FOX ROTHSCHILD LLP

Formed in the Commonwealth of Pennsylvania

By: Gerard P. Norton, Esq.

Alain Leibman, Esq.

Joseph Schramm, III, Esq.

Princeton Pike Corporate Center

997 Lenox Drive, Building 3

Lawrenceville, NJ 08648-2311

Tel: (609) 896-3600 

Fax: (609) 896-1469

Attorneys for Plaintiff American Institute

 of Certified Public Accountants

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

AMERICAN INSTITUTE OF CERTIFIED 

PUBLIC ACCOUNTANTS,

 Plaintiff,

 v.

KAPLI INC. and KWANG WOO NAM, 

 Defendants.

Civil Action No.

VERIFIED COMPLAINT

Plaintiff, American Institute of Certified Public Accountants (“AICPA”), a 501(c)(6) notfor-profit corporation organized and existing pursuant to the laws of the District of Columbia, 

with a place of business located at 100 Princeton South Corporate Center, 200 Princeton South 

Corporate Center, Ewing, New Jersey 08628, by and through its attorneys, brings this action 

against defendants KAPLI Inc. (“KAPLI”), a New York corporation with a place of business 

located at 227 Grand Avenue, Palisades Park, New Jersey 07650, and Kwang Woo Nam

(“NAM”), a resident of Leonia, New Jersey, and hereby alleges as follows:

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 1 of 56 PageID: 1
2

NATURE OF THE ACTION

1. This is a civil action for damages and injunctive relief involving the infringement 

by defendants KAPLI and NAM (collectively, “Defendants”) of copyrighted, secure questions 

and test items from the Uniform Certified Public Accountant (CPA) Examination. 

2. Defendants have engaged in the unauthorized disclosure and use of copyrighted 

and secure active Uniform CPA Examination questions and test items. Defendants have 

solicited, obtained, copied, and distributed active Uniform CPA Examination questions and test 

items from individuals who had taken the Uniform CPA Examination. What is known of the 

Defendants’ infringing activity has already caused the AICPA to re-write examinations and 

abandon questions and test items developed at great expense and effort, and threatens the 

integrity of the single foundational examination for CPA licensure across the United States and 

around the world. 

3. The AICPA develops and owns the copyright to the Uniform CPA Examination,

which is a uniform examination that constitutes the most significant component of the 

requirements for licensure as a Certified Public Accountant in all fifty states, the District of 

Columbia, Puerto Rico, U.S. Virgin Islands, Guam and the Commonwealth of Northern Mariana 

Islands. 

4. NAM is a principal and/or employee of KAPLI. KAPLI operates a live and 

internet-based commercial test preparation program that purports to assist prospective examinees 

in preparing to take the Uniform CPA Examination. As part of that program and for their 

economic benefit, KAPLI and NAM have improperly solicited, obtained, copied and distributed 

copyrighted Uniform CPA Examination materials belonging exclusively to the AICPA. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 2 of 56 PageID: 2
3

JURISDICTION AND VENUE

5. This action arises under the Copyright Act, 17 U.S.C. § 101 et seq. This Court 

has original and exclusive jurisdiction over copyright claims pursuant to 28 U.S.C. §§ 1331 and 

1338(a). 

6. The Court has original jurisdiction over the AICPA’s state law claim for unfair 

competition under 28 U.S.C. § 1338(b). The Court has supplemental jurisdiction over the 

AICPA’s state law claim for tortious interference with contracts under 28 U.S.C. § 1367(a). 

7. The Court has personal jurisdiction over KAPLI based on one or more of the 

following activities: (a) KAPLI transacts business within and avails itself of this District; (b) 

KAPLI contracts to render services within this District; (c) KAPLI expects or reasonably should 

expect its acts to have legal consequences in this District; (d) KAPLI engages in a persistent 

course of conduct in this District; (e) KAPLI engages in commercial transactions with residents 

of New Jersey; (f) KAPLI engages in ongoing interactions and communications with residents of 

New Jersey through the use of its website; and (g) KAPLI engages in acts interfering with

contracts entered into by the AICPA, a Washington, D.C., company with an office located in

Ewing, New Jersey, and individuals who take the Uniform CPA Examination in this District.

8. This Court has personal jurisdiction over NAM based on one or more of the 

following activities: (a) NAM transacts business within and avails himself of this District; (b) 

NAM contracts to render services within this District; (c) NAM expects or reasonably should 

expect his acts to have legal consequences in this District; (d) NAM engages in a persistent 

course of conduct in this District; (e) NAM engages in commercial transactions with residents of 

New Jersey; (f) NAM engages in ongoing interactions and communications with residents of 

New Jersey through the use of the KAPLI website; and (g) NAM engages in acts interfering with 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 3 of 56 PageID: 3
4

contracts entered into by the AICPA, a Washington, D.C., company with an office located in

Ewing, New Jersey, and individuals who take the Uniform CPA Examination in this District. 

9. Venue in this District is proper under 28 U.S.C. §§ 1391(b) and 1400(a). 

Defendants are doing business in this District, they and their agents may be found within this 

District, and a substantial part of the events giving rise to the AICPA’s claims occurred in this 

District. 

PARTIES

10. The AICPA is a not-for-profit Washington, D.C., corporation with an office in 

Ewing, New Jersey. The AICPA is the national professional membership organization of 

Certified Public Accountants. Among other things, the AICPA is responsible for examination 

content, development, and scoring of the Uniform CPA Examination.

11. Defendant KAPLI Inc. is a New York corporation with its principal place of 

business at 16 West 32nd Street, Room 306, New York, New York. It also has offices in 

Palisades Park, New Jersey; Flushing, New York; Annandale, Virginia; Los Angeles, California;

and Anaheim, California. It operates commercial test preparation review programs for the CPA, 

Enrolled Agent (EA), Chartered Financial Analyst (CFA) and Actuarial licensure examinations

at all of the above locations. On information and belief, KAPLI stands for Korean American 

Professional Learning Institute. 

12. Defendant Kwang Woo Nam is a principal and/or employee and lecturer for

KAPLI. On information and belief, he resides at 199 Christie Heights Street, Leonia, New 

Jersey 07605, among other locations.

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 4 of 56 PageID: 4
5

FACTUAL ALLEGATIONS

A. The AICPA and the Uniform CPA Examination

13. The AICPA was founded in 1887 and, upon its creation, established accountancy 

as a profession distinguished by rigorous educational requirements, high professional standards, 

a strict code of professional ethics, licensing status and a commitment to serving the public 

interest. Today, the AICPA is the world’s largest association representing the accounting 

profession, with nearly 370,000 members in 128 countries.

14. Among other activities, the AICPA develops and owns all rights in and to the 

Uniform CPA Examination. The AICPA is responsible for, among other things, content 

development and scoring with respect to the Uniform CPA Examination. 

15. Each state has a Board of Accountancy or like body (collectively, “Boards”). The 

Boards are independent of the AICPA, and are generally created by state statute. Each Board 

determines its own requirements for licensure as a Certified Public Accountant. Since 1952, 

every jurisdiction has used the Uniform CPA Examination as a component of its CPA licensure 

admissions process, including the Board for the State of New Jersey. 

B. Design of the Uniform CPA Examination.

16. The Uniform CPA Examination is designed to provide reasonable assurance to 

the Boards in protection of the public interest that those who pass the Uniform CPA Examination 

possess the level of technical knowledge and the skills necessary for initial licensure. The public 

interest is protected when only qualified individuals are admitted to the profession.

17. The Uniform CPA Examination currently consists of four sections: Auditing and 

Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 5 of 56 PageID: 5
6

Reporting (FAR), and Regulation (REG). These four sections represent a total of 14 hours of

testing.

18. All four sections of the Uniform CPA Examination contain multiple-choice 

questions (MCQs). The AUD, FAR, and REG sections also have Task-Based Simulation (TBS) 

questions; BEC has written communication questions, but no TBS questions. 

19. The TBS questions in the AUD, FAR, and REG sections are presented as case

studies, followed by tabular grids which test candidates’ knowledge and skills by generating 

responses to more complex questions.

20. Advance knowledge of specific multiple-choice questions or Task-Based 

Simulation questions, or the precise subject areas they are designed to test, would afford a testtaker a significant advantage and would undermine the examination’s ability to genuinely test the 

applicant’s level of technical knowledge and skills. 

