Full opinion text
ORDER REINHARD, District Judge. INTRODUCTION On October 4, 1992, the United States of America (government) brought three civil forfeiture actions against various shares of common stock of FirstRock Bancorp, Inc. (FirstRock) pursuant to 18 U.S.C. § 981(a)(1)(C). The government seeks to forfeit property which constitutes proceeds traceable to a bank fraud in violation of 18 U.S.C. § 1344. FirstRock is a holding company for First Federal Savings Bank of Rockford, Illinois (First Federal). James Leichter, James Shaw, Bradley Frericks, Zvi Fishbane, Sheila Powsner, Joel Pogolowitz, Robert Rubinstein, Dolores Jugo, Nathen Schwitzer, Susan B. Kirschner, Dennis Bragelman, Gus Boosalis, the Trustee for Robinson Engineering, Ltd. Profit Sharing Trust (Robinson Engineering) and Elite have filed motions to dismiss or for summary judgment of the government’s forfeiture complaint and to vacate a prior ex parte order dated October 4, 1992, authorizing the immediate seizure of their FirstRock stock. The government has also filed a motion to strike claims and for entry of a default judgment against nonclaimants. Claimant Walter J. Luscy has filed a certification in opposition to the government’s motion to strike. This court has jurisdiction over this dispute pursuant to 28 U.S.C. §§ 1345, 1355 (See Order Dated Juné 14,1993) 825 F.Supp. 191. For purposes of this order only, the court will consolidate the three civil forfeiture actions and will address all pending motions to dismiss, motions for summary judgment, the government’s motion to strike and its motion for entry of default judgment. The court’s decision on the motion for default judgment against nonclaimants is contained in a separate consolidated order. FACTS First Federal Savings and Loan Association of Rockford, Illinois (“Association”) operated as a federally chartered mutual savings association owned collectively by all its depositors until 1992. Beginning in May 1992, the Association started converting to First Federal, owned directly by FirstRock and indirectly by FirstRock’s shareholders. The Office of Thrift Supervision (OTS) monitors the conversion of a mutual savings association to a capital stock association in compliance with conversion regulations. See 12 C.F.R. § 563b (1993). The purpose of the conversion regulations is to provide an opportunity for existing depositors to continue ownership in the newly formed institution. Thus, pursuant to the regulations, existing depositors having accounts opened at a converting association on a specified date must have the right to purchase stock in the new institution before the stock is offered to the general public. See generally 12 C.F.R. § 563b.3(c) (1993). According to the regulations, no person shall transfer, or enter an agreement to transfer, the legal or beneficial ownership of conversion subscription rights, or the underlying securities to the account of another. See 12 C.F.R. § 563b.3 (1993). The government alleges that First Federal allowed eligible Association depositors to purchase FirstRock stock before making this offer to the general public in accordance with the conversion regulations. Additionally, First Federal tried to prevent speculators from wrongfully acquiring stock during the conversion. For example, the prospectus accompanying all stock order forms distributed by FirstRock included several warnings: Restrictions on Transfer of Subscription Rights and Shares Prior to the completion of the Conversion, no person may transfer or enter into any agreement or understanding to transfer the legal or beneficial ownership of the subscription rights issued under the Plan or the shares of Common Stock to be issued upon their exercise. Each person exercising subscription rights will be required to certify that a purchase of Common Stock is solely for the purchaser’s own account and that there is no agreement or understanding regarding the sale or transfer of such shares. See “The Conversion-Restrictions on Transfer of Subscription Rights and Shares.” The Company and the Association will pursue any and all legal and equitable remedies in the event they become aware of the transfer of subscription rights and will not honor orders known by them to involve the transfer of such rights. * * * # # * Restrictions on Transfer of Subscription Rights and Shares Prior to the completion of the Conversion, the OTS conversion regulations prohibit any person with subscription rights, including the Employee Plans, Eligible Account Holders and Other Members of the Association, from transferring or entering into any agreement or understanding to transfer the legal or beneficial ownership of the subscription rights issued under the Plan or the shares of Common Stock to be issued upon their exercise. Such rights may be exercised only by the person to whom they are granted and only for his account. Each person exercising such subscription rights will be required to certify that he is purchasing shares solely for his own account and that he has no agreement or understanding regarding the sale or transfer of such shares. The regulations also prohibit any person from offering or making an announcement of an offer or intent to make an offer to purchase such subscription rights or shares of Common Stock prior to the completion of the Conversion. The Association and the Company will pursue any and all legal and equitable remedies in the event they become aware of the transfer of subscription rights and will not honor orders known by them to involve the transfer of such rights. Additionally, the subscription offering stock order form FirstRock provided to prospective purchasers contained a similar warning. (See Compl., Exh. B). Moreover, the stock order form which eligible depositors were required to sign stated, “Under penalty of perjury, I certify ... that I am purchasing shares solely for my own account and that there is no agreement or understanding regarding the sale or transfer of such shares, or my right to subscribe for shares herewith.” (See Compl., Exh. B). BACKGROUND In an affidavit attached to the complaint, Federal Bureau of Investigation (FBI) special agent Lon Christensen explains why speculators are interested in obtaining stock during the initial offering. If eligible depositors exercise their subscription rights to the extent that all stock is purchased, the general public cannot purchase stock in the initial offering and can only purchase stock once public trading in the stock commences. Past conversions have shown that once the stock is traded publicly, the price per share increases significantly shortly thereafter. Thus, a person who is not an eligible depositor in a converting association (a “speculator”) has a financial incentive to convince eligible depositors to purchase stock on behalf of the speculator. Pursuant to the conversion process, FirstRock offered its available stock for sale until 12:00 p.m. on Thursday, September 24, 1992. The conversion closed on October 2, 1992. At that time, FirstRock issued shares to eligible Association depositors who had submitted stock order forms. The government alleges that included among that group were depositors illegally acting on behalf of speculators engaged in a scheme to obtain FirstRock shares through false and fraudulent representations. A federal criminal investigation was initiated during the final days of the FirstRock conversion and included the use of an undercover FBI agent who posed as an eligible First Federal depositor, “Brian T. Grant.” 