218 Broadway, LLC and Pentalon Construction, Inc. v. J.P. Morgan Chase Bank, N.A., et al.

                                                  USDC SDNY 
                                                  DOCUMENT 
UNITED STATES DISTRICT COURT                        ELECTRONICALLY FILED 
SOUTHERN DISTRICT OF NEW YORK                     DOC #: 
 nnn  nn nnn nnn mn nnn nnn mn         mannan KK        DATE FILED:_08/14/2026 
218 BROADWAY, LLC and PENTALON                     : 
CONSTRUCTION, INC.,                                : 
                   Plaintiffs,                :            25-cv-7386 (LJL) 
       -v-                                          OPINION AND  ORDER 
J.P. MORGAN CHASE BANK, N.A., et al.,              : 
                   Defendants.                : 

we                    ee KX 
LEWIS J. LIMAN, United States District Judge: 
 J.P. Morgan Chase Bank, N.A. (“Chase”) and Wells Fargo Bank, N.A. (“Wells Fargo” 
and, together with Chase, “Defendants”) each have moved to dismiss the complaint 
(“Complaint”) of Plaintiffs 218 Broadway, LLC (“218 Broadway”) and Pentalon Construction, 
Inc. (“Pentalon” and, together with 218 Broadway, “Plaintiffs”), pursuant to Federal Rule of 
Civil Procedure 12(b)(6),! for failure to state a claim for relief.  Dkt. Nos. 12, 15. 
 For the following reasons, the motions are granted. 
                          BACKGROUND 
 For purposes of these motions, the Court accepts as true the well-pleaded allegations of 
the Complaint as supplemented by the documents incorporated by reference. 
 Plaintiff 218 Broadway is a small Utah limited liability company with its principal place 
of business in Salt Lake City, Utah.  Dkt. No. 1-1 (“Compl.”) § 2.  It is a real estate developer 

' Wells Fargo also moves to dismiss the claims brought by Pentalon pursuant to Federal Rule of 
Civil Procedure 12(b)(1).  Dkt. No. 18 at 7, 12-13.  However, in their opposition brief, Plaintiffs 
clarify that only 218 Broadway brings a claim for declaratory judgment against Wells Fargo. 
Dkt. No. 22 at 12.  The Court, therefore, need not consider the Rule 12(b)(1) challenge raised by 
Wells Fargo. 

committed to affordable yet high-quality real estate development in Salt Lake City.  Id. ¶ 3.  
Plaintiff Pentalon is a well-known and longstanding commercial building contractor primarily 
working in Utah to create multi-family housing in urban areas of need, specializing in affordable 
and market-rate housing.  Id. ¶ 5.  It is a Utah domestic business corporation with its principal 
place of business in Salt Lake City.  Id. ¶ 4.                            

Defendants Chase and Wells Fargo are each global financial services firms based in the 
United States.  Id. ¶¶ 6–7.  Chase is a Delaware corporation with its headquarters in New York, 
New York.  Id. ¶ 6.  Wells Fargo is a Delaware corporation with its headquarters in Sioux Falls, 
South Dakota.  Id. ¶ 7.  Since its 2021 founding, 218 Broadway has banked exclusively with 
Wells Fargo, through which it sends and receives wire transfers of funds.  Id. ¶¶ 14, 21.   
Pentalon has used Chase for its banking needs for decades, although it has also used other banks.  
Id. ¶¶ 25–26.                                                             
Since 2021, 218 Broadway has been engaged in managing a high-profile construction 
project to bring forty-eight (48) residential units and one (1) commercial unit to downtown Salt 

Lake City (the “Project”).  Id. ¶ 12.  It anticipates that it will receive a profit of nearly $875,823 
from the Project while also providing substantial benefits to the local community.  Id. ¶ 13.  
Pentalon is 218 Broadway’s general contractor for the Project.  Id. ¶ 23.  Pentalon has calculated 
an anticipated profit of approximately $600,000 from the Project while providing substantial 
benefits to its workers and the local community.  Id. ¶ 24.               
Shortly before December 13, 2023, Pentalon sent an invoice to 218 Broadway seeking a 
milestone payment of $637,566.33 for work performed to date in furtherance of the Project.  Id. 
¶ 28.  On December 13, 2023, alongside the invoice, 218 Broadway requested wire instructions 
from Pentalon.  Id. ¶ 29.  That same day,2 218 Broadway received an email which included wire 
account instructions and beneficiary information for Pentalon (the “Wire Instructions”).  Id. ¶ 30.  
On its face, the email reflected that it was sent by Pentalon’s Controller, with a purported copy to 
Pentalon’s President and Pentalon’s Project Manager.  Id.  The Wire Instructions directed 218 
Broadway to send the money to a specific nine-digit account number ending in 0213 (the “0213 

Account”) and titled to “Pentalon Construction” at Chase.  Id. ¶ 32.  While the invoice was 
legitimate, the email containing the Wire Instructions that 218 Broadway received was forged by 
a hacker/fraudster monitoring and manipulating communications in real-time, unbeknownst to 
both 218 Broadway and Pentalon.  Id. ¶ 31.                                
The following day, December 14, 2023, 218 Broadway sought to pay the invoice in 
accordance with the Wire Instructions.  Id. ¶ 32.  218 Broadway executed the wire in person at 
Wells Fargo, through personnel who handled all such 218 Broadway wires.  Id. ¶ 35.  218 
Broadway gave Wells Fargo the name, address, and account number for the intended beneficiary 
of the wire, including the name “Pentalon Construction” with a Utah address, and the 0213 

Account information.  Id. ¶¶ 36, 38.  The wire was then executed for the full amount of the 
invoice, and 218 Broadway sent a confirmation email to Pentalon verifying that Wells Fargo sent 
the wire to Chase and that Pentalon would receive the wire at Chase later that day.  Id. ¶¶ 38–39. 
Pentalon was unable to find the funds wired by 218 Broadway in its accounts.  Id. ¶ 40.  
After Pentalon was unable to provide the Wire Instructions it purportedly sent to 218 Broadway, 
it was discovered that the email containing the Wire Instructions was created by a 



2 The Complaint alleges that the email was received on December 13, 2024.  Id. ¶ 30.  From 
context, it is apparent that the date contains a typographical error and should state 2023.   
hacker/fraudster and not by Pentalon.  Id. ¶¶ 45–46.  Pentalon never authorized the opening or 
usage of the 0213 Account (and indeed has entirely separate accounts at Chase).  Id. ¶ 51. 
Upon discovering the fraud, and within days of the wire being sent, 218 Broadway met in 
person with Wells Fargo to review the matter, open a fraud investigation, and place a wire recall 
request to Chase.  Id. ¶ 47.  Wells Fargo confirmed that it had sent the wire amount, the 

beneficiary account number, the beneficiary’s name, and the beneficiary address to Chase when 
processing the wire and that, although the beneficiary’s name and address were both accurate, 
the beneficiary account number identified in the Wire Instructions was not an accurate account 
number for Pentalon.  Id. ¶¶ 48–49.                                       
Pentalon immediately notified Chase of the fraud and sought its assistance in obtaining 
control of the 0213 Account.  Id. ¶ 54.  Despite making efforts to do so, however, Pentalon could 
not return the wire, obtain any bank statements or information on the 0213 Account, or instruct 
Chase regarding the 0213 Account opened without its permission.  Id. ¶ 51.  Chase responded to 
recall requests by stating that it was waiting for “its client” (the purported owner of the 0213 

