UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

FEDERAL DEPOSIT INSURANCE

CORPORATION AS RECEIVER FOR

BROADWAY BANK,

Plaintiff,

v.

DEMETRIS GIANNOULIAS, GEORGE

GIANNOULIAS, JAMES MCMAHON,

SEAN CONLON, STEVEN DRY, DONNA

ZAGORSKI, STEVEN BALOURDOS,

GLORIA SGUROS and ANTHONY

D'COSTA,

Defendants.

Case No. 12 CV 1665

Judge Robert M. Dow Jr.

Magistrate Judge Daniel Martin

NOTICE OF MOTION

TO: ALL COUNSEL OF RECORD

PLEASE TAKE NOTICE that on February 5, 2015 at 10:00 a.m., or as soon thereafter as

counsel may be heard, we shall appear before The Honorable Magistrate Judge Daniel Martin in

Courtroom 1350 of the United State District Courthouse at 219 South Dearborn Street, Chicago,

Illinois, and then and there present (1) Federal Deposit Insurance Corporation Office of

Inspector General's Motion for Protective Order Regarding Subpoena Issued by "Certain"

Defendant; and (2) Memorandum in Support of FDIC-OIG's Motion for Protective Order

Regarding Subpoena Issued by "Certain" Defendants, true and correct copies were filed and

served upon you.

Dated: January 30, 2015

John A. Davidovich

Counsel

FDIC Office of Inspector General

3501 North Fairfax Drive

Arlington, Virginia 22226

(703) 562-2439 (phone)

(703) 562-6433 (facsimile)

Respectfully submitted,

FEDERAL DEPOSIT INSURANCE CORPORATION

OFFICE OF INSPECTOR GENERAL

By: Q'

hn A. Davidovich

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 1 of 40 PageID #:4268
Adriana Rojas

Associate Counsel

FDIC Office of Inspector General

3501 North Fairfax Drive

Arlington, Virginia 22226

(703) 562-6344 (phone)

(703) 562-6433 (facsimile)

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CERTIFICATE OF SERVICE

The undersigned certifies that a copy of the foregoing was served on all counsel of

record via e-mail on January 30, 2015.

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

FEDERAL DEPOSIT INSURANCE

CORPORATION AS RECEIVER FOR

BROADWAY BANK,

Plaintiff,

u

DEMETRIS GIANNOULIAS, GEORGE

GIANNOULIAS, JAMES MCMAHON,

SEAN CONLON, STEVEN DRY, DONNA

ZAGORSKI, STEVEN BALOURDOS,

GLORIA SGUROS and ANTHONY

D'COSTA,

Defendants,

Case No. 12 CV 1665

Judge Robert M. Dow Jr.

Magistrate Judge Daniel Martin

FEDERAL DEPOSIT INSURANCE CORP.'S MOTION FOR PROTECTIVE

ORDER REGARDING SUBPOENA ISSUED BY "CERTAIN" DEFENDANTS

The Federal Deposit Insurance Corporation Office of Inspector General ("FDIC-OIG"), a

non-party to this litigation, by its attorneys, pursuant to Federal Rule of Civil Procedure 26(b),

respectfully moves the Count to enter a protective order providing that the FDIC-0IG is not

required to provide further responses to the subpoena dated October 7, 2014 issued by

Defendants Conlon, Dry, Zagorski, Balourdos, Sguros and D'Costa ("Certain Defendants" or

"Defendants") on the grounds that the subpoena seeks irrelevant information uruelated to the 20

Loss Loans and providing additional documents would be oppressive and unduly burdensome.

In support of this motion, the FDIC-OIG states:

1, Under Federal Rule of Civil Procedure 26(b), parties may obtain discovery of any

"nonprivileged matter that is relevant to any panty's claim or defense." FED. R. C~v. P. 26(b).

Matters that are irrelevant to the claims and defenses at issue are not discoverable. E.E.O. C. v.

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 4 of 40 PageID #:4271
Mer•~•ill Lynch, 677 F. Supp. 918, 932 (N.D, Ill. 1987) (denying motion to compel where the

information sought was "not relevant to any issue remaining in this case"). Under Rule

26(b)(1)(C), a count may limit discovery if it determines that "the burden or expense of the

proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in

controversy, the parties' resources, the importance of the issues at stake in the action, and the

importance of the discovery in resolving the issues." FED. R, C~v. P. 26(b)(1)(C).

2. On January 20, 2015, the FDIC-OIG's counsel had a telephone conversation with

the Certain Defendants' counsel wherein they in good faith attempted to resolve the differences

giving rise to this motion but were unable to reach an accord.

3. The FDIC-OIG should be protected from providing additional documents in

response to the subpoena dated October 7, 2014 issued to the FDIC-OIG by Certain Defendants

as the subpoena seeks irrelevant information uruelated to the 20 Loss Loans and providing

additional documents would be oppressive and unduly burdensome,

4. A memorandum is submitted in support of this motion.

FOR THESE REASONS, either independently or in combination, the FDIC-OIG urges

the Court to enter a protective order, providing that the FDIC-OIG need not provide additional

documents in response to the subpoena dated October 7, 2014 issued to the FDIC-OIG by

Certain Defendants, and granting any further and additional relief the Court deems appropriate.

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 5 of 40 PageID #:4272
Dated; January 30, 2015

Respectfully submitted,

FEDERAL DEPOSIT INSURANCE

CORPORATION OFFICE OF INSPECTOR

GENERAL

~ r

By:

hn A. Davidovich

John A. Davidovich

Counsel

FDIC Office of Inspector General

3501 North Fairfax Drive

Arlington, Virginia 22226

(703) 562-2439 (phone)

(703) 562-6433 (facsimile)

Adriana Rojas

Associate Counsel

FDIC Office of Inspector General

3501 North Fairfax Drive

Arlington, Virginia 22226

(703) 562-6344 (phone)

(703) 562-6433 (facsimile)

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 6 of 40 PageID #:4273
CERTIFICATE OF SERVICE

The undersigned certifies that a copy of the foregoing was served on all counsel of

record via e-mail on January 30, 2015,

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

FEDERAL DEPOSIT INSURANCE

CORPORATION AS RECEIVER FOR

BROADWAY BANK,

Plaintiff,

_~

DEMETRIS GIANNOULIAS, GEORGE

GIANNOULIAS, JAMES MCMAHON,

SEAN CONLON, STEVEN DRY, DONNA

ZAGORSKI, STEVEN BALOURDOS,

GLORIA SGUROS and ANTHONY

D' COSTA,

Defendants.

Case No. 12 CV 1665

Judge Robert M. Dow, Jr.

Magistrate Judge Daniel Martin

MEMORANDUM IN SUPPORT OF FDIC OFFICE OF

INSPECTOR GENERAL'S MOTION FOR PROTECTIVE ORDER

REGARDING SUBPOENA ISSUED BY GIANNOULIAS DEFENDANTS

INTRODUCTION

Defendants Sean Conlon, Steven Dry, Donna Zagorski, Steven Balourdos, Gloria Sguros

and Anthony D'Costa ("Defendants") served a subpoena on the Federal Deposit Insurance

Corporation Office of Inspector General ("FDIC-OIG"),anon-party to this litigation. The

subpoena seeks all of the documents related to the Material Loss Review ("MLR") .performed

after the Bank closed to determine, inter° alia, the cause of failure. The MLR was done by the

FDIC-OIG with KPMG's assistance.

Defendants' requests go far beyond the well-established parameters of relevant discovery

— the 20 loans that are the subject of the Amended Complaint ("Loss Loans"). Defendants'

requests are further irrelevant because Defendants could not have relied on the MLR's regulatory

analysis, which was done after the Bank closed. By producing documents relating to KPMG's

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 8 of 40 PageID #:4275
methodology, its sample loan review (which included five of the Loss Loans), and its

conclusions, inter° cilia, about the Bank's loan underwriting and credit- administration practices,

the FDIC-OIG has satisfied any arguable production obligation.