122,942 shares (No. 92 C 20288) Christensen outlines what the undercover FBI agent discovered when the agent posed as “Grant.” On September 23,1992, “Grant” received a telephone call from a person identifying himself as Jim Shaw. Shaw asked “Grant” if he had a checking or savings account at First Federal. When “Grant” answered affirmatively, Shaw said he would wire money to “Grant’s” checking account so that “Grant”' could then write a check to First Federal. Shaw told “Grant” he wanted “Grant” to buy $200,000 of First Federal stock. Later that same day “Grant” met with Shaw and another person (later identified as Leichter). Shaw, in the presence of Leichter, executed a FirstRock Subscription Offering Stock Order Form. Shaw required “Grant” to sign the form as well as two irrevocable-stock power forms and two forms regarding stock certificates registered in names other than that of an account. {See Compl., Exh. C-3, D-1 to D-5). During their conversation, Shaw told “Grant” he would be dealing with Shaw’s partner, Brad Frericks, in the future. Shaw told “Grant” that when “Grant” received the stock, Shaw should get it immediately. When “Grant” asked about the “under penalty of perjury” certification on the stock order form, Shaw told him it was a trick. “Grant” was also told if anyone asked, “Grant” was to say he was purchasing the stock for himself. At the end of the meeting, Shaw, in Leichter’s presence, gave “Grant” $500 in cash. “Grant” was to receive an additional $1,000 when the stock issued. Subsequently, Frericks told “Grant” $150,000 would be wired into his account at First Federal. In fact, the government alleges a total of $151,500 was wired into “Grant’s” account from various sources. Shaw admits he and Frericks, operating through SCI, entered written agreements similar to the one described above with four other First Federal depositors: Kevin Drew, Cory Church, Trent Johnson and Ellen Steinhagen. These agreements were entered into and executed between September 17 and September 24, 1992. Under the terms of the agreements, SCI agreed to loan each depositor funds ranging from $151,000 to over $211,000. The depositors were to use the funds to purchase FirstRock stock in accordance with their subscription rights. Shaw and Frericks have filed verified claims to 101,782 shares of defendant property in shares. The government also interviewed Steven Pierce on October 2, 1992, whose former brother-in-law is Leichter. According to Pierce, he and Leichter agreed that Pierce would purchase stock. Because Leichter was providing the money, they “set it up” so that Leichter would be acting as trustee over the stock and Pierce would have the beneficial interest. Pierce thought the transaction would involve 100 to 200 shares. He stated he signed the forms (described above) before they were filled out. When the FBI showed Pierce the stock order form, he noted it was for 20,000 shares for $200,000. According to Pierce, that was the first time he saw the completed forms and “in no way” did he have $200,000. Leichter has filed a verified claim to 21,160 shares of defendant property in shares. Zvi Fishbane, Sheila Powsner, Nathen T. Schwitzer, Joel Pogolowitz, Robert S. Rubinstein, Dolores Jugo and Walter Luscy have filed verified claims to defendant property in 122.942 shares. According to their verified claims, each claimant invested a sum of money with Norman Beckoff or Brett Brandes. Brandes or Beckoff then invested each claimant’s money with Frericks, Shaw and/or SCI, who then allegedly used the funds to purchase FirstRock stock. Each claimant asserts he or she has a valid interest to the extent of the value of the amount invested in the shares of stock. 105,800 shares (No. 92 C 20289) In 105,800 shares, Christensen recounts a similar scheme between Hamilton Investments, Broadmoor Insurance Agency and the following eligible First Federal depositors: Karen M. Naramore, Tamara Stone, Jennifer Streit, and Michelle Teeters. {See Compl., Exh. A, at 8-19). Christensen also recounts that an eligible First Federal depositor, Dennis Bragelman, allegedly obtained funds to purchase FirstRock stock from name unknown), the owner of North Water Produce. Bragelman has filed a verified claim to 21,160 shares of defendant property in 105,-800 shares. Robinson Engineering has also filed a verified claim to 21,160 shares. In its verified claim, Robinson Engineering states that it tendered $211,600 to Hamilton Investments. Hamilton Investments then used this sum to purchase the shares of stock which are the subject of this forfeiture action. Susan B. Kirschner has also filed a verified claim to 21,160 shares of defendant property in 105,800 shares. In her verified claim, Kirschner states she loaned $211,600 to eligible First Federal depositor Karen Naramore on September 24, 1992, and the subject shares were pledged to Kirschner as security for the loan. Gus W. Boosalis also filed a verified claim to 42,320 shares of defendant property in 105,800 shares. Boosalis asserts he is owner of these shares but does not state how he acquired this status. However, in his statement of facts filed with his motion for summary judgment, Boosalis elaborates as to how he is the “owner” of 42,320 shares. According to Boosalis, he forwarded $421,000 to a Merrill Lynch broker, Paul Savigos (presumedly Paul Svigos), for investment in FirstRock stock through Marty Flanagan III of Hamilton Investments. Flanagan then created a stock pledge transaction between Teeters, Streit and Boosalis. 49,032 shares (No. 92 C 20290) In 1,9,082 shares, Christensen outlined a similar scheme between Elite and the following eligible First Federal depositors: Timothy Elliott, Roderick Malone, Holly Suddarth and Patrick L. Suddarth. Elite has filed a claim for 49,032 shares. In its claim, Elite states the loan agreements and powers of attorney between itself and Elliott, Malone and the Suddarths grants Elite an interest in the stock. On October 4, 1992, when the government initiated the present forfeiture actions, it also filed an ex parte motion to request a judicial determination of probable cause based on each complaint and accompanying affidavit. That day, after reviewing each complaint and affidavit, Magistrate Judge P. Michael Mahoney entered a finding of probable cause that the defendant property was subject to forfeiture and ordered the United States Marshal to seize the defendant property and give notice of the seizure. Magistrate Judge Ma-honey also ordered FirstRock to halt transfer of the defendant property and deliver the stock certificates to the U.S. Marshal. CONTENTIONS Various claimants contend the following: (1) FirstRock was not “deceived” within the meaning of the bank fraud statute because of information found on the face of the stock order form; (2) FirstRock was not “deceived” within the meaning of the statute because it had information as a result of its involvement in the government’s “sting” investigation; (3) given the nature of volatile publicly-traded security, the seizure of defendant property is not appropriate; (4) with respect to Trent Johnson, the complaint fails to allege any specific facts establishing a preconversion illegal agreement; (5) violation of OTS regulation 12 C.F.R. § 563b.3(i) is a prerequisite to a violation of section 1334 and the various agreements executed between