Account) to decide if it would authorize the return of the stolen funds.  Id. ¶¶ 58, 61. 
As it turns out, and as the FBI confirmed, the 0213 Account was fraudulent, opened 
shortly before the wire was sent, and was essentially drained through further suspicious 
transactions within twenty-four (24) hours after being opened.  Id. ¶ 56. 
Plaintiffs allege two alternative theories on information and belief.  In the first 
alternative, Plaintiffs allege that Chase opened the 0213 Account in Pentalon’s name at the 
request of a fraudster who presented no legitimate authority or records authorizing that fraudster 
to open such account.  Id. ¶ 33.  In the second alternative, Plaintiffs allege that Chase allowed a 
fraudster to access the 0213 Account and use it to receive a transfer designated for Pentalon 
when Pentalon was not the named owner or beneficiary of the 0213 Account.  Id. ¶ 34.  Plaintiffs 
do not affirmatively allege that the 0213 Account was in Pentalon’s name or in the name of some 
other person or entity.                                                   
                 PROCEDURAL HISTORY                                  
This case was initiated by summons and complaint filed in New York State Supreme 

Court, New York County, Commercial Division on August 7, 2025.  Dkt. No. 1-1.  The 
Complaint contains four claims for relief: (1) Count I alleges aiding and abetting conversion 
against Chase and John Doe Chase Employees #1-#10, id. ¶¶ 63–68; (2) Count II alleges aiding 
and abetting fraud against Chase and John Doe Chase Employees #1-#10, id. ¶¶ 69–74; (3) 
Count III seeks a declaratory judgment against Chase for violation of UCC § 4A-207(c)(2),3 id. 
¶¶ 75–79; and (4) Count IV alleges a violation of UCC § 4A-207(c)(2)4 against Wells Fargo, id. 
¶¶ 80–88.                                                                 

3 There are several ambiguities in Plaintiffs’ UCC claims.  First, Plaintiffs do not specify in the 
Complaint under which state’s version of the UCC they bring claims.  Compl. ¶¶ 77–90.  
However, both Chase and Plaintiffs treat Plaintiffs’ claims as arising under NY UCC §4-A-207 
in their briefs.  See Dkt. No. 13 at 14–20; Dkt. No. 21 at 18–20; Dkt. No. 25 at 9–10.  Thus, the 
Court will treat Plaintiffs’ UCC claims as arising under New York law.  See Smart Recovery 
Techs. LLC v. Supplies Plus MI LLC, 

2026 WL 787788

, at *14 (S.D.N.Y. Mar. 20, 2026) 
(“Under New York law, where ‘[t]he parties’ briefs assume’ that a certain body of law controls, 
‘such implied consent is sufficient to establish choice of law.’” (quoting Krumme v. WestPoint 
Stevens Inc., 

238 F.3d 133, 138

 (2d Cir. 2000))).  Second, in the Complaint, Plaintiffs bring a 
claim against Chase under UCC § 4A-207(c)(2), the text of which maps onto NY UCC §4-A-
207(3)(b).  Compl. ¶¶ 77–81.  However, in their opposition brief, Plaintiffs argue that the 
language of “NY UCC § 4-A-207(b)(1)” entitles them to relief.  Dkt. No. 21 at 18.  The language 
cited by Plaintiffs comes from NY UCC § 4-A-207(2), which maps onto the text of UCC § 4-A-
207(b).  Because both Plaintiffs and Chase treat Plaintiffs’ claim as arising under NY UCC § 4-
A-207(2), the Court will do so as well.  See Dkt. No. 13 at 18–20; Dkt. No. 21 at 18; Dkt. No. 25 
at 9–10.                                                                  
4 Wells Fargo interprets Plaintiffs’ UCC claim as arising under Utah Code § 70A-4a-207.  Dkt. 
No. 13 at 8–11.  However, the language of Utah Code § 70A-4a-207(5) is identical to that of 
UCC § 4A-207(c)(2) and NY UCC § 4-A-207(3)(b).  Indeed, Wells Fargo cites several cases 
interpreting the NY UCC in its brief, Dkt. No. 18 at 8, and its arguments against liability under 
the Utah UCC apply fully to the NY UCC.  See Monreal v. Fleet Bank, 

735 N.E.2d 880, 883

 
(N.Y. 2000) (“One of the Uniform Commercial Code’s basic purposes is to make uniform the 
With the consent of Wells Fargo, Chase removed the case to this Court, pursuant to 

28 U.S.C. §§ 1441

 and 1446, invoking diversity jurisdiction under 

28 U.S.C. § 1332

.  Dkt. No. 1.   
On November 12, 2025, Defendants filed their respective motions to dismiss.  Dkt. Nos. 
12, 15.  Chase accompanied its motion to dismiss with a memorandum of law in support of the 
motion and the declaration of Sylvia E. Simson.  Dkt. Nos. 13–14.  Wells Fargo accompanied its 

motion to dismiss with a memorandum of law in support of the motion and the declarations of 
Erica D. Cook and Bryan D. Leinbach.  Dkt. Nos. 16–18.                    
On December 15, 2025, Plaintiffs filed memoranda of law in opposition to the respective 
motions to dismiss filed by Chase and Wells Fargo.  Dkt. Nos. 21, 22.  On January 22, 2026, 
Chase and Wells Fargo each filed reply memoranda of law in further support of their respective 
motions to dismiss.  Dkt. Nos. 25, 26.                                    
The Court denied Defendants’ motion for a stay of discovery, Dkt. No. 34, and discovery 
is proceeding in this action pursuant to a protective order, Dkt. No. 37.   
                    LEGAL STANDARD                                   
I.   Standards for Dismissal Under Fed. R. Civ. P. 12(b)(6) and 9(b)      
To survive a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), a complaint must 

include “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on 
its face.’”  Ashcroft v. Iqbal, 

556 U.S. 662, 678

 (2009) (quoting Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 570

 (2007)).                                                    
A complaint must offer more than “labels and conclusions,” “a formulaic recitation of the 
elements of a cause of action,” or “naked assertion[s]” devoid of “further factual enhancement” 
in order to survive dismissal.  Twombly, 

550 U.S. at 555, 557

.  The ultimate question is whether 

law among the various jurisdictions.”).  Therefore, the Court treats 218 Broadway’s claim 
against Wells Fargo as arising under NY UCC § 4-A-207(3).                 
“[a] claim has facial plausibility, [i.e.,] the plaintiff pleads factual content that allows the court to 
draw the reasonable inference that the defendant is liable for the misconduct alleged.”  Iqbal, 

556 U.S. at 678

.  “Determining whether a complaint states a plausible claim for relief will . . . be a 
context-specific task that requires the reviewing court to draw on its judicial experience and 
common sense.”  

