Doe et al v. Stanford Federal Credit Union et al

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States District Court
Northern District of California
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
JOHN DOE, et al.,
Plaintiffs,
v.
STANFORD FEDERAL CREDIT UNION,
et al.,
Defendants.
Case No. 25-cv-07241-NW
ORDER GRANTING MOTIONS TO
DISMISS
Re: ECF Nos. 91, 95, 103
Plaintiffs John Doe and Jane Doe allege that certain financial institutions and individuals
conspired to defraud Plaintiffs of nearly $570,000 through a cryptocurrency scam. Pending before
the Court are three motions to dismiss Plaintiffs’ first amended complaint (“FAC”) filed by
Defendants Choice Financial Group (“CFG”) and Mercury Advisory LLC (ECF No. 91);
Community Federal Savings Bank (“CFSB”) and The Currency Cloud (ECF No. 95); and
Stanford Federal Credit Union (“SFCU”) (ECF No. 103). See ECF No. 89 (FAC).1
Defendants’ motions to dismiss are GRANTED.
I. BACKGROUND
A. Allegations in the FAC2
Plaintiffs, a married couple, allege that they are victims of a cryptocurrency fraud. Their
story begins when Plaintiffs received a Facebook advertisement to join an “investment school” run
by an entity called the “Wealth Trading Institute.” After using the platform successfully, Plaintiffs
1 Other than the complaint, record citations are to material in the Electronic Case File (“ECF”);
pinpoint citations are to the ECF-generated page numbers at the top of documents.
2 All allegations are taken from the FAC and are taken as true for purposes of this Order.
Case 5:25-cv-07241-NW Document 127 Filed 10/14/26 Page 1 of 9

2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States District Court
Northern District of California
were directed to wire from their SFCU and EverBank accounts approximately $570,000 over the
course of just a few days to entities named “Focusyr,” “Visionary,” “Lumina,” and
“Novaventure.” Plaintiffs initiated seven transactions over the course of four days (July 30, 2024
through August 2, 2024). On August 2, 2024, “Plaintiffs communicated with SFCU through its
website messaging system regarding [one of the wire] transfer[s] and asked that it be processed
promptly, stating that the prior wire had taken approximately 24 hours and that Plaintiffs ‘would
appreciate the prompt processing of this wire.’” FAC ¶ 58.
These four entities turned out to be fraudulent.
According to the complaint, the fraudulent entities maintained bank accounts at Defendants
CFSB and CFG. Defendant CFSB transferred Plaintiffs’ wired funds to Defendant Currency
Cloud, which then transferred the funds to Defendant TranSwap. Defendant CFG transferred
Plaintiffs’ wired funds to Defendant Mercury Advisory.
Upon learning of the crypto scam, on August 5, 2024, Plaintiffs notified SFCU that two of
their $200,000 wire transfers were fraudulent and requested immediate recall. On August 7-8,
2024, SFCU informed Plaintiffs that it was communicating with its risk team and the recipient
institutions. Plaintiffs also notified the recipient banks of the fraud and requested return of their
funds.
The gravamen of Plaintiffs’ complaint is that the recipient banks engaged in unlawful
conduct by processing the Plaintiffs’ requested wire transactions to fraudulent entities, and SFCU
failed to reasonably investigate Plaintiffs’ fraud allegations. Id. ¶¶ 7-8.
B. Procedural History
On August 27, 2025, Plaintiffs—then represented by counsel—filed a complaint against
sixteen defendants: SFCU; EverBank, N.A.;3 CFSB; CFG; Currency Cloud; TranSwap
Technologies (UK) Ltd (“TranSwap”);4 Mercury Advisory; Wealth Tutor Institute; Beach Focusyr
3 On November 13, 2025, Plaintiffs filed a notice voluntarily dismissing all claims against Defendant
EverBank without prejudice. ECF No. 32.
4 To date, only Defendants SFCU, Mercury Advisory, Currency Cloud, CFG, CFSB, and
EverBank have been served. ECF Nos. 11, 12, 13, 14, 15, 16. TranSwap Technologies has not
Case 5:25-cv-07241-NW Document 127 Filed 10/14/26 Page 2 of 9