claimants and depositors do not violate the OTS regulation; (6) the alleged scheme to defraud did not expose FirstRock to a risk of loss nor otherwise threaten the financial integrity of the institution; (7) the stocks issued by FirstRock were not “owned by or in the custody or control of a financial institution” within the meaning of section 1344; (8) the shares issued to the depositors are not “proceeds” within the meaning of the statute. Several claimants also assert an “innocent owner” defense. See 18 U.S.C. § 981(a)(2). The government contends certain claimants lack standing to contest the forfeiture in the instant case. Alternatively, the government asserts it need not prove a violation of section 563b.3(i) of the OTS regulations to prove a violation of section 1344(2). The government also asserts it has sufficiently pled bank fraud in violation of section 1344(2) for purposes of a motion to dismiss. Additionally, the government contends Magistrate Judge Mahoney’s finding of probable cause is sufficiently supported by the verified complaint and accompanying affidavit. Moreover, the government argues that seizure and forfeiture of the defendant property is statutorily authorized and constitutionally permissible. I. Standing The government contends the interests of certain parties who have filed motions to dismiss are insufficient as a matter of law to create cognizable claims. The government concludes that in the absence of legally protected interests in the seized shares these claimants lack the standing to contest the present forfeiture actions. Because standing is a threshold issue and fundamental to a court’s subject matter jurisdiction, this court will address the standing issue first. See United States v. $38,000.00 in United States Currency, 816 F.2d 1538, 1543 (11th Cir.1987). The Seventh Circuit notes there are two forms of standing in a forfeiture case: Article III standing and statutory standing. See United States v. U.S. Currency, in the Amount of $103,387.27, 863 F.2d 555, 560 n. 10 (7th Cir.1988). The court disagrees with the government’s broad assertion that claimants to property seized pursuant to section 981 must prove they are owners or lienholders to establish Article III standing. Rather, to contest a forfeiture, a claimant must first show a sufficient interest in the property to give him Article III standing. In the Amount of $103,387.27, 863 F.2d at 560 n. 10. A claimant need not prove the merit of his underlying claim but must be able to show “at least a facially colorable interest in the proceedings” sufficient to satisfy Article III. $321,470.00, 874 F.2d at 302; see also United States v. One 18th Century Colombian Monstrance, 797 F.2d 1370, 1375 (5th Cir.1986), cert. denied, 481 U.S. 1014, 107 S.Ct. 1889, 95 L.Ed.2d 496 (1987). Once that hurdle is met, a claimant must satisfy the procedural rules of the Supplemental Rules for Certain Admiralty and Maritime Claims (Admiralty Rules) to establish statutory standing. A claimant bears the burden of establishing standing. United States v. $321,470.00, U.S. Currency, 874 F.2d 298, 302 (5th Cir.1989); United States v. $38,000.00 in U.S. Currency, 816 F.2d 1538, 1543 n. 11 (11th Cir.1987). At issue in the present dispute is whether certain claimants have Article III standing. The government has brought this action pursuant to the civil forfeiture statute, 18 U.S.C. § 981(a)(1)(C) (West Supp.1993), which authorizes the United States to subject to forfeiture, “Any property, real or personal, which constitutes or is derived from proceeds traceable to a violation of section ... 1344 of this title[.]” A claimant in a forfeiture case has Article III standing if “he has a legally cognizable interest in the property that will be injured if the property is forfeited to the government. It is this claim of injury that confers upon the claimant the requisite ‘case or controversy5 standing to contest the forfeiture.” $38,000.00 in U.S. Currency, 816 F.2d at 1543-44 n. 12. Thus, courts have held that possession of legal title only with no authority to exercise dominion and control over the property does not confer standing to challenge a forfeiture. United States v. One Parcel of Land, Known as Lot 111-B, Tax Map Key 4-4-03-71(4), Waipouli, Kapaa, Hawaii, 902 F.2d 1443, 1444 (9th Cir.1990); United States v. 526 Liscum Dr., 866 F.2d 213, 217 (6th Cir.1988). Conversely, a property interest less than ownership, such as a possessory interest, may be sufficient to confer standing. See United States v. Currency $267,961.07, 916 F.2d 1104, 1106 (6th Cir.1990); see also United States v. One Rural Lot, 739 F.Supp. 74, 77 (D.P.R.1990) (“[t]he term ownership interest has been liberally construed to encompass any person with a recognizable legal or equitable interest in the seized property.”). The court must analyze the standing of the following “claimants”: Leichter, Shaw, the Fishbane claimants; Kirschner; Robinson Engineering; Boosalis; and Elite. A. Leichter On the Subscription Offering Stock Order Form for Steven Pierce, James Leichter is listed as the person in whose name the stock is to be registered. (See 122,942 shares Compl., Exh. C-5). Purports edly, Leichter was acting as Pierce’s trustee. The government notes Pierce has failed to file his own claim to the defendant property. The government asserts Leichter has failed to indicate he is filing the claim as trustee for Pierce, has failed to attach the agreement purportedly establishing his role as Pierce’s trustee, and has failed to assert the claim is authorized by Pierce. The government also notes Pierce has disavowed the stock order. (See 122,942 shares Compl., at 16-17). The government, in essence, challenges the trustee arrangement. However, this is a factual issue and cannot properly be decided on a motion to dismiss. For purposes of a motion to dismiss, all well-pleaded allegations are accepted as true. In the affidavit attached to the complaint, Christensen recounts Pierce’s statement regarding the transaction at issue, wherein he describes Leichter as trustee over the stock and Pierce as having the beneficial interest. Additionally, following Leichter’s name on Pierce’s stock order form is the acronym, “TTEE.” Thus, the pleadings sufficiently reflect a trust establishing Leichter as trustee for Pierce for purposes of this motion and it is irrelevant, for purposes of a motion to dismiss, that Leichter has failed to attach a copy of the trust agreement. It is basic to the law of trusts that a trustee may represent a beneficiary in all actions relating to the trust when the beneficiary’s rights as against the trustee or the rights between beneficiaries are called into question. See United States v. 120 Beacon St., No. 85-2787-2, 1987 WL 20225, at *1 (D.Mass. Nov. 6, 1987). Unproven allegations of a “sham” trust do not eviscerate Leichter’s standing based on his status as record owner of the stock as Pierce’s trustee. 