21. The development of Uniform CPA Examination questions is a lengthy, 

painstaking and expensive process involving numerous individuals and several levels of review 

and analysis. This process begins with expert input from multiple groups of CPAs who work to 

draft a set of statements defining the knowledge and skills that are required of entry-level CPAs, 

which is compiled in an outline. The outline is then sent to practicing CPAs in a survey that asks 

each survey respondent to rate each statement on a number of criteria, such as relevance, 

importance and frequency. The survey data is then gathered and evaluated by committees of

CPAs, which recommend how statements should be organized for testing, as well as the relative 

proportion that each area should represent on the Uniform CPA Examination. The committees’ 

recommendations are then sent for review by the Board of Examiners, which is composed of

CPAs and other experts in testing, and are also sent out to a wide audience of stakeholders in 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 6 of 56 PageID: 6
7

what is known as an “exposure draft.” Comments are collected from the stakeholders and 

presented to the Board of Examiners for a final review. At this point, an outline of content and 

skills eligible for testing is approved for use. 

22. After finalizing the outline of knowledge and skills eligible for testing, the 

AICPA begins the process of developing questions to measure that material. First, the AICPA 

recruits CPAs to draft test questions and provides the CPAs with training in how to write test 

questions based on the approved outline of knowledge and skills. Test questions are drafted for 

initial review and subsequently reviewed for content and editorial quality and revised, as 

necessary. After initial review, the questions are presented to committees of CPAs for review 

based upon, among other things, accuracy, relevance, and match to specifications. The 

committee may accept, revise, or reject a question. 

23. Next, test questions are revised, based on the committee review, for pre-testing. 

Pre-testing is done on operational test items. That is, some of the questions that each Uniform 

CPA Examination candidate takes are pre-test questions that do not contribute to the candidate’s 

score. Pre-test data are statistically analyzed to identify questions for further review before they 

are used as operational questions which contribute to candidate scores. 

24. After questions are approved for use based on pre-testing, tests are assembled for 

administration. Test forms are assembled to meet specifications on a number of dimensions, 

with the goal being that test forms from examination to examination are comparable to each 

other. After assembly, the test forms are checked to ensure that they meet the specifications, and 

are then reviewed again in final preparation for test administration. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 7 of 56 PageID: 7
8

25. At present, it costs approximately $2,500 to develop a single question/task of the 

quality necessary to be administered on the Uniform CPA Examination. This cost does not 

pertain to research questions or written communication question types.

C. Copyright Ownership of the Uniform CPA Examination.

26. It has been, and will continue to be, the regular practice of the AICPA to register 

Uniform CPA Examination questions and test items for each section of the Uniform CPA 

Examination with the Register of Copyrights pursuant to and in compliance with the secure-test 

regulations issued by the United States Copyright Office. 

a. The “TX” registration numbers assigned by the United States Copyright 

Office to Uniform CPA Examination test items and/or sets of computer-based items registered 

by AICPA for the Regulation (REG) section of the examination include the following: TXu 1-

733-026 (1/2/2010 through 12/31/2010), TXu 1-733-133 (1/2/2009 through 12/31/2009), TXu 1-

596-767 (1/2/2008 through 12/31/2008), and TXu 1-577-171 (1/2/2007 through 12/18/2007. 

b. The “TX” registration numbers assigned by the United States Copyright 

Office to Uniform CPA Examination test items and/or sets of computer-based items registered 

by AICPA for the Auditing and Attestation (AUD) section of the examination include the 

following: TXu 1-733-024 (1/2/2010 through 12/31/2010), TXu 1-732-982 (1/2/2009 through 

12/31/2009), TXu 1-596-760 (1/2/2008 through 12/31/2008), TXu 1-577-155 (1/2/2007 –

12/28/2007), and TXu 1-329-087 (1/2/2006 through 12/29/2006).

c. The “TX” registration numbers assigned by the United States Copyright 

Office to Uniform CPA Examination test items and/or sets of computer-based items registered 

by AICPA for the Financial Accounting and Reporting (FAR) section of the examination include 

the following: TXu 1-733-097 (1/2/2009 through 12/31/2009), TXu 1-596-758 (1/2/2008 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 8 of 56 PageID: 8
9

through 12/31/2008), TXu 1-577-166 (1/2/2007 through 12/28/2007), and TXu 1-329-088 

(1/2/2006 through 12/29/2006).

d. The “TX” registration numbers assigned by the United States Copyright 

Office to Uniform CPA Examination test items and/or sets of computer-based items registered 

by AICPA for the Business Environment and Concepts (BEC) section of the examination include 

the following: TXu 1-733-126 (1/2/2009 through 12/31/2009), and TXu 1-596-764 (1/2/2008 

through 12/31/2008).

27. At all relevant times, the AICPA has been the sole owner and holder of all rights, 

title and interest in and to the copyrights in the Uniform CPA Examination questions and test 

items at issue, subject only to certain non-exclusive licenses that authorize third parties, known 

as Authorized Review Course Providers, to use for examination preparation courses sample 

Uniform CPA Examination questions that have been retired by the AICPA and will not be used 

in future testing. KAPLI does not have a non-exclusive licensing agreement, nor a contract with 

the AICPA, and is therefore not an Authorized Review Course Provider. 

28. The Uniform CPA Examination test items and questions are original, 

copyrightable materials, and the AICPA has complied in all respects with the requirements of the 

Copyright Act, 17 U.S.C. § 101 et seq. The AICPA therefore enjoys certain exclusive rights 

with respect to the test and the test questions, including the exclusive right to copy, distribute, 

display, and publish the tests and test questions; to authorize others to do so; and to prepare 

derivative works.

29. The Uniform CPA Examination is a “secure” test, which means that the questions 

and test items on the examination are confidential, that they have not been previously disclosed 

by the AICPA to the general public, and that the administration of the examination is secure. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 9 of 56 PageID: 9
10

30. Confidential Uniform CPA Examination questions are not intended to be made

available to the public except during actual test administrations or when the AICPA elects to 

retire the questions or under such other circumstances as AICPA has authorized. Unauthorized 

disclosure of secure test items compromises the integrity of future examinations; causes 

significant financial harm to the AICPA; and undermines the integrity of the licensing process 

for CPAs globally. 

31. The current “Uniform CPA Examination Candidate Bulletin” (the “Bulletin”)

includes the following “CONFIDENTIALITY AND BREAK POLICY AGREEMENT,” which 

is also referred to as the “Policy Statement and Agreement Regarding Exam Confidentiality and 

the Taking of Breaks”:

Before you begin your examination, you will be required to accept 

the terms of the following confidentiality and break policy 

statement. If you do not accept the statement, your test will be 

terminated and your test fees will be forfeited. 

Policy Statement and Agreement Regarding Exam 

Confidentiality and the Taking of Breaks 

I hereby agree that I will maintain the confidentiality of the 

Uniform CPA Examination. In addition, I agree that I will not: 

• Divulge the nature or content of any Uniform CPA Examination 

question or answer under any circumstance 

• Engage in any unauthorized communication during testing 

• Refer to unauthorized materials or use unauthorized equipment 

during testing; or 

• Remove or attempt to remove any Uniform CPA Examination 

materials, notes, or any other items from the examination room 

I understand and agree that liability for test administration 

activities, including but not limited to the adequacy or accuracy of 

test materials and equipment, and the accuracy of scoring and 

score reporting, will be limited to score correction or test retake at 

no additional fee. I waive any and all right to all other claims. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 10 of 56 PageID: 10
11

I further agree to report to the AICPA any examination question 

disclosures, or solicitations for disclosure of which I become 

aware. 

I affirm that I have had the opportunity to read the Candidate 

Bulletin and I agree to all of its terms and conditions. 

I understand that breaks are only allowed between testlets. I 

understand that I will be asked to complete any open testlet before 

leaving the testing room for a break. 

In addition, I understand that failure to comply with this Policy 

Statement and Agreement may result in invalidation of my grades, 

disqualification from future examinations, expulsion from the 

testing facility and possible civil or criminal penalties. 