Id. at 679

.  Put another way, the plausibility requirement “calls for enough fact 

to raise a reasonable expectation that discovery will reveal evidence [supporting the claim].”  
Twombly, 

550 U.S. at 556

; see also Matrixx Initiatives, Inc. v. Siracusano, 

563 U.S. 27, 46

 
(2011) (same).                                                            
In addition, claims for fraud must be pled with particularity to satisfy the heightened 
pleading requirements of Rule 9(b).  Particularity “requires that the plaintiff (1) detail the 
statements (or omissions) that the plaintiff contends are fraudulent, (2) identify the speaker, (3) 
state where and when the statements (or omissions) were made, and (4) explain why the 
statements (or omissions) are fraudulent.”  Eternity Glob. Master Fund Ltd. v. Morgan Guar. Tr. 
Co. of N.Y., 

375 F.3d 168, 187

 (2d Cir. 2004) (internal quotation marks omitted).  Although 

“[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally,” 
Fed. R. Civ. P. 9(b), “plaintiffs must allege facts that give rise to a strong inference of fraudulent 
intent.”  Lerner v. Fleet Bank, N.A., 

459 F.3d 273, 290

 (2d Cir. 2006).  Plaintiffs may raise this 
inference “either (a) by alleging facts to show that defendants had both motive and opportunity 
to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of 
conscious misbehavior or recklessness.”  

Id.

 at 290–91.                   
II.  Consideration of Documents Integral to the Complaint or Incorporated by 
Reference                                                            
In connection with its motion to dismiss, Chase has submitted and asked the Court to 
consider the following: (1) a “Business Signature Card,” Dkt. No. 14-1; and (2) wire transfer 
details, Dkt. No. 14-2.  The Business Signature Card is for the 0213 Account and was signed on 
December 8, 2018, and contains the account title “Theodore Kampenga III DBA Santa Clarita 
Air Conditioning and Heating.”  Dkt. No. 14-1.  The wire transfer details describe the credit 
party as Theodore Kampenga III DBA Santa Clarita Air Conditioning and H.  Dkt. No. 14-2.  
Wells Fargo has provided (1) 218 Broadway’s “Outgoing Wire Transfer Request,” Dkt. 

No. 16-1; (2) 218 Broadway’s “Business Account Application,” Dkt. No. 16-2; and (3) Wells 
Fargo’s “Deposit Account Agreement,” Dkt. No. 16-3.  The Outgoing Wire Transfer Request is 
dated December 14, 2023, with an originator name of “J Derek Allen” and beneficiary 
information for Pentalon Construction with an account number ending in 0213.  Dkt. No. 16-1 at 
2.5  The signature line contains the originator’s agreement to the information in the Outgoing 
Wire Transfer Request and to the terms and conditions of the Request, including that Wells 
Fargo was authorized to rely on the information in the Request in making the requested funds 
transfer.  Id. at 3.  The agreement states, in relevant part:             
If  a  wire  transfer  request  describes  the  person  to  receive  the  wire  transfer 
(“Beneficiary”) inconsistently by name and account number, the wire transfer may 
be made on the basis of the account number even if the account number identifies 
a person different from the Beneficiary.                             
Id. at 4.  The Deposit Account Agreement governs Wells Fargo and 218 Broadway’s contractual 
relationship and contains a similar provision:                            
If an instruction or order to transfer funds describes the party to receive payment 
inconsistently by name and account number, we’ll rely on the beneficiary account 
number even if the account number identifies a party different from the named 
recipient.                                                           


5 Citations to this docket entry use ECF pagination.                      
Dkt. No. 16-3 at 19.6  The Business Account Application, which was signed by a representative 
of 218 Broadway, indicates 218 Broadway’s agreement to be bound by the Deposit Account 
Agreement.  Dkt. No. 16-2 at 5.7                                          
Plaintiffs argue that the Court should disregard the two exhibits annexed to Chase’s 
motion and the three exhibits annexed to Wells Fargo’s motion.  See Dkt. No. 21 at 21–23; Dkt. 

No. 22 at 8–10.  The Court agrees that consideration of Chase’s exhibits at the motion-to-dismiss 
stage would be inappropriate.                                             
Two separate rules permit the Court to consider documents that are not contained within 
the four corners of the complaint.  See Tellabs, Inc. v. Makor Issues & Rts., Ltd., 

551 U.S. 308

, 
322–23 (2007) (on a motion to dismiss, “courts ordinarily examine . . . documents incorporated 
into the complaint by reference, and matters of which a court may take judicial notice”).  Outside 
of these circumstances, however, “[w]hen ruling on a Rule 12(b)(6) motion, the court is 
generally confined to the four corners of the complaint and the allegations contained therein.”  
Trundle & Co. Pension Plan v. Emanuel, 

2019 WL 4735380

, at *2 (S.D.N.Y. Sept. 27, 2019) 

(citing Roth v. Jennings, 

489 F.3d 499, 509

 (2d Cir. 2007)).              
First, under Federal Rule of Evidence 201, the Court may take judicial notice of a fact 
that is “not subject to reasonable dispute because it (1) is generally known within the trial court’s 
territorial jurisdiction; or (2) can be accurately and readily determined from sources whose 
accuracy cannot reasonably be questioned.”  Fed. R. Evid. 201(b).  Under Rule 201, “courts have 
considered newspaper articles, documents publicly filed with the SEC or FINRA, documents 
filed with a Secretary of State, documents filed with governmental entities and available on their 


6 Citations to this docket entry use ECF pagination.                      
7 Citations to this docket entry use ECF pagination.                      
official websites, and information publicly announced on certain non-governmental websites, 
such as a party’s official website.”  Wells Fargo Bank, N.A. v. Wrights Mill Holdings, LLC, 

127 F. Supp. 3d 156, 166

 (S.D.N.Y. 2015) (collecting cases).                  
None of the exhibits submitted by Defendants fall within the ambit of Rule 201.  The 
details of Chase and Wells Fargo’s internal banking records are not publicly known and cannot 

be “accurately and readily” verified by the Court.  See Church & Dwight Co. Inc. v. SPD Swiss 
Precision Diagnostics, GmbH, 

2014 WL 2526965

, at *7 (S.D.N.Y. June 3, 2014) (declining to 
consider exhibits that were not “public records” but rather internal documents held in 
confidence).  Moreover, Plaintiffs’ pleadings are at odds with at least a portion of the exhibits, 
calling into question their veracity.  See, e.g., Dkt. No. 21 at 22 (“[T]he Complaint pleads that the 
FBI determined that the Chase Account had recently been opened before the Wire, which raises 
all sorts of questions about the ‘Business Signature Card,’ which was issued years before the 
Wire.”).                                                                  
Second, relying on Federal Rule of Civil Procedure 10(c), the Second Circuit has long 

held that a complaint “is deemed to include any written instrument attached to it as an exhibit or 
any statements or documents incorporated in it by reference,” and that a court may consider 
documents incorporated in a complaint by reference on a 12(b)(6) motion without converting it 
to a Rule 56 motion for summary judgment.  Cortec Indus., Inc. v. Sum Holding L.P., 

949 F.2d 42

, 47–48 (2d Cir. 1991); see Nicosia v. Amazon.com, Inc., 

834 F.3d 220

, 230–31 (2d Cir. 2016) 
(“statements or documents incorporated in [the complaint] by reference” properly considered on 
motion to dismiss).  Those same principles permit the Court to consider on a 12(b)(6) motion to 
dismiss documents upon which the plaintiff relies in bringing suit, which are integral to the 
complaint, and as to which they had notice.  Cortec, 949 F.2d at 48.  For this rule to apply, the 
plaintiff must have relied on the document in drafting the complaint; notice and possession are 
not enough.  Nicosia, 

834 F.3d at 231

.  Generally, this “occurs when the material considered is a 
‘contract or other legal document containing obligations upon which the plaintiff’s complaint 
stands or falls, but which for some reason—usually because the document, read in its entirety, 
would undermine the legitimacy of the plaintiff’s claim—was not attached to the complaint.’”  