This is yet another attempt by Defendants to unduly expand the scope of this litigation,

Each prior effort has been rebuffed. This should be, too. To require the FDIC-OIG to produce

anything more would be oppressive and unduly burdensome. Accordingly, the FDIC-OIG is

entitled to protection under Federal Rule of Civil Procedure 26(b).

BACKGROUND FACTS

The FDIC-OIG is an independent unit within the FDIC that conducts audits,

investigations and other reviews of the FDIC's programs and operations. Under Section 38(k) of

the Federal Deposit Insurance Act, 12 U.S.C. 18310, when the Deposit Insurance Fund ("DIF")

incurs a material loss with respect to an insured depository institution, the inspector general of

the appropriate federal banking agency must make a written report to the agency to review the

agency's supervision of the institution and to ascertain why the institution's problems resulted in

a material loss to the DIF.

On April 23, 2010, the Illinois Department of Financial and Professional Regulation

closed Broadway Banlc and appointed the FDIC as receiver ("FDIC-R"), See Dlct. #144 at 2. On

May 14, 2010, the FDIC-R notified the FDIC-OIG that Broadway's total assets at closing were

$1.1 billion and the estimated loss to the DIF was $390.2 million. See Id. Following

Broadway's closure, consistent with its statutory mandate, the FDIC-OIG conducted a MLR of

Broadway's failure and issued a written report.l The FDIC-OIG retained KPMG to assist with

the MLR.

' A MLR is a public document. Additionally, Defendants received a copy of the MLR for Broadway as

part of the FDIC-R's document production.

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 9 of 40 PageID #:4276
The MLR concluded that the primary causes of Broadway's failure and the $390.2

million loss to the DIF were because of:

its Board and management pursuing an aggressive growth strategy concentrated in

CRE and ADC loans,2 without establishing sound credit risk management

practices to manage those loans, and the bank's inability to absorb significant

loan-related losses during a severe economic downturn. Broadway's CRE and

ADC concentrations were exacerbated by the bank's significant emphasis on out

of territory lending and large borrower relationships.

As part of its work for the FDIC-OIG, KPMG selected and analyzed 15 Broadway loans,

Of this sample, five are Loss Loans alleged in the Amended Complaint.

Defendants served awide-ranging subpoena, dated October 7, 2014, to the non-party

FDIC-OIG. Exhibit 1.

On November 7, 2014, the FDIC-OIG served its objections and response. Exhibit 2.

The FDIC-OIG's objections included overbreath, vagueness, various privileges and

confidentiality. The FDIC-OIG further objected to the requests as irrelevant to the extent that

the requests went beyond the Loss Loans. Nonetheless, without waiving its objections, the

FDIC-OIG agreed to "produce non-privileged documents within its possession, custody or

control responsive to the request that refer to or discuss the 20 loss loans that are the subject of

the Amended Complaint, and not already produced by the FDIC-R or the FDIC-C."

On November 13, 2014, the FDIC-OIG produced 138 documents consisting of excerpts

from KPMG's work papers. These excerpts include background about the FDIC; KPMG's

methodology and work plan; and KPMG's conclusions about the causes of Broadway's failure

and material loss, the Banlc's loan underwriting, credit administration practices, liquidity and the

FDIC's supervision of Broadway and include KPMG's review and evaluation of the sample

z "CRE" refers to a commercial real estate loan. "ADC" refers to an acquisition, development and

construction loan. See Dkt. #144 at 1.

3

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 10 of 40 PageID #:4277
loans. Virtually all of this information is included in the publicly available MLR. Further, the

primary source of KPMG's information was the Banlc's reports of examination and the

regulatory work papers. These excerpts reference a few interviews with FDIC-C or IDFPR

regulatory personnel undertaken after the Bank's closure. The FDIC-OIG did not produce any

FDIC-C documents reviewed by KPMG as any such documents are in the FDIC-C's control.

As indicated at the January 20, 2015 "meet and confer," Defendants are dissatisfied with

the FDIC-OIG's production. Defendants believe that the entirety of the KPMG work papers

(including all documents KPMG reviewed) and everything in the FDIC-OIG's file are relevant

because: (1) "every allegation" of the FDIC-R's complaint puts the Banlc's loan practices at

issue; and (2) the post-closure regulatory analysis of the material causes of the Bank's failure

supports Defendants' regulatory reliance defense.

The FDIC-OIG disagrees and seeks protection from producing additional documents in

response to the following requests:

• All agreements between the FDIC-OIG and KPMG regarding Broadway.

(Request No. 1.)

• All documents sufficient to identify all FDIC-OIG personnel who worked

on Broadway's MLR. (Request No, 3.)

• All documents provided by or to the FDIC-OIG regarding Broadway.

(Request Nos. 4, 5.)

• All FDIC-OIG internal or external communications regarding Broadway.

(Request No. 6.)

• All KPMG work papers, reports, summaries or any other documents,

regarding Broadway. (Request Nos. 7, 8.)

• All documents "solicited, received or considered" by the FDIC-OIG from

any other FDIC division regarding Broadway's MLR. (Request No, 9.)

• All FDIC-OIG drafts of Broadway's MLR. (Request No. 10.)

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 11 of 40 PageID #:4278
• All FDIC-OIG interview notes and all other FDIC-OIG notes and

memoranda regarding any tests or examinations performed by the FDICOIG as part of Broadway's MLR. (Request Nos. 13, 14.)

• "All documents reviewed, analyzed, and/or relied on by" FDIC-OIG as

part of the MLR "to the extent not responsive to Requests 1 through 14,

supra." (Request No. 15.)

ARGUMENT

I. The FDIC-OIG Should be Protected from Further Production Because Defendants'

Requests Go Beyond the Well-Established Discovery Limitation of the Loss Loans.

The scope of appropriate discovery in this case is well settled. Both Judge Grady and this

Court repeatedly have made it clear that discovery should be limited to the Loss Loans. See, e.g.,

Dkt. #239 at 3 ("[t]he scope of the, FDIC-R's lawsuit remains limited to the 20 Loss Loans");

Dkt. #206 at 6 ("[f]or purposes of this lawsuit, the only relevant aspect of the Banlc's operation is

the 20 Loss Loans. The FDIC-R's positions on. , .the Bank's overall condition is irrelevant to the

FDIC-R's theories of liability as the FDIC-R is not seeking to recover for any aspect of the

Bank's operation other than the 20 Loss Loans"); Dkt. #132 at 4-5 (denying Defendants' motion

to compel search terms "Capitalized" and "Capitalization" as pat-t of ESI Protocol because the

"connection between [these] terms...and the complaint's core negligence allegations is

tenuous"); Dlct. #158-1 at 5; Dkt. #206 at 6.

Defendants' subpoena to the FDIC-OIG goes far beyond the Loss Loans. As indicated in

the FDIC-OPIG's response, the requests are overbroad,3 vague and seek privileged and

confidential material. Nonetheless, the FDIC-OIG produced excerpts from the KPMG work

papers that discussed and summarized its sample loan review, which included five of the Loss

Loans. Additionally, the FDIC-0IG produced excerpts of the KPMG work papers that described

its conclusions, inter• alia, about the Banlc's loan underwriting and credit administrative

3 In addition to overbroad search terms, the time frame for Defendants' subpoena is overbroad in that it

seeks documents from December 1, 2004 to the present.

E

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 12 of 40 PageID #:4279
practices. This production more than satisfies the well-established relevance limitation of the

Loss Loans.

Any claim by Defendants that the requested documents should be produced because they

are relevant to the Banlc's lending practices, generally, has been rejected. As Judge Grady

recognized: "There's absolutely no point in the court addressing or a jury addressing the

question of whether the bank, generally speaking was well run. We're talking about 20 loans."

