Lee v. Foris Dax, Inc.
3:24-cv-06194
N.D. Cal.Sep 5, 2025Background
- Plaintiff Jung Min Lee alleges Crypto.com, First Republic Bank (in receivership, FDIC-R), and former First Republic employee Catherine Evans aided scammers who duped Lee’s husband (Patz, over 65) into moving nearly $1 million in community funds into cryptocurrency scams.
- Lee alleges aiding-and-abetting (fraud, conversion, trespass to chattels), receipt of stolen property (Cal. Pen. Code § 496), and unlawful UCL claims; she amended twice after prior dismissals.
- FDIC-R disallowed Lee’s administrative FIRREA claim as untimely (Claims Bar Date Sept. 5, 2023); Lee filed the administrative claim after that date and then sought judicial review within 60 days of disallowance.
- Court finds FIRREA’s mandatory administrative exhaustion jurisdictional; Lee failed to show she lacked notice of the receivership so the narrow late-filing exception does not apply.
- Court dismisses claims against FDIC-R and Evans with prejudice for lack of jurisdiction.
- Court dismisses Crypto.com aiding-and-abetting and § 496 claims with prejudice for failure to plead actual knowledge/substantial assistance, but denies dismissal of the unlawful-prong UCL claim insofar as it is plausibly grounded on alleged Bank Secrecy Act (BSA/AML) violations by Crypto.com.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction over FDIC-R and Evans under FIRREA | Lee argues she lacked effective notice of the receivership/Claims Bar Date and thus qualifies for the late-filed exception | FDIC-R says administrative process is jurisdictional and Lee filed her proof of claim late; late claims are final unless claimant lacked notice and files in time | Held: FIRREA jurisdictional; Lee received inquiry/public notice and fails narrow exception — claims against FDIC-R and Evans dismissed with prejudice |
| Aiding-and-abetting liability against Crypto.com | Lee alleges Crypto.com "must have known" the recipient wallets were tied to scammers and substantially assisted by processing/whitelisting transfers | Crypto.com contends Lee fails to plead actual knowledge (only alleges should-have-known), and exchanges lack bank fiduciary duty; ordinary transactions don’t show substantial assistance absent knowledge | Held: Dismissed with prejudice — pleadings show neither direct nor sufficient circumstantial evidence that Crypto.com "must have known"; substantial-assistance element unmet |
| Receiving stolen property (Cal. Pen. Code § 496) against Crypto.com | Lee alleges Crypto.com received funds obtained by theft and knew they were stolen | Crypto.com argues property wasn't yet ‘‘stolen’’ when it received funds and Lee fails to plead actual knowledge | Held: Dismissed — property not plausibly shown to have been stolen on receipt and actual-knowledge element not pleaded |
| Unlawful prong of UCL based on statutory violations (including BSA/AML) | Lee contends Crypto.com violated BSA/AML (31 U.S.C. § 5318(h), implementing regs) by failing to implement adequate AML/Travel Rule, and those violations can predicate an unlawful UCL claim | Crypto.com argues many asserted predicates involve misrepresentation (requiring reliance) or lack private right of action; challenges plausibility | Held: Denied as to BSA/AML predicate — court finds BSA-based unlawful UCL theory plausible and not barred here; other statutory predicates tied to misrepresentation/reliance rejected |
Key Cases Cited
- Cook v. Brewer, 637 F.3d 1002 (9th Cir. 2011) (Rule 12(b)(6) pleading standard discussion)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for complaints)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions vs. factual allegations)
- In re First All. Mortgage Co., 471 F.3d 977 (9th Cir.) (aiding-and-abetting standard requires knowledge and substantial assistance)
- Casey v. U.S. Bank Nat'l Ass'n, 127 Cal. App. 4th 1138 (2005) (actual knowledge requirement for aider liability)
- Uccello v. Laudenslayer, 44 Cal. App. 3d 504 (1975) (distinction between must-have-known and should-have-known)
- ConAgra Foods, Inc. v. Sup. Ct., 17 Cal. App. 5th 51 (Cal. Ct. App.) (actual knowledge standard and aiding-and-abetting discussion)
- Cel–Tech Communications, Inc. v. L.A. Cellular Telephone Co., 20 Cal.4th 163 (1999) (scope of UCL and when other statutes bar UCL predicates)