberco in the amount of $17 million (count 2), and money laundering (counts 3 and 4). Horton pled guilty to all counts and is serving a total of 90 months in federal prison. (United States v. James Michael Horton, case no. l:06-cr-87). In these criminal proceedings, Judge Bell issued restitution orders approaching $100,000,000.00. 6. Teleservices Group, Inc. is an affiliated corporation of Cyberco. According to the testimony of James Horton in the bankruptcy proceedings, Teleservices was a shell corporation that had no employees, assets, or operations. (Horton Exam. 51-52, 118-20). Barton Watson, Krista Watson and other Cyberco employees, using pseudonyms, would impersonate corporate officers of Teleservices when necessary. (Id., 52-54). The principals represented Teleservices to the outside world in a number of ways. To leasing companies such as plaintiffs, Teleservices was said to be a manufacturer or seller of computers. The Watsons and Horton made a number of contradictory representations to Huntington concerning the nature of Teleservices, including describing it as a client of Cyberco, an investment by Krista Watson, a company owned by Barton and Krista Watson, a corporation used to funnel personal funds to Huntington Bank, a vendor of computers (Horton Exam. 122), a call center, or a related entity in the process of becoming the financial leg of the Cyberco group of businesses. (White Dep., 45^47; Hutchings Dep. 129; Hekman Dep. 28-30). The Cyberco principals offered these explanations for the purpose of deceiving both plaintiffs and Huntington. (Horton Exam. 167-68). Teleservices is also in bankruptcy. (In re Teleservices Group, Inc., No. 05-00690 (W.D.Mich.Bankr.)). B. Plaintiffs’ Transactions With Cyberco and Teleservices 1. ePlus Group Leasing Transactions (a) Effective March 3, 2004, ePlus Group and Cyberco entered into a Master Lease Agreement (Compl. Ex. H). Under the Master Lease Agreement, ePlus Group promised to lease to Cyberco certain personal property, to be described in schedules. (¶ 1). The ownership of the leased property remained in ePlus Group. (¶ 7). (b) Pursuant to the Master Lease Agreement, ePlus Group and Cyberco entered into four lease schedules, as follows: (1) Schedule no. 1 (Compl. Ex. I), dated March 3, 2004, covering 85 servers and two racks for a three-year period, totaling $3,554,820.10; (2) Schedule no. 2 (Compl. Ex. J), dated March 16, 2004, covering 65 servers and two racks for a three-year period, totaling $3,485,226.10; (3) Schedule no. 3 (Compl. Ex. K), dated September 17, 2004, covering 132 servers and nine racks for a three-year period, totaling $4,990.420.96; and (4) Schedule no. 4 (Compl. Ex. L), dated October 6, 2004, covering 63 servers and four racks for a three-year period, totaling $2,489,783.94. (c) The computer equipment to be purchased by ePlus Group for purposes of leasing to Cyberco was allegedly manufactured by Teleservices. When the computer equipment described in each schedule was purportedly delivered from Teleservices to Cyberco, Cyberco issued to ePlus Group a certificate of acceptance, certifying that the assets set forth in the schedule had been delivered to Cyberco, inspected, and found to be in good order. (Longanecker Dep., 21-22; Compl. Ex. M). (d) ePlus Group financed the purchase and lease transactions through third-party lenders, including GMAC and Bank of America, on a non-recourse basis. When ePlus Group received the certificates of acceptance, it directed its lenders to disburse funds to Teleservices by issuing a “Proceeds Letter.” (Longanecker Dep., 15-18). ePlus Group directed that the proceeds be sent directly to a Teleservices bank account in the Silicon Valley Bank in California. (Id,., 18-19). (e) ePlus alleges that its computer leasing transactions with Cyberco and Teleservices were fraudulent and that the leased computer equipment never existed. It alleges that it delivered monies to Teleservices for the purchase of scheduled equipment for delivery to Cyberco and for its use, but that Teleservices was a sham company set up by Cyberco to create the false impression that Cyberco was leasing and receiving expensive computer equipment in arm’s length transactions from a real equipment vendor. (Compl. ¶ 31). For present purposes, these allegations are assumed to be true. 2. El Camino Resources, Ltd. Leasing Transactions (a) Effective May 27, 2004, plaintiff El Camino entered into a Master Equipment Lease with Cyberco Holdings. (Compl., Ex. A). The Master Equipment Lease contemplated