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Case 3:18-cv-00196-CRS Document 1 Filed 03/28/18 Page 1 of 4 PageID #: 1

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION

GEORGE CAMPOS
and HEATHER CAMPOS,

Plaintiffs,

v. 3:18-cv-196-CRS
Civil Action No.: _____________________

LOUISVILLE METRO POLICE
OFFICERS CREDIT UNION, and
JOSEPHINE “JOSIE” CROWE,

Defendants.

NOTICE OF REMOVAL OF ACTION

COMES NOW Defendant Louisville Metro Police Officers Credit Union, by counsel,

pursuant to 28 U.S.C. §§ 1441 and 1446 and hereby provides notice of the removal of this matter

from the Circuit Court of Jefferson County, Kentucky, to this Court. In support of its Notice,

Defendant Louisville Metro Police Officers Credit Union hereby states as follows:

1. On or about March 7, 2018, the Plaintiffs filed their Original Complaint in this

matter in the Jefferson County Circuit Court, Kentucky, Civil Action No. 18-CI-001360, which is

attached hereto as “Exhibit A.”

2. Defendant Louisville Metro Police Officers Credit Union received personal service

on March 8, 2018.

3. There is no specific demand set forth in the Plaintiffs’ Complaint. However, given

the allegations the amount in controversy is over $75,000.00.

4. Plaintiffs’ Complaint asserts claims based on purported violations of the Electronic

Funds Transfer Act, 15 U.S.C. §1693, et seq., and the Computer Fraud and Abuse Act, 18 U.S.C.

§1030, et seq. See Exhibit A.
Case 3:18-cv-00196-CRS Document 1 Filed 03/28/18 Page 2 of 4 PageID #: 2

5. Plaintiffs’ claims under the Electronic Funds Transfer Act and the Computer Fraud

and Abuse Act are federal questions over which this Court has original jurisdiction under 28

U.S.C. §1331. Defendant Louisville Metro Police Officers Credit Union hereby removes this

case to this Court pursuant to 28 U.S.C. §§ 1441 and 1446.

6. Plaintiffs’ counsel contact information is as follows:

J. Allan Cobb, Esq. Ben Carter, Esq.
Andrea R. Hunt, Esq. Ben Carter Law, PLLC
Cobb Law, PLLC 900 S. Shelby St.
1303 Clear Springs Trace, Suite 100 Louisville, KY 40203
Louisville, KY 40223 Telephone: (502) 509-3231
Telephone: (502) 966-7100 Facsimile: (502) 792-7511
Facsimile: (502) 343-5900

7. Upon information and belief, Josephine “Josie” Crowe is also a defendant in this

matter but has not yet appeared in the case, apparently has not yet been served in the case, and has

no counsel of record. Because the time frame for Defendant Louisville Metro Police Officers

Credit Union to file its Motion to Dismiss and remove this case would elapse before consent could

be obtained, Defendant is proceeding with removal. A copy of the Notice of Removal is being

sent via certified mail to:

Josephine “Josie” Crowe
4258 Sunrise Drive
Sellersburg, IN 47172-9243

8. A copy of the docket sheet from the Jefferson Circuit Court is attached hereto as

“Exhibit B.”

LOUISVILLE METRO POLICE
OFFICERS CREDIT UNION

BY COUNSEL
Case 3:18-cv-00196-CRS Document 1 Filed 03/28/18 Page 3 of 4 PageID #: 3

/s/ Ronald H. Hatfield, Jr.
Ronald H. Hatfield, Jr. (KSB No. 93000)
Litchfield Cavo LLP
Village Professionals Building
99 Cracker Barrel Drive, Suite 100
Barboursville, West Virginia 25504
Telephone: (304) 302-0500
Facsimile (304) 302-0504
hatfield@litchfieldcavo.com

Counsel for Defendant Louisville Metro
Police Officers Credit Union
Case 3:18-cv-00196-CRS Document 1 Filed 03/28/18 Page 4 of 4 PageID #: 4

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION

GEORGE CAMPOS
and HEATHER CAMPOS,

Plaintiffs,

v. 3:18-cv-196-CRS
Civil Action No.: _____________________

LOUISVILLE METRO POLICE
OFFICERS CREDIT UNION, and
JOSEPHINE “JOSIE” CROWE,

Defendants.

CERTIFICATE OF SERVICE

The undersigned counsel for Defendant Louisville Metro Police Officers Credit Union

hereby certifies that on March 28, 2018, the foregoing “Notice of Removal of Action” was served

on counsel of record via U.S. Mail, postage pre-paid, as follows:

J. Allan Cobb, Esq. Ben Carter, Esq.
Andrea R. Hunt, Esq. Ben Carter Law, PLLC
Cobb Law, PLLC 900 S. Shelby St.
1303 Clear Springs Trace, Suite 100 Louisville, KY 40203
Louisville, KY 40223

Josephine “Josie” Crowe
4258 Sunrise Drive
Sellersburg, IN 47172-9243

/s/ Ronald H. Hatfield, Jr.
Ronald H. Hatfield, Jr.
KSB No. 93000
Case 3:18-cv-00196-CRS Document 1-1 Filed 03/28/18 Page 1 of 1 PageID #: 5
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 1 of 37 PageID #: 6

March 12, 2018

CUNA Mutual Group
Attn: Litigation Department
5910 Mineral Point Road
Madison, WI 53705

By: FedEx

To Whom It May Concern:

Enclosed, please find copy of a civil summons we received as conservator for Louisville Metro
Police Officer's Credit Union on March 8, 2018. Pursuant to the subject credit union's coverage
under its Package of Protection with CUNA Mutual Group, we request legal representation
relative to this action.