120 Beacon St., No. 86-2787-2, 1987 WL 20225, at *1. B. Shaw The government argues the option agreements do not confer standing on Shaw. This is so, the government argues, because any interest SCI may have had in the shares before exercising its options is a mere expectation. The government concludes that a future expectation of ownership is insufficient to confer standing on a claimant and relies on United States v. R.R. 2, 790 F.Supp. 200, 202 (N.D.Iowa 1991), aff'd, 959 F.2d 101 (8th Cir.1992). Shaw argues it is the very existence of the written agreements between SCI and each depositor which gave rise, in part, to the instant forfeiture. While these agreements merely granted SCI an option to purchase the stock, Shaw argues that this expectation, when coupled with the funds SCI loaned to each depositor, confers Article III standing on Shaw. The court agrees with Shaw. The written agreements and the exchange of money between SCI and the depositors lies at the heart of the government’s claimed violation of section 1344. The court finds R.R. 2, which involved a child’s future ownership expectation, inapposite. The nature of the statute at issue coupled with the extent of Shaw’s involvement in the alleged scheme which gave rise to the present forfeiture dispute indicates Shaw has a sufficiently colorable interest in the proceedings to satisfy Article III. C. The Fishbane Claimants The Fishbane claimants seek to invoke the “innocent owner” defense under 18 U.S.C. § 981(a)(2) (West Supp.1993), which states: “No property shall be forfeited under this section to the extent of the interest of an owner or lienholder by reason of any act or omission established by that owner or lien-holder to have been committed without the knowledge of that owner or lienholder.” Thus, under the clear language of the statute, to have standing the Fishbane claimants must be owners or lienholders of defendant property. See United States v. One 1987 Cadillac DeVille, 774 F.Supp. 221, 223 (D.Del.1991). None of the claimants have brought forth any evidence nor alleged the existence of any type of security agreement between themselves and Beckoff or Brandes which would elevate the claimant to the status of secured creditor. Thus, each Fishbane claimant is, in essence, an unsecured creditor. It is well-established that general unsecured creditors do not have standing to contest the forfeiture of their debtor’s property. See, e.g., United States v. 127 Shares of Stock in Paradigm, Mfg., 758 F.Supp. 581, 583 (E.D.Cal.1990) and cases cited therein. Schwitzer further argues Fed.R.Civ.P. 19 mandates his presence in the instant case. Specifically, Schwitzer argues he loaned $50,000 to SCI, which was used to purchase defendant property. If he is not allowed to intercede in the present case, Schwitzer argues, he will be irrevocably damaged. Rule 19 permits a party to be joined if the person claims an interest in the action and is so situated that disposition of the action may, as a practical matter, impair or impede the person’s ability to protect that interest. Rule 19 presupposes the person has Article III standing to protect an “interest.” In the instant case, Schwitzer’s interest is limited to the $50,000 he invested with a third party, who invested with SCI, which then became involved in a scheme to purchase FirstRock stock. The court finds Schwitzer’s interest in his $50,000 is insufficient to mandate his presence in this dispute. The defendant property consists of FirstRock stock. Schwitzer apparently played no role in the alleged bank fraud which revolves around the defendant property. He had no knowledge of the entire alleged scheme until after the government seized the FirstRock stock, nor did he know his money was going to be invested in SCI. The court finds the remaining procedural rules cited by Schwitzer to be inapposite in the instant case. The Fishbane claimants do not have standing to contest the present forfeiture action. The government’s motion to strike is granted as to these claimants, and the claimants’ motion to dismiss is denied for lack of standing. D. Kirschner Karen Naramore is an eligible First Federal depositor. On September 24,1992, Naramore purchased 21,160 shares of FirstRock stock using funds provided by Susan Kirschner. (See 105,800 shares Compl., at 11). Kirschner admits the purpose of the loan was to enable Naramore to purchase the FirstRock stock. Kirschner was told Naramore had executed loan agreement documents, including a promissory note and a pledge agreement, by which Naramore agreed to pledge the FirstRock stock as security for the Kirschner loan. The loan transaction was arranged by Kirschner’s securities investment broker for Hamilton Investments. After Kirschner tendered the check for $211,600 to Naramore on September 24, 1992, Naramore endorsed the check and deposited it into her checking account at First Federal. Naramore then drew a check for the same amount from this account, payable to FirstRock, to purchase FirstRock stock. The government has appended a pledge agreement to its complaint (see 105,800 shares Compl., Exh. D-1) which Kirschner argues is a replica of the pledge agreement entered into between herself and Naramore. The pledge agreement provided: Kirschner was to be granted a security interest under the Illinois Uniform Commercial Code (UCC) in the FirstRock stock; Naramore was the sole and absolute owner of the shares and share certificates; and, Kirschner was the beneficial owner of the shares. Initially, Kirschner argues the government’s motion to challenge her standing was filed more than six months after Kirschner filed her claim and is not timely. According to Kirschner, Fed.R.Civ.P. 12 requires all defenses and affirmative defenses to be raised within 20 days after filing a counterclaim. Kirschner’s argument is inapposite as the government is not asserting Kirschner’s standing (or lack of) as an affirmative defense. Rather, the government asserts her lack of standing as grounds for dismissal for want of subject matter jurisdiction. As such, the government’s motion to dismiss is timely. Kirschner also appears to invoke general equitable principles by arguing the government should not be allowed to challenge her standing at this stage, after Kirschner has attended hearings and engaged in discovery. The court rejects this argument. Subject matter jurisdiction is paramount to this court’s power, and a challenge to such jurisdiction may be made by any party to a lawsuit at any time, or may even be raised sua sponte by the court. A party may never “waive” subject matter jurisdiction. For the reasons set forth above, the government’s motion to dismiss Kirschner due to her alleged lack of standing is timely. The government argues the pledge agreement between Kirschner and Naramore superficially suggests Kirschner acquired a security interest in the stock Naramore purchased. The government asserts no security interest was created under Illinois law. The court need not address this issue. The court finds persuasive Kirschner’s argument that a resulting trust should be imposed on the FirstRock stock, rendering Kirschner a beneficiary owner with standing to contest the present forfeiture. The government posits a resulting trust is inapplicable in the instant case because the equitable doctrine applies only to real property. The court disagrees. A resulting trust is created by operation of law, Suwalski v. Suwalski 40 Ill.2d 492, 240 N.E.2d 677 (1968), where one person purchases property with his own funds but title is taken in the name of another. In re Wilson’s Estate, 81 Ill.2d 349, 43 Ill.Dec. 23, 410 N.E.2d 23 (1980). Whether a resulting trust arises depends on the intention of the person furnishing the purchase price at the time of the conveyance. Gary-Wheaton Bank v. Meyer, 130 Ill.App.3d 87, 90-91, 85 Ill.Dec. 180, 183, 473 N.E.2d 548, 551 (2d Dist.1984). The party seeking to establish such a trust must do so by clear