that Cyberco would lease from El Camino certain computer equipment, including servers, server racks, and related items, for Cyberco’s computer service business. The Master Equipment Lease contemplated that the leased property would be described in equipment lease schedules that would be executed by the parties from time to time in the future. (¶ 1.1). The leased equipment would at all times remain the personal property of El Camino. (¶ 1.2). (b) Pursuant to the Master Equipment Lease, El Camino entered into three equipment lease schedules: (1) Equipment lease schedule 001 (Compl., Ex. B) dated June 18, 2004, covering 114 servers and five racks for a total of $3,947,431.32 over the three-year life of the equipment lease; (2) Equipment lease schedule 002 (Compl. Ex. C) dated September 2, 2004, covering 89 servers and ten racks, for a total of $3,558,530.76 over the three-year life of the equipment lease; and (3) Equipment lease schedule 003 (Compl. Ex. D) dated October 18, 2004, covering 142 servers and eight racks, for a total of $5,679,437.76 over the three-year life of the equipment lease. (c) Cyberco represented to El Camino that Cyberco had entered into written purchase contracts with Teleservices to acquire the leased property and that each purchase contract would be assigned by Cyberco to El Camino, thus vesting title in El Camino. (Compl. ¶ 22). El Camino was led to believe that Teleservices was assembling the equipment itself. (Wong Dep., 74-76). (d) El Camino financed these transactions by borrowing from third-party lenders, including SouthTrust Bank and American Enterprise Leasing, Inc., on a non-recourse basis. (Wong Dep., 71). El Camino delivered to the third-party lenders promissory notes, backed by security agreements creating a security interest in all of El Camino’s interest in the leased equipment. Additionally, Cyberco assigned to the third-party lenders all its right to receive lease payments under the Master Equipment Lease with Cyberco. (See Promissory Notes and related documents, Compl. Exs. E, F, and G). (e) When Cyberco purportedly received the computer equipment from Teleservices, its President (Horton) sent an acceptance letter to El Camino listing serial numbers. Once Cyberco certified that the equipment was installed to its satisfaction, El Camino made payment to Teleservices. (Wong Dep., 72-75). El Camino paid for the purported servers by depositing (or having its lenders deposit) the purchase price into a Teleservices bank account at the Silicon Valley Bank in California. (f) El Camino alleges that its computer leasing transactions with Cyberco and Teleservices were fraudulent and that the leased computer equipment never existed. It alleges that it delivered monies to Teleservices intended for the purchase of scheduled equipment for delivery to Cyberco and for its use, but that Teleservices was a sham company set up by Cyberco to create the false impression that Cyberco was leasing and receiving expensive computer equipment in arm’s length transactions from a real equipment vendor. (Compl. ¶ 3 1). For present purposes, these allegations are assumed to be true. C. Relationship Between Cyberco and Huntington National Bank 1. Beginnings of Relationship (a) When James Horton became President of Cyberco in 2000, the company was engaged in the sale of computers and in computer consulting. (Horton Plea, 13). The income from the business proved to be insufficient, and the Cyberco principals came up with an idea in January of 2002 to get money from banks and leasing companies “to fill the gap.” (Id.). The principals went to the Huntington National Bank to borrow money “for growth and expansion.” (Id., 14). (b) In August 2002, Cyberco and Huntington National Bank established a comprehensive banking relationship. On October 25, 2002, Cyberco and Huntington entered into a revolving credit loan agreement (Ex. 164) collateralized by a security interest in favor of the Bank on all personal property of Cyberco, including general intangibles and accounts receivable. (Security Agreement, Ex. 165). The relationship also included general treasury services such as a checking account and wire transfer services. (SMF ¶ 6). Cyberco had five principal accounts at Huntington. The concentration account was designed to receive all incoming funds. The funds were then passed through to one of four other accounts: a payroll account, a controlled disbursement account (for paying operating expenses), the merchant account (used to process credit card payments