Please contact me or NCUA Trial Attorney, Rob Robine, if you have any questions.

tor
National Credit Union Administration
Sub-Agent for Conservator
III/JHA/MDC:mc
61772-S02

Enclosure

cc: Regional Director, and Agent for the Conservator, Myra Toeppe
Trial Attorney, Rob Robine
Problem Case Officer, James Ashman
Patrick Collins, Esquire

7000 Central Parkway, Suite 1600 - Atlanta, GA 30328 - 678-443-3000
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 2 of 37 PageID #: 7

AOC-E-105 Sum Code: Cl
Rev. 9-14 Case#: 18-Cl-001360

Commonwealth of Kentucky
Court: CIRCUIT
Court of Justice Courts.ky.gov County: JEFFERSON Circuit «>
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CR 4.02; Cr Official Form 1 CIVIL SUMMONS a
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Plantiff, CAMPOS, GEORGE, ET AL VS. LOUISVILLE METRO POLICE OFFICERS C, Defendant 0
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TO: LOUISVILLE METRO POLICE OFFICERS CREDIT U
900 WEST MARKET STREET
LOUISVILLE, KY 40202

The Commonwealth of Kentucky to Defendant:

. You are hereby notified that a legal action has been filed against you in this Court demanding relief as shown on
the document delivered to you with this Summons. Unless a written defense is made by you or by an attorney
on your behalf within twenty (20) days following the day this paper is delivered to you, judgment by default may be
taken against you for the relief demanded in the attached complaint.

The name(s) and address(es) of the party or parties demanding relief against you or his/her (their) attorney(s) are shown on the
document delivered to you with this Summons.
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Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 3 of 37 PageID #: 8

Filed i f-CI-001350

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HEATHER CAMPOS

v. VERIFIED CLASS ACTION COMPLAINT
AND JURY DEMAND

Electronically Filed

LOUISVILLE METRO POLICE OFFICERS DEFENDANTS
CREDIT UNION

900 W. MARKET ST., SUITE 100
LOUISVILLE, KY 40202

SERVE: REGISTERED AGENT
900 W. MARKET ST.
LOUISVILLE, KY 40202

JOSEPHINE "JOSIE" CROWE
4258 SUNRISE DRIVE ,
SELLERSBURG, IN 47172-9243

SERVE: KENTUCKY SECRETARY OF STATE
OFFICE OF THE SECRETARY OF STATE
SUMMONS BRANCH
700 CAPITAL AVENUE, SUITE 86
FRANKFORT, KY 40601

Com~ the Plaintiffs, George Campos and Heather Campos, individually and on

behalf of the class of people harmed by Defendants' conduct, and for their Complaint

state as follows:

NATURE OF ACTION

1. Defendant Louisville Metro Police Officer's Credit Union, Inc. ("Credit Union") is
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Filed S-Cl-00\'.'\GO Q3/07/20Hl David L.. Nicholson. Jefferson Circuit Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 4 of 37 PageID #: 9

i B-Cf~00·130(J G2vtci L Nicho!s~Jf':, .Jcffofson Circuit Clerk

2. The credit union was organized for the purposes of encouraging thrift among its '°
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3. "Members" of the Credit Union consists oflaw enforcement personnel, members
from Norfolk Southern, R.R., Reynolds Manufacturing, LL Flex, BASF, QRS

Recycling, and immediate family if the aforementioned organizations.

4. During the time giving rise to the issues in question, Defendant Josephine "Josie"
Crowe ("Crowe") was an employee of the Credit Union. During certain time

periods giving rise to the matters in issue, Crowe was both an employee and the

Vice President of the Credit Union.
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and retained Defendant Crowe without taking reasonable steps to determine

whether she should be trusted with the life savings, finances, and credit

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Filed 'l 8-Ci-OOi 360 03/07/20-iB David L. Nicholson. Jefferson Circuit Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 5 of 37 PageID #: 10

~ B-Cl-0(/1360

7. Due to the actions, inactions, and failures of the Credit Union and Crowe, on o,n
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and-sound operations, ensure financial stability, and to address issues related to

the Credit Union's operations and financial condition while maintaining Member

services.

8. In investigating the actions, inactions, and failures of the Credit Union and

Crowe, the NCUA uncovered a lack of Credit Union oversight including but not

limited to:

a. "records that do not add-up";

b. employee actions meant to conceal and hide "jaw dropping stuff';

c. affecting a "multitude of Members";

d. by employee(s) who "should never have been there";

e. resulting in "multiple people terminated."

9. Plaintiffs Campos seek compensatory, statutory, economic, and punitive damages

for Defendants' breach of fiduciary duty; fraud; negligence; conversion; breach of

duty of good faith and fair dealing; breach of contract; and violations of the

Kentucky Consumer Protection Act, KRS 367.170, et seq.; the Electronic Funds

Transfer Act, 15 U.S.C. §1693, et seq.; the Computer Fraud and Abuse Act, 18

U.S.C. § 1030; and KRS Chapter 434, Unlawful Access to a Computer and Misuse

of Computer Information.
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10. Plaintiffs allege claims under the common law and statutes of the Commonwealth "'
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of Kentucky and under federal law.

Filed David L. Nicholson. Jefferson Circuit Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 6 of 37 PageID #: 11

11. The amount in controversy exceeds the minimum jurisdictional requirement of 0:,
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12. The Credit Union is a non-profit Kentucky corporation, organized pursuant to 0
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KRS 286.6-015, and identified as a credit union (CRU) on the Kentucky Secretary

of State website. The Credit Union exists and operates at 900 West Market Street,

Suite 100, Louisville, Kentucky 40202.

13. This Court has personal jurisdiction over Defendant Crowe pursuant to KRS

454.210(2)(a).

14. Jurisdiction for this Complaint is proper in Jefferson County, Louisville,

Kentucky.

15. Venue is proper in this Court because the events giving rise to this dispute

occurred in Jefferson County, Kentucky.

THE PARTIES

16. Plaintiffs George Campos and Heather Campos are residents of Jefferson County,

Kentucky. Plaintiff George Campos is a police officer with Louisville Metro Police

Department. The Plaintiffs are members of Defendant Credit Union.

17. Defendant Crowe is, upon information and belief, a resident of Sellersburg,

Indiana and a former employee and Vice President of Defendant Credit Union.