Dkt. #158-1 at 5. This Court reached the same conclusion: "For purposes of this lawsuit, the

only relevant aspect of the Banlc's operation is the 20 Loss Loans. The FDIC-R's positions

on...the Bank's overall condition is irrelevant to the FDIC-R's theories of liability as the FDICR is not seeking to recover for any aspect of the Banlc's operation other than the 20 Loss Loans."

Dkt. #206 at 6. Accordingly, the Count should grant the FDIC-OIG the requested protection

from further production.

II. The FDIC-OIG Should Be Protected from Further Production Because Defendants

Could Not Have Relied on the MLR, Which Was Conducted after the Banlc Was

Closed.

Defendants claim that the entirety of KPMG's work papers (as well as all of the

documents on which KPMG relied) and essentially all FDIC-OIG's documents related to the

MLR should be produced because these documents are relevant to Defendant's regulatory

reliance defense. KPMG's analysis and the MLR relate solely to the FDIC-OIG's post-closure

analysis of why the Bank failed and the FDIC-C's supervision. Defendants' subpoena runs afoul

of this Court's prior refusal to order further production by the FDIC-C of purported pre-closure

regulatory comments because Defendants did not rely on them. Dkt. #239 at 4. If FDIC-C preregulatory comments need not be produced because Defendants did not rely on them, FDIC-OIG

post-regulatory comments need not be produced because Defendants cozrld not have relied on

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 13 of 40 PageID #:4280
them.

As the Court's October 27, 2014 order recognized, Defendants' two affirmative defenses

that implicate regulatory activity are based on the business judgment rule and the Illinois

Banking Act. Id. Both defenses are premised in part on Defendants' alleged reasonable reliance

on positive comments in the 2005 — 2007 examination reports. See, e.g., Dlct. # 229 at 76 — 78

(Defendants' first and second affirmative defenses). As the Court reasoned, for Defendants to

rely on the regulators' comments, Defendants had to be aware of them. Since Defendants could

not have been aware of internal regulatory comments (assuming any existed), there could be no

reliance, Dkt. #239 at 4.4

Here, Defendants seek FDIC-OIG and KPMG documents that were created after the

Bank failed. The Court's prior ruling makes it clear that regulatory documents on which

Defendants did not rely are irrelevant to their regulatory reliance defense. Defendants did not

(and could not) rely on FDIC-C pre-closure comments because they were not disclosed to

Defendants prior to closure. The same is true of the FDIC-OIG and KPMG's documents at

issue. FDIC-OIG and KPMG post-closure, retrospective comments about why the Bank failed

or how it was run were not even made (let alone disclosed) to Defendants prior to closure. Since

Defendants could not have relied on FDIC-OIG/KPMG post-closure comments, they are

irrelevant to Defendants' regulatory defense (or any other issue in the case). Accordingly, the

Court should grant the FDIC-OIG the requested protection from further production.

4 The Count's October 27, 2014 order was consistent with Judge Grady's apt observation about

Defendants' regulatory reliance defense in denying the Giannoulias Defendants' motion to compel

additional interrogatory responses fi~oin the FDIC-R: "It could be that the bank was very well run as far

as the examiners could determine at the time, but Lurking beneath that well-run surface were all kinds of .

mismanagement, There's absolutely no inconsistency in those two propositions." Dlct. #158-1 at 5

7

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III. The Burden on the FDIC-OIG to Produce Additional Documents Would Outweigh

Its Benefit Which, at Best, Is Limited and Likely Is None

This Court has made it clear that Defendants' discovery rights are not unlimited,

Defendants are entitled "a reasonable opportunity to investigate the facts — no more." Dkt. #239

at 4 (citation omitted). This is particularly apt where, as here, the Defendants' discovery is

directed to anon-party.

Regarding the FDIC-OIG, Defendants have been given a reasonable opportunity —and

more. Given that the MLR was conducted post-closure, there is no valid basis to require the

FDIC-OIG to produce anything, Given that the FDIC-OIG produced documents related to

KPMG's methodology, its sample loan review, which included five of the Loss Loans, and its

conclusions about the Bank's loan underwriting and credit administration practices, any arguable

basis for production has been satisfied.

Moreover, based on the January 20, 2015 meet and confer, Defendants apparently believe

that the FDIC-OIG also should produce every document on which KPMG relied, even though

the MLR and the already produced FDIC-OIG documents show that KPMG primarily relied on

the Bank's reports of examination and the regulatory work papers —all of which have been

produced to Defendants by the FDIC-R or the FDIC-C. Defendants also turn a deaf ear when the

FDIC-0IG explains that it cannot produce the FDIC-C's documents as those documents do not

belong to the FDIC-OIG.

In sum, the FDIC-OIG had a viable basis for refusing to produce any documents in

response to Defendants' subpoena. Nonetheless, its production more than satisfied any arguable

obligation that it might have. To require anything more of the FDIC-OIG, a non-party, would be

oppressive and unduly burdensome.

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CONCLUSION

FOR THESE REASONS, either independently or in combination, the FDIC-OIG urges

the Court to enter a protective order, providing that the FDIC-OIG need not provide further

responses to Demetris Giannoulias and George Giannoulias' subpoena dated October 7, 2014,

and granting any further and additional relief the Court deems appropriate.

Dated: January 30, 2015

Respectfully submitted,

FEDERAL DEPOSIT INSURANCE

CORPORATION OFFICE OF INSPECTOR

GENERAL

By:

ohn A. Davidovich

John A. Davidovich

Counsel

FDIC Office of Inspector General

3501 North Fairfax Drive

Arlington, Virginia 22226

(703) 562-2439 (phone)

(703) 562-6433 (facsimile)

Adriana Rojas

Associate Counsel

FDIC Office of Inspector General

3501 North Fairfax Drive

Arlington, Virginia 22226

(703) 562-6344 (phone)

(703) 562-6433 (facsimile)

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CERTIFICATE OF SERVICE

The undersigned certifies that a copy of the foregoing was served on all counsel of

record via e-mail on January 30, 2015.

10

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 17 of 40 PageID #:4284
~D j ~ ~`~ ~~ yJ'1

~ ~. ~,

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 18 of 40 PageID #:4285
AO 88B (Rev. 02/]4) Subpoena to Produce bocuments, Information, or Objects or to Pcrtnit inspection of Premises in a Civil Action

UNITED STATES DISTRICT COURT

for the

Northern District of Illinois

FDIC, as Receiver for Broadway Bank, ~

Plaintiff

~, ) Civil Action No. 12 CV 1665

Demetris Giannaulias, et al. )

Defendant )

SUBPOENA TO ~'RODUCE DOCUMENTS, INF012MATrON, OR OBJECTS

OR TO PERMIT INSPECTION Off' PR~MIS~S IN A CIVIL ACTION

To: FDIC Office of Inspector General, c/o Adriana Rojas, Associate Counsel, 3501 N. Fairfax Dr., Room E9044,

Arlington, Virginia 22226

(Name ofperson to whom this subpoena is directed)

Production: YOU ARC COMMANDED to produce at the time, date, and place set forth below the following

documents, electronically stored information, or objects, and to permit inspection, copying, testing, ar sampling of the

material: See Rider attached hereto

Place; Vedder Price P.C.,c/o Rachel T. Copenhaver, 222 N. Date and Time;

LaSalle Street, Suite 2600, Chicago, Illinois 60601-1003 10/17/2014 5;00 pm

f7 Inspection of Premises; YOt7 ARE COIVIII7ANDED to pe►•mit entry onto the designated premises, land, or

other property possessed or controlled by you at the time, date, and location set forth below, sa that the requesting party

may inspect, measure, survey, photograph, test, or sample the property or any designated object or operation on it.