and convincing evidence. Nickoloff v. Nickoloff, 384 Ill. 377, 51 N.E.2d 565 (1943). The most common situation wherein a resulting trust is imposed involves real property. Carlson v. Carlson, 74 Ill.App.3d 673, 675, 30 Ill.Dec. 607, 609, 393 N.E.2d 643, 645 (1st Dist.1979). However, Illinois law does not limit imposition of a resulting trust to real property. For example, in In re Estate of Habel, 88 Ill.App.2d 194, 201-02, 231 N.E.2d 616, 620 (1st Dist.1967), the First District imposed a resulting trust on stock purchased with funds obtained from a joint savings account. See also, e.g., Alexander v. Mermel, 27 Ill.App.2d 281, 169 N.E.2d 569 (1st Dist.1960) (imposing a resulting trust on U.S. Savings Bonds or their proceeds). The agreement discloses that Kirschner purchased the FirstRock stock with her funds but title was taken in Naramore’s name. There is abundant evidence in the verified complaint that Naramore purchased the stock with Kirschner’s money and expected no further involvement. Her only motivation for her limited involvement was the promise of a tidy sum for her troubles. The security agreement, coupled with the government’s complaint, unequivocally indicates the parties’ intent that Naramore was purchasing the stock for Kirschner’s benefit. The court finds the parties’ conduct gives rise to a resulting trust. Therefore, Kirschner is the beneficial owner of the FirstRock stock ,at the time of the forfeiture and, as such, has standing to contest the present forfeiture action. See United States v. Santoro, 866 F.2d 1538, 1545 (4th Cir.1989) (holding that the beneficial owner of an express trust has standing to contest the forfeiture action); United States v. 717 Woodard St., 804 F.Supp. 716, 725-26 (E.D.Pa.1992) (beneficiary of a resulting trust has standing to contest forfeiture action). The court notes public policy does not preclude it from imposing a resulting trust in the instant case, see, e.g., In re Torrez, 827 F.2d 1299, 1302 (9th Cir.1987) (recognizing that one who attempts to defraud the government cannot seek to enforce a resulting trust in his favor), because Kirschner seeks to invoke the “innocent owner” defense. E. Robinson Engineering Robinson Engineering also urges the court to impose a resulting trust on the stock purchased by Tamara Stone and declare Robinson Engineering a beneficial owner of said stock. In so arguing, Robinson Engineering asserts it loaned Stone $211,600 to purchase the defendant property. Neither its verified claim nor the government’s complaint support this assertion. In its verified claim, Robinson Engineering states it tendered $211,600 to Hamilton Investments. Robinson Engineering also states Hamilton Investments then used these funds to purchase FirstRock stock. Yet, Robinson Engineering has failed to show several key elements. First, Robinson Engineering has failed to show it intended for Hamilton Investments to use Robinson Engineering’s tendered money to purchase FirstRock stock. Second, Robinson Engineering has failed to show that it tendered its money before Hamilton Investment purchased the stock. See Leicht v. Quirin, 200 Ill.App.3d 1057, 1062-63, 146 Ill.Dec. 752, 755, 558 N.E.2d 715, 718 (5th Dist.1990). Third, Robinson Engineering has failed to establish the requisite connection between Hamilton Investment and Tamara Stone. The government’s complaint does not show from whom Stone received the money to purchase shares. Alternatively, Robinson Engineering argues it should be treated as a secured creditor under the UCC, and then it would have standing to contest the present forfeiture action. According to the government, a security interest in certified shares of stock can only attach if the secured party or a representative has possession of the stock certificates or the debtor has signed a security agreement containing a description of the security. See 810 ILCS 5/8-321(1), 5/8-313(1)(i) (1993) (formerly Ill.Rev.Stat. ch. 26, ¶¶ 8-321(1), (1991)). The government asserts that it is impossible to determine whether Robinson Engineering was the intended beneficiary of the pledge agreement because the documents at issue were signed in blank and did not identify the “pledge” to whom the purported security interest was granted. Moreover, the pledge agreement is devoid of any description of the stock. The absence of a description is fatal, according to the government, because pursuant to Illinois law a lien will not attach absent such a description. See 810 ILCS 5/8-321(1), 8-313 (1993) (formerly Ill.Rev.Stat. ch. 26, ¶¶ 8-321(1), 8-313 (1991)). The government also contends that even if a lien did attach to the defendant property, the lien is no longer perfected. In so arguing, the government notes 810 ILCS 5/8-321(2) (1993) (formerly Ill.Rev.Stat. ch. 26, ¶ 8-321(2) (1991)) wherein it states that without possession of the stock certificate, the security interest remains perfected only for twenty-one days unless reregistration of the stock occurs within that period. No such reregistration has been alleged here, the government notes, and absent that step, Robinson Engineering is nothing more than an unsecured creditor who lacks standing to contest the present forfeiture action. The court agrees that Robinson Engineering does not have a perfected security interest in the stock as defined by the UCC. Therefore, at best it occupies the position of an unsecured creditor, a position which is insufficient to confer Article III standing for purposes of this forfeiture action. The government is correct in noting the security agreement between Robinson Engineering and Stone contains an insufficient description. See 810 ILCS 5/9-110 (1993) (formerly Ill.Rev.Stat. ch. 26, ¶ 9-110 (1991)) (any description of personal property is sufficient if it reasonably identifies what is described). The pledge agreement states the “Pledgor owns or will acquire ownership of the shares of stock indicated on Exhibit A attached hereto[.]” (See 105,800 Shares Compl., Exh. D-1). However, Exhibit A is blank. Robinson Engineering argues the lack of description should not prevent it from obtaining a perfected security interest because the government’s intervening actions prevented Robinson Engineering from adequately describing the stock in its security agreement. However, Robinson Engineering admits the stock was not yet in existence when it executed the security agreement, and herein lies the problem. In order for a security interest to become attached and perfected, a transfer within the meaning of section 8-313(1) of the UCC must occur. 