О I ACCEPT О I DECLINE

32. The Bulletin is posted on the AICPA’s website and is available to examinees well 

in advance of their test date. All examinees must agree to abide by the policies set forth in the 

Bulletin in order to register for the Uniform CPA Examination. The information is provided 

within the Bulletin in order to provide the potential candidate with all of the available 

background information prior to taking the Uniform CPA Examination. This information 

includes, the Confidentiality Agreement, as well as Candidate Misconduct, Cheating, and 

Copyright Infringement, and Grounds for Dismissal.

33. In addition to the above CONFIDENTIALITY AND BREAK POLICY 

AGREEMENT, the Candidate Bulletin includes a section regarding additional candidate conduct

of which all candidates should be fully and consciously aware at all times:

Candidate Misconduct, Cheating, Copyright 

Infringement 

The boards of accountancy, NASBA, and the AICPA take 

candidate misconduct (including cheating on the Uniform CPA 

Examination) very seriously. If a board of accountancy determines 

that a candidate is culpable of misconduct or has cheated, the 

candidate will be subject to a variety of penalties including, but not 

limited to, invalidation of grades, disqualification from subsequent 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 11 of 56 PageID: 11
12

examination administrations, and civil and criminal penalties. In 

cases where candidate misconduct or cheating is discovered after a 

candidate has obtained a CPA license or certificate, a board of 

accountancy may rescind the license or certificate. 

* * *

All examination materials are owned and copyrighted by the 

AICPA. Any reproduction and/or distribution of examination 

materials, including memorization, without the express written 

authorization of the AICPA is prohibited. This behavior infringes 

on the legal rights of the AICPA and, in addition to the penalties 

listed above, the AICPA will take appropriate legal action when 

any copyright infringements have occurred. 

Grounds for Dismissal 

If you engage in misconduct or do not follow the test center 

regulations, the test center staff may dismiss you from the 

examination or you may have your scores canceled by your board 

of accountancy. The following are examples of behavior that will 

not be tolerated during the examination: 

• Repeating acts of misconduct after receiving prior warning(s) 

• Attempting to remove or removing examination questions from 

the testing room by any means 

• Copying, writing or summarizing examination questions on any 

material other than the scratch paper issued to you 

* * *

34. In order to help prospective examinees familiarize themselves with the types of

questions contained on the Uniform CPA Examination and otherwise prepare for the 

examination, the AICPA itself publishes previously administered, “retired” Uniform CPA 

Examination questions. The AICPA exclusively has the discretion to determine which, if any, 

Uniform CPA Examination questions are retired from examination use. For example, the 

AICPA compiles these previously administered, “retired” CPA examination materials and sells

them to authorized, licensed Authorized Review Course Providers for use as educational 

materials for the courses they teach to potential CPA candidates in preparation of taking the 

examination; instructors of Continued Professional Educational courses; and textbook

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 12 of 56 PageID: 12
13

publications for classroom instruction. The AICPA also provides “retired” questions within 

professional publications, such as the Journal of Accountancy, The New Jersey Society of 

Certified Public Accountants, The Pennsylvania Institute of Certified Public Accountants, as well 

as other state society publications and bulletins. 

35. In addition to the above, “retired” examination question are also used by the 

AICPA in order to help prospective examinees familiarize themselves with the types of questions 

contained on the Uniform CPA Examination and otherwise prepare for the examination. To 

familiarize candidates with the formation and functionality of the Examination, sample tests and 

a tutorial are provided on the AICPA website.

D. Administration of the Uniform CPA Examination.

36. The Uniform CPA Examination is administered during the first two months of

each calendar quarter at test centers maintained and operated by an AICPA vendor throughout 

the United States in a computer-based (rather than paper-based) format. Since April 2004, the 

computer-based Uniform CPA Examination has been administered over one million times. 

37. The vendor that administers the Uniform CPA Examination for the AICPA offers 

each administration of the examination on multiple dates spanning the first two months of each 

calendar quarter. For example, the first quarter administration of the Uniform CPA Examination 

for 2011 was administered throughout the months of January and February 2011. The second 

quarter administration of the Uniform CPA Examination for 2011 was administered throughout

the months of April and May 2011. The next administration of the Uniform CPA Examination 

will be offered throughout July and August 2011. 

38. On January 2, 2011, beginning with the first quarter administration of the 

Uniform CPA Examination in 2011, the AICPA launched a new format for Uniform CPA 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 13 of 56 PageID: 13
14

Examination. The AICPA intends to use this new format for several years until the next update 

to the Uniform CPA Examination. 

E. Defendants’ Unlawful Conduct

39. Defendants have actively solicited KAPLI students to send to KAPLI, through 

NAM, copyrighted and secure active questions and test items from the Uniform CPA 

Examination which they have recently taken. KAPLI has compiled these copyrighted and secure 

questions and test items from the Uniform CPA Examination based upon comments from its 

students that have taken the Uniform CPA Examination, reconstructed the copyrighted and 

secure questions and test items from the Uniform CPA Examination as faithfully as they are able 

to do from the test-takers’ recollections and comments, and then disclosed those Uniform CPA 

Examination questions and test items to further individuals then enrolled in KAPLI’s Uniform 

CPA Examination review program or who purchased KAPLI’s Uniform CPA Examination 

materials. Defendants and their agents ask for and encourage such debriefings, and conduct 

lectures using questions and test items which replicate as closely as possible from the collective 

memory of test-takers the tabular grids and subject areas on the most recently-administered 

examination.

40. The AICPA received information late in 2010 from a confidential source that 

KAPLI, which markets itself to Korean-speaking persons wishing to study for portions of the 

Uniform CPA Examination, and NAM, an individual affiliated with KAPLI, were utilizing 

actual, copyrighted examination questions in their activities, and that KAPLI did so without 

authorization from the AICPA. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 14 of 56 PageID: 14
15

41. In response to the information received from this confidential source, the AICPA

engaged Kroll Associates, Inc., an investigative firm, to undertake a background investigation of 

KAPLI and NAM, and then to undertake an undercover investigation.

42. The initial background investigation revealed the following, among other 

information: (a) a media source had reported NAM’s claim that 80% of KAPLI’s students who 

passed the Uniform CPA Examination had no background in accounting; (b) NAM is noted to be 

a CPA on the KAPLI website; (c) the KAPLI website states that KAPLI stands for Korean 

American Professional learning Institute; and (d) KAPLI’s web site indicates that it has seven 

offices in the United States, including an office at 227 Grand Avenue, Suite H, Palisades Park, 

New Jersey. 

43. On October 1, 2010, an undercover investigator from Kroll, fluent in Korean,

called the KAPLI office in New York, New York, and learned from a staffer named Woo Yong 

Nam that KAPLI’s New York City location provides only lectures in Korean, but that KAPLI’s 

offices in New Jersey and Virginia provide lectures in both English and Korean.

44. On October 27, 2010, the undercover investigator preliminarily reviewed 

KAPLI’s website on cafe.naver.com/kapli, which is apparently used by KAPLI faculty and 

administration to communicate regarding, among other things, their job duties for KAPLI and to 

provide weekly summary reports of duties conducted. Thereafter, the undercover investigator 

continued to periodically monitor the KAPLI website. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 15 of 56 PageID: 15
16

45. Several items on the cafe.naver.com/kapli website contain references to potential 

extraction and/or dissemination of materials “brain-dumped”1 by students who had recently 

taken sections of the Uniform CPA Examination.

46. There were also website references to the tight control which KAPLI maintains 

over the “afterward comments” of its students who have taken the Uniform CPA Examination 

and of DVD’s containing recorded lectures teaching the examination questions and test items. 

For example, an April 20, 2010 message posted by “namlaw,” which is, upon information and 

belief, the account used by NAM, warned KAPLI staff that:

[N]ot a single DVD, other than those pertaining to multiple choice 

lectures, should ever be taken outside school premises. . . . and if 

AICPA or a CBT center (Computer Based Testing center) became 

aware of these materials, [literally; he or she; the school] would 

undoubtedly [100%] be subjected to criminal punishment. 

This is a very serious matter. There is no doubt that KAPLI

will be shutdown and this could lead to dramatic implications . 

. . Of course, [we; the school] must strictly manage the “afterward 

comments” provided by students who had taken the exams. These 

must be stored in the cabinet and make sure that they are not 

exposed outside. . . .” (emphasis added).