Place: Date and Time:

The following provisions of Fed. R, Civ, P, 45 are attached —Rule 45(c), relating to the place of compliance;

Rule 45(d), relating to your protection as a person subject to a subpoena; and Rule 45(e) and (g), relating to yom• duty to

respond to this subpoena and the potential consequences of not doing so,

Date: 10/OB/2014

CLERK OF G'O URT

Signature of Clerk or Deputy Clerk

OR i~ a ~ C(~~~

{ C- '

—T Allorney's signature

The name, address, e-mail address, and telephone number of the attorney representing (name ofparry) Defendants,

Sean Conlon, Steven Dry, Donna Zaporski, Steven Balourdos, Gloria Sguros, end Anittony D'Coata ,who issues or requests this subpoena, are;

Rachel T, Copenhaver, Vedder Price P.C„ 222 N, LaSalle Strset, Suite 2600, Chicago, Illinois 60Fi06-1003, rcopenhaver@vedderprice.com, (312) 609-7514

Notice to tl~e person ~v~o issues or requests this subpoena

If this subpoena commands the production of documents, electronically stared information, or tangible things or the

inspection of premises before trial, a notice and a copy of the subpoena must be served on each party in this case before

it is served on the person to whom it is directed. ~'ed, R. Civ. P. 45(a)(4).

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 19 of 40 PageID #:4286
Federal Deposit Ynsurance Corporation Office of Inspectoa• Geuei•al subpoena Rider

Fe~'eral Deposit Insrsrartce Cor~poratdon, as Receiver for Broadway Bunk v. Gdannoulias, et al,

Case No. 1 Z~cv-1665

Definitions and Instructions

1, "OIG" means the Federal Deposit Insurance Corporation Office of Inspector

General and each and every one of its subsidiaries, divisions, business units, ennployees, agents,

representatives, or any other person or entity acting or purpoi~tin~ to act for or oi~ its behalf

2. `Broadway Bank" means Broadway Bank of Chicago, Illinois, which was a

wholly-owned subsidiary of Broadway Bancorp, Inc., each of its employees, agents,

representatives, directors, officers, affiliates ox any other person or entity acting or purporting to

i

C act for ox on its behalf (both past and present).

C 3. "Material Loss Review" means the OICr's Office of Material Loss Review's

Material Loss Review of Broadway Bank, Chicago, Illinois, Report No. MLR~11-004,

November 2010, and any and all drafts, amendments, inserts, memoranda, summaries, Executive

Summaries, responses, and suppot~ting documentation.

4. "Loss Loans" means the following loans that were originated by }3roadway Bank:

Borro~ve►•

Broadway Banlc

Loan Number

Gold Johnson Holding, I,LC 316010

Wilshire Blvd. BST, LLC 315770

Federal Street L,,A., LLC 315710

Water Street Realty Group, LT,C 315530

Southside House LLC 315325

625 W. Division. Condo„ LP 315315

Shubh Oceanic LLC 315050

Prospect R. Equities LLC 314950

CHICAGQ/N2620784, I

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 20 of 40 PageID #:4287
Prospect R, Equities ~.LC 314955

ASAT, Tnc, 314900

261 E. 78 Realty Gorp. 314825

Lytm &Anderson Homes, LLC 314775

Shubh Hotels Springdale, LT.0 314805

Shubh Boca Condominiwn LLC ~ 314770

Lawrence Properties, LLC 314780

John R. DeSilva ~ 314730, 31S69S

4750 N. Winthrop, LLC 314720

The Bedford Lofts, T.LC 313825, 314640

TCrieger SPA, LLC 314G20

Normandy Shores LLC 313985

i

5. As used herein, the term "document" means the following:

A) "Document" is used in the broadest possible sense permitted by FAD. R.

Clv, P. 34 and means, without limitation, all documents or writings containing written ar printed

material, symbols ar a physical image ar sound, and includes, but is not limited to, any and all

written, recorded or graphic matter of every type and description, however and by whomever

prepared, whether signed or unsigned, preliminary, reviewed draft, other draft. or final, produced,

reproduced, disseminated or made, that is in the possession, custody or control of the person to

whom these Inter~~ogataries t~.~~e propounded (as that person is defined herein).

B) The term "document" shall include, without limitation, agreements,

appointment books, calenda~•s, cha~~Cs, computer printouts, conferences, contracts, data

compilations fronn which information can be obtained, descriptions, diagrams, diaries, drafts,

emails, envelopes, financial statements, graphs, instructions, inter or infra-office

2

CHICAGO/N2620784,1

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communications, ledgers, letters, memoranda, microfiche, microfalzn, minutes and notes of

meetings, notebooks, notes, photocopies, photographs, plans, publications, published or

tmpublished speeches or articles, purchase orders, recordings, records, reports, scrapbooks,

specifications, tape or disk recordings, telegrams, telephone or other conversations or

communications, telexes and transexipts.

C) The term "document" shall also include, without limitation, electzonically

stored data from which information can be obtained either directly, indirectly, or by translation

through detection devices or readers, and any such document is to be produced in a reasonably

legible and usable form,

' 6. "Communications" means all inquiries, discussions, conversations, negotiations,

agreements, understandings, meetings, telepk~one conversations, messages, electronic mails,

letters, notes, telegrams at~d all other forms of oral or written intercourse.

7. The words "regarding" and "in connection with" mean having any connection,

association or concern with or any relevance, relation, pertinence, or applicability to or any

implication bearing on, the subject matter, whether directly ox indirectly.

8. The word "and" includes the disjunctive "ox," and the word "or" includes the

conjunctive "and." Words in the singular shall be interpreted to include the plural and words in

the plural shall be interpreted to include the singula~~. A masculine, fenninine or neuter form of a

word shall be interpreted to include the other genders. The use of any tense of any verb shall Ue

interpreted to include all other tenses,

9. Where a claim of privilege is asserted in responding or objectizig to any discovery

requested in this Subpoena and information is not provided an the basis of such assertion, you

shall, in response or by objection, identify the nature of the privilege (including vvoa~l~ product}

3

CHTCAGONJ2620784.1

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 22 of 40 PageID #:4289
which is being claimed. VVben any privilege is claimed, you shall indzcate, as to the infozrnation

requested, whether: (a) any documents exist; or (b) any communications took place; and (c)

provide the following information for each such document or communication in a "privilege log"

or simi~a~~ format;

a. the type of document or communication;

b. the general suUject matter of tlae document or aommtmication;

c, the date of the document or communication;

d, the authors) of the document or participants in the communication;

e. the addressees) and and other recipients) of the document; and

f, the custodian of the document, where applicable.

10. This Subpoena and its 12ider are continuing in nature and requixe supplemental

response if you obtain further information between the tinne of compliance and any hearing or

trial in the case.

11, The relevant time period for these Requests is from December 1, 2004 through the

present.

4

CHICAGp/N2620784, I

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 23 of 40 PageID #:4290
Requests for Pi•odYaction

1. All agreements betv~reen OIG and third parties, including but not limited to

KPMG, regarding Broadway Bank,

2. Doctur~ents sufficient to identify each and every third party that performed work

for OIG regarding Broadway Bank.

3. Documents sufficient to identify all OIG staff who worked on the Material Loss

Review of Broadway Bank.

4. All documents regarding Broadway Bank or the T.,oss Loans provided to any and

all third panties, including but not limited to KPMG, b~ OrG.

S. All documents regarding Broadway Bank or the Loss Loans received by OTG

from any and all third parties, including but not limited to KPMG.

6. All communications, r~vhether internal or with any third parties, regarding

Broadway Bank or the Loss Loans,

7. All documents, including but not limited to reports and summaries, prepared by

KPMG regarding Broadway Bank or the Loss Loans,

8. All KPMG work papers regarding Broadway Bank or the Loss Loans.

9, All documents, reports, and/or analyses by any t}uxd party and/or other division of

I'DIC, izicluding but not limited to reports prepa~•ed by the Division of Resolutions and

Receivexships and Division of Supervision and Consumer Protection, that were solicited,

reviewed, andlo~~ considered by OIG as part of OIG's Material Loss Review of Broadway Bank.

1 p. All drafts of OIG's Material Loss Review of Broadway Bark.