Id.

 (quoting Global Network Commc’ns, Inc. v. City of New York, 

458 F.3d 150

, 156 (2d Cir. 
2006)).  Finally, even where a document is considered “integral” to a complaint, “it must be clear 
on the record that no dispute exists regarding the authenticity or accuracy of the document.”  Id. 
(quoting DiFolco v. MSNBC Cable L.L.C., 

622 F.3d 104, 111

 (2d Cir. 2010)). 
The Court does not have the power to consider Chase’s exhibits under Rule 10(c).  
Plaintiffs have not referred to or relied on Chase’s “Business Signature Card” or wire transfer 
details in their pleadings; indeed, given that these are internal bank documents, one of which 
relates to an account owned by neither Plaintiff, it is dubious that Plaintiffs had any notice—
much less possession—of the documents.  Even if these documents could be considered integral 

to the Complaint, Plaintiffs did not have possession or notice of the documents prior to drafting 
the Complaint.                                                            
The same cannot be said about Wells Fargo’s exhibits, however.  While it is true that 
Plaintiffs do not make explicit reference to the Outgoing Wire Transfer Request, Business 
Account Application, or Deposit Account Agreement in the Complaint, Wells Fargo’s exhibits 
are “integral” to the Complaint since “the transactions at issue . . . would not have occurred but 
for Plaintiff’s execution of those documents.”  Jajati v. JPMorgan Chase Bank, N.A., 

711 F. Supp. 3d 169

, 173 (E.D.N.Y. 2024) (finding “Wire Transfer Outgoing Requests” and “Wire 
Transfer Agreements” to be integral to the complaint despite the complaint’s lack of reference to 
them); see also McCarthy v. JP Morgan Chase Bank, 

772 F. Supp. 3d 298

, 306–07 (E.D.N.Y. 
2025) (finding “Deposit Account Agreements” and “Wire Transfer Agreement Forms” to be 
integral to the complaint); Miceli Contracting Co., Inc. v. JPMorgan Chase Bank N.A., 

2025 WL 3239668

, at *5 (E.D.N.Y. Aug. 19, 2025) (same).  In other words, Wells Fargo’s exhibits are 
contracts which define 218 Broadway and Wells Fargo’s obligations—as will be discussed 

infra—in a manner dispositive of this case.  See Nicosia, 

834 F.3d at 231

.  Moreover, no dispute 
exists regarding the authenticity or accuracy of the exhibits.  While Plaintiffs claim that they 
“have no way of knowing whether these documents are truly complete, accurate copies of Wells 
Fargo’s purported corporate documents,” Plaintiffs have not actually called into question any 
element of the documents as being inaccurate.  Dkt. No. 22 at 10.         
The Court will therefore consider the exhibits annexed to Wells Fargo’s motion in 
deciding the motions to dismiss.                                          
                      DISCUSSION                                     
Plaintiffs bring four claims—three against Chase and one against Wells Fargo.  Plaintiffs 
claim that Chase is liable for (1) aiding and abetting conversion; (2) aiding and abetting fraud; 

and (3) violating NY UCC § 4A-207(2).  Compl. ¶¶ 65–81.  218 Broadway claims that Wells 
Fargo is liable for violating NY UCC § 4A-207(3).  Id. ¶¶ 82–90.          
No issues of standing must be addressed by the Court.  Wells Fargo initially challenged 
Pentalon’s standing to bring claims against it, Dkt. No. 18 at 12–13, but Plaintiffs have since 
clarified that only 218 Broadway brings suit under NY UCC § 4A-207(3) against Wells Fargo, 
Dkt. No. 22 at 12.                                                        
I.   Aiding and Abetting Fraud                                            
“To establish liability for aiding and abetting fraud under New York law, ‘the plaintiffs 
must show (1) the existence of a fraud; (2) the defendant’s knowledge of the fraud; and (3) that 
the defendant provided substantial assistance to advance the fraud’s commission.’”  Krys v. 
Pigott, 

749 F.3d 117, 127

 (2d Cir. 2014) (alteration accepted) (quoting Lerner, 

459 F.3d at 292

). 
“The particularity requirements of Federal Rule of Civil Procedure 9(b) apply to claims of aiding 
and abetting fraud no less than to direct fraud claims.”  IMG Fragrance Brands, LLC v. 
Houbigant, Inc., 

759 F. Supp. 2d 363, 383

 (S.D.N.Y. 2010); see Green Star Energy Sols., LLC v. 

Edison Props., LLC, 

2022 WL 16540835

, at *14 (S.D.N.Y. Oct. 28, 2022).    
Plaintiffs’ claim fails on two grounds: first, the failure to establish Chase’s actual 
knowledge of the underlying fraud; and second, the failure to show that Chase substantially 
assisted the execution of the underlying fraud.                           
A.   Actual Knowledge                                                
Assuming arguendo that Plaintiffs have adequately stated a claim for fraud, Plaintiffs 
have not sufficiently alleged Chase’s knowledge of the fraud with the required specificity.  
“While actual knowledge of the underlying fraud may be averred generally under Rule 9(b), the 
plaintiff must accompany the general allegation with allegations of specific ‘facts giving rise to a 
strong inference of actual knowledge regarding the underlying fraud.’”  ICD Cap., LLC v. 

CodeSmart Holdings, Inc., 

2020 WL 3961617

, at *6 (S.D.N.Y. July 13, 2020) (internal quotation 
marks and citation omitted), aff’d, 

842 F. App’x 705

 (2d Cir. 2021) (summary order).  “The 
requirement that a plaintiff allege ‘actual knowledge’ to state a claim for aiding and abetting 
fraud is ‘a distinct requirement from the scienter required to allege the underlying fraud.’”  
Berdeaux v. OneCoin Ltd., 

561 F. Supp. 3d 379

, 412 (S.D.N.Y. 2021) (quoting In re Agape 
Litig., 

773 F. Supp. 2d 298, 308

 (E.D.N.Y. 2011)).                        
“Actual, not constructive, knowledge is required to impose liability on an alleged aider 
and abettor.”  Rosner v. Bank of China, 

2008 WL 5416380

, at *4 (S.D.N.Y. Dec. 18, 2008) 
(citing Lerner, 459 F.3d at 292–93), aff’d, 

349 F. App’x 637

 (2d Cir. 2009) (summary order); see 
Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 

446 F. Supp. 2d 163

, 201 n.279 (S.D.N.Y. 2006) (collecting cases); Berman v. Morgan Keegan & Co., Inc., 