from Cyberco’s alleged customers), and a lockbox account. The line of credit was used to fund the first three accounts, when their balances were insufficient to meet operations. The lockbox account, which was set up by a separate agreement, was used to secure the Bank’s lien on Cyberco’s accounts receivable. At the end of each day, all funds were taken out of the four accounts and transferred to the Bank to pay down the line of credit. This is known as a “zero balance” arrangement. (Ex. 239). (c) At the outset, Cyberco’s revolving loan from Huntington was $9 million. Because Cyberco’s accounts receivable were intended as the primary collateral for the loan, Huntington required Cyberco to submit to an audit of receivables before the loan was finally approved. (Hutchings Dep., 300-01). The audit, or “field examination,” was conducted in September 2002 by Lender Services of Bingham Farms, Michigan. (See Audit Report, Ex. 171). The audit was not conducted at the offices of Cyberco, but at Huntington’s commercial loan office in Grand Rapids, because James Horton, Cyberco’s President, refused to allow the auditors access to Cyberco’s premises or accounting personnel, stressing a desire not to arouse concern among the company’s employees about its financial stability. (Id., 6). The audit report noted the lack of access to Cyberco’s premises, as well as the fact that the auditors were required to wait excessively for requested information and were not given immediate access to all current accounts receivable data. A member of Huntington’s audit staff, Dave Emig, expressed in writing concerns about these discrepancies, as well as the fact that all information was channeled through one person, James Horton. (Ex. 174). Nevertheless, Huntington consummated the Cyberco loan on October 25, 2002. (Ex. 164). (d)Beginning in December 2002, Cyberco made a series of significant overdrafts. The first was on December 30, 2002, in the amount of $400,000.00. Bank personnel contacted James Horton, who explained the problem away as the result of a stop-payment issued by a customer (Cargill) on a check that had been issued prematurely. Horton said that this left Cyberco in a temporary cash-flow crunch and asked for an increase in the line of credit of $400,000.00. (Ex. 176). In January 2003, Cyberco made an overdraft in the amount of $71,500.00, which remained unresolved for several days. (Ex. 177). In February 2003, Cyberco overdrew its account by $1 million. (Ex. 111). Barton Watson explained the situation away, blaming it on an unexpected delay in a deposit from a customer, Loekheed-Martin. Huntington advanced Cyberco $1 million to cover the overdraft pending a permanent increase in the revolving loan. This was based upon Cyberco’s provision of a backlog report and favorable receivables and inventory information. (Id.). These overdraft situations came to the attention of a number of senior Bank officers, including John Kalb, the Senior Regional Credit Risk Officer. Kalb testified that the situation raised a red flag for him and warranted further investigation. (Kalb Dep., 191-92). Part of the problem was that Cyberco was not using the lockbox, which was designed to secure the Bank’s liens on Cybereo’s accounts receivable. (Id., 191). Kelly Hutchings, the Commercial Bank Officer with principal responsibility for the Cyberco account, throughout the life of the relationship attempted without success to have Cyberco use the lockbox as required by the loan documents. (Hutchings Dep., 354; Ex. 111). When confronted on the lockbox issue, Cyberco justified its actions by criticizing the bank for providing inferi- or services and accusing it of “fundamental breaches of trust in your lock box system.” (Def. Ex. 6 at FBI 156). (e) In March and again in September of 2003, Cyberco demanded a “hard hold” be placed on its automated clearinghouse account, allegedly because Cyberco believed its security had been breached by a former employee. The Bank accepted this explanation at face value and closed down the concentration account and controlled disbursement account immediately, understanding that this action would cause overdrafts. (Ex. 63). An employee in the Bank’s Treasury Management Department asked that Bank officials be vigilant for suspicious activity, not by Cyberco but by the alleged former employee. (IcL). Glenn Getschow, a Treasury Services Manager at the Bank, participated in a meeting among Bank officers with Barton Watson and possibly James Horton, to explain to them that a hard hold was not necessary and that the Bank could protect Cyberco from attempts by an ex-employee to hack into their accounts, but Cyberco insisted on the hold, which caused twenty-three overdrafts in March of 2003. (Getschow Dep., 62-71). During September 2003, the second occasion for the hold, a number of significant checks bounced for insufficient funds. Additionally, in that month, Cyberco received an NSF check in the amount of $2.3 million from Teleservices, drawn on the Silicon Valley National Bank. Huntington was not then aware that Teleservices was a related corporation to Cyberco. 