11. All responses and comments received by OIG regarding the Material Lass

Review.

5

CHICAGO!#2620784,1

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 24 of 40 PageID #:4291
12, Documents sufficient to identify all Broadway Bank boi7•ower relationships

reviewed by KPMG,

13, All notes, transcripts, and/or memoranda o£ interviews conducted by OXG as part

of the Material Loss Review, including, but not limited to, the interviews conducted on August

i

27, 2010 by Leon Wellons (OIG Senior Audit Specialist) and Albei~o Sanabria (KPMG) with

examiners from the Illinois Department of Financial and Professional Regulation,

14. All notes, memoranda, and/or results of az~y tests or examinations performed by

OIG as part of the Material Loss Review, including but not limited to notes, memoranda, and/or

results of tests designed to assess Broadway Bank's regulators' compliance with laws and

regulations.

15. All documents reviewed, analyzed, and/ox relied upon by OIG as pa~~t of the

Matexial Loss Review, to the extent not responsive to Requests 1 through 14, supra,

16. All documents which refer or relate to the Loss Loans to the extent not responsive

to Requests 1 through 1 S, supra,

G

CHICAGO/N2620784.1

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 25 of 40 PageID #:4292
..~ ,~ ~ , _

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 26 of 40 PageID #:4293
u~tr~~~r~,~ ~ r~ ra~~~ Dr~TRI C~~~ cou~a r

~+~OI"t'I'X~la, TrIO~d.TIrIE1~N llI~TIZ[CZ' OI+~ II,,C.TI~IOI~

~~A~'1`E121~ DT~rT~I011`dt

FEDERAL DEPOSIT IN~UR.ANCE

COKPORATION AS I2~CLNER IOR

BRUAD~~~AY BANK,

~'1<~intiff,

v,

DEMFTRIS GIANNOUI.,IA~, CrEO.RGF.

GZANNOULI~IS, JAMES MCMAHUN,

SEAN CUNT.ON, STEVEN DRY, DONNA

7AGORSKI, STEVEN ]3ALOURllOS,

GLORIA 5GUR0~, ANTHONY U'CO~TA,

Defendants.

NO. 12 CV 1665

Judge Jalu~ r. Crrady

Magistrate Jude I7aniul Martin

RL~I't~l`~~~ ~CO CL1~IAII°~ DJ~I~END~'VT~' ~CJB~'OENA DATED

OCT013FT2 8, 2Q1~4 TO FDIC OI~'F+'ICE Off+ II~II~P~CTOIt G~Ni~RAL

The Federal Deposit Z~xsura~i~e Corporation Office of Inspector General ("FDIC OIG"), a

nosy-party to this liti~atioi~, pursuant to Tederal Rule of Civil Pz~ocedure 45(cl), submits the

following responses and objections to the Subpoena dated October 8, 2014, issued by Sean

Conlon, Steven D~•y, Donna 7agorslci, atev~n Balourdos, Cilo~~ia S~uros, and Azxthony D'Costa,

rL~~rz,4~, o~,~~c~rrorr~

1, 7'he FDIC OIG objects to the definition of "OZG" as overbroad, unduly

b~.irdensome, riot t~~a~onal~ly calculated t~ lend to the discovery of admissible evidet7ce, ai~cl calling

for information outside of its ~~ossessiov, custody, or c~~ntrol. Th.e OTG responds to this subpoena

in its et~pacity only. This rcas~~ouse is nit n7ade on behalf of Plaintiff, the T~DIC in its capacity as

Receiver for ~3rr~adway dank ("FDIC~T."), or the FDIC iii its aor~~c7rate capacity ("k~llICwC").

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 27 of 40 PageID #:4294
2. The FDIC OIG objects io the de~Yiitian of "13r~adwa~y Bank" grid "I3anlc" as

overbroad, unduly burderisoi~ie, i~ot reasonably calculaf.ed to lead is the discovezy ~f admissivfe

evidence, and callii~~ t'or i~iformation outside of its possession, cc.Ystocly, or caut~~or.

3, The FZ~IC 01G objects to the defiziition of "Material Loss Review" ~s overbroad,

tuiduly burdensoi7~e, not rea.s~7n~.bly calcul~7.ied io lead to t11~ discovers ~f admissible evide~ice, ar~d

calliiY~; for infor~ntttion outside of its possession, custody, or eoi~trol,

4, Tl~e F'I~IC~QYG abjeets to Defendants' instructions as overbroad, un.~llaly

b~u°dezison~e, riot reasonably ealculat~d to lead to tlae diseov~ry of admissible evidence, and calling

~'or ii~iforrnation outside of ll~~e PD7CeC's possession, ctistocly, and co~~t~•ol,

5, The FDIC-01G further objects to T~eCei7dat~ts' Instruction Na, 11, which pui•l~orts to

set the relevant tili~e period for these requests as December 1, 2004 to the ~~resent, as beyond tha

scope of releva~lt discovery i~~ the litigation,

6, The FDIC-OICr objects to these requests to tkle extexit that they seek material

protected from discovery by the attorneywclieiat privilege, the deliberative process ~rivzle~e, the

law enforccinent privilege, the b~ilc ex~tnicier's privilege, bank privacy statutes ai d re~ulatary

res~rictioi~s i~lcluding, but not limited to, 12 C~,F,R, § 309,5, or a~~y other privilege or irnxnunity

available by statute, regulation, or cc~inmon law,

7. The FDIC-OIG objects to the, doctm~~:nt requests to the extent that they seek to

ini~~~os~ oblig~fio»s beyond tl~c~se in~p~sed under the ~~edcral Rules of Civil Procedure or the Local

Rules for the Noz~theril District of 111inais.

8, The FDIC•~OIG objects to tl~e production or identification of documents iioi currently

icy its poss~ssioa►, custody or' aoni.rol,

9. The T~DIC-OICr objects to t~~e ~roduation or id~t~~i~cation of ciorurrients that are

2

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publicly avail~it~le,

10, Where the r17IC-OIG has sYatecl t~iat ii will respond and produce doctunents, such

statements do not imply or constitute a t•e~>resentation that such documents ire known to ehist car

do, in fact, exist, To ~lae extent suah doctu~lents are IoGated aftct~ a reasonable search, znd are i~ot

subject to any objection or privilege, they till be produced as provided herein,

11. These general objections shall Ue deemed applicable to and continuing with respcat to

each of the document requests responded to below. The ~ene~al objections assert~c3 above aee

incorporated into eac11 and every one of the responses set forth herein. 5ucli objections are not

waived, nor in any way limited, b~ any response to any specific z•cquest.

12, The FDIC-UTG objects to any request that calls for ii7fonnatioii that is confidential,

proprietary, or subject to confidentiality restrictions imposed by airy law, rule, or regulation. Aziy

statement that the FDIC-OIG will be producing documents shall be understood to mean that the

I'DIC-OTG will produce such documents ozily in accord with avd under the terms of the Protective

Oz•der entered in this case,

13. The i~i~'ori~iation cozltained ire the FDIC-OiU's responses is produced based on

informatio~l presently available to the HDTC-OIG, FDl.C~OIG reserves the right fo amend,

suppleme~lt, or ~Iter its responses, objections, and ~~roduction of docun~r•,nts at any time,

14. Inadvertent reliance oz~ ax disclosure of aa~y documents s~Ybjeat to ar~.y pz•ivilege, or

otherwise Z~rotucted or iminut~e from discovery, sli~~ll iiot eon~tiCute. ~. waiver of any privilege or of

any other ground for ~bjectit~g t.a discovery of such documents or their subject mait~r, or cif tl~e

TiDIC-OIG's ri~lats to abject to the use of such documents during i:his or any later proceeding, (See

F,R.E, 5U2(b))

15, The FDIC~•OIG objects to the exte~rt the subpoena welts doct~i~ients being; requested

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 29 of 40 PageID #:4296
of oz~ already ~~•odttced liy Che FD1C~K c~X~ FDIC-L.