18. Defendant Credit Union is a credit union charted under the laws of the

Commonwealth of Kentucky, with a principal place of business at 900 West

Market Street, Suite 100, Louisville, KY 40202.
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Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 7 of 37 PageID #: 12

STATEMENT OF FACTS DO
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DEFENDANT CREDIT UNION ENTRUSTS $28 MILLION IN MEMBERS' 0

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ASSETS TO ITS EMPLOYEE AND VICE PRESIDENT DEFENDANT CROWE co
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19. Defendant Credit Union was founded in 1942 and serves over 3,500 members

and businesses in the Louisville, KY area. Pursuant to KRS 286.6-005, Credit

Union is a cooperative, nonprofit association, incorporated under this subtitle

(i.e., KRS 286.6, et seq.), for the purposes of encouraging thrift among its

members, creating a source of credit at a fair and reasonable rate of interest, and

providing an opportunity for its Members to use and control their own money on

a democratic basis in order to improve their economic and social condition.

20.Defendant Credit Union has over $28 million in assets and offers loans, checking

accounts, savings accounts, and related services. Among its membership benefits

is complimentary payroll deductions. Defendant Credit Union advertises, "You

tell us where you want the money deposited and we will take care of it for you."1

21. Members of Defendant Credit Union are primarily law enforcement personnel

and their families, but membership is also open to employees of Norfolk

Southern Railroad, Reynolds Manufacturing, LL Flex, BASF, or QRS Recycling,

and their immediate families.

22. Defendant Crowe was, at all relevant times, either an employee OR both an

employee and Vice President of Defendant Credit Union. Her actions, as

described throughout this Complaint, were in the course of her employment and

service with Defendant Credit Union. co
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Page5 of 27
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 8 of 37 PageID #: 13

DEFENDANT CREDIT UNION LEARNS OF DEFENDANT CROWE'S ""~,
IMPROPRIETIES, BUT WITHHOLDS CRITICAL INFORMATION FROM 0
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23. On June 30, 2017, Defendant Credit Union posted an announcement on its

website notifying Members that it was conducting a statement verification for the

quarter ending June 30, 2017. 2

24. This announcement shifted responsibility to members to confirm the accuracy of

quarterly statements Defendant Credit Union provided Members. Not only did

Defendant Credit Union instruct members to notify it of errors in its own

records, but it attempted to wash its hands of its own obligation to do so, stating

that unless Members reported any errors within ten days, Defendant Credit

Union would assume its records were accurate.

25. For the next five months, Defendant Credit Union sat on this information. During

that time, Members were kept in the dark as to both improprieties and potential

remedies that could have (and should have) been undertaken to improve their

economic and social condition.

26. Defendant Crowe remained in her position as Credit Union employee and Vice

President, with the only statement made to Members being that Crowe had been

suspended.

27. While the Credit Union "Supervisory Committee" was concerned enough about

improprieties, improper allocations, and misappropriations as far back as June

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Page 6 of 2.7
Filed 18-C!-00'1360 03/07 /20i 8 David L. Nicholson. Jefferson Circuit Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 9 of 37 PageID #: 14

2017, to hire Kenneth Kling CPA to undertake an audit and reconciliation, the 0:,

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findings of the Member paid-for CPA have not been disclosed to Members. 0
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LMPD UNCOVERS DEFENDANT CROWE'S SCHEME; C
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DEFENDANT CREDIT UNION ENTERS CONSERVATORSHIP; AND
MEMBERS ARE LEFT IN THE DARK

28.In or around November 2017, Louisville Metro Police Department began

investigating possible financial crimes involving Defendant Credit Union. The

Federal Bureau of Investigation moved swiftly to take over this investigation.

Shortly later, the Kentucky Department of Financial Institutions opened a

separate investigation.

29.0n November 30, 2017, WAVE 3 News reported that "numerous" sources

indicated that a number of fictitious accounts had been set up in officers' names,3

30. Upon information and belief, Defendant Crowe had been using her position as

employee or Vice President to access Member account or credit report

information in order to: (1) establish or set-up fictitious loans in members'

names; (2) divert Members' electronic transfers to other accounts; (3) fail to pay-

off loans; and (4) engage in other improper allocations and misappropriations, to

the detriment of Credit Union Members.

31. As a result of Defendant Crowe's activities, Defendant Credit Union reported

inaccurate information about members' loans to one or more credit reporting

agencies.

32. On December 15, 2017, the NCUA, in cooperation with the Kentucky Department
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of Financial Institutions, placed Defendant Credit Union into conservatorship, 0
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Page7 0£27
l 8-Cl-00'1 '.\60 ()3/0712018 David L. Nicholson. Jnffon;;on Circuit Clcirk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 10 of 37 PageID #: 15

assuming control over the credit union, to protect the assets of Members, <>'.)
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maintain safe-and-sound operations, ensure financial stability, and to address 0
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maintaining Member services. The NCUA has made no decisions about the long-

term future of Defendant Credit Union, including whether or not to liquidate the

Credit Union.

33. In investigating the actions, inactions, and failures of the Credit Union and

Crowe, the NCUA found that a "multitude of members" were affected by

Defendants' actions stated herein; that "yes, there was supposed to be oversight";

that Defendants' activities were "jaw-dropping stuff'; that "loans existed on

vehicles that were already sold"; that the schemes being investigated were

"extremely convoluted" and "done to conceal," and affected "a multitude of

members"; resulting in "multiple people [being] terminated."

34.At some point, Defendant Crowe was suspended from Defendant Credit Union. It

is presently unknown how long she has been or was suspended, any statements

she gave regarding the improprieties and misappropriations, if or when she was

terminated (and the grounds for any such termination).