2. Investigation by Gail White (a)Gail White was a 29-year employee of Huntington National Bank. At the time the Bank received the NSF check from Teleservices, White had no previous substantive involvement with the Cyberco banking relationship. But, because of the absence on that particular day of the responsible Bank officers, White was called upon to decide whether to cover the shortfall in the Cyberco account caused by the $2.3 million NSF check. (SMF ¶ 9). The dishonor of such a large check was not common at the Bank, so White concluded that she should look into the situation before coming to a decision. (White Dep., 13, 197). Her initial investigation involved looking at the activity that surrounded the dishonored check. She noticed that there were large dollar transactions coming through the account, and that many came from a “particular source,” namely Teleservices. (Id., 13-14). Teleservices was an “unknown entity” to her at the time. (Id., 14). White also noticed foreign transactions in the account, including transactions involving Pakistan, the UK, China, and Australia. Seeing transactions from Pakistan triggered her attention, because Pakistan was known for money laundering. (Id., 14-15). (b) Gail White went to the region’s Chief Risk Officer, John Kalb, to discuss her concerns. She met with him sometime in November 2004. (Id., 18). She did not mention fraud, but just said that she thought something might be wrong. When he inquired concerning her reasons, she mentioned the large NSF check and the large dollar transactions moving from Cyberco accounts out of the country. White thought that Kalb seemed skeptical of her concerns, but he did direct her to do whatever she needed to do and to keep him informed. (Id., 19-20). (c) White also informed the portfolio manager of the Cyberco account, Kelly Hutchings, of her findings, including that she was unable to ascertain the nature of Teleservices. (White Dep., 65-66). White found it odd that Teleservices appeared on the payables report, given her knowledge that Teleservices had transferred large amounts of money into Cyberco. (Id., 68). (d) In October 2003, apparently at White’s instigation, a number of employees of Huntington National Bank met with Cyberco’s CEO, Barton Watson. In addition to White, Cal Hekman (the Bank’s Commercial Lending Manager), Glenn Getschow (Treasury Manager), and Kelly Hutchings attended the meeting. (White Dep., 44-45). Hutchings established the meeting “to understand how Teleservices works within Cyberco, if it did.” (White Dep., 44). Watson presented conflicting explanations concerning the relationship between Cyberco and Teleservices. According to White, Barton said that Teleservices was in the process of being set up as the “financial management leg” of Cyberco, which would be in charge of disbursing money throughout the company. (Id., 46). (This would account for the fact that Cyberco was receiving large transfers of money from Teleservices.) Wfliite found this explanation unsatisfying and contradictory, especially in light of Watson’s statement that Teleservices was to act as a help desk. (Id., 46^7). Other participants at the meeting also received contradictory understandings of the nature of Teleservices. Hekman, for example, believed that Watson said that Teleservices was a “service operation” affiliate. (Hekman Dep., 28). James Horton, President of Cyberco, testified that Cyberco purposely misled Huntington concerning the nature of Teleservices “to allay any suspicion that Huntington might have about what Teleservices was and what its function was, why it [Cyberco] was getting money from Teleservices.” (Horton Exam., 167-68). For her part, nothing Wfliite learned at the meeting satisfied her suspicions about possible wrongdoing in the Cyberco accounts. (White Dep., 46). Immediately after the meeting, she told other Bank officers that she suspected that the $2.3 million dishonored check