3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States District Court
Northern District of California
Inc. (“Focusyr”); Tengfei Yang; Visionary Solutions Holdings Limited (“Visionary”); Hui Fung
Lui; Lumina Solutions Holdings, Ltd (“Lumina”); Lok Him Lo; Novaventure Stone Ltd
(“Novaventure”); and Jianhao Li (collectively, “Defendants”). ECF No. 1 (Compl.).
Plaintiffs asserted fifteen claims: (1) Violation of the Fair Credit Billing Act, (2) Violation
of Section 10(b) of the Securities Exchange Act of 1934 and Sec Rule 10b-5, (3) Violation of
Section 20(a) of the Securities Exchange Act, (4) Violations of Section 10(b) and Rule 10b-5 of
the Securities Exchange Act, (5) Violation of Sections 4b and 6(c)(1) of the Community Exchange
Act, (6) Violation of Section 13(b) of the Commodity Exchange Act, (7) Aiding and Abetting
Violations of Sections 4b and 6(c)(1) of the Commodity Exchange Act, (8) Fraud, (9) Aiding and
Abetting Fraud, (10) Conversion/Aiding and Abetting Conversion, (11) Civil Conspiracy, (12)
Negligence, (13) Breach of Contract, (14) Unjust Enrichment, and (15) California Business &
Professions Code § 17200 et seq. Compl. ¶¶ 85–201; see also ECF No. 82, App’x.
SFCU, CFSB, CFG, Currency Cloud, and Mercury Advisory —the only Defendants that
had been served—moved to dismiss. ECF Nos. 27, 47, 59. The Court dismissed the first, fourth,
seventh, ninth, tenth, twelfth, thirteenth, and fifteenth claims with leave to amend, and dismissed
the fourteenth claim with leave to amend only as to Stanford and without leave to amend as to all
other Defendants. ECF No. 82 at 6–14.
Plaintiffs, now proceeding pro se,5 filed their FAC on April 10, 2026. In the FAC,
Plaintiffs assert eight claims against six Defendants (SFCU, CFSB, Currency Cloud, CFG,
Mercury Advisory, TranSwap):
1. Count I – Violation of the Fair Credit Billing Act against SFCU;
2. Count II – Violation of California Commercial Code §§ 11202—11204 and
Article 4A against SFCU;
3. Count III – Breach of Contract against SFCU;
4. Count IV – Declaratory Relief against SFCU;
been served. ECF No. 125.
5 Plaintiffs’ counsel was permitted to withdraw on February 13, 2026. ECF No. 83.
Case 5:25-cv-07241-NW Document 127 Filed 10/14/26 Page 3 of 9

4
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States District Court
Northern District of California
5. Count V – California Business & Professions Code § 17200 et seq. against all
Defendants;
6. Count VI – Conversion against CFSB;
7. Count VII – Aiding and Abetting Fraud against CFSB, Currency Cloud, CFG,
Mercury Advisory, and TranSwap Technologies (UK) Ltd.; and
8. Count VIII – Negligence against CFSB, Currency Cloud, CFG, Mercury
Advisory, and TranSwap Technologies (UK) Ltd.
Defendants now move to dismiss Plaintiffs’ FAC. ECF Nos. 91, 95, 103. The motions are
fully briefed. ECF Nos. 109, 114, 117, 119, 122.
II. LEGAL STANDARD
To survive a motion to dismiss, a complaint must contain at minimum “a short and plain
statement of the claim showing that the pleader is entitled to relief” and “a demand for the relief
sought.” Fed. R. Civ. P. 8. The complaint must clearly establish the claims and parties such that a
defendant would have “no difficulty in responding to the claims with an answer and/or with a Rule
12(b)(6) motion to dismiss.” Hearns v. San Bernardino Police Dep’t, 530 F.3d 1124, 1131–32
(9th Cir. 2008).
Federal Rule of Civil Procedure 12(b)(6) is designed to “test[ ] the legal sufficiency of a
claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A dismissal under Rule 12(b)(6) for
failure to state a claim can be based on either (1) the lack of a cognizable legal theory, or (2)
insufficient facts to support a cognizable legal claim. Balistreri v. Pacifica Police Dep’t, 901 F.2d
696, 699 (9th Cir. 1988). When analyzing a complaint under Rule 12(b)(6), the well-pled factual
allegations are taken as true and construed in the light most favorable to the nonmoving party.
Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual
allegations are not entitled to the assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009),
and therefore are insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera
Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010).
III. DISCUSSION
The Court addresses the arguments raised by each group of Defendants in their respective
motions to dismiss.
Case 5:25-cv-07241-NW Document 127 Filed 10/14/26 Page 4 of 9