~N1~CIFIC Tt~~I'OiV~E~

1. All ~i~rec;inents between nIC; and third parties, inch~ding but not limited to KPIVIG,

regarding Broadway Bank,

Ttl~~~l'OI~I~~; The FDIC-OIG objects to this request as; (a) overbroad; (U) improp~~•1~ calling, for

inf~rm~tinn r~rntertrrl by tlx* l,a~,k pvan,i,_~„;~ 1,,~,.,;I~~A~ ti;o t~,:~ .,ter .,,.~..,,..,+ .~ .~i ~ .- vaaavtv~.i itvl.I.t iJii YilN~l.~ 1/1 I,L1lJ

attoi7iey-client privilege; (c) ix~re]evant and r~oC reasonably calculated to lead to the discovery of

adizussible evidence to the extant that the ~~equest sous beyond the 201oss IUa~7s that are the s~it~ject

of the Amended Complaint (see, e.g., laocicet No. 239); and (d) improper to the e~;.tent that it calls

fo~~ confidential iiiforixiation uncles 12 C,F,R, §§309,1-309,7,

2. 17ooin~ae~rts sufficient to identify each ~u~d every third panty that p~rfarnx~d work for OIG

regarding Broadway IIanlc,

TtE~PO~~i~~: lhc; FDICaOIG objects to this t~equsst as; (a} overbroad; (b) iiiiproperly calling for

information protected by the k~atik exatnitter privilege, the iaw ei~forceiz~ent p~~ivileg~, or tl~e

attoi~leywcliei~t privilege; (c) irrelevant and not reasonably calculated to lead to the discovery of

admissible evidence to fihe extent that the request goes beyond the 201i~ss loans that a~~e the subject

of tl~~ Amcnciad Camplauit (see, e.~,., Docket Nn, 239); acid (d) improper° to the extent that it calls

foz~ confidential iiafoi~r~iation tuidc;r 12 C.r.R. §§309.1-309,7,

:i, T)ocumei~ts sultici~nt to identify all OIC~ staff who worked oii the Material Loss Review a~'

Broadway ~iaiilc.

R~~1'UIV~I,: The ~'D1C~OIG pbj~:cts to this req~.~esi sts; (a) overbroad; (b) itnpropeYly calling for

information protected by the b~rilc exatnincr privil~~e, the law enfo~cezi~ent privilege, ~r fYi~

4

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zttonley~client privilege; (e) irrelevant az~d riot reasc~t~ably calculated to lead to Che discovery of

adznis~ible evidence to the extent that the request gees beyond the 20 loss loins that axe the subject

of the Amended Complaint (see, e, g,, Docket Na, 239); and (d) iizipt•opez• to ih~: extezit that it calls

fox confidential information under 12 C.F,R. §§309.1.-309,'7.

4, All docutilents rega.rdin~ Broadway B~nlc or the Loss Loans provided to any and all third

pRrties, includixig but not limited to ICPMG, by OICr,

rz~sr~o~vsr: The FDIC-OIG objects to this request as; (a) overbroad; (b) improperly calling for

information protected by the batilc examiner privile~a, the law enforcement privilege, ox the

attor~iey-client privilege; (c) irrelevant and not z•easonably circulated to lead to the discovery of

admissible evidenca t:o tl~e extent t11at the request goes beyond the 20 loss loans that are the subject

of kfie Amended Coni~laint (see, e. g,, DacJcet No. 239) ; az~.d (d) improper to the extent that it calls

for confidential information under 12 C.F.R. §§309,1309,7. Subject to and without Waiving tl~e

foregoing objections, FDIC-UTG states that it wi11 produce non-privileged docuy~aez~.ts withi~i its

~ossesszoi~, CUStOC~~ 01' GOYILI•ol responsive to this request that refer to or discuss the 20 loss Ioans

that are the subject of ~h~ Aineiided Complai~it, and not already ~~roduced by the FDIC~IZ or the

FDIC-C,

5. All doctu~ients regarding; Broadway Bank ar the l.,ass Loans received by OIG 1'rolii airy and

X11 third parties, including but nat limited to T~.PMGr.

It~!:S~'ON~I~; The IiDIC-OIG ot~j~cts to this request as: (a) overbroad; (b) iniprapezly calling for

information protected b~~ the ba7~lc examuier p~•ivile~e, the law ezlforcernent privilege, or the

att.arney-client ~~rivile~c; (c) irre(c;v~u7t end nat reasoriabl~ c~tic~rlatzd to lead to the discav~ry of

admissible ~~vidunce to tl~e ex~eilt that the request goes t~cyoi7d the 20 loss loads Chat. a~~~; the subject

5

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 31 of 40 PageID #:4298
o~ the An~end~d Corn~laia~t (see, e.g,, Doalcet No. 239); acid (d) ii7~pz•oper ~c~ the extent t11a~ it calls

far confidential information under 12 C,1~,R_. §§309,I-309.7, Subject to anal without ~~vaiving the

fo~•egoing abjectians, T'DIC•~OIG states that if will proclucc. ~iotieprivileged documents within its

possessioix, custody or co~~~rol responsive to this request that r~f~r fo o~• discl.~ss tlic; 20 lUss loans

thaE ~~re the subject of the An~ie»ded Cor~nplaint., ai~c~ not already produced ty the ~'DIC~R ar the

FDIC-C;,

C, All cor~imurzieatioi~s, wlx~,tl~ie~~ iritei~r.~al or with (1urc1 parties, re~ardiizg B1•oadwtzy Bank ~~r

tl,P ~,~55 r o~~5,

T21~~51'ON~N~: The FDIC~C~IG objects to this request as; (a) overbroad; (b) improperly calling for

infor~~ation p~•otected try the bank exat~aii7er~ privilege, the law enforcement privilege, the

c~eliberatzve process privilege, ~r the attorney-client privilege; (c) i~•relevant and not. reasonably

calculated to lead to the diseavery of admissible. evici~iice to _the extent that the zec~uest goes

Ueyond the 70 loss loans that are the subject of the Ai»ei~ded Complaint (see, e.g., Docket No.

239); end (d) in~pro~~er to the extent that it calls for confidential information under 12 C,Ia,R.

§§309.1 309,7. subject to and without waiving tllu foregoing objections, FDIC-OIG states that it

will produce nanrprivileged docurneni:s within its possession, custody or control ~~esponsive to this

1•equast that ~~ef'er• to or' discuss the 20 loss loans thaC are the subject of the flrnended Complaint,

wild nt~t already produced by kh~ T~TJIC-R or tll~ I~I~IC-C.

7. All cioctztrien~s, including but nr~t lizliited to ~~eports and surnmari~s, prepared ~y

K.1'MG regarding $roadway l3a.nk ox' the Loss Loans,

FLll~i'0~5~; `~'he FJ7I(:~OrG objects to this r.~equest as: (a) ar~~xbroad; (b) itxelevant and not

t•easonably r.alculated to lea-d to the discovery cif admissible evidence to the exterrt that the request

6

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does Meyond the 2U loss loans that are the subject of the mended Complaint (sce, e,g,, Docket

No. 239); and (c) ii~iproper to the extent that it calls for canfidenCial information under I2 C.F,R,

§§309.1-309.7. Subject to and withput waiving Che foregoing objections, FDIC-OIG slates that it

will produce non-}~rivileg~d docum~i~ts within ils possession, custody oz' cantt•ol respoi7sive to this

request that refer to ar discuss the 7.0 loss loans Chat are the subject of tl~.e Amended Complaint,

aid not already produced by t:he FDIC-R or the I'DIC~C,

$. All KPMG work gapers regarding Broadway Bank or the Loss Loans,

RESPOT~t~E: T11e ~'DIC~OTG objects to this request as; (a) overbroad; (b) ix•relev~nt and not

reasonably calculated to lead to the discovery of admissible evidence to the extent that the requesC

goes beyond the 20 loss loans that are the subject of the Amended Con~plaiait (see, e.g., Doeket

No. 239); and (c) improper to the extent that it calls for confidential information under 12 C.Q.R.