PLAINTIFFS DISCOVER FICTITIOUS LOANS IN THEIR NAMES,
UNAUTIIORIZED CREDIT CARD CHARGES, AND INACCURATE
CREDIT REPORTS

35. Plaintiffs discovered fictitious loans in their name. Plaintiffs then brought these

loans to the attention of Cole Mccollum ("McCollum"), Assistant Vice President
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and Compliance Officer for Defendant Credit Union. McCollum provided 0
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Plaintiffs with a screenshot showing part of Defendant Credit Union's database, 0
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listing loans in the Plaintiffs' names. ::;;
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Page 8 of27
18-CI-GO: 360 03/07i20i 8 David L. Nicholson. Jefferson Circuit Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 11 of 37 PageID #: 16

36. The database of member loans lists at least 28 loans opened for Plaintiff George ro
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Campos and at least six loans for Plaintiff Heather Campos. Plaintiffs did not 0
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open or authorizing the opening of aforementioned 28 and six loans. 0
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37. The screenshots revealed that: (1) a number open loans in the name of the

Plaintiffs have outstanding balances and have not been. closed, despite the fact

that they have been paid in full; (2) at least one open loan in Plaintiff George

Campos' name is not being paid under his instructions-and Crowe's

guarantee-for biweekly direct deposit deductions to be paid to all outstanding

loans, and has a deficiency; and (3) at least ~8 loans opened in have been opened

in the name of Plaintiff George Campos and six in the name of Plaintiff Heather

Campos, which exceeds the number oflegitimate loans in their names.

38.Loan #1. The database listed a Loan #1 in Plaintiff Heather Campos' name as

delinquent on an outstanding balance. This loan was paid off long ago.

39.Loan #3. The database listed a Loan #3 in Plaintiff Heather Campos' name.

Upon information and belief, this loan is related to Loan #25 in Plaintiff George

Campos' name, a loan that was paid off long ago.

40.Loan #5. The database listed a Loan #5 in the name of Plaintiff Heather

Campos. This loan is for a "used auto." The balance is $16,170.58 and the payoff

amount is $16,422.62. The due date is October 6, 2017. The loan is delinquent in

the amount of $797.72. Before being informed of the loan by Defendant Credit

Union, Plaintiff Heather Campos had no knowledge of Loan #5. She did not
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recognize the loan, receive any benefit from it, initiate or participate in it, 0
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Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 12 of 37 PageID #: 17

41. Loan #6. The database listed a Loan #6 in the name of Plaintiff Heather o,
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Campos. It is a "signature" loan. The balance is $3,730.33 and the payoff amount 0
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is $3,783.26. The due date is October 25, 2017. The loan is delinquent in the 0
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amount of $277-44. Plaintiff Heather Campos is unaware of the basis of this loan,

and is unsure as to whether or not it is a good loan and what the proper balance

is. By failing to abide its common law and statutory duties to maintain accurate

account information, Defendant Credit Union has been able to provide correct

and accurate information to Plaintiff Heather Campos.

42.Loan #19. The database listed a Loan #19 in Plaintiff George Campos' name as

having an outstanding balance. He paid off this loan in 2014, via a check given

directly to Defendant Crowe.

43. Loan #25. The database listed a Loan #25 in Plaintiff George Campos' name as

having an outstanding balance. However, this loan was paid off long ago.

44. Loan #28. The database listed a Loan #28 in Plaintiff George Campos' name.

Although he has been paying for this loan via $850.00 biweekly deductions, and

Defendant Credit Union has made all required deductions, the database lists the

loan as at least three months delinquent. In addition, upon information and

belief, the listed payoff amount of $25,955.82 is inaccurate.

45. Diverted EFT payments. Since at least 2008, Plaintiff George Campos has

made biweekly payments on loans with Defendant Credit Union via after-tax

deductions from his direct-deposit paycheck in accordance with Defendant Credit
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46. From April 14, 2013 through November 18, 2017, Plaintiff George Campos 2
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instructed Defendant Credit Union to deduct $677.16 from each paycheck and :§:
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iB-Cl-001360 03/C7/20, 8 David L. Nicholson. Jefferson Circuit Cierk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 13 of 37 PageID #: 18

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use those funds to repay his loans with Defendant Credit Union. Defendant

Crowe specifically told Plaintiff George Campos this was being done AND she

would personally correct and resolve all "issues" brought to her attention.

47. On or around November 30, 2017, Plaintiff George Campos sought-out

Defendants regarding problems with a credit card statement and a loan he did

not recognize. Going to the Credit Union and telling the receptionist that he

needed to speak with someone about a problem, Plaintiff George Campos was

asked: ''Are you hear about the .Josie [Defendant Josephine 'Joise' Crowe] thing?"

Plaintiff George Campos was directed to McCollum to discuss both unauthorized

credit card charges made by Defendant Crowe AND an unknown loan. Although

Defendant Credit Union, McCollum, and even the receptionist were aware of "the

Josie thing," no acknowledgement or explanation was made to Plaintiff George

Campos, concerning the know improprieties, allocations, and misappropriations.

Instead, McCollumjust stated that the Credit Union was doing everything in its

power to resolve the problem and to get everything fixed. To date, Plaintiff

George Campos has never been told exactly what the problem is or how the

problem will be fixed. Worried about his credit, Plaintiff George Campos

increased his bi-weekly deposits to $850.00, to cover the debts that were

uncovered, but still not explained.

48.To date, Defendant Credit Union has deducted at least $91,776.48, purportedly to

apply those funds to his loans.
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Page uof 27
Filed !8-C!-001360 03/07i2Gi 8 David L. Nicholson. Jefferson Circuit Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 14 of 37 PageID #: 19

#28 via his biweekly deductions, yet Defendant Credit Union's database listed 00
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or more Credit Union employees.

50.Credit Card Charges. Upon information and belief, unauthorized personal

charges were made on a credit card in the name of Plaintiff George Campos.

51. Inaccurate, Negative Credit History. Defendant Credit Union has reported

to one or more credit reporting agencies negative, inaccurate credit history for

the Plaintiffs as a result of Defendants' deceptive tactics.