810 ILCS 5/8-321 (1993) (formerly Ill.Rev.Stat. ch. 26, ¶ 8-321 (1991)); Jeanne L. Schroeder & David G. Carlson, “Security Interests Under Article 8 of the Uniform Commercial Code,” 12 Cardozo L.Rev. 557 (1990). A security interest so transferred is a perfected security interest. However, implicit within sections 8-313 and 8-321 is that, [N]o party in this case can have acquired a security interest in shar'es of (certified) stock without having taken actual possession of the stock certificates. The district court reached the same conclusion. Although there is little case law on this point, the relevant decisions do seem to assume that physical delivery is necessary to create a secured interest in certified securities under the relevant provisions of Article 8. FDIC v. W. Hugh Meyer & Assoc., 864 F.2d 371, 375 (5th Cir.1989); see also United States v. BCCI Holdings (Luxembourg), S.A., 822 F.Supp. 1 (D.D.C.1993) (under UCC § 8-321(1), a security interest in certified stock can attach and become enforceable only if the certificate is possessed by the secured party, an agent thereof, or a bailee who has been notified of the secured party’s interest). In other words, to be in possession of a security, the security must exist. See Kaufman v. Diversified Indus., Inc., 460 F.2d 1331, 1334 (2d Cir.), cert. denied, 409 U.S. 1038, 93 S.Ct. 517, 34 L.Ed.2d 487 (1972); Schroeder & Carlson, supra, at 584 n. 104. Stone signed the security agreement on September 24, 1992, but the stock was not in existence at that time and was not issued until October 2,1992. Moreover, the government seized the stock certificates before they reached Stone’s hands. Thus, Stone has never taken physical delivery of the stock, and section 8-313(1) remains unsatisfied. Additionally, a security interest in certified shares can be perfected only by rigorous compliance with section 8-313. Dickerson, supra. The first method of transfer is delivery of the certificate to the purchaser or a person designated by her. See 810 ILCS 5/8-313(1)(a) (1993). Stone never received the certificate. See Schroeder & Carlson, supra (section 8-313(1)(a) means actual physical possession of the security). The second method and sixth method (810 ILCS (1993)) apply to uncertified securities, which are inapplicable here. See Order Dated June 14, 1992 (holding that the securities at issue were “certified” at all times). Sections 8-313(1)(c), (d), (h)(i) and (j) are inapplicable here because no financial instruction was involved. Section 5/8-313(1)(e) does not apply because Stone never received the certified security and, therefore, could not acknowledge she held for Robinson Engineering. Section 8-313(1)(g) applies to clearing corporations. Section also involves a financial intermediary, and sections and (iv) involve uncertified securities. By process of elimination, the only methods potentially applicable to the instant case are section or section Neither section applies in the instant case. Under 8-313(1)(h)(ii) several conditions must be met: (1) the debtor must have signed a security agreement, (2) the security agreement must contain a description of the security (presumably sufficient to satisfy 9-110), (3) a third person in possession of the certified security must receive the security agreement (or a written notification signed by the debtor, which may be the security agreement). Stone did not receive a copy of the security agreement while in possession of the certified security. Therefore, section is not satisfied, regardless of whether the security agreement contained an adequate description of the stock. With respect to section even if the transaction between Robinson Engineering and Stone satisfied this section, the government is correct in noting that any security interest Stone may have had pursuant to this section became unperfected after 21 days because no other section of 8-313(1) was satisfied. See 5/8-321(2). The court notes that 21 days began running when Robinson Engineering gave value for the FirstRock stock. See 5/8-313(1)(i). Without a perfected security interest in the FirstRock stock as defined by Illinois law, Robinson Engineering, as merely a general, unsecured creditor, has no standing to contest the present forfeiture action. See United States v. One 1965 Cessna 820C Twin Engine Airplane, 715 F.Supp. 808, 810-11 (E.D.Ky.1989) (after determining claimant did not have a perfected security interest in seized property under the Kentucky UCC, court concluded claimant had no standing to contest the forfeiture). Robinson Engineering also argues it was prevented from executing a proper security agreement because of the government’s actions. It appears Robinson Engineering wishes the court to “ignore” the government’s conduct or “ignore” Robinson Engineering’s failure to conform to the “technicalities” of the UCC. The court declines to do either. Moreover, Robinson Engineering’s general reliance on the principles of Article III in reciting its potential injuries if not allowed to contest the present dispute do not show how it would be elevated above the status of a general unsecured creditor. For the reasons set forth in this section, the government’s motion to dismiss Robinson Engineering for lack of standing is granted. Robinson Engineering is given leave to amend its verified claim within 30 days to allege facts sufficient to show the existence of a resulting trust. Furthermore, Robinson Engineering’s Rule 12(b)(6) motion to dismiss is denied for lack of standing. Should Robinson Engineering timely file an adequate verified claim, it is given leave to refile its motion to dismiss. “loaned” money to eligible FirstRock depositors Streit and Teeters. Streit and Teeters then purchased FirstRock stock, and their names appear on the stock certificates. The court finds the executed “loan agreements” between Boosalis, Teeters and Streit give rise to a resulting trust. The language in the agreements as well as the testimony set forth in Christensen’s affidavit and Boosalis’ affidavit indicate that Teeters and Streit may hold legal title to the stock, but the stock was purchased with Boosalis’ funds and for his benefit. The court notes that at the time Boosalis tendered money to Hamilton Investments for the purpose of purchasing FirstRock stock, he did not know Teeters and Streit would be the persons using his funds to purchase the stock. Nor does the testimony set forth in Christensen’s affidavit indicate Teeters and Streit knew they were purchasing stock on behalf of Boosalis. Rather, they only knew of Hamilton Investments. However, in his uncontested statement of facts Boosalis states his broker, Marty Flanagan III, executed the agreements between Teeters, Streit and Boosalis. Thus, there is a sufficient nexus between Boosalis’ funds and Teeters’ and Streit’s agreements to support a finding that a resulting trust arose. Boosalis has Article III standing to contest the present forfeiture. G. Elite The government argues the pleadings filed by Elite demonstrate, at best, that Elite is an unsecured creditor. According to the government, Elite’s “loan agreements” with FirstRock depositors Elliott, Malone, and the Suddarths do not define the property interest vested in Elite nor establish the minimum requirements of a protectable lien. The court disagrees and finds that the agreements between Elite and the various claimants give Elite, at minimum, a facially colorable interest in the present action sufficient to satisfy Article III standing requirements. On its face, the agreement purports to create a partnership, and the court finds the language therein is sufficient to show Elite has, at a minimum, a facially colorable interest in the present dispute to satisfy Article Ill’s standing requirements. H. Walter J. Luscy Walter J. Luscy has filed a verified claim in No. 92 C 20288 stating, in pertinent part, that he made an investment of $10,000 in certain bank stock which was going to go public. He made this investment after being contacted on September 23,1992, by a long time friend who was a secretary to a man who made some investments in SCI. Luscy states he transferred $10,000 to the account of Brian T. Grant at First Federal. Like the Fishbane claimants, Luscy is an unsecured creditor and lacks Article III standing to contest the forfeiture of the debt- or property. His verified claim does not assert any security interest which would arguably give him standing. In sum, the court finds Leichter, Shaw (as well as Frericks), Kirschner, Boosalis and Elite have standing to contest the present forfeiture. Furthermore, the government concedes Bragelman has standing. The court will address their respective motions to dismiss or for summary judgment. II. Leichter’s motion to dismiss A. Intent to Deceive Section 981, in part, authorizes the United States to subject to forfeiture any property “which constitutes or is derived from proceeds traceable to a violation of section ... 