§§309,1-309.7. Subject to and without waiving the foregoing objections, FDIC-OrG states that it

will produce iron-~rivile~ed documents within its possession, custody or control z•es~~onsive to this

rec7uest that refer to or discuss the 20 loss loans that are the sLtbject of the Amended Complaint,

and not already produced by the FDIC-R or the ~'DTC-C.

9. All doeiunents, reports, and/or analyses by any third party and/or other division of the

~~D1C, including but nat lin7ited to reports prepared by the Division of Resolutions and

Receiverships and Division of Supervision and Consumer Protection, that wire solicited,

reviewed, and/ar considez~ed by OIG As part of SIG's Material Loss Revie4v of k3i•oadway Bank.

KII+~~PO1~I~F; The PDIC~OIG objects to this request as: (a) overbroad; (U) inlp~~op~rly calling fir

inforinatian }~rot~ctecl by the banlz examiner ~rivile~e, fih~ law enforceirietit privilege, the

deliberative process privilege,, or the attorney-clia~it privilege; (c) irrelevant and not reasonably

calaulatEd to lead to the discovery of admissible evid~iace to Ct~e extent that the request does

beyonca the 20 loss loans that ~lt~e the subject of tl~e Ai~~etided Coa~~plai~7t (see, e. g,, locket No.

1

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 33 of 40 PageID #:4300
739); a.nd (d) improper Co the extent that it calls for co~ifzciential information ulid~r 12 C,F,R.

§§309,1-309,7, ~ubj~ct to at7d withotyt w~ivzn~ tlla i'ar•e~;oin~ - objections, FDIC-OXG states that it

will produce t on-privileged clocun~ez~ts within its ~~oss~ssion, custody or control re~ronsive fo this

r~quLst that refer ~o or dise~Yss the 20 loss loans that are; tlic. s~il~ject of the Amended Cori~.plaint,

a7zd not alt'ead}~ pradured b~ the FnIC,~~7. or the FDIC-C,

1d, All drafts of OIG's Matst~ial Loss Rc.vieiv of ~3t~oadway Bank,

RE~~'OTt~ + ; Tl3e FDIC-OTCs objects to tlYis request as. (a) ovei~hr~ad.; (b) improperly callix~~ for

information r~i~otected ~y tl~e I~fuilc examiner pz~ivilege, the law ~:nforcement privile~~, the

deliberative process ~~rivilege, or t11e attarney-client privilege; (c) irrelevant end not reasonably

calculated to lead to the discovery of admissible evici~i~ce to the extent that the 1•equest does

l~eyoz~d the 20 loss loans that are the subject of the Am~,nded Goixzplaint (see, e,g,, Docket No,

239); and (d) improper to tlae extent that it calls for• coii~iclential information under 12 C,F,R,

§§09.1-309.7.

11, All z•esponses and eoinnaents received by OIG r•ebardii~g thy; Material Lass Review.

12C~P01'~aE: I'he FDIC~OIG objects to this rec~trest as; (a) overbroad; (b) improperly calling for

ii~f'orinztion px•otected by the b~~k cx~miner privilege, tl7e iaw enfarceulent privile~~, the

deliberaCive 7~r'OC~55 ~~rivilege, or the attorziey~client prirrile~e; (c) irrelevant and not reasonably

calctrla#ed to lead to the discovery c7f admissible evidence to tl~e extelrt that the request goes

beyond Che 20 loss Loans t11at are the subject of the An~endc~ Goai~plai~it (see, e.g., Docket. No,

'~39); Ana (d) izxipropfsr to thG c,x1.e»t t.hr~t it calls for confidential ir~~'orznatio~~ ur~dee 1?.. C.F,I~,

§§309,1-~~9.7.

8

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12, Docuiixents sufficient i.o icielitify all T31•o~dw~y k3an14 borrower relationships revie~~ed by

rCPIv1U.

RE~PON~t~.: The FDIC-OICr objects io dlis requesi as; (a) overl~raacl; (U) iz~relevai~t aixt not

reasonably calculated to lead to the disc~v~:~y of acli~iissible evidence to the extent that the request

goes beyond the 20 loss loans that are the subject of tihe Aiiiended Complaint (see, c.g,, Docket

Nn, 239); az~d (c) imprape~ to the exient that it calls fox confidential information under 12 C.r,R,

§§309.1-309.7. Subject to and without waiving the foz~e~;oirig ob~ectiozis, I~~DIC-C3IU states that it

will produce non-privileged documents within its }possession, custody or control responsive to this

request that refer to or discuss fhe 20 loss loans that are the subject of the Amended Complaint,

and nat already produced by the FDIC-R or the rDTC-C.

13. All notes, transcripts, and/or memoranda of interviews conducted by O1G as part of tl~e

Material Loss Review, 111C~L1C~111~„ but not limited ta, the interviews conducted nn August 27, 2010

by Leozi We~laus (UIG Senior• Audit Specialist) acid Alberto Sanabria (KPMCr) with examiners

from the Illinois Department of S~inancial and Professional Regulation.

RE~'1'ON~I+a; `i'he FDIC-OICr objects to this request as: (a) overbt~oad; (b) izxlpropexly calling for

information protected by the hank examiner privilege, the law enfo~•cement privilege, the

deliberative process pY•ivtle~e, or the attorney-client privilege; (e) irrelevant grid i~ot reasonably

calculated to lead to the discovery of admissible evidence to the extent ttlat the request goes

beyond the 20 loss loans that are the subject of tl~e Amended Complai~~t (s•ee, e, g., Docket No,

239); at~d (ci) ir7zproper to flee extetlt that it calls for confidential information w~dcr 12 C,F,R.

§§ 09.1-309,x.

q

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 35 of 40 PageID #:4302
14, All notes, rnemo~~~nda, and/or r~e5lllts cif any tests or' exaii~iti~tions per•f'ormed by OIG as

part of t17e 1vla.terial Loss Review, iticluaiiig bui not lirraited to notes, a~~ez7lorand~, and/or results of

tests designed to assess ~lroad~~vay's Bank's regulators' compliance r~vith la~~s and re~ulatioiis.

RE~P~NSE: The F]aICaOIG objects to this Y~ec~uest as; (a) c>varl~r~aci; (1~) improperly calling for

infarma~ion protected by t1~e b~~ik e~arni»~r pcivileL;e, the law enforc:emcnt privilege, tl~e

delib~r~~tivs r~~~ocess ~~rivil~~e, or the attor•z~e~r~cliez~rt pi°ivile~e; (o) ii~~elevant ana not i•easo~aabl~

calculated to lead to the discovery oC ldrnissible evidence to the extent that the request goes

beyond the 2Q loss loans that are the subject of the Ai~iGnc~ed Complaitlt (see, e.g., llocket No.

239); nud (d) itiipro~er to ilie e~tezit that it calls fir con~det~ti~l infotn~ation under 1~ C,F.R.

~§309.1-309.7,

1 S, All documerrts reviewed, analyzed, acid/or relied upon by OIG as ~~art of the Material Lciss

iZeview, to the extent nofi responsive to Rec7uests 1 through 1 ~, supra.

I~ESPOI~~I±,; 'Ilse FDIC-0IG objects to this request as; (a) ovez•broad; (b) value, ill-d~:tined,

ambiguous, and a catchall xequest with no reasonable parameters, t•ez~dez•ing the request

unreasonable; (c) duplicative and cumulative of prior requests, and, for those z•easons, unduly

burdensome; (d) iiT~pi•ope;rly calling fot~ information protected ~.iy the bazzk. exaininec privilege, the

law ez~forcei~nent privilege, the deliberative process privilege anc~ the attorney-client privilege; (e)

ii~rel~va~It and a~iot a~~asoir~bly calculated to lead to fb~e diseoveiy of admissible evidence to tl~e

extent that the request goes beyozld tl7e 20 loss loans t.~at are the subject of tlae Alrleuded

Conxpla.int (see, s.~>., Docket No. 7.:~9); anc~ (f) itnr~ro~cr to tkic extezit thzt it aal~s for cozifidential

information under 12 C,I',R, §§309,1-309,'1,

fli7

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 36 of 40 PageID #:4303
16. All doeuinents which refer o~~ relate to tl~e I,osi Loins to tl~e extent not responsive; to

R~qu~sts 1 tliz•ou~h 15, supra.