2011 WL 1002683

, at *10 (S.D.N.Y. Mar. 14, 2011) (“Mere allegations of constructive knowledge or 
recklessness are insufficient to satisfy the knowledge requirement.” (internal quotation marks 
omitted)), aff’d, 

455 F. App’x 92

 (2d Cir. 2012) (summary order).  Constructive knowledge is 

“[k]nowledge that one using reasonable care or diligence should have, and therefore that is 
attributed by law to a given person.”  Fraternity Fund Ltd. v. Beacon Hill Asset Mgmt., LLC, 

479 F. Supp. 2d 349, 368

 (S.D.N.Y. 2007) (quoting Black’s Law Dictionary (8th ed. 2004)). 
Plaintiffs allege that if Chase followed “federal law,” “the industry standard of care in 
managing large-dollar commercial accounts,” and internal “Chase policies,” it would have 
caught and had actual knowledge of the underlying fraud.  Compl. ¶¶ 33–34.  Under their first 
alternative theory of liability, Plaintiffs claim that had Chase followed proper procedure, it would 
have known that the 0213 Account was fraudulent since Pentalon had a “prior banking 
relationship” with Chase and knew Pentalon’s “unique identifiers.”  Dkt. No. 21 at 12.  

Similarly, under their second theory, Plaintiffs allege that had Chase followed procedure, it 
would have noticed the mismatch in names between the wire transfer’s intended beneficiary and 
the owner of the 0213 Account.  

Id.

                                       
Plaintiffs do not identify the federal law, industry standard of care, or Chase policies that 
would have put Chase on notice of the alleged fraud.  Their pleading is defective for that reason 
alone.  See Zamora v. FIT Int’l Grp. Corp., 

834 F. App’x 622

, 628 (2d Cir. 2020) (summary 
order) (“Plaintiffs’ speculation that JPMorgan must have known about the scheme because it had 
in place unspecified anti-money-laundering controls is similarly insufficient to support a strong 
inference of actual knowledge here.”); cf. Berman, 

2011 WL 1002683

, at *10 (“‘Know Your 
Customer Rules’ and other various stock exchange rules and monitoring requirements . . . at 
most speak to whether [the defendant] should have known of the fraud; they do not reflect actual 
knowledge of fraud.”).                                                    
Plaintiffs do not plead facts establishing strong circumstantial evidence of conscious 
misbehavior or recklessness.  They do not affirmatively plead that the 0213 Account was in the 

name of Pentalon or what procedures there were in place that Chase should be presumed to have 
followed that would have alerted it to the fraudster.  Plaintiffs also do not plead facts that would 
establish that Chase knew that a wire directed to the 0213 Account should be deposited in an 
account other than the 0213 Account, even if the name of the beneficiary did not match the name 
on the 0213 Account.  The standard practice as reflected in the UCC is to match only account 
numbers.  UCC § 4-A-207 cmt. 2.  Nor do Plaintiffs plead facts suggesting a motive for why 
Chase, a major financial institution built upon consumer trust, would knowingly allow its 
accounts to be used for fraud.  See In re Refco Inc. Sec. Litig., 

826 F. Supp. 2d 478, 517

 
(S.D.N.Y. 2011) (“Actual knowledge may also be implied from a strong inference of fraudulent 

intent, and a motive is probative of that inference.”) (internal quotation marks and citation 
omitted).                                                                 
Even if Chase identified some “red flags” but negligently failed to act on its suspicions, 
that would not permit a plausible inference of knowledge.  See Lerner, 

459 F.3d at 294

 (finding 
that although several banks’ knowledge of “red flags”, i.e., overdrawn accounts, dishonored 
checks, and transfers of money to a personal account, “may have put the banks on notice that 
some impropriety may have been taking place, those alleged facts do not create a strong 
inference of actual knowledge of . . . theft”); Rosner, 

2008 WL 5416380

, at *6 (“New York 
courts overwhelmingly recognize that a plaintiff does not satisfy Rule 9(b) by alleging a bank’s 
actual knowledge of a fraud based on allegations of the bank’s suspicions or ignorance of 
obvious ‘red flags’ or warning signs indicating the fraud’s existence.”) (collecting cases); 
Chemtex, LLC v. St. Anthony Enters., Inc., 

490 F. Supp. 2d 536, 547

 (S.D.N.Y. 2007) (“[E]ven 
alleged ignorance of obvious warning signs of fraud will not suffice to adequately allege ‘actual 
knowledge.’”).  Pleadings which allege that Chase should have known about the underlying 

fraud are not the same as pleadings which allege that Chase did, in fact, know about the fraud.  
See Jacobs v. Barclays Bank PLC, 

2025 WL 41644

, at *2 (S.D.N.Y. Jan. 7, 2025), aff’d, 

2025 WL 3537338

 (2d Cir. Dec. 10, 2025) (summary order); Heinert v. Bank of Am., N.A., 

410 F. Supp. 3d 544

, 549–50 (W.D.N.Y. 2019), aff’d, 

835 F. App’x 627

 (2d Cir. 2020) (summary 
order); Huang v. Hong Kong & Shanghai Banking Corp. LTD, 

2022 WL 4123879

, at *5 
(S.D.N.Y. Sept. 9, 2022).                                                 
B.   Substantial Assistance                                          
Moreover, even if Plaintiffs could establish Chase’s actual knowledge of the underlying 
fraud, Plaintiffs’ claim fails for the independent reason that Plaintiffs have failed to adequately 
allege that Chase provided “substantial assistance” to the fraudster.     

“To plead substantial assistance, a plaintiff generally must plead facts from which the 
Court can infer that (1) the defendant affirmatively assisted, helped conceal, or failed to act when 
required to enable the fraud to proceed; and (2) ‘the actions of the aider/abettor proximately 
caused the harm on which the primary liability is predicated.’”  Berdeaux, 561 F. Supp. 3d at 416 
(quoting Rosner, 

2008 WL 5416380

, at *12).  “‘But-for’ causation is insufficient; aider and 
abettor liability requires the injury to be a direct or reasonably foreseeable result of the conduct.”  

Id.

 (quoting Cromer Fin. Ltd. v. Berger, 

137 F. Supp. 2d 452, 470

 (S.D.N.Y. 2001)).  “Inaction 
on the part of the alleged aider and abettor ‘ordinarily should not be treated as substantial 
assistance, except when it was designed intentionally to aid the primary fraud or it was in 
conscious and reckless violation of a duty to act.’”  Rosner, 

2008 WL 5416380

, at *5 (quoting 
Armstrong v. McAlpin, 

699 F.2d 79, 91

 (2d Cir. 1983)).                    
Banks regularly provide “[r]outine banking services, including opening accounts, 
executing wire transfers, and processing checks” to their customers.  Zamora v. JPMorgan 
Chase Bank, N.A., 

2015 WL 4653234

, at *3 (S.D.N.Y. July 31, 2015).  Unless the bank has 

violated a duty to act or engages in activities intentionally designed to facilitate the fraud, the 
provision of such services does not constitute “substantial assistance.”  

Id.