1344 of this title[.]” 18 U.S.C. § 981(a)(1)(C) (Supp.1992). Section 1344 is entitled “[b]ank fraud” and states: Whoever knowingly executes, or attempts to execute, a scheme or artifice— (1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; shall be fined ... or imprisoned])] 18 U.S.C. § 1344 (Supp.1992). Section 1344 requires proof of a specific intent to deceive. See United States v. Harrod, 856 F.2d 996, 1001 (7th Cir.1988). Leichter argues that in the instant case the government must prove Leichter was ineligible to exercise subscription rights and he intentionally concealed this ineligibility from FirstRock. As proof that he did not intend to deceive FirstRock, Leichter notes his full disclosure as Pierce’s trustee on the stock order form in that the form clearly lists the stock was to be registered in his name as trustee for Pierce. He argues that, as a matter of law, he cannot be deemed to be intentionally fraudulent. This court finds a question of fact exists as to whether Leichter intentionally defrauded FirstRock. Leichter may be technically correct in that the face of the stock order form indicates Leichter is acting as trustee for Pierce. However, as trustee, Leichter should be acting solely on behalf of Pierce. Herein lies the alleged fraud. In the affidavit attached to the verified complaint, Christensen recounts Pierce’s description of the trust between himself and Leichter. According to Pierce, no formal documents were drawn up regarding their relationship. Pierce recounts that Leichter supplied the money in the form of a loan to Pierce and determined how many shares would be purchased. Pierce stated he merely signed the stock order form and placed his name and account numbers in the appropriate places then gave the otherwise blank form to Leichter. Pierce thought Leichter would be purchasing 100 to 200 shares and when he discovered Leichter had purchased 20,000 shares, he stated he was going to contact the bank and cancel the order because the form was not true. (Christensen Aff., at 17). Furthermore, Pierce stated it was his understanding Leichter would also sign the form at the bottom as trustee. While this court earlier stated that questions of fact regarding the trust did not preclude Leichter from possessing the necessary standing to challenge the forfeiture, these same questions of fact preclude dismissal as a matter of law based on Leichter’s argument. If the trust was set up like Pierce recounts, Leichter’s role was not that of “trustee.” Rather, Leichter was a speculator and used the word “trustee” to fraudulently conceal his true role in the scheme. If Leichter’s true role was as purchaser of the stock, he was not acting on behalf of Pierce and arguably violated section 1344. Moreover, Leichter asserts his failure to file a copy of a trust agreement, which the subscription agreement requires, is immaterial because FirstRock accepted the form without such a written agreement. The court disagrees and believes Leichter’s failure to submit a written agreement is evidence of his intent. B. FirstRock’s knowledge Leichter and Kirschner claim there is no violation of section 1344(2) because FirstRock knowingly exposed itself to risk due to the information resulting from the FBI investigation. Leichter asserts the conclusion that “FirstRock had notice, before any stock was issued to Leichter, as Trustee for Pierce, of the facts the Government now asserts show fraudulent conduct on Leichter’s part.” Leichter offers no proof for this assertion beyond its conclusion that the complaint concedes FirstRock was aware of all material facts surrounding the Leichter/Pierce transaction. Yet Leichter does not refer to any specific part of the complaint to support this conclusion. Moreover, the government disputes the amount of information available to FirstRock from the FBI investigation prior to this forfeiture action. Nothing in the complaint indicates FirstRock was aware of any information regarding the Leichter/Pierce transany other allegedly illegal transacto the conversion. Thus, a question of fact exists regarding FirstRock’s knowledge of the allegedly fraudulent activity, rendering dismissal of the verified complaint under Rule 12(b)(6) inappropriate on this ground. Leichter also appears to be arguing that if FirstRock did not know of any fraudulent activity concerning Leichter and Pierce, it should have. Specifically, Leichter asserts FirstRock had a duty to make further inquiries because of Leichter’s listed status as Pierce’s trustee. However, what FirstRock knew or should have known regarding any risk of loss is a question of fact and inappropriate for this court to determine on a Rule 12(b)(6) motion. C. The ownership, custody or control element Section 1344(2), inter alia, renders illegal any scheme whereby a person fraudulently obtains the securities or assets owned by FirstRock or under its custody or control. See 18 U.S.C. § 1344(2) (Supp.1993). Leichter and Shaw contend the verified complaint is missing this key element to a section 1344 violation and emphasize the following allegation in the complaint: “The defendant property was obtained by and constitutes proceeds traceable to a knowing scheme to obtain securities of a financial institution by means of false and fraudulent pretenses and representations as more fully described in the affidavit attached hereto and incorporate ed herein.” (See Compl., ¶ 5). Shaw argues the “of’ in the government’s complaint does not satisfy the ownership requirement of section 1344(2). In arguing the government has not pled the securities were under the custody or control of FirstRock, Leichter and Shaw fail to refer to the affidavit attached to the complaint which the government specifically incorporated therein. The court agrees with the government that it may properly consider the attached affidavit in determining whether the government has sufficiently pled a cause of action to survive a motion to dismiss. The Admiralty Rules, which govern forfeiture cases under section 981, see 18 U.S.C. § 981(b)(2) (Supp.1992), authorize a court to review the verified complaint and any supporting papers to determine whether an action in rem appears to exist before authorizing a warrant to seize the property. See Supp.R. C(3). If a court may consider supporting papers in deciding whether to issue a warrant, it logically follows that a court may consider those same supporting papers to determine whether the government has stated a cause of action, an inquiry closely related to whether a warrant should issue. See United States v. 4492 S. Livonia Rd., 889 F.2d 1258, 1266 (2d Cir.1989) (in determining the sufficiency of a complaint in a forfeiture action, courts may examine any supporting affidavits to determine whether they cure a lack of particularity in the complaint itself); United