47. An August 3, 2010 message post to the cafe.naver.com/kapli website by “happy 

81 (ra7327),” concerning administrative guidelines for KAPLI staff members, stressed that the 

staff should strictly manage “post-exam comments” and emphasized that these materials “should 

never be leaked to other places [outside school premises] and employees should make sure that 

other people (other than KAPLI students) do not know about these materials.” 

 

1 Writings on the cafe.naver.com/kapli website are almost exclusively in Korean. The exact 

Korean word used on the cafe.naver.com/kapli website to describe “brain-dumped” materials is 

“후기 (Hoo Gi),” which may mean “afterward comments,” or “records (or notes) authored after 

an event (or experience).”

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 16 of 56 PageID: 16
17

48. A November 11, 2010 message posted by “namlaw” reiterated the importance of 

not releasing outside the KAPLI premises any Korean-language DVDs:

[A]ll Korean language DVD’s, except for those pertaining to AP 

[Accounting Principles] and multiple choice questions, may never 

be leased [rented] out to be viewed at home. In particular, those 

DVDs pertaining to Review and Simulations lectures may 

(absolutely) never be rented out to be viewed at home. 

Recently, AICPA has been issuing serious warnings about 

duplication and leakage of exam questions and it is in fact 

conducting investigations regarding these matters. (emphasis 

added). 

49. Also available on the cafe.naver.com/kapli website are emails, including one from 

a student whose initials are “HS” to namlaw@hotmail.com, dated November 18, 2010. 

According to the email, “HS” had sat for the Regulation portion of the Uniform CPA 

Examination and the email provided details as to what he/she remembered from the examination.

50. At the time the undercover investigator was gathering information on KAPLI’s 

operations, KAPLI offered an Accounting Principles course (for which it then charged a fee of

$500), a Business Law course (for which it then charged a fee of $1,700, as part of a “Regulatory 

course package”), and a comprehensive review course package (for which it then charged 

$5,700). KAPLI’s review courses are primarily presented through a combination of live lectures 

and pre-recorded DVD lectures shown to KAPLI students by KAPLI staff at KAPLI’s facilities. 

KAPLI also permits students to access certain review materials on the internet through KAPLI’s 

online course package, which was offered by a KAPLI staff member to the undercover 

investigator for an extra fee of $500. 

51. The undercover investigator enrolled at the KAPLI New York location in order to 

take the Accounting Principles course, beginning in late January 2011. Beginning in February 

2011, he also attended Business Law courses, which were to be taught by NAM.

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 17 of 56 PageID: 17
18

52. To pay for the courses, the undercover investigator provided KAPLI with checks, 

which were deposited by KAPLI in an account in the name of KAPLI Inc. at the Bank of

America in New York, New York. 

53. At least two individuals from KAPLI made statements to the undercover 

investigator indicative of their knowledge that KAPLI was improperly using actual Uniform 

CPA Examination questions in its courses. 

54. For example, on February 9, 2011, during a session of the Accounting Principles 

course, given as a live lecture by Jong Wook Noh, Mr. Noh told the undercover investigator in 

substance that he should, at least one month before the actual examination, watch the review 

DVD’s created by KAPLI. Mr. Noh stated that the review DVDs provided explanations on 

sample questions likely to appear on the examination. Mr. Noh replied “yes” when asked by the 

undercover investigator if the KAPLI DVDs contained explanations regarding questions from 

prior examinations. 

55. In addition, on February 15, 2011, while attending a session of the Accounting 

Principles course, the undercover investigator spoke with a KAPLI staff member about taking 

DVD’s home to review. The staff member stated that KAPLI prohibits students from borrowing 

its DVD’s since the school and/or its staff could be subject to police investigations if some of

those DVD’s are leaked. 

56. NAM personally made statements on more than one occasion indicative of his 

knowledge that he and KAPLI were improperly using actual Uniform CPA Examinations 

questions and test items in their courses. 

57. On February 21, 2011, NAM gave a lecture at KAPLI’s New York office as part 

of its Business Law Course. In the course of his lecture, NAM identified specific topics in the 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 18 of 56 PageID: 18
19

business law materials which were unlikely to be, or would definitely not be, on the actual 2011 

Uniform CPA Examination, including the following: (a) he stated that promissory estoppel, 

covered in the KAPLI course textbook, will not be tested on the exam; and (b) he stated that the 

students could ignore textbook sections relating to property law, insurance law, and debtorcreditor relationships, since they were unlikely to appear on the 2011 examination then being 

administered. 

58. On February 24, 2011, KAPLI presented at its New York office a DVD lecture 

described as having been given the day before by NAM at KAPLI’s New Jersey location. In the 

course of this lecture, NAM made several references to specific topics in the business law 

materials which would be tested on the actual 2011 Uniform CPA Examination. 

59. For example, NAM explained that only three of four areas relating to the Statute 

of Frauds – contracts relating to real estate, contracts that cannot be fulfilled in one year, and 

contracts for goods worth more than $500 – are likely to appear on the test.

60. In subsequent lectures presented by KAPLI, NAM made additional references to 

specific topics in the business law materials which would be tested on the actual 2011 Uniform 

CPA Examination. For example, in a live lecture presented by NAM at KAPLI’s New York

office on March 7, 2011, NAM stated that, as to negotiable instruments under Article 3 of the 

Uniform Commercial Code, the actual Uniform CPA Examination would involve a picture or 

drawing of a personal check with two different currency amounts written on the line underneath 

the name of the payee and the numerical box on the right-hand side of the check; he predicted 

that the test-taker would be asked if the personal check should be deemed invalid, and that the 

correct answer would be in the negative, since the check was still valid. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 19 of 56 PageID: 19
20

61. In the same March 7, 2011 session, NAM told the students how to access 

KAPLI’s website through use of a log-in account, because KAPLI would begin to regularly 

upload sample questions related to the tax and business law subjects tested on the examination. 

He also stated that he would have a better idea about the 2011 version of the Uniform CPA 

Examination by late March or early April 2011.

62. Specifically, in the March 7, 2011 session, NAM asked the students to send him 

via email any questions or problems they might be able to recall after taking the actual 

examination. Specifically, he stated that he was not forcing students to do so, and that it was 

illegal to do so, but “if you really feel the urge to send me what you saw on the exam, send me an 

email.”

63. Further evidence of NAM’s knowledge of the illegal nature of soliciting and 

distributing secure and copyrighted portions of the Uniform CPA Examination came during a 

March 10, 2011 online lecture about the new format of the Regulation (REG) section of the 

Uniform CPA Examination. NAM stated that the lecture was not being recorded by KAPLI, as 

the contents of the lecture may violate AICPA rules and lead to cancellation of CPA licenses. 

NAM said that he would try to provide his “feelings” about what will appear on the new 

examination. 

64. As set forth above, KAPLI and NAM were providing their students with 

infringing copies of the Uniform CPA Examination questions and test items both during the first 

quarter 2011 administration of the new examination and immediately prior to the second quarter 

administration of the examination. 

65. NAM proceeded in the March 10, 2011 lecture to provide great detail about what 

precisely would appear on the new examination. He stated the following, among other things: 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 20 of 56 PageID: 20
21

(a) there will be no more than two research questions, which would very likely pertain to two 

specific topics; (b) there would be questions about pensions, and gave details of the structure and 

nature of those questions; (c) there will be questions concerning Form 1041, involving profits 

incurred after death; (d) there will be questions involving stock redemptions; (e) there will likely 

be questions about gifts and trusts; (f) there will be questions pertaining to incentive stock 

options; and (g) there would only be one or two questions relating to installment payments.

66. NAM’s March 10, 2011 online lecture was in part recorded surreptitiously by the 

undercover investigator and his colleagues, including capturing screenshots of the material

presented by NAM, and of pre-prepared questions, answers, and test items which appeared on 

whiteboards shown during NAM’s lecture. These screenshots reflected that NAM was using 

pre-prepared tabular grids substantially similar to those appearing on the Uniform CPA 

Examination administered during the first quarter of 2011. These screenshots were provided to 

the AICPA for review and verification as to whether the information represented or depicted 

questions currently being tested in the Regulation section of the Uniform CPA Examination. 