 (finding defendant did 
not substantially assist by failing to flag accounts opened “without a social security or taxpayer 
identification number”).  Indeed, “[i]t is well-established that ‘the mere fact that participants in a 
fraudulent scheme use accounts at a financial institution to perpetrate it, without more, does not 
in and of itself rise to the level of substantial assistance.’”  Berman v. Morgan Keegan & Co., 
Inc., 

455 F. App’x 92, 96

 (2d Cir. 2012) (summary order) (quoting S.E.C. v. Lee, 

720 F. Supp. 2d 305, 330

 (S.D.N.Y. 2010)); see also Berdeaux, 561 F. Supp. 3d at 416 (“As a matter of firmly 
established Second Circuit precedent, such conduct is patently insufficient to plead substantial 

assistance necessary to support a claim for aiding and abetting fraud.”) (collecting cases).  
In Jacobs v. Barclays Bank PLC, a court in this District dismissed a claim of aiding and 
abetting fraud against Barclays after the plaintiff, Joshua Jacobs, was fraudulently induced by a 
third party to wire money into two Barclays bank accounts.  

2025 WL 41644

, at *1.  Like 
Plaintiffs in the instant case, Jacobs alleged that Barclays aided and abetted the fraud by: “(1) 
failing to confirm the identities of [defendant account] holders; (2) failing to halt, freeze, or 
reverse the fraudulent wire transfers; and (3) refusing [plaintiff’s] request for information about 
the [fraudulent accounts].”  Id. at *2.  Judge Abrams concluded that since Jacobs had failed to 
allege that Barclays’ services to the fraudsters “differed from those provided to other customers,” 
that is, they were “routine banking transactions,” Barclays’ actions did not rise to the level of 
“substantial assistance.”  Id. at *3; see also Huang, 

2022 WL 4123879

, at *5 (“The caselaw is 
clear that approving transfers, even where there is a suspicion of fraudulent activity, does not 
amount to substantial assistance.” (quoting In re Agape Litig., 

681 F. Supp. 2d 352, 365

 
(E.D.N.Y. 2010))).                                                        

Jacobs is on all fours with this case.  Plaintiffs have not alleged that Chase provided the 
fraudster with any assistance beyond routine banking services.  Consequently, Plaintiffs’ aiding 
and abetting fraud claim fails as a matter of law.                        
II.  Aiding and Abetting Conversion                                       
Plaintiffs’ aiding and abetting conversion claim against Chase fails on the same grounds 
as their aiding and abetting fraud claim.  “Under New York law, the elements of . . . aiding and 
abetting a conversion[] and aiding and abetting a fraud are substantially similar.  The claims 
require the existence of a primary violation, actual knowledge of the violation on the part of the 
aider and abettor, and substantial assistance.”  Weshnak v. Bank of Am., N.A., 

451 F. App’x 61

, 
61–62 (2d Cir. 2012) (summary order) (citing Kirschner v. Bennett, 

648 F. Supp. 2d 525, 533

 

(S.D.N.Y. 2009)).  Plaintiffs have failed to plead sufficient facts supporting an inference that 
Chase had actual knowledge of the underlying conversion or substantially assisted the 
conversion.                                                               
Plaintiffs’ allegations could be understood to sound in conversion itself.  Plaintiffs do not 
allege that Chase merely supported the fraudster’s conversion of the funds.  Instead, Plaintiffs 
claim that “Chase exercised dominion and control over the Wire” by (1) refusing to take steps to 
return the funds transfer after being notified of the fraud by Plaintiffs and Wells Fargo, and (2) 
allowing the wire to be processed despite the mismatch in the intended beneficiary and account 
owner.  Dkt. No. 21 at 17.  Even construing the Complaint to allege a claim against Chase as 
principal rather than as aider and abettor, it fails to state a claim for relief.  “Conversion is the 
‘unauthorized assumption and exercise of the right of ownership over goods belonging to another 
to the exclusion of the owner’s rights.’”  Simon v. Weaver, 

327 F. Supp. 2d 258, 262

 (S.D.N.Y. 
2004) (quoting Vigilant Ins. Co. of Am. v. Housing Auth. of the City of El Paso, Texas, 

660 N.E.2d 1121, 1126

 (N.Y. 1995)); see also LoPresti v. Terwilliger, 

126 F.3d 34, 41

 (2d Cir. 

1997).  “To plausibly allege a conversion claim, a plaintiff must show: ‘(1) the property subject 
to conversion is a specific identifiable thing; (2) plaintiff had ownership, possession or control 
over the property before its conversion; and (3) defendant exercised an unauthorized dominion 
over the thing in question, to the alteration of its condition or to the exclusion of the plaintiff’s 
rights.’”  Benex LC v. First Data Merch. Servs. Corp., 

2016 WL 1069657

, at *5 (E.D.N.Y. Mar. 
16, 2016) (quoting Moses v. Martin, 

360 F. Supp. 2d 533, 541

 (S.D.N.Y. 2004)); see Kim v. Lee, 

576 F. Supp. 3d 14

, 33 (S.D.N.Y. 2021), aff’d, 

2023 WL 2317248

 (2d Cir. Mar. 2, 2023) 
(summary order).  “Two key elements of conversion are (1) plaintiff’s possessory right or 
interest in the property and (2) defendant’s dominion over the property or interference with it, in 

derogation of plaintiff’s rights.”  Colavito v. N.Y. Organ Donor Network, Inc., 

860 N.E.2d 713, 717

 (N.Y. 2006) (internal citations omitted).                             
Defendants argue that Plaintiffs cannot make out an underlying claim of conversion for 
two reasons.  See Dkt. No. 13 at 12–14; Dkt. No. 25 at 8–9.  First, that the funds wired to Chase 
are not “specific and identifiable property,” Dkt. No. 13 at 13–14, and second, that Chase did not 
exercise “unauthorized dominion” over the wire, Dkt. No. 25 at 9.         
Plaintiffs’ funds are “specific and identifiable” property.  Chase is correct in stating that 
funds deposited with one’s own bank are not specific and identifiable.  This is because customers 
do not retain title over money deposited with a bank; instead, “the relationship between a bank 
and a depositor is the strictly contractual one of debtor and creditor.”  Tevdorachvili v. Chase 
Manhattan Bank, 

103 F. Supp. 2d 632, 643

 (E.D.N.Y. 2000); see also Miller v. Wells Fargo 
Bank Int’l Corp., 

540 F.2d 548, 560

 (2d Cir. 1976) (“Money deposited in a general account at a 
bank does not remain the property of the depositor.  Upon deposit of funds at a bank, the money 
deposited becomes the property of the depositary bank; the property of the depositor is the 

indebtedness of the bank to it, a mere chose in action.”).  Consequently, “when the bank has 
misused the depositor’s money, the depositor’s remedy lies in contract—not tort.”  Newbro v. 
Freed, 

409 F. Supp. 2d 386

, 395–96 (S.D.N.Y. 2006) (citing Tevdorachvili, 

103 F. Supp. 2d at 643

), aff’d, 

2007 WL 642941

 (2d Cir. Feb. 27, 2007) (summary order).  But no such contractual 
relationship exists between 218 Broadway and Chase.  And a specific sum of money wired to a 
specific bank account by a non-customer is “specifically identifiable” property for which a claim 
of conversion can be brought.  See, e.g., Constrafor, Inc. v. Fed. Deposit Ins. Corp., 

2025 WL 2636588

, at *5 (S.D.N.Y. Sept. 12, 2025); ADP Inv. Commc’n Servs., Inc. v. In House Att’y 
Servs., Inc., 

390 F. Supp. 2d 212

, 224–25 (E.D.N.Y. 2005); Newbro, 

409 F. Supp. 2d at 397

. 