from Teleservices was part of a check kite. (Hekman Dep., 136-37). (e) Wfliite continued her research and analysis concerning the activity in Cyberco’s accounts, including tracking deposits and payments in and out of the accounts. (White Dep., 32-33). Her investigation included looking into the “other entities” that she had come across that had different names but similar addresses as Cyberco. She determined, for example, that Teleservices had a number of addresses, but that one was 25 South Division, the same address as Cyberco. (White Dep., 21). In addition, in October 2003, she started compiling an Excel spreadsheet of Cyberco’s account activity and other data concerning Cyberco and Teleservices, which she updated periodically. (SMF ¶ 14). 3. Huntington Decides to End the Banking Relationship With Cyberco (a) During the time that Gail White’s investigation of Cyberco was continuing, Bank officers decided to terminate the relationship with Cyberco. The process began in December 2003 or January 2004, when Kelly Hutchings approached her superiors and said, “This is getting out of hand, we’ve got to get out of this relationship.” (Hutchings Dep., 440). A principal triggering event for this decision was the failure of Cyberco to provide audited financial statements for 2002. (SMF ¶ 17). Hutchings was also concerned that Cyberco’s initial business model had turned out to be inaccurate. (Hutchings Dep., 277-78). A memo written by John Kalb on January 16, 2004, explained that there were no demonstrable financial reasons for terminating the relationship, but there had always been “red flags” associated with the client, including overdrafts, lack of controls, failure to provide audited financials, and the nature of the business. He also expressed concern with the type of deposits coming into the lockbox. (Ex. 90). By memorandum dated January 9, 2004, Kalb informed the Regional President, James Dunlap, of the decision as follows: 3. John Irwin, Cal Hekman, Kelly Hutchings and I had a meeting relating to Cyberco and despite the “good numbers” the “red flags” continue. It is our joint conclusion that we should exit the account and I give the team credit for taking this step despite outward financial performance. If there is one thing that has been clear about recent times it is the heightened risk of financial misinformation (as well as fraud) and we need to be cognizant of that fact as we see these red flags. We will keep you informed as to how we will communicate this exit to the client or if there is another chapter to the saga. Here is hoping we don’t lose money in the process. (Ex. 154). (b) Management instructed • Kelly Hutchings to inform Cyberco of its decision. She and Cal Hekman had lunch with Krista Watson and Jim Horton and told them that they did not think the relationship between Huntington and Cyberco “was a good fit.” (Hutchings Dep., 211). The Bank officers did not mention any of the “red flags” that motivated the decision, nor did they raise with Cyberco its failure to provide audited financial statements for the year 2002. (Hutchings Dep., 213). (c) Cyberco officers decided to allow a “gradual migration” by Cyberco from the Bank. (Irwin Dep., 50-51). Consequently, the Bank decided to allow credit extensions during the transition period, but only if Cyberco produced the overdue audited financial statements for 2002. (Hutchings Dep., 198). On January 9, 2004, Kelly Hutchings informed Krista Watson of the Bank’s inability to proceed with a credit extension without the audited financials. (Ex. 161). On January 20, 2004, and April 22, 2004, Huntington National Bank did grant Cyberco extensions of its line of credit, despite the fact that the 2002 audited financial statements were never produced. (Exs. 89,106). (d) In connection with Cyberco’s second request for an extension of its line of credit on March 29, 2004, Kelly Hutchings did pose to Cyberco a list of questions concerning the history of overdrafts, Cyberco’s failure to abide by the lockbox agreement, and its relationship to Teleservices. Hutchings had sent the same questions to Krista Watson four months earlier but received no response. (Hutchings Dep., 216). Cyberco’s initial reaction to the request was an e-mail from Barton Watson expressing a sense of “insult” and explaining away the overdrafts as a “clerical error.” (Def. Ex. 6 at FBI 104). On March 31, 2004, Horton sent Hutchings a four-page memo with a two-page cover (Ex. 163). Among other things, the memo justified Cyberco’s failure to