The results of the AICPA review and verification are set forth below in ¶¶ 68 – 72.

67. In addition to NAM’s multiple admissions that he and KAPLI have been 

making, and continue to make, unauthorized and improper use for their own profit of AICPA 

copyrighted materials, a comparative review of the KAPLI materials and actual Uniform CPA 

Examination test materials corroborates the infringement. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 21 of 56 PageID: 21
22

68. The following question actually appeared on the Uniform CPA Examination

administered during the first quarter of 2011:

Individual Deductions

Scroll down to complete all parts of this task.

The Internal Revenue Service (IRS) has notified Smith that his U.S. Individual Income Tax Return

(Form 1040) for year 2 has been selected for examination. Smith prepared the tax return without 

professional assistance. Smith engaged a CPA to review the details of the tax return and to 

represent him before the IRS.

Listed in the table below are the amounts that Smith claimed as deductions for 

year 2. Smith has provided the CPA with explanations and worksheets for each 

entry, shown in columns A and B.

In column C, enter the correct amount of the allowable deduction. Your entry may be the same 

amount as reported by Smith (if Smith’s entry is correct) or a revised amount (if Smith’s entry is 

incorrect). Enter all amounts as positive values. If a response is zero, enter a zero (0).

A B C

Deductions

Item and amount entered 

by Smith

Explanation of transactions

Correct 

amount as 

determined 

by CPA

Medical expenses 

$6,900 

(prior to 7 1/2% limitation)

Smith's list of unreimbursed, after tax medical 

expenses includes: 

Medical insurance premiums $3,900 

Removal of tattoos: $250 

Medical and dental examinations: $1,000 

Over-the-counter medications: $50 

Prescription drugs: $450 

Emergency room visit for leg injury: $1,250

Interest expense 

$4,100

Smith's list of interest expense includes: 

Home mortgage interest: $3,100 

Interest assessed on late payment of taxes: $200 

Credit card finance charges: $800 

A review of Smith's Form 1098 indicated a payment of 

$3,600 interest on the mortgage loan.

Gifts to charity 

$5,855

Smith's list of cash gifts to charity includes: 

Church: $3,000 

Red Cross: $500 

Local museum: $805 

Local hospital: $750 

Cash gift to a needy neighbor: $800 

All of Smith's documentation supports the amounts 

deducted except a letter from the church 

acknowledging $3,250 of contributions received and a 

letter from the museum indicating $ 850 of 

contributions. 

{Question from actual Uniform CPA Examination continues on next page}

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 22 of 56 PageID: 22
23

Taxes Paid 

$6,400

Smith's list of taxes paid includes: 

Real estate taxes: $3,000 

State income taxes withheld:$2,000 

State estimated income taxes paid in year 2: $500 

State extension tax payment made in year 2 for Smith's 

year 1 state tax return: $700 

Local assessment for sidewalk improvements: $200

Casualty losses 

$4,000 

(prior to 10% AGI

limitation and $100 floor)

Smith purchased a used motor van in December, year 

2, that was completely destroyed in a fire the following 

day. A review of Smith's file indicated that the cost 

and fair market value of the van were $24,000. Smith 

filed a claim with the insurance company. 

The claim was settled for $20,000 in June of year 3 

(after the year 2 tax returns were filed).

Other miscellaneous 

deductions-gambling 

losses $16,000

Smith's worksheet summarized details of gambling 

losses: 

Lottery: 

Lottery ticket purchases: $8,700 

Lottery ticket winnings: $10,800 

Casinos: 

Wagers placed: $14,200 

Casino winnings: $6,500 

Other gambling: 

Cost of bingo games: $1,200 

Winnings from bingo games: $0 

Horse race bets placed: $7,000 

Winnings from horse racing: $3,200 

Certain miscellaneous 

deductions 

$1,800 

(prior to 2% AGI

limitations)

Smith paid the following invoices during year 2: 

Legal fees for the preparation of last will and 

testament: $2,000 

Defensive driving course fee to reduce auto premiums: 

$200 

Safe deposit box used for storing U.S. Savings Bonds: 

$400 

Unreimbursed union dues: $600 

Unreimbursed "steel-toed" shoes and hard hats used 

in construction industry: $500 

Annual wholesales grocery membership fee: $100 

On March 10, 2011, just days after the first administration of the new Uniform CPA 

Examination format ended in February 2011, KAPLI and NAM distributed its copyrighted 

contents to KAPLI students. For example, the following question was presented by KAPLI 

during NAM’s March 10, 2011 lecture concerning the Regulation section of the Uniform CPA 

Examination (words in red are those appearing identically in both the actual CPA examination 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 23 of 56 PageID: 23
24

question/test item and in KAPLI’s infringing version, reconstructed from the “brain-dumps” of

recent KAPLI test-takers)2:

Itemized Deductions -Sch A : KAPLI

Real Time 

Only

A B C

Tax payer Description

Correct 

Amount

Medical Expense 

(7.5% AGI Floor)

Over the counter drug 

Vision surgery 

Hair Plant 

Disability Insurance Premiums

Taxes Paid State Property Taxes 

Federal Income taxes

Interest id Mortgage prepayment penalty 

Interest charged to credit card

Interest on income tax

underpayment

Charitable contributions 

(AGI Limit) 

Church 

Museum

Casualty and Theft 

Losses

Miscellaneous Itemized

Deductions 

(2% of AGI floor)

Safety deposit box rent 

Grocery Store Membership Fee

Will Preparation fees

Miscellaneous Itemized 

Deductions 

(No floor items) 

Winning 

Gambling cost 

Gambling winning

The foregoing KAPLI question/test form closely models both the content and tabular 

format of an actual question that appeared on the Uniform CPA Examination administered 

during the first quarter of 2011. Critically, the format of the actual question appearing on the 

examination was unique and launched as part of a new examination format that launched on 

January 2, 2011. The question’s tabular format is a part of the original work of authorship 

protected by the AICPA’s copyrights. 

 

2

 A screenshot of NAM’s March 10, 2011 lecture displaying this question is attached hereto as 

Exhibit A.

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 24 of 56 PageID: 24
25

Some of the most telling evidence of illegal copying by KAPLI and NAM is in the 

examples of “miscellaneous deductions” in the foregoing questions. Although the actual 

Schedule A to a U.S. Individual Income Tax return, Form 1040, lists no specific “miscellaneous 

deductions,” both the actual Uniform CPA Examination question and the infringing KAPLI 

question list such “miscellaneous deductions” as will preparation fees, membership fees, and 

gambling winnings and losses. 

69. The following question also appeared on the Uniform CPA Examination 

administered during the first quarter of 2011:

Tax Planning-Retirement Cals

Scroll down to complete all parts of this task.

Your client, Reggie, wants to invest $5,000 in a growth stock, and is considering each of 

the following investment alternatives in which to invest this amount:

* A growth stock that does not pay dividends and is held in a brokerage account.

* A traditional IRA that would be fully deductible in this current tax year.

* A Roth IRA for which Reggie qualifies each year.

Complete the table below by clicking each shaded cell and entering the appropriate value 

of each investment, and assume the following:

* A 25% federal tax rate for ordinary income.

* A 15% tax rate for long-term capital gains.

* A 6% return on investment yearly.

* A projected 7-year holding period (at which point the client will retire at age 65 and all 

funds will be withdrawn).

Round all values to whole dollars after all calculations are complete. If a response is zero, 

enter a zero (0).

Investment Brokerage account Traditional IRA Roth IRA

Tax savings on contribution 

for year 1 0

Future value of 6% for 7 years 1.50363 1.50363 1.50363

Tax on distribution

Net distribution in year 7

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 25 of 56 PageID: 25
26

The following question was also presented by KAPLI during Nam’s March 10, 2011 lecture3:

IRA 1 : KAPLI

Traditional IRA Roth IRA Stock

Tax Saving

7 yrs future value 

factor

Tax 

(7 Distribution)

Net Distribution

Once again, the format of the infringing KAPLI question bears a striking resemblance to 

the question actually appearing on the Uniform CPA Examination. The content of the KAPLI 

question also mirrors that of the actual examination question. For example, although KAPLI and 

NAM could have selected any term of years, months, or days, for the required future value 

calculation, they knew from the “brain-dumping” test-takers that the time period actually tested 

was 7 years. Candidates that are exposed to the format and content of examination questions 

prior to taking the examination gain a substantial and unfair advantage over candidates that do 

not know what subjects will be tested or the format in which they will be tested on the Uniform 

CPA Examination. Candidates who are exposed to such information prior to taking the 

examination are more likely to arrive at the correct answer and to do so in less time than 

examination candidates that were not previously provided such advance information.