52. Upon information and belief, one or more Credit Union employees concealed the

aforementioned schemes of malfeasance, improprieties, improper allocations,

and misappropriations, by: (1) using the usernames and passwords of other

employees of Defendant Credit Union to access their computers to carry out this

scheme; and (2) maintaining and hiding paper records in a separate file cabinet,

outside of the formal file keeping process, but still within the physical confines of

the Credit Union offices.

53. The Credit Union knew or should have known of the aforementioned

malfeasance, improprieties, improper allocations, and misappropriations, and

taken the proper steps to both prevent and uncover them.

DEFENDANT CREDIT UNION STONEWALLS THE PLAINTIFFS' EFFORTS
TO IDENTIFY ALL FICTITIOUS LOANS IN THEIR NAMES

54. On January 29, 2018, Plaintiff George Campos requested a copy of his file and 00
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loans from Mr. McCollum, who declined to produce those materials because "too 0
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Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 15 of 37 PageID #: 20

55. On February 9, 2018, an employee of Defendant Credit Union called Plaintiff

Heather Campos about a Dodge Charger, explaining that she had not received

any paperwork for the car. The Plaintiffs have not owned the Charger for four

years.

56. On February 14, 2018, an employee of Defendant Credit Union called the

Plaintiffs to collect on a credit card. She stated that Plaintiff George Campos owed

a balance of $1,200.00. When he informed her that he had disputed that balance,

she stated that she had no record of such dispute. She called Plaintiff George

Campos later that day to inform him that she could see the claim.

57. 808 KAR 6:105 "Records Required," mandates that a Credit Union shall keep

certain records in either paper or electronic format. These requirements include:
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finance loans maintained in separate files at all times; and (5) is an error is made, e
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it is to be appropriate corrected without erasures.

58. On February 15, 2018, Plaintiffs Campos requested a review of a full accounting

of: (1) direct deposits made; (2) loan payments made; (3) loan payoffs; and (4)
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any and all negative credit history reports to any and all credit reporting agencies, 0
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for the period of January 2, 2015 through February 15, 2018. The Credit Union, .,..
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Dvvid L. f'Jicholson. Jefferson Circuit Cicrk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 16 of 37 PageID #: 21

remedy was to file an Affidavit-signed under penalty ofperjury-for the loans in

dispute. When told there were numerous issues regarding the existence of both

loans and loan amounts that must be investigated prior to an accurate Affidavit

being signed, Plaintiffs Campos were still not afforded any opportunity to review

their Credit Union financial records.

CLASS ALLEGATIONS

59.A class action under CR 23.01 is the proper forum to bring Plaintiffs' claims. The

potential class is so large that joinder of all members would be impracticable.

Additionally, there are questions oflaw or facts that are central to resolution of

the controversy and are common to the class, the claims or defenses of the

representative parties are typical of the claims or defenses of the class, and the

representative parties will fairly and adequately protect the interests of the class.

60. This action satisfies all the requirements of CR 23 including numerosity,

commonality, typicality, adequacy, predominance and superiority.

a. The Class is so numerous that joinder of all members is impracticable.

Defendant Credit Union has over 3,500 members, and Mark Cantor, the

Director of Special Actions for the NCUA, stated that "a multitude of

members" were affected by Defendants' deceptive actions. While the exact

number is not known at this time, it is generally ascertainable by

appropriate discovery from Defendants and other sources, and from the

sworn testimony of class members.
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Page 14 of 27
i8-Ci-001360 03/07i20i8 David L. Nicholson. Jefferson Circuit Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 17 of 37 PageID #: 22

predominate over individual questions, and they include, without ""M
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Defendant Credit Union members; were fraudulent; were negligent;

and/ or violated the Kentucky Consumer Protection Act and/ or

federal law;

n. The extent of damages caused by Defendants' acts.

c. Plaintiffs' claims are typical of those of the other Class members because

Plaintiffs, like every other Class member, were exposed to virtually

identical actions by Defendants and suffered substantially similar harm as

a result of Defendants' actions.

d. Plaintiffs will fairly and adequately represent and protect the interests of

the Class in that they have no disabling conflicts of interest that would be

antagonistic to those of the other members of the Class. Plaintiffs seek no

relief that is antagonistic or adverse to the members of the Class and the

infringement of the rights and the damages they have suffered are typical

of other Class members.

e. The class litigation is an appropriate method for fair and efficient

adjudication of the claims involved. Class action treatment is superior to

all other available methods for the fair and efficient adjudication of the

controversy alleged herein. It will permit a large number of class members
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Page 15 of 27
Fi1ud i 8-Cl-001360 03107/2018 David L. Nicholson. Jefferson Circuit Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 18 of 37 PageID #: 23

individual actions would require. Class action treatment will permit the "'
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adjudication claims by certain class members, who could not individually 0
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afford to litigate a complex claim against a financial institution with over 0
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$28 million in assets. Further, even for those class members who could

afford to litigate such a claim, it would still be economically impractical.

61. The nature of this action and the nature of Kentucky laws available to Plaintiffs

and the Class make the use of the class action device a particularly efficient and

appropriate procedure to afford relief to Plaintiffs and the Class for the wrongs

alleged because Defendants would necessarily gain an unconscionable advantage

since they would be able to exploit and overwhelm the limited resources of each

individual Class member with superior financial and legal resources; the costs of

individual suits could unreasonably consume the amounts that would be

recovered; proof of a common course of conduct to which Plaintiffs were exposed

is representative of that experienced by the Class and will establish the right of

each member of the Class to recover on the cause of action alleged; and individual

actions would create a risk of inconsistent results and would be unnecessary and

duplicative of this litigation.

62. The proposed Classes are described as follows:

CLASS

All members of Defendant Credit Union who purchased Defendant Credit
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funds diverted to other accounts or otherwise stolen; (3) had fictitious loans obtained in 2
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Page 16 of 27
Filed 18-C:-OOi 360 03/C?/2018 David L. Nicholson. Jefferson Circuit Cierk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 19 of 37 PageID #: 24

their names, using their property as collateral or (4) who had false, inaccurate, or c,
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63. Plaintiffs reserve the right to modify or amend the definition of the proposed

Classes and to modify, amend or remove proposed subclasses, before the Court

determines whether certification is appropriate and as the parties engage in

discovery.