abide by its lock-box agreement by criticizing the Bank’s competence, accusing it of “fundamental breaches of trust in your lockbox systems.” (Id. at 3). With regard to Teleservices, Horton claimed that Teleservices Group had been established by Krista Watson and that it was becoming the basis for Cyberco’s Business Process Outsourcing (BPO) operation. (Id. at 4). He advised that the Philippines had become the center for the BPO operations because of their high English-language skills. (Id. at 3-4). Hutchings testified that she did not know of the legal relationship between Cyberco and Teleservices before getting the memo, but only understood that Teleservices was a “cash consolidator” for Cyberco, collecting receivables on behalf of Cyberco. (Hutchings Dep., 66-69). 4. Huntington Goes to the FBI (a) Even though the Bank had decided to terminate its relationship with Cyberco, Gail White continued the investigation that she had begun in October of 2003. By the time she had reviewed two months’ worth of receivable and payable reports for Cyberco, she suspected that Cyberco was conducting a “receivables fraud,” pursuant to which Cyberco was reporting work in progress as actual receivables, thereby inflating receivables reported to the Bank. (White Dep., 78-83, 327-29). She also realized that most of the funds being deposited into Cyberco’s account were coming from the Teleservices account at Silicon Valley Bank in California. (Id., 84-87). In mid-April 2004, White communicated her suspicions of receivables fraud to John Kalb and said that she questioned the validity of “some” of the receivables. She said that the Bank needed to audit the receivables. He told her that she should call corporate security and get them involved. (White Dep., 78-79, 81). White also informed her direct supervisor, John Irwin, of her concerns about the accuracy of Cyberco’s reports of its account receivable. (SMF ¶ 24). (b) White contacted Larry Rodriguez, the Bank’s West Michigan Corporate Security Officer, who was a 26-year veteran of the Michigan State Police. (SMF ¶ 26). Richard Harp was the Security Director at the Bank’s corporate headquarters in Columbus, Ohio, and was Rodriguez’s supervisor. Harp authorized Rodriguez to investigate White’s suspicions of illicit activity. (SMF ¶ 27). On March 29, 2004, at Rodriguez’s direction, White provided Harp with the spreadsheet of account activity and other data that she had been compiling. (SMF ¶28; White Dep., 59). (c) White met with Rodriguez on April 15, 2004. White advised Rodriguez that she first suspected problems with Cyberco in July of 2003, and at first thought that Cyberco was involved in an elaborate kite. (Ex. 84). She showed him the spreadsheet that she had been developing since October 2003, which tracked account activity for Cyberco, including transfers and transactions into and from the account. (White Dep., 79-80). In a memorandum to Richard Harp summarizing his interview with Gail White, Rodriguez reported the following possible irregularities: (1) The Cyberco account was set up as an asset-based lending situation, in which all receivables were to go through the lockbox, but accounts receivable were not going through the lockbox as they should have. Only eleven transactions per month on average were going through the lockbox, when it should have been about sixty. Furthermore, the accounts receivable payments were not following the expected pattern “for legitimate customers of Cyberco.” (2) Despite efforts to address the problem by use of wire transfers, a concern remained regarding the accounts receivable. If the accounts receivable were inflated, “more money has gone out than should have and there isn’t enough available to cover the loan.” (3) The company had provided no financial statements since 2001.(4) The $2.3 million bounced check continued to be a concern, especially because Barton Watson could not provide a satisfactory explanation of what happened. When it had been suggested that there should be some verification of accounts receivable, “Watson threw a fit and demanded that it not be done.” (5) Another problem was that the principals of Cyberco demanded that no personal credit reporting be done, claiming that it had nothing to with their commercial accounts. (Ex. 84). By the conclusion of the White interview, Mr. Rodriguez suspected a possible fraud. (Rodriguez Dep., 33-35). By his own review of the account history, he could not understand exactly what was going on, but did believe that there were “red flags of