 

3

 A screenshot of NAM’s March 10, 2011 lecture displaying this question is attached hereto as 

Exhibit B.

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 26 of 56 PageID: 26
27

70. Below is another example of a question that appeared on the Uniform CPA 

Examination administered during the first quarter of 2011:

Pension Distributions

Multiple clients have received distributions from retirement accounts during the year. 

For each of the clients in column A:

* Enter the amount taxable to the client in column F;

* Enter the amount of penalty, if early withdrawal penalty applies, in column G

Enter all amounts as positive values. If a value is zero, enter a zero, (0).

Life expectancy tables are available in the Resources tab if required.

A B C D E F G

Client and age

Distribution 

Type 

Distribution 

Amount Basis Distribution note

Taxable

Amount

Amount of early 

withdrawal 

penalty

Client A; Age -

65; 

Spouse age-47 Roth IRA $10,000 $4,000 

Client A began 

making these 

contributions 

seven years ago

Client B; Age -

58; Single

Traditional

IRA

 $32,000 

with basis $32,000 

Client B began 

making 

contributions 10 

years ago. This 

was a one-time 

withdrawal for a 

personal 

purchase.

Client C; Age -

38; Single

Traditional

IRA $11,000 $0 

Client C took the 

distribution to 

make a down 

payment toward 

the purchase of a 

first home.

Client D; Age -

46; Spouse age44

Lifetime 

annuity from a 

qualified 

employer 

retirement 

plan 

$12,000

($1,000 per 

month) $84,000 

Estimated

lifetime 

distributions: 

$360,000

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 27 of 56 PageID: 27
28

The following question was presented by KAPLI during NAM’s March 10, 2011 lecture, and

closely tracks the foregoing question that actually appeared on the Uniform CPA Examination

administered during the first quarter of 20114:

IRA 2 : KAPLI

Distribution IRA Taxable Penalty

Taxpayer A 

L/O/62

Taxpayer B 

L/O/60

Taxpayer C 

L/O/38

Taxpayer D 

L/O/57

Taxpayer E 

L/O/45

The foregoing KAPLI and actual Uniform CPA Examination questions both test the same 

content, namely calculating the taxable amounts of IRA distributions and resulting penalties, if 

any, for taxpayers of various ages. Both questions do so in substantially similar tabular format. 

Moreover, one “brain-dumper” debriefed by KAPLI and NAM apparently was able to recall the 

precise age of the one of the hypothetical “clients.”

 

4

 Two screenshots of NAM’s March 10, 2011 lecture displaying this question are collectively 

attached hereto as Exhibit C.

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 28 of 56 PageID: 28
29

71. The first quarter 2011 administration of the Uniform CPA Examination also 

featured the following question: 

Redemption C Corporation Stock

Able Co., a C corporation, has four individual shareholders, Anchor, Blank, Link, and Erode. 

The shareholders are unrelated except for Link, who is Erode's father. The company plans to 

make an offer to redeem shares of stock from only one shareholder, but only after calculations 

are made for the individual shareholders indicated below. Assume only after calculations are 

made for the individual shareholders indicated below. Assume that the redemption, except for 

the facts below, would be treated as a dividend.

Ownership in Able Co. is summarized as follows:

Anchor Blank Link Erode Total

Number of 

shares owned 1,000 2,000 2,000 5,000 10,000

Purchase price 

per share $30 $25 $20 $35 

Current

ownership 

percentage 10% 20% 20% 50%

Shares to be 

redeemed 200 600 0 1800

Assume that Able Co.'s current and accumulated earnings and profits exceed the total amount 

of the redemption proceeds.

For each potential redemption below, enter the requested amount in the associated shaded 

cell. When entering a shareholders' ownership percentage, it must be entered as a decimal 

rounded to four places (e.g., 12.34% should be entered as .1234)

For a shareholder's tax basis per share in the remaining shares owned, enter the amount 

rounded to the nearest cent (e.g., $6.321 should be entered as $6.32). Enter all amounts as 

positive values. If a value is zero, enter a zero (0).

Potential 

redemption

Ownership 

percentage after 

redemption

Amount and treatment of 

distribution Basis per share in 

remaining shares

Dividend Sale or exchange

600 of Blank's 

shares are 

redeemed for 

$38 per share

1,800 of Erode's 

shares are 

redeemed for 

$50 per share

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 29 of 56 PageID: 29
30

During his March 10, 2011 lecture to KAPLI students, NAM presented the following question, 

which is substantially similar in content and format to the foregoing question from the Uniform 

CPA Examination administered during the first quarter of 20115:

Stock Redemption : KAPLI

Stock Redemption

A B C D Total

Stock

Stock Basis

Ownership 

(%)

Stock

Redemption

Stock Redemption

Ownership 

percentage (%)

Dividend 

Amount

Sales

Amount

Stock Basis

Total

A

D

Both of the foregoing questions are presented in a substantially similar tabular format, 

with each including a lower 4 x 4 open grid. The information most critical to the required 

calculation is displayed in the column and row titles, which are also strongly similar as between 

the copyrighted and infringing versions. The differences between the copyrighted and infringing 

materials are trivial; every Uniform CPA Examination candidate would understand that “stock” 

and “shares” are synonymous terms and so would have been recalled by a “brain-dumper” 

synonymously. 

 

5

 A screenshot of NAM’s March 10, 2011 lecture displaying this question is attached hereto as 

Exhibit D.

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 30 of 56 PageID: 30
31

72. The Uniform CPA Examination administered during the first quarter of 2011 

contained the following question concerning taxation of trust distributions:

Income Taxation of Trusts

The fiduciary of two separate simple trusts engaged you to prepare Form 1041, U.S Income Tax 

Return for Estates and Trusts. The fiduciary provided you with the following information for the 

Barker Trust and the Link Trust for year 2.

A B C

Barker Trust Link Trust

Treasury note interest $0 $12,400

Interest earned on 

certificates of deposit 6,200 0 

Tax-exempt interest income 0 8,100 

Dividend income 0 16,200 

Long-term capital gain 0 11,400 

Short-term capital gain 5,600 0 

Short-term capital loss 0 2,000 

Fiduciary and accounting 

fees 3,200 4,600 

The fiduciary also provided the following information relating to the trust:

Each trust has a sole-individual beneficiary.

Each trust is required to distribute its current accounting income annually.

Each trust is allowed a $300 personal exemption.

In the Link Trust, $1,200 of expenses is allocable to tax-exempt interest.

In the shaded cells in Columns B and C, enter the amounts for each trust item shown in Column A. 

Enter all amounts as positive values. If an amount is zero, enter a zero (0).

A B C

Trust items Barker Trust Link Trust

Income required to be 

distributed to each 

beneficiary

Trust distributable net 

income

Trust income distribution

deduction

Trust taxable income

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 31 of 56 PageID: 31
32

NAM’s March 10, 2011 lecture also contained a question regarding trusts6:

Simple Trust : KAPLI

Simple Trust A Simple Trust B

Dividend Income

Taxable Interest

Income

Tax-Exempt Interest 

Income

Capital Gain to 

Corpus

Administrative 

Expense

Fiduciary FeesDeductible

Simple Trust 

A B

Taxable Income

before distribution

Distributable net 

income

Taxable income To 

beneficiaries

These questions are yet another example of KAPLI and NAM copying the AICPA’s specific 

tabular format and content. The fictionally client-named “Link” and “Barker” Trusts in the 

AICPA question are interchangeable with KAPLI’s Simple Trusts for clients “A” and “B.” The 

KAPLI question also contains the vast majority of the AICPA’s row titles. 

 

6 Two screenshots of NAM’s March 10, 2011 lecture displaying this question are collectively 

attached hereto as Exhibit E

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 32 of 56 PageID: 32
33

F. Continuing infringing activity and maintenance of “brain-dumps” in KAPLI 

binders.