64. Plaintiffs will fairly and adequately protect the interests of the class. The interests

of the class representatives are consistent with those of the other members of the

class. In addition, the Plaintiffs are represented by experienced and able counsel

who have expertise in the areas of tort law, consumer protection law, and trial

practice.

65. This class action is superior to all other available methods for the fair and

efficient adjudication of this controversy. Because of the number and nature of

common questions of fact and law, multiple separate lawsuits would not serve the

interests of judicial economy.

BREACH OF FIDUCIARY DU'IY

66. Plaintiffs reiterate the allegations contained in the paragraphs above, as if fully

set forth herein.

67. Defendant Credit Union owes a fiduciary duty to all its members. This includes a

duty to verify its own records, rather than shift that responsibility to its members
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Filed /H-Cr-oo·:3ECi OJjC7/20i8 D;c1vrd L Nicho[sot:. Jefferson Circuit Cic,rk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 20 of 37 PageID #: 25

68.Further, Defendants provided advice and counsel to Plaintiff George Campos that "'~,
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"everything will be fine," that Defendants "will fix" problems with a credit card c
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statement and a loan he did not recognize, and that he would pay off his loans 0
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faster, as long as he agreed to increase the amount deducted biweekly from his

paycheck.

69. Defendant Credit Union's actions, as described above, breached its fiduciary duty

to its members.

70. Plaintiffs suffered damages as a result of the breach.

FRAUD

71. Plaintiffs reiterate the allegations contained in the paragraphs above, as if fully

set forth herein.

72. Defendants fraudulently induced Plaintiff George Campos to increase the amount

deducted from his biweekly direct deposits to $850.00 with materially false

statements.

73. When Plaintiff George Campos contacted Defendants regarding a credit card

statement and a loan he did not recognize, Defendants made a material

representation to him asserting that "everything will be fine" and of Defendant

Crowe's present intention that she "will fix it" ifhe increased the amount

deducted from his biweekly direct deposits.

74. This representation was false because the Defendants had been, and continued

their practice of, diverting those funds to one or more accounts controlled by
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76. Defendants made the false statement with the purpose of inducing Plaintiff co
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George Campos to increase the amount available to Defendants to carry out their 0
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77. Plaintiff George Campos did, in fact, rely upon this fraudulent representation,

and such reliance was reasonable or justifiable.

78. The misrepresentation caused injury to the Plaintiffs, including falsely inflated

loan balance(s) and negative credit history.

79. As a result of Defendants' actions, the Plaintiffs incurred damages in an amount

to be proved at trial.

FRAUDULENT OMISSION

So.Plaintiffs reiterate the allegations contained in the paragraphs above, as if fully

set forth herein.

81. The Defendants' fraud also includes deliberate omissions in their

communications to Plaintiffs.

82. Defendants knew that they were not conforming with their own internal policies

and procedures or with customary banking practices in managing member

accounts. Indeed, for five months after shifting responsibility to its members to

verify its own records, Defendant Credit Union retained Defendant Crowe in her

position as Vice President while she continued to perpetrate her scheme.

83. The Defendants had a duty to disclose the material fact that they were not

conforming with their own internal policies and procedures or with customary
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85. Because they did not disclose these material facts, Plaintiff George Campos was cc
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induced to place funds with Defendant Credit Union and to increase the amount C
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deducted from his biweekly direct deposits. a
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86.Plaintiffs have been injured by Defendants' omissions because they now are faced

with an unknown number of falsely inflated loan balances and inaccurate

negative credit histories.

CONVERSION

87. Plaintiffs reiterate the allegations contained in the paragraphs above, as if fully

set forth herein.

88.At all relevant times, the Plaintiffs have had legal title to the funds in their

accounts with Defendant Credit Union.

89.At all relevant times, the Plaintiffs had possession of or the right to possess those

funds.

90. The Defendants exercised dominion over those funds in a manner which denied

the Plaintiffs' rights to use and enjoy those funds, to the Defendants' own use and

beneficial enjoyment.

91. The Defendants intended to interfere with the Plaintiffs' possession of those

funds.

92. The Plaintiffs demanded to view and make copies of Defendant Credit Union's

records to determine the amount of funds stolen and/or embezzled.

93. Defendant Credit Union refused, while at the same time insisting that the
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Fried :8-C!,00136fl 03i07/20H1 Dc1vid L. Nidm!son. Jefferson Circuit Clod,;
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 23 of 37 PageID #: 28

94. Defendants' acts were the legal cause of the Plaintiffs' loss of funds in their 0:,
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BREACH OF DUTY OF GOOD FAITH AND FAIR DEALING

96. Plaintiffs reiterate the allegations contained in the paragraphs above, as if fully

set forth herein.

97. Both the credit union agreement and Electronic Funds Transfer Agreement

between the Plaintiffs and Defendant Credit Union created a contract. Upon

information and belief, Defendant Credit Union agreed under each contract to act

in a commercially reasonable fashion as a reasonably prudent financial

institution would act.

98.In every contract, there is an implied covenant of good faith and fair dealing.

99.Defendant Credit Union, through Defendant Crowe, breached the implied

covenants of good faith and fair dealing with the Plaintiffs.

100. As a direct and proximate result of Defendant Credit Union's actions, the

Defendants have caused damages incurred by Plaintiffs.

NEGLIGENT HIRING, RETENTION, AND SUPERVISION

101. Plaintiffs reiterate the allegations contained in the paragraphs above, as if

fully set forth herein.