fraud.” (Id., 35-37). (d)Rodriguez called Harp and informed him that the next step would be to contact the FBI. (Rodriguez Dep., 125). He also informed Harp of the risk that the Bank might suffer a $16 million loss as a result. (Id.). Harp gave him the go-ahead to contact the FBI. (Id., 125-26). Rodriguez testified that he then had enough information to contact the FBI “and see if they had any active investigations on this company.” (Id., 128). If they did, then he knew that they had “a situation.” If they did not, he would have to decide on what to do after talking to the FBI. (Id.). Rodriguez had by that time a history of working with the FBI on behalf of Huntington National Bank and had in the past learned whether indictments had been or would be issued on particular matters involving the Bank. (SMF ¶ 31). (e) Rodriguez approached Special Agent William Blynn of the FBI, who informed him that the FBI had an active investigation on Cyberco. (Rodriguez Dep., 44-53). At some point before May 3, 2004, Rodriguez was in the FBI office on unrelated business and approached the agent in charge of the investigation, Roberta Gilligan. He told her that he suspected that there may be some type of fraudulent activity involving Cyberco as it affected the Bank. (Gilligan Dep., 25-26, 105). This was before any subpoenas had been issued for Cyberco records, but after a subpoena had been served on Huntington in Columbus, Ohio, for records concerning a company known as Stryon, an entity of Cyberco which turned out not to be related to the fraud. (Id., 105-07). On May 3, 2004, Rodriguez provided Gilligan with information that he had gleaned from local court records involving cases against Cyberco and its principals. Among other things, he found that Barton Watson had a criminal history and had been sanctioned by the SEC. (SMF ¶ 34). The FBI did not inform Rodriguez of the nature or focus of its investigation. (Rodriguez Dep., 50-53, 66). (f) Gail White first met with Agent Gilligan of the FBI (as well as Agent Rodney Urlaub of the IRS, and Postal Inspector Gil Webb) on May 20, 2004. Rodriguez arranged this initial interview. (SMF ¶ 40). White copied her entire Cyberco file for the FBI, including her spreadsheet. She gave Agent Gilligan internal Bank emails and correspondence to and from Cyberco. Included in the information that White provided the FBI was that portion of White’s spreadsheet detailing Cyberco’s payments to financial institutions and leasing companies. (SMF ¶¶ 41-43). (g)Special Agent Gilligan prepared an FBI 302 report to memorialize her interview of Gail White. (Ex. 239). According to the 302 report, White described the relationship between Huntington and Cyberco and detailed for her the nature of Cyberco’s accounts at the Bank and its credit relationship. She advised that the collateral for the then $15 million line of credit was Cyberco’s accounts receivable, which should have been processed through the lockbox account, but that not many receivables were going to the account. She advised that most of the funds coming into the lockbox account were from a company called Teleservices, Inc. (Id., 1-2). She told Gilligan about the dishonored $2.3 million Teleservices check, drawn on the Silicon Valley National Bank, and about the Bank’s subsequent meeting with principals of Cyberco with regard to that transaction. She repeated Watson’s description of Teleservices as a “help desk” and his paranoia about ex-employees hacking into the company’s accounts. (Id., 2). Referring to her spreadsheet, White shared her conclusion that Teleservices’ funds, drawn on the Silicon Valley National Bank in California, were used to pay Cyberco’s debts both to Huntington and to other financial institutions. “White suspected that Teleservices was responsible for collecting the accounts receivable for Cyberco. White advised that Teleservices is the primary source of funds for the Cyberco account. Payments were made by check from Teleservices, but more recently, Teleservices has been wiring funds into the Cyberco account.” (Id., 3). White provided Gilligan with a spreadsheet showing wire transfer activity, again showing that transfers to Cyberco were principally from the Silicon Valley Bank account of Teleservices. The spreadsheet also reflected numerous wire transfers from the Cyberco account to overseas entities, including entities in Australia, the Philippines, and Shanghai. (Id,., 3). (h) According to Agent Gilligan’s 302 report, White provided a spreadsheet of internal transfer