73. KAPLI’s and NAM’s infringing activities continue to the present. On May 17, 

2011, KAPLI staffer, and NAM’s cousin, Woo Yong Nam, told the Kroll undercover 

investigator by telephone that KAPLI had been providing weekly live online lectures, which had 

been uploaded to the KAPLI website, except for certain portions containing what he called 

“sensitive information,” which were not on the website. The portions containing “sensitive 

information,” he said, could only be viewed by students at the New York branch. The 

undercover investigator asked whether the “sensitive information” pertained to information about 

the 2011 Uniform CPA Examination, and Woo Yong Nam replied in the affirmative.

74. On May 23, 2011, a remarkable event occurred at the KAPLI offices: the 

undercover investigator was actually shown binders which contain the “brain-dump” comments 

of KAPLI test-takers so that he could study directly from them. 

75. The undercover investigator was present at the KAPLI office in New York on that 

occasion to view what had been described as the “sensitive information” about the 2011 Uniform 

CPA Examination, without knowing precisely what to expect. While waiting for Woo Yong 

Nam to burn DVDs containing the “sensitive information” so that he could view them in the 

office, the undercover investigator was shown into one of the classrooms. As he was walking 

into a classroom, he saw a thick plastic binder labeled “FARE” on a round table out in the open 

(FARE is the abbreviation for Financial Accounting and Reporting Examination, which is one of 

the four sections in the Uniform CPA Examination). Under that label were written warnings in 

Korean that the binder could only be accessed at KAPLI and “should never be taken outside, 

borrowed or copied.” The undercover investigator opened the cover of the ringed binder and 

saw numerous documents pertaining to post-examination comments which appeared from their 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 33 of 56 PageID: 33
34

content to have been submitted by individuals who took the “FARE” section of the AICPA 

examination on dates varying from 2007 and 2011. The undercover investigator copied several 

comments, which were written in Korean, and which appeared to disclose questions on the 

Financial Accounting and Reporting (FAR) section of examinations given in August 2010, 

November 2010, and May 2011.

76. Woo Yong Nam told the undercover investigator that KAPLI students were free 

to access the binder at KAPLI. When the undercover investigator asked if there were any other 

binders containing post-examination comments, Woo Yong Nam opened one of the lower

drawers to a metal cabinet behind the administration desk and showed the undercover 

investigator another binder; this one contained what appeared to be post-examination comments 

regarding the Regulatory (REG) section of the examination.

G. Likelihood of flight from the jurisdiction of this Court -- KAPLI and NAM’s 

connections to Korea and tenuous financial condition.

77. There is substantial concern that, once he is alerted to the pendency of this action, 

NAM may flee this jurisdiction and the United States, and that KAPLI may fold its United States 

operations in favor of its South Korean operations. These concerns are based in part on the ties 

both NAM and KAPLI have to South Korea and the admitted tenuous financial condition of 

KAPLI.

78. NAM has strong ties to South Korea, where he continues to do work and where he 

resides for extended periods. For example, during NAM’s March 7, 2011 lecture in KAPLI’s 

New York office, the undercover investigator learned that NAM would be away until May 2011, 

and NAM confirmed during the on-line lecture of March 10, 2011 that he would be going to 

South Korea in April 2011.

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 34 of 56 PageID: 34
35

79. In addition, on February 15, 2011, the undercover investigator was advised at the 

KAPLI offices in New York by a staff member that many KAPLI lecturers, including NAM, 

occasionally go to South Korea to teach AICPA courses at Sogang University.

80. Further, on February 21, 2011, at a Business Law course lecture which the 

undercover investigator attended in the New York office of KAPLI, NAM stated that he has 

worked as an in-house counsel for SK Global in South Korea, and that he taught at Ajou 

University business school in South Korea.

81. Moreover, on February 28, 2011, at a Business Law course lecture which the 

undercover investigator attended at the New York office of KAPLI, NAM stated that he had 

recently been appointed as a professor at Sogang University’s Graduate School of International 

Studies.

82. In an effort to determine the present whereabouts of NAM, on May 27, 2011, the 

undercover investigator telephoned a number associated with an address for an individual named 

Kwang Woo Nam in Leonia, New Jersey, which was obtained from a national identifier database 

maintained by an independent vendor. The undercover investigator dialed the number and asked 

for Mr. Nam. A male answered and stated in Korean that Mr. Nam was not there; that he 

recently bought an apartment in Fort Lee, New Jersey, but was rarely there; and that any 

correspondence for Mr. Nam should be sent to 199 Christie Heights Street, Leonia, New Jersey 

07605.

83. On February 21, 2011, at a Business Law lecture which he gave in the New York 

office of KAPLI, NAM stated in the presence of the Kroll undercover investigator that KAPLI 

has been running a deficit for some time.

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 35 of 56 PageID: 35
36

84. As of May 27, 2011, the New York County clerk’s office judgment docket book 

showed an outstanding Warrant filed by the New York State Department of Taxation and 

Finance against KAPLI based on a judgment for $1,685.09 for taxes, penalties and interest due 

from a period in 2006. 

H. Effects of KAPLI and NAM’s infringement.

85. Defendants have disclosed secure, copyrighted Uniform CPA Examination 

questions and test items that the AICPA planned to use, and did in fact use, on administrations of

the Uniform CPA Examination.

86. The Defendants do not have and have never had permission to reproduce, publish, 

display, distribute copies of, or prepare derivative works based on any released or unreleased 

Uniform CPA Examination questions or other copyrighted Uniform CPA Examination materials.

87. Defendants’ misappropriation, use and distribution of the AICPA’s copyrighted 

materials have at all relevant times been, and continue to be, willful and knowing.

88. Because Defendants have distributed secure questions and test items copied from 

actual Uniform CPA Examinations, the AICPA has been required to retire the compromised 

questions. The AICPA has been and will be required to modify future Uniform CPA 

Examination test items and questions that it had planned to use for future administrations of the 

Uniform CPA Examination.

89. Defendants’ conduct threatens the integrity of the CPA licensing process on a 

national and global basis and, absent injunctive relief, will compromise the integrity of future 

Uniform CPA Examinations. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 36 of 56 PageID: 36
37

COUNT I 

(Copyright Infringement)

90. The AICPA incorporates by reference the allegations contained in paragraphs 1 -

89 as if fully set forth herein.

91. Each version of the Uniform CPA Examination is an original work of authorship 

that is copyrighted under the laws of the Unites Sates on creation. The AICPA owns the 

copyright in each of these Uniform CPA Examination test items and in the questions and 

answers contained therein.

92. Under the Copyright Act, 17 U.S.C. § 101 et seq., the AICPA enjoys exclusive 

rights with respect to the Uniform CPA Examination test items and the questions and answers 

contained therein, including the exclusive rights to reproduce, distribute, publicly perform, 

display and create derivative works based on the test items and questions and answers.

93. The AICPA has been issued certificates of registration by the Register of 

Copyrights for the Uniform CPA Examination, as described in paragraph 26, above.

94. Defendants have not been authorized to reproduce, publish, distribute copies of, 

or prepare derivative works based on any portion of any of these Uniform CPA Examination test 

items or questions or answers, or any other copyrighted AICPA works.

95. Defendants have infringed the AICPA’s copyrights in numerous Uniform CPA 

Examination test items, including some or all of the test items listed in paragraph 26, above and 

the questions and answers contained therein, by copying, reproducing, distributing, publishing, 

and/or displaying the foregoing copyrighted materials, or derivations thereof, without permission 

or authorization from the AICPA. 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 37 of 56 PageID: 37
38

96. Defendants have willfully infringed and are continuing to infringe the AICPA’s 

copyrights by copying, reproducing, distributing, publishing, preparing derivative works from,

and displaying copyrighted Uniform CPA Examination questions, or derivations thereof.

97. Defendants’ actions, as alleged above, have affected the public interest and have 

the potential for repetition.

98. Defendants’ infringement of the AICPA’s copyrights has substantial financial 

harm to AICPA, for which the AICPA is entitled to damages and other relief.

99. Defendants’ deliberate and wrongful acts of infringement have caused and will 

continue to cause great injury and damage to the AICPA, which injury and damage cannot be 

readily quantified. 