Plaintiffs’ conversion claims fail, however, because Chase did not exercise “unauthorized 
dominion” over Plaintiffs’ funds.  Where the defendant’s exercise of dominion is authorized, 
when it follows the plaintiff’s instructions, no claim of conversion can lie.  See, e.g., Dynamic 
Worldwide Logistics, Inc. v. Exclusive Expressions, LLC, 

77 F. Supp. 3d 364, 371

 (S.D.N.Y. 
2015) (“According to the Complaint, [plaintiff’s] employee authorized the transfer of cargo . . . . 
Therefore, the Complaint fails to adequately plead a claim for conversion.”); see also Nat’l 
Steamship Co. v. Sheahan, 

25 N.E. 858, 859

 (N.Y. 1890) (affirming dismissal of action for 
replevin of allegedly converted steamship tickets “because the defendant neither unlawfully 
obtained possession of the tickets nor wrongfully disposed of them”).  A party temporarily 
entrusted with property can follow its owner’s instructions to deliver that property to a third 
party without assuming liability in tort.  See Dynamic Worldwide Logistics, 

77 F. Supp. 3d at 371

 
(“Second, when possession of the property by a defendant was initially lawful, an action for 
conversion only arises if plaintiff made demands for return of the property or a defendant 
wrongfully transferred or dispossessed of it.”).  Chase was fully authorized by 218 Broadway to 

transfer the wire to the 0213 Account.  Compl. ¶¶ 37–38.  218 Broadway only sought to 
repossess the funds after the money had already been transferred to the 0213 Account.  Id. ¶ 58.  
At that point, the owner of the 0213 Account—whether it was Pentalon or not—was entitled to 
the money in the 0213 Account absent a legal showing that the money was acquired unlawfully, 
and in the absence of such a showing, 218 Broadway had no claim to the money.  Thus, it cannot 
be said that Chase exercised unauthorized dominion over the funds by refusing to return them to 
218 Broadway.                                                             
III.  Violation of NY UCC § 4-A-207(2) by Chase                           
Plaintiffs also seek a declaratory judgment against Chase under NY UCC § 4-A-207(2).  
NY UCC § 4-A-207(2) addresses the circumstance in which a payment beneficiary’s 

bank receives a payment order with an inconsistent account owner and account identification 
number.  Specifically, it states:                                         
(2) If a payment order received by the beneficiary’s bank identifies the beneficiary 
both by name and by an identifying or bank account number and the name and 
number identify different persons, the following rules apply:        
(a) Except as otherwise provided in subsection (3), if the beneficiary’s bank does 
not know that the name and number refer to different persons, it may rely on the 
number  as  the  proper  identification  of  the  beneficiary  of  the  order.    The 
beneficiary’s bank need not determine whether the name and number refer to the 
same person.                                                         
(b) If the beneficiary’s bank pays the person identified by name or knows that the 
name and number identify different persons, no person has rights as beneficiary 
except the person paid by the beneficiary’s bank if that person was entitled to 
receive payment from the originator of the funds transfer.  If no person has rights 
as beneficiary, acceptance of the order cannot occur.                
NY UCC § 4-A-207(2).                                                      
The drafters of § 4-A-207(2) specifically contemplated the fact that a “very large 
percentage of payment orders” issued by banks are processed by “automated means using 
machines capable of reading orders on standard formats that identify the beneficiary by an 
identifying number or the number of a bank account.”  Id. § 4-A-207 cmt. 2.  These orders are 
often processed “without human reading,” and with intended beneficiary names often playing 
“no part in the process of payment,” even if names are collected.  Id.  Consequently, § 4-A-
207(2) was drafted to allocate risk when mismatches in the intended beneficiary and account 
number—whether due to error or fraud—inevitably arose.  See 3 White, Summers, & Hillman, 

Uniform Commercial Code § 24:6 (6th ed.).                                 
The goal of § 4-A-207(2) was to clarify the responsibilities of banks in verifying the 
details of payment orders.  Id. (comparing Sec. Fund Servs., Inc. v. Am. Nat’l Bank and Tr. Co. 
of Chicago, 

542 F. Supp. 323

 (N.D. Ill. 1982) with Bradford Tr. Co. of Boston v. Texas Am. 
Bank-Houston, 

790 F.2d 407

 (5th Cir. 1986)).  Section 4-A-207(2)(a) made clear that banks had 
no duty to discover and reject mismatched orders—thereby allowing society to reap the benefits 
of automated payments, namely “speedy, inexpensive, and not labor intensive” fund transfers.  3 
White, Summers, & Hillman, Uniform Commercial Code § 24:6 (6th ed.); see also NY UCC § 4-
A-207 cmt. 2 (automated transfers allow “substantial economies of operation” and lowered 

“possibility of clerical error”).  Only when a bank was already aware of a mismatch does it have 
a duty to stop a funds transfer, NY UCC § 4-A-207(2)(b), thus imposing no additional duty to 
discover mismatched information and imposing liability on the party which knowingly could 
have prevented the mismatched payment.  See 3 White, Summers, & Hillman, Uniform 
Commercial Code § 24:6 (6th ed.).                                         
Plaintiffs have not alleged a violation of § 4-A-207(2) under either of their theories.  
Plaintiffs’ first alternative theory of liability fails to state a claim under § 4-A-207(2).  To 
refresh, Plaintiffs allege that Chase allowed the fraudster to open the 0213 Account under 

Pentalon’s name.  But if the fraudster had been able to open an account at Chase in Pentalon’s 
name, the trigger for § 4-A-207(2)—a mismatch in intended beneficiary and account owner 
name—would be absent.  Plaintiffs may or may not be able to state a claim on a different theory.  
They cannot state a claim under § 4-A-207(2).                             
Plaintiffs’ second alternative theory passes this initial checkpoint but flounders on other 
grounds.  Plaintiffs’ second theory is that Chase allowed the wire transfer to be executed despite 
a mismatch in intended beneficiary and account owner names.  To begin, § 4-A-207(2)(a) 
permits a bank to “rely on the [account] number as the proper identification of the beneficiary of 
the order,” assuming the bank “does not know that the name and [account] number refer to 

different persons.”  NY UCC § 4-A-207(2)(a).  As discussed above, Plaintiffs have not 
sufficiently alleged that Chase had “actual knowledge” of the name mismatch at the time it 
completed the wire transfer.  See Frankel-Ross v. Congregation OHR Hatalmud, 

2016 WL 4939074

, at *3 (S.D.N.Y. Sept. 12, 2016); see also UCC § 4-A-207 cmt. 2 (“‘Knowledge’ and 
‘knows’ are defined . . . to mean actual knowledge.”).  Section 4-A-207 does not presume a bank 
had knowledge of a mismatch merely because a mismatched detail appeared on a process 
payment order—otherwise the distinction between § 4-A-207(2)(a) and § 4-A-207(2)(b) would 
be superfluous, imposing liability on banks wherever a plaintiff could show a mismatched 
transfer was approved.  See 3 White, Summers, & Hillman, Uniform Commercial Code § 24:6 
(6th ed.).                                                                
Moreover, Plaintiffs’ § 4-A-207(2) claim independently fails due to the lack of privity 
between Plaintiffs and Chase.  UCC § 4-A-402 “‘provides the remedial scheme’ for violations of 
Sec. 4-A-207.”  Wellton Int’l Express v. Bank of China (Hong Kong), 