activity conducted by checks between Cyberco Holdings, Teleservices, and Corporate Property Associates. White thought that it was “unusual” that Teleservices had accounts in Grand Rapids with Founders Trust, but that the business was in New York. She also advised Gilligan of suspicious individual transactions involving Krista Watson and James Horton. (Ex. 239 at 3-4). She also related the episode in which Barton Watson “threw a fit” when the Bank asked to audit the Cyberco accounts receivable. Instead, he purportedly hired the certified public accounting firm Grant Thornton in Hong Kong to certify the accounts receivable, but White thought the audit report contradicted itself and was “basically worthless.” (Id., 4). Finally, White advised that “due to the concerns of HNB” Cyberco had been asked to find another bank. (Id., 5). Attached to the 302 report were the spreadsheet and other documents provided by White to Special Agent Gilligan. (i) White did not have and thus could not provide to the FBI documentation concerning the source of funds into the Teleservices account at Silicon Valley Bank. She did have the impression from the bank relationship officers, however, that Teleservices was purchasing equipment on behalf of Cyberco customers and that the customer was paying Teleservices, which acted as a “clearinghouse.” (White Dep., 295-96). On the basis of her discussions with White, Agent Gilligan believes that White did not know what the sources of funds from Teleservices to Cyberco were. (SMF ¶ 46; Gilligan Dep., 84-85). (j) The FBI did not provide White with any confirmation of White’s suspicions. It is the FBI’s normal practice not to disclose to interviewees information that the FBI learns from other aspects of its investigation, and the FBI followed that practice with regard to its interview of White and other Bank employees. (Gilligan Dep., 104-05; SMF ¶ 49). (k) Agent Gilligan testified that at the conclusion of White’s initial interview, there was an understanding that the FBI would follow up with her and would probably have additional interviews. (Gilligan Dep., 55). Gilligan anticipated that White would be instrumental in helping the FBI determine what Bank records meant or how the transactions flowed. (Id.). Following the May 20, 2004 interview, White continued to monitor Cyberco’s accounts and provided account information to the FBI in June 2004, August 2004, and September 2004. (Gilligan Dep., 116, 118; White Dep., 359, 527). (l) A Grand Jury subpoena from this court was issued to Huntington National Bank compelling production, among other things, of all financial records for Cyberco Holdings and specifying certain account numbers. (Ex. 197). Before issuing the subpoena, Special Agent Gilligan contacted Rodriguez to identify the bank accounts that were related to Cyberco so that the subpoena could indicate specific account numbers, and to make it easier for the Bank to obtain the subpoenaed documents. (Gilligan Dep., 24-25). The FBI issued a second subpoena later in its investigation, again after consulting with White. (White Dep., 360; Gilligan Dep., 121-22). (m) Gilligan interviewed White a second time, on June 16, 2004. White advised Gilligan that the unpaid balance of Cyberco’s line of credit was $13.8 million and that Cyberco was paying on its line of credit as agreed. According to the FBI 302 report prepared by Agent Gilligan (Def. Ex. 6, at FBI 91-92), White provided numerous computerized printouts reflecting Cyberco’s accounts and related information, along with a spreadsheet of recent wire activity and supporting documents. White also provided a copy of the audit report from Grant Thornton, as well as email communications and copies of checks. Like the first interview, the June interview was voluntary. (Gilligan Dep., 122-23). (n) Agent Gilligan asked Gail White to participate in a follow-up interview on August 25, 2004. (Gilligan Dep., 123). The interview was memorialized by IRS Agent Rodney Urlaub, who was also present. (Def. Ex. 6 at FBI 135-36). Urlaub’s memorandum reflects that White briefly reviewed the history of the line of credit from Huntington Bank. She reported that Cyberco had reduced the indebtedness to around $5 million. “Based upon the suspicious financial activity of Cyberco, Huntington Bank has demanded that Cyberco pay off the line of credit by August 27, 2004.” (Id., 135). White also provided to the agents an updated list of payments from Cyberco to other financial institutions, which revealed that wire transfers from