102. Defendant Credit Union knew or reasonably should have known that

Defendant Crowe was unfit to serve as Vice President.
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Defendant Crowe as Vice President created an unreasonable risk of harm to the N,
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Plaintiffs. :;;:
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21
E·-C!--GC 1350 03/07/201 E. David L Nlci1olso1 1 , jefhnson Circuit Clei-k
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 24 of 37 PageID #: 29

104. Plaintiffs suffered damages as a result of the breach. ro
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NEGLIGENCE PER SE: UNLAWFUL ACCESS TO A COMPUTER AND "--
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105. Plaintiffs reiterate the allegations contained in the paragraphs above, as if

fully set forth herein.

106. By engaging in the course of conduct alleged herein, Defendants violated

KRS Chapter 434, Unlawful Access to a Computer and Misuse of Computer

Information.

107. KRS 434.845(1), regarding unlawful access to a computer, provides, "A

person is guilty of unlawful access to a computer in the first degree when he or

she, without the effective consent of the owner, knowingly and willfully, directly

or indirectly accesses, causes to be accessed, or attempts to access any computer

software, computer program, data, computer, computer system, computer

network, or any part thereof, for the purpose of: (a) Devising or executing any

scheme or artifice to defraud; or (b) Obtaining money, property, or services for

themselves or another by means of false or fraudulent pretenses, representations,

or promises."

108. KRS 434.855(1), regarding misuse of computer information, provides, "A

person is guilty of misuse of computer information when he or she: (a) Receives,

conceals, or uses, or aids another in doing so, any proceeds of a violation of KRS

434.84s; or (b) Receives, conceals, or uses or aids another in doing so, any books,

records, documents, property, financial instrument, computer software, 00
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computer program, or other material, property, or objects, knowing the same to 4-
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have been used in or obtained from a violation of KRS 434.845." 0
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Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 25 of 37 PageID #: 30

109. KRS 446.070 allows individuals injured by a person's violation of statutory .,.,
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or regulatory standard of care when the violated statute or regulation does not 0

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provide a civil remedy and the injured individual is within the class of persons the C
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legislature or administrative agency intended to protect with its statute or

regulation, respectively.

110. Defendants, as described above, used Defendant Credit Union's computer

database to (1) take out fictitious loans in members' names; (2) divert members'

automatic periodic electronic transfers to other accounts; and (3) obtain loans for

Defendant Crowe and/ or others, in the names of members and using members'

property as collateral. Further, Defendant Crowe concealed this scheme by using

the usernames and passwords of other employees of Defendant Credit Union to

access their computers to carry out this scheme.

111. Defendants' breach of the standard of care as defined by KRS 434.845(1)

and KRS 434.855(1) caused Plaintiffs to suffer damages.

BREACH OF CONTRACT

112. Plaintiffs reiterate the allegations contained in the paragraphs above, as if

fully set forth herein.

113. The credit union agreement between the Plaintiffs and Defendant Credit

Union created a contract. Upon information and belief, Defendant Credit Union

agreed under that contract to act in a commercially reasonable fashion as a

reasonably prudent financial institution would act.
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with the Plaintiffs. "'
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Filed if~-Ct-·OO~i36D 03/C?/2018 D2vid L. N:choison. Jefferson Circuit Ckrk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 26 of 37 PageID #: 31

115. As a direct and proximate result of Defendant Credit Union's actions, the 00
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Defendants have caused damages incurred by Plaintiffs. ....
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KENTUCKY CONSUMER PROTECTION ACT 0
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116. Plaintiffs reiterate the allegations contained in the paragraphs above, as if

fully set forth herein.

117. By engaging in the course of conduct alleged herein, Defendants engaged

in unfair, false, misleading, and/or deceptive acts or practices in the conduct of

trade and/ or commerce.

118. Plaintiffs are within the class of people the Kentucky legislature intended

to protect with the Kentucky Consumer Protection Act.

119. Plaintiffs purchased Defendant Credit Union's services for personal,

family, or household purposes.

120. Defendants engaged in false, unfair, deceptive, or misleading acts or

practices, including, but not limited to:

a. Setting up fictitious accounts in members' names;

b. Diverting members' recurring loan payments to accounts controlled by

Defendant Crowe; and

c. Obtaining loans for Defendant Crowe, using members' automobiles as

collateral;

121. As a result, the Defendants have violated the Kentucky Consumer

Protection Act, KRS 367.170.
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i8-C!-D0136G D3!G7i20'l8 Dz-:vid L. NicrJcdson ..Jefferson Circuit ClGi-k
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 27 of 37 PageID #: 32

123. Plaintiffs are entitled to consequential and punitive damages, pre- "'ro
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judgment interest, and attorneys' fees under the Kentucky Consumer Protection 0
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Act, KRS 367.170, et seq. C
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ELECTRONIC FUNDS TRANSFER ACT

124. Plaintiffs reiterate the allegations contained in the paragraphs above, as if

fully set forth herein.

125. By engaging in the course of conduct alleged herein, Defendants violated

the Electronic Funds Transfer Act, 15 U.S.C. §1693, et seq.

126. Defendants failed to make electronic funds transfers in accordance with

the terms and conditions of one or more of the Plaintiffs' accounts in the correct

amount or in a timely manner when properly instructed to do so by the Plaintiffs,

in violation of 15 U.S.C. §1693h(a)(1).

127. As a result of Defendant's foregoing violations of the Electronic Funds

Transfer Act, the Plaintiffs incurred actual damages in an amount to be proved at

trial.

128. The Plaintiffs are entitled to actual damages, statutory damages, and

attorney's fees pursuant to 15 U.S.C. § 1693m(a).

129. The class Plaintiffs are entitled to statutory damages pursuant to 15 U.S.C.

§ 1693m(a)(2)(B).

COMPUrER FRAUD AND ABUSE ACT

130. Plaintiffs reiterate the allegations contained in the paragraphs above, as if
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fully set forth herein. 0
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131. By engaging in the course of conduct alleged herein, Defendants violated ""N
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the Computer Fraud and Abuse Act, 18 U.S.C. § 1030. z
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Ftied : 8-CI 00 i 3GO s David L. r,,;ichoison. Jefferson Circuit Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 28 of 37 PageID #: 33

132. Defendant Credit Union is a "financial institution" as that term is defined ""
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in 18 U.S.C. § 103o(e)(4)(C). "-
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133. Defendant Crowe intentionally accessed a computer or computers without 0
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authorization or exceeded authorized access, and thereby obtained information

contained in a financial record of Defendant Credit Union.