612 F. Supp. 3d 358

, 364 

(S.D.N.Y. 2020) (quoting Frankel-Ross, 

2016 WL 4939074

, at *3); UCC § 4-A-207 cmt. 2 
(describing payment obligations arising from a misdescription as being governed by § 4-A-402).  
Section 4-A-202 “incorporates a ‘privity’ requirement so that the remedy applies only between 
the parties to a particular payment order and not to the parties to the funds transfer as a whole.”  
Wellton, 612 F. Supp. 3d at 364 (quoting Grain Traders, Inc. v. Citibank, N.A., 

160 F.3d 97, 101

 
(2d Cir. 1998)) (alterations accepted).  As the beneficiary bank, Chase was not party to the 
payment order (which occurred between 218 Broadway and Wells Fargo).  Likewise, although 
Pentalon was a customer of Chase, it too was not party to the payment order between 218 
Broadway and Wells Fargo.  Therefore, neither Plaintiff can make out a claim under § 4-A-

207(2) against Chase or Wells Fargo.                                      
IV.  Violation of NY UCC § 4-A-207(3) by Wells Fargo                      
218 Broadway also seeks the refund of 218 Broadway’s wire transfer from Wells Fargo 
under NY UCC § 4-A-207(3).                                                
Again, 218 Broadway’s first alternative theory of liability has no leg to stand on under 
§ 4-A-207(2) since it assumes no mismatch in intended beneficiary and account holder names. 
218 Broadway’s second theory also fails, but for different reasons.  218 Broadway brings 
its claim under § 4-A-207(3), which states that:                          
(3) If (i) a payment order described in subsection (2) is accepted, (ii) the originator’s 
payment order described the beneficiary inconsistently by name and number, and 
(iii) the beneficiary’s bank pays the person identified by number as permitted by 
paragraph (a) of subsection (2), the following rules apply:          
(a) If the originator is a bank, the originator is obliged to pay its order. 
(b) If the originator is not a bank and proves that the person identified by number 
was not entitled to receive payment from the originator, the originator is not obliged 
to pay its order unless the originator’s bank proves that the originator, before 
acceptance of the originator’s order, had notice that payment of a payment order 
issued by the originator might be made by the beneficiary’s bank on the basis of an 
identifying or bank account number even if it identifies a person different from the 
named beneficiary.  Proof of notice may be made by any admissible evidence.  The 
originator’s bank satisfies the burden of proof if it proves that the originator, before 
the payment order was accepted, signed a writing stating the information to which 
the notice relates.                                                  
NY UCC § 4-A-207(3).                                                      
The threshold conditions of § 4-A-207(3) are met.  The pleadings allege that the payment 
order received by Chase identified the beneficiary by name and account number, and that the 
intended beneficiary and account owner had different names.  Compl. ¶¶ 34–38.  The 
“originator” of the payment order, 218 Broadway, is not a bank, and has at this stage sufficiently 
plead that the person controlling the 0213 Account was not the person entitled to receive money 
from 218 Broadway.  Id. ¶¶ 40–46, 56.  Therefore, 218 Broadway is not obligated to pay unless 
Wells Fargo provided 218 Broadway with notice that the payment order might be made by Chase 
based on the provided account number despite a mismatch in name (prior to the payment being 
ordered).                                                                 
However, Wells Fargo did provide notice to 218 Broadway that payment might be made 
on the account number provided by 218 Broadway.  Wells Fargo’s exhibit containing its Deposit 
Account Agreement provides, in relevant part:                             
If an instruction or order to transfer funds describes the party to receive payment 
inconsistently by name and account number, we’ll rely on the beneficiary account 
number even if the account number identifies a party different from the named 
recipient.                                                           
Dkt. No. 16-3 at 19.  The Business Account Application, which was signed by a representative of 
218 Broadway, indicates 218 Broadway’s agreement to be bound by the Deposit Account 
Agreement.  Dkt. No. 16-2 at 5.  The exhibit containing the Outgoing Wire Transfer Request also 
includes an appended “Wire Transfer Agreement,” which states:             
If  a  wire  transfer  request  describes  the  person  to  receive  the  wire  transfer 
(“Beneficiary”) inconsistently by name and account number, the wire transfer may 
be made on the basis of the account number even if the account number identifies 
a person different from the Beneficiary.                             
Dkt. No. 16-1 at 4.  The Outgoing Wire Transfer Request was signed by a representative of 218 
Broadway.  Id. at 3.  218 Broadway does not dispute the accuracy or authenticity of any of these 
documents, which its representative reviewed and signed.                  
218 Broadway’s allegation that Wells Fargo, through its “general advertising” and 
“account representative,” represented that it matched the “name, address, and account number” 
of 218 Broadway’s payment order to the beneficiary account, is inapposite.  Compl. ¶ 37.  The 
plain text of § 4-A-207(3)(b) is clear, stating: “The originator’s bank satisfies the burden of proof 
if it proves that the originator, before the payment order was accepted, signed a writing stating 
the information to which the notice relates.”  NY UCC § 4-A-207(3)(b).  The factual record 
makes clear that Wells Fargo has met this burden, and therefore, 218 Broadway is not entitled to 
relief under § 4-A-207(3)(b).                                             
                      CONCLUSION                                     
Plaintiffs have lost a substantial sum of money to fraud.  However, as a matter of law, 
Plaintiffs cannot sustain their claims against Defendants.                

For the foregoing reasons, Defendants’ motions to dismiss are GRANTED and Plaintiffs’ 
Complaint is DISMISSED with prejudice.8                                   

8 Plaintiffs did not seek leave to file an amended complaint, nor do they indicate what allegations 
 The Clerk of Court is respectfully directed to close Dkt. Nos. 12, 15, and 38 and to close 
the case. 

 SO ORDERED. 

Dated: August 14, 2026                                     :             Ee   □□ 
New York, New York                           LEWIS J. LIMAN 
                                         United States District Judge 

they would add to an amended complaint to cure its deficiencies.  See Cesiro v. Rite Aid of New 
York, 

2022 WL 392907

, at *6 (S.D.N.Y. Feb. 9, 2022) (“[W]here a plaintiff has neither 
requested leave to amend, nor indicated additional facts that would be added to the complaint, a 
court is not required to grant leave to amend sua sponte.”).  Moreover, even if new allegations 
were added that would allow an amended complaint to survive the motion-to-dismiss phase, the 
exhibits provided by Chase, although not considered by the Court at this stage in the litigation, 
cast doubt on Chase’s actual knowledge and substantial assistance of fraud and conversion and 
Chase’s actual knowledge of the mismatched account details—suggesting instead that the wire 
transfer was a typical, automated transfer made on the basis of account number and not account 
owner name.  See Dkt. Nos. 14-1, 14-2. 

                                 27