100. As a result of Defendants’ conduct, as alleged herein, the AICPA has suffered and 

continues to suffer irreparable damage, and unless this Court enjoins Defendants from further 

commission of such acts of infringement, the AICPA will have no adequate remedy at law. 

COUNT II

(Contributory Infringement)

101. The AICPA incorporates by reference the allegations contained in paragraphs 1 -

100 as if fully set forth herein.

102. With knowledge of the infringing activity, Defendants have induced, caused, or 

materially contributed to the acts of third parties in infringing upon copyrights held by the 

AICPA. Among other activities, they have done so by:

a. encouraging and/or soliciting others to send to KAPLI, through NAM, 

questions and answers and other AICPA materials that are protected by the copyrights held by 

the AICPA; and

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 38 of 56 PageID: 38
39

b. distributing through live lectures broadcast over the internet copies of

Uniform CPA Examination questions and other Uniform CPA Examination materials that are 

protected by the copyrights held by the AICPA.

103. Defendants’ acts have harmed the AICPA, for which the AICPA is entitled to 

damages and other relief.

COUNT III

(Tortious Interference With Contractual Rights)

104. The AICPA incorporates by reference the allegations contained in paragraphs 1 -

103 as if fully set forth herein.

105. All Uniform CPA Examination examinees agree to comply with the AICPA’s 

testing policies as a condition of taking the Uniform CPA Examination. In exchange for being 

allowed to take the Uniform CPA Examination and having AICPA score their exams and report 

their scores to the National Association of State Boards of Accountancy (NASBA), examinees

agree to comply with the AICPA’s testing policies, including the confidentiality provisions 

which examinees agree to abide.

106. Defendants have been aware at all relevant times that Uniform CPA Examination 

examinees are subject to a non-disclosure obligation to the AICPA. Indeed, non-disclosure 

requirements were imposed upon NAM when he took the Uniform CPA Examination. Further, 

NAM personally advised students that it was illegal to provide him with specific questions they

could remember from the actual Uniform CPA Examination at the very same time he solicited 

students to send any questions they could remember from the Uniform CPA Examination to him 

by email. 

107. Despite this knowledge, Defendants have encouraged third parties to breach their 

non-disclosure confidentiality obligations by sending “brain dumps” to, and/or discussing 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 39 of 56 PageID: 39
40

Uniform CPA Examination questions and answers with, NAM, and perhaps through other 

means.

108. The AICPA has been financially harmed by the Defendants’ tortious interference 

with the AICPA’s contractual rights, and is entitled to compensatory and punitive damages as a 

result of those breaches, as well as other relief.

COUNT IV

(Unfair Competition)

109. The AICPA incorporates by reference the allegations contained in paragraphs 1 -

108 as if fully set forth herein.

110. The conduct of Defendants, as alleged above, constituted unfair competition and 

has wrongfully deprived the AICPA of the benefit of its contractual relations and has harmed 

numerous Uniform CPA Examination examinees, the Boards of Accountancy of each 

jurisdiction, and the AICPA by subverting the CPA licensing examination in violation of

N.J.S.A. § 56:4-1 et seq. and other applicable law. Defendants have also intentionally interfered 

with the AICPA’s relationships with Uniform CPA Examination examinees in an effort to inflict 

harm upon the AICPA.

111. The foregoing conduct is in violation of the accepted practices and procedures of 

the commercial test preparation industry.

112. The AICPA has been damaged by Defendants’ unfair competition.

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 40 of 56 PageID: 40
41

PRAYER FOR RELIEF

WHEREFORE, the AICPA respectfully requests that the Court:

1. Enter appropriate temporary and thereafter a preliminary and permanent 

injunctive relief as provided by 17 U.S.C. § 501 et seq. and any other applicable law.

2. Enter an order for impoundment and other relief as provided by 17 U.S.C. § 503

and any other applicable law.

3. Enter an order for turnover to the AICPA of all infringing materials and articles 

by means of which such infringing materials may be reproduced as provided by 17 U.S.C. § 503

and any other applicable law.

4. Enter an order freezing any KAPLI accounts at Bank of America.

5. Award the AICPA compensatory and punitive damages, including but not limited 

to, all profits earned by the Defendants, directly or indirectly, by reason of their infringement of

the AICPA’s copyrights, plus the AICPA’s actual damages resulting from the infringement of 

the AICPA’s copyrights by the Defendants, as authorized by 17 U.S.C. § 504(b) and any other 

applicable law; or, as an alternative to the AICPA’s actual damages and the Defendants’ profits, 

and at the election hereinafter by the AICPA, statutory damages based upon the Defendants’ 

willful infringement in the maximum amount permitted by the Copyright Act, as authorized by 

17 U.S.C. § 504(c) and any other applicable law.

6. Award the AICPA interests, costs, and reasonable attorneys’ fees, as provided by 

17 U.S.C. § 505 and by any other applicable law.

7. Enter an order requiring that Defendants permit the AICPA or the AICPA’s

designated representative to attend or otherwise monitor Defendants’ commercial Uniform CPA 

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 41 of 56 PageID: 41
Examination review operations to ensure compliance with the terms of the preliminary

injunction.

8. Enter an order requiring Defendants to provide an accounting.

9. Award the AICPA such other legal or equitable relief as the Court deems just and

proper.

FOX ROTHSCHILD LLP

Attorneysfor PlaintiffAmerican Institute

ofCertified Public Accountants

BY:_~__

GERARD P. NORTON

ALAIN LEIBMAN

JOSEPH SCHRAMM, III

Dated: June 15, 2011

42

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 42 of 56 PageID: 42
VERIFICATION

I hereby verify that I am the Director of Examination Development and Operations of

American Institute of Certified Accountants, plaintiff in this action. All of the above statements

are true the best of my personal knowledge, with the exception of the statements set forth in

paragraphs 4, 7, 8, 11, 12, 39, 42 - 66, 73 - 76, and 78 - 84 which are supported by the

Declarations of Daniel E. Karson and Junil Lee, both of Kroll Associates, submitted herewith.

The statements set forth in paragraphs 4, 7, 8, 11, 12, 39, 42 - 66, 73 - 76, and 78 - 84 are

supported by the Declarations of Daniel E. Karson and Junil Lee because those individuals

conducted an investigation of KAPLI Inc. and Kwang Woo Nam and therefore have personal

knowledge of certain ofthe facts alleged herein, of which no individual employed by the AICPA

has personal knowledge.

Under 28 U.S.C. § ~746, I hereby declare under penalty of perjury that the foregoing is

true and correct.

Dated: June /.(2011

LV1 1371901v21 06/15/11

43

Michael A. Decker

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 43 of 56 PageID: 43
LOCAL CIVIL RULE 11.2 CERTIFICATION

Plaintiff, American Institute of Certified Public Accountants knows of no other

arbitration or lawsuit involving this matter, nor is any to Plaintiff's knowledge contemplated, and

Plaintiff knows of no other person who should be joined at this time.

FOX ROTHSCHILD LLP

Attorneysfor PlaintiffAmerican Institute

ofCertified Public Accountants

By:_c{2L---

GERARD P. NORTON

ALAIN LEIBMAN

JOSEPH SCHRAMM, III

Dated: June 15, 2011

JURY DEMAND

Plaintiff, American Institute ofCertified Public Accountants hereby demands a trial by

jury on all causes of action so triable.

FOX ROTHSCHILD LLP

Attorneysfor PlaintiffAmerican Institute

ofCertified Public Accountants

BY:_~ _

GERARD P. NORTON

ALAIN LEIBMAN

JOSEPH SCHRAMM, III

Dated: June 15, 2011

44

Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 44 of 56 PageID: 44
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 45 of 56 PageID: 45
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 46 of 56 PageID: 46
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 47 of 56 PageID: 47
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 48 of 56 PageID: 48
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 49 of 56 PageID: 49
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 50 of 56 PageID: 50
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 51 of 56 PageID: 51
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 52 of 56 PageID: 52
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 53 of 56 PageID: 53
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 54 of 56 PageID: 54
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 55 of 56 PageID: 55
Case 3:11-cv-03461-MLC-TJB Document 1 Filed 06/15/11 Page 56 of 56 PageID: 56