5
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States District Court
Northern District of California
A. SFCU’s Motion to Dismiss
SFCU moves to dismiss the five claims Plaintiffs assert against it: violation of the Fair
Credit Billing Act (Count 1); violation of California Commercial Code §§ 11202—11204 and
Article 4A (Count 2); breach of contract (Count 3); declaratory relief (Count 4); and violation of
California Business & Professions Code § 17200 et seq. (“UCL”) (Count 5). ECF No. 103. For
the reasons set forth below, SFCU’s motion to dismiss is GRANTED without leave to amend.
1. Count I – Violation of the Fair Credit Billing Act
Plaintiffs allege that SFCU failed to send written acknowledgement of Plaintiffs’ notice
disputing the transfers as required under the Fair Credit Billing Act (“FCBA”). FAC ¶¶ 154-161.
SFCU moves to dismiss on the grounds that Plaintiffs’ FCBA claim is time barred.
The Court agrees. The FCBA requires that claims be brought within one year from the
date of the alleged violation. 15 U.S.C. § 1640(e). Plaintiffs allege that the violation stems from
Plaintiff’s August 5, 2024 notification, yet, Plaintiffs did not initiate this case until August 27,
2025, more than a year later. Plaintiffs do not contest the statute of limitations argument in their
opposition to SFCU’s motion to dismiss.6 ECF No. 119.
Plaintiffs’ Count 1 is dismissed.
2. Count II – Violation of California Commercial Code §§ 11202—11204
and Article 4A
Plaintiffs bring a claim under Division 11 of the California Commercial Code, seeking a
refund of their transferred funds. FAC ¶ 188. To state a claim under Division 11, Plaintiffs must
plausibly allege that the transfer was “not authorized and not effective as the order of the
customer.” Cal. Com. Code § 11204(b)(i). Plaintiffs have not done so here. Plaintiffs not only
authorized the transfer orders, but they requested that the transfers be expedited. FAC ¶ 58; Liu v.
Bank of Am., N.A., No. 24-CV-07400-HSG, 2026 WL 2255456, at *5 (N.D. Cal. Aug. 5, 2026)
(dismissing plaintiffs’ claims under Division 11 where plaintiffs had initiated wire transfers that
6 Plaintiffs additionally did not oppose SFCU’s argument that the FCBA is not the appropriate
governing law for a wire transfer dispute, which would be a separate ground for granting dismissal
if the statute of limitations had not already run. ECF No. 119.
Case 5:25-cv-07241-NW Document 127 Filed 10/14/26 Page 5 of 9