134. Defendant Crowe intentionally accessed a computer or computers without

authorization or exceeded authorized access, and thereby obtained information

contained in a file of a consumer reporting agency on the Plaintiffs.

135. Defendant Crowe, knowingly and with intent to defraud, accessed one or

more protected computers without authorization, or exceeded authorized access.

By means of such conduct, Defendant Crowe furthered the intended fraud and

obtained the loans, automatic electronic transfers, and direct deposits described

herein.

136. Upon information and belief, Defendant Crowe's conduct caused loss

during any one-year period aggregating at least $5,000 in value.

137. Upon information and belief, Defendant Crowe's conduct caused damage

affecting 10 or more protected computers during any one-year period.

138. As a result of Defendants' foregoing violations of the Computer Fraud and

Abuse Act, the Plaintiffs incurred damages in an amount to be proved at trial.

139. Plaintiffs are entitled to economic damages.

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WHEREFORE, Plaintiffs George Campos and Heather Campos request that this 0
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1. Grant a jury trial; 2
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Page 26 of 27
Fi!w! 18-Cl-OO! 360 03/07/20! 8 David L. Nicholson. Jefforson Circu;t Clerk
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 29 of 37 PageID #: 34

2. Award the Plaintiffs compensatory damages, statutory damages, and punitive 0,
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damages; and pre- and post-judgment interest; 4-
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3. Allow the Plaintiffs to amend their Complaint; 0
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4. Order Defendants to pay Plaintiffs' attorneys' fees as allowed under the Kentucky

Consumer Protection Act, and the Electronic Funds Transfer Act, and encouraged

in equity;

5. Award the Plaintiffs such equitable relief as this Court deems proper; and

6. Award the Plaintiffs any and all other relief to which they appear entitled.

VERIFICATION AITACHED

Respectfully submitted,

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/s/J. Allan Cobb ..-
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J.ALLANCOBB ~)

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ANDREA R. HUNT C/l
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COBB LAW, PLLC er
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1303 Clear Springs Trace, Suite 100 :s:Cl
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ls/Ben Carter
BEN CARTER
BENCARTERLAW, PLLC
900 S. Shelby St.
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(502) 509-3231
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ben(ii) benearterlaw.com 0
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Counselfor Plaintiffs George Campos ....
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Filed 18-Cl-001360 David L. Nicholson, Jefferson Circuit Clerk

VERIFICA'fION

I, George Campos, hereby certify that I have read the foregoing Verified Class

Action Complaint and J1;1-ry Demand and that to the best of my knowledge and belief the

statements therein are true.

7th day of March 2018.

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I, Heather Campos, hereby certify that I have read the foregoing Verified Class

Action Complaint and Jury Demand and tha~ to the best of my knowledge and belief the
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Subscribed, aclmowledge, and sworn to before me by Heather Campos on this the

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Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 31 of 37 PageID #: 36

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Filed 18-Cl-001360 03/07/2018 David L. Nicholson, Jefferson Circuit Clerk
https://www.lmpocu.org/member-benefits 1/2
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 32 of 37 PageID #: 37

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ATTN: ALL CREDIT UNION MEMBERS

Re: STATEMENT VERIFICATION

PLEASE BE ADVISED THAT THE
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LOUISVILLE METRO POLICE OFFICERS
CREDIT UNION IS CONDUCTING A
STATEMENT VERIFICATION FOR
QUARTER ENDING JUNE 30, 2017.

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Filed 18-Cl-001360 03/07/2018 David L. Nicholson, Jefferson Circuit Clerk
https://www.lmpocu.org/statement-verification 1/3
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 34 of 37 PageID #: 39

18-Cl-001360statement Verification - LouisvillA1e\~li1 P-oUUi{;)~Wtlredlt'\1Jt!for¥D11 Circuit Clerk

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https:/fwww.lmpocu.org/statement-verification 2/3
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Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 36 of 37 PageID #: 41

3/71:ro~I@ d

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EXCLUSIVE: Police investi.gate possible theft at .:,:
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credit union that serves officers
Published: Thursday, November 10th 2017, 10:26 pm EST
llpdated:Thursday, November 10th 2017, 11:05 pm EST
By Natalia Martinez, Reporter CONNECT.~
LOUISVILLE, KY (WAVE)- Officers with the Loulsvflle Metro Police Department are just starting to uncover a possible theft that could affect many of
their own.

The investigation involves the Louisville Metro Police Officers Credit Union. It serves officers and their immediate families.

» MUGSHOTS: November 2017 RoynduR
LMPD tells us that representatives with the credit union contacted them to file a criminal report related to theft this week, WAVE 3 News
Investigative Reporter Natalia Martinez found out.

They could not tell us who they are investigating or how much money may be involved.
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MORE FROM WAVE3.COM ~0
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Representatives with the credit union did want to assure their clients that they are fully insured. They also wanted them to know that they are co
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Copyright 2017 WAVE3 News. All Rights Reserved. ·~
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Filed 18-Cl-001360 03/07/2018
http://www.wave3.com/story/369682241exclusive-police-investigate-possible-theft-at-credit-union-that-serves-officers 1/2
Case 3:18-cv-00196-CRS Document 1-2 Filed 03/28/18 Page 37 of 37 PageID #: 42

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Filed 18-Cl-001360 03/07/2018 David L. Nicholson, Jefferson Circuit Clerk
http://www.wave3.com/story/36968224/exclusive-police-investigate-possible-theft-at-credil-union-that-serves-officers 2/2
Case 3:18-cv-00196-CRS Document 1-3 Filed 03/28/18 Page 1 of 2 PageID #: 43
Case 3:18-cv-00196-CRS Document 1-3 Filed 03/28/18 Page 2 of 2 PageID #: 44