States v. 288-290 North St., 743 F.Supp. 1068, 1074-75 (S.D.N.Y.1990) (same). According to the language of the statute, the securities must have been owned by FirstRock or in its custody or control at the time individuals obtained or attempted to obtain the securities by false representations. See United States v. Blackmon, 839 F.2d 900, 904 (2d Cir.1988) (the property must be obtained at a time when the bank has custody or control of the property). The verified complaint and supporting affidavit sufficiently show the government has pled that the defendant property was in the custody or control of FirstRock at the time of the alleged illegal activity for purposes of this motion. While each complaint does not contain express language that the stock was in FirstRock’s “custody or control” at the time of the fraudulent activity, Christensen’s affidavit contains numerous allegations to support this element. Leichter and Kirschner argue the shares could not have been in FirstRock’s custody or control because they did not come into existence until issued on October 2, 1992, at which time they were transferred to an underwriter. According to the language of section 1344, the property must be in FirstRock’s ownership, custody or control at the time of the fraudulent activity. Although the transactions which gave rise to the present disputes occurred on or before September 24, 1992, the executed agreements remained in effect and the fraudulent activity continued until at least October 2, 1992, when the shares were issued. That the shares were then transferred to an underwriter is inconsequential, as the underwriter was the agent of FirstRock. Shaw and Kirschner argue the stock was not in FirstRock’s custody or control at the time of the alleged fraudulent activity “in the usual way financial institutions own or control securities.” According to Shaw, the stock was not entrusted to FirstRock by customers. Rather, the stock was “simply” a vehicle for altering the type of ownership of First Federal. An inquiry into a financial institution’s motive as to why it owns, controls or retains custody over a security is not dictated by the language of the statute, and the court declines to do so. Moreover, there is nothing to suggest FirstRock was conducting its conversion process other than in the “usual” manner. D. Public Policy Leichter also argues the seizure of a publicly traded stock should be vacated because it unfairly penalizes the owners of the seized stock. Because of its volatile nature, Leichter argues, seizure of the stock is improper and subjects him to an unreasonable risk of loss. The court is not persuaded by Leichter’s argument as it defies the clear language of sections 981 and 1344 when read in conjunction. Section 981 broadly subjects to forfeiture “any property, real or personal, which constitutes or is derived from a violation of ... section 1344.” See 18 U.S.C. § 981(a)(1)(C) (Supp.1992) (emphasis added). In turn, section 1344 penalizes anyone who knowingly and fraudulently obtains “moneys, funds, credits, assets, securities or other property” owned by a financial institution. See 18 U.S.C. § 1344(2) (Supp.1992) (emphasis added). By specifically listing “securities” in section 1344, Congress intended such property to be subject to forfeiture under section 981. Nor is this court persuaded by Leichter’s argument that seizing 10% of outstanding FirstRock stock constitutes an unreasonable seizure in violation of the Fourth Amendment. Leichter contends that by seizing such a large portion of FirstRock’s outstanding stock the government has artificially reduced the available pool of FirstRock shares. According to Leichter, two groups of shareholders are unfairly penalized as a consequence: those who bought immediately after the seizure, and those who purchased FirstRock stock after the seizure and do not sell before the seized stock is returned to the market. However, as the government notes, Leichter’s standing to make this argument is doubtful because he does not fall within either category. Additionally, Leichter has not shown a distinct and palpable injury as opposed to an abstract or hypothetical injury, thus failing to satisfy a core component of Article III standing. See Slowiak v. Land O’Lakes, Inc., 987 F.2d 1293, 1296 No. 92-2518, slip op. at 5 (7th Cir.1993). Leichter also asserts less burdensome alternatives existed for the government to achieve its objectives. However, the court rejects this argument. The plain language of section 981 does not require the government to weigh less burdensome alternatives before subjecting property to forfeiture. III. Shaw’s motion to dismiss A. Johnson Shares In his memorandum in support of his motion to dismiss, Shaw argues the complaint fails to plead facts sufficient to state a claim for forfeiture of the Johnson shares. Specifically, Shaw argues the allegations in the complaint do not show that Johnson had any agreement regarding the sale or transfer of his stock. Oddly enough, in his response to the government’s motion to strike Shaw for lack of standing, Shaw asserts the existence of such an agreement in arguing he has Article III standing in the present dispute. Specifically, in detailing the loan agreements between SCI and depositors Johnson, Steinhagen, Church, Drew and “Grant,” Shaw states, “Between September 17 and September 24, 1992, each of these five depositors executed and entered into written agreements with Claimants operating through SCI.” Moreover, Shaw has filed a verified claim, in part, for the stock purchased by Johnson. In light of his earlier position regarding Johnson, the court finds Shaw has waived this argument. Moreover, as Shaw himself notes, the complaint alleges: (1) Johnson signed and submitted a stock order form for FirstRock stock; (2) on September 23, 1992, an FBI agent observed Shaw enter a branch office of First Federal; (3) the agent later determined Shaw hand delivered original stock order forms in the name of Johnson; (4) on October 2, 1992, Johnson stated in an interview that he had “come into” some money and refused to answer further questions. Contrary to Shaw’s assertion, these allegations give rise to a reasonable inference that an agreement existed between Shaw and Johnson. B. Section 563b.3(i)(l) Shaw, Bragelman, Boosalis and Elite assert the gravamen of the government’s claimed violation of section 1344(2) rests on a violation of section 563b.3(i)(1) of the OTS regulations. See 12 C.F.R. § 563b.3(i)(1), (2) (1993). Shaw contends that, as a matter of law, the loan agreements between SCI and the depositors do not violate the OTS regulation. Kirschner also argues the security agreement between herself and Naramore does not violate the OTS regulation. The government argues it need not prove a violation of the OTS regulation. Rather, it need only prove a violation of section 1344. According to the government, section 1344(2) was violated when Shaw participated in a scheme to solicit First Federal depositors to purchase shares on behalf of Shaw. As part of the scheme, the depositors signed stock order forms which stated, in part: Under penalty of perjury, I certify that ... I am purchasing shares solely for my own account and that there is no agreement or understanding regarding the sale or transfer of such shares, or my right to subscribe for shares herewith. Federal Regulations prohibit any person from transferring or entering into any a