6
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States District Court
Northern District of California
eventually were identified as fraudulent). In opposition, Plaintiffs do not address the authorization
issue and instead reference facts and arguments that were not raised by Defendants. ECF No. 119
at 8.
Plaintiffs’ Count 2 is dismissed.
3. Count III – Breach of Contract; Count V – Violation of the UCL
Plaintiff brings two additional California law claims against SFCU, breach of contract and
violation of the UCL. “[T]he California Supreme Court has held that given its detailed regulatory
structure, Division 11 displaces or “preempts” common law causes of action involving funds
transfers in two specific circumstances: ‘(1) where the common law claims would create rights,
duties, or liabilities inconsistent with division 11; and (2) where the circumstances giving rise to
the common law claims are specifically covered by the provisions of division 11.’” Liu, 2026 WL
2255456, at *5-6 (quoting Zengen, Inc. v. ComericaBank, 41 Cal. 4th 239, 253 (2007)) (applying
Division 11 preemption “equally to common law and statutory claims,” such as the UCL). Here,
Plaintiffs’ claims all stem from the same underlying facts regarding the wire transfers, such that
the “circumstances giving rise” to Plaintiffs’ state claims are covered by Division 11. “Where the
“gravamen” of a claim at common law is the same as the subject matter specifically covered by
[Division 11], [Division 11] controls.” Forefront Telecare Inc. v. Bank of Am., N.A., No. 19-CV-
03866-SK, 2019 WL 13201988, at *3 (N.D. Cal. Aug. 21, 2019). Accordingly, the Court finds
that Plaintiffs’ breach of contract and UCL claims are preempted.
Plaintiffs’ Counts 3 and 5 as to SFCU are dismissed.
4. Count IV – Declaratory Relief
Plaintiffs do not assert an independent cause of action along with their request for
declaratory relief. FAC ¶¶ 186-190. To the extent Plaintiffs seek declaratory relief related to their
breach of contract claim, that relief is duplicative; determination of Plaintiffs’ breach of contract
claim would have resolved any need for declaratory relief. Diversified Cap. Invs., Inc. v. Sprint
Commc'ns, Inc., No. 15-CV-03796-HSG, 2016 WL 2988864, at *9 (N.D. Cal. May 24, 2016)
(dismissing declaratory relief claim where “plainly duplicative” of the breach of contract claim).
Plaintiffs’ Count 4 is dismissed.
Case 5:25-cv-07241-NW Document 127 Filed 10/14/26 Page 6 of 9

7
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States District Court
Northern District of California
B. CFSB and Currency Cloud’s Motion to Dismiss
The Court turns to CFSB and Currency Cloud’s motion. CFSB and Currency Cloud move
to dismiss the four claims Plaintiffs assert against them: violation of California Business &
Professions Code § 17200 et seq. (Count 5); conversion (Count 6); aiding and abetting fraud
(Count 7); and negligence (Count 8). ECF No. 95. As explained below, CFSB and Currency
Cloud’s motion to dismiss is GRANTED without leave to amend.
1. Count V – Violation of the UCL; Count VI – Conversion; Count VIII –
Negligence
For the reasons stated above, see supra Section A.3, Plaintiffs’ UCL, conversion, and
negligence claims brought against CFSB and Currency Cloud are similarly preempted by Division
11 of the Commercial Code. For each claim against each Defendant, the “gravamen” is that the
Defendants should not have accepted and executed upon Plaintiffs’ transfers, and accordingly
Defendants must reimburse Plaintiffs. Forefront Telecare Inc, 2019 WL 13201988, at *3. These
allegations fall squarely under the purview of Division 11, and therefore, Division 11 controls and
preempts these claims.
Plaintiffs’ Count 6 is dismissed, and Plaintiffs’ Counts 5 and 8 are dismissed as to CFSB
and Currency Cloud.
2. Count VII – Aiding and Abetting Fraud
Plaintiffs assert that CFSB and Currency Cloud aided and abetted the fraudulent activity.
FAC ¶¶ 211-244. Plaintiffs have failed to plead a foundational element of aiding and abetting
fraud, namely, that Defendants knew of the fraudulent activity.
“Under California law, banks generally owe no duty to non-customers like Plaintiffs.”
Evans v. ZB, N.A., 779 F. App’x 443, 444 (9th Cir. 2019) (citing Casey v. U.S. Bank Nat. Assn.,
127 Cal. App. 4th 1138, 1149 (2005)). “However, California law recognizes an exception: when a
bank knows a customer is perpetrating fraud, it may not assist the customer accomplish the tort.”
Evans, 779 F. App’x at 444 (citation omitted). “In order to plead a claim for aiding and abetting
fraud, [Plaintiffs] must plead facts that make it plausible that defendants either ‘(a) [knew] the
other’s conduct constitute[d] a breach of duty and [gave] substantial assistance or encouragement
Case 5:25-cv-07241-NW Document 127 Filed 10/14/26 Page 7 of 9