~i~'Ol'~~L< , The FDIC-OZG objects to t1~is request as; (a) overbroad; (b) va~uc, ill-defi~ied,

ambiguous, azid a catchall request with zio reasonable parameters, rendering t(ie request

unreasonable; (c) duplicative and cumulative of p~~ior requests, acid, foX~ those xcasons, t~ndi~ly

burdensome; (d) improperly calling for infor•matio~i ~iotected by the bank examin~;r privilege, tl~e

law enforcement privilege, the deliberative process ~~rivile~e and the attorney-client privilege; (e)

irrelevant and nc~t reasonably calculated to lead to the discovery of admissible evidence to the

extent that the request seeks dncumeiits Cleat "relate t~" the 7Q loss loins that az~e the subjecf of the

Amended Complaint, as the phrase "relate to" .is t~tade~zied, va~u~ ~zld ambiguous; azicl (f)

improper to tkze extent that it ca11s for confidenti~.l information under 12 C,F,R. §§309,1-309.7.

Dated; Novernl~er 7, 2014 R.espectfiilly submitted,

FEDEI~L D~~'OSIT INSURANCE

CORPORATION OF'I'ICE

Off' INSPECTOR GENERAL

._~

y' -- __._ ....

Adriana Rojas

AdriaiYa Rojas

Associate Counsel

rDIC Office of Inspector General

3501 North I'airfax Drive

A,rlingtoil, Virginia 22226

703-562-6341 (~lLone)

703~562n6433 (Czcsiinile)

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 37 of 40 PageID #:4304
c~c~i~~~~~~rc~~r~L c~~{~ ~~a~v~c~,

T'he undersigned al:tor~aey certifies that ~t tt•ue aY~c1 correct copy of the Paregoin.g was

served on ~zll coiu~sel of rPcor•d via e-nxail on Novembex 7, 2014,

:iAAP~i IA~~~;.~ j ~ ,, ,t, ,~

V

1?

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 38 of 40 PageID #:4305
~+':f)XC v, ~iaunonli:~s, et ~l,

Csase ~o. ~.2 (~`V ~6~iS

William ~, Chaxxan

Bryan T, Mohlei

~'xyox C~shi~i~zi LZ.I'

7 Times Squsre

N'ew Yorlc, NY 10436

Telephozie; (212) X21 4100

b~nohler(a,~x oxaas~nxaza,canY

~ohat~ron(a)~ryoxoaskuaiar~. can

Lric Y'. C~xoi

Neal, Gerber & ~isenbc~rg LLP

Twa N'ox~tlx Lsialle Street

Suita 1700

Chicago, Illinozs 60602

Telephone; (x:12) 269-8000

ecl~oi n~el~w.com

Corcr:selfor~ Ueferi~Xar~lsllsnretrls

G~~rrtr:orcl~as nrx~l ~eaj~ge G~ara~~vrrXin,s

Robez~t J, Aynb~ose

DRvid C, Van Uylcp

Scott kz~ast

Josoph W,13arber

Dorui~ Rizzuto

T-3oward and 1Tot~vard ~'LLC

200 South MicXzigazz Avexlue

Surte 1100

Cl~{cflgo, Illinois 6060

Telephone; (31z) 3"/2-~OpU 

:RA~~bxosenhow~rd,~andhowa~•d,com

DV anD~!ke(a~lio~ard aiic~ho~~ ~~d, col~~

SFrost a~ho~~~dEiudhowtu~d,corr~

J'WBa~~ber c~hawarda~idhow~rd,coaii

drizzuto lioward~ndho arclWaoin

Cor~rrsel for Defe~c~7rzf~~ JRf~1es .tl~c~~rrl~or~

Ratad~~l M, T,endin~;

Rack~e~ T, CaX~ankx~ver

Veddez• 1'riee P,C;,

222 I~ortlY LaSalle Street

Suite 26,00

ChYcago, Illirioi~ G4601

Telepho~.e; (312) 609-'15Q0

relendin~(a7~vetldei~rict~.corn

xeopex~.hf~vern veld c~i~rice, cam

Cotr~tsel for~.Ucfertdartls S'ea~t Corclori, S"teve~r

.dry, Dora Lagor~slci, Ste>>era .B~rloatrdos,

Atctltor~y D'Costa artt~ Gloria Sgr~ros

Susan G, ~eibus

~`, Thomas Hecht

De~ti 7, polales

TZiali~~t~d H. 'S'i1~l~.nan

Set1~ A, ZzorvAth

Uii~atetiti & Hurls

"10 West Madison

Su{te 3SQ0

Chicago, Z~. 60602

s Jf~elbus~ul~law.corrl

fthecht uhlaw.com

dl~ola es~uh(awsc~~p,

rhtil I~man~uhlaw.com

sahorvath ~utilaw,com

Car~rtsel far .prrrtrattff F:i7.IC, .I~eredVe1~,~ar~

Br~onr~iv~cy X~a~Pk

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 39 of 40 PageID #:4306
FDIC v. Giannoulias, et al.

Case No. 12 CV 1665

SERVICE LIST

William L. Charron Randall M. Lending

Bryan T. Mohler Rachel T. Copenhaver

Pryor Cashman LLP Vedder Price P.C.

7 Times Square 222 North LaSalle Street

New Yorlc, NY 10036 Suite 2600

Telephone: (212) 421-4100 Chicago, Illinois 60601

bmohler ~rvorcashman.com Telephone: (312) 609-7500

wcharron ~rvorcashman.com relending~,veddei~price.com

rcop enhaver(a~veddei-~rice. com

Eric Y. Choi

Neal, Gerber &Eisenberg LLP Counsel for Defendants Sean Conlon, Steven

Two North LaSalle Street Dry, Do~za Zagorski, Steven Balourdos,

Suite 1700 A~ztltony D'Costa and Gloria Sguros

Chicago, Illinois 60602

Telephone: (312) 269-8000

echoi(a~n~elaw.com

Counsel fog Defendants Demetris

Giannoaclias afid George Gi~cnfzoulis

Robert J. Ambrose Susan G, Feibus

David C. Van Dylce F. Thomas Hecht

Scott Frost Dean J. Polales

Joseph W. Barber Richard H. Tilglunan

Donna Rizzuto Seth A. Horvath

Howard and Howard PLLC Ungaretti &Harris LLP

200 South Michigan Avenue 70 West Madison, Suite 3500

Suite 1100 Chicago, IL 60602

Chicago, Illinois 60604 s feibus e,uhlaw.com

Telephone; (312) 372-4000 fthecht cz,uhlaw.com

RAmbrosenhowardandhoward.com ~polales(a~ulilaw.com

DVanDvlce e howardandhoward.com rhtilghman(c~uhlaw.com

SFrost cr,howardandhoward.com sahorvath cr,uhlaw.com

JWBarber cr,howardandhoward.com

drizzutonao,howardandhoward.com Mary Anne Benden

FDIC

Cortnsel for Defen~la~zt T~cmes McMtclzoii 300 South Riverside Plaza, Suite 1700

Chicago, IL 60606

3121382-6510

mbenden(a~fdic. o~v

Counsel fot~ Plaintiff FDIC, Receiver for

B~oa~lwc~y Bank

Case: 1:12-cv-01665 Document #: 259 Filed: 01/30/15 Page 40 of 40 PageID #:4307