8
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States District Court
Northern District of California
to the other to so act or (b) [gave] substantial assistance to the other in accomplishing a tortious
result and the person’s own conduct, separately considered, constitute[d] a breach of duty to the
third person.’” Bradshaw v. SLM Corp., 652 F. App’x 593, 594 (9th Cir. 2016) (quoting Casey,
127 Cal. App. 4th at 1144). Here, Plaintiffs appear to be proceeding under the first avenue and are
attempting to allege that CFSB and Currency Cloud knew that the scammers conduct constituted a
breach of duty, and the Defendants gave substantial assistance to the scammers to accomplish the
alleged fraud. See, e.g., FAC ¶ 240.
This Court previously found that Plaintiffs did not plead with particularly that Defendants,
individually and specifically, knew of the alleged cryptocurrency scheme and gave substantial
assistance to the fraudulent entities to accomplish that scheme. See ECF No. 82. Plaintiffs now
fail to cure those deficiencies in the FAC. Plaintiffs do not plead any facts to demonstrate CFSB
and Currency Cloud’s knowledge of the scam, let alone specifying the “who, what, when, where,
and how” of Defendants’ alleged misconduct. Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097,
1106 (9th Cir.2003). Plaintiffs’ Count 7 is dismissed is dismissed as to CFSB and Currency
Cloud.
C. CFG and Mercury Advisory’s Motion to Dismiss
The Court turns to the third and final motion to dismiss. CFG and Mercury Advisory
move to dismiss the three claims Plaintiffs assert against them: violation of the UCL (Count 5);
aiding and abetting fraud (Count 7); and negligence (Count 8). ECF No. 91. As explained below,
CFG and Mercury Advisory’s motion to dismiss is GRANTED without leave to amend.
1. Count V – Violation of the UCL; Count VIII – Negligence
For the reasons stated above, see supra Section A.3, Plaintiffs’ UCL and negligence claims
against CFG and Mercury Advisory are also preempted by Division 11 of the Commercial Code.
Plaintiffs’ Counts 5 and 8 against CFG and Mercury Advisory are dismissed.
2. Count VII – Aiding and Abetting Fraud
Similar to Plaintiffs’ allegations against CFSB and Currency Cloud, Plaintiffs’ have failed
to state a claim for aiding and abetting fraud against CFG and Mercury Advisory. Plaintiffs have
not stated with particularity that CFG and Mercury Advisory had knowledge of the fraudulent
Case 5:25-cv-07241-NW Document 127 Filed 10/14/26 Page 8 of 9

9
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
United States District Court
Northern District of California
scheme. Evans, 779 F. App’x at 444.
Plaintiffs’ Count 7 against CFG and Mercury Advisory is dismissed.
D. Service on Remaining Defendants
This case was filed on August 27, 2025. See ECF No. 1. As of the date of this Order, the
docket reflects no evidence that the summons and complaint have been served on Defendant
TranSwap Technologies. ECF No. 125. While Plaintiffs explain that they have “undertaken
substantial efforts to serve” TranSwap, a foreign defendant, still, over a year has passed since
Plaintiffs filed their complaint. ECF No. 87. With a single exception, filed a year after initiating
this case, Plaintiffs have failed to regularly inform the Court of any efforts they have made to
serve TranSwap, and have not asked for this Court’s assistance as to potential service alternatives.
Given that with this Order, all Plaintiffs’ claims against all Defendants are dismissed without leave
to amend, the Court will not grant Plaintiffs further extensions of time to serve TranSwap.
Plaintiffs’ claims against TranSwap and any Doe Defendants are dismissed without
prejudice. Plaintiffs’ motion for alternate service is terminated as moot. ECF No. 125.
IV. CONCLUSION
Defendants’ motions to dismiss are GRANTED. ECF Nos. 91, 95, 103. The Court
previously granted Plaintiffs an opportunity to amend their complaint. Because Plaintiffs were
unable to correct the deficiencies, Plaintiffs’ claims against SFCU, CFSB, CFG, Currency Cloud,
and Mercury Advisory are now dismissed without leave to amend.
The Clerk of Court shall enter judgment and close this case.
IT IS SO ORDERED.
Dated: October 14, 2026
Noël Wise
United States District Judge
Case 5:25-cv-07241-NW Document 127 Filed 10/14/26 Page 9 of 9